“First they ignore you, then they ridicule you and then you win” says Mahatma Gandhi. In a very different setting we can imagine one man thinking in similar terms these days: Amazon’s Jeff Bezos is un- der attack. It started in the United States, now the attacks have reached Germany. The accusations against Amazon range from manipulation of rankings to monopolizing the market.
Jeff Bezos stays calm und repeats him- self explaining that books have to be- come cheaper because they compete against other media channels. Besides the question whether it is good or not good what the market dominating company does we have to wonder how we could get to this point in the first place. Why has Amazon not received this kind of attention earlier? Why now?
Why do we let a corporation grow that apparently threatens authors while only starting to protest when we get to feel its immense power? Why do we ignore and laugh about ideas that potentially turn into innovations and market dominating companies and then fight them out of desperation while most of the time losing the battle?
Just a few days ago Berlin’s taxi lobby triggered a legal ban on Uber in the city due to safety concerns. Established 2009 in San Francisco, California, Uber allows private drivers to transport people from one location to the other in their cars, like taxis would.
In Munich, Frankfurt, Hamburg and Düsseldorf Uber drivers are on duty already and it is very likely that this is only a matter of time until they get to serve Ger- many’s capital too. On June 11th 2014 London’s taxi drivers blocked the entire inner circle of the city in a desperate at- tempt to protest Uber. Worldwide taxi drivers followed. Undoubtedly Uber has become a very real threat for taxi drivers around the globe. Again, we have to wonder how we have come to this point.
Ignored, then laughed at and ultimately funded with over 17 billion US dollars Uber today is worth more than German car makers Audi and BMW combined. It is hard to imagine that anything is going to stop this 5 year old company anytime soon. How come taxi drivers respond only now? Is it really completely unpredictable when, where and how a disruptive business model kills old technologies or models?
As a cognitive psychologist I am interested in how human beings draw conclusions, make predictions and decisions based on the limited set of information available to them. When evaluating ideas, future perspectives or assessing the feasibility of an idea human beings use mental shortcuts and irrationally come to very biased assessments of the current situation.
In line of these biases we might be prone to falsely conclude from the fact that there have been taxis throughout our life- time so far that there will be taxis forever.
Or that there will be books published by publishing companies. One of the causes of our convictions lies in the fixation on patterns.
Human beings see patterns and structure where there really is none. When we look back on a century of innovation it seems as if everything had to happen exactly the way it happened leading to the status quo. The development of the worldwide was the answer to our desire to connect globally, Google was the response to an impossible amount of information that had to get organized and Facebook was the logical next step to global connectivity on a social level.
One idea leads to another and every single step in this evolution we could have predicted. Our feeling of logical order and sense making consistency in our his- tory of ideas is to great extent an illusion. This becomes very apparent when we try to predict actual developments. Even an international financial collapse like 2008 had not been foreseen (with a few exceptions). In hindsight though it appears al- most self evident that a collapse had been unavoidable. This cognitive bias is called hindsight bias.
In past events we find an inherent logic that is plausible to an extent that lets us believe we could predict what is going to happen next. Particularly experts can be very far from reality when predicting the future while at the same time being absolutely convinced to be right.
The status quo bias leads us to believe that the now and here is a good place and any change in this belief becomes a loss. At the same time the confirmation bias makes us search for evidence in fa- vor of our hypotheses and assumptions
and we ignore counter evidence. On top we apply Wishful Thinking and think in more detail about what we would like to happen rather than thinking about what is likely going to happen.
Will there be televisions in the near future? Will Netflix conquer international markets? Will there still be printed copies of books or will Amazon close down this part of the business? Will we learn how we have learned in the past? Will there be universities and schools still? Will MOOCs replace these systems? Will AirBnb kill the hotel industry? Just be- cause it is hard for us to imagine a future state of the world does not mean at all that it will not happen.
It does not even mean that this future is in any sense more unlikely than a future we can easily imagine. Our brains are not made to predict complex future scenarios like these. Our brains are made to live with them. We are programmed to ignore new ideas, laugh about them, to potentially fight them and eventually to think that it all makes sense after all. The task of my generation is – more than ever be- fore – to question our own understanding and distrust our prognoses and judgments.
We live in a world in which institutions such as newspapers, publishers, universities, taxis, video rental stores and hotels can disappear from one day to an- other and we after the fact think this was inevitable. If we find this good or bad does not matter so much. If nevertheless we want to design our future we have to start changing our minds and begin to imagine the unimaginable.
By Christoph Burkhardt, originally published with The Huffington Post on 08/09/2014
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