262ventures.com

There is just too much good stuff flowing out of the New Yorker these days, say what you will about the ‘controversial’ cover.  I need to mention a particular article, “The Eureka Hunt“, in which Jonah Lehrer describes recent advances in neurological process of insights, which is extremely relevant to those working in the creative, scientific, and services industries.  The basic premise of the article is “How do we have those ‘Eureka!’ moments” when suddenly, seemingly out of nowhere, we solve a problem we have been struggling with.  I’m quite certain that every human being has had this moment, typically when we least expect it.  I recall solving many research problems in graduate school while sleeping or playing our indoor version of the basketball game HORSE.

The moral of the story, according to the conducted research, is that diligence, focus, and drive are required to get us through the necessary analysis and extrapolation of a problem, until we reach the point where a unique insight or leap needs to be made.  But at that point, those same qualities that we store in the the work ethic tool chest, need to be abandoned to allow insights to occur, to allow our brain to make connections between what our brain stores as disparate concepts.  The researchers suggest that only when we allow ourselves to relax, to allow our minds to wander can we invoke the required parts of our brain to make these connections.  What are the consequences of this research?  For companies that rely on major intellectual advances, it is important to foster an environment that can promote this relaxation.  A few examples: ping pong tables, yoga, guitar hero, a library of book, dart boards, surfboards.  The author even specifically mentions the success of Google, the corporate king of blending the work-relaxation environment.

What else can we do to stimulate insightful thinking?

We’re in the midst of putting some stuff together which you should hear about in the next coming months.  We’ll be back shortly.

I’m curious to see how much volume the gas bank mygallons receives and how much success they enjoy a few years down the road.

I distinctly recall standing in the lobby of building 66 in 2004 or 2005 with RDB discussing the, then unheard of, gas price of $2.75/gallon.  He had just read an article about a gas bank in the midwest which offered “gas forwards” to consumers and hedged their position on the CME.  The concept was really simple: you sell small forward contracts on oil to consumers, who do not have the capital or access to participate in oil forward contract markets, aggregate those positions and hedge them on the CME, and extract a small fee in the form of annual account fees and small premiums on gas prices.  The bank could hold its exposure to practically zero,  or could even speculate on the price of gas, while earning pure profit from the premium that the consumers pay.

I haven’t heard anything about that gas bank concept since, until today.  Gasoline has hit a price point which is causing a change in consumer behavior.  It would seem that the gas bank concept would have significant traction in today’s economy as consumers fear the upward ticking prices at the pump.  From books such as Predictably Irrational, we expect that the human brain tends to misprice the effect of recent trend.  Mygallons cleverly provides useful links to articles with titles like “$200 oil” or “$11 gas”, promoting that fear.  I would guess that there would be a lot more customers at mygallon’s website today than at the anonymous gas bank, RDB and I discussed, three years ago.

Final thought on this concept: There is no perfect gasoline hedge, only a correlated hedge through contracts on oil.  The airline industry had similar problems in hedging their costs of jet fuel.  Will this affect mygallons?