Paul Saffo gives us his rules for forecasting, starting off with a great description of the “cone of uncertainty” that is involved in any sort of forecasting. He goes on to discuss how humans get the future so wrong – among them are the linear expectations we have, whereas change isn’t linear, but instead moves in more of an “S” curve.
Nassim Nicholas Taleb gave a very humorous talk on how change happens. He’s got a book out called “The Black Swan,” a book I’ve ordered and look forward to reading. The title comes from the old European idea that swans were only white, therefore things that were impossible were “as likely as a black swan,” this phrase being enshrined in Shakespearean dialogue, among others. Until people got to Australia. They’ve got black swans.
Taleb’s talk focused on the human bias in forecasting – how we use data solely taken from survivors and success stories. Everyone wants to hear how so-and-so made millions in the dot-com boom-and-you-can-too, but no one wants to hear how my Uncle Ernie lost a million bucks. Especially if you’re interested in his descriptions of the psychology involved, “Mediocristan” and “Extremistan” are fascinating topics.
(image via flickr user kamoda)