Google is an old business

In a TechCrunch interview Tyler Cowen proclaimed:

Google is an old business…. Google has never really been about human psychology.

Google revenue

Truly effective advertising is based on psychology.
A lot of people in our industry haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have.
~ Steve Jobs
In 1998, Bill Gates “couldn’t imagine a situation in which Apple would ever be bigger and more profitable than Microsoft.” Today, Apple’s market capitalization is $683 billion, more than double Microsoft’s current value of $338 billion.
Steve Jobs took a near bankrupt company and turned it into the most valuable company in the world by understanding the importance of human psychology in designing products and services.
Steve Jobs iPhone

Steve Jobs unveils first iPhone

Apple made $18.04 billion in profit and $74.6 billion in revenue for the first quarter of 2015. Those are both records for Apple alone, but there’s more: The numbers mean Apple just had the most profitable quarter of any company ever, beating out Russia’s Gazprom by a neat $1.8 billion. Apple now has five of the top ten most profitable quarters. ExxonMobil has three.
In his book, Average Is Over, Cowen also proclaimed:

[Freestyle chess] is the model to consider if you wish to be among the high earners of the very near future….

This insight clarifies many key issues, such as how we should reform our education; where new jobs will come from and why (some) wages might start rising again; which regions will see skyrocketing real estate prices and which will empty out; why some companies will get smarter and smarter, while others just try to ship product out the door; which human beings will earn a lot more and which workers will move to low-rent areas to make ends meet; and how shopping, dating, and meeting negotiations will all change.

Michael Mauboussin Head of Global Financial Strategies, Credit Suisse

Michael Mauboussin
Head of Global Financial Strategies, Credit Suisse
Our interview:

In our interview with Michael Mauboussin of Credit Suisse, I asked:
Q: It is my contention that teaching freestyle chess at the scholastic level would be a very effective first step in helping student comprehend deep learning algorithms. Do you see this as a plausible assertion?
A: Absolutely. One of the advantages of having a computer program run alongside you is that it provides feedback – in effect, you get to see what moves make sense and why. And because the computer can crunch values so much faster than a human, it speeds up learning processes.
It’s interesting to note that today’s great young chess players have come of age in world where computers have always been better than humans – Kasparov lost to Deep Blue back in 1997. So young people today can learn not only from coaches and teachers but also from software programs. That is a substantial advantage versus prior generations. We saw a similar process in poker.

Tyler Cowen

Whether we will remain a middle class society or not depends firstly on how many people will prove to be effective working with intelligent machines.
~ Tyler Cowen
Shivon Zilis, an investor at BloombergBETA in San Francisco, put together the graphic below to show what she calls the Machine Intelligence Landscape.

Machine Learning

According to the Forbes article “Tech 2015: Deep Learning And Machine Intelligence Will Eat The World” by Anthony Wing Kosner:

These companies will need more people who can create, iterate and debug deep learning and other kinds of machine learning models. They will also need an even larger cohort of developers and designers who can create usable experiences on screens that make all of this intelligence actionable.

In the coming years machine intelligence will become very important but it is also important to understand the part human psychology will play in developing the future.
Emile Durkheim described human beings as “Homo duplex,” or “two-level man.” The lower level is the level of the profane—the level of ordinary consciousness and self-interested pursuits.  The higher level is the level of the sacred at which we lose our petty selves and become simply a part of a larger whole.
Jonathan Haidt author of The Righteous Mind wrote:

I mean that we evolved to see sacredness all around us and to join with others into teams that circle around sacred objects, people and ideas. This is why politics is so tribal. Politics is partly profane, it’s partly about self-interest. But politics is also about sacredness. It’s about joining with others to pursue moral ideals. It’s about the eternal struggle between good and evil, and we all believe we’re on the side of the good.

This perspective also helps explains the persistent undercurrent of dissatisfaction in modern life. Ever since the Enlightenment, modern secular society has emphasized liberty and self-expression. We exult in our freedom, but sometimes we wonder: Is this all there is? What should I do with my life? What’s missing? What’s missing is that we are homo duplex, but only our first-floor, profane longings are being satisfied.

The old model of advertising and branding was to improve public perceptions, and mainly focuses on our “profane longings.” The new model demands that businesses help to improve public life and address our higher level of sacredness. To survive, businesses must start nurturing ideas, not just pushing products and services.
Here’s to the crazy ones. The rebels. The troublemakers. The ones who see things differently. While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
Knowledgeable marketers understand that what worked in the past is not working (or not working well) now. A new approach is needed. As A. G. Lafley, Chairman of the Board, President, and CEO of Procter & Gamble, told his executives, “We need to reinvent the way we market to consumers. We need a new model.”
The medieval philosopher Moses Maimonides insisted that conflicts between science and the Bible arise from either a lack of scientific knowledge or a defective understanding of the Bible. Many great scientists such as Sir Isaac Newton, Nikola Tesla, George Washington Carver, Robert Boyle, Michael Faraday and Louis Pasteur were deeply religious men. (More:
In “Who is Your God? Take the Test,” we quote from a book telling us that knowing a person’s image of God provides us with an opportunity to understand the most intimate moral and introspective conversations they have. And if we know your answer to these two questions:
  1. To what extent does God interact with the world?
  2. To what extent does God judge the world?
Then we have tremendous insight into your entire worldview, which is important because innovation requires empathy and faith.
Demis Hassabis

Chess prodigy Demis Hassabis is the co-founder of DeepMind which was acquired by Google for ~$500 million.

Demis Hassabis is a great example of the potential relationship between chess and machine intelligence. At the ages of 13, Demis reached the rank of chess master, and was the second-highest-rated player in the world under 14 at the time. Hassabis received his PhD in cognitive neuroscience from University College London in 2009. On January 27, 2014, DeepMind founded by Hassabis was acquired by Google for about $500 million – the company’s largest European acquisition – in order to add technology and talent to Google’s core business of search.
Machine intelligence can also address the fact that the standard research techniques of corporate America are cheating us of many great experiences. Malcolm Gladwell describes this as the “Kenna problem:”

If I ask you why you think what you think, can I trust your answer?

This process [standard market research] is fundamentally flawed. It is completely screwed. We totally overrate the significance of what we find out when we go through this kind of formal process and the consequence of that overreliance on this system is that we are cheating ourselves of all kinds of wonderful experiences that we would otherwise have [such as Kenna].

About 10 years ago, I developed a local entertainment television show called Live From VA that interviewed such guests as: Academy Award winner Mo’NiqueRussell Simmons & Rev RunKanye WestPharell Willams & Chad Hugo (the Neptunes), and Katt Williams. The underlying idea for the television show was to develop a tech company based on the strengths of African-Americans, for example music. Considering the recent $3 billion sale of Beats By Dr. Dre to Apple, maybe there is something to this basic philosophy.
According to a Business Insider article “Dr. Dre Earned More In 2014 Than Any Entertainment Star On Record:”

[$620 million is] the amount the rapper-producer-entrepreneur earned before taxes in 2014, according to Forbes, which crowned Dr. Dre the “Hip-Hop Cash King.” His earnings represent the highest annual total for any entertainer ever evaluated by Forbes.

In fact, that figure is more than the combined earnings of everyone else on Forbes’ annual Hip-Hop Cash Kings list, which includes P Diddy and Jay Z, tied at the No. 2 spot ($60 million); Drake at No. 4 ($33 million); and DJ Khaled at No. 20 ($7 million).

Hip Hop rich

With the help of Skymind, we will be using deep learning techniques for developing music artists. From the Wired article, “The Mission to Bring Google’s AI to the Rest of the World:”

[D]eep learning… seeks to remake computing by more closely mimicking the way the human brain processes information, giving machines more power to “learn” as time goes on.

The technology has so much promise, it has sparked a kind of arms race among the giants of tech. Google and Facebook recently hired the two academics who originally laid out the concepts behind deep learning, and earlier this month, Chinese search giant Baidu followed suit when it snapped up another academic at the heart of the movement. But Adam Gibson, an independent software engineer based in San Francisco, doesn’t want this new technology locked inside the biggest names on the net. He believes deep learning techniques should be available to any website, company, or developer interested in using them. And that’s why he’s launching a new startup called Skymind.

Chad Hugo & Pharrell Williams Live From VA.

Chad Hugo and Pharrell Williams doing a plug for Live From VA.


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