Kayfabe: October 15, 2017 Snippets

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This week’s theme: how Pro Wrestling teaches us that our recent attempts to deal with Fake News will only make the problem worse. Plus introducing two new members of the Social Capital family: eShares and Autonomic.

Welcome back to our Snippets series on reflexivity, perception and reality, and most recently facts versus feelings. So far we’ve walked through: 1) what happens when perception and reality reciprocally influence one another, 2) how that can wreak havoc in environments like the stock market, especially when network effects are involved, and 3) a particularly powerful kind of reflexive feedback: the amplification of our own emotions.

Last week, we introduced the topic of fake news, and the idea that it isn’t so much about true versus false, but rather about facts versus feelings. In the battle for our attention and our actions, the fight between facts versus feelings is a profoundly unfair one; the reason why can be understood in terms of our discussion of reflexivity and on the interplay between perception and reality. Facts spreading in a group are subject to negative feedback: errors, distortion or amplification of the message will self-correct over time as the difference between the signal and the source gets larger. Feelings, on the other hand, are subject to positive feedback: errors, distortions and amplification of a feeling will multiply and grow, as we receive confirmation that our emotions are valid. False facts in isolation will tend to self-correct, but feelings or beliefs will self-reinforce and become genuinely real, overriding facts in the process and making them irrelevant. When people say “A lie spreads faster than the truth”, that actually misses the point: it’s more accurate to say, “an emotion-laden lie will spread faster than the emotion-less truth.”

This matters to us today because we’re facing an epidemic of fake news, targeted manipulation, and other kinds of mass spreading of misinformation on the internet, particularly on Facebook, Twitter and Google news results. The collective response by many, including from the tech companies in question as well as from our elected officials, has been something like the following: “Fake news is a problem. We need better transparency and safety checks into what’s real and what’s fake, so that it’s easier to tell when a circulating piece of news is clearly bogus.” This is a plausible enough argument, but I hope by now you’ve learned from our discussion of facts versus feelings that this kind of approach is exactly backwards. Not only will it fail to solve the problem, it will almost definitely make the fake news problem worse.

To dig into why this is so, it helps to understand a concept from the world of professional wrestling: “Kayfabe.” Helpfully explained to non-WWE literate audiences earlier this year by Nick Rogers:

“Although the etymology of the word is a matter of debate, for at least 50 years ‘kayfabe’ has referred to the unspoken contract between wrestlers and spectators: We’ll present you something clearly fake under the insistence that it’s real, and you will experience genuine emotion. Neither party acknowledges the bargain, or else the magic is ruined.

To a wrestling audience, the fake and the real coexist peacefully. If you ask a fan whether a match or backstage brawl was scripted, the question will seem irrelevant. You may as well ask a roller-coaster enthusiast whether he knows he’s not really on a runaway mine car. The artifice is not only understood but appreciated: the performer cares enough about the viewer’s emotions to want to influence them. Kayfabe isn’t about factual verifiability; it’s about emotional fidelity.

People who have never watched or do not really understand pro wrestling often struggle with this: how can audiences be experiencing such genuine emotion when presented with a performance that’s so clearly fake? It’s not so different than when we ask, how can people genuinely be sharing and reacting to fake news stories that are so obviously and outrageously false? The answer is because whether the wrestling itself is live or scripted, or whether the news story is factually accurate or not, does not matter. What matters is how effectively the performance is able to evoke and sustain a particular kind of emotion in its target audience; everything else follows from there. As Rogers writes: “Does the intended audience know that what they’re watching is literally made for TV? Sure, in the same way they know that the wrestler Kane isn’t literally a demon. The factual fabrication is necessary to elicit an emotional clarity.”

Furthermore, and most importantly for our discussion, the participants’ insistence that what’s being presented is real, even though it obviously isn’t, is an essential part of the performance. So when we propose adding “this is real, verified Genuine News” tags or other kinds of validation and transparency into our social media feeds, we may mistakenly think that we are making things harder for the fake news artists. In reality, we are making their jobs even easier. First of all, we will be giving them more Kayfabe ammunition, and yet another channel to stoke the positive feedback cycle of perceived emotions and genuine feelings in their target audience. And second, by forcing “validation” on every news story that gets shared, it reinforces the idea that facts are generally not to be trusted, giving the Kayfabe artists an even easier path to victory.

It’s hard to teach the concept of Kayfabe to an algorithm. It’s hard to “validate” organically spreading news, stories and gossip that spreads within a network, whatever that means. It’s hard to design a personalized news feed for 2 billion humans on earth that doesn’t immediately plunge into a spiral of perceptions, reality and reflexivity. There are no easy answers for this. But the current solutions being proposed are dangerous ones: by targeting the real versus fake problem, and not the facts versus feelings problem, we may be setting ourselves up for disaster. And next week, we’ll get a preview of what that disaster might look like; because unfortunately, it’s already starting to happen.

Two different Nobel Prize winners got a lot of attention in the community this past week. First, author Kazuo Ishiguro won the Nobel Prize in Literature:

The 2017 Nobel Prize in Literature goes to Kazuo Ishiguro | Constance Grady, Vox

How I wrote The Remains of the Day in four weeks | Kazuo Ishiguro, in The Guardian

Eight lessons Kazuo Ishiguro can teach us about the writing process | Writing Routines

Kazuo Ishiguro, The Art of Fiction interview | Susannah Hunnewell, The Paris Review

And second, Richard Thaler won the Nobel in economics (yes, it’s not a “real” Nobel but it’s impressive anyway) for his work on behavioral economics and decision making:

Richard H Thaler: integrating economics with psychology | 2017 Committee for the Prize in Economic Sciences

The Nobel in economics rewards a pioneer of “nudges” | The Economist

The Nobel Prize for clever mind games goes to… | Jason Zweig, WSJ

Nobel Prize awarded to Richard Thaler for his work on decision making | Tyler Cowen, Marginal Revolution

Driving changes:

China hastens the world towards an electric car future | Keith Bradsher, NYT

The secret behind Norway’s EV “Miracle” isn’t oil | Alex Roy, The Drive

On the road to self-driving: Waymo safety report | Waymo

Interviews with tech execs:

Google CEO Sundar Pichai: “I don’t know whether humans want change that fast” | Jemima Kiss, The Guardian

Exclusive interview with Facebook’s Sheryl Sandberg | Sara Fischer, Axios

“Cricket should not shy away from technological change throwing up new challenges” | Satya Nadella, in ESPN CricInfo

Other reading from around the Internet:

Basecoin (Bitshares 2: Electric Boogaloo) | Preston Byrne

Black Mirror is a parade of tragedies. So why do we watch it? | Jason Kottke

Different worlds | Scott Alexander, Slate Star Codex

Saudi Aramco considers shelving international IPO | Financial Times

The economies of innovation: from follower to leader | Bill Janeway, at the Swiss Energy and Climate Summit

Can local food help Appalachia build a post-coal future? | Sarah Jones, The Nation

In this week’s news and notes from Social Capital, we’re happy to share the news of two new impressive organizations joining our extended family.

You may recall a few weeks ago in Snippets that we talked a bit about a brewing liquidity crisis in the private tech ecosystem. Part of what has made Silicon Valley and the greater tech industry so successful is a special social contract that exists between founders, investors and employees: the shared value of participating in the upside. This contract, expressed in stock options and RSUs for a broad swath of employees and not just upper management, represented a new, forward-thinking way for employees to own a piece of what they’ve created. The recent liquidity crisis of companies staying private for longer highlights how important this social contract has become; at Social Capital we’ve taken our own initiatives to help address these challenges, and thankfully we’re not alone: there are other great entrepreneurs and companies with different and complimentary visions of how to help.

Today, we’re delighted to announce our investment in one of these great companies: eShares.

eShares raises $42 million to manage equity compensation and incentives | Katie Roof, TechCrunch

Meet the startup making it easier to buy and sell shares in private companies | Lora Kolodny, CNBC

eShares’ mindset can be summed up in one line from its highly quotable CEO, Henry Ward: “We want more people to have ownership in productive firms.” How? First, by building a product that cleans up a lot of the manual paper processes around equity compensation, ownership and stock incentives: this is the kind of task that needs to be done by software, and eShares’ product is the best there is. Second, by using this software to empower employees to become real owners of what they’ve helped build, rather than supplicants to an uncertain future IPO process or acquisition. And third, by creating an entirely new kind of private liquidity market that compliments the public markets and serves a productive role in society. To help make progress towards these important goals, our own Arjun Sethi is joining eShares’ board; congratulations to all on the progress so far and we look forward to many secondary and tertiary benefits of eShares’ work down the road.

Second, another great company we’ve actually been working with for a little while now has quietly been working on something very important. That company is Autonomic, and while you may not yet have heard of them by name, you’ve definitely heard of their biggest industry partner: Ford.

Ford taps Silicon Valley startup to build transportation software | Paul Lienert, Reuters

Ford invests in Autonomic to make open-source mobility service platform | Zac Estrada, The Verge

Ford backs stealth Silicon Valley startup Autonomic | Kia Kokalitcheva, Axios

The full extent of Autonomic’s capabilities as a platform will be revealed over time, so we don’t want to spoil any surprises. But to get an idea of what they’re working on, consider all of Ford’s different initiatives around mobility recently: their purchase of Chariot, their adventures into car sharing, their sponsorship of bike sharing programs, and much more. Ultimately, it’s all about the uncoupling of the one-driver, one-car relationship towards a new world where many different passengers, with many different destinations, consume many different kinds of transportation in order to get where they need to go. In this new world, there are a lot of new kinds of jobs to do: fleet maintenance, supply and demand balancing, surge management, safety, and so much more that we’re only beginning to explore. Whether you believe self-driving cars are five, fifteen, or fifty years away, Autonomic’s thesis is one that’s very difficult to ignore, and we couldn’t think of a better team to execute on that thesis. #Au

Have a great week,

Alex & the team from Social Capital