Author Archives: ghotchkiss

A Market for Morality

Things are going to get interesting in the world of marketing. And the first indication of that was seen this past Sunday during the Super Bowl. As Bob Garfield noted, there were a lot of subtle and not so subtle undercurrents of messaging in the ads that ran in between the distracting sub-story that played out on the field. Things got downright political with a number of 167 thousand-dollar-a-second ad swipes at the current president and his policies.

I and many others here at Mediapost have been criticized over the past several months for getting political when we should have been talking about media and marketing. But as this weekend showed, we’re naïve to think those two worlds don’t overlap almost completely. And that’s about to become even more true in the future.

Advertising has to talk about what people are talking about. It has always been tied to the zeitgeist of society. And in a politically polarized nation, that means advertising’s “going to go there”. That’s normal. What’s not so normal is this weird topsy-turvy trend of for-profit companies suddenly becoming the moral gatekeepers of America. That’s supposed to be the domain of government and – if you believe in such things – religion. That’s in a normal world. But in the world of 2017 and the minds of 53.9% of America (the percentage of the electorate who didn’t vote for Trump) there is a vast, sucking moral vacuum on at least one of those fronts. It seems that Corporate America is ready to step up and fill the gap.

Suddenly, there is a market for morality. Of course, we have always had “feel-good” advertising and codes of corporate responsibility but this is different – both in volume and tone. It is more overtly political and it plays on perceived juxtaposition of the mores of the nation and the official stance of the government. Markets are built to be nimble and adaptive. Governments are seldom either of these things. Corporate America is sensing a market opportunity by taking the high road and the Super Bowl marked the beginning of what may become a stampede to higher moral ground.

This isn’t the first time this has happened. Around the turn of the last century, we saw the rise of welfare capitalism. In a rapidly expanding industrial market where there was a scarcity of human resources and little legislative regulation of working conditions, corporations became paternalistic. The reasoning was that no one could better provide stability for workers than the corporation that employed them. What is different about the current situation, however, is that this moral evangelism is primarily aimed at the market, not internal operations. We’ll come back to this in a bit.

This creates an interesting dynamic. In a free market economy citizens have the right to vote with their wallets. After a deeply divisive election the debate can continue in a market suddenly divided along political lines. This is compounded by the interconnected and interactive nature of marketing today. We have realized that our market is a complex system and plays by it’s own rules, none of which are predictable. Social network effects, outriding anomalies and viral black swans are now the norm. As I said in an earlier column, branding is becoming a game of hatching “belief worms” – messages designed to bypass rationality and burrow deep into our subconscious values. Our current political climate is a rich breeding ground for said “worms.”

You might say, “What’s wrong with Corporate America taking a moral stand? “

Well..two things.

There is no corporation I’m aware of that has as its first priority the safeguarding of morality. As economist Milt Friedman said, corporations are there to make a profit. Period. And they will always follow the path most likely to lead to that profit. For example, Silicon Valley has been very vocal in its condemnation of the Muslim travel ban not because it’s not right but because it jeopardizes the ability to travel for its employees from Muslim countries. And a century ago, welfare capitalism spread because it helped employers hang on to their employees and gave them a way to keep out unions. Even if morality and profitability happen to share the same bandwagon for a time the minute profitability veers in a new direction, corporations will follow. This is not the motivational environment you want to stake the future on.

Secondly, there is no democratic mandate behind the stated morality of a corporation. There are a lot of CEO’s that have robust ideological beliefs, but it is fair to say the moral proclivities of a corporation are necessarily tied to a very select special interest group: the employees, the customers and the shareholders of that corporation. Companies, by their very nature, should not be expected to speak for “we, the people.” Much as we would like morality to be universally defined, it is still very much a personal matter.

Take just one of these moral stakeholders – the customers. According to Blend, a millennial messaging app, their users loved the Coke, Budweiser and Airbnb ads that all had overt or thinly veiled moral messages. But there was a backlash from Trump supporters asking for boycotts of all these advertisers along with others that got political. The social storms stirred up on both sides were telling. Reaction was quick and emotionally charged. In a world where branding and beliefs are locked together at the hip, we can probably expect that morality and marketing will be similarly conjoined. That means that morality, just like marketing, will be segmented and targeted to very specific groups.

The Winona Ryder Effect

I was in the U.S. last week. It was my first visit in the Trump era.

It was weird. I was in California, so the full effect was muted, but I watched my tongue when meeting strangers. And that’s speaking as a Canadian, where watching your tongue is a national pastime. (As an aside, my US host, Lance, told me about a recent post on a satire site: “Concerned, But Not Wanting To Offend, Canada Quietly Plants Privacy Hedge Along Entire U.S. Border.” That’s so us.) There was a feeling that I had not felt before. As someone who has spent a lot of time in the US over the past decade or two, I felt a little less comfortable. There was a disconnect that was new to me.

Little did I know (because I’ve turned off my mobile CNN alerts since January 20th because I was slipping into depression) but just after I whisked through Sea-Tac airport with all the privilege that being a white male affords you, Washington Governor Jay Inslee would hold a press conference denouncing the new Trump Muslim ban in no uncertain terms. On the other side of the TSA security gates there were a thousand protesters gathering. I didn’t learn about this until I got home.

Like I said, it was weird.

And then there were the SAG awards on Sunday night. What the hell was the deal with Winona Ryder?

When the Stranger Things cast got on stage to accept their ensemble acting award, spokesperson David Harbour unleashed a fiery anti-Trump speech. But despite his passion and volume, it was Winona Ryder, standing beside him, that lit up the share button. And she didn’t say a word. Instead, her face contorted through a series of twenty-some different expressions in under 2 minutes. She became, as one Twitter post said, a “human gif machine.”

Now, by her own admission, Winona is fragile. She has battled depression and anxiety for much of her professional life. Maybe she was having a minor breakdown in front of the world. Or maybe this was a premeditated and choreographed social media master stroke. Either way, it says something about us.

The Stranger Things cast hadn’t even left the stage before the Twitterverse started spreading the Ryder meme. If you look at Google Trends there was a huge spike in searches for Winona Ryder starting right around 6:15 pm (PST) Sunday night. It peaked at 6:48 pm with a volume about 20 times that of queries for Ms. Ryder before the broadcast began.

It was David Harbour that delivered the speech Ryder was reacting to. The words were his, and while there was also a spike in searches for him coinciding with the speech, he didn’t come close to matching the viral popularity of the Ryder meme. At its peak, there were 5 searches for “Winona Ryder” for every search for “David Harbour.”

Ryder’s mugging was – premeditated or not – extremely meme-worthy. It was visual, it was over the top and – most importantly – it was a blank canvas we could project our own views on to. Winona didn’t give us any words, so we could fill in our own. We could use it to provide a somewhat bizarre exclamation point to our own views, expressed through social media.

As I was watching this happen, I knew this was going to go viral. Maybe it’s because it takes something pretty surreal to make a dent in an increasingly surreal world that leaves us numb. When the noise that surrounds us seems increasingly unfathomable, we need something like this to prick our consciousness and make us sit up and take notice. Then we hunker down again before we’re pummelled with the next bit of reality.

Let me give you one example.

As I was watching the SAG awards Sunday night, I was unaware that gunmen had opened fire on Muslim worshippers praying in a mosque in Quebec City. I only found out after I flicked through the channels after the broadcast ended. Today, as I write this, I now know that six are dead because someone hated Muslims that much. Canada also has extreme racism.

I find it hard to think about that. It’s easier to think about Winona Ryder’s funny faces. That’s not very noble, I know, but sometimes you have to go with what you’re actually able to wrap your mind around.

The Vanishing Value of the Truth

You know, the very powerful and the very stupid have one thing in common. They don’t alter their views to fit the facts. They alter the facts to fit the views.

Dr. Who, 1977

We might be in a period of ethical crisis. Or not. It’s tough to say. It really depends on what you believe. And that, in a nutshell, is the whole problem.

Take this past weekend for example. Brand new White House Press Secretary Sean Spicer, in his very first address, lied about the size of the inauguration crowd. Afterwards, a very cantankerous Kellyanne Conway defended the lying when confronted by Chuck Todd on Meet the Press. She said they weren’t lies…they were “Alternate Facts”.

http://www.nbcnews.com/widget/video-embed/860142147643

So, what exactly is an alternate fact? It’s something that is not a fact at all, but a narrative intended to be believed by a segment of the population, presumably to gain something from them.

To use a popular turn of phrase, it’s “Faking It til You Make It!”

And there you have the mantra of our society. We’re rewarding alternate facts on the theory that the end justifies the means. If we throw a blizzard of alternate facts out there that resonate with our audience’s beliefs, we’ll get what we want.

The Fake It Til You Make It syndrome is popping up everywhere. It’s always been a part of marketing and advertising. Arguably, the entire industry is based on alternate facts. But it’s also showing up in the development of new products and services, especially in the digital domain. While Eric Ries never espoused dishonesty in his book, The Lean Start Up, the idea of a Minimal Viable Product certainly lends itself to the principle of “faking it until you make it.” Agile development, in its purest sense, is about user feedback and rapid iteration, but humans being humans, it’s tough to resist the temptation to oversell each iteration, treading dangerously close to pitching “vaporware.” Then we hope like hell that the next development cycle will bridge some of the gap between reality and the alternate facts we sold the prospective customer.

I think we have to accept that our world may not place much value on the truth any more. It’s a slide that started about 100 years ago.

The Seven Habits of Highly Effective People author Stephen Covey reviewed the history of success literature in the US from the 1700’s forward. In the first 150 years of America’s history, all the success literature was about building character. Character was defined by words like integrity, kindness, virtue and honor. The most important thing was to be a good person.

Honesty was a fundamental underpinning of the Character Ethic. This coincided with the Enlightenment in Europe. Intellectually, this movement elevated truth above belief. Our modern concept of science gained its legs: “a branch of knowledge or study dealing with a body of facts or truths.” The concepts of honor and honesty were intertwined

But Covey noticed that things changed after the First World War. Success literature became preoccupied with the concept of personality. It was important to be likeable, extroverted, and influential. The most important thing was to be successful. Somehow, being truthful got lost in the noise generated by the rush to get rich.

Here’s the interesting thing about personality and character. Psychologists have found that your personality is resistant to change. Personality tends to work below the conscious surface and scripts play out without a lot of mindful intervention. You can read all the self-help books in the world and you probably won’t change your personality very much. But character can be worked on. Building character is an exercise in mindfulness. You have to make a conscious choice to be honest.

The other interesting thing about personality and character is how other people see you. We are wired to pick up on other people’s personalities almost instantly. We start picking up the subconscious cues immediately after meeting someone. But it takes a long time to determine a person’s character. You have to go through character-testing experiences before you can know if they’re really a good person. Character cuts to the core, where as personality is skin deep. But in this world of “labelability” (where we think we know people better than we actually do) we often substitute personality cues for character. If a person is outgoing, confident and fun, we believe them to be trustworthy, moral and honest.

This all adds up to some worrying consequences. If we have built a society where success is worth more than integrity, then our navigational bearings become dependent on context. Behavior becomes contingent on circumstances. Things that should be absolute become relative. Truth becomes what you believe is the most expedient and useful in a given situation.

Welcome to the world of alternate facts.

Yahoo and the Transitory World

The writing has been on the wall for some time. But where once it spelled out Yahoo, it now says Altaba.

The Yahooligans are no more, have ceased to be, bereft of life, they rest in peace. Marissa Mayer may be riding off into the Silicon Valley sunset with her golden parachute trailing behind. The parking lot attendants at 701 First Avenue, Sunnyvale, CA could soon be sandblasting her name off the CEO’s reserved parking spot. And, predictably, we Internet codgers are mourning the loss of yet another digital pioneer.

But here’s the thing. For the last 150 years the point of a corporation is to not be a permanent fixture. And, in this world, that’s truer than ever. So we’d better get use to stepping around a growing pile of corporate corpses.

The notion of a corporation has been around since Roman times. The name comes from the Latin corpus (body) and means “body of people.” The original idea was that a corporation would live on beyond the lifespan of any of its members. This has certainly been true of the Stora Kopparberg, a mining community in Sweden, the oldest corporation in the world. It started in 1347.

But things changed in 1855 with the passing of the Limited Liability act in England. This flipped the idea of the perpetuity of a corporation on its head. This legislation allowed shareholders to walk away from the wreckage of a failed corporation without assuming any personal liability. It enabled serial entrepreneurialism and lowered the threshold of tolerable risk.

In short, corporate limited liability law made it okay for business people to try and possibly fail.

In the century and a half since the passing of the limited Liability Act (and similar legislation in most US states) we somehow believed that corporations existed to build size and scale, as befits a market that’s pre-occupied with mass. Economist Ronald Coase said the reason corporations exist is that because in imperfect markets, there is less friction doing things inside an organization than outside, making corporate structures more profitable than open markets. That was true in markets that built physical things from raw materials scattered around the world and then also had to distribute those things to distant markets.

But that’s not the world we live in. The world we live in is the world of rapid iteration and Eric Ries’ “Minimum Viable Product”. Increasingly, these products are not made of physical stuff but of digital bytes, where there is very little in the way of transactional costs.

I think we have to start thinking of the Minimum Viable Company – companies that can be assembled quickly around a market need but also can be disassembled and repurposed quickly. In today’s world, that’s the purpose of an organization and it’s a transitory thing.

In their book Creative Destruction, Richard Foster and Sarah Kaplan envision a new corporate structure more like a venture capital fund. A corporation should be made up of a number of transitory operating units that explore market opportunities in a Darwinian fashion. Arguably, this is closer to the model adopted by Google with Alphabet and, ironically, the new corporate structure of Altaba.

But even here, corporate hubris tends to get in the way. At some point, inevitably, the powers that be begin to believe they’re smarter than the market and build an illusion of sustainability. As economist Joseph Schumpeter said, “The problem that is usually being visualized is how capitalism administers existing structures, whereas the relevant problem is how it creates and destroys them.” Corporations have a vested interest in the status quo. Cognitive biases being what they are, we’ll always favor on the side of what we have rather than what we should build. For this reason, I think Coase’s justification for the corporation might be on its last legs.

That was definitely true of Yahoo. It was a corporation that lived beyond its time. Sooner or later, that had to catch up with it.

 

 

What Comes After Generation Z?

We’re running out of alphabet.

The latest generation is Generation Z. They were born between 1995 and 2012 – according to one demographic primer. So, what do we call the generation born from 2013 on? Z+One? Do we go with an Excel naming scheme and call it Generation AA? Or should we just go back to all those unused letters of the alphabet. After all, we haven’t touched A to W yet. Thinking along those lines, Australian social researcher and author Mark McCrindle is lobbying for Generation Alpha. It’s a nice twist – we get to recycle the alphabet and give it a Greek flavor all at the same time.

Maybe the reason we short-sightedly started with the last three letters of the alphabet is that we’re pretty new at this. Before the twentieth century, we didn’t worry much about labeling every generation. And, to be honest, much of that labeling has happened retroactively. The Silent Generation (1925 – 1942) didn’t call themselves that right off that bat. Being Silent, they didn’t call themselves anything. The label wasn’t coined until 1951. And the G.I. Generation, who preceded them ((1901 – 1924), didn’t receive their label until demographers William Strauss and Neil Howe affixed it in 1991.

But starting around the middle of the last century, we developed the need to pigeonhole our cohorts. Maybe it’s because things started moving so quickly about that time. In the first half of the century we had the twin demographical tent poles of the two World Wars. In between we had the Great Depression. After WWII we had the mother of all generational events: the Baby Boom. Each of these eras brought a very different environment, which would naturally affect those growing up in them. Since then, we’ve been scrambling madly to keep up with appropriate labels for each generation.

The standard approach up to now has been to wait for someone to write a book about a generation, which bestows the label, and then we all jump on the bandwagon. But this seems reactive and short sighted. It also means that we get caught in our current situation, where we have a generation that remains unnamed while we’re waiting for the book to be written.

We seem hooked on these generation labels. I don’t think they’re going to go anywhere any time soon. Based on our current fascination with Millennials, we in the media are going to continue to lump every single sociological and technological trend into convenient generationally labeled behavioral buckets. So we should give this naming thing some thought.

Maybe we could take a page from the World Meteorological Organization’s book when it comes to naming hurricanes and tropical storms. They started doing this so the media would have a quick and commonly understood reference point when referring to a particular meteorological event. Don’t generations deserve the same foresight?

The World Meteorological Organization has a strict procedure: “For Atlantic hurricanes, there is a list of male and female names which are used on a six-year rotation. The only time that there is a change is if a storm is so deadly or costly that the future use of its name on a different storm would be inappropriate. In the event that more than twenty-one named tropical cyclones occur in a season, any additional storms will take names from the Greek alphabet.”

I like the idea of using male and female names. This got me thinking. Maybe we combine the WMO’s approach and that of the wisdom of crowds. Perhaps the male and female names should be the most popular baby names of that generation. In case you’re wondering, here’s how that would work out:

Silent Generation (1925 – 1942): The Robert and Mary Generation
Baby Boomers I (1946 – 1954): The James and Mary Generation
Baby Boomers II (1955 – 1965): The Michael and Lisa Generation
Generation X (1966 – 1976): The Michael and Jennifer Generation
Millennials (1977 – 1994): The Michael and Jessica Generation
Generation Z (1995 – 2012): The Jacob and Emily Generation
Generation ??? (2013 – Today) – The Emma and Noah Generation

The sharp sighted amongst you will have noticed two problems with this. First, some names are stubbornly popular (I’m talking about you Michael and Mary) and span multiple generations. Secondly, this is a very US-Centric approach. Maybe we need to mix it up globally. For instance, if we tap into the naming zeitgeist of South Korea, that would make the current generation the Seo-yeon and Min-jun Generation.

Of course, all this could be needless worrying. Perhaps those that affixed the Generation Z label knew something we didn’t.

Branding in the Post Truth Age

If 2016 was nothing else – it was a watershed year for the concept of branding. In the previous 12 months, we saw a decoupling in the two elements we have always believed make up brands. As fellow Spinner Cory Treffiletti said recently:

“You have to satisfy the emotional quotient as well as the logical quotient for your brand.  If not, then your brand isn’t balanced, and is likely to fall flat on its face.”

But another Mediapost article highlighted an interesting trend in branding:

“Brands will strive to be ‘meticulously un-designed’ in 2017, according to WPP brand agency Brand Union.”

This, I believe, speaks to where brands are going. And depending on which side of the agency desk you happen to be on, this could either be good news or downright disheartening.

Let’s start with the logical side of branding. In their book Absolute Value, Itamar Simonson and Emanuel Rosen sounded the death knell for brands as a proxy for consumer information. Their premise, which I agree with, is that in a market that is increasingly moving towards perfect information, brands have lost their position of trust. We would rather rely on information that comes from non-marketing sources.

But brands have been aspiring to transcend their logical side for at least 5 decades now. This is the emotional side of branding that Treffiletti speaks of. And here I have to disagree with Simonson and Rosen. This form of branding appears to be very much alive and well, thank you. In fact, in the past year, this form of branding has upped the game considerably.

Brands, at their most potent, embed themselves in our belief systems. It is here, close to our emotional hearts, which mark the Promised Land for brands. Reid Montague’s famous Coke neuro-imaging experiment showed that for Coke drinkers, the brand became part of who they are. Research I was involved in showed that favored brands are positively responded to in a split second, far faster than the rational brain can act. We are hardwired to believe in brands and the more loved the brand, the stronger the reaction. So let’s look at beliefs for a moment.

Not all beliefs are created equal. Our beliefs have an emotional valence – some beliefs are defended more strongly than others. There is a hierarchy of belief defense. At the highest level are our Core beliefs; how we feel about things like politics and religion. Brands are trying to intrude on this core belief space. There has been no better example of this than the brand of Donald Trump.

Beliefs are funny things. From an evolutionary perspective, they’re valuable. They’re mental shortcuts that guide our actions without requiring us to think. They are a type of emotional auto-pilot. But they can also be quite dangerous for the same reason. We defend our beliefs against skeptics – and we defend our core beliefs most vigorously. Ration has nothing to do with it. It is this type of defense system that brands would love to build around themselves.

We like to believe our beliefs are unique to us – but in actual fact, beliefs also materialize out of our social connections. If enough people in our social network believe something is true, so will we. We will even create false memories and narratives to support the fiction. The evolutionary logic is quite simple. Tribes have better odds for survival than individuals, and our tribe will be more successful if we all think the same way about certain things. Beliefs create tribal cohesion.

So, the question is – how does a brand become a belief? It’s this question that possibly points the way in which brands will evolve in the Post-Truth future.

Up to now, brands have always been unilaterally “manufactured” – carefully crafted by agencies as a distillation of marketing messages and delivered to an audience. But now, brands are multilaterally “emergent” – formed through a network of socially connected interactions. All brands are now trying to ride the amplified waves of social media. This means they have to be “meme-worthy” – which really means they have to be both note and share-worthy. To become more amplifiable, brands will become more “jagged,” trying to act as catalysts for going viral. Branding messages will naturally evolve towards outlier extremes in their quest to be noticed and interacted with. Brands are aspiring to become “brain-worms” – wait, that’s not quite right – brands are becoming “belief-worms,” slipping past the rational brain if at all possible to lodge themselves directly in our belief systems. Brands want to be emotional shorthand notations that resonate with our most deeply held core beliefs. We have constructed a narrative of who we are and brands that fit that narrative are adopted and amplified.

It’s this version of branding that seems to be where we’re headed – a socially infectious virus that creates it’s own version of the truth and builds a bulwark of belief to defend itself. Increasingly, branding has nothing to do with rational thought or a quest for absolute value.

The Magic of the Internet Through My Dad’s Eyes

“Would you rather lose a limb or never be able to access the Internet?” My daughter looked at me, waiting for my answer.

“Well?”

We were playing the game “Would You Rather” during a lull in the Christmas festivities. The whole point of the game is to pose two random and usually bizarre alternatives to choose from. Once you do, you see how others have answered. It’s a hard game to take seriously.

Except for this question. This one hit me like a hammer blow.

“I have to say I’d rather lose a limb.”

Wow. I would rather lose an arm or a leg than lose something I didn’t even know existed 20 years ago. That’s a pretty sobering thought. I am so dependent on this technical artifact that I value it more than parts of my own body.

During the same holiday season, my stepdad came to visit. He has two cherished possessions that are always with him. One is a pocketknife his father gave him. The other is an iPhone 3 that my sister gave him when she upgraded. Dad doesn’t do much on his phone. But what he does do is critically important to him. He texts his kids and he checks the weather. If you grew up on a farm on the Canadian prairies during the 1930’s, you literally lived and died according to the weather. So, for Dad, it’s magic of the highest sort to be able to know what the temperature is in the places where his favorite people live. We kids have added all our home locations to his weather app, as well as that of his sister-in-law. Dad checks the weather in Edmonton (Alberta), Calgary (Alberta), Kelowna (BC), Orillia (Ontario) and his hometown of Sundre (Alberta) constantly. It’s his way of keeping tabs on us when he can’t be with us.

I wonder what Dad would say if I asked him to choose between his iPhone and his right arm. I suspect he’d have to think about it. I do know the first thing I have to do when he comes to our place is set him up on our home wifi network.

It’s easy to talk about how Millennials or Gen-X’s are dependent on technology. But for me, it really strikes home when I watch people of my parent’s generation hold on to some aspect of technology for dear life because it enables them to do something so fundamentally important to them. They understand something we don’t. They understand what Arthur C. Clarke meant when he said,

“Any sufficiently advanced technology is indistinguishable from magic.”

To understand this, look for a moment through the eyes of my Dad when he was a child. He rode a horse to school – a tiny one room building that was heated with a wood stove. Its library consisted of two bookshelves on the back wall. A circle whose radius was defined by how far you could drive the wagon in a single day bound the world of which he was aware. That world consisted of several farms, the Eagle Hill Co-op store, the tiny town of Sundre, his school and the post office. The last was particularly important, because that’s where the packages you ordered from the Eaton’s catalogue (the Canadian equivalent of Sears Roebuck) would come.

It’s to this post office that my step-dad dragged his sleigh about 75 years ago. He didn’t know it at the time, but he was picking up his Christmas present. His mother, whose own paternal grandfather was a contemporary and friend of Charles Darwin, had saved milk money for several months to purchase a three-volume encyclopaedia for the home. Nobody else they knew had an encyclopaedia. Books were rare enough. But for Isobel (Buckman) Leckie, knowledge was an investment worth making. Those three books became the gift of a much bigger world for my Dad.

It’s easy to make fun of seniors for their simultaneous amazement of and bewilderment by technology. We chuckle when Dad does his third “weather round-up” of the day. We get frustrated when he can’t seem to understand how wifi works. But let’s put this in the context of the change he has seen in his life on this earth. This is not just an obsolete iPhone 3 that he holds in his hand. This is something for which the adjective “magical” seems apt.

Perhaps it’s even magic you’d pay an arm and a leg for.

Watson:2020 – America’s Self-Driving Presidency

Ken Jennings, the second most successful Jeopardy player of all time, has an IQ of 175. That makes him smarter than 99.9998615605% of everybody. If you put him in a city the size of Indianapolis, he’d probably be the smartest person there. In fact, in all of the US, statistics say there are only 443 people that would be smarter than Mr. Jennings.

And one machine. Let’s not forget IBM’s Watson whupped Jennings’ ass over two days, piling up $77,147 in winnings to Jennings $24,000. It wasn’t even close. Watson won by a factor of more than 3 to 1.

That’s why I think Watson should run for president in 2020. Bear with me.

Donald Trump’s IQ is probably in the 119 range (not 156 as he boasts – but then he also boasted that every woman who ever appeared on the Apprentice flirted with him). Of course we’ll never know. Like his tax returns, any actual evidence of his intelligence is unavailable. But let’s go with 119. That makes him smarter than 88.24% of the population, which isn’t bad, but it also isn’t great. According to Wikipedia, if that IQ estimate were correct, he would be the second dumbest president in history, slightly ahead of Gerald Ford. Here’s another way to think about it. If you were standing at a moderately busy bus stop, chances are somebody else waiting with you would be smarter than the President Elect of the United States.

Watson won Jeopardy in 2011. Since then, he’s become smarter, becoming an expert in health, law, real estate, finance, weather – even cooking. And when I say expert, I mean Watson knows more about those things than anyone alive.

Donald Trump, on the other hand, has probably learned little in the last 5 years because, apparently, he doesn’t have time to read. But that’s okay, because he reaches the right decisions

“with very little knowledge other than the knowledge I [already] had, plus the words ‘common sense,’ because I have a lot of common sense and I have a lot of business ability.”

In the President Elect’s mind, that also qualifies him to “wing it” with things like international relations, security risks, emerging world events, domestic crises and the other stuff on his daily to-do list. He has also decided that he doesn’t need his regular intelligence briefing, reiterating:

“You know, I’m, like, a smart person. I don’t have to be told the same thing in the same words every single day for the next eight years. Could be eight years — but eight years. I don’t need that.”

That’s right, the future leader of the free world is, “you know, like, a smart person.”

Now, President Watson could also decide to skip the briefing, but that’s because Watson can process 500 gigabytes – the equivalent of a million books – per second. Any analyst or advisor would be hard pressed to keep up.

Let’s talk about technology. Donald Trump doesn’t appear to know how to use a computer. His technical prowess seems to begin and end with midnight use of Twitter. To be fair, Hillary Clinton was also bamboozled by technology, as one errant email server showed all too clearly. But Watson is technology: and if you can follow this description from Wikipedia, apparently pretty impressive technology: “a cluster of ninety IBM Power 750 servers, each of which uses a 3.5 GHz POWER7 eight-core processor, with four threads per core. In total, the system has 2,880 POWER7 processor threads and 16 terabytes of RAM.”

In a presidential debate, or, for that matter, a tweet, Watson can simultaneously retrieve from its onboard 16-terabyte memory, process, formulate and fact check. Presumably, unlike Trump, Watson could remember whether or not he said global warming was a hoax, how long ISIS has actually been around and whether he in fact had the world’s greatest memory. At the very least, Watson would know how to spell “unprecedented”

But let’s get down to the real question, whose digit do you want on the button: Trump’s “long and beautiful” fingers or Watson’s bionic thumb? Watson – who can instantly and rationally process terabytes of information to determine optimum alternatives – or Trump – who’s philosophy is that “it really doesn’t matter…as long as you’ve got a young and beautiful piece of *ss.”

I know what you’re thinking – this is us finally surrendering to the machines. But at least it’s intelligence – even if it is artificial.

Note: In writing what I thought was satire, I found once again that fact is stranger than fiction. Somebody already thought of this 4 years ago: http://watson2016.com/

The Cathedral and Bazaar Cycle of Mar -Tech Innovation

Each year my friend Scott Brinker sits down to update his marketing technology landscape and each year he is amazed by the explosion of vendors he has to fit on a single slide. Last year’s version clocked in at 3874 Mar Tech solutions – almost twice as many as 2015. He started in 2011 with about 150 and it has effectively doubled with each iteration. While everyone has expected eventual consolidation this hasn’t happened to date.

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Scott’s Marketing Technology Landscape – 2016

Why?

For a possible answer, we can look at a fascinating study conducted by a UCLA team looking at the fossil record of cars. Since 1896, there is a reliable record of the introduction of new automobile makes and models. In essence, this creates a “fossil” record, similar to biology, where we can look at the evolution of a technology over an extended time period. In this case, the researchers were looking to isolate the factors that led to the greatest introduction of new models and the discontinuation of old models. When many new models were being introduced, the evolution of the automotive technology accelerated. The researchers wanted to see if this pace of evolution was tied to strength of the economy, changes in oil prices or the number of other cards on the market. What they found was that competition in the marketplace played a bigger role in the variety of car models than either economic growth or oil prices.

However, these periods of rapid innovation didn’t last forever. Inevitably, there was a period of consolidation, where the major manufacturers focused on a few models to increase profitability. It’s a lot more profitable to produce a popular model with relatively few changes over a long period of time.

Once again, we have an oscillation or wave happening.

What is interesting about this is that these periods of rapid innovation always come from an open market with many competitors – exactly what is happening in marketing technology right now. That is because open markets always drive more innovation than can be achieved within hierarchal organizations. As Eric Raymond showed in his brilliant essay on the open source movement – The Cathedral and the Bazaar – the evolutionary forces of a distributed open market (or “Bazaar”) always trump vertical integration (“Cathedrals”) when it comes to spinning off fresh ideas.

In their book “Creative Destruction,” authors Richard Foster and Sarah Kaplan show that organizations (cathedrals) tend to favor incremental innovation with occasional forays into substantial innovation. But markets (bazaars) unleash transformational innovation. The unpredictability and risk increases by a factor of ten as you go from one version of innovation to the other, but so do the rewards. Innovation in markets grow on a logarithmic scale. It’s why some players – like Tesla and Google – have espoused the open-source “Bazaar” approach in areas like sustainable transportation and artificial intelligence where rapid innovation is essential.

There is another critical factor at play here as well. The market/bazaar, being ruthless, quickly culls the competitors down to those that have the best market potential. This explosion of innovation and the subsequent winnowing need a brutally competitive market environment – a rugged landscape in evolutionary terms. Organizations/Cathedrals are reluctant to pull the plug on losers as they fall victim to the sunk cost fallacy and loss aversion. Markets/bazaars operate like nature – “red in tooth and claw” – with a brutal efficiency in dispatching the less fit.

After this explosion of innovation and the subsequent purge, there is a period of consolidation where the biggest players benefit. Let’s call this the Cathedral phase. Here, operational efficiency takes over, looking for greater profitability. Here, market tested innovation is acquired by the largest organizations and systematically incorporated into a replicable template that allows for scalability. Here, the Cathedral model does what it excels at, maximizing profits. Of course, there is a trade off. Innovation withers and dies in this environment, leading to eventual stagnation, which triggers the need for break out innovation all over again.

Will marketing technology follow the Cathedral/Bazaar pattern? In his last landscape, Scott mentioned that rather than coalescing around an “a small oligopoly of platform providers competing for that starring role” the Mar-Tech ecosystem seems to be embedding plug and play compatibility allowing for a longer “Bazaar” phase. Perhaps, with the elimination of market friction, we’re getting to a point where profitability can be uncoupled from the need for scale. I guess we’ll have to wait and see how many mar-tech vendors end up on the 2017 version of Scott’s slide.

 

 

 

 

Back to the Coffee House: Has Journalism Gone Full Circle?

First, let’s consider two facts about Facebook that ran in Mediapost in the last two weeks. The first:

“A full 65% of people find their next destination through friends and family on Facebook.”

Let’s take this out of the context of just looking for your next travel destination. Let’s think about it in terms of a risky decision. Choosing somewhere to go on a vacation is a big decision. There’s a lot riding on it. Other than the expense, there’s also your personal experience. The fact that 2 out of 3 people chose Facebook as the platform upon which to make that decision is rather amazing when you think about it. It shows just how pervasive and influential Facebook as become.

Now, the next fact:

“Facebook users are two-and-a-half times more likely to read fake news fed through the social network than news from reputable news publishers.”

There’s really no reason to elaborate on the above – ‘nuff said. It’s pretty clear that Facebook has emerged at the dominant public space in our lives. It is perhaps the most important platform in our culture today for forming beliefs and opinions.

Sorry Mark Zuckerberg, but not matter what you may have said in the past about not being a media outlet, you can’t duck this responsibility. If our public opinions are formed on your private property that is a unimaginably powerful platform then – as Spidey’s Uncle Ben said (or the French National Convention of 1793; depending on whom you’re prefer to quote as a source) – “With great power comes great responsibility.” If you provide a platform and an audience to news providers – fake or real, you are, ipso facto, a media outlet.

But Facebook is more than just an outlet. It is also the forum where news is digested and shared. It is both a gristmill and a cauldron where beliefs are formed and opinions expressed. This isn’t the first time something like this has happened, although the previous occurrence was in a different time and a very different place. It actually contributed directly to the birth of modern journalism – which is, ironically – under threat from this latest evolution of news.

If you were an average citizen London in 1700 your sources for news were limited. First of all, there was a very good chance that you were illiterate, so reading the news wasn’t an option. The official channel for the news of the realm was royal proclamations read out by town criers. Unfortunately, this wasn’t so much news as whatever the ruling monarch felt like proclaiming.

There was another reality of life in London – if you drank the water it could possibly kill you. You could drink beer in a pub – which most did – or if you preferred to stay sober you could drink coffee. Starting in the mid 1600’s coffee houses started to pop up all over London. It wasn’t the quality of the coffee that made these public spaces all the rage. It was the forum they provided for the sharing of news. Each new arrival was greeted with, “Your servant, sir. What news have you?” Pamphlets, journals, broadsheets and newsletters from independent (a.k.a “non-royal”) publishers were read aloud, digested and debated. Given the class-bound society of London, coffee houses were remarkably democratic. “Pre-eminence of place none here should mind,” proclaimed the Rules and Orders of the Coffee-House (1674), “but take the next fit seat he can find.” Lords, fishmongers, baronets, barristers, butchers and shoe-blacks could and did all share the same table. The coffee houses of London made a huge contribution to our current notion of media as a public trust, with all that entails.

In a 2011 article the Economist made the same parallel between coffee houses and digitally mediated news. In it, they foreshadowed a dramatic shift in our concept of news:

“The internet is making news more participatory, social, diverse and partisan, reviving the discursive ethos of the era before mass media. That will have profound effects on society and politics.”

The last line was prescient. Seismic disruption has fundamentally torn the political and societal landscape asunder. But I have a different take on the “discursive ethos” of news consumption. I assume the Economist used this phrase to mean a verbal interchange of thought related to the news. But that doesn’t happen on Facebook. There is no thought and there is little discourse. The share button is hit before there is any chance to digest the news, let alone vet it for accuracy. This is a much different atmosphere of the coffee house. There is a dynamic that happens when our beliefs are called on the mat in a public forum. It is here where beliefs may be altered but they can never change in a vacuum. The coffee house provided the ideal forum for the challenging of beliefs. As mentioned, it was perhaps the most heterogeneous forum in all of England at the time. Most of all it was an atmosphere infused with physicality and human interaction – a melting pot of somatic feedback. Debate was civil but passionate. There was a dynamic totally missing from it’s online equivalent. The rules and realities of the 18th century coffee house forced thoughtfulness and diverse perspectives upon the discourse. Facebook allows you to do an end run around it as you hit your share button.