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Since I spoke at Webstock last year, I’ve had literally twos of people come up to me on the street and animatedly say how my talk was the highlight of their conference experience. Specifically, it was hilarious that I had a font goof and several letters were missing on each slide. Font fail, if you will.

<talk goes here>

This year that won’t happen, sorry to disappoint. Again.Anyway, I’m going to tell you some stories and develop a thesis that will hopefully make you feel more comfortable about something you don’t currently like. Your job is to see whether you can figure out what that is before I just out and tell you. If you succeed ... well, I apologize in advance for how boring the rest of the talk will be. HA.

I’m going to talk about virtuous circles, or feedback loops.

0.

the best example of feedback loops is science.

Religion

before we had science, we had religion. in religion, things are true

because God said so

because God said so. So how does

change?

our knowledge of the world change?

change?

Ah, well, you see, it doesn’t. Not in any systematic way that progressively improves our understanding of the world we’re in.

1610

This guy was the first scientist. He inherited a world view that was a thousand years old, developed by Aristotle and Ptolemy and refined by countless others. The view was being questioned by the time he arrived, by people like

1543

Copernicus. He was an astronomer who like all astronomers of the time made observations of the night sky using his naked eyes. He suspected that we didn’t have a geocentric cosmos (Earth in the middle), we had a heliocentric cosmos (Sun in the middle). He and Kepler, though, couldn’t bring themselves to abandon all the trappings of the old model and so threw themselves into inelegant maths to make a theory that was both Aristotle-compatible and observation-compatible.

Even Galileo began astronomy by seeing the skies through the eyes of an Aristotelian. But Galileo, when he looked through one of these (a “looker”, the first telescope)

saw more detail than anyone had ever seen before. He made detailed maps of the moon, and tracked the motion of planets through the sky. He even saw moons on other planets, something that hadn’t been seen before and which definitely violated Aristotle.

Galileo’s observations about planetary motions were hard to explain in any way but that the Earth and the other planets are in orbit around the Sun. Tada! Heliocentrism overthrows geocentrism, cosmology takes a giant step forward, science rises, enter the Enlightenment and it’s a short hop until we’re exploring those things that Galileo saw.Not that fast. Kepler and Copernicus had met with opposition when they mentioned their theories. But Galileo didn’t give up. He wrote a book, in common Italian rather than the Latin of the elites, explaining his theory. His book had a character called Simplicus in whose mouth were put

the Pope’s arguments, made appropriately ridiculous. The pope used to be his friend. Used to be. There were charges of heresy, and

he went before these fellows, the Inquisition. Galileo had to recant, say “ok ok, I don’t believe that at all”, and died still under house arrest. However, rumour has it he muttered

E pur si muove!

“E pur si muove” after recanting. “But still it moves”. Anyway, this stubborn bugger is widely acknowledged to be the first scientist. He had begun as an Aristotelian with his theories but changed them based on evidence, and he went looking for evidence to test his theories.

science = world view?

He got in such a power of strife because he was trying to change the view of the world. We think science is the view of the world. It’s not.

Science = change

Science is how we change our view of the world. That’s what science is, it’s change. Change is scary if you’re the fat rich bugger with a slick beard and a lot of sitting on the top of the heap. Hence all that business with the Inquisition, house arrest, etc.

change based on evidence

It’s not just random change, though, it’s change based on evidence. Scientists change their opinions based on observation.

In fact, there’s a nice little loop here. A feedback loop. A scientist has a theory, which makes predictions. Well, you can design experiments or observations to test those predictions and see whether they’re true or not. If they’re not, then you have to formulate a new theory and with it comes a greater predictive power and understanding of the world around us.

Of course, if we just test and find it’s true, we never get off the loop. We never get to revise and thus improve. So it’s important to, at some point, have a test come back that shows the theory’s predictions are wrong. In fact, that is THE most important thing. To be science,

Falsifiable

theories must be make predictions that you can measure and show to be false. It took nearly 500 years after Galileo for that to be figured out--500 years during which gravity, magnetism, electricity, atomic theory, and even quantum theory were figured out, so obviously not understanding what they were doing didn’t entirely stop them making progress. This theory of falsifiability was put forward by

Karl Popper1934

Karl Popper. Good book, “Logic of Scientific Discovery”, well worth reading. Kiwi connection too--he came to Christchurch from Vienna, fell in love with the place as a socialist haven, and only left to go to England to Cambridge, be knighted, and die famous. He managed to live two Kiwi stories: the creative class immigrant and the brain drain.

knowledge increases when someone is

wrong

Anyway, the key point to make is this: our knowledge about the world only increases when you find out that someone was wrong. That’s what science is.

Scientists Seek Failure

All that scientists want to do is to find a failure. They’re human, of course, so preferably it’s someone else’s failure, but they can only get a name for themselves if they find that someone was wrong.

a theory with predictions

test

how did it hold up?

revise

Because that’s what the feedback loop of science needs.

1. A/B Testing

Whew. Let’s look at some other feedback loops. I talked about A/B testing at Webstock last year.

Amazon

Amazon do it. They show you

A

B?

two different versions of the same web page. Well, not you obviously, they don’t show you two pages at the same time. They show 10% of their visitors the shiny new version, with different ads or a bigger Kindle picture or whatever, and the other 90% get the standard home page. Then they see who buys more per capita--those who saw old A or new B. If the new page gets more sales, they whack it in for everyone.

Here’s that feedback loop. But I’ve written this the wrong way. It’s actually

we assume that the current way of doing things is the best possible. Then we test that by running a different ad. Does it result in better sales? If so, our assumption was wrong and we have a new candidate for The Best Way Of Doing Things. Which we test by running a different ad .... This is continuous improvement, each time around the loop makes us better.

2. Open source

Or another example, Open Source software like Linux and Rails.

“scratch your own itch”

The guiding philosophy of open source is that you can scratch your own itch. Whether it’s a printer driver that should mail you when you job is done, or a new button in your mail app to unsubscribe from mailing lists, you can add the feature if you want it.

Here’s the feedback loop. You use the software, if it doesn’t work for you, you can make it better. In proprietary software, you rely on market forces to direct the vendor to scratch your itch for you. Not always going to happen and not always most efficient.Notice how this isn’t refining a hypothesis, this refines software.

3. User testing

Related to this is user-testing. Remember science? User-testing is the experiment and evidence part of the loop: if you take it out, there’s no way to go around the loop and get better! Wouldn’t it be horrible if we lived in a world where software didn’t get better because it was tested on users?

4. Community

Another example, from web sites. Can you build feedback loops into sites of community contributions to steer the participation in directions you want? (e.g., away from goatse and swastikas)

One way is to let people tell you what’s good and what’s bad. Here’s Digg.

Here’s Slashdot, with thumbs-up and thumbs-down. Slashdot’s been in this space a long time--they have a very functional and elaborate system for managing comment threads using “karma” points that you give to comments you like.

Here’s Flickr. Information on what’s been favourited is used to bubble up interesting images.

So this is the feedback loop. We show some news items or photos, we get the user to apply critical thought and tell us whether they’re good or not and thumbs-up/thumbs-down them. This then informs our choice of news items and photos to show the next person.

homophily

The danger is that you only show people things that they like, or you only show people things that everyone likes, and nobody is ever surprised or discovers things they didn’t know they wanted. This situation, where we only see more things like the things we like, is called homophily. The opposite of homophily is

serendipity

serendipity. We can break our feedback loop, deliberately, to add surprises and new things. Just because we know what’s popular and what people like, doesn’t mean we have to show just that to them.

5. Free Speech

Another feedback loop is in free speech. You see, there are two different approaches to the problem of

“what if people say bad things that are wrong?!”

people saying things you don’t like. The first, as exemplified

Germany

by Germany, is to forbid it. There are things you can’t say in Germany, like “those Nazis were lovely chaps, just a bit misunderstood”.

America

In America, however, you can say almost anything. Speech, particularly political speech, is constitutionally protected. Why? Because the founders of the country believed in a feedback loop

whereby the things people said could be subjected to critical thought, determined to be bullshit, and corrected. If people weren’t allowed to say those things, the correction from the feedback loop could never happen.Of course, it all falls down because it assumes most people can bring critical thought to bear upon bad arguments.

6. Marketing

Or another example, this time from marketing.

iPhone vs cafe trainingor

Why I’m not Steve Jobs

Here’s a simple story to show you how they work.

Cafe Training Web Site

• market: cafes and restaurants with unskilled labour

• product: web site with training videos

• benefits: better staff, happier customers, greater income

I had a brilliant idea for a web site. NZ has a lot of cafes, but high employment. So the only wait staff are generally untrained high-turnover people. That perhaps explains why the service is shit here. So I thought I could run a web site with training videos for cafe staff: the cafe owners would pay me $50 per person and the new waitron would learn how to do it. The cafe owner would be happy, I’d be happy.

My friend Marc Hedlund shot this down with one question.

“Will your users do your marketing for

you?”

How do you get your users to do your marketing for you? The cafe owner would treat my web site like a competitive edge, and wouldn’t want to tell other cafe owners about it. Compare this to

the iPod. Everyone who had an iPod wanted to tell their friends about it. Even if you didn’t flash it about like this guy advertising that you were hip to the iPod, you had the little white ear buds and people even bought little white ear buds so they could pretend their huckory Zune was an iPod so they could get laid. Now that’s your customers doing your marketing.

Here’s the flowchart for the iPod feedback loop. The see/share-covet bit is where we get the growth each time through the loop. If you replace “purchase” with “contribute”, you’ve got Flickr, Slashdot, Digg, and so on.

“viral” marketing

With the iPod, one user infects ten others, and each of those infect ten others and .... You’ve probably heard the popular term for this.

It’s an analogy to the spread of a disease, or the growth in a population. You start with one happy iPod user, in this case Thomas Hobbes.

They tell nine other people. Now you have ten happy iPod users. Each of those people tells another nine.

Now you’ve got 100. Each of those tells nine people ...

And now you’ve got a thousand, and so on. Notice how with science we have a fixed number of scientists and we’re improving the model one bit each time through the loop, but now we’re changing the numbers and not the model? We’re getting ten times as many customers each time through the loop, exponential growth. These self-reinforcing positive feedback loops are powerful things.

“syphilitic” marketing

but do me a favour and don’t use the term “viral marketing”. I hate that phrase.

7. Evolution

Next topic is timely, as Darwin’s 200th birthday was a week ago. Happy Birthday to you ...

biomimesis

biomimetics, or biomimesis, is building devices that use designs stolen from the natural world. For example, here’s a scuttling robot:

This is obviously based on the lobster. Good for getting around on uneven surface underwater: tail pushes you down and forwards, legs deal with bumps and holes without unbalancing the body. An Australian biomimeticist was asked why he turned to nature. He said “every technique you see in nature is a success. The failures have all died off over millions of years.”

That’s the evolutionary feedback loop: how well you fit the environment determines whether you live or die, and thus whether you breed and pass your genes on.

?

Question: what type of feedback loop is this? Is it a steady rate of improvement, like science, or an exponential growth like customers?

MULTIPLY

Exponential growth: each individual makes many babies, each baby makes many more babies. In only a few generations dramatic changes can be seen in populations.

This is the light-coloured pepper moth, common in England before the Industrial Revolution. So common, in fact, only a handful were reported before 1850. They were an unusual mutation. When coal-burning smokestacks started covering the landscape with soot, these buggers were easy to see on the now-dark trees. Consequently, the white moth’s population decreased while

this fellow’s numbers grew. By 1895, the dark moth was 98% of the population.Once coal went out of favour and trees slowly lost their carbon coat, the ratio of dark moths in the population declined and has been steadily declining.

MULTIPLY

This is because each surviving dark moth was able to pass on its melanin-producing genes, and each of those dark baby moths could make more dark moths. That’s how they drove out the light moths in only 50 years. Exponential growth, powered by a feedback loop.

8. Economics

The next feedback loop.

GDPtra

de deficit

unemployment rate

infla

tion

cash rat

e

marginal tax rate

You might think of economics as the source of boring phrases in the business section of the paper.

“Wealth of Nations”, Adam Smith (1776)

It’s not boring. Borrow this book from the library and read the first few chapters. I found it electrifying: he nails, in an easy-to-understand way, how the world works.

feedback loops of money

Money has feedback loops, and we’re starting to go through some of them now as the economy contracts.

Businesses hire workers for money. Businesses sell things like washing machines to workers for money.Too many workers? Business won’t need to pay as much for them. Those jobs that pay more will attract workers. Now businesses have to pay more to get the supply of workers.

Similarly, if there are too many washing machines for sale, the price will be low, perhaps too low to make a profit, and businesses will stop making them until the price returns to a reasonable level. This means they need fewer staff, so there are more staff for hire, so wage costs go down, so perhaps the cost of making them comes down ...And so on.

simulatable

The point is that money flows in a predictable way. So predictable that you can build economic models: workers behave like this, businesses behave like this, government behaves like this, consumers behave like this, so the money flows like this.

That’s what this is: MONIAC, a simulation of the New Zealand economy ... in water. It’s in the lobby of the Reserve Bank building, not far from here. I’m going to see it later today. Built by a NZ economist, money moves between reservoirs (corresponding to govt, banks, consumers, etc.) according to rules (valves) that you can change.

price = supply & demand

So economics turns the mystery of money into rules. Makes it predictable, so you can look at the world around you and figure out what’s really going on.The biggest rule is that supply and demand together determine prices. Prices of washing machines, prices of food, prices of the software that you’re building in your companies.

economy = b0rked

But, I hear you thinking, the economy’s crashing to pieces. Rules, my arse!

But rules aren’t the same as predictability. Here’s a picture of that. Each point on this picture is a feedback loop. You start with the (x,y) coordinates, go through a very simple feedback loop a bunch of times to compute a value, and colour the point based on what the value converges to (or doesn’t converge to). What you can tell is that there are huge variations in outcome for tiny little variations in input. Those exponential feedback loops, like evolution and money, don’t give predictable results. That’s chaos theory. You’ve heard about it on tele and it sounds hard, so it must be true.

9. Invention

Let’s bring it back to something that’s near and dear to Webstockians’ hearts: new stuff.

innovation

This word is so 2005: innovation. An innovation is simply

innovation = invention you can sell

an invention that you can sell. It’s easy to imagine an invention you can’t sell (shoes made of lava, an exploding toilet, a web site to teach French to cats). Inventions aren’t innovation. It’s the useful ones, the ones that you can find a market for, those are the innovations that change the world.

Joseph Schumpeter(1883-1950)

this economist, Joseph Schumpeter, gave us some of the best thinking about innovation. He coined the term

“creative destruction”

“creative destruction” for the curious inability of feedback to have effect in companies. It works like this.

There’s a company with a product, a great product, it makes lots of money. Think Sony and the walkman. Kids, a walkman is a portable cassette player with headphones. Like an iPod but from the Dark Ages. Anyway, Sony invented them and made a shitload of money from them.

However, eventually a new innovation came along, the MP3 player. Companies made those. The products weren’t as reliable, they didn’t have all the music available that Walkmen did, they only appealed to geeks and not the mainstream. Sony figured they were safe.

After all, the MP3 players were only earning a little bit of money from their crappy devices that played only a few bits of music and that you had to be a geek to drive. Sony focused on the Walkmen, selling customers on the advantages of quality tape products.

But as time went on, MP3 players got better. More music was available for them, and you didn’t have to be a technohead to drive them. You could do things with them that you couldn’t with a Walkman. Apple entered the market and ate Sony’s lunch. Sony has tried repeatedly to enter the digital music playing market, and has failed repeatedly.

LinuxMicrosoft

Its not just Sony and MP3 players. Think Microsoft vs Linux, or

Google DocsWord

feature-rich Microsoft Word facing down feature-poor but free Google Docs

AppleCreative

even in digital music markets, Creative had their huge market headstart shot to pieces from the expensive iPod that was Mac-only at first.

CanonKodak

photographic film used to be how you made photos, and Kodak ruled the roost. They’ve nearly gone under now, because digital cameras ate away at their market and Kodak wasted its headstart and market advantage just blathering about how much high quality film was to digital.

WebNewspapers

Newspapers are being eaten by the Web. Nobody knows how it will turn out, except that the future of print newspapers is grim.

mini millsBig mills

not just computers, the classic example is vertically integrated steel mills that could do huge amounts of work being replaced by the smaller mini mills.

GunsArchery

even five hundred years ago, guns replaced bows and arrows. You might think guns are naturally better than bows and arrows, but that’s hindsight talking. The first guns were ghastly inaccurate things. But you didn’t need trained staff, so the archery industry withered as the firearms industry bloomed.

?

The question you should be asking is: what the fuck were these people thinking? Why did they just sit back and let their huge profits and huge market share evaporate?

“The Innovator’s Dilemma”, Clayton

Christenson

This book tells us why this happens. Big companies are invested (financially and emotionally) in the products that made them big. They must defend those products against competition. They see it as stupid to adopt a new technology product that’s crapper than the great thing they’re offering--it’d eat away at their business, they don’t know how to reach the people who might be interested in that new technology anyway, maybe the economics of the new technology are so dodgy that only a small company would want to chase the first customers. Lots of reasons why not to. They miss the big reason: because if they don’t kill their cash cow, someone else will.

“I used to be afraid of a big company stealing

my idea ....”

A friend at a large American web company said, “I used to be afraid of a big company stealing my idea. Now I realize that I have nothing to worry about. They can’t do anything with the ideas inside their company, let alone the ones outside.”

feedback loop?

What’s the feedback loop here? Well, it should be that companies

constantly ask themselves whether they’re meeting every customer’s need as best they can with the technology available, and then introduce new products to test this hypothesis. If the hypothesis is proven false with sales, they update the product line. The problem with this is that it’s largely bollocks. It’s all big companies can do to breathe and service the customers they have with the products they have. Don’t expect them to think agile and nimbly react to new possibilities. The best they can hope for is to buy the upstart company before the legacy product’s marketshare drops all the way to zero.

10. You

Which brings me to the end, and to the final feedback loop. It’s not about big companies, it’s about you.

9.5. S92

Guilt on accusation.MashupsQuestions in Parliament.Protest at Parliament today, 12-12.30Be a protest in Auckland.Web site blackout on Monday.Feedback loop for government.

Here’s the genesis for this talk. My kids didn’t want to run around the schoolyard in PE because the other kids were faster than them. I remembered that pain well. But what I know now, now that I’m not in school any more, is that it’s not about racing other kids, it’s just about getting personal best times. I explained that this loop is how you get better: after doing something, you measure to see how you did and then decide what to do to next. So you might practice more or change your finger positions if you were learning the violin, or if you’re applying for a job and don’t get it then you might try dressing different or doing your paperwork different. If you don’t run around the field in PE, I said, you’ll never know whether you’re getting fitter.It worked, a testament to my kids’ smarts rather than my motivational brilliance.But I want you take this to heart. I want you to live your own feedback loop so you can get what you want from life. But, you might ask, if they’re so useful why doesn’t everyone do it?

A Challenge!

Let me show you one reason why it’s not easy. Here’s a challenge.

If a card has a vowel on one side, then it has an even

number on the other side.

A B 4 7

Let’s say someone tells you that cards with a vowel on them have an even number on the other side. How do you test this hypothesis?(take answers)

If a person is drinking beer, then the person is over 18.

Beer Coke 22 16

Is it any easier if we change the domain to something closer to your heart?How would we test the hypothesis that beer drinkers are all over 18?

If a person is drinking beer, then the person is over 18.

Beer Coke 22 16

We’d have to look at the Beer card to make sure the beer drinker wasn’t under 18, and we’d have to look at the 16 card to make sure the young person wasn’t drinking beer.

If a card has a vowel on one side, then it has an even

number on the other side.

A B 4 7

The same thing is true for the vowel/number hypothesis.

Not Wired That Way

We humans evolved to deal well with specific situations--we learn well from example, and we can estimate numbers well. But there are lots of modern situations where we haven’t evolved well. Falsifying is an example: we learn from example by enjoying confirmation. But to test a hypothesis, we must seek out counterexamples and our brains just aren’t good at that unless it’s a situation we’re already very familiar with.

For example, that exponential growth we saw earlier--that’s compound interest. Everyone raves at you to put your money in a bank account with compound interest, that’s why--every dollar works for you, even the ones you earn in interest, and they all just keep working for you making more dollars. But we’re lousy at estimating compounding.Here’s another example.

QuestionLinda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.

Which is more probable?

A. Linda is a bank teller.

B. Linda is a bank teller and active in the feminist movement.

QuestionLinda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in anti-nuclear demonstrations.

Which is more probable?

A. Linda is a bank teller.

B. Linda is a bank teller and active in the feminist movement.

We’re bad at dealing with probabilities and subsets. Many people will tell you that B is more likely, because Linda sounds likely to be a feminist. But if you look at the probabilities, fewer people are bank tellers AND feminists so the probability of B is lower than the probability of A.

Practice

Because it doesn’t come natural, practice it. Look for situations where you can test one of your hypotheses. Think hard to make sure you’re observing the right things!

the other challenge

But the real reason people don’t test their hypothesis is

because we, as a society, don’t understand failure. If you’re like me, you worry that when you fail you’ll be thought less of. Maybe you’ll be fired, maybe you’ll lose friends, maybe it’ll be harder to get the next pay rise. We’re taught from an early age to seek success but that

failure = bad

failure is bad.

failure = bad

I say that’s rubbish.

failure = TEH AWESUM!

Failure is awesome! Failure is fantastic! Failure is how we learn!You’re laughing. That’s because you’re conditioned to believe failure is bad. Snap out of it!Of course, failure is only good ...

Don’t be afraid to fail, so long as you learn

if you learn from your mistakes. The problem is that we’re so afraid of failure, we never inspect our failures to learn. We’ve become a Far Side strip.

failure without learning=

bad

It’s failure without learning that’s bad. You can’t succeed unless you take risks. They’re not called risks for nothing--with any risk you take there’s a chance of failure as well of success. But failure can teach you things and prepare you for success.Don’t just take my word for it:

“It is on our failures that we base a new and

different and better success.”

-Havelock Ellis

“Failure is instructive. The person who really thinks learns quite as much from his failures as from his successes.”

-John Dewey

“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the

game winning shot and missed. I’ve failed over and

over and over again in my life and that is why I succeed.”

-Michael Jordan

“Experience is simply the name we give our

mistakes.”-Oscar Wilde

“It is a mistake to suppose that men succeed through success;

they much oftener succeed through failures. Precept, study, advice, and example

could never have taught them so well as failure has done.”

- Samuel Smiles

“I have not failed. I've just found 10,000 ways

that won't work.”-Thomas Alva Edison

“Success consists of going from failure to failure without loss of

enthusiasm.”-Winston Churchill

The Secret

So here’s the secret to being able to do something well.

fail small

It’s simple: fail small. Don’t start by failing at huge things. Huge failures have huge costs and it’s not always possible to get a correspondingly huge amount of learning from them. Fail small: learn a little at a time.

fail before it’s big

This doesn’t mean you can’t tackle big projects, just that you tackle them small bit by small bit, and always keep your eye open for the situation where you can say “this isn’t going to work, the project has failed but hasn’t yet cost us a huge amount”. Learn as much as you can for the lowest cost that you can.

the gate

someone recently explained it to me like this: projects go through phases: scoping, requirements, development, testing, maintenance, etc. At each phase, there’s a gate: we could kill it after scoping, or we go onto requirements. We could kill it after the requirements, or we go on to development, etc. All too often, though, we view a project as a race through the gate: we have to make it through that gate, not get the project killed.That’s so backwards. The projects that fail small are wonderful! Just ask anyone who has been on a project that failed big!

learn from the failures

So fail early and fail often, but always learn from the failures. That’s my thesis. That’s the different approach to something unpleasant. I want to leave you with a simple catchphrase that sums up how to build your own personal feedback loop, three short words that I hope you will take back and try to apply in your life, in your work, and in your works:

fail forward fast

FailForwardFast

fail forward fast

nathan@torkington.com

Thank You

thank you

“Cybernetics”, byNorbert Weiner

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