César Hidalgo: evaluation

Transcript context

…I absolutely love that. Mean, there was a wonderful example in your book. You had you're talking about Barnes and Noble over there in Seattle, and they they they went up against Jeff Bezos and they said, well, you know, Jeff, we've launched a website and and we think we can do what you do better than they do. And they, you know, Jeff said, I don't think so. You know, you you might have a website, but you're a completely different type of business to us. We are geared up. We have the logistics. We can send individual things anywhere in in, you know, in in America. They were set up for wholesale and and retail. But but the thing is, so, know, they they could do the same thing, they were wired differently. So that brings in the idea of architectural innovation, architectural knowledge. So it's a very interesting concept that was introduced by Rebecca Henderson from HBS, and the idea is that when you innovate, often you have what would be called gradual innovation in which you are changing a component. So for instance, 1 of the classic examples in this literature is the manufacture of aircraft. So if you had propeller aircraft that had combustion engines, changing 1 engine for a more powerful engine or a newer engine model was something that you could do relatively easily because you didn't have to redesign the entire airframe. You just brought the new engine, replace old 1 with the new 1 and you were done. When jet engines were invented, you needed to redesign the entire airframe, you know, to be able to produce an aircraft. So the companies that were operating with combustion engines, they went bust, most of them, and there was a new wave of companies like Boeing, you know, that were newcomers at that time, that were specialized on jet engines because they were designing the entire airframe around the new engine. Now, in the case of Blockbuster and Amazon, those are very good examples of architectural innovation because you might think that, well, Barnes and Noble is able to ship millions of book to all of these stores, know. It has thousands, if not maybe tens of thousands of employees that are experts on the business of books and dealing with clients. And the idea of shipping the book directly to a consumer might look like a small incremental innovation. But in reality it was an architectural innovation, and when I do talks and I present this with slides, what I do is I show the picture of a Barnes and Noble, and then next to that I show a picture of an Amazon fulfillment center, which looks like kind of like this part of the airport that is you know sorting all of the different luggage, and that shows that no, that little idea of just shipping directly to consumer require a completely different organizational design, and the distance between the Barnes and Noble organization in this network that we were describing before in that model with the to the Amazon model was enormous in reality just because of that change. Exactly. And and this is the reason why in my opinion LLMs are not intelligent because they don't have this coarse grained dynamic adaptation of their architecture. But we're getting ahead of ourselves a little bit. So at the beginning of the book, you spoke about this concept of a person bite, which is roughly how much can 1 person know. And we're a collective intelligence. We work together. And you you spoke about this kind of power law learning curve, which is basically at what point does our learning asymptote? And and and we'll get to that as well. But there was 1 fascinating example you you gave you're talking about this this shipbuilding company. And over the course of, I think it was at the second world war or the first world war, they became much more efficient at building ships. And was that because of experience or was it because of process?…

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