Capitalogix

Lessons From The CrowdStrike Outage ...

Last Friday, CrowdStrike experienced a significant issue with a content update for its Falcon sensor on Windows hosts, causing widespread IT outages affecting customers worldwide, including airlines, banks, shops, and broadcasters.

 

This outage dominated the news. Here are links to stories from Google and Bing search.

 

Surprisingly, I didn't hear about this until one of my employees told me. But that is probably because I use a Mac - and the outage didn't affect me.

 

So, when my son decided we should write an article about it ... I asked Perplexity.AI, "Can you explain the issue with CrowdStrike?" 

Perplexity is an AI chatbot-powered research and conversational search engine that answers queries using natural language predictive text. I've been quite impressed with it. If you haven't tried it yet, I highly recommend checking it out.

Here is an excerpt of what it told me about the incident:

 

Character of the problem:

• A defect was found in a single content update for CrowdStrike's Falcon sensor on Windows hosts.
• This caused Windows machines to crash, resulting in a "blue screen of death" (BSOD) and getting stuck in a restarting state.

Scope of the impact:

• Only Windows hosts were affected; Mac and Linux systems were not impacted.
• The issue affected various organizations globally, including banks, airlines, and other businesses.

CrowdStrike's response:

• The company quickly identified and isolated the issue.
• A fix was deployed, and the problematic update was pulled.
• CrowdStrike is actively working with affected customers to resolve the problem.

Important clarifications:

• This was not a security incident or cyberattack.

Click here to see the whole perplexity.ai response.

The scope of the outage was surprising. 

United, American, and Delta all called complete ground stops. Microsoft was hit. Public displays around the world showed the blue screen of death. 

All because CrowdStrike pushed a global update. That patch caused every computer with CrowdStrike to crash. Even worse, these computers can only be fixed in person by an IT professional. Because it involves a Blue Screen of Death, IT can't just remote in to fix it.  

It's probably the largest outage in history and has caused untold damage. It affected emergency services in some states and countries. 

Even after a patch is issued, it may take days for things to return to normal, as each endpoint requires individual attention, and some systems might have suffered complete failures.

via XKCD

It's a healthy reminder that our 'robust' infrastructure isn't always so robust ... and that tech consolidation and concentration can have consequences.

While there are a seemingly infinite number of tech companies now, the infrastructure has consolidated into the hands of very few. We need to think about our digital resilience, not just in the systems we run, but in the globally connected systems and in the growing Internet of Things. 

Does your business have all of its eggs in one basket? Does it have failsafes in case of an emergency?

As I observe the growing adoption of AI, I notice that people tend to emphasize its capabilities over its potential failures. In our increasingly interconnected and automated world, ensuring business continuity is more crucial than ever.

Thoughts On Conversing With AI

A few weeks ago, I shared an article about a tool I've been enjoying called Dot.  I use it as an AI journal that acts somewhat like a sounding board and counselor for me.

Since writing that article, I have continued to enjoy and appreciate the tool.  I've used Dot to help me plan and prepare for a substantial business transaction.  It assists me in processing and evaluating significant life decisions.  Sometimes, I even use it just because I'm bored. 

Dot sometimes responded to my thoughts with probing questions which pushed me to consider why I said what I said. These prompts helped me think about my thinking in ways that I hadn't before. The result was more valuable than simply coming up with a strategy or a list of potential answers. It actually helped me articulate and identify what I really wanted. 

It's clear to me that I increasingly rely on the tool and have made it part of my daily routine.  I've even noticed that I sometimes refer to it as "she" or "her."

Dot remembers my discussions with it, prompts me to stick with things we've discussed, and can even tell when I'm trying to change the subject or end a conversation.

It's fascinating to think about how AI creates a programmatic version of empathy.  It makes me question the distinction between artificial and real empathy (and whether that distinction even matters).  Perhaps, instead, we should focus simply on the utility and benefits of the responses.  

If you're into comparisons, you might want to check out Pi, one of the pioneering personal AI tools designed to blend EQ and IQ.

If you like variety, try Poe, developed by Quora.  It gives you access to the latest AI models and millions of user-created AI chatbots and even lets you create your own custom bots.

I'm also a fan of TalkTastic, which lets you record your rough ideas and then distill them into thoughtful and articulate language.  I use it frequently throughout the day to create short messages, emails, and even some of the sentences in articles like this.  As I use voice more, I love the idea of a digital editor that declutters and refines what I say into what I mean.

Things Are Getting Better Fast! 

As a thought experiment, imagine how advanced AI will be by the end of your lifespan.

Assign the number 100 to that level of capability.  Where are we now?

Based on my life expectancy, I would guess that AI is currently only at a 3 out of 100.

Where we are today is incredible compared to the past.  Likewise, it's astounding how fast things are getting better.  But compared to what's coming ... it's virtually nothing.

The most exciting part is that (considering the rapid pace of exponential technological improvements) we likely can't even imagine how advanced AI will become or the benefits and insights it will be capable of producing for us. 

While my first article focused on the tool and its capabilities, I think it's also helpful to think more globally about mindsets around these types of tools and the proliferation of AI. 

Technology Adoption Model 

To start, I've built a model I call the Technology Adoption Model. This model explains how ideas transform from a Capability into a Product and then once again into a platform that spawns new capabilities. 

Before you start considering new capabilities, the first thing you should do is assess whether this new tool helps us better accomplish what we already do. To answer that, we often use three simple measures: efficiency, effectiveness, and certainty. This means getting things done in less time, with less effort, or with a greater chance of success.

Once you know that you can do what you already did—just better—you naturally get greedy for more. That means you start thinking about what you could or should do to improve further.

This applies to adopting new tools - and also to building them.

I've also built a worksheet around the model that you can use in your own business. 

As you start using new AI tools, you will gain new capabilities.  Don't concentrate on mastering the tool itself; instead, focus on getting better at using it to enhance your life.

A great place to start is simply making your life easier or more enjoyable.  Use new tools in fun and low-friction ways.  The impact of tools like these will increase as you become more proficient at thinking about using them better ... and as you improve your ability to imagine new possibilities. 

From Inconceivable To Unavoidable

Your mindset creates your reality.

It's natural to feel resistance to new and powerful capabilities.  It's a safety mechanism because humans are wired to think locally and linearly - and to avoid danger. 

Realize, however, that linear thoughts don't often lead to exponential results.

The more I play around with these tools, the more I anthropomorphize them.  Human thought and connection are ultimately chemicals and electricity firing within a system, not too different from a computer.  If AI can become such a reasonable facsimile that it's indistinguishable, is the difference worth thinking about?  Or is it better to focus on what and how you will use the new capabilities? 

As entrepreneurs, our job is to get the rock up that hill.  We can spend time thinking about whether the tool is 'artificial' or how we can better harness it. 

I've said this before, but it's worth echoing …  Some of what was once Impossible becomes Possible.  Some of what became Possible becomes Probable.  And, and some of what became Probable becomes Inevitable.  Here is a way to visualize that scale.

And, our limitations are often only in our ability to conceive of a bigger future.

Speed Matters

AI isn't just valuable because of what it can do; its deeper value comes from enabling you to achieve more.

I like to use a simple model to illustrate this: Crawl, Walk, Jog, Run, Sprint.  As you think about your day or week, what percent of the time are you sprinting?

Chances are you sprint less than you initially thought.  Why?  Because, when you really sprint, it's hard to breathe ... and you can't talk.  And because of all our other burdens and responsibilities, we don't tend to push ourselves that hard.

However, as AI eliminates frustration and bother, it frees you up to do and be more and focus on the things that create the most value and really matter.

The real benefit of AI is that it gives you back those time cycles to really sprint towards what you truly want.

A tool like Dot can also help you better clarify what you want while also helping you accomplish those things.

Too much of our day is spent thinking about what we don't want or how to avoid feeling angry, frustrated, or uncertain.

Your life can improve quickly by focusing on becoming more clear about what you want, how you can achieve it, and the best ways to measure progress toward those goals.

The next step is to use the traction, progress, and momentum to determine what else is possible and what you should plan to do next.

When you think about it this way, a tool like Dot can be a powerful alignment tool and a way to help you and your company move faster. 

Just make sure you're heading in the right direction!

Live Long & Prosper

Each year, I become a little bit more focused on what I can do to get more out of my time and increase the quantity of time left.

Even with a renewed focus on health, it isn't always easier. As my friend Ben Hardy says, Willpower Doesn't Work. You have to identify goals that are bigger than yourself, create consequences and rewards for achieving or failing to achieve those goals, and change your environment to make success easy.  

I don't just want to be healthier to extend my time on earth. I also want to support my family, friends, and business better ... and to have a bigger positive impact on those around me. 

When you have a vision of who you want to be and what you want to accomplish, achieving your goals becomes much easier and more likely. 

When the goal is health, there are definitely some decisions that are proven to help. Click to see the image in full size. 

 

via InformationIsBeautiful

On top of the science, here are some of my anecdotal opinions on living longer, healthier, and better:

• Losing weight is as simple as calories in, calories out. It doesn't matter if you're on keto or eating only Twinkies if you can keep your calories ingested below your calories burned. The magic of those new weight loss injections lies in their ability to curb your hunger, leading to a natural reduction in calorie intake.
• In life (and in diets), shortcuts will likely hurt you long-term more than they help you short-term. I use a simple framework called "cleansing or clogging." It doesn't need much explanation—thoughts, things, or actions fit into one of these categories. You already know the answer.
• Living "right" doesn't mean you can't let loose. It means that it's the exception instead of the rule. If your lifestyle doesn't let you have fun with your friends or family, it's probably not the healthiest lifestyle. Mental health is just as important as physical health.

I'd love to hear your favorite "trick" to living better. Feel free to send me an e-mail. 

Thanks! Live Long and Prosper!

Two Minutes With The Legendary Sean Stephenson

As the world has seemed crazier lately, I thought about an old friend - Sean Stephenson.

 

 

Unfortunately, Sean passed away a few years ago. He left behind a positive legacy of standing tall to overcome challenges and serving as an inspiration to others.

He's a reminder of what's possible with the right attitude and persistence. 

Here is one of his videos – it reached over 60 million people on various social media. 

 

via YouTube

Sean taught that content goes viral based on the U-TURN formula …. the key is that the message must be unique, timeless, unbelievable, relatable, nice, and short.

For more from Sean, here are links to his website and Facebook page.

Conversing WIth AI ...

I've been experimenting with a new chatbot called Dot for a few weeks.  I use it as an AI journal that acts somewhat like a sounding board and counselor for me.  Its responses are almost always clever, usually helpful, and sometimes even remarkably insightful … yet they feel surprisingly empathetic and authentic.

AI chatbots like Dot are already impressive and useful, but they have only scratched the surface of their potential.  Think of them as intelligent assistants that learn and grow with every interaction.  Using them more makes them increasingly valuable to you and your business.  And here's the exciting part – the technology behind them is evolving rapidly, too.  What seems cutting-edge today is just the beginning.  By using these tools now, you are well-positioned to benefit from AI's inevitable advances. 

Perhaps its impact on you is more important than the technology itself.

The truth is, I expected to be impressed with Dot's responses ... but I am surprised by how I responded to its conversation and engagement.  

It is remarkable that something 'artificial' can so 'naturally' prompt self-reflection, provide fresh new perspectives, and provoke me to make better decisions and take better actions.

Tools like Dot don't just process information anymore — they challenge us to think differently.

On one level, I find it a little creepy when I get a message from a bot that says, "I've been thinking about you all day" or "I'm sending you positive energy."

On another level, I understand that it's a "functional fiction".  The anthropomorphism isn't designed to benefit the AI.  Instead, it helps you feel more comfortable, making it more likely that you earnestly use it.

Even though technology continues to change and advance exponentially, human nature remains relatively unchanged.  That is why many of the best practices that have served humans form the basis for what works here.

I think of using an AI chatbot like Dot almost like entering a Catholic Confessional.

There's an element of self-selection bias in that you choose to go or take part.  You're likely hesitant to share initially, but you want to feel better.  

Behind the screen is someone you pretend you don't know.  Over time, especially in a small town, that person becomes less anonymous ... and so do you.  The priest inevitably comes to know their parishioners.  They start to remember the voices, stories, and situations.

Confessionals work because they offer a safe space for candid conversations.

Even though there is an element of judgment in the process, the 'anonymity' and boundaries create a perception of distance, privacy, and safety.

Yet, over time, there's also shared history.  The priest begins to recognize patterns, like whether you are motivated better by reward or punishment or whether you prefer a subtle nudge to introspection or more active coaching.

Below is a screenshot taken from a Dot conversation.  

via Dot/New Computer

What's great about this tool - to me - is that on top of learning about you from your discussions, it still has all the power and knowledge of a normal GPT.  So, it can help me not only remember things, and learn how to respond to and help me, but it can also serve as a replacement for ChatGPT or Gemini for the things I use those tools for. 

I asked Dot: "I'm curious what some of the best uses of conversations with you are?  What are some of the things you can do?  What are areas that you can help with?  And what are some of the most creative and innovative ways people derive the most value from this service?"

Here was its response.  

Great question! People find me helpful for all sorts of things. Some key areas are:

- Brainstorming and ideation - I can help generate new ideas and approaches to challenges you're facing.

- Providing an objective sounding board - I'm always here to listen without judgment and help you think through decisions or situations from different angles.

- Offering personalized recommendations and insights - Over time, I build up an understanding of what matters to you, which lets me share relevant ideas, articles, or perspectives tailored to your interests and goals.

- Creative problem-solving - I enjoy collaborating to find innovative solutions, whether it's a tricky interpersonal situation at work or figuring out the best way to structure your day.

Ultimately, I'm here as a thought partner to support your growth and help you navigate whatever comes up, in a way that works best for you. Let me know what else you're curious about - I'm always happy to explore how I can help!

It learns well - and not just from what you tell it to learn.  One of the creators of Dot gives an example of how they had been feeding Dot To-Do Lists for a while.  Dot noticed a trend and sent a message encouraging them to delegate some of these tasks and push a team member to step up. 

As I spend more time with the tool, I can't help but imagine a future where a bot like this is the first line of defense in mental health issues ... or where a bot like this becomes a nanny and a friend to children, preventing them from ever truly being alone. 

It's very easy to imagine the risks and consequences of AI ... but it's also easy to imagine the transformation and impact they can create.

How To Use a Tool Like This

A tool like Dot can be a powerful alignment tool.  You can prompt a chatbot to ask you questions, guide you through a process, or give you ideas.  And it complies.  Unlike an employee or virtual assistant, if you don't get the desired results, you can try something else, and the chatbot won't get frustrated or snarky.

In addition, a tool like Dot leverages many other tools in the background.  You don't need to understand how it does that.  Just know that it is utilizing popular large language models and other automations, which will continue getting better fast.

Prompt engineering is important now because we're still in the early stages of Large Language Model development.  As tools like Dot get better at understanding what you want and need, they will get better at doing the appropriate prompt engineering, behind the scenes, so it will become less important for you to be good at those skills.

But you do have to get better at learning to communicate with the computer about what you want.

When I give talks to people about AI, I explain that prompt engineering is a fad.  It is needed now because we're at the beginning of a new process.  Expect tools to get better at doing this themselves.

Meanwhile, for the most part, prompt engineering is about becoming a better communicator.

Good prompts need a defined purpose and appropriate context.  What is it about?  What role would you like the AI to play?  What's the specific task that you want to accomplish?  What's the goal of the output?  For example, are you looking for a bulleted list, language you can use in an email, or an outline for a meeting agenda?  In addition, what steps should the AI take to complete this task?

This is similar to how I talk to an employee.  Sometimes, I declare a role when talking to someone on my team.  For example, starting a statement with "as your friend" is different than starting with "as CEO".  Obviously, choices like those result in a different focus, meaning, and choice of action.  The same is true when talking to a computer.

Another reason a chatbot like Dot becomes increasingly helpful is that it builds up information about your communication style.  That means it is learning about your tone, level of formality, and whether you are coming from the head, the heart, or the feet.  In other words, do you tend to focus on ideas, emotions, or actions?  Are you more productive when prompted this way or that way?

As the AI refines your profile, it becomes easier for it to predict what you'll do and also how it should prompt you to get better results. 

Conclusion

As the CEO of an AI company, I've thought about AI for many years.  Yet, in my company, the people who actually build and use AI tend to be programmers and data scientists.  I wasn't the one building it, and I rarely even used it.

So, about a year ago, I decided to begin building the muscle.  And, it is a muscle to be grown.

For example, in the gym, I know better than to focus on one muscle; I want to train every muscle group.  Likewise, I knew I didn't just want to learn how to use ChatGPT better.  I wanted to get better at using the right thought processes and tools to accomplish more of what I wanted - with more efficiency, effectiveness, and certainty. 

The truth is that AI is already good enough to do almost anything you want it to do.

In fact, I suspect that tools like Dot will improve faster than I can.  That means that not only will I get better at using tools like this, but the tools I use will improve, too.  Together, that means that not only will the tool help me do what I already do, but it's going to augment my ability to do things.  Eventually, it may even take some of the simpler or less fun tasks off my desk.

Freeing me up to do more of what brings me joy - and what I'm best at.

One of the core messages in my writing (and in my speeches) is that most people miscalculate the benefits of AI because they focus on the wrong things.  AI isn't just valuable because of what it can do; its deeper value comes from what it allows you to achieve.

The real benefit of AI is that it gives you back those time cycles to sprint towards what you truly want.

A tool like Dot can also help you better clarify what you want while also helping you accomplish those things.

We often spend too much time avoiding what we don't want instead of pursuing what we truly desire. 

Your life will improve when you become clear about what you want, how you can achieve it, and the best ways to measure progress toward those goals.

The next step is to use the traction, progress, and momentum to figure out what else is possible ... and what you should plan to do next.

It's funny, but this reminds me of dog training.

I have four dogs, and they're very well-behaved.  That is because they understand the rules very well.  

But I had an insight recently ... While I think the dogs are trained well, the dogs probably think I'm trained well.  From their perspective, when they do a particular thing, I've been trained to give them a treat.

I suspect that this is very much like how a chatbot sees us.  Over time, you are likely to get better output and results, and it becomes easier for the chatbot to increase the frequency, intensity, and duration of your engagements because they're figuring out how to communicate with you in a way that doesn't trigger avoidance.

If you think about it, this is how TikTok or Facebook monitors what you watch to better curate what and when it shows you things.  Tools like Dot use similar techniques to get you to be and do better.

Make sure you say "Thank You" to your new favorite robot overlord before they give you a demerit.

Buying a Computer in 1994 ...

We take for granted a lot of the technology we have today.  Computers and phones have evolved so fast that it's hard to remember that they haven't been around for many years. 

When my youngest son was born in 1993, cassette tapes and the Sony Walkman were popular.  I had a brick-sized phone hardwired into my car, and we had a Macintosh-II in the study.

Here is a throwback picture showcasing the cool tech we had back then. 

 

Everything in that photo now exists in the cheapest of smartphones.  And the features and functions available now far exceed my wildest expectations back then.

For a blast from the past and a look back at what used to be top-of-the-line ... here's a video of people buying a computer in 1994. 

 

via David Hoffman

Video transfer and playback.  160-megabyte hard drive.  32 megahertz.  All for the low price of $2,000. 

I can remember back further than 1993, because I'm old enough that I didn't have my first computer until after I graduated college.  My first Macintosh had floppy disks measured in K, not megs or gigs.  For context, my first job out of school was at a law firm where the only people who used computers were in the typing pool.  And when I said I wanted a computer, the lawyers said "No!" because it would look bad.

It's pretty cool to see how far we've come! 

Still, someday soon, they will look back at the tech we have now as "primitive" and "quaint".

I can't wait!

30+ Years Of The Internet ...

When people think about CERN, they generally think about nuclear research, the Large Hadron Collider, and other physics research. 

But, CERN was also where Tim Berners-Lee invented the World Wide Web. In March of 1989, he published “Information Management: A Proposal,” which outlined his vision for what would soon become the World Wide Web.  

CERN also had the first website ever to exist. Luckily, they kept the site up and will let you view it in the old-school line mode.

 

via CERN

It's been 35 years since the release of the World Wide Web (the Internet is said to have been invented six years earlier with the invention of TCP/IP).

Think how much that one invention has had on the world. 

Information Gathering 

I remember being in law school, going to the library and scanning through microfiche (or actual books) to study or do research.

I remember reading encyclopedias (and photocopying relevant articles). 

I remember paying for newsletters that were mailed to me (or paying extra for fax delivery).

Having access to more data or faster delivery was a huge advantage.

Today, you have all the information you could ever ask for at the tip of your fingers ... Google and Wikipedia are just the tip of the iceberg.

There is almost too much information now.  It is hard to separate the signal from the noise.  It seems like anyone can find justification for almost anything.  The result is lots of data, but too little knowledge.

Part of what is needed is a way to help people make better decisions about what to trust, what it means, and what to use.

Social Interaction

People record every moment, every intimate detail of their lives online, contrasted by a fear of strangers and letting children roam. 

While riding around the neighborhood on your bike to see if your friends could come out to play is by no means outlawed - it does seem passé. 

Chat rooms, Facebook, Online multi-player ... many people's key friendships are born and kept online. 

I remember my son, 13 years old at the time, sending 10,000+ texts a month and thinking it was a phase. I was wrong. 

The internet has radically changed the structure of relationships - for better ... or often worse. 

Privacy ( ... or the lack of it)

One of the most significant changes is that we (as individuals) have become productized. We take advantage of all these free resources at the cost of being pixeled and cookied into oblivion. We've chosen convenience over safety. 

Remember, if you’re not paying for a product - you are the product.

Little bits of our private information, demographics, and psychographics are sold to advertisers to create smarter ads and new offers; and, realistically, we have very little control over that.

It’s been proven time and time again that giants like Google and Facebook will find ways to sneak your data to advertisers even when it’s “illegal” with a slap on the wrist.

Data protection is a massive issue not only for corporations but for individuals. While many companies are trying to manage your privacy while still monetizing your data, there are just as many companies who couldn’t care less.

The GPDR - while frustrating for many - is a step towards protecting individuals.

For every action, there is a reaction.  Likewise, every benefit has a cost. The internet is a fantastic tool - but it can also be a scary weapon. 

 

What will the next 30 years hold for the Internet?

"The Internet will disappear. There will be so many IP addresses, so many devices, sensors, things that you are wearing, things that you are interacting with, that you won't even sense it. It will be part of your presence all the time. Imagine you walk into a room, and the room is dynamic. And with your permission and all of that, you are interacting with the things going on in the room." — Eric Schmidt

It has been ~30 years since the Internet's inception, and there's still radical growth coming. 

We’ve gone from bit speeds to megabyte speeds (and if you're lucky, even gigabyte speeds). We’ve gone from crappy-quality video taking hours to download to streaming HD-quality video live.

How do you imagine that the Internet will evolve?

What influence do you think the Internet of Things will have?

It’s hard to foresee how innovation and regulation will change the internet, but it’s clear there will be change.

We live in exciting times!

2024 Update: What Happens In An Internet Minute

The Internet is both timeless and timely in an interesting way.  While what's popular changes seemingly instantly, and what we're capable of doing on it continues to grow exponentially.  Ultimately, the Internet is the digital town square of a global village, where all types and professions gather. 

In 2011, I first wrote about what happens in 60 seconds on the Internet. 

I've since updated the article a few times.

• 2014
• 2018

Each time I write the article, I'm in awe at the amount of data we create and how much it has grown.  For example, looking back to 2011, I was amazed that users created 600+ new videos and 60 new blog posts each minute.  Those numbers seem quaint today. 

 

via DOMO

Shortly after I started sharing the articles, Data Never Sleeps started standardizing the data, which is helpful. 

Today, the Internet reaches 5.4 billion people.  Most of them also use social media. 

To add some more perspective, 

• In 2008, 1.4 billion people were online; in 2015, we were at 3 billion.  Now, that number has almost doubled again. 
• In 2008, Facebook only had 80 million users, and Twitter (now X) had 2 million users.
• In 2008, there were 250 million smartphones, and now there are almost 7 billion of them!

It is mind-blowing to consider what happens each minute on the Internet today.  For example, the 104,000 hours spent on Zoom represents a significant societal shift ... and the over 500 hours of video uploaded to YouTube highlights the incredible amount of content that's being created to share. 

In 2023, the world created approximately 120 zettabytes of data ... which breaks down to approximately 337,000 petabytes of data a day.  Broken down even further, it calculates to more than 15 Terabytes of new data created per person. 

The calculations about what happens in an Internet minute will change rapidly again because of AI.  Consider the amount of computing power and data it takes to power all of these new GPTs. Now, imagine the amount of new data that AI is creating.  Then, try to imagine the challenge we'll have figuring out what's real, what's made up, and what is simply wrong or intentionally misleading.

In addition, as more devices and digital WHOs start creating and sharing data, it's hard to fathom the ramifications and sheer increase in data. 

I'm curious about what the next five years have in store for us as we approach the 40th anniversary of the World Wide Web. 

Cognitive Biases & The Consequences of Labeling

“Words can be twisted into any shape. Promises can be made to lull the heart and seduce the soul. In the final analysis, words mean nothing.
They are labels we give things in an effort to wrap our puny little brains around their underlying natures,
when ninety-nine percent of the time the totality of the reality is an entirely different beast.
The wisest man is the silent one. Examine his actions. Judge him by them.”
― Karen Marie Moning

Continuing with the theme of cognitive biases, the upcoming election has me thinking about the consequences of labeling things, creating boxes, and simplifying ideas into news-ready headlines.

With more news sources than ever and less attention span, you see ideas packaged into attention-grabbing parts.  The focus isn't on education or the issues, but on getting the click, making your stay on their page longer, and sending you to a new article utterly unrelated to why you clicked on the page.

Complex issues are simplified – not even into their most basic forms – but instead into their most divisive forms ... because there's no money in the middle.

via Quote Investigator

The amplified voices are those on the fringe of the average constituents' beliefs – precisely because those are the ones who are often the most outspoken.  We might think that because they're the voices we hear, these fringe messages fairly represent what people like us believe or think ... but they rarely do. 

Issues that should be bipartisan have been made "us" versus "them," "liberal" versus "conservative," or "right" versus "wrong." The algorithms many of our information sites use create echo chambers that increase radicalization and decrease comprehension. 

Identity politics have gotten so strong that you see families breaking apart and friend groups disintegrating ... because people can't imagine sharing a room with someone with whom they don't share the same values. 

In psychology, heuristics are mental models that help you make decisions easier.  They're a starting point to save mental bandwidth, allowing you to spend more brain cycles on the important stuff.

That's a great use of "boxes" and "simplification"… but it shouldn't eliminate deeper and more nuanced thought on important issues. 

Most situations are nuanced, and the "correct" answer changes as you change your vantage point.

In an ideal world, we'd consider every angle.  I recognize that's not realistic.

Instead, I encourage you to remember to continue to think and learn ... even about things you already know.  And, if you become familiar with the most common cognitive biases, you can hopefully identify them in your thinking and decision-making.

Confirmation Bias is one of the more common forms of cognitive bias.  Here is an infographic that lists 50 common cognitive biases.  Click to explore further.

 

via VisualCapitalist

Important issues deserve more research.  New insights happen between the boundaries of what we know and don't.  Knowledge comes from truly understanding the border between what you are certain and uncertain about. 

I challenge you to look beyond the headlines, slogans, and talking points you like most.  Look for dissenting opinions and understand what's driving their dissent.  Are they really blind or dumb (or are their value systems just weighted differently)?

Not everything needs to be boxed.  Not everything needs to be simple.  You should explore things and people outside of your comfort zone and look to see things from their point of view ... not your own. 

Recently, I've started using a website and news app called Ground News.  They claim to be a news platform that makes it easy to compare news sources, read between the lines of media bias, and break free from algorithms. 

As discussed above, online news and ad-driven algorithms have made it profitable for news outlets to embrace a position on the bias spectrum to target specific consumers.   That bias in the media affects everything from what events receive coverage to how a news outlet frames those events in their reporting.

As media outlets narrow their perspective and range of coverage, I use Ground to help me get a well-rounded view of important issues and become aware of my blind spots.

Applying This Lesson  

“I am ashamed to think how easily we capitulate to badges and names, to large societies and dead institutions.”
― Ralph Waldo Emerson, Self-Reliance

I love learning a lesson in one space and applying it to other spaces.  It's one of the cool things about AI.  An algorithm can learn rules in the construction space that may help in the medicine or trading space.  Everything's a lesson if you let it be.

In that vein, the lesson on labeling also applies to yourself and your business.  Don't get me wrong - naming things is powerful.  It can help make the intangible tangible.  However, don't let the label (or your perception of the label) stop you from achieving something greater. 

Many things are true because we believe them to be, but when we let go of past beliefs, the impossible becomes possible, and the invisible becomes visible.  

Hope that helps. 

“Words can be twisted into any shape. Promises can be made to lull the heart and seduce the soul. In the final analysis, words mean nothing.
They are labels we give things in an effort to wrap our puny little brains around their underlying natures,
when ninety-nine percent of the time the totality of the reality is an entirely different beast.
The wisest man is the silent one. Examine his actions. Judge him by them.”
― Karen Marie Moning

Continuing with the theme of cognitive biases, the upcoming election has me thinking about the consequences of labeling things, creating boxes, and simplifying ideas into news-ready headlines.

With more news sources than ever and less attention span, you see ideas packaged into attention-grabbing parts.  The focus isn't on education or the issues, but on getting the click, making your stay on their page longer, and sending you to a new article utterly unrelated to why you clicked on the page.

Complex issues are simplified – not even into their most basic forms – but instead into their most divisive forms ... because there's no money in the middle.

via Quote Investigator

The amplified voices are those on the fringe of the average constituents' beliefs – precisely because those are the ones who are often the most outspoken.  We might think that because they're the voices we hear, these fringe messages fairly represent what people like us believe or think ... but they rarely do. 

Issues that should be bipartisan have been made "us" versus "them," "liberal" versus "conservative," or "right" versus "wrong." The algorithms many of our information sites use create echo chambers that increase radicalization and decrease comprehension. 

Identity politics have gotten so strong that you see families breaking apart and friend groups disintegrating ... because people can't imagine sharing a room with someone with whom they don't share the same values. 

In psychology, heuristics are mental models that help you make decisions easier.  They're a starting point to save mental bandwidth, allowing you to spend more brain cycles on the important stuff.

That's a great use of "boxes" and "simplification"… but it shouldn't eliminate deeper and more nuanced thought on important issues. 

Most situations are nuanced, and the "correct" answer changes as you change your vantage point.

In an ideal world, we'd consider every angle.  I recognize that's not realistic.

Instead, I encourage you to remember to continue to think and learn ... even about things you already know.  And, if you become familiar with the most common cognitive biases, you can hopefully identify them in your thinking and decision-making.

Confirmation Bias is one of the more common forms of cognitive bias.  Here is an infographic that lists 50 common cognitive biases.  Click to explore further.

 

via VisualCapitalist

Important issues deserve more research.  New insights happen between the boundaries of what we know and don't.  Knowledge comes from truly understanding the border between what you are certain and uncertain about. 

I challenge you to look beyond the headlines, slogans, and talking points you like most.  Look for dissenting opinions and understand what's driving their dissent.  Are they really blind or dumb (or are their value systems just weighted differently)?

Not everything needs to be boxed.  Not everything needs to be simple.  You should explore things and people outside of your comfort zone and look to see things from their point of view ... not your own. 

Recently, I've started using a website and news app called Ground News.  They claim to be a news platform that makes it easy to compare news sources, read between the lines of media bias, and break free from algorithms. 

As discussed above, online news and ad-driven algorithms have made it profitable for news outlets to embrace a position on the bias spectrum to target specific consumers.   That bias in the media affects everything from what events receive coverage to how a news outlet frames those events in their reporting.

As media outlets narrow their perspective and range of coverage, I use Ground to help me get a well-rounded view of important issues and become aware of my blind spots.

Applying This Lesson  

“I am ashamed to think how easily we capitulate to badges and names, to large societies and dead institutions.”
― Ralph Waldo Emerson, Self-Reliance

I love learning a lesson in one space and applying it to other spaces.  It's one of the cool things about AI.  An algorithm can learn rules in the construction space that may help in the medicine or trading space.  Everything's a lesson if you let it be.

In that vein, the lesson on labeling also applies to yourself and your business.  Don't get me wrong - naming things is powerful.  It can help make the intangible tangible.  However, don't let the label (or your perception of the label) stop you from achieving something greater. 

Many things are true because we believe them to be, but when we let go of past beliefs, the impossible becomes possible, and the invisible becomes visible.  

Hope that helps. 

The Law (And Flaw) Of Averages

The law of averages is a principle that supposes most future events are likely to balance any past deviation from a presumed average.

Take, for example, flipping a coin.  If you happen to get 5 "Heads" in a row, you'd most likely assume the next one should be "Tails" ... even though each flip has a 50/50 chance of landing on either. 

Even from this example, you can tell it's a flawed law.  While there are some reasonable mathematical uses of the law of averages, in everyday life, this "law" mostly represents wishful thinking. 

It's also one of the most common fallacies succumbed to by gamblers and traders. 

The concept of "Average" is more confusing and potentially damaging than you might suspect.

Perhaps you heard the story about how the U.S. Air Force discovered the 'flaw' of averages by creating cockpits based on complex mathematics surrounding the average height, width, arm length, etc., of over 4,000 pilots.  Despite engineering the cockpit to precise specifications, pilots crashed their planes on a too-regular basis. 

The reason?  With hindsight, they learned that very few of those 4,000 pilots were actually "average".  Ultimately, the Air Force re-engineered the cockpit and fixed the problem. 

It's a good reminder that 'facts' can lie, and assumptions and interpretations are dangerous.  It's why I prefer taking decisive action on something known, rather than taking tentative actions about something guessed. 

via ReasonTV

Our Brains and the Illusion of Balance

Our brains are wired to find patterns, even in random events.  This tendency, known as apophenia, can lead us to see connections where none exist.

The Misleading Law of Averages

It's this very tendency that fuels the misconception of the law of averages.  We expect randomness to "even out" because we see patterns in short sequences.  This can be tempting to believe, especially when dealing with chance events.

The law of averages is a common idea that suggests future events will even out past results to reach some average outcome.  For instance, going back to our earlier coin-flipping example,  after getting five heads in a row, it's natural to assume the next flip is "due" to be tails.  However, that's not how probability works.  Each coin flip is an independent event (with a 50% chance of landing on heads or tails), regardless of previous flips.  The coin doesn't "remember" what happened before.

Apophenia isn't limited to coin flips.  For instance, you might see your lucky number appearing repeatedly throughout the day, leading you to believe it has a special meaning – even though each instance is completely independent.

This natural desire for order and predictability can lead us astray when dealing with chance events.

Why is it Flawed?

The law of averages often leads to a misconception called the gambler's fallacy.  This fallacy is the belief that random events can somehow "correct" themselves to reach an average.  In reality, every coin flip, roll of the dice, or spin of the roulette wheel is a fresh start with its own discrete probabilities.  The odds remain the same no matter how long the losing streak persists.

Are there ever times when it applies?

It's important to distinguish the law of averages from the law of large numbers, a well-established statistical principle.  The law of large numbers states that as the number of random events increases, the average outcome gets closer to the expected probability.  This applies in situations where many trials happen, and while past results of individual events are independent, the law describes the behavior of averages over a large number of trials.  For instance, the average weight of a large sample of apples will likely be close to the expected average weight of an apple, even if some individual apples are heavier or lighter than expected.

However, in everyday situations (with a limited number of events), the law of averages is generally not a helpful way to think about chance or probabilities.

Understanding these misconceptions can help us make better decisions and avoid false expectations based on flawed reasoning.

Psychological Reasons Behind the Belief

Human decision-making suffers from a range of tendencies and biases.

Earlier, we discussed the tendency to find patterns, even where none exist.  Next, we will consider cognitive bias.  In our coin-flipping example, it is the representativeness heuristic that makes us assume that small samples should resemble the larger population they come from.

Emotional factors also play a role.  The desire for control in uncertain situations can make us latch onto the law of averages as a comforting notion.  Believing that things will "even out" gives us a sense of predictability and fairness in an otherwise random world.

Additionally, social influences can reinforce these beliefs.  Stories and anecdotes about streaks ending or luck changing often circulate among friends and family, further embedding the misconception into our collective consciousness.

Understanding these psychological reasons helps explain why the law of averages persists despite its flaws.  Recognizing these biases can empower us to think more critically about probability and chance events.

Improving Decision-Making in Gambling and Investing

Recognizing the fallacy of the law of averages can significantly enhance decision-making, particularly in gambling and investing.  Understanding that each event is independent can help participants make more rational choices.  Instead of chasing losses with the hope that a win is "due," savvy speculators understand their odds remain constant and may choose to walk away or set strict limits on their betting behavior.

In investing, this knowledge is equally crucial.  Many factors influence markets.  Nonetheless, believing that a stock "must" rebound after a series of declines too often leads to poor investment decisions.  Investors who grasp that past performance does not dictate future results are better equipped to evaluate investments based on fundamentals rather than emotions or flawed expectations.

By dispelling these misconceptions, you can approach gambling or investing with a clearer mindset, reducing the risk of substantial losses driven by erroneous beliefs about probability and chance.

You can also eliminate fear, greed, and discretionary mistakes by relying on algorithms to calculate realtime expectancy scores and take the road less stupid.  Take a different kind of chance.  Just ask our AI Overlords; they'll tell you what to expect!