It turns out when our body gets excited about something, we can’t reliably tell what caused the excitement.

In David McRaney’s brilliant article, he explains how we routinely misattribute physiological arousal and how the most common target of misattribution is other people. It’s part of why doing challenging or exciting activities with your partner can help strengthen your relationship, and why roller coasters and scary movies can make great first dates — when we reflect on the time, we often assume that it was the person we were with that helped get our heart racing rather than the excitement of the activity.

The misattribution of arousal

Networks effects can lead to massive, rapid growth especially if you manage to get a virtuous cycle turning.

Amazon leveraged this model by Jeff Bezos in 2001 for mega growth. Amazon calls it a virtuous cycle (and some call it a virtuous circle). And, more recently, the Uber variation, by David Sacks explains much of Uber’s wild ride. The virtuous cycle is a form of flywheel where once it gets going it keeps on spinning.

When you build a platform that leverages network effects in the right way it can enable growth way beyond what has historically been possible.

Also, see Metcalfe’s Law, the business flywheel, exercise and sleep

The ‘Virtuous Cycles’ of Amazon and Uber

There don’t seem to perfect definitions for either recessions or depressions. A recession is commonly defined as two successive declining quarters of GDP, but it’s not gospel. And a depression is a kind of prolonged recession for 3–4 years. So I liked Harry Truman’s clarifying explanation — US president from 1945–1953:

A recession is when your neighbour loses his job.  A depression is when you lose yours.  —Harry Truman 

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Recession vs depression