The Gap Between People and Platforms

I read with interest fellow Spinner Dave Morgan’s column about how software is destroying advertising agencies, but not the need for them. I do want to chime in on what’s happening in advertising, but I need a little more time to think about it.

What did catch my eye was a comment at the end by Harvard Business School professor Alvin Silk: “You can eliminate the middleman, but not his/her function.”

I think Dave and Alvin have put their collective thumbs on something that extends beyond our industry: the growing gap between people and platforms. I’ll use my current industry as an example – travel. It’s something we all do so we can all relate to it.

Platforms and software have definitely eaten this industry. In terms of travel destination planning, the 800-pound Gorilla is TripAdvisor. It’s impossible to overstate its importance to operators and business owners.  TripAdvisor almost single-handedly ushered in an era of do-it-yourself travel planning. For any destination in the world, we can now find the restaurants, accommodations, tours and attractions that are the favorites of other travellers. It allows us to both discover and filter while planning our next trip, something that was impossible 20 years ago, before TripAdvisor came along.

But for all its benefits, TripAdvisor also leaves some gaps.

The biggest gap in travel is what I’ve heard called the “Other Five.” I live in Canada’s wine country (yes, there is such a thing). Visitors to our valley – the Okanagan – generally come with 5 wineries they have planned to visit. The chances are very good that those wineries were selected with the help of TripAdvisor. But while they’re visiting, they also visit the “other five” – 5 wineries they discovered once they got to the destination. These discoveries depend on more traditional means – either word of mouth or sheer serendipity. And it’s often one of these “other five” that provide the truly memorable and authentic experiences.

That’s the problem with platforms like TripAdvisor, which are based on general popularity and algorithms. Technically, platforms should help you discover the long tail, but they don’t. Everything automatically defaults to the head of the curve. It’s the Matthew Effect applied to travel – advantage accumulates to those already blessed. We all want to see the same things – up to a point.

But then we want to explore the “other five” and that’s where we find the gap between platforms and people. We have been trained by Google not to look beyond the first page of online results. It’s actually worse than that. We don’t typically scan beyond the top five. But – by the very nature of ratings-based algorithms – that is always where you’ll find the “other five.” They languish in the middle of the results, sometimes taking years to bump up even a few spots. It’s why there’s still a market – and a rapidly expanding one at that – for a tour guided by an actual human. Humans can think beyond an algorithm, asking questions about what you like and pulling from their own experience to make very targeted and empathetic suggestions.

The problem with platforms is their preoccupation with scale. They feel they have to be all things to all people. I’ll call it Unicornitis – the obsession with gaining a massive valuation. They approach every potential market focused on how many users they can capture. By doing so, they have to target the lowest common denominator. The web thrives on scale and popularity; the rich get richer and the poor get poorer. Yes, there are niche players out there, but they’re very hard to find. They are the “other five” of the Internet, sitting on the third page of Google results.

This has almost nothing to do with advertising, but I think it’s the same phenomenon at work. As we rely more on software, we gain a false confidence that it replaces human-powered expertise. It doesn’t. And a lot of things can slip through the gap that’s created.

 

The Importance of Playing Make-Believe

One of my favourite sounds in the world is children playing. Although our children are well past that age, we have stayed in a neighbourhood where new families move in all the time. One of the things that has always amazed me is a child’s ability to make believe. I used to do this but I don’t any more. At least, I don’t do it the same way I used to.

Just take a minute to think about the term itself: make-believe. The very words connote the creation of an imaginary world that you and your playmates can share, even in that brief and fleeting moment. Out of the ether, you can create an ephemeral reality where you can play God. A few adults can still do that. George R.R. Martin pulled it off. J.K. Rowling did likewise. But for most of us, our days of make-believe are well behind us.

I worry about the state of play. I am concerned that rather than making believe themselves, children today are playing in the manufactured and highly commercialized imaginations of profit-hungry corporations. There is no making — there is only consuming. And that could have some serious consequences.

Although we don’t use imagination the way we once did, it is the foundation for the most importance cognitive tasks we do. It was Albert Einstein who said, “Imagination is more important than knowledge. For knowledge is limited, whereas imagination embraces the entire world, stimulating progress, giving birth to evolution.”

It is imagination that connects the dots, explores the “what-ifs” and peeks beyond the bounds of the known. It is what separates us from machines.

In that, Einstein presciently nailed the importance of imagination. Only here does the mysterious alchemy of the human mind somehow magically weave fully formed worlds out of nothingness and snippets of reality. We may not play princess anymore, but our ability to imagine underpins everything of substance that we think about.

The importance of playing make-believe is more than just cognition. Imagination is also essential to our ability to empathize. We need it to put ourselves in place of others. Our “theory of mind” is just another instance of the many facets of imagination.

This thing we take for granted has been linked to a massive range of essential cognitive developments. In addition to the above examples, pretending gives children a safe place to begin to define their own place in society. It helps them explore interpersonal relationships. It creates the framework for them to assimilate information from the world into their own representation of reality.

We are not the only animals that play when we’re young. It’s true for many mammals, and scientists have discovered it’s also essential in species as diverse as crocodiles, turtles, octopuses and even wasps.

For other species, though, it seems play is mainly intended to help come to terms with surviving in the physical world.  We’re alone in our need for elaborate play involving imagination and cognitive games.

With typical human hubris, we adults have been on a century-long mission to structure the act of play. In doing so, we have been imposing our own rules, frameworks and expectations on something we should be keeping as is. Much of the value of play comes from its very lack of structure. Playing isn’t as effective when it’s done under adult supervision. Kids have to be kids.

Play definitely loses much of its value when it becomes passive consumption of content imagined and presented by others through digital entertainment channels. Childhood is meant to give us a blank canvas to colour with our imagination.

As we grow, the real world encroaches on this canvas.  But the delivery of child-targeted content through technology is also shrinking the boundaries of our own imagination.

Still, despite corporate interests that run counter to playing in its purest sense, I suspect that children may be more resilient than I fear. After all, I can still hear the children playing next door. And their imaginations still awe and inspire me.

Selfies: A Different Take on Reality

It was a perfect evening in Sydney Harbor. I was there for a conference and the organizers had arranged an event for the speakers at Milsons Point – under the impressive span of the Harbour bridge. It was dusk and the view of downtown Sydney spread out in front of us with awesome breadth and scope. It was one of those moments that literally takes your breath away. That minute seemed eternal.

After some time, I turned around. There was another attendee, who was intently focused on taking a selfie and posting it to social media. His back was turned to the view behind him. At first, I thought I should do the same. Then I changed my mind. I’d rely on my memory and actually try to stay in the moment. My phone stayed in my pocket.

In the age of selfies, it turns out that my mini-existential crisis is getting more common. According to a new study published in the Journal of Consumer Research, something called “self-presentational concern” can creep into these lifetime moments and suck the awe right out of them. One of the study authors, Alixandra Barasch, explains, “When people take photos to share, they remember their experience more from a third-person perspective, suggesting that taking photos to share makes people consider how the event (and the photos) would be evaluated by an observer. “

Simply stated, selfies take us “out of the moment”. But this effect depends on why we’re taking the selfie in first place. The experimenters didn’t find the effect when people took selfies with the intent of just remembering the moment. It showed up when the selfie was taken for the express purpose of sharing on social media. Suddenly, we are more worried about how we look than where we are and what we’re doing.

Dr. Terri Apter, a professor of psychology at Cambridge University, has been looking at the emergence of selfies as a form of “self-definition” for some time. “We all like the idea of being sort of in control of our image and getting attention, being noticed, being part of the culture.” But when does this very human urge slip over the edge into a destructive spiral? Dr. Apter explains, “You can get that exaggerated or exacerbated by celebrity culture that says unless you’re being noticed, you’re no one,”

I suspect what we’re seeing now is a sort of selfie arms race. Can we upstage the rest of our social network by posting selfies in increasingly exotic locations, doing exceptional things and looking ever more “Mahvelous”? That’s a lot of pressure to put on something we do when we’re just supposed to be enjoying life.

A 2015 study explored the connection between personality traits and posting of selfies. In particular, the authors of the study looked at narcissism, psychopathy and self-objectification. They found that frequent posting of selfies and being overly concerned with how you look in the selfies can be tied to both self-objectification and narcissism. This is interesting, because those two things are at opposite ends of the self-esteem spectrum. Narcissists love themselves and those that self-objectify tend to suffer from low self-esteem. In both cases, selfies represent a way to advertise their personal brands to a wider audience.

There’s another danger with selfie-preoccupation that goes hand-in-hand with distancing yourselves from the moment you’re in – you can fall victim to bad judgement. It happened to Barack Obama at Nelson Mandela’s memorial ceremony. In a moment when he should have been acting with appropriate gravitas, he decided to take a selfie with Danish Prime Minister Helle Thorning-Schmidt and then British Prime Minister David Cameron. It was a stunningly classless moment from a usually classy guy. If you check a photo taken at the time, you can see that Michelle Obama was not amused. I agree.

Like many things tied to social media, selfies can represent a troubling trend in how we look at ourselves in a social context. These things seem to be pointing in the same direction: we’re spending more time worrying about an artificial reality of our own making and less time noticing reality as it actually exists.

We just have to put the phone down sometimes and admire the view across the harbor.

 

Why We’re not Ready for AI to Take the Wheel…Yet

It’s interesting to see how we humans assign trust.

Consider the following scenario. At any time, in any city in the world, you will put your life in the hands of a complete stranger in an environment you have no control over without a second thought. We do it every time we hail a cab. We know nothing about the driver or their safety record. We don’t know if they’re a good person or a psychopath. We place trust without any empirical reason to do so.

Yet a number of recent surveys indicate the majority of us don’t trust self-driving cars. A recent survey by AAA found that 71% of us would be afraid to ride in a fully self-driving vehicle. I’m one of them. I’m not sure I could slam the door on a self-driven Uber and relax in the back seat while AI takes the wheel. Yet I pride myself on being a fairly rational person and there are plenty of rational reasons why self-driving cars should be far safer than the human powered equivalents.  Even the most skeptical measured comparisons call it a toss-up.

And that brings us to key point- we don’t assign trust rationally. We do it emotionally. And emotionally, we have a tortured relationship with technology.

The problem here is two-fold. First, our trust mechanisms are built to work best when we’re face-to-face with the potential recipient of trust. Trust evolved to be a human-dependent process. And that brings us to the second problem. Over the last thousand years or so, we have learned how to trust in institutions. But that type of trust is dissolving rapidly.

Author and academic Rachel Botsman has spent over a decade looking at how technology is transforming trust. In an interview with Fast Company, she unpacks this notion of imploding institutional trust, “Whether it’s banks, the media, government, churches . . . this institutional trust that is really important to society is disintegrating at an alarming rate. And so how do we trust people enough to get in a car with a total stranger and yet we don’t trust a banking executive? “

I think this transformation of trust has something to do with the decoupling phenomenon I wrote about last week. When we relied on vertically integrated supply chains, we had no choice but to trust the institutions that were the caretakers of those chains. But now that our markets have flipped from the vertical to the horizontal, we are redefining our notions of trust. We are digitally connecting with strangers through sharing economy platforms like AirBnB and Uber and, in the process, we are finding new signals to indicate when we should trust and when we shouldn’t.

There is another unique aspect to our decision to trust. We tend to trust when it’s expedient to do so. Like so many things in human behavior, trust is just one factor wrapped up in our ongoing risk vs reward calculations. Our emotions will push us to trust when it’s required to get what we want. The fewer the alternatives available to us, the more we tend to trust.

Our lack of trust in self driving vehicles is a more visceral example. I don’t think anyone believes the creators of self-driving technology are out to off our species in a self-driven version of a Mad Max conspiracy. We just aren’t wired to trust machines with our lives. There is an innate human hubris that believes that when it comes to self-preservation, our fates are best left in our hands.

Self-driving proponents believe that with time and exposure, these trust issues will be resolved. The trick to us trusting machines with our lives is to lull us into not thinking about it too much. Millions of us do it every day when we board an airplane. The degree to which our airborne lives are dependent on technology was tragically revealed with the recent Boeing Max incidents. The fact is, if we had any idea how much our living to see tomorrow is dependent on technology, we would dissolve into a shuddering, panic-stricken mess. In this case, ignorance is indeed bliss.

But there are few times when we have to make the same conscious decision to put our lives in the metaphorical hands of a computer to the extent we do in a self-driven car. If we look at how we decide to trust, this an environment strewn with psychological landmines. Remember, we tend to trust when we have no options. And in this case, our option couldn’t be clearer. The steering wheel is right there, begging us to take over. It freaks us out then the car pulls away from the curb and we see the wheel start turning by itself. It’s small wonder that 71% of us are having some control issues.

 

The Decoupling Effect – And How Regulators Struggle to Keep Up

What happens when you take a world divided by distance and connect it with technology?

If you said massive disruption, you’d be right, but perhaps this is just symptomatic of an even bigger shift. What you have is a world that is becoming decoupled. In a world subject to the whims of physicality, you had tremendous amounts of transactional friction that was caused by the infrastructure required to make things happen. This infrastructure created long logistical value chains that were required to make markets function.

Let’s say you had to plan a family holiday in 1979. Realistically the only way was to use a travel agent, who was the required link between you and all the separate silos required to book plane tickets, reserve a hotel, arrange for transfers and get your tickets to Disneyland. There was a long value chain with you at one end and all the disparate pieces of your vacation on the other. That chain has since been blown apart and reconnected in a much more direct way by technology. This is the nature of decoupling.

This process introduces an interesting paradigm shift that sits at the heart of disruption. It takes a vertical chain dictated by the physical and logistical friction of a marketplace and shifts the axis 180 degrees to a number of stacked horizontal markets – all directly connected to the end customer – each of which opens up tremendous new opportunities. Take, from the example above, the process of booking a hotel room. When we pick this out of the vertical chain and rotate it to a horizontal market directly connected to consumers, suddenly there is whole new universe of options, with room for AirBnB, Couchsurfing, VRBO, Flipkey and a host of other emerging platforms.

It’s this flipping of axes that lies at the heart of the decoupling that is redefining our notion of a marketplace. According to Harvard professor Thales Teixeira, it’s here – not technology – where we find the true center of disruption. He has just written a new book, “Unlocking the Customer Value Chain,” that explores this notion of decoupling.  In it, he shows how once a “decoupled link” flips from the vertical to the horizontal, there is plenty of room for new start-ups to emerge and disrupt the incumbents. In an interview for the Knowledge@Wharton podcast, he points out that for start-up, “decoupling is looking at one activity in the customer value chain and deciding to do it much better than the incumbent.”

Teixeira also reminds us of a vital point in all of this market upheaval. This decoupling and pivoting from the vertical to the horizontal brings with it a new wave of benefits for the customer. It takes a previously necessary pain point away from them and instead opens up a huge range of new options.  He notes, “My key finding in the book, after looking at many industries, is it’s the customer who is disrupting these businesses. The changing needs and wants and behaviors of customers are actually the root cause of this huge shift away from large retailers into other startups and other online retailers.”

But if the benefits of decoupling tend to accrue to the customer, there are equal and corresponding pain points that fall on other parties. I’ve already mentioned the market incumbents. But legislators and regulator also feel the impact of disruption. It’s in the nature of a customer value chain to be fairly cohesive and somewhat stable. These chains formed to overcome the physical market logistics that introduced transactional friction into the process of buying something. The chain was the only way to overcome this friction. And that friction introduced some degree of stability into the market. Chains take time to form and this stability allows for regulators and legislators to eventually introduce governing checks and balances to address loopholes and unintended consequences in the market.

When markets become decoupled, however, they move at a speed that soon leaves governance in the dust. These emerging opportunities and the start-ups that jump on board rely solely on the “Invisible hand” to bring balance to a dynamic marketplace. That tends to work fine to balance forces of supply and demand, but markets exist within ecosystems and it’s these ecosystems that can be negatively impacted by the disruptions that come with decoupling.

Again, let’s take AirBnB as an example. I live in the Canadian province of British Columbia. The biggest city in B.C. is Vancouver, which represents an ecosystem uniquely vulnerable to the sources of disruption. First, Vancouver prides itself on both sustainability and liveability. It’s one of Canada’s most popular tourist destinations. It also happens to be one of the world’s hottest real estate markets. The emergence of AirBnB dropped like a bombshell into the midst of this fragile triangle, unleashing unintended consequences in all directions. Predictably, the incumbent players felt the strain. Hotels and motels struggled to respond to the flood of new options in the market. But less predictably, residential neighborhoods were transformed into extended accommodation villages. Municipal taxes went from being an investment in the common good to a business expense to be kept under control. Zoning bylaws were ignored en masse. City legislators are just now cracking down on new legislation to try to corral the forces of disruption. And AirBnB is fighting back on multiple fronts.

This decoupling of the world is a Pandora’s box. Now that it’s opened, it will never again be closed. The links of the chain that are being decoupled will continue to get more granular, opening up more and more market opportunities. Teixeira gives the example of Sephora, who uncoupled something as minute as trying a sample of a lipstick or blush and turned it into a market opportunity.

Why Are So Many Companies So Horrible At Responding To Emails?

I love email. I hate 62.4% of the people I email.

Sorry. That’s not quite right. I hate 62.4% of the people I email in the futile expectation of a response…sometime…in the next decade or so (I will get back to the specificity of the 62.4% shortly).  It’s you who suck.

You know who you are. You are the ones who never respond to emails, who force me to send email after email with an escalating tone of prickliness, imploring you to take a few seconds from whatever herculean tasks fill your day to actually acknowledge my existence.

It’s you who force me to continually set aside whatever I’m working on to prod you into doing your damned job! And — often — it is you who causes me to eventually abandon email in exasperation and then sink further into the 7thcircle of customer service hell:  voicemail.

Why am I (and trust me, I’m not alone) so exasperated with you? Allow me to explain.

From our side, when we send an email, we are making a psychological statement about how we expect this communication channel to proceed. We have picked this channel deliberately. It is the right match for the mental prioritization we have given this task.

In 1891, in a speech on his 70th birthday, German scientist Hermann Von Helmholtz explained how ideas came to him  He identified four stages that were later labeled by social psychologist Graham Wallas: Preparation, Incubation, Illumination and Verification. These stages have held up remarkably well against the findings of modern neuroscience. Each of these stages has a distinct cognitive pattern and its own set of communication expectations.

  1. Preparation
    Preparation is gathering the information required for our later decision-making. We are actively foraging, looking for gaps in our current understanding of the situation and tracking down sources of that missing information. Our brains are actively involved in the task, but we also have a realistic expectation of the timeline required. This is the perfect match for email as a channel. We’ll came back to our expectations at this stage in a moment, as it’s key to understanding what a reasonable response time is.
  2. Incubation
    Once we have the information we require, our brain often moves the problem to the back burner. Even though it’s not “top of mind,” this doesn’t mean the brain isn’t still mulling it over. It’s the processing that happens while we’re sleeping or taking a walk. Because the brain isn’t actively working on the problem, there is no real communication needed.
  3. Illumination
    This is the eureka moment. You literally “make up your mind”: the cognitive stars align and you settle on a decision. You are now ready to take action. Again, at this stage, there is little to no outside communication needed.
  4. Verification
    Even though we’ve “made up our mind,” there is still one more step before action. We need to make sure our decision matches what is feasible in the real world. Does our internal reality match the external one? Again, our brains are actively involved, pushing us forward. Again, there is often some type of communication required here.

What we have here — in intelligence terms — is a sensemaking loop. The brain ideally wants this loop to continue smoothly, without interruption. But at two of the stages — the beginning and end — our brain needs to idle, waiting for input from the outside world.

Brains that have put tasks on idle do one of two things: They forget, or they get irritated. There are no other options.

The only variance is the degree of irritation. If the task is not that important to us, we get mildly irritated. The more important the task and the longer we are forced to put it on hold, the more frustrated we get.

Next, let’s talk about expectations. At the Preparation phase, we realize the entire world does not march to the beat of our internal drummer. Using email is our way to accommodate the collective schedules of the world. We are not demanding an immediate response. If we did, we’d use another channel, like a phone or instant messaging. When we use email, we expect those on the receiving end to fit our requirements into their priorities.

A recent survey by Jeff Toister, a customer service consultant, found that 87% of respondents expect a response to their emails within one day. Half of those expect a response in four hours or less. The most demanding are baby boomers — probably because email is still our preferred communication channel.

What we do not expect is for our emails to be completely ignored. Forever.

Yet, according to a recent benchmark study by SuperOffice, that is exactly what happens. 62.4% of businesses contacted with a customer service question in the study never responded. 90.5% never acknowledged receiving an email.  They effectively said to those customers, “Either forget us or get pissed off at us. We don’t really care.”

This lack of response is fine if you really don’t care. I toss a number of emails from my inbox daily without responding. They are a waste of my time. But if you have any expectation of having any type of relationship with the sender, take the time to hit the “reply” button.

There were some red flags that these non-responsive companies had in common. Typically, they could only be contacted through a web form on their site. I know I only fill these out if I have no other choice. If there is a direct email link, I always opt for that. These companies also tended to be smaller and didn’t use auto-responders to confirm a message had been received.

If this sounds like a rant, it is. One of my biggest frustrations is lack of email follow-up. I have found that the bar to surprise and delight me via your email response procedure is incredibly low:

  1. Respond.
  2. Don’t be a complete idiot.

Clear, Simple…and Wrong

For every complex problem there is an answer that is clear, simple, and wrong
H. L. Mencken

We live in a world of complex problems. And – increasingly – we long for simple solutions to those problems. Brexit was a simple answer to a complex problem. Trump’s border wall is a simple answer to a complex problem. The current wave of populism is being driven by the desire for simple answers to complex problems.

But, like H.L. Mencken said…all those answers are wrong.

Even philosophers – who are a pretty complex breed – have embraced the principle of simplicity. William of Ockham, a 14th century Franciscan friar who studied logic, wrote “Entia non sunt multiplicanda praetor necessitate.” This translates as “More things should not be used than are necessary.” It has since been called “Occam’s Razor.” In scientific research, it’s known as the principle of parsimony.

But Occam’s Razor illustrates a short coming of humans. We will look for the simplest solution even if it isn’t the right solution. We forget the “are necessary” part of the principle. The Wikipedia entry for Occam’s Razor includes this caveat, “Occam’s razor only applies when the simple explanation and complex explanation both work equally well. If a more complex explanation does a better job than a simpler one, then you should use the complex explanation.”

This introduces a problem for humans. Simple answers are usually easier for us.  People can grasp them easier.  Given a choice between complex and simple, we almost always default to the simple. For most of our history, this has not been a bad strategy. When all the factors the determine our likelihood to survive are proximate and intending to eat you, simple and fast is almost always the right bet.

But then we humans went and built a complex world. We started connecting things together into extended networks. We exponentially introduced dependencies. Through our ingenuity, we transformed our environments and, in the process, made complexity the rule rather than the exception. Unfortunately, that our brains didn’t keep up. They still operate as if our biggest concerns were to find food and to avoid becoming food.

Our brains are causal inference machines. We assign cause and effect without bothering to determine if we are right.  We are hardwired to go for simple answers. When the world was a pretty simple place, the payoff for cognitively crunching complex questions wasn’t worth it. But that’s no longer the case. And when we mistake correlation for causation, the consequences can be tragic.

Let’s go back to the example of Trump’s Wall. I don’t question that illegal (or legal, for that matter) immigration causes pressures in a society. That’s perfectly natural, no matter where those immigrants are coming from. But it’s also a dynamic and complex problem. There are a myriad of interleaved and inter-dependent factors underlying the visible issue. If we don’t take the time to understand those dynamics of complexity, a simple solution – like a wall – could unleash forces that have drastic and unintended consequences. Even worse, thanks to the nature of complexity, those consequences can be amplified throughout a network.

Simple answers can also provide a false hope that keeps us from digging deeper for the true nature of the problem. It lets us fall into the trap of “one and done” thinking. Why hurt our heads thinking about complex issues when we can put a checkmark beside an item on our to do list and move on to the next one?

According to Ian McKenzie, this predilection for simplicity is also rotting away the creative core of advertising. In an essay he posted on Medium, he points to a backlash against Digital because of its complexity, “Digital is complex. And because the simplicity bias says complicated is bad, digital and data are bad by association. And this can cause smart people trained in traditional thinking to avoid or tamp down digital ideas and tactics because they appear to be at odds with the simplicity dogma.”

Like it or not, we ignore complexity at our peril. As David Krakauer, President of the Santa Fe Institute and William H. Miller Professor of Complex Systems warned, “There is only one Earth and we shall never improve it by acting as if life upon it were simple. Complex systems will not allow it.”