#MentalNote · Education · Random

Using the Fermi Method To Improve Estimations Skills

Physicist Enrico Fermi was one of the most brilliant minds of the 20th century. He won the Nobel prize in physics, held several patents and was best known for developing the first nuclear reactor. During career, he became well known for his ability to make fast, excellent approximate calculations with little or no concrete data. In one well-known example, when the first atomic bomb was detonated during the Manhattan Project, Fermi dropped a few scraps of paper as the shock wave from the detonation passed. After some coarse calculation, Fermi estimated the power of the blast from the motion of the scraps as they fell.

His estimation strategy spawned what we now call Fermi problems or estimates. These problems normally involve making justified estimations about an amount and their variance or minimum or maximum. These problems have been used in employee interviews (how effective they are is question for another day) to better identify a candidate’s ability to break down seemingly large unknown problems and create a reasonable estimate. Here’s an example of some common Fermi problems:

  1. How many plastic flamingos still exist in the United States?
  2. What is the total number of shots taken in one NBA season?
  3. How many hot dogs are bought at all the Major League Baseball games for one season?
  4. What is the average lifetime of a pencil?
  5. How many musical notes are played on your favorite radio station in a given year?
  6. How much popcorn is popped at the movie theater on an average Saturday?
  7. What is the probability that you have a doppelganger?
  8. How many hours of tv will you watch in your lifetime?
  9. How much gasoline does a typical automobile use during its lifetime?
  10. If everyone in our city donated one day’s wages to a good cause, how much money could be raised?

As you can see, most of these questions are abstract and unknowable but Fermi type problems rely on estimation, dimensional analysis, approximation, but most importantly, approaching the unknown from a knowable place. For example, taking a look at a question like how many hours will you watch tv in your lifetime, might look like a daunting and unknowable number. But we can approach it from a knowable place and come up with an estimate by asking a couple of key “knowable questions. For example, if I’m trying to figure out, “How many hours of tv will you watch in your life?”. Here are a couple of the questions you might ask to get you to a solid estimate;

  • What is the average lifespan of your gender based on where you live? (We know the average life expectancy of a male in the US is 78.4…based on US census data)
  • What tv shows do you watch frequently on a weekly basis – Daily Show (4*30 minutes), Dragon ball Super ( 1*30 minutes), GPS (1*1 hour) = 3.5 hours a week.
  • How does this extrapolate to other parts of my life?  (I probably watched 3.5 hours of tv now, including netflix, amazon prime, etc but I probably have decreased my tv watching as I’ve gotten older. I probably watched 15-20 hours a week when I was a child (4-17- thinking of my favorite tv shows and daily schedule) and 10-15 when I was a young adult. (18-29)
  • Do I think my time watching tv will increase or decrease? – Most likely increase. I’m pretty busy now so I’ll probably get to the point where its back to 6-8 hours per week. In the long term, I think i’ll have more free time and also will have kids that will want to watch tv with me.  

Once we’ve got a majority of the inputs, (duration of life, baseline on tv show hours) now we can start estimating amount of time per year and then develop an estimate.

  • 0-3 ( Not really sure but let’s just say I spent 30 hours a week watching television) – 4 years * 52 weeks * 30 hours = 6,240 hours
  • 4-17 (20 hours a week) – 14 years * 52 weeks * 20 hours = 14,560 hours
  • 18-29 (15 hours a week) – 12 years * 52 weeks * 15 hours = 9,360 hours
  • 30-40 (8 hours a week) – 11 years * 52 weeks * 8 hours = 8,580 hours
  • 41-50 (6 hours a week) – 10 years * 52 weeks * 6 hours=  3,120 hours
  • 51-60 (15 hours a week)  – 10 years * 52 weeks * 15 hours = 7,800 hours
  • 61- 78 (10 hours a week) – 18 years * 52 weeks * 10 hours = 9,360 hours

I will spend an estimated 59,020 hours, or about 7 years watching television during my lifetime.

With Fermi problems, it’s less about the primary questions and more about the questions you can ask to identify certainty and fundamental assumptions that  affect estimations. For example, three major assumptions I made to come up with 59,020 hours are:

  1. The rate of tv watching is consistent on a day to day.
  2. Tv watching is connected to the amount of free time I think I’ll have in a given week.
  3. I’ll live to be the average age (78.4 years)

There are other ways to go about approaching this question. You could take a subtractive approach and identify the minimum and maximum time you can have to watch tv. IE, if a sleep 6-8 hours for the rest of my life, spend 8 hours working, 1 hour exercising, 1 hour eating, how much time do I have to watch tv a day? What are some other pressures that can affect how much tv time I have? To get more granular, what does my weekend look like? What do I normally do on vacation. There are questions that could bring you to a more approximate estimate, but the time spent on the estimate should be proportional to the need for accuracy.

The Fermi method has practical applications, it can be helpful in day to day estimating in work and play. From a project management perspective, the Fermi method can be really helpful when developing out approximate hours for  for client / internal estimates on upcoming features or projects. Most importantly, start with what you know. How many people will interface with the project? Based on previous projects, how long do your processes like discovery, check-ins, QA, and etc. normally take? While each project is different in its own way, asking these questions help expose what you know and areas where you’re making assumptions. Over time, you can evaluate how well your assumptions play out after each project.

I challenge you to find ways you can estimate better buy identifying your assumptions and approaching unknown questions from a knowable place

business · Current Events · Technology · venture capital

The Real Opportunity to Re-Invent Healthcare

It’s been a while…. I’ve been quite busy over the last couple of months trying to build stuff….. I’ll explain in another post. In the mean time, I thought I’d share some content I had the chance to write for another reason on to my blog. I’ve realized I do a lot of writing but not a lot of posting. I hope with such a nice set up and audience, I’d switch that around for the rest of the year. So here’s an exercise I worked on a couple of weeks ago on defining an investment thesis for the healthcare sector. Thought it would be interesting to think of how the healthcare industry is changing as a whole and where the opportunities are for the entrepreneur, investor, and everyone else. 

Over the last 20 years, I’ve had a well rounded set of experience and exposure to the healthcare industry. I grew up in a healthcare household. My father worked for several cutting edge biotech companies and my mother has worked as a nurse in hospitals and did home care. I had cousins who all became different types of medical doctors. For several summers, I worked and interned at hospitals and pharmaceutical manufacturing facilities in my teens. I’ve been through two near-death experiences where I had to be hospitalized for an extended period of time due to mysterious diseases (a story for another day).

The healthcare industry faces some tough challenges in the next 10 to 20 years. An evolving regulatory environment and changing business models have created declining margins for public and private healthcare in the United States. While margins have declined, demand and costs have significantly increased. We’re seeing growth in our population but also a demographic transition. Baby boomers, for example, are entering a phase in their lives where healthcare will become the primary expense but with diminished savings and labor costs on the rise, how will baby boomers afford to have the same kind of care their accustomed to while dealing with a longer life expectancy and more expensive care?   

While the healthcare industry faces regulatory, demographic shifts, and margin challenges, there are some major themes that get me excited about its future. Healthcare, just like other industries, is shifting from responsive to preventative. With the proliferation of the internet, mobile, and other smart devices, healthcare is something that doesn’t just happen when you’re in a hospital. It has the potential to happen 24/7 and this has a significant implication on service delivery, business models, and product innovation.  Preventative medicine flips the traditional healthcare business model on its head and allows for an endless possibility in ways we can treat people before they ever step foot into a doctors office.

The shift to preventative health is also driven by access and the creation of information in ways we haven’t seen in the healthcare space. For example, I used 23&Me to learn about my genetic makeup/lineage but also received health reports. This information wouldn’t have been available to the average consumer or even a medical professional 10 or 15 years ago. We’ve also seen an increase in the digitization of health records too. Combined, I see a future trend of personalized and holistic healthcare service delivery that isn’t beholden to location or labor costs. This presents an amazing opportunity to solve for population growth and demographic shifts. We can improve quality of care and also deliver high-quality care at scale.

Africa · business · startups · Technology

Strengths and Weaknesses of Nigeria’s Tech Ecosystem with Chika Umeadi from Tiphub

I got a chance to talk about the Nigerian Tech Ecosystem with Andrew from Global Startup Movement Podcast. We discussed the following:
  1. Outside of access to capital, what are the common challenges for Nigerian entrepreneurs I works with?
  2. How has deal flow coming out of Nigeria evolved since I started Tiphub?
  3. Have I seen an uptick in startup activity outside of Lagos?
  4. Whats the balance of Venture vs. Angel capital in Nigeria?
Listen to it on:
Africa · business · Current Events · startups · Technology

Foresight Africa viewpoint – African entrepreneurship in technology: Challenges and opportunities in 2018

I wrote a viewpoint on African entrepreneurship in Technology for Brookings Institute’s Foresight Africa 2018 Report. Here’s a link to the blog post here.

My Notes:

  • My 1st published article in a major publication… ***touchdown dance***
  • Updates on Fundraising in Africa from 2017: Read this CNN article here.
  • After all the Black Panther fanfare, I wish I could add more information on the diaspora’s role in advancing entrepreneurship and technological advances In Africa. I believe they have a major role to play in funding, ideas exchange and actual implementation.

That’s all for now. Cheers!!

CU

#MentalNote · Self-Revelation

Life Debt

I enjoy watching movies during short flights. It helps me pass the time. This most recent trip back to Chicago was a little different. I had just concluded a successful week in Washington DC  and running a program for tiphub . We met a lot of great companies, and other stakeholders and a bunch of folks had a great time. Overall solid experience.

I found myself reflecting on my time in Washington DC and a couple of quote from Seneca hit me.

“Let us prepare our minds as if we’d come to the very end of life. Let us postpone nothing. Let us balance life’s books each day. … The one who puts the finishing touches on their life each day is never short of time.” Seneca

As I started to meditate on this quote, I realized I frequently forget to balance life’s book. So much, I’ve accumulated life debt. This debt operates similar to financial debt in a sense. It weighs you down, if you have too much, you lose out on opportunities you’d normally get, and you have less freedom.

I realized I procrastinated/ half stepped myself straight into an existence that is okay by most standards but only a small example of what I’m supposed to be.

I’ll most likely look at that moment as a turning point in my life. I realized what it really meant to live on purpose. I saw the past, present, and future all in one moment and saw what it meant to be fully committed…. All in…regardless of the probability of failure and more focused on the idea that the opportunity that passes may never come around again.

At this point I’m rambling but it’s like a light has gone on and life makes sense. Everything’s changed (except for my inability to write coherently.) for the better and I’m excited to see where this epiphany takes me.

Travel more…. you’ll start having these come to Jesus moments more and more.