This document contains a reading list and notes from a psychology for startups lecture. The key points are:
1) Mental models define how we think the world works and influence all of our decisions, but they are not always accurate. We must actively seek to improve our models.
2) Our minds are prone to predictable errors and biases like availability bias, representativeness bias, and anchoring. We must be aware of these to avoid irrational decisions.
3) When seeking advice, focus on those with broad but not too deep expertise ("foxes"), rather than experts in a single area ("hedgehogs"). Foxes are more likely to give good long-term advice.
4)
This presentation was designed for a class on Management Support Systems. The emphasis is on dynamic decisions and group decision making, rather than research involving described scenarios.
This presentation was designed for a class on Management Support Systems. The emphasis is on dynamic decisions and group decision making, rather than research involving described scenarios.
Nature of Cognitive Psychology & Current Trends
According to Neisser(1967), Cognitive Psychology is the branch of psychology concerned with how people acquire, store, transform, use and communicate information.
Cognitive Psychology deals with our mental life; what goes inside our heads when we perceive, attend, remember, think, categorize, reason, decide, and so forth.
Human psychology an intriguing subject in which a very important aspect is how we recognize and tend to form impressions about our environment and other individuals in the social world is brilliantly explained in this chapter summarized in a visual format.
A History of Personality Psychology (Part 1)MotiveMetrics
The history of personality psychology dates as far back as Ancient Greece. Indeed, philosophers since the 4th Century BCE have been trying to define exactly what it is that makes us us. Want to know more? Check out this blog post for a further explanation, http://hub.am/148ETuU.
Ethics, a very important part of psychological research which play major role in the conduction of psychological research it's about the moral values and social norms which applies to all Researchers and there are a comprehensive guidelines about ethics given by American Psychological Association 2013 listed in this presentation.
S420 "Beyond Google: Advanced Search," given at the National Genealogical Society Family History Conference, Charleston, South Carolina, Saturday 14 May 2011
Nature of Cognitive Psychology & Current Trends
According to Neisser(1967), Cognitive Psychology is the branch of psychology concerned with how people acquire, store, transform, use and communicate information.
Cognitive Psychology deals with our mental life; what goes inside our heads when we perceive, attend, remember, think, categorize, reason, decide, and so forth.
Human psychology an intriguing subject in which a very important aspect is how we recognize and tend to form impressions about our environment and other individuals in the social world is brilliantly explained in this chapter summarized in a visual format.
A History of Personality Psychology (Part 1)MotiveMetrics
The history of personality psychology dates as far back as Ancient Greece. Indeed, philosophers since the 4th Century BCE have been trying to define exactly what it is that makes us us. Want to know more? Check out this blog post for a further explanation, http://hub.am/148ETuU.
Ethics, a very important part of psychological research which play major role in the conduction of psychological research it's about the moral values and social norms which applies to all Researchers and there are a comprehensive guidelines about ethics given by American Psychological Association 2013 listed in this presentation.
S420 "Beyond Google: Advanced Search," given at the National Genealogical Society Family History Conference, Charleston, South Carolina, Saturday 14 May 2011
when AES(☢) = ☠ --- a crypto-binary magic trickAnge Albertini
this talk has been OBSOLETED:
the new version is: http://www.slideshare.net/ange4771/when-aes-episode-v
a detailed presentation on AngeCryption (getting a valid JPG after encrypting a JPG)
- slides, src & PoCs: https://corkami.googlecode.com/svn/trunk/src/angecryption/
- PoC||GTFO downloads: http://openwall.info/wiki/people/solar/pocorgtfo
related: http://blog.fortinet.com/AngeCryption-at-Insomni-Hack/ by @cryptax
Dr. Michael Gutter discusses the effects of bias in this 2 hour webinar on heuristics, anchoring and narrowing choice presented on behalf of the Military Families Learning Network's Personal Finance Team.
People make many decisions. In decision-making scenarios people use rules of thumb (heuristics) to assist in decision-making. Often the heuristics lead to decisions contrary to the desired outcomes. This presentation outlines a set of cognitive biases common in decision making and how to prevent the biases or mitigate the consequences.
Hello Everyone,
A big thank you for all the interest in this study guide. It was originally created as a fun introduction that took the Cognitive Bias wiki and tried to make it easier to memorize.
However, the authors of the wiki article have expressed some concern over the accuracy of certain entries. The document was taken down until that could be corrected.
But, people started asking that I release a new version with a warning. In response, a new "Beta version" of the document has been uploaded with a very strong warning label up front and improved citations. I make it clear that all the text is based on an evolving wiki page and that some of the cognitive biases in there might be incorrect wiki entries. My hope is that this will continue to get people interested in pitching in to help fix the Cognitive Bias wiki pages. :) When the wiki is in a good place, I will take the document out of Beta, and will remove the warning label.
If you are a cognitive expert, join “Operation Fix The Cognitive Bias Wiki!” Add your suggestion to the conversation here: http://en.wikipedia.org/wiki/Talk:List_of_cognitive_biases
Thanks for your interest!
Eric
P.S. . The images have been updated for better remixing and sharing rights. Rather than using permission based images, now all the images are public domain or free non-commercial use by anyone.
Heuristics, bias and critical thinking in testing distributionMatt Mansell
This was a day long workshop I gave at the NZTester 2015 conference. Looking at psychology and cognitive science research and how to apply that to testing.
Smart Data for Behavioural Change: Towards Energy Efficient BuildingsAnna Fensel
“The Semantic Web is not a separate Web but an extension of the current one, in which information is given well-defined meaning, better enabling computers and people to work in cooperation.” - this statement of Tim Berners-Lee has gained even more relevance since the start of this century.
The humanity is rapidly developing and persistently experiencing local and global challenges, such as global warming/climate change, dis-balances in demand and supply, among many others. Mastering most (if not all) of them require a behavior change. Behavioral change is difficult to achieve per se, and it is important that technology – as a major enabler - has a positive rather than a negative impact here.
Further, the dramatic growth of data volumes (Big Data, Internet of Things) and the data’s increased power and impact and on the people's daily lives are calling for new types, practices and policies of behavior with data.
These factors made the role of semantic technology even more crucial: in terms of providing a well-defined meaning, and eventually delivering Smart Data for a functional and fair data value chain.
Addressing the behavioural change with Smart Data, I discuss potential ICT solutions investigating the domain of energy efficient buildings. Particularly, our completed OpenFridge experiment will be presented: design and development of the Internet of Things data system with semantic and data analytics enablers for building new services on a top of typical home appliance data — in particular, refrigerators. The system has been evaluated with real life end-user pilots.
In conclusions, I overview our related ongoing work, namely, in the areas of the impact of Big Data on society and related research roadmapping (linking to sociology), personalized energy efficiency data management services in buildings (linking to psychology), and semantic data licensing (linking to law).
A short presentation for beginners on Introduction of Machine Learning, What it is, how it works, what all are the popular Machine Learning techniques and learning models (supervised, unsupervised, semi-supervised, reinforcement learning) and how they works with various Industry use-cases and popular examples.
Web Visions PDX '12: Applying Behavior DesignChris Risdon
Presentation given at WebVisions Portland. (for those that saw my SxSW presentation, presentation has been refined and updated)
More and more products and services are designed around motivating users and incentivizing change. Products and services in finance, health and the environment, among other areas, are increasingly designed around influencing behavior. Some are doing this better than others. There are useful academic models and patterns for applying persuasion techniques. However, these techniques tend to stand alone, separate from our proven methods and processes for designing for good user experiences.
Extending human capabilities: Design for people, not around Brian McKenna
A commonly held perspective is that humans are the source of error in systems and thus, something to design around - often framing things in terms of cognitive biases or human error. The goal in these systems is to reduce human input, often to the point of eliminating them from the system altogether.
But there is another way to think about the human role - a positive perspective that considers and takes advantage of human capabilities. This sees the human operator as a valuable contributor that is essential for system success.
This presentation walks through some commonly held views on humans and presents an alternate perspective that puts humans in a better light. It also describes how this perspective impacts how we design systems so that we can help reduce the blind spots that are created when we try to take people out of a system.
The Key to Great Teams: Understanding the Human Operating SystemAtlassian
How do organizations become adaptive, agile, and resilient? What fosters trust and makes people feel safe to speak their minds? Stefan Knecht from it-economics – a 2016 Best Workplaces in Germany award recipient – say the master key lies in a social operating system used for over 300,000 years: the human operating system (OS H). Recent findings from behavioral, cognitive, and organizational sciences help us understand parts of this system – like what makes humans tick and how groups successfully form and perform. This talk will explain the idea behind OS H and teach you how you can employ the concept in your own organization to build trust, resiliency, adaptivity, etc. Come away with a solid understanding of social needs and the company dynamics you can help create to meet these needs. Even the best tools and technology will only get you part of the way to building world-class teams.
Stefan Knecht, Manager, it-economics GmbH
Neuromarketing: The Brain Science of Web MarketingWebVisions
Call it neuromarketing. Call it behavioral economics. Call it Jedi mind tricks. Whatever you call it: brain science and marketing go together. And anyone can learn how to do it.
In this presentation, Andy will review the research, the case studies and the specific web marketing tactics that work with natural, human behavioral tendencies.
• Herds, Halos and How to use Social Proof
• Calls to Action? Or Calls to Conform?
• Context, contrast and the power of priming
• Fear, Loss and Scarcity
• Eye tracking, Design and Busy Minds
We'll reveal secrets of marketing masters with specific examples of the relationship between the brain, behavior and marketing on the web. If there are humans in your target audience, this presentation is for you.
Kit Oliynyk (Speaker) Senior Business Design Lead, Ventera
The ethos of "makers"—how making things and simply being creative for the sake of creativity can be a bad thing, if we're not willing to be responsible for our legacy and pretend that “design isn’t political.” This session will consider case studies of companies and products that are making our lives and our society worse—sometimes unintentionally. We'll talk about dark patterns and how they could cost millions of dollars—and, sometimes, human lives. There are three areas of transformation where we as an industry can get better:
Self-identity: Transform our beliefs to shift from pure craftsmanship to becoming the makers of social good, evolve our definition of success from “moving fast and breaking things” into the sustainability and health of our society.
Connection: Engage with as many people as possible in our companies (beyond just tech), overcome our biases through diversity and inclusion, and share beliefs and values that empower our partners and us to care about people, together.
Future-proofing: Ask questions to one another to collectively identify the emerging risk zones for our products and services using a variety of tools, including EthicalOS, moral value maps, “worst-case scenario” workshops and more.
Biases are nonconscious drivers — cognitive quirks — that influence how people see the world. They appear to be universal in most of humanity, perhaps hardwired into the brain as part of our genetic or cultural heritage, and they exert their influence outside conscious awareness.
On the whole, biases are helpful and adaptive. They enable people to make quick, efficient judgments and decisions with minimal cognitive effort. But they can also blind a person to new information, or inhibit someone from considering valuable options when making an important decision.
All of these biases, and others, lead many great companies and institutions to make disastrous and dysfunctional decisions.
Every decision we make is one made on behalf of your user. How do we know the decisions we make are the right ones? It is time we initiate a conversation: About where we are and where we want to go, about how we define and measure goodness and rightness in the digital realm, about responsibility, about decisions and consequences, about building something bigger than our own apps. It is time we talk about the ethics of web design. This talk introduces a method for ethical decision making in web design and tech. Rather than a wet moralistic blanket covering the fires of creativity, ethics can be the hearth that makes our creative fires burn brighter without burning down the house.
Presented at WordCamp Europe 2018: https://2018.europe.wordcamp.org/session/the-ethics-of-web-design/
Persuasion Equation The Subtle Science of Getting Your Way.docxkarlhennesey
Persuasion Equation: The Subtle Science of Getting Your Way
by Mark Rodgers
AMACOM. (c) 2015. Copying Prohibited.
Reprinted for Personal Account, Purdue University Global
[email protected]
Reprinted with permission as a subscription benefit of Skillport,
All rights reserved. Reproduction and/or distribution in whole or in part in electronic,paper or other forms
without written permission is prohibited.
Chapter 2: Decision Making—The Surprising Reasons People Say Yes and No
Picking his way through the cramped ballroom, with people-filled padded chairs all askew, there was no clear route. Obstacles,
however, were not this man’s primary concern. On his face, you could see his mind racing—searching for what he would say
once he was in front of the crowd. Few people like public speaking, but this situation seemed even more torturous than usual.
He found his standing spot, turned, and faced the crowd.
“I have traveled three hours round-trip every day to attend this session. I’ve driven dangerous roads and in heavy traffic. You
are a talented and knowledgeable group. I have learned from you, and you have learned from me. And I sure could use the
money to help pay for gas. Please, please. Pick me!”
That scene played out in a Calgary persuasion workshop during which I asked three volunteers to vie for a single, crisp $100
bill by convincing the audience to individually award them the money. The idea: Whoever makes the most compelling case,
winning the affections of the crowd, walks away with the cash and the bragging rights.
Participants are allowed to make their case in any way they deem appropriate, with one exception: They can’t share the money
or materially benefit the crowd in any way. (I’ll buy you all drinks!) Adding to the pressure, I give them just four minutes to
develop their case and only 25 seconds to present it.
What would you say if you were in this situation?
This activity mirrors business life today in many ways. You are often in competition with others for the account, the promotion,
the project. You must think on your feet and be able to put together compelling arguments fast, and you might not have much
time to state your case. Sometimes you need to do all this—especially in peer-to-peer persuasion situations—without offering
your target some sort of material gain. Not an easy assignment, to be sure.
The most interesting aspect of this workshop activity, though, is not the people vying for the money—it’s the people deciding
who will earn the money. You may think that people are carefully analyzing participants’ arguments, weighing the pros and the
cons to rationally decide who gets their votes. That’s not what’s happening. At all. The surprising truth is that most people have
no idea why they say yes.
UNEXPECTED TRUTHS ABOUT YOUR THINKING
Nobel Prize–winning economist and author Daniel Kahneman suggests that human beings possess two “systems” for thinking:
one that processes information very quickly, and one that d ...
What data scientists really do, according to 50 data scientistsHugo Bowne-Anderson
My talk at PyData NYC, 2018.
This is the abstract:
Hugo Bowne-Anderson, data scientist and host of the DataFramed podcast, will give you a view into the thinking of 50 leading data scientists from around the world about the trends driving the data science revolution. During his interviews with these thought leaders, Hugo discovered themes and lessons about the past, present, and future of data science.
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
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A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
Tata Group Dials Taiwan for Its Chipmaking Ambition in Gujarat’s DholeraAvirahi City Dholera
The Tata Group, a titan of Indian industry, is making waves with its advanced talks with Taiwanese chipmakers Powerchip Semiconductor Manufacturing Corporation (PSMC) and UMC Group. The goal? Establishing a cutting-edge semiconductor fabrication unit (fab) in Dholera, Gujarat. This isn’t just any project; it’s a potential game changer for India’s chipmaking aspirations and a boon for investors seeking promising residential projects in dholera sir.
Visit : https://www.avirahi.com/blog/tata-group-dials-taiwan-for-its-chipmaking-ambition-in-gujarats-dholera/
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
Digital Transformation and IT Strategy Toolkit and TemplatesAurelien Domont, MBA
This Digital Transformation and IT Strategy Toolkit was created by ex-McKinsey, Deloitte and BCG Management Consultants, after more than 5,000 hours of work. It is considered the world's best & most comprehensive Digital Transformation and IT Strategy Toolkit. It includes all the Frameworks, Best Practices & Templates required to successfully undertake the Digital Transformation of your organization and define a robust IT Strategy.
Editable Toolkit to help you reuse our content: 700 Powerpoint slides | 35 Excel sheets | 84 minutes of Video training
This PowerPoint presentation is only a small preview of our Toolkits. For more details, visit www.domontconsulting.com
VAT Registration Outlined In UAE: Benefits and Requirementsuae taxgpt
Vat Registration is a legal obligation for businesses meeting the threshold requirement, helping companies avoid fines and ramifications. Contact now!
https://viralsocialtrends.com/vat-registration-outlined-in-uae/
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
What are the main advantages of using HR recruiter services.pdfHumanResourceDimensi1
HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
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This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
1. Justin Singer - justin.e.singer@gmail.com http://msnbcmedia.msn.com/i/MSNBC/Components/Photo/_new/Afghanistan_Dynamic_Planning.pdf
Psychology for Startups 19 February 2013
2. Reading list: http://bit.ly/WVxDCS
• Psychology of Intelligence Analysis: http://1.usa.gov/12K7Wc1
- Chapter 1 - Thinking about Thinking
- Chapter 2 - Perception
- Chapter 4 - Strategies for Analytical Judgment
- Chapter 6 - Keeping an Open Mind
• Everybody’s an Expert: http://nyr.kr/WVwviv
• Munger’s Worldly Wisdom: http://bit.ly/WVwxXQ
• Wikipedia’s List of cognitive biases: http://bit.ly/1332wsr
• David Foster Wallace - This is Water
- Part 1: http://bit.ly/W2D4RM
- Part 2: http://bit.ly/W2DgR8
• The Psychology of Human Misjudgment: http://bit.ly/15tDl1N
• The Design of Everyday Things: http://amzn.to/12KctuP
3. Why psychology?
Product
Strategy
Hiring
Managing
Marketing
Entrepreneurship depends on robust models of learning
habit
behavior
desire
interaction
expectation
4. Today’s arguments
• Pay close attention to mental models -- they’re the
basis for everything
• Our minds are broken, but in predictable ways
• The most important choice you will make is whose
advice to take
• Fuck it. Keep moving forward
6. What are mental models?
“[M]odels people have of themselves, others, the
environment, and the things with which they interact."
- Donald A. Norman. The Design of Everyday Things (1988)
10. What are mental models?
Mental models define how we think the world works,
but not necessarily how it actually works
- Me, just now
Mental models are necessarily personal
If a model doesn’t work for you, build a better one
When judging a model’s quality, focus on process, not outcome
11. How do we form mental models?
Real world What a video camera would record.
Interpretation The story we create in our mind.
Is our story confirmed or disconfirmed?
Feedback (usually we only ask the former)
12. Single-loop learning
Real world
Information
Decision feedback
Decision making Mental
rules model
http://en.wikipedia.org/wiki/Mental_model
13. Single-loop learning
“Insanity is repeating the same mistakes and expecting
different results.”
- Narcotics Anonymous. Basic Text, pg. 11
(nope, not Einstein)
Want better results? Change your model
http://amonymifoundation.org/uploads/NA_Approval_Form_Scan.pdf
14. Double-loop learning
Real world
Information
Decision feedback
Decision making Mental
rules model
http://en.wikipedia.org/wiki/Mental_model
15. Learning loops in Product Design
What’s missing?
Donald A. Norman. The Design of Everyday Things (1988).
16. Learning loops in Product Design
User feedback should alter the
product by altering the design model
Donald A. Norman. The Design of Everyday Things (1988).
17. And remember...
Just because people are using the same words,
doesn’t mean they are thinking the same thing
http://guide.cred.columbia.edu/guide/sec1.html
18. Strong sources of mental models
• Physical laws (especially movement mechanics)
- Elasticity (springs)
- Friction
• Large and representative data sets (empirical
observation)
• Careful experimentation (seeking to disconfirm)
• Relevant analogy
19. Weak sources of mental models
• Abstract theory
• Personal experience
• Irrelevant analogy
• Repeated observations (small data sets)
• Single observation (single data point)
• Anecdote/inductive reasoning (Malcolm Gladwell)
• Opinion
Unfortunately, the less data we have,
the more heavily we weight it
21. What are heuristics?
Heuristics are simple, efficient rules people use to
form judgments and make decisions
Heuristics usually work well, but can lead to systematically
irrational outcomes. These errors are called biases
Key people to know: Herbert A. Simon, Amos Tversky, Daniel Kahneman
22. Three major heuristics to know
Overweights the probability of events
Availability that are recent, vivid, or dramatic
Overweights the probability of events
Representativeness
that match our expectations
Anchoring and Overweights the importance of the first
adjustment piece of information we receive
23. Availability heuristic
The more vivid or recent an event, the more likely
we are to overestimate its likelihood
24. Availability heuristic
Deaths vs. Dollars
Annual deaths Annual spending ($B)
597,689 Heart Disease $2.049
574,743 Cancer $5.448
69,071 Diabetes $1.076
83,494 Alzheimer’s $0.448
35,332 Car Accidents $0.867
NHTSA budget
All deaths since 2000 3,023 Terrorism $6.814
TSA budget
http://en.wikipedia.org/wiki/Transportation_Security_Administration
http://report.nih.gov/categorical_spending.aspx
http://www.dot.gov/mission/budget/nhtsa-fy-2010-budget-estimate
http://www.state.gov/j/ct/rls/crt/
http://www.cdc.gov/nchs/fastats/deaths.htm
25. Availability heuristic
How feature creep happens
Just because a few people bitch about it doesn’t mean
you should change it. Dig deeper and use your judgment
https://twitter.com/vacanti/status/184003264361148416
26. Representativeness heuristic
The fact that something “looks” like you’d expect
does not make it more likely to be what you’re
looking for
28. Representativeness heuristic
What does random look like?
Random
HHHHHTTTTH
HTHHHTHTHT
Not random
Gambler’s fallacy: the belief that small samples will
reflect the populations they’re drawn from
29. Proof by example
We tend to vastly overweight the evidentiary value of
small, not necessarily representative samples
30. Base rate fallacy
When making judgments, we tend to ignore prior
probabilities and focus on expected similarities
http://www.businessinsider.com/how-andreessen-horowitz-chooses-investments-2013-2?op=1
To be fair, this is a bit of a cherry pick -- the next slide in the deck is more nuanced
31. Representativeness heuristic :: hiring
What does a designer look like?
http://karakreative.blogspot.com/2013/02/graphic-designer-of-month-paul-rand.html http://tech.fortune.cnn.com/2011/06/27/quoras-designing-woman/
http://vimeo.com/putorti http://topics.nytimes.com/top/reference/timestopics/people/f/shepard_fairey/index.html
32. Representativeness heuristic :: hiring
Designers look like everyone else!
Paul Rand Rebekah Cox
Jason Purtorti
Shepherd Fairey
http://karakreative.blogspot.com/2013/02/graphic-designer-of-month-paul-rand.html http://tech.fortune.cnn.com/2011/06/27/quoras-designing-woman/
http://vimeo.com/putorti http://topics.nytimes.com/top/reference/timestopics/people/f/shepard_fairey/index.html
33. Representativeness heuristic :: hiring
Who do you want to work with?
• Great people are... • Great people are not necessarily...
- Thoughtful - Ex-FB/Paypal/Google/etc.
(also, fundamental attribution error)
- Productive
- Team-oriented
- Graduates of Stanford/CMU/
Wharton/Columbia/college
- Quick studies
- Arrogant
- Patient teachers
- Overly deferential
- Empathetic
- Aggressively passionate
- Pragmatic
- On Twitter
- Comfortable with
- Morally superior
uncertainty
- A strong cultural fit
- “Design-y”
34. Representativeness heuristic :: skill vs. luck
Fundamental attribution error
We tend to overvalue personality-based explanations and
undervalue situational explanations for the actions of others
Self-serving bias
We tend to attribute our successes to personal/internal factors
and attribute our failures to situational/external factors
35. What’s more likely?
That a large group of Super Businessmen happened to work
together at Paypal...
Or, that a large group of smart people happened to meet and
work together at the right place at the right time?
http://money.cnn.com/2007/11/13/magazines/fortune/paypal_mafia.fortune/index.htm
36. What’s more likely?
That a large group of Super Businessmen happened to work
together at Fairchild Semiconductor...
Or, that a large group of smart people happened to meet and
work together at the right place at the right time?
http://www.inc.com/articles/201109/then-and-now-venture-capital.html
37. Representativeness heuristic :: skill vs. luck
Judging outliers
When it comes to judging outliers, we tend to overestimate
the effect of skill and wildly underestimate the effect of luck
The law of exponential returns
Any great entrepreneur can build a $10M* business on skill
No great entrepreneur can build a $1B business without luck
* Amounts aren’t meant to be taken literally
38. Anchoring and adjustment
The tendency to base subsequent judgments on the
first piece of information we gather (even when the
information is entirely irrelevant)
39. Anchoring and adjustment
Negotiating strategies
• When you receive a lowball offer, reject it out of hand
(i.e., don’t make a counteroffer)
• Corollary: if making the first offer, aim for just beyond acceptable
(i.e., not so high or low as to elicit rejection)
• Don’t send an agreeable person to the negotiating table
• Decide walkaway points before negotiating and stick to them
• Be wary of framing effects
• Smile! Sadness tends to exacerbate the anchoring effect
• Practice! Anchoring effects diminish with experience
40. “The fox knows many things;
the hedgehog one great thing.”
- Archilochus
Expert Prediction
http://www.etsy.com/listing/60007735/woodland-animal-pair-hedgehog-and-fox
41. What does this have to do with startups?
Every feature
suggestion
opinion
piece of advice is a prediction
Who should you listen to?
How much credence should you give?
42. What will Facebook
close at on its IPO day?
http://collider.com/mark-zuckerberg-reviews-the-social-network/
http://www.theatlantic.com/technology/archive/2012/05/twitter-tech-elite-seriously-overstimated-facebooks-closing-price/257406/
43. Oopsies...
$38*
* required significant price support from underwriters
http://collider.com/mark-zuckerberg-reviews-the-social-network/
http://www.theatlantic.com/technology/archive/2012/05/twitter-tech-elite-seriously-overstimated-facebooks-closing-price/257406/
46. "Freddie Mac and Fannie Mae are fundamentally sound. They're not in
danger of going under…I think they are in good shape going
forward."
- Barney Frank (D-Mass.) House Fin. Svcs. Comm. chairman, July 14, 2008
Placed into conservatorship in September
"I think you'll see [oil prices at] $150 a barrel by the end of the year"
- T. Boone Pickens, May 20, 2008
$100/bbl in May - $135/bbl in July - $38/bbl in November
“The subscription model of buying music is bankrupt. I think you
could make available the Second Coming in a subscription model and
it might not be successful.”
- Steve Jobs, Rolling Stone, Dec. 3, 2003
Spotify and Rdio would beg to differ
47. These are very, very smart people who
were very, very wrong.
Why?
48. What does it mean to be T-shaped?
http://www.stratabridge.com/2011/08/putting-the-t-into-leadership/t-shaped/
49. One model for thinking about advisors
Fox Fox-Experts Hedgehog-Experts
Knows many things well
Hedgehog
Knows one thing well
Expert
Expert in the subject at hand Fox-Dilettantes Hedgehog-Dilettantes
Dilettante
Expert in a related subject
(but not the one at hand)
When it comes to China, the Chinese Ambassador is an expert
and the British Ambassador is a dilettante
50. Refers to political extremism
regardless of party
Tetlock, Philip E., Expert Political Judgment: How Good Is It? How Can We Know? (2005), fig. 3.4
51. If advice is a prediction, then whose advice
deserves your attention?
Short-term advice Long-term advice
1. Fox-Experts 1. Fox-Dilettantes
2. Fox-Dilettantes 2. Fox-Experts
3. Hedgehog-Dilettantes 3. Hedgehog-Dilettantes
4. Hedgehog-Experts 4. Hedgehog-Experts
Turns out that a lot of knowledge in
a single area is a dangerous thing
52. How to recognize a fox
• skeptical of deductive approaches to explanation and prediction
• disposed to qualify tempting analogies by noting disconfirming
evidence
• reluctant to make extreme predictions of the sort that start to
flow when positive feedback loops go unchecked by dampening
mechanisms
• worried about hindsight bias causing us to judge those in the
past too harshly
• prone to a detached, ironic view of life
• motivated to weave together conflicting arguments on
foundational issues in the study of politics, such as the role of
human agency or the rationality of decision making
Tetlock, Philip E. Expert Political Judgment: How Good Is It? How Can We Know? 2006.
53. There is no textbook for this
“Everyone is totally blind, feeling around in the dark, trying
to succeed at building this thing we call a ‘business’.”
- Dan Shipper
The best you can hope for is to develop
a robust learning process
http://danshipper.com/how-to-make-a-million-dollars
54. Treat your models as hypotheses
Make sure they’re testable
Models that can’t be disproven are aren’t model -- they’re beliefs
Actively seek to disprove them
Welcome disproof -- a model disproved is a lesson learned
Look for hidden assumptions
Treat secondhand data as assumptions until proven otherwise
Question their predictability
The same event may be evidence of many different hypotheses
Models don’t care about your loyalty
If a model doesn’t work, change it
55. Uncertainty stops most people in their tracks, but it’s
only by movement that uncertainty can be resolved
In the meantime, read widely
think deeply
stay humble
chose your advisors wisely
improve your model set
move forward.
“Strong opinions, weakly held.”
- Paul Saffo
56. “Our brains have just
one scale, and we
resize our experiences
to fit.”
http://xkcd.com/915/
57. Jerry Neumann - mti@neuvc.com
Justin Singer - justin.e.singer@gmail.com