#4 - Big Tech, Uncertainty and Tribalism
On iHealth, Misinformation Epidemic and the Dunning-Kruger effect
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Time changes rapidly. It has been almost a month since we started this newsletter and the global narrative has dramatically shifted from “Flatten the curve” to “Live with the virus”. Some countries have successfully managed to flatten and have started to reboot their economy while a few others are cautiously optimistic and gradually easing the lockdown restrictions.
This week we explore:
The shopping spree of Big Tech
Big Tech’s dangerous union with the government
Apple’s strategic pivot
When Information Overload Increases Uncertainty
The Outrage Epidemic
Let us dive in.
Big Tech Shopping, Economy Unlocking
Read the article here
With the global economy reeling under the pandemic induced recession and dozens of businesses filing for bankruptcy, tech’s largest companies (Facebook, Apple, Amazon, Google, Microsoft) are deliberately laying the groundwork for a future where they will be bigger and more powerful than ever. The tech companies have become near-essential services with people turning to them to shop online, entertain themselves and stay in touch with loved ones. Their skyrocketing use has given them new fuel to invest as other industries retrench. These tech companies are continuing a historic pattern by doubling down on growth during a time of economic pain. It is observed that in previous recessions, the companies that invested while the economy was vulnerable often emerged stronger like IBM in the 1990s .
Whose investments do you think will see the maximum payoff?
Do you believe this pandemic will be Darwinian in making the strong organizations more stronger?
When Two Powerful Entities Collaborate
Read the article here
Franklin Foer writes that as governments are struggling to manage the containment of the virus, Big Tech companies have stepped in to help the governments. This is a contrasting departure from the early days where Tim Cook refused to cooperate with the FBI to crack open the password of a dead terrorist’s iPhone. This symbiotic association can have serious ramifications on individual privacy.
As tech and government grow more comfortable with each other, they’ll face the temptation to further indulge their shared worst instincts. Both wield intrusive powers with inconsistent regard for the prerogatives of privacy. A symbiosis of concentrated economic power and concentrated political power was a path to fascism.
There is a need for a transparent neutral antitrust regulation which does not favour any company along with the creation of a Data Protection Agency to scrutinize how these companies exploit the information that flows through their devices and platforms.
Will the future see stronger coordination between government and Big Tech?
What mechanisms are in place to avoid such alliances ?
Health To Be Wealth For Tim Cook
Read the article here
Tim Cook believes that in the future, Apple greatest contribution to mankind would be health. Specifically, Apple is building a system to aggregate data from modern connected devices (like watches, scales, fitness equipment, mattresses, etc) and integrate it with traditional health records (lab results, conditions, medications, procedures) in order to unlock a new, comprehensive view of your body’s health. They are planning to build the operating system for healthcare.
A unique combination of scale and privacy. Apple’s focus on privacy got them in the door with healthcare companies, and their scale allows healthcare providers to tap into their customer base for large scale research studies that make the relationship mutually beneficial.
This could be a potential game changer for Big Tech and for Apple, if they dominate the healthcare ecosystem.
Will they create a platform or an aggregator?
Does Anybody Know Anything?
Read the article here
Barry Ritholtz writes that
We are terrible at making forecasts and predictions as the world is too variable and random, we can try to make intelligent forecasts and better probabilistic bets but overall we are not good at this.
The proclivity to make forecasts reflects a lack of humility, it is arrogance to believe we can foretell the future
We want to believe someone else can predict the future due to our fear of the unknown.
So now do you know which investment of which Big Tech company will see the maximum payoff ?
More Misinformation = More Uncertainty
Read the article here
There are three types of uncertainty - probability, ambiguity and complexity. Probability uncertainty refers to situations in which it is difficult to ascertain risk levels. Ambiguity uncertainty refers to situation where we face imprecise, insufficient or conflicting information. Complexity uncertainty occurs when an issue is technically difficult to understand.
A method to deal with probability uncertainty is to comply with expert recommendations and reducing your risk and embracing the fact that we are all at risk.
You can consolidate conflicting information to determine what is more likely and know when to stop the search for clarity when managing ambiguous uncertainty.
To manage complexity, consult experts and recognize that complexity cannot be always resolved and focus on other things.
Virus Pandemic vs Outrage Epidemic
Read the article here
Russ Roberts believes that there has been a genuine change in society due to tribalism. Our ability to feed and indulge our tribalism, particularly with news and politics. The news and information business has become competitive to cater to your deeply held beliefs where the providers are ready to change what they serve. The internet allows people to consume news and information the way they want to on 3 characteristics - fit, comfort and style. What fits their notions, what comforts them and what their friends accept and respect.
This increasing trend is worrying for the ideal of democracy as people give up their quest for truth. Roberts recommends a bottom-up solution to improve the information landscape by embracing humility, following people who don’t agree with you, being mindful of your outrage, spending more time with humans and find non-political outlets for outrage.
Do you believe that there exists a truth in isolation? Or is truth just a successful delusion of the collective?
Mental Model For The Week - Dunning-Kruger Effect
Awareness of the limitations of cognition (thinking) requires a proficiency in metacognition (thinking about thinking).
In other words, being stupid makes you too stupid to realize how stupid you are.
Book Recommendation For The Week - Zero to One by Peter Thiel
The book summarizes Peter Thiel’s philosophy as an entrepreneur and venture capitalists. It describes his contrarian approach by reasoning from first principles and gives unique insights into looking at new-age startups which have the potential to define the future.
Some key lessons from this book were that biggest leaps are vertical, not horizontal. Horizontal is copying things that work and vertical is doing something blue sky - totaly new.
An interesting question which Peter Thiel asks in interviews - What is one truth which very few people agree with you on?
Buy the book here.
Podcast Recommendation For The Week - David Dunning on Masters In Business
A conversation with the person who recognized and researched on the cognitive bias - David Dunning. Yes, the Dunning in the Dunning-Kruger effect.
Metacognition is the ability to self evaluate your skill set and your findings.
Overconfidence is a phenomenon that lies within a family of skills called metacognition which is basically skill in knowing how to evaluate your thinking and control your thinking.
This fascinating conversation explores the limits of our ignorance in great detail.
You may view a few notes here
The complete link to the podcast is here
Afterthought
“The chief task in life is simply this: to identify and separate matters so that I can say clearly to myself which are externals not under my control, and which have to do with the choices I actually control. Where then do I look for good and evil? Not to uncontrollable externals, but within myself to the choices that are my own…”
- Epictetus
That wraps up this week’s edition of The Curious Cat. Hope you liked it.
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Take care, stay safe and have a nice weekend. We shall see you next Saturday.
Regards,
Team Curious Cat