Facts versus Feelings: October 8, 2017 Snippets
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This week’s theme: we pivot our discussion of reflexivity from markets and networks to news stands and friend feeds. Plus welcoming Sandhya Venkatachalam as the newest partner at Social Capital!
So far in our Snippets series on reflexivity, we’ve looked at how perception and reality can mutually impact one another, and how the two are intimately linked whenever network effects appear in a product or business. Starting this week, we’re going to shift gears and talk about a very different kind of network effect that’s gotten a lot of attention recently: fake news. Our goal over the next few weeks is to understand and appreciate how perception and reality affect each other in information that we share and the things that we believe. Then we’ll have a fresh perspective as we try to figure out what’s going on in the media, what might versus won’t work with respect to Google and Facebook, and an understanding of why this problem may be one of the defining ones of the next while.
Let’s establish one thing at the very beginning: If you want to really understand Fake News, know that it’s not about true versus false. It’s about facts versus feelings.
Suppose some factual information is making it’s way around inside your office: “At this morning’s staff meeting, we agreed to proceed with Option A.” As that spreads around, it’s possible that it may get relayed incorrectly: someone might accidentally repeat the message as “We ruled out Option A”, maybe even someone maliciously spreads false information about Option A. These things happen; deviations from the initial message may appear in time. But the wider the deviation, the more apparent it will become; the evidence and the pull to correct the message and reconcile it with its true value will strengthen over time. Factual inaccuracies tend to be subject to negative feedback pressure: the greater the deviation from the true value, the stronger will be the signal that something’s off.
Now instead, let’s imagine a feeling being spread inside your office: “We’re annoyed with our Boss this morning.” It may have started from your boss being grouchy at the staff meeting; it may have started with someone else having a bad day and blaming it on your boss; it doesn’t matter. What matters is that as others perceive this feeling, it can directly affect how they in turn feel about your boss this morning. They may become annoyed too: “You’re right; he’s really been treating us badly these days.” Your feelings, and my perception of your feelings, will impact my own feelings and change the actual value of how annoyed we both are. If you were only 2 out of 10 annoyed, but my agreement with you causes me to become 3 out of 10 annoyed, and then our mutual friend to become 4 out of 10 annoyed in agreement, this is not a deviation from an initial signal. It’s a genuine positive feedback cycle. As annoyance grows into anger or outright falsehood (“I heard we were all supposed to get bonuses, and he withheld them! Yeah, what a jerk!”), we don’t perceive this as a deviation from the original message; we perceive it as validation that our feelings are genuine.
This creates two problems. We can understand both in terms of the interplay between perception and reality.
The first problem here is that feelings can take advantage of reflexivity in a way that facts do not. Your perception of a fact does not usually change the fact, but perception of a feeling can absolutely create or change a feeling. Historical facts don’t become true or false because enough people say otherwise, but feelings absolutely can: “it doesn’t matter if it was true or not before; it’s true now.” The second problem is that when feelings and facts come into conflict, facts rarely stand a chance. The reason why is a fundamental feature of human neuroscience: it’s just the way our brains are wired. Feelings don’t just override facts, they shape our perceptions and our memories. We all believe that we perceive facts and then form feelings about those facts; in reality it’s the opposite. We have feelings, and then we see, interpret, and remember facts that serve those feelings. When people say that we’re slaves to our emotions, they’re correct down to our individual neurons. We see numerous examples in the real world of people (or news articles, or political parties) compromising on facts in pursuit of greater emotional clarity; in fact, it’s what our brains are authentically doing all along. Perception of feelings doesn’t just alter feelings; it alters what we believe to be the facts themselves. Uh oh.
Next we’ll see how this inherent asymmetry between facts and feelings gets weaponized through fake news, and how we are likely witnessing the beginning of a new kind of international conflict. But we now know not to call it a Fake News fight. It’s a Real Feelings one.
Elsewhere in the world:
This week’s podcast episode recommendations:
Getting to the future faster | Exponent.fm with Ben Thompson & James Allworth
Ranji Nagaswami: the outsourced CIO | Masters in Business Podcast with Barry Ritholtz
Microsoft on the move:
A rare joint interview with Microsoft CEO Satya Nadella and Bill Gates | Seth Stevenson, WSJ
Cities seeking tech companies:
Georgia city will rename itself Amazon if it wins the new headquarters | Shannon Liao, The Verge
In memory:
Free falling with Tom Petty | Amanda Petrusich, The New Yorker
In memory of Paul S Otellini, 1950–2017 | Intel Newsroom
Other reading from around the Internet:
The ultimate list of product & design resources to understand the tech ecosystem | Sam DeBrule
The cost of innovation has risen, and productivity has suffered | The Economist
Bluetooth won’t replace the headphone jack — walled gardens will | Nilay Patel, The Verge
Nobel Prize goes to researchers who figured out how our cells tell time | John Timmer, Ars Technica
What are the flaws in two-factor authentication? The Economist
And just for fun:
In this week’s news and notes from the Social Capital family, we’re pleased to officially welcome a new partner to the team: Sandhya Venkatachalam.
Social Capital hires a partner to lead its new growth unit | Polina Marinova, Fortune
Sandhya joins the growth unit at Social Capital, where she will be working with her longtime colleague Tony Bates. In addition to her previous work with Tony at Skype and Cisco, Sandhya had recently been a founding partner at Centerview Capital. She brings a great depth of experience to the newly founded growth team, and we look forward to providing that expertise as a part of Social Capital’s offering to companies at every stage of their life cycle. We’re very fortunate to be able to work with people of Sandhya’s caliber, and we’re thrilled to see what she and Tony have coming up. Welcome on board!
We’re also happy to share some good news: your life insurance may get a little faster and a little more consumer-friendly, thanks to Captricity.
MassMutual and Captricity set to launch LifeRisk 360 Digital Initiative
The new LifeRisk 360 joint initiative between MassMutual and Captricity is a risk assessment platform that brings the power of artificial intelligence, and also the power of computers in general, to what today remains a very manual process: scanning and collecting the data out of the tens and hundreds of thousands of paper documents held by life insurance companies everywhere. The platform extracts and enhances data from any kind of consumer input, including handwritten documents, and delivers it into the systems and workflows of insurance providers. This helps to automate the overall underwriting process, reduce decision time, and reduce data fidelity throughout the entire back end.
Even better, the two are exploring a potential partnership that would make LifeRisk 360’s technology available to the entire US life insurance market: that’s great news, although the demand isn’t surprising given that 13 of the top 20 US life insurers use Captricity already. Captricity’s CEO Kuang Chen had this to say: “Our planned partnership with LifeRisk 360 rewards our insurance carriers and their customers by reimagining underwriting as a new, digital process. This solution enables insurers to eliminate many of the manual steps and friction associated with underwriting. It will be an industry pivot point, giving carriers the ability to accelerate their own data-driven underwriting initiatives to deliver minimally invasive decisions faster.”
LifeRisk 360 is due to launch in Q1 of 2018, so if you happen to work in the back office of a life insurer, we’re sorry but you may just have to continue filing papers by hand until then. But when the time comes, it’ll feel that much better.
Have a great week,
Alex & the team from Social Capital
