One of the surest things I have learned from blogging experience to date is that when I hit a wall, the worst possible response is to try to charge through.  The brute force approach only breeds more frustration and reinforces the existing resistance.  A far better strategy is to stop straining.  As Morpheus says in The Matrix: “Stop trying to hit me and hit me!”  Sometimes it is best to stop trying and instead to just write, accepting whatever comes of it.

When nothing else is working the easiest subjects to write about, without fail, are those frustrations themselves.  Fortunately, these self indulgent reflections have an uncanny knack for uncovering new insights.  It turns out that when you stop chastising yourself and instead examine the sources of resistance, you often stumble upon nuggets of wisdom that generalize beyond the situation at hand.

That is how the seeds of this post emerged.  I started several others over the past few weeks, each of which quickly ballooned into thousands of words of incoherent garbage.  Each one only became more muddled the more I attempted to repair it, like layers of scar tissue piled one over another.  Finally I gave in…abandoned all of them and began teasing apart my frustrations.  Sure enough, within a few pages those ramblings uncovered something interesting…

The Shape of Productivity Cycles

I have now been through this cycle enough times to recognize a consistent pattern in my oscillations from productivity to stagnation and back again.  Each cycle begins as described above.  Coming off a period of creative stagnation my head is filled with new material.  During these troughs, all the hours that would otherwise be allocated to productive output default instead to content consumption (inputting new material).

As I begin to climb out of the trough my initial writing efforts are predictably disappointing.  The difficulty at this point in the cycle is that I am trying to play with too many moving pieces.  I don’t yet know which ideas will become core themes and which will remain peripheral.  I’m not yet confident about which themes remixed into fruitful combinations, and which will lead only to dead ends.

At some point along the way everything snaps suddenly into place.  An entire set of ideas crystallizes in a flash, and I immediately recognize how everything fits together.  A series of (overly)ambitious posts usually follows.  Sometimes these come together exactly as expected and the writing process proves rewarding.  At other times the new themes prove more challenging to articulate than anticipated.  But regardless of whether this new material lives up to expectations, the process writing itself follows a similar tempo.  At this point I am all in…fully committed.

Eventually the ambitious material is exhausted and gives way to mundane task of tying up loose ends and filling in gaps.  When a given theme is particularly successful this stage can be milked for quite a while.

Finally, towards the end of a cycle I get a second wind.  At the point all the puzzles pieces have been into a fully realized mental model and all the gaps filled.  That mental model briefly engenders a flurry of easily harvested follow-on insights.  This is the most psychologically comfortable stage in the cycle.  New material flows effortlessly from brain to text editor.

Once that last gasp fizzles I proceed reluctantly into a new trough.  I lose interest in whatever themes I had been working with and gradually lose focus.  That leads me to seek out new material, and the introduction of new material further muddies the cognitive waters as new patterns interfere with old flows.

Reversing the Narrative

Some of you might recognize the pattern described above as a mirror image of Venkat Rao’s Double Freytag Triangle narrative model:

In Venkat’s model clarity initially arrives in the form of a cheap trick, an incomplete insight that initiates a period of sense-making and slow momentum building (the valley).  Peak tempo does not arrive until the heavy lift, which constitutes a deliberate effort to move the entire episode towards climax (separation event) and closure.

My productivity cycles turn out, quite unexpectedly, to hit the same points in the opposite sequence.  [You will have to accept my assurance at face value that I did not massage the description above to produce this result...at least not consciously.]

My initial explorations give way to a sudden epiphany that then demands only a brief sense-making pause before proceeding towards a separation event.  Peak tempo and peak entropy are achieved with the first triangle, early in the episode.  If the separation event is successful then I descend into the valley, which now represents a period of exploitation (milking) rather than momentum building.  The cheap trick comes at the end of the sequence in the form of a final flurry of cheap insights.

Interpretations

I’m not yet entirely sure what to make of this mirror image arc.  Perhaps I am just doing it wrong, getting over-eager when new ideas pop into my head and failing to incubate them to their full potential.  That has surely been the case in at least a few situations.

But perhaps there is also a more charitable interpretation.  I will offer one such alternative…

Venkat’s formulation makes two relevant assumptions that (to my knowledge) are not explicitly stated:

1. The cheap trick is “cheap“.  The initial insight is incomplete, not fully formed.  It requires an extended period of sense-making and momentum-building to be developed into something exploitable.
2. The decision-maker possesses, has access to, or can develop the capabilities necessary to carry the cheap trick all the way through a heavy lift.

Taken together these two assumptions indicate a narrative arc in which success hinges on capacity for deliberative execution more so than the quality of intuitive insight.  In Tempo, Venkat explains:

Once you have spotted the cheap trick – a pattern that you can exploit to extract rewards from an initially incomprehensible environment – you must reflect on and reorganize the discoveries you made during exploration.  A cheap trick is not just an exploitable insight, it is an organizing insight.  It serves as a speck of dust around which a compact mental model can crystallize and grow, within the turbulent soup of data created by your exploration.  It allows you to makes sense of what you’ve learned.

In other words, the cheap trick merely provides an initial spark, which allows you to extract rewards only after it is deliberately developed for a period of time.

What happens if we challenge that assumption?

Suppose that the cheap trick springs forth from the exploration process relatively complete.  It immediately reorganizes your mental model and allows you to rapidly make sense of the “turbulent soup of data” that you have collected.  Suppose also that the value of the cheap trick exists primarily in the insight itself and not in its potential use as the substrate for a product or service.

To be clear, the cheap trick still remains in need of validation.  Our revised assumption of “completeness” does not necessarily imply validity.  What it does imply is that the potential gains from an extended period of sense-making and momentum-building are unlikely to justify their respective costs.  Instead what this cheap trick needs is an accelerated test of its validity…a separation event.

Venkat describes the decision to embark on a heavy lift as follows:

You launch a heavy lift when you are unable to stand the valley any longer, and sense that you are approaching diminishing returns.  Whether this timing is optimal depends on your estimate of the organizing capacity of the cheap trick.  If you overestimate its capacity, you will stay in the valley too long, and your act of creative destruction will fall victim to the perils of perfectionism.  If you emerge too early, you may find you have not extracted enough value from the cheap trick to earn the disproportionate returns you dreamed of.

So the optimal amount of time spent building momentum (in the valley) is a function of the returns you expect to reap from your insight.  This is where we will need to invoke a challenge the second assumption above.  If you, the decision maker, judge yourself ill-prepared (or ill-suited) to carry the cheap trick across the valley and through a heavy lift, then you likely do not have any extravagant dreams of extracting disproportionate returns in the first place.

In this case your optimal journey through the valley may shrink to zero.

Recalibrating

By challenging two implied assumptions we have now created a scenario in which the sensible decision is to immediately embark on a “moderate lift” and thereby to court a separation event.  What happens next is particularly interesting…

The separation event will either validate or invalidate your initial insights.  If your insights are invalidated then the game is over.  You might engage in a brief salvage effort but before long you will return directly to Go without collecting $200.

If the separation event leads to modest validation then you will likely proceed through the narrative arc described above – the reverse double Freytag triangle.

If your insights are met with particularly enthusiastic validation then you get a one time option to reconsider your earlier decisions and to return to the path of the standard double Freytag narrative.

Where does this option come from?

In the excitement surrounding a well received insight you gain the opportunity to step back in time and reposition the moderate lift as a cheap trick.  This opportunity presents itself when successful validation attracts the resource required for the full narrative arc that were previously lacking.  This might involve potential collaborator/facilitators showing up on your doorstep or sudden access to personal development opportunities.

Consider for example an amateur youtube video that unexpectedly goes viral.  The creator of the video enjoys a brief moment of fame, and more importantly, attention.  If employed skillfully, those fifteen minutes of fame can attract the resources necessary to persevere through the valley and embark on a legitimate heavy lift.  The act that was originally conceived as a rushed “moderate lift” – the production of the youtube video – reverts back to a cheap trick in the service of grander ends.

The Decision Point

Many unanticipated success stories follow this form.  So too do many one-hit-wonders.

I faced this decision myself on a microscopic scale last summer after publishing Unifying the Value Universe.  Though that post was just a tiny blip in the grand scheme, it was an overwhelming success relative to my capabilities and expectations at the time.

For a brief moment I enjoyed my fifteen minutes of long-tail fame.  Numerous people suggested that I should expand the post into an ebook and several even offered to collaborate on the project.  Ultimately I decided to politely decline those overtures…I wasn’t confident at that point in time that I would be capable of writing a book (even a short ebook) that I would be proud of.

That brings us back to the question of capabilities and expected rewards.  Given my temperament, I don’t mind playing the role of the tortoise.  While I am certainly not immune to temptation, prematurely admitting a flood of entropy into my life would have been a high price to pay for the rewards on offer.

For other people in different circumstances the cost/benefit analysis will point in the other direction.  Those individuals predisposed to adopt the role of the hare will be far more likely to seize the day and surge ahead into the unknown.

***

I titled this post “Case Studies in Narrative (Ir)Rationality” because these decisions generally owe far more to our innate temperament than to any sense for narrative rationality.  All of the above analysis may be fun to tease apart now, but it is all retrospective rationalizing.  I didn’t have any of this in mind when deciding how to proceed last summer.  Now that I am familiar with these concepts, they do serve as a useful organizing framework for current decision making, but they rarely drive my ultimate conclusions.

One of the primary benefits of models like the double Freytag is that they allow us to recognize how consistently biased our decisions actually are.  I don’t mean this cynically.  It is simply a fact of reality that (barring mental illness) we tend to manifest consistent preferences and leanings in our decision making.  We can only hope that having baselines for comparison, like the double Freytag, will allow us to recognize the particular decision points at which our constitutional biases threaten to lead us thoroughly astray.

photo courtesy of slightlynorth

Luis, one of the CEO’s from our first National Science Foundation class, came in to speak to our next class. We had a couple of minutes to catch up between sessions and the conversation got strangely awkward when I asked him how their startup was going.

“I’m kind of embarrassed to tell you, but we dumped the entire business idea and are doing something else” he said, avoiding eye contact.  “Oh, you pivoted when your team analyzed customer feedback?” I said as I grabbed some coffee.  He looked uncomfortable. “No, I was standing in the shower when it just hit me that our nano-materials technology should be used for something completely different. I didn’t change a few business model components, I changed all of them.”

I guess my jaw dropped a bit because Luis just continued. “I’m feeling guilty because I was using Customer Development and the Startup Owners Manual until I had that insight. But there was nothing in your book that prepared me for what just clicked in my head. I just saw our entire new business model in a flash, all of it at once. I’m now having the company execute on what came to me in the shower. A small part of me is confused whether I’m doing the right thing, but mostly I’m just convinced it’s as right as anything I’ve ever done. But there’s no chapter in your book or anyone else’s on this.”

I tried to stay calm as I realized what I was hearing.  “Luis, you need to pay attention to me very carefully. You just had an epiphany. If you’re lucky you may have a few more in your career. But while epiphanies are extremely rare, they are immensely important and need to be listened to. What you had was no accident. You were collecting enormous amounts of data on one side of your brain, but it was the other side that recognized the pattern. No one knows if epiphanies are always right, but people who follow them tend to get rich, famous or both.”

There are several aspects of this post that are striking.  First and foremost, I was surprised to see how accurately Steve Blank describes the phenomenology of epiphany, particularly by reference to unconscious data collection and pattern recognition.

That begs the question – Why does this side of the equation get so little attention in the lean start-up literature, including Blank’s other writings?

Blank uses terms like epiphany and insight liberally but rarely in context equivalent to anecdote above.  [He did title his first book Four Steps to the Epiphany but in that context he seems to mean something very different.]

Part of the answer can found in the statement, “If you’re lucky you may have a few more in your career. But while epiphanies are extremely rare they are immensely important and need to be listened to.”

If you assume that epiphany arrives only a few times in a career then it is reasonable to emphasize other factors that the entrepreneur can influence more readily.

But is this a valid assumption?  Are epiphanies “extremely rare“?

Self-Selection

I would argue that Blank’s assumption is only partially true.  Epiphany is not universally rare.  Rather, the lean start-up movement has become self-selecting.

The methodology has been formalized in such a way that it attracts people who think like Steve Blank (and the other leading figures of the movement).  It encourages people who are execution oriented and discourages people who are insight oriented.

Self-selection is evident in Blank’s anecdote.  Luis, the entrepreneur, is obviously conflicted by his recent moment of clarity.  Despite expressing conviction in his decisions, he also describes himself as “embarrassed” and “feeling guilty“.  Blank refers to Luis as “avoiding eye contact“.

That is the attitude we would expect of someone for whom epiphany is an infrequent and uncomfortable occurrence.   While Luis’s reaction may seem typical within the start-up community, he is certainly not representative of the general population.  Let’s define epiphany as:

a spontaneous realization, produced through unconscious pattern recognition, that suddenly enters conscious awareness

By that definition I have small epiphanies almost every day.  Larger epiphanies – those that spur me to reconsider major foundational assumptions – arrive every few months.  That is not meant to imply that I would be a particularly brilliant entrepreneur.  [I have my fair share of shortcomings in other areas.]  On the contrary, I am not particularly exceptional in favoring intuitive pattern recognition over methodical deliberation.

Using the popular myers-briggs personality typology as a guide, nearly half the population (Perceivers) will tend to trust the former over the latter.  If epiphany is extremely rare in Steve Blank’s experience, it has more to do with the company he keeps than the phenomenon of epiphany itself.

Courting Epiphany

If epiphanies truly are as valuable as Blank believes, then it might be worth trying to attract a bit more cognitive diversity into the entrepreneurial community.  At first blush Blank seems to agree:

While we can describe an epiphany, we don’t know how to teach it or make it happen. But we do know how to set up the conditions for it to occur.

First interact with lots of people — the more they are different from you with different ideas, and different perspectives the better.

Unfortunately, he immediately qualifies that statement by reverting to a methodological orientation:

(Getting out of the building in the Customer Development process guarantees you’ll do just that.)

Let’s be clear, the Customer Development process absolutely does not ”guarantee” that you will be introduced to different perspectives.

Perspective is conveyed through high bandwidth communication.  Hypothesis testing may help you confirm, invalidate or revise existing perspectives, but it cannot inherently suggest new perspectives.  Any empirical data gathered is just that – data – until it is interpreted through a new perspective.  To that end, entrepreneurs need to be having real conversations, not just the metaphorical variety.

Secondly, if those real conversations are all taking place within the SV/SF echo chamber then the entrepreneur isn’t accessing a meaningful diversity of perspectives.  Truly new perspectives will only be found by stepping outside the self-selected community.

To some extent Blank seems to recognize the value of introducing an entirely different modes of thinking:

It can be challenging for an entrepreneur to slow down, disengage from the relentless pace and smell the roses.  But making this kind of time for your right brain to process what your left-brain has learned can bring you insights you’d never uncover otherwise.  (emphasis mine)

Unfortunately, that is as far as he goes.  He does not entertain the possibility of making space for more right-brained people in the start-up community.  Sometimes we have to be content with baby steps…

If nothing else, Blank’s post is small step in the right direction at a time when the perceived value of ideas has been diminished to near zero.  Though one blog post hardly signals a paradigm shift, at the very least it is encouraging to see the focus on execution circumscribed, so that entrepreneurs like Luis need not feel quite so guilty about embracing their own insights.

photo by Norma Desmond

This post will just scratch the surface by addressing two questions:

1. Why do companies evolve in the opposite direction as the economy as a whole?
2. What distinguishes the growth of an attention economy venture from that of a transactional economy venture?

Where We’ve Been

Before we get going let’s quickly recap where we have been.  We have posited that socioeconomic coordination has developed in distinct layers, each layer emerging out of the foundations created by previous layers…

Hunter gatherer tribes relied on one-to-one relationships and cultural norms to facilitate cooperation within small groups.

With the advent of agriculture, tribes became stationary and their carrying capacity increased.  Larger populations and more investments in long-term resources demanded new forms of organization.  Political hierarchies emerged to provide the needed stability.  These political institutions initially took the form of simple feudal arrangements and gradually developed towards more elaborate structure.

As political economies grew they eventually reached scales at which the costs of the bureaucratic infrastructure (in terms of both inefficiency and/or inequality) exceeded the benefits of additional stability.  It was at these frontiers (geographical and ideological) that markets emerged.  The most prominent markets were spawned by state bureaucracies in support of political aims, but some also emerged at the edges outside state influence (i.e. black markets).

Markets grew and eventually far exceeded the scale of the bureaucracies that spawned them.  But markets also have their limits.  Those limits are not necessarily geographic in nature, but rather are related to flexibility and complexity.  The transactional model has proved highly effective at facilitating many forms of commerce but has proved too rigid for newer forms of collaboration.

It is at those edges that attention economies have emerged.  Like each preceding paradigm, much of the attention economy has been built via market oriented activity, but it is quickly taking on a life of its own.

The Social Technology Stack

Those four layers produce a picture of the overall economic space as follows:

This is the social technology stack – four domains of socioeconomic technology built one on top of another.  Each addresses a distinct scale and scope of economic activity.  Each emerged out of the limitations of the preceding paradigm.

Unfortunately the visualization cannot be drawn to scale or it would be impossible to discern.  In reality each paradigm is several orders of magnitude larger than the one preceding it.  To a very rough approximation, relationship economies top out at 150 people, political hierarchies at 150 thousand, and transactional economies at 150 million.  [We could debate these thresholds endlessly but for our purposes such precision is unnecessary.  Moreover, the thresholds are not fixed.  New technology extends the functional ranges in both directions, blurring prior boundaries.]

The area of the attention economy is drawn smaller than that of the transactional economy due to its current stage of development.  While attention economies already reach larger scales than transactional markets (represented by the outer radius of the yellow ring), the depth (value-add) of that activity still lags the depth of transactional commerce (represented by the width of the yellow ring relative to the green ring).

This russian doll model intuitively conveys that each layer is necessarily underpinned by preceding layers…

• Political hierarchies are fragile when their relational foundations are weak.
• Markets are corrupted when not supported by healthy political institutions.
• Attention economies would remain shallow without preexisting markets to motivate deep investment.

The Development Paths of New Ventures

For this part of the analysis it will be helpful to make a distinction between innovative ventures and competitive ventures.

• Innovative venture will be used to describe new ventures that enter the market via pie-expanding innovation.  Initially they have few direct competitors and therefore are not competing for share of a preexisting market.
• Competitive venture will be used to describe new ventures that enter preexisting markets and compete directly with incumbents for market share.

The distinction is qualitative.  Competitive ventures will need to offer some incremental innovation in order to gain market share.  Successful innovative ventures will indirectly compete with incumbents, even if only via disruption.

Innovative and Competitive are only the two extremes of a continuum.  I will illustrate the all-or-nothing cases for the sake of clarity.  The same approach could easily be used to illustrate various shades of grey.

Innovative Ventures

First let’s look at the development path of innovative ventures.

Innovative ventures will tend to be found at the edges of the russian-doll chart.  While this comports with our intuitive notions that innovation tends to occur at edges (geographical and metaphorical), we could also intuit the same from the structure of our working model.

Recall that each of the rings corresponds to a particular economic paradigm in a 2×2 plane.  Each paradigm will initially develop in fits and starts until it gain enough momentum to become self sustaining.  Growth will then accelerate until the socioeconomic technology inherent to that paradigm begins to produce diminishing returns.  This is the familiar sigmoidal growth curve applied to countless technological cycles.

Because innovative ventures are defined as pie-expanding they will opportunistically position themselves relative to the most promising environments for growth.  In the russian-doll model that is the outer rings.

Therefore we can plot the growth of an innovative venture using an analogous set of concentric rings centered on the outer edge of the previous chart:

The three rings represent three stages of growth.  Each arc extending beyond the boundaries of the attention economy represents new economic growth.  As the bubble expands so too does the overall economic pie.  Those arcs are shaded yellow to indicate that they are additive specifically to the attention economy.

The arcs that carve inwards (shaded) represent existing economic value that is captured as compensation.

Stages of Growth

At stage 1 the new venture sets up shop somewhere on the frontier.  It begins producing an appropriate attention asset, generating small bubble of outward growth, and in so doing it captures a small portion of the existing pool of attention (shaded yellow).

The attention captured during stage 1 facilitates further growth in the attention asset (via user generated content, social marketing, social proof, etc).  Assuming that the product itself continues to improve, this creates a virtuous cycle allowing the venture to advance to stage 2.  By that point the attention asset has generated a larger growth bubble (solid yellow) resulting in a commensurate capture of the existing attention pool (shaded).

Once the attention asset expands beyond stage 2, the value produced (radius of the 3rd growth bubble) exceeds the depth of the existing attention economy (width of the yellow ring).  The third compensation arc reaches into the green zone.  At this point the attention asset has grown to the point that will begin converting a portion of that attention into financial revenue.

We can now answer our first question: Why do new ventures evolve in the opposite direction of the economy at large?

Value creation in any given form will tend to be compensated in kind.  When someone offers you access to an attention product it is only natural to reciprocate with a similarly illegible gesture, a social share for example.  If someone offers you free access to a social networking platform you reciprocate by contributing content to that platform and inviting your friends to join.

In the shell chart above, the radial width of any given shell can be thought of as the depth of value exchanged.  In stages one and two, the depth of value offered by our hypothetical attention asset is offset fully via attention capture.  In the current start-up lingo, we might call this the “scale first” phase.

Once we reach stage 3 we enter the “monetize later” phase.  The  russian-doll model illustrates why the “scale first, monetize later” strategies has become so popular.  It is the natural development path for a venture that gets its start on the attention economy frontier.

The further the venture grows beyond stage 3, the more thoroughly it will prioritize monetary compensation over attention reciprocity.  If it gets sufficiently large its growth trajectory will eventually bring it into contact with the political economy ring, at which point all sorts of dubious activity might occur.

The russian-doll model predicts that as the attention economy expands, the grow first phase will get longer and monetize later stage will be pushed ever later.  At some point in the not too distant future the current venture capital model, premised solely on financial returns, will begin to break down.

A Note on Product Market Fit

The growth trajectory described above explains why “product-market fit” has emerged as such a prominent issue for the entrepreneurial community in just the past 5-10 years.  It is not because no one ever thought to consider the issue previously.  It is because the issue did not exist in its current form prior to recent expansion of the attention economy.

What the start-up gurus really mean by product-market fit (at least as applied to the majority of consumer internet start-ups) is wedging a product designed for the attention economy into the transactional economy.  It’s all about bridging the green-yellow barrier.

We shouldn’t be surprised that even with all the methodology that has been codified, the best options that anyone has come up with are advertising and freemium.  There are only so many ways you can unilaterally change your business model without driving your initial customers away.  Smaller, more flexible ventures will find themselves able to manage the attentional/transactional boundary in far more nuanced ways than the large institutions.

The unfortunate side effect of all the focus on product-market fit is that would-be entrepreneurs are being taught to disproportionately focus on business models rather than prioritizing innovation.  They are being taught how to optimize for the capture side of the equation rather than the creation side of the equation.

In other words, entrepreneurs are being taught to act like MBAs.  They are being taught formula.

Competitive Ventures

What distinguishes an attention economy start-up from a more conventional competitive venture?

After working through the previous example the answer becomes obvious.  A competitive venture will face none of the complications associated with managing the boundary between two paradigms.

A competitive venture sets itself up well inside the frontiers.  As such, its development path is comparatively simple.  It immediately produces a legible product and immediately receives legible transactional currency in compensation.  Its activity has no meaningful impact on the size of the economic pie because it merely replaces incumbent competitors.

Growth does not result in any meaningful strategic shift because all activity (production and compensation) remains within the transactional ring.

This may seem like a preferable growth trajectory, but remember that the development of new paradigms is a direct response to diminishing returns (i.e. lack of viable opportunity) in the previous paradigms.  Innovators are migrating towards the attention economy because that is where open frontiers exist.

Commoditization

There are some innovative (pie expanding) ventures that start up in the transactional economy, but often these ventures end up being commodity businesses.

Here’s why: in order to achieve immediate market acceptance in the transactional economy a product must satisfy a want or need so obvious that it generates anticipatory demand.  However, such obvious opportunities only remain unaddressed if they are enormously challenging.  Otherwise someone would have seized them by now.

Even if you can crack the technological challenge, there will be sure be a host would-be competitors working on it at the same time.

A timely example of this phenomenon is the market for photovoltaic technology.  The potential market for affordable renewable energy is so enormous that it might as well be unlimited.  Because the opportunity is so obvious and because the monetization strategy is so direct, the competition is tremendous.  Even as demand for solar products has grown exponentially, prices have fallen even more rapidly and most producers have lost money.

Future Directions

The russian-doll model can be extended in a number of directions to produce practical insights about specific strategies.  A few worth considering:

• What would a platform strategy look like?
• How would the strategies of dominant tech firms be depicted?
• Apple
• Google
• Facebook
• What might that exercise reveal about their future prospects?
• What types of products and strategies will be most successful assuming various potential economic scenarios?
• Acceleration of attention economy growth?
• Political collapse?
• European financial collapse?
• How would this model describe the struggles of incumbent companies to adapt to new technologies?

I may need to upgrade my artistic capabilities to appropriately depict some of this stuff but conceptually it isn’t all that difficult.  Let me know in the comments if you come up with any intriguing scenarios…

photo courtesy of Adrian S Jones

The next day Forbes ran a column asking - Did Greg Smith Commit Career Suicide?  It is one of the most unintentionally divisive bits of journalism you will ever find, completely dismissing Smith’s intentions and analyzing his decision in utilitarian terms.

The majority of commenters reflexively side with Smith, arguing that Forbes writer Susan Adams completely lost the plot.  A few seem to have adopted Smith as a kind of populist folk hero.  A separate minority defends the article, playing the role of sober realist.

The whole debate reminds me a quote from our friend Sebastien Paquet:

The worst career faux pas you can make as a mainstreamer is to tell the truth.

Seb’s insight points to a truth underlying both sides of the debate.  The crux of the issue is a tension so pervasive that we rarely take notice of it.  It is the tension between the individual perception of reality on the one hand, and socially constructed reality on the other.  Greg Smith vs Goldman Sachs is ultimately a case of individual truth vs social institution.

The Extremes

Some people struggle with this tension more than others.  It is the people at the extremes who (counter-intuitively) struggle least.  At one extreme we find people who are regularly in discord with social constructions.  Such individuals do recognize this discordance but they have become numb to it, trusting their own perceptions by default.  The archetype here is the the eccentric artist who expresses little regard for social convention.

At the other extreme we find people whose individual experience confirms the reality of social constructs.  These are people we might call socially-oriented.  They avoid psychic tension by adopting the social fabric as their reality.  This is not to say that such people are incapable of independent thought, but their brand of independent thinking tends to build upon social constructs that are taken for granted.

The Conflicted Middle

In order to make sense of the Greg Smith/Goldman debate we must turn our attention to the middle of the spectrum.

The people in the middle are those who actively shift between opposing constructs.  They must constantly balance questions like:

What world am I in now?
Which perceptions should I be filtering out/in?
Is it safe to reveal what is going on in my head at this moment?
Should I translate these thoughts into something more politically correct?

Most of this deliberation goes on below the level of conscious awareness.  Internal percepts are constantly weighed against external social cues.  When behavioral biases are rewarded (internally or externally) they are thereby reinforced and eventually become habitualized facets of personality.

The most obvious example of this tension is in the notion of work-life balance.

Psychic Partitions

For decades corporate culture maintained sturdy partitions that facilitated the necessary context switching.  To borrow one of Venkat Rao’s preferred archetypes, the organization man literally changed uniforms when moving between these two realities.  Every morning the organization man donned a business suit and entered the socially constructed world.  In the evening he changed into casual attire in preparation for reentry into individuated reality.

It has been clear for some time that the work-life balance paradigm is slowly disintegrating.  That is not news.  The anxiety produced by this ongoing transition is also well documented.  Less attention is given to the underlying cause of this anxiety.

It is not a matter of only balancing competing interests.  That much we accomplish with aplomb.  Deep anxiety is produced by competing interests imposed via incompatible worlds.  It is impossible to balance such interests when the opposed contexts apply incompatible standards.

One standard set of standards must dominate the other.  That is, once partitions are destroyed the organization (as psychic prison) not only bleeds into personal life but also invalidates personal life.

Greg Smith’s dilemma points to a further locus of psychic tension.  In addition to actively navigating between two worlds,  the modern organization man must also actively balance the trade-offs between them.  Investments in one domain naturally invalidate any assets accrued in the other.

If you have no other options, you make the best of your situation.  Twenty years ago Greg Smith would have kept his mouth shut, adopting Goldman’s perception of reality as necessary to get by.  But the existence of options amplifies an uncomfortable tension into an almost unbearable state of self-denial.

The Costs of Honesty

I experienced this first hand when I first acknowledged the possibility of quitting my job.  At first it was only a pipe dream with little impact on my day to day experience.  But over time the idea percolated.  I explored other options, and bit by bit the pipe dream gained realism.  In inverse proportion, every asinine policy and pointless bureaucratic process slowly became more offensive to my sense of self.

When I finally pulled the trigger, years of investments into social constructs crashed instantaneously.  I would be exaggerating if I said those investments became worthless – I’m sure at least a few readers are comforted knowing that I have attained some formal education – but those investments easily entered penny-stock territory.

For someone like Greg Smith, straddling the middle of the curve, the investments sacrificed are that much more costly.  I gave up a comfortable job at a public company, but I was never in the same income universe as a twelve year veteran at Goldman Sachs.  Smith’s decision to honor his own individual reality annihilated that mountain of accrued social capital.

Some will say that he should have resisted the temptation to go public…that he should have resigned quietly.  The Forbes article defers on this point to career coach Roy Cohen:

Cohen says that the kind of disillusionment with ethical standards that Smith expressed is common on Wall Street, but that it was “naïve” for Smith to blame his employers for his personal feelings. “It’s a problem in every financial institution,” says Cohen. Wise employees keep their sentiments to themselves, he says, and resign if they are unhappy.

Would a quiet resignation have been more appropriate?

We can only speculate as to Smith’s motives.  Perhaps he really is a belligerent fool just itching for a fight.  Or perhaps Smith’s sense of self was so diminished that he needed the affirmation.

It is worth noting the precise wording of the quote above…the casual dismissal of “personal feelings“…the assertion that “wise employees keep their sentiments to themselves“.

Cohen is asserting a particular perception of reality drawn from his own experience…and Cohen’s perception, being nearly synonymous with social constructs, denies Greg Smith’s individuality.  Cohen confirms this interpretation in the following passage:

Roy Cohen…says that Smith’s Times piece “raises questions about this fellow’s integrity and loyalty.” An even bigger issue, says Cohen: When Smith detailed how Goldman employees “callously … talk about ripping their clients off,” he put the livelihoods of the 30,000 people employed by the firm at risk.

In this context we can understand Smith’s decision to go out guns blazing.  He would tell you that remaining at Goldman would have raised questions about his integrity.  In his op-ed Smith states:

I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.

The contrast in tone is striking.

Earning Salvation

“it appears that man’s whole business is to prove that he is a man and not a cog-wheel“.
- Fyodor Dostoevsky (via The Outsider by Colin Wilson)

The unavoidable tension between the spheres of the individual and the social explains why the notion of “fuck-you money” resonates so strongly with the modern organization man.  The euphemism is somewhat misleading; it is not about being able to pick petty fights.  The appeal derives from the earned right to embrace one’s own reality.

It is the level of accomplishment at which the modern organization man transcends his dualistic world.  He has earned the right to honor himself without running afoul of social standards.  He can leverage enough resources to remold a small corner of the social world in his own image.

This is very important.  For the life-long achiever, opting out would be a failure.  That is the stuff of mid-life crises.  When someone has maintained this balance for so long, the only satisfactory exit is the one that justifies all the prior years of struggle.

Fuck-you money is an earned ticket out of the clueless zone.  It is the only mode of escape that allows someone to persist in the belief that he was never clueless in the first place.

Fuck-you money is the capitalist equivalent of biblical salvation.  The organization man is born impure, torn between two worlds.  Through capitalist virtue he absolves himself of original sin and gains access to paradise where no such conflicts exist.

The Fight or Flight Response

If you are unconvinced by all this talk of incompatible realities, I would ask you briefly to consider your own behavior.  Try to recall a situation in which someone’s bizarre (but harmless) behavior made you excessively uncomfortable.  Common examples would include:

• an otherwise normal person talking nonsense to himself without any inhibition
• someone unselfconsciously picking his nose in public (particularly in tight quarters)
• someone loudly talking on a cell phone about personal matters
• a parent allowing a young child to behave too childishly (crawling all over the floor and such)

My personal example: there is a kid in my apartment complex, probably in his twenties, who must have OCD or some similar disorder.  He spends hours in a small courtyard outside my window – walking in circles, talking to himself, and clapping at random intervals.

Why is this sort of behavior be so irritating?

It cannot be the distractions themselves.  We regularly tune-out far worse annoyances.

It is perceived attack on our personal sovereignty that drives us nuts.  These sorts of behaviors remind us that the reality we take for granted really cannot be taken for granted.

When we witness nutty behaviors our mirror neurons adopt the perspectives of the “nutty” people enacting them…and those alien perspectives are viscerally repellent.  (The reaction is all the more violent when these people are smarter than us, better looking, more successful or otherwise better off.)

We can be sure that such frustration are primarily psychological in nature because they evaporate once explained.  They become known phenomenon…not new information calling on empathy for interpretation.

The Spectrum Personified

Anyone who has ever been in a romantic relationship has experienced a similar phenomenon.  We effortlessly overlook undesirable behaviors when we want to like someone (beginning of a relationship), and we are pathologically unable to ignore the same behaviors when we feel threatened (end of a relationship).

These dynamics are the central focus of the movie The Edge of Love, a film tracking the lives of four characters…

Dylan, a poet, lives completely in his own world.  In the middle of WWII London he crosses paths with his childhood sweetheart Vera.  They were briefly lovers at the age of 15 and both have idealized their first time during the years apart.  Dylan immediately pronounces his undying love but fails to mention that he is now married.  Vera is a bit of an idealist herself but lives enough in the “real” world to take offense at Dylan’s omission when (wife) Caitlin appears on the scene shortly thereafter.

Caitlin is in love with the bits of performance art with which Dylan frequently regales her.  She is barely aware of the man beneath the performance.

An uneasy detente emerges.  The flirtation between Dylan and Vera continues and Caitlin immediately suspects their prior relationship.  Nevertheless, a fast friendship develops between the rival women.

The real fun begins when army officer William enters the picture, doggedly courting Vera.  Up to this point Dylan maintains the facade of attachment to wife Caitlin…but as Vera’s affections shift Dylan’s melancholy can no longer be contained.

The psychic prison that is Caitlin’s affection becomes clear.  In a revealing exchange, Dylan is up late composing verse lamenting the loss of Vera’s affections.  Caitlin wakes up and asks aggressively: “You don’t write poetry about me anymore?”

And a few moments later: “Bring that body back to me.”

Vera, for her part, understands these things somewhat better and resists William’s courtship as long as possible.  It is only when William is assigned to the battlefield that she reluctantly agrees to a rushed wedding.

***

The remainder of the plot follows predictable lines.  Tensions increase in William’s absence.  The relationship between Dylan and Caitlin shows increasing strain.  Dylan retreats into his private world while Caitlin desperately searches for external validation.  Dylan and Vera ultimately (and anti-climactically) succumb to temptation (just once), which sets the stage for the anticipated conflict when William returns from the battlefield shell-shocked, suspicious and jealous.

The climax is disappointing theatrically, but compelling philosophically.  William is put on trial for firing his rifle into Dylan and Caitlin’s home and then entering the living room with a (supposedly live) grenade.

The motive: After being insulted by Dylan’s elitist friends (and suspecting Dylan’s relations with Vera) William decides to scare the bejesus out of everyone to teach them a lesson about the gritty realities of war.

In the climactic scene, Dylan is called as a witness in William’s defense, to confirm (the truth) that William had only meant to scare them.  Instead Dylan testifies that William had intended to kill them.

This moment is quite telling.  Dylan is not merely actin in spite of a rival.  Dylan and William represent opposite ends of the spectrum.  William represents everything that Dylan abhors…everything that impinges on a poet’s individually constructed reality.  By falsifying his testimony, Dylan effectively denies William’s existence, and in so doing denies the reality that William represents, with all its weapons and wars and absurd obligations.

In a final plot twist, William is found not guilty despite Dylan’s perjury.  Again, the philosophical statement is clear.  William represents the socially constructed world.  The (faceless and nameless) jurors support the home team regardless of the evidence.

The Cog-Wheel Hypothesis

The entire film supports the same principle we find in all the examples above.  I am calling this the Cog-wheel hypothesis:

People will reflexively defend whatever constructs validate their experienced reality, regardless of any “objective” considerations.

Individuals who authentically present an air of objectivity have simply expanded the volume of their bubbles.  In the examples above:

• Greg Smith asserts a particular moral position, destroying 12 years of accumulated social capital.
• Roy Cohen unequivocally asserts the primacy of social constructs, regardless of the nasty behavior those constructs might obscure.
• In our daily lives, we exhibit fight or flight towards others whose behaviors imply conflicting perceptions of reality.
• The characters in The Edge of Love throw away long-standing relationships to defend the constructs underpinning their sense of self.

The final scene of The Edge of Love reinterprets the entire film as a story about the friendship between Vera and Caitlin.  While awkwardly exchanging final goodbyes, the two woman – who occupied adjacent positions in the middle of the spectrum – slowly soften towards each other and share a sentimental moment.  Despite their constant rivalry, they shared the same world…and that is all that ultimately mattered.

photo courtesy of greekadman

This is something I struggle with often.  I wrote a number of months ago about working backwards.  That is how all my material takes shape.  The ideas appear first and take on a life of their own.  One idea connects to another producing a tapestry of interconnections…

Eventually it comes time to articulate these patterns and communicate them to others…and that is when the difficulty starts.  It is at that this point that I need to invent some narrative device that conveys to you – the reader – why you should care.  This would be easy if I knew a priori why I cared, but as I just explained, that is generally not the case.  I care about a particular set of ideas because it  made a bunch of intriguing connections in my head…not because I made a decision beforehand to study those connections.

Unfortunately (for me), remarkable content rarely begins with:

“Hey you!  Here’s some stuff I’ve been noodling on.  I think it’s pretty cool…So pay attention!”

This is where framing comes in – introducing the primary theme via some narrative device that subtly facilitates shared perspective with the reader.   Admittedly, this an area where I need more practice.

It would not be such an obstacle if I were writing about the Facebook IPO or new Ipads.  In that case I could just launch into it and assume that everyone knows what’s going on.  But when introducing evergreen content generated by the random collisions in my head, inventing a compelling frame can be a challenge.

In face to face communication we would describe this as the process of generating rapport.  It is usually accomplished through contextually appropriate small talk that eventually segues into the main course.  Gradually you shift gears – clearing your throat, raising your voice, changing your tone, adjusting your posture and expression to indicate what is coming next.

The written word doesn’t avail itself to those same cues.  The written word also constrains external contextual cues.  We are not sharing a physical space at a dinner party, or a backyard bbq, or in a classroom.  There is no shared notion of “the weather” to act as absolute last resort fallback when the small talk reaches a dead end.

Instead we share a simple two dimensional canvas.  Any shared context must either be declared up front or artfully crafted into the narrative itself.

Sticking to the Formula

This is why so many bloggers are attracted to tried and true formulas.  They precisely identify a legible target audience and subsequently stick to the script.  If you know exactly who the reader is then you can skip all the difficult context setting stuff.  The context is always assumed to be the target niche, plain and simple.

[The prevailing wisdom in the internet marketing world states that you should choose a niche and then narrow it down with at least two qualifiers.  While this particular method is referred to as "the two qualifier method", countless other versions of the same general concept exist.  Using this approach, OnTheSpiral might be - "the ultimate source for information on the attention economy for 20-something males who crossfit."]

Sadly, it is not uncommon to see positioning statements that are just that contrived.  When used inappropriately, these statements merely provide window dressing, allowing hordes of me-too bloggers to republish the same tired material with only the most superficial amendments.  (Which is not to say that the two-qualifier is never appropriate.  It has its place for targeting certain types of marketing content.)

But my purpose in this post is not to disparage formulaic blogging yet again…

I am more interested in why/how these formulas come to be so widely accepted.

Shortcuts like the two-qualifier method seem to gain popularity because the alternatives are really hard – i.e. illegible, and therefore not easily conveyed via readily teachable methods.  It is far easier to engage in simple stereotyping (categorical targeting) than it is to artfully draw the reader into your perspective.  The latter is a skill not easily achieved without arduous self-directed practice.

A Meta-Formula

Compelling content consists of (at least) two components: information and perspective.

Information provides the substance…the particulars.  Perspective organizes the particulars, creating coherence.

The former is legible.  The latter is illegible.  Engaging content needs both.  Information without perspective results in dry textbook style prose.  Perspective without information results in hollow rhetoric.

Let’s return to the “niche plus two qualifier” method…where does it fail?

The problem is that all three components end up describing legible market segments.  They end up constraining the information to be conveyed rather than the describing the intended perspective.  Neglect of the perspective is almost inevitable given the phrasing of two-qualifier statements.

In my mock example above, “attention economy” is a legible topic area, while “20-something” and “crossfit” are both legible demographic/lifestyle groups.  I might intend the qualifiers to act as proxies for perspectives, but neither is particularly useful in that regard.  The fill-in-the-blank format inherently focuses the mind on legible constructs.

Compare to the Nike advertisement embedded below:

Now fill in the blanks.  What is the niche and what are the two qualifiers?

I’ll wait…

Is the niche cyclists?  Athletes?

You can’t identify any of the three because that isn’t how the ad is targeted.  It is targeting perspective.  Nike conveys the intended perspective (attitude) so poignantly that the ad transcends market segment.

Here we need to be careful….the Nike ad is not devoid of legible information.  The fact that it features Lance Armstrong (specifically), that he did survive testicular cancer (specifically)…those details clearly contribute to the overall impact.  However, those details do not constrain the target audience.  It is the illegible content that accomplishes the targeting.

Compelling content can take either form.  It can take the form of perspective supported by information, or information supported by perspective.  In some cases the targeting  might be shared between the two while in other cases the targeting is entirely accomplished by one or the other.  A methodology that focuses the mind on only one or the other thereby imposes certain biases on the content creator that may not be appropriate.

So, if it is just as valid to organize content around perspectives…what can we say about perspective?

What Drives You?

A couple weeks ago I was talking to a frequent collaborator who mentioned a personality inventory intended to identify “core motivations”.  This particular typology placed people into three groups:

• People motivated by achievement
• People motivated by influence
• People motivated by relationship

It struck me immediately that this list is one pillar short of a full house.  Provided only the three categories above, many of the great thinkers throughout history would be left unaccounted for…

Where would you put Albert Einstein in this typology?  (Having recently collected a bunch of quotes for my talk at Refactor Camp, this makes for easy fodder.)

You might guess that Einstein was motivated by achievement.  Perhaps he was striving to win the nobel prize or to achieve some unique legacy in the field of theoretical physics.  His own statements would disagree:

Try not to become a man of success but rather try to become a man of value.

Perhaps instead he was motivated to attain the influence that is due someone at the pinnacle of his profession.  Again, the evidence suggests otherwise:

I believe that a simple and unassuming manner of life is best for everyone, best both for the body and the mind.

This typology clearly needs a fourth category, to which I will presume to affix the label “coherence”.  Dictionary.com defines coherence as:

1. the act or state of cohering; cohesion.
2. logical interconnection; overall sense or understandability.
3. congruity; consistency.

I suggest that people like Einstein are ultimately driven by a desire for “logical interconnection” or “congruity” with their external environment.  Adding this fourth category also generates an symmetry that was previously lacking.  We can now decompose the four types based on characteristics across two dimensions:

• Achievement – desire to create impact in the impersonal environment
• Influence – desire to create impact in the human world
• Relationship – desire for emotional interconnection with the human world
• Coherence – desire for logical interconnection with the impersonal environment

It is easy to see why this fourth “core motivation” might be missed.

Coherence seekers are potentially the most passive of the four types.  The majority of coherence motivated individuals – armchair philosophers and the like –  might easily fade into the background.  Each of the other types seeks, first and foremost, either to interact with the social world or create some externalized impact (or both).  The coherence seeker does not necessarily pursue either, except as such pursuits further his/her primary aim.

The minority who, like Einstein, are unambiguously notable, are easily rationalized into one of the other three categories (assuming we ignore their self-reported internal experience).

Blogging for Perspective

I indulge the tangent above because it offers a set of primitives to anchor our discussion of perspective.  The core motivation typology is not definitive by any means, but it does give us something reasonable to work with.

If it’s not obvious already…I see myself as the fourth type.  (After completing the associated questionnaire, I predictably scored as confused combination of the three acknowledged types.)  I always bristled at the suggestion that I needed to define a priori a narrow target market.  Early on, I didn’t have enough experience to pinpoint the flaws in the conventional line of thinking.  I only knew that it felt wrong.  I have learned over the years that those feelings often point the way towards further coherence.

As I have I have gradually gained experience, it has become apparent that there is this other, equally valid, method of organizing content.  I have been unwittingly organizing around perspective from the beginning.  The pattern only become apparent in retrospect.

Along the way, as I drifted from one topic to another, the readers who were anchored to specific legible domains did indeed jump ship.  That was somewhat discouraging at first.  Now I have accepted it…

Blogs organized around topical niche tend to wander around a variety of perspectives.  They enthusiastically invite guest bloggers to contribute, introducing numerous (sometimes inconsistent) voices to the stream.  That approach is appropriate for some purposes but it is not conducive to coherence.  I prefer to meander through a variety of topics, all the while remaining true to a particular brand of coherence.

It is more challenging to build an audience this way.  Perspective is difficult to externalize…and even when conveyed skillfully, it is sometimes difficult for readers to internalize as intended.  Early efforts are rarely rewarding, and consequently the temptation always exists to milk any legible construct that succeeds in attracting attention.

But those who stick with it will inevitably get the itch to move on to new material…to seek new truths.

***

I have talked with several people over the past couple weeks who were wrestling in one way or another with this issue.  They were all asking some variety of the question: How should someone like me be blogging?

All of these individuals were/are coherence seekers…they are people who excel at identifying patterns across a variety of disciplines and constructing unique perspectives.

The literal-minded types who overwhelmingly dominate the problogger space are ill-equipped to serve these explorers.  The probloggers have never traveled this path and therefore, in their minds (for all intents and purposes) such a path does not exist.  In a certain sense they are right.  This approach does not avail itself to a single path…there is no formula, no twelve step method for instant success.  But they are wrong to discourage people unlike themselves on that basis.

For the kindred coherence seekers out there, this my advice:

Recognize that you are setting off without a map or a compass, but don’t let that reality discourage you from wandering around blindly until you find your way.

I say this not from any position of authority but rather as a fellow blind wanderer.  Whenever you endeavor to create something original, the normal rules do not apply (except where you decide that they do).

There is no requirement that you must respect existing categories.  Your role-models are not other bloggers.  Your role-models are other coherence seekers in whatever form they may present themselves.  If you are to survive on this path you will need to become adept at translating the lessons from one domain to another.

The price you pay for this autonomy is extracted in the form of slow progress…sometimes apparent only to yourself.  Make your peace with the fact that other people will often be unable to comprehend what you are doing, perceiving your efforts as naive stagnation.

Communicating perspective is an art.  You gain in capability only through laborious practice.  But you will also know unambiguously when you are pointed in the right direction…and once you get moving in the right direction, inertia takes care of the rest…for a while anyway

photo courtesy of miuenski      

Finch: It was strange.  I suddenly had this feeling that everything was connected. It was like I could see the whole thing…one long chain of events that stretched all the way back before Lark Hill. I felt like I could see everything that had happened, and everything that was going to happen. It was like a perfect pattern laid out in front of me, and I realized that we are all part of it, and all trapped by it.

Dominic: So do you know what’s going to happen?

Finch: No, it was a feeling.  But I can guess…

- V for Vendetta

A couple days ago I watched V for Vendetta for something like the 500th time.  It is one of those brilliant movies I can watch over and over again, and notice something new each time (including a few flaws here and there).  This time what struck me was the subtly implied dialectic between artistic sentimentality – characterized by V among others – and the coldly rationalistic orientation characterized by the primary villains, Creedy and Suttler.

The plot of the movie is revealed through the investigations of Chief Inspector Finch, as he gradually uncovers the connections between V’s personal history and the rise to power of the authoritarian Norsefire party.  Despite being a party member, Finch is identifiable as a protagonist by his embrace of intuition and narrative, as evidenced in the quote above.  The contrast is particularly clear in the following exchange:

Nameless Yes-man: Chancellor, I know no one seems to want to discuss this but, [deep breath] if we are to be prepared for any eventuality, then it can’t be ignored any longer.  The red report in front of you has been vetted by several demolition specialists.  Now it concludes that the most logical delivery system for the terrorist to use would be an airborne attack.

A seperate report has been filed suggesting a train, despite the fact that the tunnels surrounding parliament have been sealed shut.

Chancellor Suttler: [ominously] Who filed that report?

Nameless Yes-man: Chief Inspector Finch.

Chancellor Suttler: Do you have any evidence to support this conclusion Mr. Finch?

Finch: No sir, it’s just a feeling.

Chancellor Suttler: [menacing] If I am sure of anything Inspector Finch it is that this government will not survive if it is to be subject to your feelings.

As such, the line is drawn.  The unlikely protagonist follows his internal compass while the villain berates him for lack of evidence.  This is a curious dichotomy, and one I am beginning to more recognize more regularly in common cultural attitudes.  It is not only villainous politicians who express this attitude.  The intellectual community offers it own flavor in the form of empirical extremists.

They blithely dismiss any information that is not sourced from a double-blind placebo controlled study.  When presented with new ideas these individuals reflexively denigrate any propositions they deem untestable.  Conjectures that have not been tested, or that are not yet testable, are condemned as unscientific and dismissed.

We see this accusation levied today at ongoing theoretical endeavors like string theory.  Wikipedia notes:

 Opponents, such as David Gross, suggest that the idea is inherently unscientific, unfalsifiable or premature.

My perusals through wikipedia revealed fewer criticisms of this sort than I expected, so perhaps this debate is maturing within the academic community.  Nevertheless, such criticisms are alive and well in online discussion forums and popular science culture.  Consider for example the worldview implied by the xkcd comics below.  First, endorsing half-baked empiricism:

Then mocking incomplete theory:

Similarly, I recently began reading Design in Nature: How the Constructal Law Governs Evolution in Biology, Physics, Technology, and Social Organization by Adrian Bejan.  [Check out John Hagel's thorough review for a nice summary of the constructal law.]  A quick glance at the associated wikipedia page reveals criticisms almost identical to those above:

The main criticism of constructal theory is that its formulation is vague.  The constructal law states that “For a finite-size system to persist in time (to live), it must evolve in such a way that it provides easier access to the imposed currents that flow through it”, but there is neither a mention of what these “currents” are nor an explicit definition of what “providing easier access” means. As a result, constructal theory is very versatile, but often unconvincing: depending on the choices made for the currents and the “access” to them, it can lead to extremely different results.

I have no particular cause to come to the defense of either theory (though admittedly I am intrigued by the implications of constructal theory).  I am more interested in the form of the criticisms themselves.  Though they may seem irrefutable when presented in isolation, they are far more tenuous when considered in appropriate context.

The history of science is replete with “unscientific” ideas that were only gradually developed into empirically testable theories after long periods of speculative formulation.

Pseudoscience?

When studying any complex phenomenon it is inevitable that researchers will intuit certain insights prior to formulating testable hypotheses.  When the subject matter in question is a candidate unified theory of everything (string theory) it stands to reason that the process of precisely formulating testable hypotheses might take many years.

Albert Einstein published his first paper on the theory of special relativity in 1905.  In a 1907 publication he predicted gravitational time dilation (the notion that time slows down for particles/objects moving near the speed of light), but that hypothesis would not be testable for many years.  In a 1911 publication on general relativity Einstein predicted the gravitational deflection of light.   That prediction would ultimately be confirmed eight years later.

Surely we don’t want to claim that Albert Einstein was dabbling in pseudoscience in those 15 years before the experimentalists caught up with his theory?  But applying the standards implied above, we would have to conclude that indeed he was.  He was promulgating what appeared to be an untestable theory, and the initial skepticism with which relativity was received reflected that assessment.  Case in point, in 1921 Einstein was granted the Nobel prize, not for his work on relativity, but rather for his work on the photoelectric effect, as relativity was still considered controversial.

Einstein’s example makes clear the shortcoming of the strict empiricist attitude.  That attitude is not incorrect so much as it is myopic.  In short, it denies the role of art in science.  It denies the importance of intuition and insight.  It presumes that all “scientific” thinking must be conducted bottom-up…naively ignoring the role of top-down observation in guiding empirical experimentation.

The Role of Art in Science

It should not be surprising that the counterpoint to myopic rationalism is to be found in the arts rather than the sciences.  As Evey says in V for Vendetta – “Artists use lies to tell the truth.”  Ideally, science would use the truth to tell the truth…but unfortunately the path to objective truth is not always readily apparent.  Sometimes we need to catch a glimpse of subjective truth in order to orient our search for objective truth.

Those glimpses of subjective truth are the domain of art.  The translation of  subjective truth into empirical hypothesis is the domain of the theoretician.  If the world were simple, such translation would not be necessary.  Fortunately, the world is beautifully complex and offers plenty of fodder for theoreticians to play with.

To ignore the existence of complex problems requiring of theoretical translation is the epitome of irrationality.  The individual’s who myopically insist on empirical evidence before opening their minds to any new idea, are choosing to remain willfully ignorant of the labyrinthine reality in which we find ourselves enveloped.  They are choosing to restrict their vision to only the reductive world that current scientific tools can meaningfully quantify.  Historian Jacob Burckhardt described their folly thusly:

The essence of tyranny is the denial of complexity.

I can do no better Burckhardt so I will leave it there for today…

photo courtesy of brandoncripps

What are these temptations?  We are all familiar with the phrase ‘power corrupts’, but to what sorts of power does this phrase refer?  What do we mean by ‘corruption’?  Can we be no better than supreme court justice Potter Stewart?

I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description ["hard-core pornography"]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.

—Justice Potter Stewart, concurring opinion in Jacobellis v. Ohio 378 U.S. 184 (1964)

I think we can do better by understanding the lifecycle of productive ventures in the context of their environment.  In part I of this series I proposed that there is a consistent pattern in the evolving structure of human societies.  That argument described the overall human created environment – the accumulated stack of social ‘technologies’, that forms the background for all economic activity.   That stack has been developed through four economic paradigms:

• early hunter-gatherer tribes employed relational economies
• stationary agrarian civilizations added a layer of hierarchical political structure
• industrial societies fully embraced an additional layer consisting of transactional mechanisms (markets, money, prices, etc)
• we are now currently building a fourth layer that I have been referring to as the attention economy

[As an aside, my current speculation is that beyond the attention economy, additional layers of technology will form something like relationship economy 2.0.  I may write more on that at some point, but given our current vantage point any such extrapolations are more science fiction than informed forecast.]

Does this framework help us differentiate between the evil corporations and the good citizens?

I think it does.  The key insight comes from recognizing that while the socioeconomic environment develops in one direction through those stages, individual ventures tend to develop in the opposite direction.  Individual ventures take shape at the contemporary edge and, as they grow, are gradually caught in an undertow that pulls them from the edge and into the depths of the dominant paradigm.

The prevailing wisdom in the start-up community illustrates this pattern beautifully…

A Cynical Take on The Start-Up Lifecycle

The seed of a the modern consumer internet start-up – let’s call our hypothetical example, Undertow Inc. – takes shape when a few collaborators (a relational group) get together to hack up an idea.  If all goes well they produce a beta product for release to a select subset of the public (an attention economy).  The attention economy is where they will remain for some time, gradually building up their credentials (registered users, pageviews, etc).

As their achievements compound they eventually encounter the boundaries of the attention economy in its current stage of development.  Users and eyeballs are great but in order to pay the bills – and more importantly for our ambitious little sociopaths, to scale - they will need more than attention.  They will need money.  Preferably lots of it…a war chest so to speak (a now doubly anachronistic euphemism derived from political conflict).

Once Undertow Inc accepts outside investment the transactional economy has its hooks in.  Our fledgling start-up is now the steward of scarce transactional assets, and will need to establish formal structures to manage and account for those assets.  Even so, these are still early days.  The VC investors would rather hit a home run than pinch pennies so the focus remains on growing the attention asset.

It is only after ‘product-market fit’ is firmly established that the transactional economy hooks begin skewing incentives.  It is at this point that advertising begins colonizing all corners of the user interface.  Carefully tested eye-candy is introduced to draw attention to anything monetizable.  What was once an innovative product becomes the gaping mouth of a conversion funnel.  Initial success (hype) create a snowball effect, as the herd of VC sheep begin carpet bombing offer sheets with increasingly unreasonable return expectations.  [Remember, this is the cynical version of the story ]

If/when Undertow Inc “successfully” reaches IPO scale it is thoroughly bound to the transactional economy.  Non-financial goals take a backseat to maximizing profits.  Moreover, the profit seekers in question are more fickle than ever.  The long-term VC is replaced by a faceless mob of institutional investors and day-trading CNBC junkies. [This last part is generally left out of the silicon valley version of the script]

The most successful institutions eventually arrive in territory more commonly populated by the industrial icons of an earlier generation – the political economy.  As Undertow Inc assumes a dominant position relative to its competitors, the temptation to fortify that position via political finagling becomes almost irresistible.  The first tentative steps into this territory are likely defensive in nature – protecting IP from patent trolls, or perhaps a reluctant lobbying effort to fend off a predatory incumbent.

Those same defensive capabilities are easily redeployed offensively…and the once disruptive upstart assumes the role of the politically connected incumbent

The Generous Version

Ok, that was the cynical version.  I present it first A) because it was more fun to write with a touch of humor, and B) because sadly that is the script we encounter in the popular media most often.  The temptation of ‘growth for its own sake’ is difficult to resist and those organizations that embrace the temptation enthusiastically are celebrated most visibly.

Fortunately, there is a more generous perspective on the above story.  I argued in part I that each successive paradigm is spawned by, and founded upon, the social technology established during the preceding paradigm (i.e. markets are created by governments, etc).  Nevertheless, those foundations are far from perfect.  They are full of flaws and extraneous material, just as our bodies are full of hidden genetic defects and vestigial organs.

The value of the process described above becomes clear when we acknowledge that the impetus for foundational reform rarely comes from within.  The government is about as likely to reform itself as the human appendix is to decide it has outlived its usefulness and spontaneously disappear.  The same can be said for the systematic distortions in the financial markets as currently constituted.  

Innovation comes from the edge.  Some innovations can spark positive change while remaining at the edge…pulling the action away from obsolete social technology.  In other cases the existing foundations still provide irreplaceable supporting functions.  In these cases reform must be carried to the core, which occurs only when foundations are built to support the necessary reforming innovations.

What does that mean?

It would be nice to think that government responds to the people, but for the most part it doesn’t…at least not anymore.  The political economy serves and is sustained by the transactional economy.  The government is an enormous bureaucratic Leviathan and, for the most part, it accepts input only through other bureaucratic channels.

Institutionalized lobbying is one of the few effective ways of introducing new ideas into the bureaucracy.  Admittedly, this dynamic is difficult to see in the current environment, wherein lobbying takes a predominantly abusive form.  If we were to consider earlier eras, in which the shift from political economy to transactional economy was closer to the frontier, this dynamic would be more pronounced.

We can see shades of that prior dynamic today in emerging economies like China where there exists a constant tension between the need for rapid growth and the need for policies that restrain the worst abuses of a growth-at-any-cost attitude.  In that sort of environment there is much greater potential for productive friction at the interface of government and market.

In the developed world there is a similar opportunity for productive friction at the interface of transactional economy and the attention economy.  Assets produced by transactional economy players are actively spurring the growth of the attention economy.  At the same time, the undertow from the transactional economy (return expectations), reigns in the self-destructive potentialities that might follow from an unconstrained attention bubble.

In both cases, some degree of backtracking is justifiable and generative.  Obviously, the further a given institution backtracks the more circumspect its motives become.  We are right to denounce the government when it attempts to prescribe cultural norms – matters that are rightly decided by relational groups.  The freedom to ignore such manipulations is the founding principle of modern government.  Likewise, our attention economy innovator comes off as increasingly suspicious the further it backtracks.

The Evil Corporation

So what makes a company evil?

The answer should not be difficult to discern.  The evil corporation is the one that succumbs to the temptation of growth for its own sake, becomes cancerous or parasitic, artificially fortifies its dominant position, or undermines progress to reinforce its own necessity.  It is the corporation that backtracks, not to build generative foundations, but to feed at the teet of powerful incumbents.

The evil corporation is the immortality project, both literally and figuratively.  It is both the corporation that attempts to avert its own natural life cycle and the corporation founded for no reason other than to facilitate the founders own denial of death.

How does a growing company avoid becoming evil?

This one is not terribly complicated either.  It starts (and ends?) with adherence to basic economic principles – investing resources such that marginal benefits exceed marginal costs – inclusive of all economic domains in which the organization participates.  Non-evil ventures build foundations as necessary to support their core value-producing activities.  They do not harvest one market in order to produce illusory growth in another.  They do not consume attention assets in order to generate financial returns.  They do not ride the undertow into the deep water hoping to become one of the sharks.

Of course, “don’t be evil” is a cute slogan but ultimately it is external pressure from upstarts – particularly from those that don’t sabotage themselves – that keeps the system balanced.  Attention economy stalwarts like Wikipedia and Craigslist have dramatically exceeded all expectations by embracing their niche.  The value propositions they offer are fundamentally products of the attention economy.  Recognizing this, they have primarily invested their resources into efforts that further those attention markets.

Such strategies do not necessarily imply any sort of purity.  Both organizations still need to pay the bills and employ reasonable staffs.  They both engage transactional economies as appropriate – Wikipedia through its donation drives and Craigslist by charging for certain listings.  What they have avoided are the types of hooks that would corrupt their incentives…that would turn their focus away from maximizing attention and towards maximizing financial profits.

Now obviously that example does not apply universally…every venture will not necessarily look like Wikipedia.  This analysis is not intended to imply that every organization should migrate to some idealized location on the socioeconomic map.  Some value propositions inherently belong in the transactional economy…

Smartphones, for example, are designed by massive teams of highly educated engineers who are co-located in lavish all-inclusive facilities.  Smartphones are manufactured on massively expensive capital equipment with the help of a small army of Chinese laborers.  It would be naive to argue that such highly refined production processes should somehow shift towards the attention economy.  Likewise, full time bloggers need to pay the rent, artists need to eat, and some products that initially serve attention markets are improved by embracing the scale and refinement possible in the transactional economy.

I am arguing instead that the pitfalls inherent in any foundation building exercise should be carefully considered.  Just because it is fun to dip your toes in the undertow doesn’t mean you should allow yourself to be pulled out to sea.  Bigger is not always better.

Though it may be difficult today to see that financial returns are not unequivocally preferable to attentional returns, people would have once said the same about money.  There was a time when most necessities were produced in relationship economies and money was primarily a tool in the pursuit of political status.  When organizations (or individuals) lose sight of this perspective they flirt with the worst possible outcome…

Unintentionally Evil

The unintentionally evil organization becomes addicted to the temptations offered by the incumbent paradigm (money, political influence, etc).  It becomes a slave to inertia.  Once it sets its transmission in reverse it cannot reengage forward momentum.  A foundation building exercise becomes a permanent course reversal.  The organization the rose to prominence on the edge unwittingly morphs into an evil empire.

[Facebook seems to be on this path, positioning itself at once as a disruptor of political ossification while at the same time embracing the profit motive in the most depressingly ill conceived manner.]

Avoiding this fate is easier said than done.   Every successful venture eventually faces the innovator’s dilemma.  The unintentionally evil corporation compounds the challenge by misunderstanding its inherent fit with its environment.

The prevailing wisdom in entrepreneurial communities obscures this challenge through its treatment of ‘product-market fit‘…presuming from the start that the only worthwhile goal is to migrate into the transactional economy as rapidly as possible.  That approach will prove appropriate for only a small minority of entrepreneurial ventures.  A more honest approach would first consider how a particular venture should be positioned relative to the intersection of attention economy economy and transactional economy.

photo courtesy of aeroSoul

Secondly, for new readers who found their way here within the past week – I tend to weave through several related themes at any given time.  I will get back to the socioeconomic evolution thread soon enough.  In the mean time I hope you will enjoy this as well…

Misinterpreted Life Scripts

Last week I wrote a quick reaction to a post by Cal Newport, in which he implied that diligent focus trumps all other factors in the pursuit of career success, including the innate suitability of the chosen career.  Now Cal has written a new post qualifying that position, but again his conclusions are too reductive for my tastes.  I hate to pick on Cal again – I don’t want this to read like a personal attack – but his new post provides such an ideal entry-point for a discussion of broader themes that I can’t pass it up.  That said, I want to be clear up front that I have a lot of respect for Cal’s work (I have previously cited him in a positive context) and the criticisms introduced in this first section will be qualified later on.

Cal begins by describing the events that led Daniel Kahneman and Amos Tversky (abbr: K&T) to initiate research into cognitive heuristics; research that would ultimately result in a Nobel Prize and the birth of behavioral economics:

“Our expert colleagues…greatly exaggerated the likelihood that the original result of an experiment would be successfully replicated,” Kahneman recalls of their results. “They also gave poor advice to a fictitious graduate student about the number of observations she needed to collect.”

“Even statisticians are not good intuitive statisticians,” he concluded

This small observation led to a bigger idea: perhaps humans are hardwired with cognitive shortcuts to help them make sense of an uncertain world, and perhaps these shortcuts, in certain situations, consistently lead to irrational conclusions.

This hypothesis was profound. At the time, social science believed that humans were fundamentally rational, and only emotion, like fear or anger, could lead us to irrational behavior. Kahneman and Tversky were proposing that humans, on the contrary, were wired for illogic. [emphasis original]

Cal proceeds to note the gap of five years between their first meeting and their now famous publication in the journal Science, concluding that though diligent focus was critical, it cannot fully explain the magnitude of their success.  His revised hypothesis:

The Directed Diligence Theory
It’s not enough to just focus relentlessly on a small number of things (though this is almost always necessary). You must also direct this diligence by simultaneously and systematically exposing yourself to the reality of what’s valuable in the relevant field.

Paraphrasing, Cal is arguing for diligent career planning in addition to diligent practice.  Diligent practice provides the means.  To achieve maximum impact, the ends should be determined by a deliberate survey of the chosen field.

This seems like a reasonable inference.  The only problem is that it bears no resemblance whatsoever to what actually happened.  The directed diligence theory is entirely a product of Cal’s preference for reductive principles and bears no relation to K&T’s actual intentions.

Cal’s own wording hints at this inconsistency when he states (above), “This small observation led to a bigger idea“.  The implied order of events is important.  K&T did not set out to leave their mark on the field of psychology.  They were not strategically pursuing “the reality of what [was] valuable in the relevant field“.  They were scratching an itch…exploring a small intrinsically interesting idea that naturally “led to a bigger idea“.  Kahneman’s Nobel Prize autobiography is quite explicit on this point:

I realized only recently how fortunate we were not to have aimed deliberately at the large target we happened to hit. If we had intended the article as a challenge to the rational model, we would have written it differently, and the challenge would have been less effective. [emphasis mine]

The only reasoning Cal offers to justify his conclusion reads as follows:

Kahneman and Tversky’s diligence, for example, was directed by their understanding, as psychology professors, that the model they were pursuing was a radical departure from an orthodoxy that had started to show strain. The field was looking for new models and they knew they were on to one possibility.

Unfortunately, this explanation is a non-sequitor.   Sure, by 1974 K&T were familiar enough with the field of psychology to understand their intellectual surroundings.  But that wasn’t what motivated their research.  They had no intentions of rocking the boat for the sake of individual acclaim.

Kahneman’s personal history suggests that he had been unwittingly pulling on this thread throughout much of his early life.  His autobiography teems with anecdotes and reflections portraying a meandering a career path.  At one point he reflects on a research experience during a summer away from graduate school:

Fifteen years after that summer, I published a book entitled “Attention and Effort,” which contained a theory of attention as a limited resource.  I realized only while writing the acknowledgments for the book that I had revisited the terrain to which Rapaport had first led me. [emphasis mine]

In recounting his early teaching experience, nearly a decade before meeting Amos Tversky, Kahneman observes:

To teach effectively I did a lot of serious thinking about valid intuitions on which I could draw and erroneous intuitions that I should teach students to overcome.  I had no idea, of course, but I was laying the foundation for a program of research on judgment under uncertainty. [emphasis mine]

There is no indication in autobiographical evidence that Kahneman’s research interests were ever influenced by external standards of value.  On the contrary, he consistently followed his intuitions in whatever directions proved intrinsically rewarding.

Cognitive Biases

It is ironic then that Cal chose to frame his argument within a narrative about research into cognitive biases.  When read with a critical eye his post takes on a bizarre self-referential quality.  The evident cognitive dissonance is striking.  Case in point: Cal subtitles the first section of his post “The Five Year Eureka Moment”, despite his own admission that the eureka moment occurred up front – an intuitive insight drawn from a “small observation“.  He may have intended this as a play on words, but even so it misrepresents the reality.

Similarly, he downplays obvious contradictory evidence:

Here’s what caught my attention about this story. This paper — Kahneman and Tversky’s first publication on their theory — came out in 1974, a half decade after they first began pursuing the underlying ideas. In other words, it took them a full five years to refine a rough hunch, through systematic exploration and discussion, into an idea too good to be ignored. [emphasis original]

Here Cal refers to “a rough hunch”, again undermining his presumption of a deliberately directed course of research.  But there is a larger point worth noting:  though Kahneman and Tversky’s most famous paper was published in 1974, prior to that they had jointly published at least four other papers on the same themes.  The 1974 publication wasn’t the first publication of their theory, just the one that happened to attract notice.

This is a subtle but important distinction.  The former framing reinforces the (intended) impression of a carefully scripted assault on the status quo.  The reality is far more ambiguous.

How does a thoughtful individual like Cal Newport manage such a skewed account of events?  In part, this is an example of confirmation bias, the tendency to selectively gather information and/or to selectively interpret information so as to confirm existing beliefs.  But I think there is more to it than that…

Divergent Modes of Cognition

This is where I will expose my own biases.  I will also do my best to contextualize the criticisms presented above.

The perspective I will offer suggests that Cal’s biases are not personal failings.  Rather, I suspect that Cal is largely incapable of seeing the world otherwise, and that we are all inclined towards similar biases (myself included of course ).

By way of analogy, Cal isn’t biased in the sense that a sports fan is biased about his favorite team.  Rather, he is biased in the way that a mother is biased about her newborn child.  In a mother’s perceived reality, her newborn truly is the most uniquely precious child in the world.  She is neurologically precluded from believing otherwise.  Similarly, I suspect that Cal is in a certain sense neurologically incapable of appreciating the role of intuition in the Kahneman & Tversky story.

The divergence between my interpretation and his, is less a matter of the factual record and is more a matter of perspective.  And the differences between our perspectives correlate quite nicely with the divergent modes of cognition in the two hemispheres of the brain.

While there has been plenty of shallow psuedoscientific nonsense written about this topic, the empirical research is quite deep and well validated.  In The Developing Mind, psychiatrist Daniel Siegel summarizes the role of the left hemisphere as follow:

The following findings…have been consistently obtained investigations ranging from studies of “split brain” patients to studies involving brain function imaging.  When information is presented to only the left hemisphere, verbal output reflects an effort to create a story or make sense of what it sees or hears.  Michael Gazzaniga and colleagues have called this the “interpreter” function of the left hemisphere.  For the isolated left hemisphere, these words are confabulations – made-up stories that fit with the data, but are unrelated to the gist or context of the situation…The left hemisphere uses syllogistic reasoning, stating major and minor premises and deducing logical conclusion from a limited set of data in an attempt to clarify cause-effect relationships.
…
The left hemisphere tries to create explanations for the information it receives, but it lacks the ability to process the context of this information, and so its conclusions are based on selected details without relational meaning.  The left hemisphere’s interpreter deduces an explanation that is superficially logical but is often without contextual substance if this hemisphere is acting in isolation from information from the right hemisphere. [emphasis mine]

And the right:

In contrast to the left, the right hemisphere appears to be able to make sense of the essential meaning of the input it is able to perceive: Contextual information is perceived and processed, and the gist of a situation is sized up and understood.  The right hemisphere does not use syllogistic logic to deduce conclusions about cause-effect relationships, but rather represents information about the environment.  Such information includes the relationships of various components of experience, including elements of mental processes and spatial relationships.  Since the right hemisphere is nonverbal, the output of its processing must be expressed in non-word-based ways, such as drawing a picture or pointing to a pictorial set of options to make its output known to the external world.  [emphasis mine]

The left-hemisphere – being the primary seat of language – processes discrete, abstracted, categorical representations in the linear and literal manner that facilitates the sharing of meaning between individuals.

The right hemisphere processes information holistically and non-linearly, preserving contextual relationships, but as a result it cannot externalize or communicate its internal representations nearly as effectively.

In brief, the right hemisphere produces a comprehensive and nuanced mental model of the world, that is intrinsically bound to the subjective context.  The left hemisphere produces the precise (but reductive) representations that enable us to interact with, and manipulate the “objective” world.  (It should be obvious that these statements are themselves highly reductive and should not be taken as comprehensive or absolute.)

[For the visual learners, a talk by Iain McGilchrist, adapted into an RSA animate presentation, can be found here.]

Unbalanced Minds?

For many tasks we would ideally want to engage the active cooperation of both hemispheres.  For example, as I write this piece I am compressing imprecise impressions from my subjective mental model into discrete bits of language.  Those bits of language can then be externalized and conveyed to you via context-independent media.

Unfortunately, we are not particularly good at this balancing act…

I am proposing instead that we are each innately partial to one pole or the other.  To be clear, this is educated speculation on my part.  Though I have not yet found research specifically addressing this point, there is plenty of evidence that lateral activation patterns can be uneven.  For example, left-handers are significantly more likely to exhibit language function in the right hemisphere.  From a distinctly different angle: the two hemispheres develop asymmetrically such that environmental factors may affect each uniquely.  Dan Siegel writes:

The right hemisphere is dominant in its activity and development during the first three years of life.  Children who experience severe emotional deprivation during this period may be at most risk of having losses in the structural components of their right hemispheres…These issues also raise the point that the time of experience, be it optimal or traumatic, may have the largest impact on those parts of the brain that are in the most active phase of development. [emphasis mine]

I don’t expect to convince you of this point in the space available here.  I only want introduce the pattern and point out how neatly it maps onto the (mis)interpretations outlined above, as well as my zealous reaction to the same.  In short, Cal Newport demonstrates all the signs of left-hemispheric dominance while I am heavily inclined towards the right.

Cal persistently seeks out universal principles that can be applied independent of context.  He attempts to distill literal cause-effect relationships from complex contextual information.  He is attracted to external/social motivators, as evidenced by his primary theme: “being so good they can’t ignore you“.

In contrast, several of my past posts demonstrate an almost pathological aversion to extrinsic motivators.  I am also highly allergic to formulaic thinking, tending instead to construct elaborate mental models even when I would be better served by simply following instructions.  In an IQ test I will easily ace all the spatial/pattern-recognition questions and struggle with the word associations.

The point here is not that one approach is better than the other.  If these patterns are neurologically fixed to any significant degree, it is more interesting to consider what they suggest about how we (can/should) make individual decisions:

• how we define our life scripts – retrospectively and/or prospectively
• how we perceive success and failure
• how we evaluate advice from others
• how we choose role models and mentors
• what motivates/demotivates us
• where progress is likely to come quickly/slowly

Cal writes:

Returning to my own example, it was only a few years ago that I began to internalize this lesson. Just because an idea was interesting to me, I now accepted, was not enough by itself to justify diligent pursuit.

That sounds like terrible advice to me…but perhaps it is just right for him.

photo courtesy of Rantz

Are these merely provocative analogies or is there a common process underlying each set of events?

Fundamentally these are statements about the nature human productive activity, our methods of organizing that activity, and the tools that facilitate that organizational structure.  Our evaluation of such claims must then be grounded in an understanding of the evolution of organizational structures.

Niche Construction

Lorenz thought that the world is knowable, but it is knowable through the categories of the knower, which were shaped by evolution.

So evolutionary adaptation by natural selection results in a partial correspondence, a kind of isomorphism between the structure of the world and the organization of the knower. On that account, organisms do not make theories of the world, they are theories of the world. [emphasis mine]

-Sam Bowles paraphrasing Conrad Lorenz

The ecological environment is not nearly as natural as we might think.  In reality it is a composite of active efforts by myriad organisms to construct niches that enhance their own prospects for survival and reproduction.

Niche construction is not a phenomena isolated to ecology.  The organism itself is a constructed niche.  It is the niche constructed by and for the genetic material.  Biological organisms are quite literally the ecological environment evolved around their DNA.

In the case of the human organism, niche construction takes the form of the society we see all around us, and that society exhibits the same isomorphism described in the quote above.  Human civilization is an emergent and embodied theory relating the human organism to its external world.  To whatever extent human society expresses a compelling theory of the world, it thrives.

Niche construction promotes survival by buffering the organism from the environment.  Just as the DNA uses the biological body to insulate itself from external selection pressures, so too human civilization serves to buffer the human organism from environmental selection pressures.

However, if/when each evolves towards greater complexity and capability, each creates new pressures – both internally and externally.  Externally, more capable evolutionary machines require a more fruitful environment to sustain themselves.  Internally, more complex evolutionary machines require more advanced means of mediating their own complexity.

…

Given this perspective, we can interpret claims like those at the start of this piece as references to a constructed niche evolving towards greater complexity.  DNA evolved T-cells, red blood cells, and neurotransmitters.  Humans have evolved language, money and information technology.

The remainder of this piece will address common themes apparent throughout the recent evolutionary history of those mechanisms, including:

• how they influence the form of self-organizing social structures
• how those structured societies evolve towards internal and external limits
• the dynamic balance between change and stability, innovation and conservatism, adaptability and survivability
• how that dynamic equilibrium responds to mismatch between organizational capacity and constraints

Understanding the dynamics common to various coordinating mechanisms should allow us to better understand the shifts currently underway in appropriate context, and thereby to better predict the course that current transition might take.

Clarifications and Disclaimers:

Before I dive off the deep end, a bit of housekeeping:

Throughout this piece I use the term “society” frequently.  My usage does not assume any particular definition.  For our purposes, society simply refers to: an interconnected and dynamically interdependent population.

Secondly, what follows is an exercise in pattern recognition.  The goal is to develop a framework with which to organize further exploration.  This piece is not intended as the definitive explanation for all human history.  That much should be obvious.  I do want to encourage your comments and criticisms.  However, I hope you will be mindful of the intended purpose and moderate your feedback accordingly.

Onward…

Four Coordination Paradigms

In a series of previous posts I developed (with your feedback) a framework outlining four modes of economic exchange (read: value creating exchange):

• Relationship Economy -    illegible exchange between related parties
• Political Economy -             legible exchange between related parties
• Transactional Economy - legible exchange between unrelated parties
• Attention Economy -          illegible exchange between unrelated parties

There exists a distinct historical trend in relation to these four modes of coordination that will allow us to repurpose the model towards our current ends…

Relationship Economy

Prehistoric man would have perceived only the relationship economy.  Prior to the advent of agriculture and the formation of stationary civilizations, all “economic” behavior was organized relationally.

Relationship economies were characterized by relative equality and a general lack of structure.

The modes of coordination available to prehistoric man were entirely informal.  All individuals within small tribal groups enjoyed reciprocal relationships with one another.  Productive activity was organized cooperatively and the fruits of that productive activity were allocated according to social norms and customs.

Political Economy

When nomadic tribes began to form stationary civilizations, around the time of the agricultural revolution, new organizational principles emerged.

The political economy is what we are familiar with by reference to the ‘great civilizations’ described in history books.  Through most of recorded history human society was organized predominantly via political coordination.  These societies were characterized by real power projected through hierarchical institutions.  Individuals gained power through explicit status in formal bureaucracies.

Though much production remained within relational units (extended families, small communities), the relational unit was now embedded in a new reality that had grown up around it.  In larger civilizations – enabled by agriculture – individuals could no longer rely exclusively on shared norms to mediate social behavior.  Activity that extended outside the immediate community was mediated by codes of conduct defined by formal institutions.  Productive activity and the allocation of resources were also mediated by a hierarchical social structure.

Transactional Economy

Political economies proceeded to dominate the world scene for thousands of years.  It is only within the past couple hundred years that the transactional paradigm has emerged as the predominant mode of economic coordination.

Transactional economies are characterized by a decentralized self-organizing structure.  Power and influence are a function of access to resources, primarily financial capital.

The bulk of economic activity is coordinated through impersonal markets.  The production and distribution of resources is decentralized and mediated by self-adjusting pricing mechanisms.

Correlations

Admittedly, all of the above is described in very broad strokes.  For those interested in detailed historical examples of each paradigm I recommend David Graeber’s Debt – The First 5000 Years, which I recently reviewed.  My distinctions between relational, political and transactional economies roughly parallel Graeber’s distinctions between communism, hierarchy, and exchange respectively.

Unfortunately, Graeber never builds much conceptual architecture around that basic outline, leaving it to readers to extract their own patterns from the voluminous historical evidence he presents.  With the remainder of this post I will begin outlining the first couple layers of conceptual scaffolding, as I see it.  As you have surely surmised, I will eventually incorporate a fourth category (attention economy), for which Graeber does not offer a parallel. The failure to recognize that fourth paradigm is likely the foremost reason why Graeber seems to favor such an anachronistic position.

After establishing the overall pattern in this post, I will turn in future posts to the competitive dynamic that plays out in the rivalry between paradigms, which will prove particularly interesting as applied to the current shift towards attention economics.

The Evolutionary Pattern

Below is an illustration of the pattern described so far (the arrows labeled rationalization and specialization will be addressed later on):

Human civilization first takes form in relational tribes and remains in that state for quite some time.  The transition to political economy begins around the same time as the agricultural revolution and the advent of stationary populations.  Both of those characteristics – geographic fixedness and development of agriculture – engendered population grow that which was possible with a nomadic lifestyle:

 The shift to agricultural food production supported a denser population, which in turn supported larger sedentary communities, the accumulation of goods and tools, and specialization in diverse forms of new labor. The development of larger societies led to the development of different means of decision making and to governmental organization. Food surpluses made possible the development of a social elite who were not otherwise engaged in agriculture, industry or commerce, but dominated their communities by other means and monopolized decision-making. [wikipedia]

Though human civilizations began dabbling with debt and money thousands of years prior to the industrial revolution, much of that early dabbling amounted to mere dead end experiments.  Transactional markets did not reach a self-sustaining and self-perpetuating inflection point until the last couple hundred years.  That transition corresponds roughly with the industrial revolution.

Admittedly, the criteria ‘self-perpetuating’ and ‘self-sustaining’ are subjective.  Nonetheless, it is fair to say that the industrial revolution marked a shift away from markets that existed primarily as vehicles for politically oriented rent-seeking, and towards markets driven primarily by market forces.  Surely politically motivated market interventions continues to exist even in present day, however governments’ ability to manipulate markets without provoking massive unintended consequences has steadily decreased.  In other words, governments have become minority players.

The Stimulus

What precipitates the phase changes demarcating individual paradigms?

The scale and complexity achievable within each paradigm is functionally constrained.  The coordination mechanisms available within a given paradigm are limited in both:

• their ability to mediate internal complexity
• their ability to foster technological solutions to environmental constraints

As growth and development proceed within a given paradigm, pressure on existing coordination mechanisms mounts and faults begin to form.  Without new tools one of two outcomes is inevitable:

1. Failures of internal coordination sabotage further growth
2. Unchecked expansion becomes cancerous and crashes into environmental limits

Collapse

Both cases describe a form of collapse.  Joseph Tainter has described the first type, arguing that societies collapse when they encounter problems they are unable to solve:

Tainter argues that sustainability or collapse of societies follow from the success or failure of problem-solving institutions and that societies collapse, when their investments in social complexity and their “energy subsidies” reach a point of diminishing marginal returns. He recognizes collapse when a society rapidly sheds a significant portion of its complexity. [wikipedia]

Collapse in this case takes the form of stagnation or implosion.  The social infrastructure, having exceeded certain limits, produces more costs than benefits and begins tearing itself apart.  In dramatic cases a period of chaos ensues and the population reverts to a simpler way of life until a new paradigm is developed.

Jared Diamond has addressed second situation – collapse as a result of environmental depletion.  Though I haven’t reviewed all of Diamond’s work, my impression is that the collapses he studies are even more destructive.  When environmental constraints are exceeded, complete collapse – resulting in the death of entire populations – tends to follow.

This second sort of collapse may derive indirectly from failings of the first sort.  For example, resource depletion may be avoided if appropriate rationing mechanisms exist.  Similarly, effective signalling mechanisms may be used to raise the alarm and mobilize a search for solutions.  It is when the capabilities don’t exist that populations charge recklessly into environmental collapse.

Revolution

The Social Technology Stack

At this point it is worth addressing a subtle misconception.  It would be easy to read “revolution” as an overthrow of what came before.  That is in fact how we use the term in the geopolitical context.  For example, The French Revolution and The American Revolution were violent conflicts involving the overthrow of old regimes and the birth of entirely new regimes.

Social revolutions present a different character.  Note that in the previous section revolution is offered as counterpoint to collapse.

The emergence of political economy did not (necessarily) imply a violent a dissolution of relational communities.  To the contrary, hierarchical structures must have initially taken form within relational communities.  Likewise, the emergence of transactional markets did not coincide with a violent overthrow of political institutions.  Rather, markets were created by extant political bureaucracies as a means of furthering their influence.

The antagonism that eventually develops between adjacent paradigms is characterized more accurately by the modern definition of disruption, rather than the conventional meaning of revolution.

Transitions

As such, transitions from one paradigm do not represent wholesale change, but instead an accelerating shift at the margin.  Earlier modes of organization may gradually lose influence while remain pervasive in a dwindling capacity. The historical events we assign to demarcate transitions are really just tipping points.  To borrow John Hagel’s terminology – such events are merely harbingers that the core is being pulled towards the edge.

If we were to visualize the evolutionary arc in three dimensions it might look something like a migrating sand dune – the tail gradually shrinking in prominence,  meanwhile the leading edge grows as it is swept forward into virgin territory.

Dialectic rivalry emerges only once the child paradigm grows large enough to threaten the parent.  Moreover, the dialectics themselves are ultimately hollow.  Whatever rivalry may develop, the child cannot snuff out the parent without smashing its own foundation…

Foundations

Each successive paradigm is built upon a foundation constructed in previous periods.  The ideological pillars of political institutions are built upon social norms originally established within the relational context.  Transactional markets sprout only on ground that has been prepared by political hierarchies.

Without the necessary foundations later paradigms are not achievable.  As Graeber points out, the spontaneous emergence of money from primordial barter is a myth.  Communal hunter gatherers would have been mystified by – and likely violently opposed to – the notion of a economic exchange outside the context of custom and ritual.

This is a reality rediscovered all too frequently by development economists, uber-philanthropists and ambitious technocrats.  Well meaning efforts to install market oriented institutions in developing countries have consistently met with disappointing results.  Effective markets require not only well developed institutions, but also a culture of compatible norms and ethics.  Without these foundations markets serve only to produce more efficient corruption [see this recent Econtalk podcast for more].

The Socioeconomic Paradigm Shifts

Let’s dig more deeply into the specific characteristics of the two transitions discussed so far.  In the illustration above I labeled them rationalization and specialization.  We will find that each is a reaction to the particular pressures – the abundance and scarcities – created within the earlier paradigm.

Rationalization

Definition: to make rational or conformable to reason.

Rationalization, in this context, is the process of introducing explicit structure to a previously informal society.  What relational tribes lacked, quite simply, was stability.  The lack of formality has a certain utopian appeal but it also undermined progress.  Nomadic tribes could only produce as much technology as they could carry.  Moreover, reliance on implicit norms restricted relational groups to a scale at which ubiquitous relationships could be maintained (Dunbar’s number +/-).

Rationalization required formalizing implicit social norms, thereby producing explicit standards.  This code of conduct, as such, would allow individuals to expect consistent behavior from others, independent of context.  It is that standard of context independence that would have allowed populations to grow beyond previous limits.

Over the course of thousands of years, greater scale and complexity would have demanded increasing explicit structure, which in turn enabled still greater scale.  And it was the stable, structured, and populous civilization that formed the foundation for the next shift.

Specialization

Specialization is the process of subdividing the labor pool and allowing different groups to focus on developing expertise in specific roles.

Specialization can only emerge from within a rational social structure.  Prior to the advent of stable political economies specialization would have been dangerous.  If you specialize – relinquishing your self-sufficiency – and the social structure proves unreliable, you could starve.  The greater your dependence on unrelated parties for your survival, the more assurance you will require that the existing status quo will not be suddenly disrupted.

If you can rely on people outside your immediate family to act predictably, your universe of feasible productive activities expands dramatically.  However, specialization also introduces a wedge into the hierarchical society.  As individuals specialize they become more expert in their chosen fields than people above them in the hierarchy.  The more specialization, the more intractable this problem becomes.  Economies that are both highly specialized and highly diverse (deep and wide) eventually become unmanageable. Hierarchy becomes at best impotent, and at worst destructive.

It is at this point that decentralized markets become a necessity.

…

Upcoming: competitive dynamics, attention economy, other stuff…

photo courtesy of Jon-Luke

At each pause there is some probability I will break the cycle, but these probabilities do not accrue linearly.  A 20% chance of breaking the cycle does not imply that by the fifth cycle I am sure to stop.  It feels more like a coin flip – each time the probability is the same and sometimes you come up heads ten times in a row.

Last night I nearly fell into the zombie trap.  I was ready to go to sleep, all my electronics already shut down, when some vague hint of a thought about twitter popped into my head.  Because my defenses were primed I was able to resist the impulse, and I decided instead to rewind my memory and analyse the preceding thought process.  This is what I found…

The momentary association with twitter wouldn’t qualify as a legitimate thought.  There wasn’t any real content to it.  Nevertheless, it was immediately followed by a mental image of me picking up my phone and opening the twitter app.  Again, this image didn’t contain any conscious intention.  It was merely an automatic visualization of the next pre-programmed step.

I then decided to project my memories forward to see how this sequence might have played out.  I envisioned myself staring at twitter wondering why/how I had ended up there, then setting the question aside and succumbing to some further automatic behavior like checking for new direct messages or mentions.

Why not just stop after the first befuddled pause?

While reviewing my thought process I realized the psychology is analogous to the loss aversion that compels us to follow stock market investments down rather than cut our losses.

The large majority of all human behavior is controlled unconsciously.  The capacity of conscious awareness is quite limited.  Because conscious awareness cannot keep tabs on everything the unconscious mind is doing, we remain relatively uninhibited when engaging small, trivial, habitual behaviors.  We mindlessly proceed from one pre-programmed action to the next.  If you find yourself in the bathroom with the shower running you won’t often pause to reconsider how you got there.  Rather, you will habitually undress and jump in.

The same cognitive dynamics apply to more significant actions as well.  This is why context change is so helpful when trying to reinforce a set intention.  If you try to exercise at home in front of the television your willpower is likely to dissipate within a few minutes.  By simply driving yourself to the gym you significantly enhance your chances of success.  The change in context offers external cues that constantly reinforce the initial intention.  Moreover, the act of transporting yourself to another location presents a sunk cost that you are compelled to justify.  With each additional layer of intentional behavior the cognitive burden associated with a course reversal becomes more prohibitive.

Investments and Loss Aversion

If we reverse the intentional process described above, the result is loss aversion.  Intentional decisions have a certain characteristic smell to them.  Walking into the bathroom and turning on the shower feels intentional even when we do it automatically.  When you were a child you probably hated showers.  At some point along the way you intentionally trained yourself to shower habitually, and eventually you began to enjoy it.  That aura of intentionality still lingers.

Investment decisions have that same characteristic smell, only much stronger.  As a result, we implicitly accept that past investment decisions must have been made for a good reason even when the conscious mind can’t immediately conjure up what that reason might have been.  If investment decisions are actually not intentional…when we invest impulsively…then we irrationally resist selling losers because there exists no evidence that could logically contradict the original decision.

In short, if you buy impulsively then you condemn yourself to sell irrationally as well.  And if you are already locked into an irrational decision, how likely is it that you will impulsively decide to eat a loss?

Note the parallels to the zombie clicking trap.  When I suddenly find myself staring blankly at twitter, my first question is – Why am I here?  If I can’t answer that question then I am locked into an irrational state of mind.  But of course, internally it doesn’t feel like an irrational state of mind…it just feels like I haven’t yet found what I came for.  If I just look around for moment I’m sure I will remember what I was doing.

As such, it isn’t stubbornness that compels me to justify the sunk cost.  Rather, it is cognitive incoherence – the brain’s effort to reconcile its default premise with an incompatible observation.

• Premise: My behaviors are motivated by sensible intentions.
• Observation: I am staring at twitter for no discernible reason.

It is far less cognitively burdensome to follow the script – to continue mindlessly clicking away, expecting at any moment to stumble upon the clue needed to contradict the observation – than it is to open the can of worms that follows from doubting the premise.

The Fix?

Senseless habitualized behaviors are more difficult to overcome than it might seem at first.

Stock market professionals advise that you should always develop an explicit investment thesis prior to acting on any investment decision.  You need to understand your explicit reasons for buying so that you can rationally evaluate arguments for selling.

Unfortunately, exercising greater conscious awareness is only a limited solution.   Opening that can of worms indiscriminately will lead only to a perpetual state of paralyzing doubt.  Over-reliance on conscious evaluation is the definition of analysis paralysis.

The key then is to distinguish generative patterns from destructive ones, and to sequester individual behavioral patterns based on increasingly subtle contextual cues.  Context used to be obvious.  You would adopt one set of behaviors at the office, then swap in a different behavioral pattern at home.  Balancing the two was a relatively trivial matter of balancing time between the two physical locations.

Now those boundaries are blurred and our computers and phones do everything.  Yet context, however ambiguous, is no less important.  Are you exploring or exploiting?  Consuming or producing?  Learning or performing? Are you acting socially or individualistically?  Collaboratively or cooperatively?

Each distinction suggests certain shifts in the allocation of focused awareness.  Accepting the wrong premises for a given context can result in confounding cognitive contradictions.  And we have a long way yet to go.  Expect zombie traps to be become far more prevalent before any semblance of predictable order returns to the world.

photo courtesy of Zebra Pares