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Posted on May 25, 2018 @ 10:13:00 AM by Paul Meagher
I drove down to the farm property on thursday to sell some square bales of hay from the barn. After my online and farm work was done for the day I went to visit
a local swimming hole and was pleasantly surprised to see that someone did some trail development since I visited last fall. I explored the trail
for awhile and, given my recent interest in Forest Bathing, I felt like this was a trail where a person could do some serious forest bathing. I took some
footage of a deep woody to riverine section of the walk. The ideal forests in this area are called Acadian Forests and are characterized by a diverse mix of hardwoods
and softwood species, often with brilliant colors in the fall. It is springtime during this walk so the leaves are still in the process of emerging. At one point in
the footage, I look at a rock type that is interesting and reminds me of coral rock.
On my drive down I decided to listen to Bill Mollison's 1983 Permaculture Design Course.
When I hit the play button, the part that started playing happened to be about the many ways in which water and trees are interconnected. He refers, for example, to a forest as a "standing lake" and trees as "columns
of water". He discusses how much surface area an acre of Eucalyptus Trees might expose to the atmosphere and comes up with an estimate of 1200 acres (there are studies on this). An intact forest is a huge condensing surface for water helping to regulate the humidity of the forest and the surrounds. He also discusses forest-based rain which occurs when humid air released by a forest supplies water to the atmosphere that causes rain downwind from that area of the forest. That area of the forest in turn adds humidity and the cycle is repeated. Remove large sections of forest and that type of rain does not happen.
I have some skepticism about these claims as do many scientists, but I do acknowledge that Bill is putting forward his own mechanical theories on the origin of precipitation which are quite testable. There is some evidence to support his claims. Bill views trees as a "living system" that has a more profound effect on the availability of water in the landscape than most scientists would claim.
Bill's discussion of trees and water offers another reason why the term forest bathing is so apt. If a forest is a standing lake why wouldn't we call it bathing when we walking in or near a dense forest canopy?
I don't think forest bathing is something I will do everyday. Sometimes I will just go for a walk around the block for my physical exercise. When I am at the farm I will do more forest bathing because there is lots of forest land around here and lots of it I haven't yet explored. When I am in my favorite spots in a forest, next to a steam, I am generally not thinking that I want to forest bath here. I have interests in hydrology, forestry, and permaculture that caused me to be there and are contributing to my enjoyment of the forest. The fact that I am forest bathing is often of secondary concern but sometimes, in particularly beautiful sections of forest, I may feel compelled to make forest bathing a priority so I don't miss the feeling of beauty that the forest is radiating.
The term forest bathing might also be used to help remind us that trees and water are interconnected in many ways. The forest is not just a carbon sink, it is also a water sink and source.
Happy memorial day weekend and I hope you have the opportunity to do some forest bathing and figure out what it means to you.
Posted on May 17, 2018 @ 10:57:00 AM by Paul Meagher
There are many types of thinking but for the purposes of this blog I propose to divide the universe of thinking into two types: Magical and Functional.
Magical thinking occurs when we don't understand the functional nature of something. Functional thinking occurs when we are attempting to understand how something functions or have figured out how something functions and can apply that knowledge to solving problems.
The world is very complex and our understanding of many aspects of it are at a magical level. How does your car work? How does the forest work? How does your home plumbing work? How does your home electrical system work? How does your computer work? You may think you know the answers to these questions but as soon as you are confronted with the problem of fixing or evolving these systems, some magical thinking is often revealed.
On my walk today I wondered how much of our thinking about starting a business is magical version functional. Some entrepreneurs believe that passion, hard work, and faith are key. This seems pretty magical to me but I don't know that I can criticize it too much in terms of results. Many of our ancestors had this ethos.
There is a bit of magical thinking involved in starting most businesses. The most critical piece of magical thinking are the leap of faith assumptions that define what the startup believes to be true, but without much actual supporting evidence in the early stages of the business. A major goal in lean startup theory is to test these leap of faith assumptions so they become a functional theory of the firm. Some magical thinking is at the core of starting a new business but it generally gets converted to functional thinking as the leaps of faith are tested and refined in the marketplace.
The term magical thinking is often used as as a put down in debates. A recent example is The Magical Thinking of Ecomodernism. The solution to alot of the problems of modernity may not be solved simply through a clear functional understanding of how things work, it may also require some magical thinking involving passion, hard work, and faith that local solutions can be found.
The book is a joy to read. It includes lots of forest imagery from Japan and you can learn alot about Japan from his discussion of Japanese forest culture and the role that forests play in contemporary cities in Japan. They really do appear to take the concept of forest bathing seriously in Japan with certain forests certified specifically for forest therapy.
Forest bathing sounds like it might be new-age tripping, but Dr. Qing Li reports alot of the research he has done over the years measuring levels of stress hormones, levels cancer killing immune cells, sleep duration, mood changes and other aspects of physical and mental health that changes as a result of exposure to forests. How much exposure, where, when, and why are all discussed in the book. You can get a preview of the art and science of Shinrin-Yoku by watching Kirsten Dirksen's interview with Dr. Qing Li.
I was under some stress this week and decided this morning that I needed to do some Shinrin-Yoku. I found a logging road leading through a young forest to an old pasture full of wild apple trees. When I exited the young forest I was drawn to a small stream that I wanted to follow back to the headwaters. I never got there but following a small stream through a wild apple tree forest is my idea of beautiful so it was an immersive way for me to forest bathe. I did manage to forget about my worries and stresses. On my drive back home I also had a breakthrough on the problem that was causing me the stress. Appears that stressing about a problem may block solving the problem. Shinrin-Yoku has many benefits.
Shinrin-Yoku is an approach to mental and physical health that is becoming more relevant as we spend more time indoors, in urban environments, and with our electronic devices. Shinrin-Yoku is about using all your senses again to experience nature. It would appear that forest trails between 2 and 4 kilometers offer a good dose of forest therapy. Doing it in the afternoon may offer more benefits than in the morning but for me the morning is when I find it easiest to do.
You don't need to live in a rural area to practice Shinrin-Yoku as many cities support nice walking trails through wooded areas. Some forests are denser with trees and better places to practice Shinrin-Yoku. One interesting figure in the book is the 40 most beautiful forests in the world which might be a good bucket list for those wanting to do some forest bathing tourism.
Posted on May 1, 2018 @ 07:12:00 PM by Paul Meagher
Wikipedia defines a fudge factor as an ad hoc quantity or element introduced into a calculation, formula or model in order to make it fit observations or expectations.
A common use of a fudge factor is in project management where you estimate how long a project might take and then multiply that time by some fudge factor to account for events or difficulties you can't anticipate. The size of the fudge factor might vary by task type or by how much estimating skill you have.
Another use of a fudge factor is in pricing your services. You might, for example, price your services differently depending on how busy you are. If you are busy already then you might multiply your going rate by some premium (e.g., x1.20 = 20% more) because you don't really need to add more work to your plate. If the customer bites at that price then it would be worth taking on the extra work but if they don't then you already have more than enough work at your going rate. Many different factors might influence your service pricing and the corresponding fudge factors you might want to use.
Fudge factors are also common in valuation where the value of a company is estimated to be some multiple of earnings (or some other quantity) common to companies in that industry. This reduces a very complex analysis to a simple rule of thumb that may or may not prove to be predictively accurate.
I recently did some year-end accounting for my farm and had to apply a fudge factor to my books to account for some uncertainty in my final numbers. A farm is like a small manufacturing plant that incurs lots of different types of expenses and receipts. The farm accounting fudge factor involved not claiming a certain amount of expenses that my bookkeeping told me I could claim. I left them unclaimed because I wanted to give myself a margin of error in case I was ever audited. The use of fudge factors in accounting is generally frowned upon and for good reason (see below), however, there is a cost to striving for extreme accuracy and there are judgement calls as to whether certain expense should be claimed. There is also procrastination and deadlines that force you to spend less time than you would like re-examining your receipts and numbers. To protect myself, and to terminate the accounting process faster, I used a fudge factor that involved not claiming a certain amount of expenses on the off chance that I might be audited. If audited, the government may end up owing me money. I can sleep soundly at night knowing that.
Fudge factors in accounting are often used to inflate earnings to make a company look more profitable than it is. Such practices are often called "creative accounting". Creativity in accounting is apparently a bad thing but you will often hear people say a good accountant will pay for themself - not because they are "creative" but are good at finding ways to decrease income and increase expenses. See The Ethics of Creative Accounting for more discussion of "creativity" as it applies to accounting.
Does the use of a fudge factor indicate that there is a problem with your approach to estimating, pricing, valuation, and accounting? It very well could be, but I also think that there is just alot of uncertainty out there that that involves diminishing returns to try to tame. You can keep on trying to estimate how long it will take to build a house but mother nature, suppliers, workers and financial institutions can all throw a wrench into your meticulously prepared estimates. People of action may be happy with throwing a fudge factor onto an estimate and getting on with the business at hand.
What causes these adjustments to be called fudge factors is that they seem ad hoc, not based in any solid theory but perhaps based on experience. The definition of a fudge factor does not indicate why we might be tempted to introduce an ad hoc quantity into our calculations. In this blog, I've provided a few reasons why we might be tempted which often comes down to a fudge factor being a strategy for dealing with uncertainty and time constraints. Because entrepreneurs and investors are often mired in uncertainty and have a limited amount of time to get things done, fudge factors may be the key to moving forward.
Posted on April 18, 2018 @ 09:31:00 AM by Paul Meagher
Last weekend I decided to walk the watershed at my ridge top farm property. The lowest area of our property has a marsh area that eventually turns into a running stream. It is the headwater area for the stream. The stream then runs for about 500 feet to the end of our property onto our neighbor's property.
As I followed the stream down I noticed 5 tributaries that joined the stream. In some cases these "tributaries" appeared to contribute almost the same volume of water so it would be difficult to say which stream was the "main" stream. A watershed does not have to end where the water meets an ocean or lake. You can arbitrarily stop at any point in your journey down a stream and say that you are only interested in the watershed before that point. For me, the end of my journey and my watershed was about 2 kms (1.25 miles) down the stream where
the first large pool of water forms. Because it is next to a road called MacKillop's Road, I decided to call the watershed the MacKillop Pool Watershed.
It came as a bit of a surprise to me that intimate knowledge of a watershed is now within my reach. All I had to do was follow all the tributaries back to their headwaters and I could better understand how the landscape creates the flow that is observed draining into the MacKillop pool.
I walked one tributary which took me far into the woods and increasingly into wilder country. Some bears are waking up and some coyotes are roaming so I decided to stop my journey before reaching the end. I'll finish the walk with a partner in the near future to see where the headwaters lie.
The next tributary I walked was the first tributary that meets the stream after it exits my property. I followed that stream quite a distance to a neighbors farm where the stream originates around a wet area of his field. I encountered the most debris so far on that tributary which I intend to clean up on my next walk when I have something to transport it out with. One of the main causes of debris in this area is the open fields and wind blowing stuff off properties that end up in low points in the landscape such as streams. One item that blew into the stream was Santa Claus (and some white silage wrap).
I still have 2 or 3 more tributaries that I will need to walk in order to visit the full MacKillop Pool Watershed. I'm looking forward to what I might observe and learn on these walks.
Fallen trees, dense alders, and spruce thickets are some of the obstacles that I frequently encountered as I walked the watershed. It is not a walk you do for pure pleasure. I carry a Fiskars billhook to help me get through really dense areas (and if I encounter some animal that wants me for a meal). One way to walk a watershed is by looking for "reaches" along the watershed. The term "reach" is used in geology to refer to a level, uninterrupted stretch of a stream. I find myself wanting to use the term "reach" to refer to the land beside and/or accross the stream that looks like the best way to get to the next point along the stream. When you are in the midst of many obstacles to your path, your plan is reduced to trying to "reach" the next viable point ahead.
The term "reach" is one that might be useful for entrepreneurs to have in their vocabulary. On the one hand you have a business plan which tries to map out the equivalent of a watershed, and then you have a reach which is how you actually navigate that watershed in a world full of obstacles. From where you are at, you need to continually look around you and figure out what is the best way to get upstream. There is no point in planning too far ahead given the uncertainty of the obstacles in your path so you look for a "reach" that at least keeps you moving in the right direction. And as you find and cross a series of reaches, you may eventually achieve the goal of getting to the headwater.
I didn't have a chance to go for my river walk for a few days so was restricted to only thinking about flow. The last couple of days I have
resumed my walks and vividly observed an interesting feature of water flow called backflow.
If you watch the water in a river go past you, you probably noticed areas in the stream where water seemed to swirl away from the
main body of the river flow and go backwards. It can be difficult to visualize what is going on in these areas just from observing
the water ripples. Fortunately, the last couple of days there have been ice plates floating on the river that can be used to help visualize these backflow forces. In this video, you can observe the ice plates whirling back into the eddy pool.
An observation is not really an observation until you make a statement about that observation that you believe to be true. For example:
The residence time of water in a stream is increased in backflow sections of a stream.
Water stays in the river longer where there is backflow because it cannot escape the backflow forces. This seems to be what is going on based on seeing the release and continued recruitment of ice plates into the backflow section of the river.
The art of observing is also the art of making observation statements that have some generality and importance. I could formulate the observation statement "there is a yellow rock protruding from the stream" but who cares about that observation statement? It is, however, important to make mundane observations in certain contexts. If you are designing a garden or landscape for a client, it would be important to note things like "ditch is overflowing", "client has 2 dogs", "sun at noon is over the
bird feeder from center of deck", etc... In the case of my backflow statement, it is a useful reminder that water does not flow at a uniform pace down a stream, the residence time of water may differ in different sections of the stream.
In Lean Startup Theory the goal is to learn about your market as quickly as you can by interacting systematically with it. There are some
specific recommendations from lean startup theory about how to measure this learning progress, but one simple metric might be how many significant observation statements you are able to come up with about your market and the running of your business.
These observation statements do not have to lead to immediate benefits in performance but the idea is that as you build up observation statements, and a truer picture of the world, that there would eventually be benefits in terms of better design or better running of your business.
We are not passive observers of nature and the observations that we make are often to see what effect various manipulations might have. These active observations are also an important part of the observations statements you might generate.
One way I intend to learn more about rivers to by making more observation statements. The backflow observation statement is a starting point. It leads me to wonder if I would be more likely to catch trout in backflow sections of a river than in other sections. If true, this could be regarded as the payoff for making these observations, but the payoff for me is to enjoy my river walks more by observing and learning from nature. A more general point is to suggest that a good way to measure learning (business or otherwise) is through the number and quality of observation statements generated from passive and active observation contexts.
Bill Mollison's 1983 Permaculture Design Course offers a good discussion on observation and making observation statements. Alot of his course consisted of making observation statements, debating them, relating them to other
observations and to theories, and making design suggestions based on the observation statements. Bill advised new landowners to spend some time observing and making observation statements about their property (e.g., 15 Things to Observe Before Starting Your Permaculture Design) prior to making any design changes to it as this is likely to generate better designs.
Posted on April 5, 2018 @ 06:06:00 PM by Paul Meagher
I'm getting ready to go out in the blustery cold wind to do some grape vine pruning for an hour or so. Sometimes I wonder why I do it? The question presupposes that we should live our lives in perpetual comfort instead of challenging ourselves against sometimes unpleasant circumstances.
The title of this blog was inspired by an essay in George Monbiot's book of essays called How Did We Get Into This Mess? (2016). The essay is called "Addicted To Comfort" and here is a sample of the impressive protest writing on display in that essay (and the book in general):
Had our ancestors been asked to predict what would happen in an age of widespread prosperity in which most religious and cultural prescriptions had lost their power, how many would have guessed that our favourite activities would not be fiery political meetings, masked orgies, philosophical debates, hunting wild boar or surfing monstrous waves but shopping and watching other people pretending to enjoy themselves? How many would have foreseen a national conversation - in public and in private - that revolves around the three R's: renovation, recipes and resorts? How many would have guessed that people possessed of unimaginable wealth and leisure and liberty would spend their time shopping for onion goggles and wheatgrass juicers? Man was born free, and he is everywhere in chain stores. ~ p. 25
To experience the fullness of life, it is necessary to get out of your comfort zone. I expect that once I start pruning I will realize that it is not such a bad thing to be doing. I will, however, pull on longjohns to add confort. I am not a masochist.
Ben Falk echoed this sentiment in his excellent recent video on maple surgaring. Ben Falk turns philosophical in this section of the video and ends with the admonition to "Stay vigorous, don't make things too easy".
I think entrepreneurship and private investing are also exercises in getting outside of comfort zones. These snippets are useful reminders of that.
Posted on April 4, 2018 @ 11:58:00 AM by Paul Meagher
This blog is a continuation of my recent blogs on rivers and flow patterns (see Part 1, Part 2, Part 3).
If you want to understand river flow you will need to study some watershed maps. The watershed of a stream is the collector area that feeds water to that stream. Properties of the watershed determine how that watershed responds to a rain event. The watershed response determines stream flow volume.
A digital elevation map (DEM) can be used to render the surface of the watershed landscape. Other maps can be overlayed onto this map to indicate, for example, infiltration rates and hydraulic roughness. Finally, if you overlay a grid onto these maps you can compute on a cell-by-cell basis (using slope, infiltration, runoff, roughness as parameters) the contribution of that watershed cell to the stream flow. You can add precipitation to this model to compute the response of the watershed and predict flow volumes.
This is a physics-based approach (versus the more common empirical/statistical approach) to simulating and predicting stream flow. It sounds fairly simple in theory but there are many details that need to be figured out if you ever wanted to do this in practice. A good book for learning those details is Distributed Hydrologic Modelling using GIS (3rd Ed., 2016) by Baxter E. Vieux.
A Geographic Information System or GIS is a piece of software that not alot of the general public uses. Now that I have a reason to use one, to map watersheds, I began looking around for a free opensource GIS system. From my research, the premier opensource version appears to be QGIS.
I am using a windows desktop operating system for the software so I downloaded an older stable 64-bit version (2.18.18-1-Setup-x86_64.exe) from http://download.osgeo.org/qgis/windows. This is a large download that installs alot of opensource geo software for windows so expect download and installation to take awhile. The latest version (v 3.0.x) can also be downloaded and run alongside the older version if you want to experiment with a buggier version of the software without as much tutorial support as the stable version. The QGIS software can also be run on other operating systems by finding the appropriate repository to download from.
My first impression is that QGIS is full of features that would take quite a while to master. There appear to be good learning resources out there for it. It is used in industry and by governments so it is not immature software. Powerful geomatic software is now within the reach of the average Jack and Jill.
To understand river flow we have to understand the larger context of the river. That larger context is called the watershed and it can often be defined precisely based on how the land drains.
A watershed is like the market for a product or service. It may be a small watershed that supplies a small first-order stream or it may be a large watershed that supplies a third-order stream. Properties of the marketshed determine the flow of traffic to your product or service. If you have alot of time on your hands, you might use GIS systems, overlays, and grid-based computing to model how consumer traffic might flow to your product or service.
Those who advocate for a bio-regional economy often make use of the watershed concept to delimit what is considered to be the local economy. Proactively, you should make an effort to trade with those who you share a watershed with. That seems like a crazy idea in some ways but in other ways it is reflective of how things worked historically and that history still bares an imprint on current trading practices if you look at trade through a watershed lens.
Another reason to trade with someone who you share a watershed with is because if that person lives upstream or downstream from you, then you are all interconnected by the various uses that you make of the water resource. Water quality and volume is a function of the whole watershed, not just some section of it. This is a very important connection that watershed users share and could be the basis of thoughtful trade patterns. Restricting your trade to just those within a certain distance from you (e.g., 100 mile diet) can cut across watersheds. That may not be that important to you, but it is a factor that is perhaps less arbitrary than a simple distance measure for defining what is local or not.
In conclusion, mapping watersheds is useful for understanding and predicting water flows. Techniques and technologies used for mapping watersheds might also be relevant to mapping marketsheds. Finally, the quest for sustainability dictates that the marketshed and the watershed should become more aligned.
The book covers different approaches to river science, more specifically flow prediction, involving neural networks, markov chains, information theory, spectral analysis, chaos theory (fractals), complexity theory (cellular automata) and monte carlo methods. I was a bit disappointed at first because I was looking for something a little more meaty about the mechanics of river flow and this seemed a bit too high level. I eventually picked up a book on hydrology for lower level details (Environmental Hydrology , 2015) which complimented Sean's faster-paced high level discussion of how river flow can be related to physics, geology and astronomy using modern tools and techniques. Sean discussed may interesting and complex topics is relatively short book (204 pages) in a way that was easy to read and entertaining. I recommend it if you have an interest in rivers and flow patterns.
To begin predicting river flow, it helps to have a time series consisting of a river flow measurement recorded at regular intervals of time (e.g., daily, monthly). Hydrologists try to predict these flows using different types of models. One type of model is an empirical one that statistically relates flow rates to dominant factors like rain fall, snow depth, temperature, previous day's streamflow, watershed topography, etc... These are often the types of models that are developed in practice for streamflow forecasting. Another type of model is a process model that uses physics equations to represent meteorological inputs and internal watershed characteristics. You run the model with the proper inputs and the model simulates expected stream flow. A final type of model is what I would call phenomenological that is based on extended observation and interaction with river flow. A beaver, for example, uses a phenomenological model to predict and alter river flows.
Humans are fortunate that we can develop empirical and process models of stream flow patterns, but it is interesting that a beaver can have a profound beneficial effect on water flows using only a phenomenological model based on observation and interaction with flows. In the Devon area of England, the wildlife trust has re-introduced beavers to an enclosed 6 acre area to study how they alter their immediate environment and downstream areas. Their main findings were that 1) beavers significantly increased biodiversity in that area, 2) they altered flow patterns so that downstream areas are less likely to flood because of the impounding and slow release of water from their dams, and 3) their dams act as a filter cleaning agricultural pollutants from the streamflow. Some of that research is reported in the Devon Wildlife Trust Beaver Project Update (PDF).
I would like to draw you attention to one graph from that report that shows the evolution of the dams over time. Starting from 0 dams in 2011 they have constructed 13 dams and completely altered and enlarged the flow of water through the landscape
I think it is worth keeping the beaver in mind when we think about modelling the flow of automotive traffic through a streetscape, the flow of foot traffic through a mall or store, or other flows that are of concern to us. We can certainly construct sophisticated models to explain and predict these flow patterns, but phenomenological models developed through sustained observation and interaction can also be powerful ways to understand these flows for the purposes of modifying them in beneficial ways.
Posted on March 7, 2018 @ 09:55:00 AM by Paul Meagher
On my morning walks by the river I take note of how much water appears to be flowing in the river. Lately the flows have not been that high because most of the snow has already melted and there has not been that much rain or snow for the last few weeks. Previously, when the snow melted the riverbanks overflowed onto roads and it was a very different river.
How do you explain and/or predict the flow of a river?
To predict flow you need to start by having a good measurement of existing flow. A standard technique is to measure the width
of the stream and the depths of the stream at various regular intervals then sum over these trapezoidal area estimates (A = Σ ai). You would then have to measure the velocity v of the water perhaps by floating a cork in water between two markers and timing how long it takes. Once you had area and velocity measurements you could compute a flow volume (Q = A x v). This flow volume would vary from day to day.
What factors might you use to explain and predict a river flow?
Explaining a river flow is different than predicting a river flow. A big factor in explaining a river flow volume is the number and size of tributaries leading into it. This factor stays fairly constant from day to day so is not very useful in predicting the daily variation in river flow. Other factors like precipitation, ground saturation, ground permeability, evaporation, etc. might be more useful in predicting the day to day expected flows.
Most cities are built along a river. Around half of those cities withdraw a major part of their water supply from upriver. Depending on the size of the city and its seasonal demand for water, this extracted volume could be a significant factor influencing flow rate.
A home property can also be the focus of an investigation into daily flow volumes. What factors explain and predict the amount of water you use on your property on a daily basis? Those on metered water have an advantage over non-metered users in that they can figure out those factors better because they have accurate flow measurements to go by (depending on how that usage is reported).
Cashflow is another type of flow that concerns entrepreneurs and investors. What are the factors that explain and predict the cashflow of a company? What is the time frame of concern in our cashflow projections - a day, a week, a month, quarterly, etc... The time frame determines how frequently we would have to measure cashflow to determine if the cashflow model is correct. Comparing cashflow models to riverflow models offers potential insights.
Donnella Meadows in her book Thinking In Systems: A Primer (3rd Edition, 2008) uses a slightly more complex stock and flow diagram to explain and predict the volume of living wood in a forest and also the lumber inventory associated with that forest:
There are many mathematical and graphical techniques you can use to explain and predict flows. The study of river flows offers a useful foundational metaphor for thinking about other types of flows (e.g., the flow of electricity is often understood in terms of water flows). The techniques needed to explain and predict stream flows might also be used to explain and predict these other types of flows as well. Something to think about the next time you are walking beside a river and looking for something to occupy your mind.
Posted on February 22, 2018 @ 08:15:00 AM by Paul Meagher
The Amazon is the largest river in the world. One of the reasons Jeff Bezos named his company after this river is because he intended his original online bookstore to be the biggest in the world.
Today I want to explore what it takes to be the biggest river in the world. I'm sure Jeff Bezos understands perfectly well why the Amazon is the biggest river. It is possible that he is using this knowledge to scale his own company.
One of the main reasons the Amazon river is the largest river in the world is because it has a Strahler number of 12. A Strahler number is a way of classifying streams based on the number and size of tributaries that feed into it. It is easiest to understand this numbering system by seeing an example:
The number assigned to a stream segment only increases when 1) two streams join, and 2) the number of both these rivers is 1 less then the stream they combine to form. When you get to the end of the Amazon river, adding a small tributary with Strahler number 1 does not increase the Strahler number of the river. It is only when two massive streams with Strahler numbers of 11 combine that the Strahler number of the ensuring stream becomes 12.
In the early days of Amazon the company, it grew by adding hard to find books to its inventory. Alot of small revenue streams from book sales fed into Amazon. Now that Amazon is a huge company, adding small revenue streams makes very little difference to its revenue flow. To grow significantly bigger, Amazon has to merge with some huge revenue streams such as grocery shopping and entertainment.
A stream is the visible manifestation of groundwater. The presence or absence of water stored in soil determines the flow characteristics of a river. Groundwater is like the customers that feed a business. The size of the Amazon river is a reflection of the groundwater that it has accumulated.
To compete against Amazon the company you would have to take the flow from one or more of its revenue streams. Amazon would be unlikely to notice flow lost as a result diverting small revenue streams, but it would likely notice if you tried to divert a revenue stream with a high Strahler number. The key is to not to get noticed by Amazon until you have a high enough Strahler number that you can fight back or maintain your ground. You may eventually decide to sell your flow back to Amazon.
Can a startup go from a small tributary to a huge river the size of Amazon without alot of merging? Very unlikely. The history of all the behemoths of industry is one of acquiring companies to become bigger companies. They merge like the Amazon river to become bigger companies.
In conclusion, the study of river networks may offer some insight into how companies grow over time.