Ouch. Profound and disturbing:

> Indeed, many of the tradeoffs involved with making a system human-proof will 
> appear to insiders and outsiders alike as inefficient, wasteful design that 
> consumes unnecessary resources and/or creates unnecessary red tape. To many, 
> this jars uncomfortably with the Silicon Valley mindset of circumventing 
> bureaucratic inertia and doing end-runs around inefficient processes.


https://medium.com/social-capital/social-scalability-june-4-2017-snippets-787892bd52a3

Social Scalability: 
On Friday, a reddit member posed a slightly urgent question in the Computer 
Science Career Questions section, and the agony expressed in the post title is 
hard to overstate:

Accidentally destroyed production database on first day of a job, and was told 
to leave, on top of this I was told by the CTO that they need to get legal 
involved, how screwed am I? | Reddit CS Career Questions

The response from the Reddit community was swift, sympathetic, and correct: 
Yeah, you may have messed up. But what happened is not your fault. It’s the 
CTO’s fault. No system should ever be designed such that one careless human 
error can destroy the entire thing; yet that seems to be precisely what 
happened. This sort of event is sadly more common than any of us would like; 
we’ve written about it in Snippets a few times before, and it’s present 
anywhere we see system design considerations being made in the name of 
“efficiency”. Indeed, it’s quite similar to another much bigger system 
catastrophe that occurred this week, when British Airways’ London operations 
were shut down for multiple days after a power surge knocked out their data 
center operations, and a single instance of human error may have been at fault:

British Airways IT systems failure: uninterruptible power supply was 
interrupted (by a panicking contractor) | Gareth Corfield, The Register

What both of these stories illustrate very well is the concept of Social 
Scalability. What is Social Scalability? A quick definition might be: “The 
redundancies and inefficiencies that protect a system from being inadvertently 
ruined by idiots or villains.” A better and more precise definition comes from 
Nick Szabo, a great currency and economics thinker, in his must-read post on 
Bitcoin and social scalability from earlier this year:

Money, blockchains and social scalability | Nick Szabo

Nick writes, (emphasis ours): “The secret to Bitcoin’s success is that its 
prolific resource consumption and poor computational scalability is buying 
something even more valuable: social scalability. Social scalability is the 
ability of an institution — a relationship or shared endeavor, in which 
multiple people repeatedly participate, and featuring customs, rules, or other 
features which constrain or motivate participants’ behaviors — to overcome 
shortcomings in human minds and in the motivating or constraining aspects of 
said institution that limit who or how many can successfully participate. 
Social scalability is about the ways and extents to which participants can 
think about and respond to institutions and fellow participants as the variety 
and numbers of participants in those institutions or relationships grow. It’s 
about human limitations, not about technological limitations or physical 
resource constraints.”

Social Scalability can partly be understood as what it isn’t: “efficiency”, or 
at least what appears to be efficiency on the surface. Bitcoin, for instance, 
is a computationally inefficient system for processing transactions compared to 
Visa or Paypal. But it’s socially scalable — it spends cheap computing 
resources in order to avoid the tradeoff between expensive human redundancy and 
systemic vulnerability to human error. Nick again: “Computers and networks are 
cheap. Scaling computational resources requires cheap additional resources. 
Scaling human traditional institutions in a reliable and secure manner requires 
increasing amounts [of] accountants, lawyers, regulators, and police, along 
with the increase in bureaucracy, risk, and stress that such institutions 
entail.”

Designing a system for social scalability must be done consciously and 
deliberately, and by people with prior experience with failure. Indeed, many of 
the tradeoffs involved with making a system human-proof will appear to insiders 
and outsiders alike as inefficient, wasteful design that consumes unnecessary 
resources and/or creates unnecessary red tape. To many, this jars uncomfortably 
with the Silicon Valley mindset of circumventing bureaucratic inertia and doing 
end-runs around inefficient processes. But in the end, such end-run pathways 
are what often lead to embarrassing unintended outcomes. And a certain reddit 
post.

What’s a take-home lesson here? Ultimately, we build technology to support 
humankind and its institutions. When we make decisions in pursuit of 
technological scalability — both in the narrow sense (in the code we write) and 
in the broad sense (in what companies get funded, for instance) — we may be 
inadvertently making social scalability sacrifices that go unnoticed. It’s 
uncomfortable, but it could be very valuable for us to think about recent 
consequences of software and the internet — Fake News, for instance — through 
the lens of technical versus social scalability. There are consequences to what 
we build.

In memory:

Jean Sammet, co-designer of COBOL, dies at 89 | Steve Lohr, NYT

More token reading:

Crypto tokens: a breakthrough in open network design | Chris Dixon

The meaning of decentralization | Vitalik Buterin

Programmable blockchains in context: Ethereum’s future | Vinay Gupta

Ethereum smart contract error costs cryptocurrency exchange QuadrigaCX $14 
million | Stan Higgins, Coindesk

Why the blockchain needs more failures to succeed | William Mougayar, Coindesk

Elsewhere in the world:

Bicycles are eating the lunch of China’s dominant car-sharing app | Li Tao, 
South China Morning Post

India will sell only electric cars within the next 13 years | Callum Brodie, 
World Economic Forum

Kenya’s $3.2 billion Nairobi-Mombasa rail line opens with help from China | 
Lily Kuo, Quartz Africa

The inside perspective:

What really happened with Windows Vista | Terry Crowley

“Like being in prison with a salary”: the secret world of the shipping industry 
| Rose George, Longreads

JPEG your ideas: lessons from Jeff Bezos on how to compress a message | Eugene 
Wei

Next-generation cancer drugs boost immunotherapy responses | Heidi Ledford, 
Nature

Other reading from around the Internet:

Bill Simmons signs deal to move The Ringer to Vox Media | Lukas Alpert, WSJ

Gears of War: when mechanical analog computers ruled the waves | Sean 
Gallagher, Ars Technica

The case for nations: the nation-state and its important legacy of social trust 
| Roger Scruton, WSJ

The rise of auto-complete culture — and why we should resist | Mark Wilson, 
Fast Co Design

Dick Costolo on Trump’s midnight tweets, taking a company public, and 
performing with Steve Carell | Inside the Hive podcast with Nick Bilton

“Secular Stagnation” even truer today, Larry Summers says | David Wessel, 
Brookings Institute

This week’s news and notes from the Social Capital family:

Toronto-based Wave Accounting has raised $32 million in Canadian dollars to 
continue growing and reaching more small businesses around the world:

Wave raises $32 million from National Australia Bank, RBC, Portag3 Ventures | 
Jessica Galang, Betakit

<img class="progressiveMedia-noscript js-progressiveMedia-inner" 
src="https://cdn-images-1.medium.com/max/800/1*lfNg3yyrIUSZZ1ESpNuytQ.jpeg";>
Wave is focused on the 95% of businesses in North America that have 0–9 
employees — the independent entrepreneurs and truly small businesses that 
occupy every nook and corner of our economy. These businesses aren’t 
necessarily using sophisticated accounting software to manage their finances; 
they’re more likely to be keeping their receipts in shoeboxes and passing 
shared versions of Excel spreadsheets back and forth. Wave gives these 
businesses an easy way to handle transactions, accounting and invoicing, paving 
the way for them to more easily apply for loans, lines of credit and other 
critical lifelines for company growth. They’re currently hiring for a number of 
positions in Toronto including software engineers, risk analysts, and 
videographers — please share with your favo(u)rite Canadians, and anyone else 
who might be interested.

Quick shoutout to Mary Meeker’s always excellent 2017 Annual Internet Trends 
report, featuring many of our friends — including Propeller Health, highlighted 
as an example of new tech-driven models for patient empowerment and health. 
Make sure to read the whole slide deck if you can, as it’s always excellent.

And finally, an inspiring lesson in podcast form: Ysiad Ferreiras from Hustle 
on all of the fundamentals of selling, and how to break into sales at a tech 
company if you’re coming from a background or community that may be unfamiliar 
with the tech industry.

Ysiad Ferreiras — how a kid from the Bronx became the VP of sales at Hustle | 
Breaking into Startups podcast

We also hear some great stories about Ysiad’s journey here: about how the first 
thing he ever sold, at 12 years old, was illegal cable boxes (which he 
cheerfully describes as “B2C sales”); his background growing up in the Bronx in 
the 90s and his experience with race, class and privilege; and so much more. 
We’re incredibly lucky to have Ysiad on the team at Hustle, and really 
recommend that everyone listen to this interview, even if you think you know a 
lot about sales. He can teach everyone a thing or two.

Have a great week,

Alex & the team from Social Capital



Sent from my iPhone

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