Inverted Passion

Be passionate about the territory, not the map

All posts by Paras Chopra

Notes on how Facebook ads work

Posted on Author Paras ChopraPosted in Notes and Summaries

I was studying Facebook ads system for Nintee, made some notes that you might find useful.

  • Facebook ads work through auction: each ad opportunity has an auction, the winner of which is decided by total value, which is So in this case, your ad will be shown to more people if
    • You have a higher bid
    • Or, more people are likely to take action that you care about
    • Or, the quality of ad is high (not spammy etc)
    • Bidding is mostly automatic by Facebook, and the way it does for maximizing results is that it starts with low bids but then gradually increases it ads don’t end up winning the auction (i.e. has lower total value) Let’s say you have two products: a) highly attractive cake (low cost and super yummy) and b) broccoli, and both are competing for the auction
      • If the objective is to find the highest volume for a given total cost (let’s say Rs 1000)
        • FB will start with low bids for both, and since more people are likely to click on the cake ad, its estimated action rate will go up and for the same bid, it will end up winning the auction
        • The only way for the broccoli ad to win an action is to increase the bid
        • So given a fixed budget Rs 1000, the cost per click of broccoli ad will be much higher than for cake (purely because more people are interested in cake v/s broccoli)
        This is why running ads for a concept before building it could give an honest signal of its attractiveness
        • Since Facebook always tries to give maximum value to advertiser and the most relevant ads to its users, you can imagine it as a matchmaking machine that minimizes the cost it takes for advertisers to reach a relevant audience
        • So, a low cost per action from FB ads tells you clearly that a significant number of people are going to find it attractive

        A good analogy to understand all this is to think about is a game: ...  Read the entire post →

Notes on how Supercell is run

Posted on Author Paras ChopraPosted in Entrepreneurship, Notes and Summaries

Supercell, the company behind the massively popular Clash of Clans game, has one of the highest valuation per employee figures out there: they’re valued at $32mn per employee. That’s insane! How do they do it?

Via The World’s Most Valuable Per Employee Company: Supercell

1/ What struck me is the sheer number of games they kill each year?

They seem to be killing 9 games for each game they release. Some of these games have been in development for years, and have the potential to be in the top 25 games worldwide. And, yet, they get killed.

2/ Why are they killed? It’s because these games don’t meet their internal benchmarks (primary of which is 30-day retention).  ...  Read the entire post →

How to increase wealth for everyone

Posted on Author Paras ChopraPosted in Book Summary

I’ve started reading The Capitalist Manifesto, a book full of data on how free markets generate prosperity.

The author is nuanced and uses data and logic to show how we should be rooting for capitalism (instead of bringing it down).

Income and wealth inequality created as a function of entrepreneurship is not a bad thing per se. Risk-takers and innovators derive a higher income when they create much more value elsewhere.

Nobody hands over a million dollars to someone else for free. Profit earned by someone in free markets is typically a surplus made available to them because they expanded the pie for everyone. (And not because they stole it from someone else. Capitalism is NOT a zero-sum game.) ...  Read the entire post →

Notes from the book “Decoding the Why”

Posted on Author Paras ChopraPosted in Book Summary

Finished (well, skimmed) the book “Decoding the Why: How Behavioral Science is Driving the Next Generation of Product Design”. It’s a decent introductory book if you have not delved into behavioral science before, but if you have, most of the ideas in the book won’t come across as surprising or new.

Nevertheless, made some quick notes.

1/ Imagining the future as concretely as possible helps us align our actions towards the future self (otherwise, the future self remains an abstract, theoretical concept).

So, whenever you can, help people imagine the benefit of making a change in their life via your product. ...  Read the entire post →

Notes from the book “Magic Words”

Posted on Author Paras ChopraPosted in Book Summary

Just finished reading Magic Words by Jonah Berger and my notes follow.

1/ Most of us spend a significant amount of time in assembling the thoughts we want to convey, but assume the words to convey them as a given.

2/ This book – written by a professor of business – takes the view that the specific words we choose to communicate have an enormous impact on the listener.

3/ Since words paint an image in the listener’s head, the same idea presented differently can paint a very different image. ...  Read the entire post →

Why you will skim this article

Posted on Author Paras ChopraPosted in Economics, Psychology

Most likely, you’re going to read this sentence and hit the back button.

Still here?

Good, then you’re likely to scan through a few paragraphs in this article and then give up. (Unless, you’re a long-time reader and trust that my writing is worthy of your time. More on this later)

Why are humans so impatient on the web?

Back in the early 1990s, when the web was getting started, websites looked like this.

Today, the same website looks like this.

What happened?

The answer to the question of why the web is increasingly becoming more visual and less text-heavy will also shed light on how we decide what to spend time on, a question that creators and entrepreneurs need to be obsessed with. ...  Read the entire post →

Don’t sell your soul to the algorithm

Posted on Author Paras ChopraPosted in Personal, Philosophy

The danger of pleasing the algorithm to go viral is that gradually you end up selling yourself to big tech companies.

This is how it works:

  • Algorithms optimize for time spent on platform, because more time spent = more time for showing ads
  • Algorithms promote content that sucks in more people (i.e. content that can go viral)
  • Certain types of content is inherently more viral (rage inducing, hot takes, lowest common denominator, etc.)
  • Creators maximizing reach prioritize creating such kind of content
  • Since creation shapes thinking (as much as the other way around), gradually they become what they tweet

    This loop has two sinister effects:

    • For the non-creator, it appears that the world is falling apart as they see extreme, hot takes all around them as nuanced, well-balanced content is seldom promoted by the algorithm
    • Creators with promise end up losing their soul in the process

    All this to make the richest companies and their shareholders even richer.

    This is why we must refuse to be dictated by the algorithm.

    It’s hard, very hard.

    But what is more important than likes and retweets is having an authentic voice (irrespective of whether it’s reaching to the masses or not).

    PS: It’s also worth noting that the algorithm forces dull sameness of content because machines optimize for a singular metric: time-spent. While what we need to become better thinkers (and also to save the democratic process) is diversity. ...  Read the entire post →

Games are problems people pay to solve

Posted on Author Paras ChopraPosted in Book Summary, Mental Models

Good definitions are powerful. Lately, while reading The Art of Game Design, it became clear to me that the author’s definition of games makes a lot of sense. He defines games as problems that people pay to solve with either their time or money.

Unlike movies or books, games are not passive: they require an active participation and in that sense, they’re problems to be solved. And the fact that we willingly pay (with time or money) to solve those problems is fascinating.

Even though I’m not a gamer, I’m building a consumer startup in the behavior change domain and that’s pushing me to study games. Specifically, I’m interested in exploring what is that about great games that people will spend many hundreds of hours trying to master them, while most consumer experiences (including courses purchased or apps installed) have a ~90% churn of users on day 1 itself.  ...  Read the entire post →

The Anti-Productivity Manifesto

Posted on Author Paras ChopraPosted in Notes and Summaries

After a barrage of recommendations on my twitter, I finally ended up reading Oliver Burkeman’s Four Thousand Weeks. The central premise of the book is simple: everyone has got about four thousand weeks to live, and spending that limited time chasing efficiency is wrongheaded.

The message seems old. The entire self-help industry revolves around saying variations of it. Stay in the present. Enjoy the moment. Seize the day. But where the book differs from the rest is that it’s both poetic and philosophical. It’s the kind of the book that, once you finish, you end up mumbling: gosh, I should have written it. ...  Read the entire post →

Wealth is not money, it’s the things we use money for

Posted on Author Paras ChopraPosted in Mental Models

As an entrepreneur, money is obviously a massive motivation for why you’re doing what you’re doing. However, it’s essential to understand that money is not wealth.

Wealth is stuff we want and by that logic, people can be wealthy even if they don’t have a lot of money. In fact, because wealth is anything that is directly desired and attained, even animals and insects can be wealthy.

Money is not wealth

The reason money is so popular because it allows us to acquire (certain types of) wealth. Money will be worthless if what you desire cannot be bought, or if there’s nothing you desire. Because most of what we desire can be had for cheap in modern society, the importance of money in our society is reinforced by people who are excessively driven by status.  ...  Read the entire post →