#8 - Data Wars and Data Banks
On TikTok wars, control based decision making, imaginative reflections, platform nationalization and belief bias
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Pedro Domingos in his book “The Master Algorithm” classifies personal data into four categories:- the data you share with everyone, data you share with friends or co-workers, data you share with various companies and the data you don’t share. The first type of data includes Amazon reviews, blogs, tweets, LinkedIn resumes, etc. The second type overlaps with the third type which is the social media photos and posts, the third type involves your credit card details, payment history, online purchases, etc. and the fourth includes your personal data on health, dating history, etc. Many questions about society and policy can be answered by learning from the data we generate in our daily lives provided the data is accessible to researchers, policy makers and citizens. We do not mean violating individual privacy but providing broad trends and actionable insights to people for beneficial use. Individual data sharing has problems and ethical concerns of privacy and hence, there is a need of an intermediary who guarantees that your data will not be misused but also that no free riders get benefits without sharing their data. The solution proposed by Domingos is a data bank. Just like a bank stores your money, the data bank would store all your data and use it wisely with your consent.
Almost all the Big Tech companies have launched their quest for building such a data bank. The same can be seen in their present and future investments in various companies - A search engine investing in home devices, payments, etc. , a social media network investing in payments, telecom, etc., an e-commerce behemoth investing in cloud storage, video content, etc. The overarching objective is to collect data and get a deeper understanding of your behavior, preferences and habits.
Will he have the last laugh?
(Photo: Mukesh Ambani Indian personalities by Clipart info licenses under CC 4.0
Jio and The Data Bank
In this quest for user data, one man in India dominated the business news headlines - Mukesh Ambani, for his herculean achievement of making Reliance Industries debt free by raising capital through selling stake in Jio Platforms from Google, Facebook and other private equity funds. Reliance also held its Annual General Meeting (AGM), which ended up becoming an Indian version of Apple’s WWDC due to the expansive outlined vision for Reliance Jio.
Ambani said things that benevolent humanitarians say - he wished to improve lives, he wanted a greener planet and mentioned that there is nothing more precious in this world than life. He framed capitalism like it was social service because even in the capitalist syndicate, it is vulgar to only talk about growth, profits and shareholder value. Profit is the intent and service is the outcome of the intent. It is important to mention this point so that there is a deeper philosophical meaning to their work. As this article writes, Ambani wishes to connect every Indian to a high speed internet at cheaper price, service millions of kirana merchants through his Jiomart retail platform and improve lives of many Indians. Ambani also has investments in edtech, telemedicine, virtual reality, video streaming, media and entertainment, 5G device and equipment, etc. making Reliance Jio, the Indian counterpart to Big Tech with the resources to fight Amazon.
In the context of building a data bank, Reliance Jio is the front runner to become this data bank in India as it has the wide range of products and services, Google and Facebook as shareholders, and strategic partnerships with Microsoft.
Let the Data Wars begin!!!
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In this issue we explore -
Platform Nationalization
TikTok Wars
Valuations of tech companies
Control Based decision making
Method of imaginative reflection
Mr Market and Stoicism
Let us dive in straight into the first piece.
Platform Nationalization Anyone?
Read the article here
After India banned TikTok, the US government also contemplated banning the Chinese app due to the strong rumours that Chinese are using it to build a face recognition database and mass data collection for illicit purposes. It sounds creepy. Doesn’t it? But these shady surveillance theories have been the contentious issue of all Big Tech platforms - you give your data when you use the platform and they use the data to improve your platform consumption experience. The lines of privacy are breached when your data is used without your consent for activities that may not be in the long term interest of humankind.
China started this practice by banning Facebook, Twitter and Google to encourage their homegrown apps - WeChat and Weibo. This trend of banning applications is accelerating the creation of nationalized platforms. Entrepreneurs limiting the use of their products in their countries and its allies. Does this ensure your data remains protected? Highly unlikely, but it will be used only by your country or their allies for various purposes.
The implications of this are a reduction in the total addressable market (TAM) due to a reduced number of users and the financial impact following due to the reduced TAM. What does this imply? This would lead to a geopolitical shift where technology influences foreign policy and there are clear allies for economic benefits. The Indian position of non-aligned will undergo a shift as countries will have to make choices for its citizens. We will see the rise of two powers - one led by the United States and allies and the other led by China and its allies. Each will establish their own guidelines and acceptable rules regarding technology. They will both actively work to prevent their citizens from using technology created by a company from the other world.
So if platform nationalization is the way forward, will we also see segmentation of platforms on other aspects like social and political beliefs given the supposed toxic nature of a few platforms? A Twitter for the left-leaning ? A Facebook for the conservatives? An Instagram of the progressives?
Tiktok TakTics Replacing Traditional Wars?
Read the article here
Ben Thompson writes that the reasons for the disconnect between the USA and China go beyond the usual divisions in tech, culture, and national security: what makes TikTok so unique is that it is the culmination of two trends: one about humans and the Internet, and the other about China and ideology.
The reason TikTok is addictive is that humans prefer videos to photos to text. TikTok makes it easy to create videos, ensuring a massive supply of content (even if most of the supply is low quality). TikTok relies on its algorithm to surface compelling content, and is not constrained by your social network. This explains why TikTok succeeds.
China has a strong ideology of Marxism which relies on absolute state power and considers ideas like “separation of powers,” “independent judiciaries,” “universal human rights,” “Western freedom,” “civil society,” “economic liberalism,” “total privatization,” “freedom of the press,” and “free flow of information on the internet.” dangerous to its existence. It has tried to gain complete control of information within its borders but also of information outside its borders.
TikTok’s algorithm unmoored from the constraints of your social network or professional content creators, is free to promote whatever videos it likes, without anyone knowing the difference. This encourages propaganda giving rise to ideological bubbles. Thompson concludes by saying that if China is on the offensive against liberalism not only within its borders but within ours, it is in liberalism’s interest to cut off a vector that has taken root precisely because it is so brilliantly engineered to give humans exactly what they want.
Do you think a data bank can become like United Nations and help in reducing these escalating geopolitical tensions due to data exchange?
Embrace, Don’t Criticize Tech Valuations
Read the article here
Valuations that are too high can lead to vaporware and waste, but a valuation that is too low can become a self-fulfilling prophecy. The rationale for inflated valuations in tech stocks is on the premise of an optimistic future though the present seems gloomy.
Intangible capital is the benefits a company derives from its people and organizational structure. Pricing the intangible capital correctly can help in leveraging small amounts of capital to totally reshape the economy instead of promoting breakups and hostile takeovers.
The author argues in this piece that accurate valuation of intangible capital for tech companies is a credible path for restoring the weak economy amidst a pandemic.
We think that valuation is belief - all decisions are fundamentally conjectures. It depends on who has the stronger belief and the aggregation of all beliefs are represented by a number.
Control Based Decision Making
Read the article here
The goal of this technique is to reinstate your control to improve efficiency in decision making. The three steps are:
Evaluating the degree of uncertainty - Observing data parameters and predictability of the data - a high predictability would mean low uncertainty and vice-versa
Regain control internally through personal management - This involves focusing on how you think, feel and act - regaining control through flexible thinking by overriding confirmation bias, sunk cost fallacy, regaining control through calm feeling by journaling and meditation techniques, regaining control through personalized acting by following your intution
Regain control externally through situational management - This involves using situation management strategies like careful selection of situations that are favorable to you and modifying negative elements of a situation
Imaginative Reflection in Decision Making
Read the article here
Some points on decision making from a mystic using the language of faith but can be used by anyone to make good decisions. The three exercises mentioned for imaginative reflection are particularly useful -
Imagine that a friend comes to you with the same situation. They describe their choices, pros and cons, and their thoughts and feelings about these proposals. What would you advise them?
Imagine that you are on your deathbed. Looking back at your life, and assuming you made the decision in question, how do you view it from that perspective?
Imagine a conversation with the divine: Those who do not believe in God could have an imaginary conversation with someone they loved and trusted and who passed away. What does this person say to you about your options? Would they be pleased, disappointed or neutral about your decision?
Imaginative reflections help in providing another perspective to the decision at hand.
This decision making method can be combined with the regret minimization framework used by Jeff Bezos.
Mr Market and Stoicism
Read the article here
Stoicism is a philosophy that helps guide our thoughts and actions in an unpredictable world by not worrying about things beyond our control and focusing on how we control ourselves and our reactions.
Mr Market is a powerful mental model introduced by Benjamin Graham on how to view the market. Mr Market is a fictional investor who is driven by panic, euphoria and apathy, and approaches investing as a reaction to his mood rather than thorough rational analysis. On days when he is euphoric about the future, he presents to you prices that are high and on days when he is depressed about the future, he presents prices that are very low. We cannot predict what mood Mr Market will be in tomorrow and hence we should not worry about him. We should only worry about how we react to if we are presented with a good bargain. Mr Market, therefore, is a Stoic view .
Now that we know about Mr Market, do you think that tech valuations are over priced or are they just reactions to different visions of the future?
Mental Model For The Week - Belief Bias
The arguments that we would normally reject for seeming stupid suddenly seem perfectly logical if they lead to conclusions we approve of. A tendency to judge the strength of the arguments based on the conclusion they lead to rather than how strongly they support the conclusion.
In other words, we judge an argument’s strength not by how strongly it supports the conclusion but by how strongly we support the conclusion.
Book Recommendation For The Week - The Lessons of History by Will and Ariel Durant
This book is a short, concise and dense read with probably the most wisdom per word (if that is a genuine metric) of many non-fiction books. It takes us through important insights that we learn about human history linking it with biology, civilization, politics, morals, economics and other important subjects that have had a very powerful role in shaping events of the past and helping in evolution.
Afterthought
Man is condemned to be free; because once thrown into the world, he is responsible for everything he does. It is up to you to give (life) a meaning
-Jean-Paul Sartre
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