Cult Of Mac, the popular Apple news website, has published an interview with me about Secondomics. The interview is with Leander Kahney (best-selling author of Inside Steve’s Brain, The Cult of Mac and The Cult of iPod).
Check it out: Cult Of Mac interview
Wired editor Chris Anderson wrote a public response to Malcolm Gladwell, rebuking him for his “parochial” critique of Anderson’s new book, “Free”. Whilst they’re both great writers, they can’t both be right. To help clear things up, I offer the following example…
How can buses be free?
For decades, buses have carried advertising on their sides. Of course, income from advertising alone is not sufficient to meet the costs of running a bus service, so the bus companies are forced to top-up their revenue by charging their passengers a “fare”.
The main costs in operating bus services are the capital invested in the vehicles, and the employment costs of the drivers. As any economist will tell you, capital expenditure is written off over a number of years, so all that’s required is to simply not replace the buses, and run the existing vehicles into the ground, and you’ve eliminated a substantial cost already. But this alone will not be sufficient to fund the bus service entirely through advertising revenue. Something must also be done about the bus drivers, who expect a financial reward for their safe driving, and organize themselves into unions to ensure that they get paid.
As always, Free finds a way. And what better way than the humble sidewalk system, which operates perfectly with no one being paid to walk, and yet, (as hard as it may be for residents of LA to believe,) millions of people get to their destination at no cost, simply by using their feet. But whilst most people are able to walk, not everyone has a driving licence. Where are we to find drivers for our Free buses?
The answer is simple. The drivers are on the buses already. They are passengers, like you and me. Just let the passengers take control of the wheel themselves. You might ask why an unqualified passenger would step up and take responsibility for the bus? Prestige, of course! We no longer live in a money-is-everything economy. These days, people get just as pumped about prestige and popularity. And who would be more popular than a fellow passenger who grabs the wheel and gets everyone home for Free! We are all drivers of the Free economy.
Does this answer your question, Malcolm?
Some good friends of mine are having no end of trouble with their home improvements. For months now, they’ve had no staircase, and have to reach their bedroom via a series of precarious ladders. This prompted them to conclude “never again.” In future, they’d purchase a property that someone else had already improved, rather than undertaking the work themselves.
A similar strategy is frequently pursued by digger wasps, who lay their eggs in burrows that must be painstakingly constructed by digging a long bore-hole with a hollowed out chamber at the bottom. As Richard Dawkins describes in The Selfish Gene, digger wasps are not always industriously inclined. On occasion, they prefer instead to take advantage of another wasp’s home improvements, by entering a seemingly vacated burrow. Whilst this strategy is often effective, things go pear-shaped if it turns out that the burrow is already occupied. Both wasps will then busy themselves filling the burrow with food, whilst only one will ultimately reap the benefit.
If digger wasps were concerned by ethics, they’d be troubled by Kant’s first formulation of the categorical imperative: “act only according to that maxim whereby you can at the same time will that it should become a universal law.” Or in other words: “what if everyone did that?”
Of course, if all wasps stopped digging, and started occupying existing burrows, then no new burrows would be dug, and the species would presumably die out. Likewise, if humans all followed my friend’s advise, and stopped improving their homes, then no homes would ever be improved. This is where natural selection (in the case of the wasps) and market forces (in the case of home improvements) comes to the rescue.
Like many examples I explore in Secondomics, the mix of behavior in a population of digger wasps (entering an existing burrow vs building a new one) will ultimately arrive at an equilibrium point. If too many wasps start entering existing burrows, then insufficient new burrows will be dug, whilst if too many new burrows are dug, the advantages of hunting for existing burrows increase.
And if everyone stopped improving their homes, then the market value of a good quality home will rise, and consequently the incentives to embark upon home improvements will increase, until ultimately, some home owners will undertake improvements.
Occupying an existing burrow, and purchasing a home which has already had work done, are both examples of secondomic strategies - allowing the guy before you to do all the hard work. And since any secondomic strategy is predicated upon following someone else’s lead, there can only be so many seconomists in any given population.
Perhaps my friends were right to live without a staircase for a few months after all.
Every day, my iPod and I go for a run. I do 4 miles, at a steady pace of 7.11 minutes per mile. I know this because my iPod+Nike kit tells me. The trouble is, sometimes it seems that everyone around me is conspiring to interrupt my run. People continually step out in front of me, causing me to slow down or swerve in order to avoid them. It’s essentially a battle of wills for who will go first and second.
Initially, I assumed that this was simply random happenstance - what one should expect from living in such a populous city. But I’ve started to notice a pattern. All too often, the road ahead is entirely empty, with someone loitering on the sidewalk, only to step out as I pass. It’s as if they’re deliberately trying to get in my way.
This realization took me back to the days when I used to do lane swimming. It was so frustrating when I was about to complete a length, and there was someone lingering at the end of the pool, who would wait until the last possible moment to push off, so I’d end of swimming right behind them on the next length, with their posterior practically on my face. Basic courtesy dictates that they should start a little sooner, or a little later, to ensure an even distance between swimmers.
But why would anyone consciously do this? What utility could they possibly derive from getting in my way?
The answer is, of course, that they don’t do it consciously. This behavior is driven by “anchoring,” an aspect of the availability heuristic, which I explore in Secondomics. The concept of anchoring was introduced by Daniel Kahneman and Amos Tversky in their seminal paper “Availability: a heuristic for judging frequency and probability.”
Put simply, anchoring is a way in which we arrive at judgements by adjusting from a pre-defined value. So for example, if I asked you whether you’d pay $10 for my book, and then asked you how much you thought it was worth, you’d probably come up with a higher figure than if I’d asked you whether you’d pay $5 for it first.
I suggest that when I’m running, my fellow pedestrians are using anchoring to determine the optimal moment to cross the road. As they see me approaching, they think about whether to step out before or after I pass, and as a consequence, they have a tendency to end up getting entangled with me more frequently than they would if they disregarded me altogether.
Of course, to support my hypothesis, I really need more reliable statistics, where I pay just as much attention to those who don’t get in my way, as those who do. And I should also remember that I’m just as susceptible to anchoring as my fellow pedestrians. It’s possible that I’m making tiny, unconscious adjustments in my speed as I see pedestrians ahead. However, this is where my iPod leaps to my defense, because it will be the first to tell you you I maintain a steady pace!
“First the worst, second the best, third the one with the hairy chest.”
Thank you to Peter, for reminding me of the above playground rhyme, which seems to preempt secondomics by… I don’t know how many years. The origins of this little ditty seem to be lost in the mists of time. (If you know where it comes from - please let me know!)
I certainly remember it being popular in school, when I was a kid, where it was used to bring people down a peg or two when they were bragging about a victory. So in secondomics terms it falls into the category of “supporting the underdog.”
I’m less certain of what it means to those who come third. I guess this depends on one’s feelings towards those of the hirsute persuasion.
Whatever the rhyme’s origins, it strikes me this will make a catchy line for marketing the book!
Just done an interview with Digital Strategy, which they’ve published a transcript of in the “Thought Leaders” section of their Digital Knowledge Centre. It’s the first time anyone’s ever called me a thought leader!
The strange tale of Susan Boyle perfectly illustrates how rankings and payoffs diverge. Boyle captured the imagination of the American media when she first appeared on the UK TV show “Britain’s Got Talent”. This unattractive, overweight spinster turned out to have a pretty good singing voice. She surprised the show’s judges, and delighted the media with her “ugly duckling” story. Her performance so much captured the public imagination that she was even invited to appear on Oprah and Larry King Live.
She was the bookies’ favorite to win the TV talent contest, as she had won everybody’s hearts. But last night, the unthinkable happened. She came second. The British public chose instead an energetic and original dance troupe called Diversity. This shock outcome left the American media reeling. ABC News proclaimed “Boyle Burned in ‘Talent’ Contest”. There seemed to be genuine shock that Boyle had not won, and absolutely no interest in Diversity, the act that actually did. Under normal circumstances, the American media would not cover a British talent show anyway - the only thing that made it a news story was Boyle’s underdog status.
And the truth is, that this outcome could not have been better for Boyle’s celebrity status. It means that she remains an underdog, and can continue to capture the hearts and minds of the American public. Because the ugly duckling story remains unresolved, she can continue to sustain her second class status, whilst the (remarkably talented) Diversity will be all but forgotten within a few months - their greatest claim to fame will ironically be that they beat Boyle.
In any business meeting, the first and most important point of order to address is who is having a beverage. In client/supplier meetings, this tends to be pretty asymmetrical. When the client visits the supplier’s offices, lavish refreshments are the norm. One might expect a brimming French press, and a steeping teapot to be ready to hand. But when suppliers visit a client, the offer of refreshments may be forgotten altogether, or proposed by the host in an offhand manner, just as everyone is sitting down at the meeting table. And this is where the principles of Secondomics kick in.
Frequently, in this situation, suppliers will politely (or meekly) reply that they are not in need of refreshment, or alternative ask for a humble glass of water, assuming this to be less hassle for their host to procure than a cup of coffee. However, where there are several attendees, I’ve observed that if one breaks rank, and asks for a hot beverage, then others are very likely to change their mind and follow suit, saying “well, if you’re making one anyway…” or words to that effect.
Those who are first to request a beverage from their clients are “bellwethers,” a term I explored in the Secondomics. The term was originally used by shepherds to describe a sheep that is a little hungrier, greedier and more curious than the others, and as a consequence, the bellwether tends to lead its flock to pastures new.
What’s happening here is of course that most suppliers seek to save their clients the hassle of procuring a beverage. The negative utility associated with displeasing their client in this way is greater than the utility that they will gain from refreshment. Once someone else has requested a beverage, the marginal cost to the client of procuring a second beverage is greatly reduced, and as a consequence, so too is the negative utility to the supplier. A classic secondomic scenario.
It’s worth noting that whilst the hassle to the client doubtless results in some negative utility, this may be offset by the psychologically positive attribution that tends to made by someone doing a favor towards the recipient of that favor. In other words, a client, having made the investment of procuring refreshments for his supplier, will tend to favor that supplier more as a consequence. Nonetheless, this positive utility will be enjoyed by all suppliers requesting a beverage, so the question of who will break ranks and be the first to request one remains.
Ask not, therefore, whether you should accept the offer of a beverage from your client, but whether you should be the first to do so. This decision may be one of the most important facing today’s business leaders.
In his book “13 Things That Don’t Make Sense,” Michael Brooks writes about some of the intriguing scientific mysteries of our time. One such mystery is the origin and variety of mating rituals and sexual displays.
In Secondomics, I wrote about beta males rhesus moneys, who have been known to lure away the alpha male so that they can copulate with his mate whilst he is distracted.
Brooks provides another example, but one where the female initiates the infidelity. He cites John Maynard Smith’s account of female deer, who sneak away whilst the alpha male stags are rutting in order to surreptitiously copulate with beta males whom Smith described as “sneaky f*****s”.
Smith was instrumental in applying game theory to evolution, and his observations on sneaky f*****s are rich with significance for secondomics. This strategy involves avoiding the risk of rutting altogether, whilst gaining the opportunity to mate with an alpha female, and potentially getting an alpha-stag to raise any progeny as if they were his own. Meanwhile, the apha male’s prowess results in him engaging in costly rutting behavior, that is both distracting, and risks injury.
Overall, however, there are presumably some advantages to sexual displays such as rutting, or they would not be selected by evolution. Being an alpha male doubtless has its benefits, and mating rituals surely do “make sense”. Nonetheless, like so many things in life, if you are “sneaky” enough, you can find ways to turn your secondary status to your advantage.
Thanks to Ben Le Foe for the reference.
