SXSW: Wisdom Of Crowds (Liveblogging)

PICT0683.JPGJames Surowiecki wrote The Wisdom of Crowds, is talking about the concepts in his book.

Three examples of the phenomenon:

  • Race tracks
  • Jellybean counting
  • Guessing the weight of a cow

In “wise crowds,” there are typically a few experts, a few people in the middle, and lot of people who individually have a high rate of error.

Yet…if you take the average of all the “guesses,” the average is usually a very good approximation…in some cases, within a few percent (3%-5%) of the actual value. Surowiecki: “Results of the market map almost perfectly onto the outcomes of events.”

There are a number of examples where the “collective guess” has provided good results:

  • Siemens (what will be the market lifespan of a product?)
  • Google (how many users with GMail have after three quarters?)
  • Eli Lilly (which drugs will make it through clinical trials?)

Why does this work?

Everyone participating in these markets has “some” idea of what the answers will be, but they also have biases.

However, this doesn’t always work. For this to work, it requires three things:

  • Some form of aggregating peoples’ judgements
  • Diversity
  • Independence

Why is diversity important? Wise crowds need cognitive diversity … difference in frames of reference, tools used to solve problems, etc. It simply expands the range of information that is available, and avoids the hurdles and obstacles that a single individual may run in to. Diversity helps to even out the blind spots and biases in a crowd…and the biases and blind spots of “experts” as well.

The phrase “collective intelligence” is being used extensively to capture this concept.

Diversity also helps in get around peer pressure. Story is told of peer pressure in psychological experients, as well as examples of “groupthink.”

Independence – make decisions on own intuitions, not piggybacking on the statements of others. Instead of aggregating the judgements of independent people, instead we come to watered-down decisions in groups, trying to find the lowest common denominator that makes everyone “happy enough.” The more “independent” the participants in the group are, the more applicable the wisdom of crowds idea is.

Humans are naturally imitative. Example: Put a person on a street corner and have him gaze up at the sky (at nothing). If one person is doing this, some passersby look up. If five people are put on a streetcorner to look up, half the passersby look up. If eight people are placed on a streetcorner and look up, eighty five percent of the people passing by also look up.

One reason independence is hard to come by is that “going with the group” is a way to protect self-reputation. Keynes: “It is better to fail conventionally than to succeed unconventionally.” If you go with the group and are wrong, you can easily say “that’s what everyone was doing” and protect reputation.

Fundamental lessons

The knowledge that we want is often NOT in places that we think to look. We also typically overestimate who “experts” are.

IMPORTANT: There is a difference between “experts” and “expert information.” We overestimate what an “expert” says, but a diverse, independent crowd can derive the “expert information.”

Great point on the “echo chamber” effect — people get locked into small worlds, even on the internet. (Think of the case where one only gets information from a limitied set of sources.)

Final story: What collective intelligence can look like

USS Scorpion, SSN-589, a nuclear submarine, was lost on tour of duty in 1968
. The Navy searched fruitlessly, then tried a crazy idea led by John Craven: Craven assembled a diverse crowd of experts, and came up with scenarios (Russian sub had hit it, torpedo went off in tube, etc.). He asked experts to bet on the scenarios (which one do you think is most likely?). He also asked them to bet on direction, velocity, etc. Independent judgements were pulled together, and pointed to a particular place on the ocean floor. No one person knew the facts, for example, how steeply the Scorpion had fallen to the ocean floor, how fast it was going, etc. More importantly, no one individual in the group came up with the location that was predicted by the group.

A few months later, the sub was found 220 yards from the location predicted by the group.

Q&A: “How many people does it take to make a crowd?”

Over 50, it’s pretty certainly a “crowd.” However, even in small groups (6-8 people), even the group’s collective judgement may surpass the results of the group’s smartest member. The challenge with small groups is that it takes a lot of work to ensure diversity and independence.

Q&A: What are some other areas where the wisdom of crowds could work?
Crime solving is one. Juries could be another…although the drive for unanimity is challenging.

This One Goes To 11…

Getting set up for the “Wisdom of Crowds” session, and Counting Crows and/or Dashboard Confessional are doing a sound check in the next room, right on the other side of the wall. Adam Duritz sounds pretty good. Let’s see if Surowiecki can compete…

SXSW: We Got Naked, Now What?

Just finished up the “We Got Naked, Now What?” session. Session description:

Some bloggers argue that you only become effective by putting more skin in the game, but is there such a thing as being too naked? Can you open your kimono in one blog post, and wear a button-down shirt in another? This panel showcases bloggers who opted to bring their personal lives onto their professional blogs, with varying degrees of success.Some have made an argument that you can bare all, and you should…to an extreme degree.

Panelists were:

Moderator: Elisa Camahort Co-founder, BlogHer

Laina Dawes Writer, Writing is Fighting
Jory Des Jardins Co-Founder, BlogHer
Elaine Liner Writer, Phantom Prof
Evelyn Rodriguez Principal, Dwelve
Elisa Camahort Co-founder, BlogHer

Great panel, overall. A lot of good discussion…where do you draw the line, if at all, in your professional blogging, with respect to exposing your personality and aspects of your life “outside the office?” Elaine Liner told a great story about how she was fired from her role as an assistant professor (she believes as a result what she wrote on her blog)…and how it was a springboard to a significantly positive change in her career.

Jory got the best line: “the way that we distinguish ourselves is through our personalities.” And I think that’s spot-on…products commoditize, processes can be replicated, software can be purchased with equal access by all parties. The truest differentiator consists of the collection of personalities in an organization.

UPDATE: Lisa liveblogged the session here

Next up: some lunch, then James Surowiecki and his “Wisdom of Crowds” session in a couple of hours. Seeya then…

The Perils Of The Professional Prognosticator

From Podcasting News:

“Comedy Central’s series “The Daily Show with Jon Stewart” and “The Colbert Report” are now available on the iTunes Music Store. The series are available at $1.99 per episode or via a new “Multi-Pass” feature on iTunes that lets fans buy the next month’s worth of 16 new episodes for $9.99.

“‘Multi-Pass’ gives fans the ability to purchase a block of 16 episodes of these hit programs during the current season and have them delivered automatically to their computer after they air on TV,” said Eddy Cue, Apple’s vice president of iTunes.” (emphasis added)

Damn. ‘Twas off by about a month.

John T. Unger: Artist (& Global Microbrand)

Mega2
John T. Unger is an artist with a penchant for playing with fire. (Literally. He makes cool metal fire sculptures and lots of other neat stuff.) John writes:

“I’ve been getting quite a lot of press and sales and commission inquiries this winter, from pretty much all over the country. Right now I’m working on drawings for 10-12 sculptures to adorn the courtyard of a 17 story Chelsea highrise in NYC. I’m waiting to hear back from an architect in Topeka, Kansas about three Great Bowls O Fire that he’d like to fit out with gas flames and install on stone pillars in a new restaurant. I just got off the phone with a client who bought a Great Bowl earlier this winter and now wants to surround his pool with some of my torches. Rock on.

I’ve done three interviews for magazines and websites this week. The Sprint Ambassador Program is sending me a free cell phone with six months of free service. School children write emails from overseas asking about my art for school reports they’re doing. HGTV contacted me a while back about possibly featuring my work on their show, Offbeat America (it doesn’t look like it will happen this time, but it’s still pretty cool to be asked). I’ve also met a lot of incredibly cool people this year that I consider to be good friends despite never having seen them in person.

Almost all of this has come about because of the time I’ve put in writing blogs.”

Go John! (And yes, Hugh, you’re right.)

Good Intentions

June 2004:If you squint, the situational software angle seems to resemble some research work that was being done ca. 2001 by Accenture and others around ‘intention value networks.’

Why is this relevant now in March 2006? It’s starting to get some legs.

A few key quotes. The words are Doc’s. (The underlines are annotations that I’ve added for context. The links afterwords are things I have added as well, but didn’t want to change the original source, lest something be latter attributed incorrectly.)

Doc: The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don’t need advertising to make them.

The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets.

The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that.

The Intention Economy is built around more than transactions. Conversations matter. So do relationships. So do reputation, authority and respect. Those virtues, however, are earned by sellers (as well as buyers) and not just “branded” by sellers on the minds of buyers like the symbols of ranchers burned on the hides of cattle.

The Intention Economy is about buyers finding sellers, not sellers finding (or “capturing”) buyers.

Links:
Conversations matter. So do relationships. So do reputation, authority and respect.
The Intention Economy is about buyers finding sellers, not sellers finding (or “capturing”) buyers.

A Few More Conference Thoughts

Continuing the conference conversation from here…

“Something has been bothering me about the format of the [Etech] conference. Each session is so rushed that there is little room for Q&A following each presentation. As a result, you don’t often get a chance to hear the audience’s point of view. The only way to get at this is if you force yourself on strangers in the hallway but, depending upon how you strike up a conversation, it can be hit or miss.”Ian Kennedy

More:

“I’d be willing to bet that, if polled, 90% of etech attendees would tell you that they hear the most interesting and compelling ideas and thoughts in the hallways, around the coffee pots, and out on the deck… not in the presentations. This year’s etech is big, much bigger even than last year (my first time here), and there are a lot of first-timers. You can usually identify them pretty easily– they’re the ones standing awkwardly alone, sometimes on the peripheries of conversations.”Chris Lott

One more, also from Chris Lott, on “The Name Badge Assessment”

Lott: “…you try to talk to one of the Conference All-Stars– perhaps someone you’ve interacted pleasantly with via email or IRC just minutes before– and they stare at your badge for a moment (you can almost hear the mental checklist preceding the shutdown: Google? Nope. Yahoo? Nope. Press? Nope. A-List blogger? Nope.) before their eyes glaze over. It doesn’t happen every time, but often enough to discourage input from just the people from whom interaction should be encouraged.”

More here.