Monthly Archives: May 2014

The power law relationship in drug development

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All opinions are my own and do not necessarily reflect those of Novo Nordisk.

A few weeks ago a friend and I had the great opportunity to go see Nate Silver speak at the University of Washington. He’s a funny, engaging speaker, and for someone like me who makes his living generating and analyzing data, Silver’s work in sports, politics and other fields has been inspirational.  Much of his talk covered elements of his book, The Signal and the Noise, which I read over a year ago. It was good to get a refresher. One of the elements that particularly struck me this time around, to the point that I took a picture of his slide, was the concept of the power law and its empirical relationship to so many of the phenomena we deal with in life.

Nate Silver graph small

Figure 1: Slide from Nate Silver’s talk demonstrating the power law relationship in business–how often the last 20% of accuracy (or quality or sales or…) comes from the last 80% of effort.

Because I spend way too much time thinking about the business of drug development, I started thinking of how this concept applies to our industry and specifically the problem the industry is facing with creating innovative medicines.

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Drug development and the NFL draft

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All opinions are my own and do not necessarily reflect those of Novo Nordisk.

The NFL draft is happening as I am writing this post. And of the many draft-related pieces I’ve read in the past few days, one from Vox.com particularly stood out. The article, by Joseph Stromberg, describes research by Cade Massey and Richard Thaler (here and here) about the skewed and irrational choices often made by teams during trades of draft picks. In essence, teams are likely to pursue a strategy in trading up that suggests they believe they have a much greater ability to forecast the future performance of a given player than is actually the case. Put another way, rather than following a strategy of diversified risk, teams commit to a specific player that they feel they need to get, rather than simply seeing who’s available when they are scheduled to pick and choosing the best player on their draft board.

Historical analysis shows that the difference between various players drafted at the same position is often negligible; on top of that teams who aggressively trade down and gather more picks in the lower rounds generally do better in terms of the value they receive for the money they spend in salaries. One might argue this is an artifact in part of the NFL Rookie salary structure, but even without that, players taken in later rounds will always command smaller salaries. Getting similar value for less money is generally a good thing.

If you’ve read posts from this blog before you know where I’m going. Drafting NFL rookies sounds a lot like developing drugs. Continue reading →

The fall and rise of the LEGO Kingdom: A review of “Brick by Brick”

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All opinions are my own and do not necessarily reflect those of Novo Nordisk.

When people ask me what I did growing up, they expect me to say “surf.” I know this because when I tell them what I did for fun their next question is always, “What, you didn’t surf?” I didn’t. Still haven’t learned. Instead I did a lot of the things boys all over the US did. I watched TV. I hung out at the mall and at fast food restaurants. And I played with LEGO.

The brick fundamentally hasn’t changed since I was a kid. My son has a bunch and the basic essence is still snapping things together with that satisfying “click,” and the gradual accretion of form and function from individual, generic elements. Kind of like how life evolves, you know? And yet at the same time LEGO has undergone great changes in packaging, themes, toy categories, and target audiences. Today it’s one of the most respected and recognized toy brands in the world. But something I hadn’t realized until reading “Brick by Brick” by David Robertson and Bill Breen is how close LEGO actually came to crashing and burning in the 90s and early aughts, before recovering to once again become a commercial powerhouse.

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