I thought that I knew how to learn from the experience that I’ve been accumulating throughout the years of hard-work while I did my absolute best to escape my day-job (so I could be full-time helping you).
I thought that I knew how I could share what I’ve learned to you and I was certain that those new insights would enable you to instantly get massive results.
I must be feeling like the Dutch explorers when they arrived at Australia believing (like the entire Western culture) that all swans are white. Then a Black Swan appeared and it changed everything they thought they knew about swans (and opened the door for what else they were missing).
So what changed everything for me?
I started reading Nassim Taleb’s “The Black Swan”.
Soon after I moved past the first pages, I stopped reading it.
I started studying it!
I underlined it. I wrote notes with questions and thoughts for future reference (and further research).
What was my biggest take-away from the book?
My biggest take-away was to realize just how fragile our knowledge really is and how easy fooled by randomness we are.
The reason why I say that our knowledge is fragile is because the way we are used to learn is also fragile.
This is even more true in complex systems where “there is a great degree of interdependence between its elements, both temporal (a variable depends on its past changes), horizontal (variable depend on one another) and diagonal (variable A depends on the past history of B)” [Taleb].
Why is this relevant?
This is extremely relevant because on complex systems we can’t rely on the Gaussian “bell curve” to make predictions about how a system works (much less “teach” people about how A leads to B).
On the Gaussian “bell curve” the outliers are irrelevant since the bulk of data is in the middle (the average). Outliers are unlikely and can be safely ignored (since the odds of finding one decrease exponentially as you move away from the average).
This is not true in complex systems (like the entrepreneurship economic system). Complexity implies the presence of “fat tails” where not only outliers exist but they occur in large unpredictable jumps and they also contribute heavily to the distribution of the data.
Most training courses about entrepreneurship are built on the premise that the results of those who take the course and apply what they’ve learned (in the form of step-by-step “how-to”s based on successful case-studies) should follow a distribution that resembles the normal distribution of the Gaussian “bell curve”. If this wasn’t true the course creator would go broke with the amount of people requesting refunds.
However, the only way for the results to follow the normal distribution is if we’re working in a reality that follows that distribution. Taleb defines that kind of reality as Mediocristan. For instance earning enough money as a freelancer to pay the bills should follow the normal distribution (hence that’s why there’s so many of them). But even that claim isn’t so straight forward as you will see.
Now, “recipes” like the following DO NOT follow the normal distribution:
- How to Charge 100X what you’re worth
- The simple path to becoming a highly-paid expert
- How to get 50% market share
- The $540 Million Dollar Blueprint
In Extremistan (as Taleb calls complex systems), there is a winner-take all (not all but the large share of the results) effect. The majority of people won’t earn “$540 Million Dollar” no matter how hard they work to follow the “blueprint”.
The Black Swan equals the huge impact of the highly improbable (it lives in Extremistran) and it changes things, for either the good (Steve Jobs) or the bad (9/11). Forever.
We tend to learn the precise (the specific steps) that lead to the appearance of The Black Swan but not the general. Or even worse – we learn the precise and then we generalize it. We tunnel our vision of the World to make it fit what (we think) we know.
Here’s why the way we learn (and teach) is broken:
The problem with induction and learning backwards
Let’s say that you and I are turkeys and you’re coming to me with a recipe (based on past evidence of what other turkeys have done) about how to live well as a turkey.
I follow the steps that you’ve shared and indeed all goes according to plan. With every new day that comes, I confirm my observations and I grow more confident and certain about how well the plan is working until… Thanksgiving day appears and I’m the chosen turkey.
Notice that this is a Black Swan event for me (totally unpredictable to me and with a high impact) but not for the butcher.
Now let’s look at the turkeys that survived. Since they are all affected (when they’re not aware of it) by the Narrative fallacy (looking at the past and creating a story that explains why we arrived at the present), they will tell you a very persuasive and convincing story (disguised as proof) that perfectly explains WHY they are still alive while I was chosen for a different fate.
E. J. Smith was a famous ship captain that in 1907 said: “In all my experience, I have never been in any accident… of any sort worth speaking about. I have seen but one vessel in distress in all my years at sea. I never saw a wreck and never have been wrecked nor was I ever in any predicament that threatened to end in disaster of any sort”.
Smith was later on named captain of… the Titanic.
Confirming a theory by looking at the data doesn’t tell you nothing about what is going to happen in the future and it doesn’t tell you anything about the validity of that theory.
Because all it takes is one evidence (Thanksgiving) to falsify your initial theory that the butcher is our friend and you’ll a live long life if you keep being fed by him. As Taleb describes “for large deviations, n = 1 is plenty of data (see maximum of divergence (Lévy, Petrov), or Kolmogorov-Smirno)”. (Taleb, 2013, Probability and Risk in the Real World)
The problem with reproducing results
When I was working on my Master degree in Management, my mentors always told me that doing a Case Study was the weakest form of research. Why? Because a Case Study is HIGHLY limited by the context where the action and the results were taken place.
Indeed, there are fundamental variables that we can’t replicate and that are detrimental to produce the same results that one person might have produced (or think they’ve produced – more on this later on):
One of interesting things about time is that it doesn’t go backwards. Yet, we believe that if something worked for someone once, it must work every time (until it doesn’t).
Time by itself doesn’t change (there’s always 24 hours in a day) but the World changes. Trying to replicate the actions that young Bill Gates did when he launched Microsoft won’t do us any good nowadays because the way the economy works today is different.
The space where we live in also plays a significant role in the way that the future unfolds. Why? Because it determines the people we live with (and by implication, the opportunities we get).
Yes – with the Internet we are everywhere and we can talk with anyone in the World. That’s true. But what’s also true is that the offline world still provides for important serendipitous encounters that might just create the opportunity that we were looking for. This means that it doesn’t matter how hard I study how Steve Jobs was successful since the times are different and I’m not in the same space that he lived.
This leads to the third point…
We are all unique and connected with each other.
Even if I went back in time and lived in the same surroundings as Steve Jobs and tried to replicate his every move (based on what we know that he did back then), I’m certain that I wouldn’t be as successful as he was at doing what he did. And that’s the key! He wasn’t following a specific plan on “how to lead a successful business like “Case X” and change the World”.
Let’s get serious about this “predictable outcome” business – two people follow the same recipe to cook a cake and at the end of the process there will be two different cakes. I bet not even YOU can make same dish twice and make it taste the same.
There’s also something else that is worth noticing…
The unknown unknowns (and the problem of silent evidence)
Even though we might not know something, that unknown has the power to influence the outcome of your actions because both what you do and what you don’t matter!
With the turkey we saw that we can do the same actions over and over again (A), get the results we want (B) AND still be surprised with a high impact event (C) that kills us precisely because we kept doing for A – staying with the Humans and let them feed us, instead of going for D – escape the Humans! For the turkey, the unknown information was that Humans like turkeys for Thanksgiving.
You might NOT being doing something (while not being aware of it) that might be the reason why people are responding the way they do. The same thing goes for something that you might be DOING (but unaware of it).
But even in the extreme situation that you are AWARE of everything you do and everything you don’t do, you’ll never know (and replicate) the natural randomness that is part of life. This randomness plays a critical role in creating the significant events that shape our lives.
Let’s say that you and I are walking through ice. I’m following you as I place my feet exactly where you placed yours every step of the way. Suddenly, the ice breaks just as I place my left foot where your left foot was just a second ago.
Maybe you were lighter than me. Maybe the way you move is different than mine. Or maybe the ice was about to break anyway (you just made it easier for it to break on the next stress event for the ice).
How your actions influence the results you get
Have you ever read that research that says that the best time to send an e-mail and get it to be opened is (I’m making this up now because it doesn’t matter) Tuesday at 10PM?
The research results: 60% of the people got 30% open rate and a 15% click rate.
But imagine that person A got and amazing 97& open rate and 87% click rate sending emails on Saturday 8AM. Since it’s just one person in a sample of let’s say 1000 people, this amazing example was diluted.
Now let’s go back in time with person A, before he even started sending e-mails. We showed him the research data and sure enough he started sending emails on every Tuesday at 22PM. His results? 20% open rate and 15% click rate. Not bad but SO FAR AWAY of what he could have done.
See the problem with “knowledge” and “evidence based research” being misused as truth? Not only is he getting poor results, he is also more “blind” at what’s missing because, after all, he’s following the “industry’s best practices”.
But it doesn’t stop here. Let’s continue with our “best time to send an e-mail” example.
By sharing the results, you are changing how the agents in the environment behave! And THAT changes the future results.
Before the research was done nobody knew when was the best time to send an e-mail (except those who were already testing their own actions). However, after the research was published, the information within it changed how internet marketers (and other pros who rely on e-mail for a living) behave and THAT changes the results.
Suddenly, people’s e-mail boxes started to be “attacked” with a stream of e-mails every Tuesday at 22PM. What’s the effect that this will make on how people respond to e-mails sent at that time? I don’t know.
What I do know is that Chris Brogan is sending his newsletters on Sunday morning because he wanted to escape the e-mail rush hour that most were chasing after.
Sharing the information that worked for most people, decreased its potential power for those who will use it.
The core issue here is that what you know (and what others know) will change how that outcome is produced!
However if person A sticks to his own tests, he would have kept getting great results sending emails on Saturday at 8AM (until it eventually stopped working)!
Ok. Now what?!
I’ve been researching, brainstorming and working on a new way to overcome the challenges that I’ve showed you and I’m building something very interesting that I can’t wait to tell you about it.
But now I want to hear from you!
What do you think about the things you’ve read? Do they challenge you? Do they make you upset? Do you agree? Disagree?
I’ll see you in the comments bellow!
P.S: If you want to get more insights like this, share your e-mail bellow so I can send it to you (plus exclusive content that I don’t post here).
P.P.S [21-10-2013]: Two articles from The Economist shed more light about the fragility of how we learn and teach: