Techstars Boston Pitch Night 2010: Beware HIPPOs

Last night, Techstars Boston had its second annual pitch night, where the graduates of the 2010 session each got eight minutes to wow the crowd of angels, VCs and other local tech luminaries.

I was a mentor to some of the teams again this year, and was thrilled to see how far they had each progressed during the program. Kudos most of all to Shawn Broderick, who runs the Boston program, but also to Bill Warner, Brad Feld, David Cohen and all the other mentors, as well as the teams themselves.

Xconomy has a great writeup of the event and the companies – so check that out here.

My favorite quote of the night was about the danger of HIPPOs, and the use of data to overcome that danger. Daniel Sullivan, CEO of Appswell, noted the problem of the HIPPO, the “Highest Paid Person with an Opinion”. Absent strong data (about whatever it is), the HIPPO will always get to make the decision (right or wrong). This is similar in some ways to the Peter Principle, that “in a hierarchy every employee tends to rise to his level of incompetence”.

Even if the Peter Principle is in operation, HIPPOs do not want to look stupid, and will be swayed by compelling data. If your organization suffers from HIPPOs making decisions purely on whim, then make sure you have good data to present, so that you get to shape those opinions.

Eureqa!

I got to listen to the Radio Lab program on my way home from a meeting last night on my local NPR station, WBUR. The final segment discussed the limits of human knowledge in science, and in particular the possibility that humans might reach limits of insight especially when scientific discovery is computer-aided.

As reported, a computer program called Eureqa was able to independently discover Newton’s law F=ma just by watching a double pendulum for a day. With input from a completely different field, it then discovered some rules by which simple cellular mechanisms work. These rules seem to be correct, because they accurately predict what will happen in the cell. However, as scientists look at those rules, they are at loss to understand them. They have no insight as to why the rules are correct.

You can listen to the segment and see the comments here.

At 8:05 into the segment, the hosts say that the scientists are “in this awkward position where they’ve got the answer, but they don’t have [pause] the insight.” And in that pause, all I could think was they would finish the sentence with “the question” … as in “they’ve got the answer, but they don’t have the question”. And why would I think that? Because of Deep Thought, Hitchhiker’s Guide to the Galaxy, and the answer to the meaning of life, the universe and everything. Douglas Adams fans (like me) know what I am talking about, and others can read about it here. I was gratified to see the comments on the Radio Lab website went exactly to the same thoughts.

What about Dweebs?

John Halamka’s recent post Geeks, Dorks and Nerds missed out the fourth scooter-rider of the apocalypse: Dweebs.

The folks at Techstars Boston have a grainy photocopy of this image on the wall, and so when I saw John’s posting (I especially like the video he references), I realized I had to post this taxonomy to support the Dweebs among us.

 

The tech industry is full of people with these characteristics, and perhaps these are key ingredients in technical or entrepreneurial success.

When searching on Google, it appears difficult to find the original source of this diagram … but I welcome someone finding the original source to attribute (just add a comment).  

Neologism: Administrative Loss Ratio

In the US Healthcare world, everyone calls the money spent on looking after patients “Medical Loss Ratio”. The new health care law requires (approximately) that the MLR be at least 85% (meaning, more or less, that at least 85% of insurance premiums go to spending on care, as opposed to administration or profit).

All this is very well, but why do they call it Medical Loss Ratio? Why is looking after me (or you) called “Medical Loss”, when the whole point of a health care system is to look after me (or you)?

What they should do is call that money “Healthcare Expenditure” (and some of it might even be “Wellness Investment”)… and instead we should talk about “Administrative Loss Ratio”. When the insurers take our healthcare dollars and overspend on administration (or corporate profit), then that is a loss ratio – not the healthcare itself.