ken atchity door to door: MIKE SPEISER'S SECRETS TO SUCCESS: AS SIMPLE AS A,B,C? [via Jason White]

MIKE SPEISER'S SECRETS TO SUCCESS: AS SIMPLE AS A,B,C? [via Jason White]

Predicting the Unpredictable

After graduating from college, I left the barren Arizona desert for Manhattan to take my first job. It didn't take long for my new Manhattanite friends to inform me that it was time to upgrade to wine from beer, so I enrolled in a wine-tasting class. But while it was great fun, I don't think that I was any better at assessing the quality of wine after I'd completed the class than I was going in, though I was much better at faking it.

It wasn't until years later that I discovered the secret, and it came via a Princeton economist. Understanding the fact that wine is an agricultural product, and as such is dramatically affected by weather, Orley Ashenfelter used decades of weather data and auction prices to come up with this equation for Bordeaux wines:

"Wine quality = 12.145 + 0.00117 winter rainfall + 0.0614 average growing season temperature 0.00386 harvest rainfall"

Assessing wine is considered an art rather than a science, but oftentimes creativity is about applying a little science to art as Orley did by taking into account weather and auction data. In an effort to inspire entrepreneurs to also turn ill-practiced art into science, below I share a few other examples.

The Mathematics of War

Sean Gourley, a physicist by training, wanted to gain a deeper understanding of what was happening with the war in Iraq. So he worked with a cross-functional group to understand "the mathematics of war." What he found was fascinating, that guerilla wars around the world in Iraq, Columbia, Peru, Indonesia and Afghanistan could be reduced to this equation:

Gourley tells the entire story in the video below, including how he arrived at the fact that alpha (the slope of the line) is 2.56. As he explains it, guerilla war has evolved to a state of equilibrium that can be defined by an equation that there is an optimal organizational structure for fighting an organized military. Guerillas either discover this structure, and implicitly, this formula, or they get killed off.

Mathletics, Sabermetrics and "Moneyball"

The story of Sabermetrics and statistics in baseball has been told many times, so I won't repeat it here. Suffice to say that if you have any interest in baseball stats, "Moneyball" is a must-read.

A story not as widely told is that of Wayne Winston and the Dallas Mavericks. A few years ago, Winston, a decision sciences professor from Indiana University, consulted the Mavericks on a new rating system aimed at measuring the impact a player has on the entire team. Points or assists don't offer much information in and of themselves; what's far more valuable information for a team is answering the question: "When player x is on the court, does our lead grow or shrink?"

From a 2003 New York Times article about the system:

Ignoring every traditional statistic for players, Sagarin and Winston have designed a ranking that is modeled on hockey's plus-minus system, in which players receive credit for being in the game when their team does well. Whether they actually score points or grab rebounds does not matter.

"Did you make the pass before the assist? Did you tip a ball to someone who made a shot? Did you set a pick? Did you take a charge?" said Winston, a fast-talking former "Jeopardy" champion who, like Sagarin, grew up outside New York City rooting for the Knicks of the late 1960's and early 70's.

"Nobody's got a stat for these," Winston said. "Ninety percent of basketball is made up of things there aren't stats for."

I just pre-ordered Winston's new book, "Mathletics," due out this fall. I can't wait to read it.

How to Develop a "Prediction Function"

Step 1:

Start with some insight about the relation between two things like the fact that weather determines wine quality.

Step 2:

Identify "output" data to tune your prediction function for example, historic auction prices as an approximation for wine quality.

Step 3:

Graph the data to examine the best way to extract the function. Does the data look like it fits a line? If so, do a simple linear regression (a very simple way to do this is the Regression function in Microsoft Excel's Data Analysis package - unfortunately, it's no longer available on Excel for the Mac, but you can do it elswhere). Does the data look like an exponential curve? If so, you can do a logarithmic regression (here is an online tool for a simple regression). And you can use much more sophisticated statistics to find the right equation, if one exists.

Step 4:

Profit.

There are so many areas in which having the ability to make dramatically better predictions would enhance our lives jobs, dating and health, to name a few. I can't wait to see what the future has in store.

Mike Speiser is a Managing Director at Sutter Hill Ventures. His thoughts on technology, economics and entrepreneurship will appear every week on http://gigaom.com/.

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Yoga Gives Back

Written by Kayoko Mitsumatsu

From Posture To Power: Microcredit Changes Lives On Both Sides of the Ocean

We can talk about making change. But affecting real change in the world comes from impacting the lives of individuals. It comes from empowering people to be independent and able to make a living on their own while at the same time being fully integrated in our interdependent global community. Sometimes it takes something that seems to be radical to make this change, but these shifts can be deceptively small. They can be even as small (or as large) as the cost of a Los Angeles Yoga class.

How could this be? In the practice of microcredit, lending seemingly small amounts of money to small-scale entrepreneurs allows them to succeed and change their circumstances. This is the fundamental basis of microcredit’s transformative power; it’s a revolutionary concept in finance. This practice shifts the emphasis from financial transactions being focused only about large loans and large scale businesses, which are out of reach of many one-person operations, institutions and organizations – to lending practices that actually make a positive difference in a person’s life. Microcredit practices based on social justice and empowerment operate through a combination of small-scale loans based on trust and community support, with structured repayment plans and programs that encourage savings. In these situations, people actually have the opportunity to solidify long-term change in their lives.

Dr. Muhammad Yunus and the Yoga Gives Back Team: Joel Bender, Leslie Hendry, Dr. Muhammad Yunus and Kayoko Mitsumatsu (left-right)

In 2006, economist Dr. Muhammad Yunus and the institution he founded, the Grameen Bank, were awarded the Nobel Peace Prize. This award was in recognition of their revolutionary efforts to create this micro-credit model, support sustainable economic practices, and provide an alternative to what were exploitive norms. When a person is caught in a cycle of poverty, they may become trapped in the system, particularly since large banking institutions have historically ignored people without assets or credit histories, who are just starting out and who may not have already proven themselves. Most banks prefer to lend large sums of money that represent a greater profit margin and are set up only for large loans in order to make a profit themselves. And even making it more challenging, people at the bottom of the economic scale worldwide have had to rely on moneylenders charging usurious terms and interest rates to obtain funds to plant the next crop, buy inventory of new equipment, or upgrade a business in any way. Institutions such as the Grameen Bank and their affiliates are offering another approach. It’s one that has significantly impacted millions of people.

As Dr. Yunus described in an exclusive interview with Yoga Gives Back in May, 2009, “We started in 1976, and today within Grameen Bank in Bangladesh, eight million people borrow micro loans, ninety-seven percent of them women.” This represents an enormous potential for change and empowerment that just did not exist on a large scale in this form prior to 1976.

There is a social cycle in economics, and Dr. Yunus explained this: “Poverty is not inside the person. Poverty is forced from outside. Poor people are as capable [a] human being as anybody else. They have the same power and energy, same potential. But they are denied such facilities. They cannot express themselves. Money is one of the most important items missing in their lives. You need a dollar to catch a dollar. You cannot catch a dollar with an empty hand. So, that first dollar, nobody has given to her. So she remains dependent on someone else. She has to be hired, to slave; she has to work to make food available on the table. What we have done, we have put that first dollar into her hands as a banking proposition. Conventional banks never come to the poor people. They go to rich people to make more money. The person who does not have a dollar – she cannot get it. So we did it. We did it in a way that is affordable to her. Because we do not insist on collateral. There is no collateral.”

While that may seem like a radical concept, the Grameen Bank has proven that their success is much more than ideological. Dr Yunus cited statistics for us, “The repayment rate is almost 100%, without collateral or anything. This is the strength of microcredit which is now spread all over the world. There are by now at least 150 million borrowers in the world today. Bu it is still very small comparing to the need. We need more microcredit organizations in the world so that more people can be reached.”

Yoga Gives Back is a 501(c)(3) nonprofit organization begun in LA, with the goal to provide a way for Western Yoga practitioners to give back to India, the birthplace of Yoga, which has given us so much. We’re heeding Dr. Yunus’ call to reach more people through expanded opportunities for and awareness of microcredit and have targeted India and Indian families, women, and would-be entrepreneurs, who would be otherwise stuck in the cycle of poverty that Dr. Yunus described. Yoga Gives Back supports microfinancing operations in India, through the Grameen Foundation, headquartered in Washington, DC. Donations go directly to Grameen Koota, Bangalore, South India and our YGB awareness campaign focuses on the real stories of how poor women are changing their lives with small loans from Grameen Koota.

Ms. Vinatha M Reddy

Grameen Koota was started by visionary teacher and philanthropist, Ms. Vinatha M Reddy (pictured, above) in 1999, who learned about Nobel Peace Recipient Dr Muhammad Yunus’ microfinancing and immediately began exploring ways of replicating his work in her hometown. In 2000, she started providing small microcredit loans, averaging $25.00 a month, to fifty local women. Today, Grameen Koota’s work is reaching out to over 280,000 women in Bangalore, Mysore and many areas of Karnataka state, in South India, making real impact on these women’s lives as well as on the local economy.

Yoga Gives Back

The Los Angeles-based Yoga Gives Back has a worldwide reach and began out of the inspiration and dedication of my Yoga mentor Joel Bender and me. Our group has suddenly started growing almost daily and our mission is shared by a quickly expanding and loving Yoga community.

When I was growing up in Japan, which is a very middle-class society, I had never experienced or seen any real poverty, especially growing up in Tokyo in 1960s and 1970s, when Japan's post-war economic miracle was taking place. Then, I had a chance to live in Brazil in the late 1970s for two years, where as a teenager, I saw the divide between poverty and wealth, the reality of the real slums, kids on the streets begging every time you stopped the car at the traffic light, all very much like India. Social injustice hit me hard.

Once I started Yoga practice and feeling my life being so enriched by it , I felt a need to use my resources to help others. I was producing a documentary on Social Entrepreneurship and learned about microfinancing. I shared this information with Joel [featured in the teacher profile in this month’s issue of LA YOGA] who had been looking for the way he could give back to India since his first visit there – so we teamed up.

When I think about the growth of Yoga Gives Back thus far, I give a lot of credit to the entrepreneurship and volunteer spirit of Americans, willing to embrace and support a new grass roots campaign like ours.

Kayoko Mitsumatsu, co-founder of Yoga Gives Back, is a documentary filmmaker whose films deal with social justice issues, including First They Killed My Father a memoir of a Cambodia’s Killing Fields’ survivor.

A Life Changing Story of Microcredit: Jayashree

Jayashree

Jayashree lives in the suburbs of Bangalore and is married and the mother of two children. We visited her at her humble dirt floor one room home for the first time in 2007. We were touched by her warm smile and most generous hospitality, serving us hot tea and cookies.

Jayashree was born into a very poor family in Bangalore. When she was a child, her family’s financial situation became so severe that she had to drop out of school and work at a garment factory. She toiled throughout her childhood and after she got married at fifteen, her meager earnings had to support her ailing in-laws. She had two children. Her husband’s rickshaw business was not enough to pay her sons’ education or secure food for the family.

In 2007, Jayashree learned from her neighbors about Grameen Koota’s microcredit program and applied for her first loan. She was granted a first loan of 7,000 rupees ($175), and immediately bought her husband’s auto rickshaw. Owning their own rickshaw business increased their income significantly.

Jayashree was able to pay back her entire loan in one year and became eligible for her second loan in 2008. Having proven her diligence, her second loan amount doubled to 15,000 rupees ($375). This time, she bought a sewing machine and started stitching bags. The family’s earnings have now tripled and she is earning 150 rupees ($3.75) a day. In addition, she opened a small shop next to her house to sell her products which is earning her an additional 100 rupees ($2.50) a day.

She is sending her elder son to a medical school. Her son dreams of becoming a doctor and thanks his mother’s business for providing his education, their own home and daily food.

To participate in a Yoga practice where the proceeds support Yoga Gives Back and directly impact the transformation of not only your own life, but that of someone in India, start your Thanksgiving week at Yogaglo, Sunday, November 22, 10:00 A.M. - 12 noon. Some of the teachers include John Sahakian, Felicia Tomasko, Alexandra Aiken and Ally Hamilton; more to be announced. Yogaglo.com; yogagivesback.com.

For more information on Yoga Gives Back or to host a Yoga Gives Back class at your own studio or location, visit: yogagivesback.org or contact yogagivesback@earthlink.net.