Category Archives: Behavior & Psychology

Quant vs Qual in the time of Crisis

Digesting reality is becoming more and more difficult. I often find myself gagging on it. Last Friday was a good example. I have been limiting my news intact for my own sanity, but Friday morning I went down the rabbit hole. Truth be told, I started doing some research for the post I was intending to write (which I will probably get to next week) and I was soon overwhelmed with what I was reading.

I’m beginning to suspect that we’re getting an extra dump of frightening news on Fridays as officials realize that it’s more difficult to enforce social distancing on weekends. Whether this is the case or not, I found my chest tightening from anxiety. My hands got shaky as I found myself clicking on frightening link after frightening link. Predictions scared the shit out of me. I was worried for my community and country. I was worried for myself. But most of all, I was worried for my kids, my wife, my dad, my in-laws and my family.

Fear and anxiety swamped my normally rational side. Intellect gave way to despair. That’s not a good mode for me. I have to run cool – I need to be rational to function. Emotions mentally shut me down.

So I retreated to the numbers. My single best source throughout this has been the posts from Tomas Pueyo – the VP of Growth at Course Hero. They are exhaustively researched statistical analyses and “what-if” models assembled by an ad-hoc team of rockstar quants. On his first post on March 10 –  “Coronavirus: Why You Must Act Now” – Pueyo and his team nailed it. If everyone listened and followed his advice, we wouldn’t be where we are now. Similarly, his post on March 19 – “Coronavirus: The Hammer and The Dance” gave a tough but rational prescription to follow. His latest – “Coronavirus: Out of Many, One” – drills down on a state-by-state analysis of COVID in the US.

I’m not going to blow smoke here. These are tough numbers to read. Even the best-case scenarios would have been impossible to imagine just a few weeks ago. But the worst-case scenarios are exponentially more frightening. And if you – like me – needs to retreat to ration in order to keep functioning, this is the best rationale I’ve found for dealing with COVID 19. It’s not what we want to hear, but it’s what we must listen to.

In my marketing life, I always encouraged a healthy mix of both quantitative and qualitative perspectives in trying to understand what is real. I’ve said in the past: “Quantitative is watching the dashboard while you drive. Qualitative is looking out the windshield.”

I often find that marketers tend to focus too much on the numbers and not enough on the people on the other side of those numbers. We were an industry deluged with data and it made us less human.

Ironically, I now find myself on the other side of that argument. We have to understand that even our most trustworthy media sources are going to be telling us the stories that have the most impact on us. Whether you turn to Fox or CNN as your news source, we would be getting soundbites out of context that are – by design – sensational in nature. They may differ in their editorial slants, but – right or left – we can’t consider them representational of reality. They are the outliers.

Being human, we can’t help but apply these to our current reality. It’s called availability bias. It the simplest terms possible, it means that those things that are most in our face become our understanding of any given situation.

In normal times, these individual examples can heighten our humanity and make us a little less numb. They remind us of the relevance of the individual experience– the importance of every life and the tragedy of even one person suffering.

“If only one man dies of hunger, that is a tragedy.
If millions die, that’s only a statistic.”

– Joseph Stalin

Normally, I would never dream of quoting Joe Stalin in a post. But these are not normal times. And the fact is, Stalin was right. when we start looking at statistics and mathematical modelling, our brain works differently. It forces us to use a more rational cognitive mechanism; one less likely to be influenced by emotion. And in responding to a crisis, this is exactly the type of reasoning required.

This is a time unlike anything any of us has experienced. In times like this, actions should be based on the most accurate and scientific information possible. We need the cold, hard logic of math as a way to not become swamped by the wave of our own emotions. In order to make really difficult decisions for the greater good, we need to distance ourselves from our own little bubbles of reality, especially when that reality is made up of non-representative examples streamed to us through media channels.

A Lesson Learned from the Lost Generation

“I wasn’t around for Y2K. Was it like this?”

The question was posed to me by a young man named Jeremy – about 18 or 19 – who brought the online order of groceries to my car. He had just been telling me how store employees had been scrambling to stay ahead of items people were starting to hoard so they could post limits to prevent the shelves being stripped bare. On this day, it was bread. He shook his head, unable to wrap it around people’s panic. He was trying to relate it to something that could serve as a baseline.

My initial reaction to his question was to laugh. Y2K was a nothingburger. We panicked, we nervously rang in the New Year of 2000, and then we laughed sheepishly and went on with life.

This is different. On so many levels. I told that to Jeremy. “I have been around for almost 60 years. I have never experienced anything like this before.”

I’ve been thinking about that conversation a lot since. In Jeremy’s short time here on the planet, he probably has never experienced true hardship. But then, neither have I. Not really. Not like what we’re about to experience.

If you were to plot a trendline of my life over the last 6 decades, it would overwhelmingly be up and to the right. Sure, there were blips. But it’s been a pretty damned good 60 years. For me, hardship has been defined by putting off a trip because I couldn’t afford it. Or buying a used car when I wanted a new one. Poor me.

In the writing of this, I tried to find some formula to put magnitude of significance to events like this. I couldn’t find one, so I made my own:

Personal Impact X Number of People Impacted X Duration of Impact

The Pew Research Center asked Americans to rank the most significant events of their lifetimes in 2016. If we just look at those events that were negative, they were 9/11 (by a significant margin), the JFK assassination and the Vietnam War.

But now let’s attempt to quantify the magnitude of significance. When I say personal impact, I’m not talking about emotional impact. I’m talking about material impacts on my life that are directly attributable to the event.

My heart broke on 9/11, just like all of yours. That day would change my perspective on many things. But in real terms, it didn’t shift my life in any significant ways. There was tightened security when I travelled, but that was about it. This in no way minimizes the tragedy of the event. I know it was excruciatingly real for some of you reading this. I’m just putting it in perspective for myself.

This will be different. There is a shit-ton of uncertainty about what lies ahead, but I’m pretty sure all our lives are going to change significantly for the next 18 months to 2 years at least.  And it will impact everyone in the world. The vast majority of us have never been through anything like this before.  But others have. In fact, a whole generation has. Unfortunately, none of them are around to talk to. They were called the Lost Generation.

My Grandfather was part of this generation. Officially, those belonging to the Lost Generation were born between 1883 and 1900. Charles Edward Hotchkiss was born in Herefordshire, England in 1888. He died in Ontario, Canada in 1955, at the age of 67. He was just 8 years older than I am today. Given what we’re going through currently, I stopped to think about what “Charlie” experienced in his lifetime.

In 1910, he boarded the SS Lake Champlain in Liverpool and came to Canada. He was 21. Four years later, he volunteered for service in World War I. In the next 4 years, 9 million soldiers would die, 21 million would be wounded (my grandfather was one of them), 7 million would be left permanently disabled. 10 million civilians also died.

Those numbers are staggering, but an even deadlier and more significant event was just getting started in 1917. Today, we remember it as the Spanish Flu but that is a misnomer. It was called that because early reporting of the severity of the influenza pandemic was censored in wartime Europe for fear that troops would panic and desert. The only country where reporting was somewhat accurate was in neutral Spain, which led to the mistaken notion that the impact was worse there than anywhere else. By the time the epidemic subsided in 1920, somewhere between 50 and 100 million people would die. It had infected 500 million people, a quarter of the world’s population.

This was the reality newly discharged Charlie came back to when he stepped off the boat in Halifax on September 14, 1919. He was 31.

Charlie married my grandmother, Rose, in 1926. Three years later, the world slipped into the Great Depression. Half of all banks in the US failed. Unemployment spiked to 25%. International trade collapsed by 65%. Millions became homeless migrants. And it would continue like this for the next 10 years. In the middle of all this – in 1935 – Charlie and Rose had a baby. It was my father, William Francis Hotchkiss.

When my dad was just 4, World War II started. My grandfather, who was 50, was too old to actively serve but the impact of the war was still immense on Rose, William and Charlie. Over the next 6 years, 100 million people would be directly impacted from more than 30 countries. It is estimated 20 million military personnel and 40 million civilians would die in those 6 years.

These events, any one of which would be staggering to us, were packed into just 3 decades. I tried to imagine myself going through that from 1990 to today. I couldn’t.

Sometimes, when you can’t see forward, it’s helpful to look back. When I did that, I realized we’re a pretty resilient species. The Lost Generation laid the foundation for the world we live in today. They weathered storm after storm after storm. They made it through. They raised families, started businesses and survived.

It will get hard for us. Really hard. It’s a definition of hardship many of us will be dealing with for the first time in our lives. But we go into this with technological and societal advantages the Lost Generation never had or could even dream of. We should be able to do this without falling apart.

We come from good stock.

Whipped Into a Frenzy

Once again, we’re in unprecedented territory. According to the CDC – COVID-19 is the first global pandemic since the 2009 H1N1 outbreak. While Facebook was around in 2009, it certainly wasn’t as pervasive or impactful as it is today. Neither – for that matter – was H1N1 when compared to COVID-19. That would make COVID-19 the first true pandemic in the age of social media.

While we’re tallying the rapidly mounting human and economic costs of the pandemic on a day-by-day basis, there is a third type of damage to consider. There will be a cognitive cost to this as well.

So let’s begin by unpacking the psychology of a pandemic. Then we’ll add the social media lens to that.

Emotional Contagion aka “The Toilet Paper Syndrome”

Do you have toilet paper at your local store? Me neither. Why?

The short answer is that there is no rational answer. There is no disruption in the supply chain of toilet paper. If you were inclined to stock up on something to battle COVID-19, hand sanitizer would be a much better choice.  Search as you might, there is no logical reason why people should be pulling toilet paper by the pallet full out of their local Costco.

There is really only one explanation; panic is contagious. It’s called emotional contagion. And there is an evolutionary explanation for it. We evolved as herd animals and when our threats came from the environment around us, it made sense to panic when you saw your neighbor panicking. Those that were on the flanks of the herd acted as an early warning system for the rest. When you saw panic close to you, the odds were very good that you were about to be eaten, trampled or buried under a rockslide. We’re hardwired to live by the principle of “Monkey see, monkey do.”

Here’s the other thing about emotional contagion. It doesn’t work very well if you have to take time to think about it. Panicked responses to threats from your environment will only save your life if they happen instantly. Natural selection has ensured they bypass the slower and more rational processing loops of our brain.

But now let’s apply the social media lens to this. Before modern communication tools were invented, emotional contagion was limited by the constraints of physical proximity. It was the original application of social distancing. Emotions could spread to a social node linked by physical proximity, but it would seldom jump across ties to another node that was separated by distance.

Then came Facebook, a platform perfectly suited to emotional contagion. Through it, emotionally charged messages can spread like wildfire regardless of where the recipients might be – creating cascades of panic across all nodes in a social network.

Now we have cascades of panic causing – by definition – irrational responses. And that’s dangerous. As Wharton Management professor Sigal Barsade said in a recent podcast, “I would argue that emotional contagion, unless we get a hold on it, is going to greatly amplify the damage caused by COVID-19”

Why We Need to Keep Calm and Carry On

Keep Calm and Carry On – the famous slogan from World War II Britain – is more than just a platitude that looks good on a t-shirt. It’s a sound psychological strategy for survival, especially when faced with threats in a complex environment. We need to think with our whole brain and we can only do that when we’re not panicking.

Again, Dr. Barsade cautions us “One of the things we also know from the research literature is that negative emotions, particularly fear and anxiety, cause us to become very rigid in our decision-making. We’re not creative. We’re not as analytical, so we actually make worse decisions.”

Let’s again consider the Facebook Factor (in this case, Facebook being my proxy for all social media). Negative emotional messages driven by fear gets clicked and shared a lot on social media. Unfortunately, much of that messaging is – at best – factually incomplete or – at worst – a complete fabrication. A 2018 study from MIT showed that false news spreads six times faster on social media than factual information.

It gets worse. According to Pew Research, one in five Americans said that social media is their preferred source for news, surpassing newspapers. In those 18 -to 29, it was the number one source. When you consider the inherent flaws in the methodology of a voluntary questionnaire, you can bet the actual number is a lot higher.

Who Can You Trust?

Let’s assume we can stay calm. Let’s further assume we can remain rational. In order to make rational decisions, you need factual information.

Before 2016, you could generally rely on government sources to provide trustworthy information. But that was then. Now, we live in the reality distortion field that daily spews forth fabricated fiction from the Twitter account of Donald. J. Trump, aka the President of the United States.

The intentional manipulation of the truth by those we should trust has a crippling effect on our ability to respond as a cohesive and committed community. As recently as just a week and a half ago, a poll found that Democrats were twice as likely as Republicans to say that COVID-19 posed an imminent threat to the U.S. By logical extension, that means that Republicans were half as likely to do something to stop the spread of the disease.

My Plan for the Pandemic

Obviously, we live in a world of social media. COVID-19 or not, there is no going back. And while I have no idea what will happen regarding the pandemic, I do have a pretty good guess how this will play out on social media. Our behaviours will be amplified through social media and there will be a bell curve of those behaviors stretching from assholes to angels. We will see the best of ourselves – and the worst – magnified through the social media lens.

Given that, here’s what I’m planning to do. One I already mentioned. I’m going to keep calm. I’m going to do my damnedest to make calm, rational decisions based on trusted information (i.e. not from social media or the President of the United States) to protect myself, my loved ones and anyone else I can.

The other plan? I’m going to reread everything from Nassam Nicholas Taleb. This is a good time for all of us to brush up on our understanding of robustness and antifragility.

What Happens When A Black Swan Beats Up Your Brand

I’m guessing the word Corona brings many things to your mind right now — and a glass full of a ice-cold beer may not be one of them. A brand that once made us think of warm, sunny beaches and Mexican vacations on the Mayan Riviera now is mentally linked to a global health crisis. Sometimes the branding gods smile on you in their serendipity, and sometimes they piss in your cornflakes. For Grupo Modelo, the makers of Corona beer, the latter is most definitely the case.

As MediaPost Editor Joe Mandese highlighted in a post last week, almost 40% of American beer drinkers in a recent poll would not buy Corona under any circumstances. Fifteen percent of regular Corona drinkers would no longer order it in public. No matter how you slice those numbers, that does not bode well for the U.S.’s top-selling imported drink.

It remains to be seen what effect the emerging pandemic will have on the almost 100-year-old brand. Obviously, Grupo Modelo, the owners of the brand, are refuting that there is any permanent damage. But then, what else would you expect them to say?  There’s a lot of beer sitting on shelves around the world that is waiting to be drunk. It’s just unfortunate it has the same name as a health crisis that so far is the biggest story of this decade.

This is probably not what the marketing spin doctors at Grupo Modelo want to hear, but a similar thing happened about 40 years ago.  Here is the story of another brand whose name got linked to the biggest health tragedy of the 1980s.

In 1946 the Carlay Company of Chicago registered a trademark for a “reducing plan vitamin and mineral candy” that had been in commercial use for almost a decade. The company claimed that users of the new “vitamin” could “lose up to 10 pounds in 5 days, without dieting or exercising.” The Federal Trade Commission soon called bullshit on that claim, causing the Carlay Company to strip it from its marketing in 1944.

Marketing being marketing, it wasn’t the vitamins in this “vitamin” that allegedly caused the pounds to melt away. In the beginning, it was something that chemists call benzocaine. That’s a topical anesthetic you’ll also find it in over-the-counter products like Orajel. Basically, benzocaine numbed the tongue. The theory was that a tongue that couldn’t taste anything would be less likely to crave food.

The active ingredient was later changed to phenylpropanolamine, which was also used as a decongestant in cold medications and to control urinary incontinence in dogs. In the ‘60s and ’70s, it became a common ingredient in many diet pills. Then it was discovered to cause strokes in young women.

The Carlay Company eventually became part of the Campana Corporation, which in turn was sold to Purex. The product morphed from a vitamin to a diet candy and was sold in multiple flavors, including chocolate, chocolate mint, butterscotch and caramel. If you remember Kraft caramels — little brown cubes packaged in clear cellophane — you have a good idea what these diet candies looked like.

Despite the shaky claims and dubious ingredients, the diet candies became quite popular. I remember my mother, who had a lifelong struggle with her weight, usually had a box of them in the cupboard when I was growing up. Sale hit their peak in the ‘70s and early ‘80s. There were TV ads and celebrity endorsers — including Bob Hope and Tyrone Power — lined up to hawk them.

Then, in 1981, the Centers for Disease Control and Prevention (CDC) published a report about five previously healthy men who all became infected with pneumocystis pneumonia. The odd thing was that this type of pneumonia is almost never found in healthy people. There was another odd thing. All five men were gay. In 1982, the CDC gave a name to this new disease: AIDS.

Of all the ways AIDS changed our world in the 1980s, one was particularly relevant to the marketers of those diet candies, which just happened to be named Ayds.

You can see the problem.

Ayds soldiered on until 1988, despite sales that dropped 50%. The company tried to find a new name, including Diet Ayds and Aydslim in the U.K. It was too little, too late. The candies were eventually withdrawn from the market.

Does this foretell the fate of Corona beer? Perhaps not. AIDS has been part of our public consciousness for four decades. A product with a similar sounding name didn’t stand a chance. We can hope that coronavirus will not have the same longevity. And the official name of the outbreak has now been changed to Covid19. For both these reasons, Corona — the beer — might be able to ride out the storm caused by corona, the virus.

But you can bet that there are some pretty uncomfortable meetings being held right now in the marketing department boardroom at Grupo Modelo.

What is the Moral Responsibility of a Platform?

The owner of the AirBnB home in Orinda, California suspected something was up. The woman who wanted to rent the house for Halloween night swore it wasn’t for a party. She said it was for a family reunion that had to relocate at the last minute because of the wildfire smoke coming from the Kincade fire, 85 miles north of Orinda. The owners reluctantly agreed to rent the home for one night.

Shortly after 9 pm, the neighbors called the owner, complaining of a party raging next door. The owners verified this through their doorbell camera. The police were sent. Over a 100 people who had responded to a post on social media were packed into the million-dollar home. At 10:45 pm, with no warning, things turned deadly. Gunshots were fired. Four men in their twenties were killed immediately. A 19-year-old female died the next day. Several others were injured.

Here is my question. Is AirBnB partly to blame for this?

This is a prickly question. And it’s one to extends to any one of the platforms that are highly disruptive. Technical disruption is a race against our need for order and predictability. When the status quo is upended, there is a progression towards a new civility that takes time, but technology is outstripping it. Platforms create new opportunities – for the best of us and the worst.

The simple fact is that technology always unleashes ethical ramifications – the more disruptive the technology, the more serious the ethical considerations. The other tricky bit is that some ethical considerations can be foreseen..but others cannot.

I have often said that our world is becoming a more complex place. Technology is multiplying this complexity at an ever increasing pace. And the more complex things are, the more difficult they are to predict.

As Homo Deus author Yuval Noah Harari said, because of the pace of technology, our world is becoming more complex, so it is becoming increasingly difficult to predict what the future might hold.

“Today our knowledge is increasing at breakneck speed, and theoretically we should understand the world better and better. But the very opposite is happening. Our new-found knowledge leads to faster economic, social and political changes; in an attempt to understand what is happening, we accelerate the accumulation of knowledge, which leads only to faster and greater upheavals. Consequently, we are less and less able to make sense of the present or forecast the future.”

This acceleration is also eliminating the gap between cause and consequence. We used to have the luxury of time to digest disruption. But now, the gap between the introduction of the technology and the ripples of the ramifications is shrinking.

Think about the ethical dilemmas and social implications introduced by the invention of the printing press. Thanks to the introduction of this technology, literacy started creeping down through social classes and it totally disrupted entire established hierarchies, unleashed ideological revolutions and ushered in tsunamis of social change. But the cause and consequences were separated by decades and even centuries. Should Guttenberg be held responsible for the French Revolution? This seems laughable, but only because almost three and a half centuries lie between the two.

Like the printing press eventually proved, technology typically dismantles vertical hierarchies. It democratizes capabilities – spreading them down to new users and – in the process – making the previously impossible possible. I have always said that technology is simply a tool, albeit an often disruptive one. It doesn’t change human behaviors. It enables them. But here we have an interesting phenomenon. If technology pushes capabilities down to more people and simultaneously frees those users from the restraint of a verticalized governing structure, you have a highly disruptive sociological experiment happening in real time with a vast sample of subjects.

Most things about human nature are governed by a normal distribution curve – also known as a bell curve. Behaviors expressed through new technologies are no exception. When you rapidly expand access to a capability you are going to have a spectrum of ethical attitudes interacting with it. At one end of the spectrum, you will have bad actors. You will find these actors on both sides of a market expanding at roughly the same rate as our universe. And those actors will do awful things with the technology.

Our innate sense of fairness seeks a simple line between cause and effect. If shootings happen at an AirBnB party house, then AirBnB should be held at least partly responsible. Right?

I’m not so sure. That’s the simple answer, but after giving it much thought, I don’t believe it’s the right one.  Like my previous example of the printing press, I think trying to saddle a new technology with the unintentional and unforseen social disruption unleashed by that technology is overly myopic. It’s an attitude that will halt technological progress in its tracks.

I fervently believe new technologies should be designed with humanitarian principles in mind. They should elevate humans, strive for neutrality, be impartial and foster independence. In the real world, they should do all this in a framework that allows for profitability. It is this, and only this, that is reasonable to ask from any new technology. To try to ask it to foresee every potential negative outcome or to retroactively hold it accountable when those outcomes do eventually occur is both unreasonable and unrealistic.

Disruptive technologies will always find the loopholes in our social fabric. They will make us aware of the vulnerabilities in our legislation and governance. If there is an answer to be found here, it is to be found in ourselves. We need to take accountability for the consequences of the technologies we adopt. We need to vote for governments that are committed to keeping pace with disruption through timely and effective governance.

Like it or not, the technology we have created and adopted has propelled us into a new era of complexity and unpredictability. We are flying into uncharted territory by the seat of our pants here. And before we rush to point fingers we should remember – we’re the ones that asked for it.

The Saddest Part about Sadfishing

There’s a certain kind of post I’ve always felt uncomfortable with when I see it on Facebook. You know the ones I’m talking about — where someone volunteers excruciatingly personal information about their failing relationships, their job dissatisfaction, their struggles with personal demons. These posts make me squirm.

Part of that feeling is that, being of British descent, I deal with emotions the same way the main character’s parents are dealt with in the first 15 minutes of any Disney movie: Dispose of them quickly, so we can get on with the business at hand.

I also suspect this ultra-personal sharing  is happening in the wrong forum. So today, I’m trying to put an empirical finger on my gut feelings of unease about this particular topic.

After a little research, I found there’s a name for this kind of sharing: sadfishing. According to Wikipedia, “Sadfishing is the act of making exaggerated claims about one’s emotional problems to generate sympathy. The name is a variation on ‘catfishing.’ Sadfishing is a common reaction for someone going through a hard time, or pretending to be going through a hard time.”

My cynicism towards these posts probably sounds unnecessarily harsh. It goes against our empathetic grain. These are people who are just calling out for help. And one of the biggest issues with mental illness is the social stigma attached to it. Isn’t having the courage to reach out for help through any channel available — even social media — a good thing?

I do believe asking for help is undeniably a good thing. I wish I myself was better able to do that. It’s Facebook I have the problem with. Actually, I have a few problems with it.

It’s Complicated

Problem #1: Even if a post is a genuine request for help, the poster may not get the type of response he or she needs.

Mental Illness, personal grief and major bumps on our life’s journey are all complicated problems — and social media is a horrible place to deal with complicated problems. It’s far too shallow to contain the breadth and depth of personal adversity.

Many read a gut-wrenching, soul-scorching post (genuine or not), then leave a heart or a sad face, and move on. Within the paper-thin social protocols of Facebook, this is an acceptable response. And it’s acceptable because we have no skin in the game. That brings us to problem #2.

Empathy is Wired to Work Face-to-Face

Our humanness works best in proximity. It’s the way we’re wired.

Let’s assume someone truly needs help. If you’re physically with them and you care about them, things are going to get real very quickly. It will be a connection that happens at all possible levels and through all senses.

This will require, at a minimum, hand-holding and, more likely, hugs, tears and a staggering personal commitment  to help this person. It is not something taken or given lightly. It can be life-changing on both sides.

You can’t do it at arm’s length. And you sure as hell can’t do it through a Facebook reply.

The Post That Cried Wolf

But the biggest issue I have is that social media takes a truly genuine and admirable instinct, the simple act of helping someone, and turns it into just another example of fake news.

Not every plea for help on Facebook is exaggerated just for the sake of gaining attention, but some of them are.

Again, Facebook tends to take the less admirable parts of our character and amplify them throughout our network. So, if you tend to be narcissistic, you’re more apt to sadfish. If you have someone you know who continually reaches out through Facebook with uncomfortably personal posts of their struggles, it may be a sign of a deeper personality disorder, as noted in this post on The Conversation.

This phenomenon can create a kind of social numbness that could mask genuine requests for help. For the one sadfishing, It becomes another game that relies on generating the maximum number of social responses. Those of us on the other side quickly learn how to play the game. We minimize our personal commitment and shield ourselves against false drama.

The really sad thing about all of this is that social media has managed to turn legitimate cries for help into just more noise we have to filter through.

But What If It’s Real?

Sadfishing aside, for some people Facebook might be all they have in the way of a social lifeline. And in this case, we mustn’t throw the baby out with the bathwater. If someone you know and care about has posted what you suspect is a genuine plea for help, respond as humans should: Reach out in the most personal way possible. Elevate the conversation beyond the bounds of social media by picking up the phone or visiting them in person. Create a person-to-person connection and be there for them.

The Fundamentals of an Evil Marketplace

Last week, I talked about the nature of tech companies and why this leads to them being evil. But as I said, there was an elephant in the room I didn’t touch on — and that’s the nature of the market itself. The platform-based market also has inherent characteristics that lead toward being evil.

The problem is that corporate ethics are usually based on the philosophies of Milton Friedman, an economist whose heyday was in the 1970s. Corporations are playing by a rule book that is tragically out of date.

Beware the Invisible Hand

Friedman said, “The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.”

This is a porting over of Adam Smith’s “Invisible Hand” theory from economics to ethics: the idea that an open and free marketplace is self-regulating and, in the end, the model that is the most virtuous to the greatest number of people will take hold.

That was a philosophy born in another time, referring to a decidedly different market. Friedman’s “virtue” depends on a few traditional market conditions, idealized in the concept of a perfect market: “a market where the sellers of a product or service are free to compete fairly, and sellers and buyers have complete information.”

Inherent in Friedman’s definition of market ethics is the idea of a deliberate transaction, a value trade driven by rational thought. This is where the concept of “complete information” comes in. This information is what’s required for a rational evaluation of the value trade. When we talk about the erosion of ethics we see in tech, we quickly see that the prerequisite of a deliberate and rational transaction is missing — and with it, the conditions needed for an ethical “invisible hand.”

The other assumption in Friedman’s definition is a marketplace that encourages open and healthy competition. This gives buyers the latitude to make the choice that best aligns with their requirements.

But when we’re talking about markets that tend to trend towards evil behaviors, we have to understand that there’s a slippery slope that ends in a place far different than the one Friedman idealized.

Advertising as a Revenue Model

For developers of user-dependent networks like Google and Facebook, using advertising sales for revenue was the path of least resistance for adoption — and, once adopted by users, to profitability. It was a model co-opted from other forms of media, so everybody was familiar with it. But, in the adoption of that model, the industry took several steps away from the idea of a perfect market.

First of all, you have significantly lowered the bar required for that rational value exchange calculation. For users, there is no apparent monetary cost. Our value judgement mechanisms idle down because it doesn’t appear as if the protection they provide is needed.

In fact, the opposite happens. The reward center of our brain perceives a bargain and starts pumping the accelerator. We rush past the accept buttons to sign up, thrilled at the new capabilities and convenience we receive for free. That’s the first problem.

The second is that the minute you introduce advertising, you lose the transparency that’s part of the perfect market. There is a thick layer of obfuscation that sits between “users” and “producers.” The smoke screen is required because of the simple reality that the best interests of the user are almost never aligned with the best interests of the advertiser.

In this new marketplace, advertising is a zero-sum game. For the advertiser to win, the user has to lose. The developer of platforms hide this simple arithmetic behind a veil of secrecy and baffling language.

Products That are a Little Too Personal

The new marketplace is different in another important way: The products it deals in are unlike any products we’ve ever seen before.

The average person spends about a third of his or her time online, mostly interacting with a small handful of apps and platforms. Facebook alone accounts for almost 20% of all our waking time.

This reliance on these products reinforces our belief that we’re getting the bargain of a lifetime: All the benefits the platform provides are absolutely free to us! Of course, in the time we spend online, we are feeding these tools a constant stream of intimately personal information about ourselves.

What is lurking behind this benign facade is a troubling progression of addictiveness. Because revenue depends on advertising sales, two factors become essential to success: the attention of users, and information about them.

An offer of convenience or usefulness “for free” is the initial hook, but then it becomes essential to entice them to spend more time with the platform and also to volunteer more information about themselves. The most effective way to do this is to make them more and more dependent on the platform.

Now, you could build conscious dependency by giving users good, rational reasons to keep coming back. Or, you could build dependence subconsciously, by creating addicts. The first option is good business that follows Friedman’s philosophy. The second option is just evil. Many tech platforms — Facebook included — have chosen to go down both paths.

The New Monopolies

The final piece of Friedman’s idealized marketplace that’s missing is the concept of healthy competition. In a perfect marketplace, the buyer’s cost of switching  is minimal. You have a plethora of options to choose from, and you’re free to pursue the one best for you.

This is definitely not the case in the marketplace of online platforms and tools like Google and Facebook. Because they are dependent on advertising revenues, their survival is linked to audience retention. To this end, they have constructed virtual monopolies by ruthlessly eliminating or buying up any potential competitors.

Further, under the guise of convenience, they have imposed significant costs on those that do choose to leave. The net effect of this is that users are faced with a binary decision: Opt into the functionality and convenience offered, or opt out. There are no other choices.

Whom Do You Serve?

Friedman also said in a 1970 paper that the only social responsibility of a business is to Increase its profits. But this begs the further question, “What must be done — and for whom — to increase profits?” If it’s creating a better product so users buy more, then there is an ethical trickle-down effect that should benefit all.

But this isn’t the case if profitability is dependent on selling more advertising. Now we have to deal with an inherent ethical conflict. On one side, you have the shareholders and advertisers. On the other, you have users. As I said, for one to win, the other must lose. If we’re looking for the root of all evil, we’ll probably find it here.

A Troubling Prognostication

It’s that time of year again. My inbox is jammed with pitches from PR flacks trying to get some editorial love for their clients. In all my years of writing, I think I have actually taken the bait maybe once or twice. That is an extremely low success rate. So much for targeting.

In early January, many of the pitches offer either reviews of 2019 or predictions for 2020.  I was just about to hit the delete button on one such pitch when something jumped out at me: “The number-one marketing trend for 2020 will be CDPs: customer data platforms.”

I wasn’t surprised by that. It makes sense. I know there’s a truckload of personal data being collected from everyone and their dog. Marketers love platforms. Why wouldn’t these two things come together?

But then I thought more about it — and immediately had an anxiety attack. This is not a good thing. In fact, this is a catastrophically terrible thing. It’s right up there with climate change and populist politics as the biggest world threats that keep me up at night.

To close out 2019,  fellow Insider Maarten Albarda gave you a great guide on where not to spend your money. In that column, he said this: “Remember when connected TVs, Google Glass and the Amazon Fire Phone were going to provide break-through platforms that would force mass marketing out of the box, and into the promised land of end-to-end, personalized one-on-one marketing?”

Ah, marketing nirvana: the Promised Land! The Holy Grail of personalized marketing. A perfect, friction-free direct connection between the marketer and the consumer.

Maarten went on to say that social media is one of the channels you shouldn’t be throwing money into, saying, “It’s also true that we have yet to see a compelling case where social media played a significant role in the establishment or continued success of a brand or service.”

I’m not sure I agree with this, though I admit I don’t have the empirical data to back up my opinion. But I do have another, darker reason why we should shut off the taps providing the flow of revenue to the usual social suspects. Social media based on an advertising revenue model is a cancerous growth — and we have to shut off its blood flow.

Personalized one-to-one marketing — that Promised Land —  cannot exist without a consistent and premeditated attack on our privacy. It comes at a price we should not be prepared to pay.

It depends on us trusting profit-driven corporations that have proven again and again that they shouldn’t be trusted. It is fueled by our darkest and least admirable motives.

The ecosystem that is required to enable one-to-one marketing is a cesspool of abuse and greed. In a pristine world of marketing with players who sport shiny ideals and rock-solid ethics, maybe it would be okay. Maybe. Personally, I wouldn’t take that bet. But in the world we actually live and work in, it’s a sure recipe for disaster.

To see just how subversive data-driven marketing can get, read “Mindf*ck” by Christopher Wylie. If that name sounds vaguely familiar to you, let me jog your memory. Wylie is the whistleblower who first exposed the Cambridge Analytica scandal. An openly gay, liberal, pink-haired Canadian, he seems an unlikely candidate to be the architect of the data-driven “Mindf*ck” machine that drove Trump into office and the Brexit vote over the 50% threshold.

Wylie admits to being blinded by the tantalizing possibilities of what he was working on at Cambridge Analytica: “Every day, I overlooked, ignored, or explained away warning signs. With so much intellectual freedom, and with scholars from the world’s leading universities telling me we were on the cusp of ‘revolutionizing’ social science, I had gotten greedy, ignoring the dark side of what we were doing.”

But Wylie is more than a whistleblower. He’s a surprisingly adept writer who has a firm grasp on not just the technical aspects, but also the psychology behind the weaponization of data. If venture capitalist Roger McNamee’s tell-all expose of Facebook, “Zucked,”  kept you up at night, “Mindf*ck” will give you screaming night terrors.

I usually hold off jumping on the year-end prognostication bandwagon, because I’ve always felt it’s a mug’s game. I would like to think that 2020 will be the year when the world becomes “woke” to the threat of profit-driven data abuse — but based on our collective track record of ignoring inconvenient truths, I’m not holding my breath.

‘Twas the Night Before the Internet

Today, just one day before Christmas, my mind swings to the serendipitous side. I don’t know about you, but for me, 2019 has been a trying year. While you would never know it by the collection of columns I’ve produced over the past 12 months, I have tried to find the glimpses of light in the glowering darkness.

Serendipity Sidetrack #1: “Glowering” is a word we don’t use much anymore. It refers to someone who has a dark, angry expression on their faces. As such, it’s pretty timely and relevant. You’d think we would use it more.

One of my personal traditions during the holidays is to catch one of the fourteen billion airings of “It’s a Wonderful Life.” Yes, it’s quintessentially Capraesque. Yes, it’s corny as hell. But give me a big seasonal heaping helping of Jimmy Stewart, Donna Reed and that “crummy little town” known as Bedford Falls.

Serendipity Sidetrack #2: The movie “It’s a Wonderful Life” is based on a 1939 short story by Philip Van Doren Stern. He tried to get it published for several years with no success. He finally self-published it and sent it to 200 friends as a 24-page Christmas card. One of these cards ended up on the desk of an executive at RKO pictures, who convinced the studio to buy the rights in 1943 as a vehicle for its star Cary Grant.

That movie never got made and the project was shelved for the rest of World War II. After the war, director Frank Capra read the script and chose it as his first Hollywood movie after making war documentaries and training films.

The movie was panned by critics and ignored by audiences. It was a financial disaster, eventually leading to the collapse of Capra’s new production company, Liberty Films. One other stray tidbit: during the scene at the high school dance where the gym floor opens over the pool (which was shot at Beverly Hills High School), Mary’s obnoxious date Freddie is played by an adult Carl “Alfalfa” Switzer, from the “Our Gang” series.

But I digress. This seasonal ritual got me thinking along “what if” lines. We learn what Bedford Falls would be like if George Bailey was never born. But maybe the same narrative machinery could be applied to another example: What would Christmas (or your seasonal celebration of choice) be like if the Internet had never happened?

As I pondered this, I realized that there’s really only one aspect of the internet that materially impacts what the holidays have become. These celebrations revolve around families, so if we were going to look for changes wrought by technology, we have to look at the structure and dynamics of the family unit.

Serendipity Sidetrack #3: Christmas was originally not a family-based celebration. It became so in Victorian England thanks to Queen Victoria, Prince Albert and Charles Dickens. After the marriage of the royal couple, Albert brought the German tradition of the Christmas tree to Windsor Castle. Pictures of the royals celebrating with family around the tree firmly shifted the holiday towards its present warm-hearted family center.

In 1843, Dickens added social consciousness to the party with the publication of “A Christmas Carol.” The holiday didn’t take its detour towards overt consumerism until the prosperity of the 1950s.

But back to my rapidly unraveling narrative thread: What would Christmas be like without the Internet?

I have celebrated Christmas in two different contexts: The first, in my childhood and the second with my own wife and family.

I grew up with just my immediate family in rural Alberta, geographically distant from aunts, uncles and cousins. For dinner there would be six of us around the table. We might try to call an aunt or uncle who lived some 2,000 miles away, but usually the phone lines were so busy we couldn’t get through.

The day was spent with each other and usually involved a few card games, a brief but brisk walk and getting ready for Christmas dinner. It was low-key, but I still have many fond memories of my childhood Christmases.

Then I got married. My wife, who is Italian, has dozens and dozens and dozens of relatives within a stone’s throw in any direction. For us, Christmas is now a progressive exercise to see just how many people can be crammed into the same home. It begins at our house for Christmas morning with the “immediate” family (remember, I use the term in its Italian context). The head count varies between 18 and 22 people.

Then, we move to Christmas dinner with the “extended” family. The challenge here is finding a house big enough, because we are now talking 50 to 75 people. It’s loud, it’s chaotic — and I couldn’t imagine Christmas any other way.

The point here is how the Internet has shifted the nature of the celebration. In my lifespan, I have seen two big shifts, both to do with the nature of our personal connections. And like most things with technology, one has been wonderful while the other has been troubling.

First of all, thanks to the Internet, we can extend our family celebrations beyond the limits of geography. I can now connect with family members who don’t live in the same town.

But, ironically, the same technology has been eroding the bonds we have with the family we are physically present with. We may be in the same room, but our minds are elsewhere, preoccupied with the ever-present screens in our pockets or purses. In my pre-Internet memories of Christmas, we were fully there with our families. Now, this is rarely the case.

And one last thought. I find — sadly — that Christmas is just one more occasion to be shared through social media. For some of us, it’s not so much who we’re with or what we’re doing, but about how it will look in our Instagram post.

The Ruts of Our Brain

We are not – by nature – open minded. In fact, as we learn something, the learning creates neural pathways in our brain that we tend to stick to. In other words, the more we learn, the bigger the ruts get.

Our brains are this way by design. At its core, the brain is an energy saving device. If there are two options open to it, one requiring more cognitive processing and one requiring less, the brain will default to the less resource intensive option.

This puts expertise into an interesting new perspective. In a recent study, researchers from Cold Spring Harbor Laboratory, Columbia University, University College London and Flatiron Institute found that when mice learn a new task, the neurons in their brain actually change as they move from being a novice to an expert. At the beginning as they’re learning the task, the required neurons don’t “fire” until the brain makes a decision. But, as expertise is gained, those same neurons start responding before they’re even needed. It’s essentially Hebbian Theory (named after neurologist Donald Hebbs) in action: the neurons that fire together eventually wire together.

We tend to think of experts as bringing a well-honed subset of intellectual knowledge to a question. And that is true, as long as the question is well within their area of expertise. But the minute an expert ventures outside of their “rut” they begin to flounder. In fact, even when they are in their area of expertise but are asked to predict where that path that may lead in the future – beyond their current rut – their expertise doesn’t help them. In 2005 psychologist Phillip Tetlock published “Expert Political Judgement” – a book showing the results of a 20-year long study on the prediction track record of experts. It wasn’t good. According to a New Yorker review of the book, “Human beings who spend their lives studying the state of the world…are poorer forecasters than dart-throwing monkeys”

Why? Well, just like those mice in the above-mentioned study, once we have a rut, our brains like to stick to the rut. It’s just easier for us. And experts have very deep ruts. The deeper the rut, the more effort it takes to peer above it. As Tetlock found, when it comes to predicting what might happen in some area in the future, even if you happen to be an expert in that area, you’d probably be better off flipping a coin than relying on your brain.

By the way, for most of human history, this has been a feature, not a bug. Saving cognitive energy is a wonderful evolutionary advantage. If you keep doing the same thing over and over, eventually the brain pre-lights the neuronal path required, saving itself time and energy. The brain is directing anticipated traffic at faster than the speed of thought. And it’s doing it so well, it would take a significant amount of cognitive horsepower to derail this action.

Like I said, in a fairly predictably world of cause and effect, this system works. But in an uncertain world full of wild card complexity, it can be crippling.

Complex worlds require Foxes, not Hedgehogs. This analogy also comes from Tetlock’s book. According to an old Greek fable, “The fox knows many things but the hedgehog knows just one thing.” To that I would add; the fox knows a little about many things, but the hedgehog knows a lot about one thing. In other words, the hedgehog is an expert.

In Tetlock’s study, people with “fox” qualities had a significantly better track record then “hedgehogs” when it came to predicting the future. Their brains were better able to take the time to synthesize the various data inputs required to deal with the complexity of crystal balling the future because they weren’t barrelling down a pre-ordained path that had been carved by years of accumulated expertise.

But it’s not just expertise that creates these ruts in our brains. The same pattern plays out when we look at the impact of our beliefs play in how open-minded we are. The stronger the belief, the deeper the rut.

Again, we have to remember that this tendency of our brains to form well-travelled grooves over time has been crafted by the blind watchmaker of evolution. But that doesn’t make it any less troubling when we think about the limitations it imposes in a more complex world. This is especially true when new technologies deliberately leverage our vulnerability in this area. Digital platforms ruthlessly eliminate the real estate that lies between perspectives. The ideological landscape in which foxes can effectively operate is disappearing. Increasingly we grasp for expertise – whether it’s on the right or left of any particular topic – with the goal of preserving our own mental ruts.

And as the ruts get deeper, foxes are becoming an endangered species.