Everything Old is New Again

The New York Times has a story about a website started by an 18 year old high school student in Vermont called Omegle (the website, not the high school student). The idea of the website is to let people chat with random strangers rather than someone they already know. As our student so wisely says, "You can’t learn anything from someone exactly like you."

Of course, for those of us who remember the Internet's early days, chatting with random strangers has a long history. In fact, I happen to know a married couple who met via a totally random MSN Messenger chat. I can remember random chats on CompuServe and AOL and ICQ and even (if I remember correctly) early versions of Skype. The whole concept of being able to chat for free with someone from anywhere in the world was one of the "gee whiz" Internet concepts right up until everyone realized that these chats don't tend to produce much in the way of learning about the world or other people. Indeed, Omegle doesn't seem to have solved the fundamental problem, summed up in the article by Jason Tanz, a senior editor at Wired:

"The first person I connected with said, 'let’s have cyber right now,'" he said of his experience on Omegle, referring to cybersex. "The second was a 14-year-old kid from London. It’s not hard to see how this is going to be a problem."

At any rate, the point is not whether Omegle is a good idea or a bad idea. The point is that to an 18 year old high school student it's a new idea. There's probably a lesson in here for would-be Internet entrepreneurs or anyone who wants to make money off of young people. The lesson is something like, think of something you used to like doing when you were a kid that people don't do anymore. Update it slightly and then have the confidence to release it into the world as though you were the first person ever to have thought of it. Otherwise you might get beat out by an 18 year old who doesn't know that he didn't invent anyway.

Book Review: Fooled by Randomness

I hadn't intended this blog to become a collection of book reviews, but I've come to like the idea of keeping a log of my thoughts on the books I've read. If for no other reason, keeping a book-review blog helps me to feel OK about actually donating a book to our favorite non-profit bookstore (Books for America) after I've finished reading it. Anyone who's seen our bookcase can attest that Nicole and I have a book problem.

As for the book Fooled by Randomness by Nassim Nicholas Taleb, there's far too much packed in to do any kind of justice to the book in a reasonable summary. Indeed, my main criticism of the book is that it is poorly written. It's very discursive and often he brings up topics that you would really already have to know something about in order to understand what he's saying. Sometimes I did and sometimes I didn't. In fact, in a postscript, Taleb mentions how boring he finds writing if he's confined to an outline or a deadline or a page limit. He just wants to let it fly and the book reads a lot like the author was writing for himself and is only letting you along for the ride. And this is a shame because this book really has some important and profound things to say.

Basically the book is about how we human beings are constantly trying to tell ourselves a story about what has happened and why it happened. And we almost never want to tell ourselves that something has happened for no reason other than a random, meaningless fluctuation. Even when we know better at some level, we cling to emotional explanations for random events. Taleb's villians are CEOs, bankers, journalists and historians who all try to make money by explaining things that are actually random. Think about it: if you watch the nightly news, every day you hear that the Dow was up or down some amount (which is usually a pretty small percentage change) and then they tell you why. Millions of transactions occurred that day and, if you add them all together, the result was that the market moved a tiny, tiny bit. Isn't the most logical explanation that, in fact, nothing happened today. People traded stocks for whatever reasons (someone is retiring and selling, someone else if saving for retirement buying and neither side of that transaction much cares about whatever went on today) and the market just moved randomly a bit. Day after day. People used to think that the weather was being dictated by the gods too. And they used to pay shamans to make the weather better. Today we think we've evolved, but is your investment adviser really earning his or her keep or they just betting on sun in the summer and snow in the winter and taking credit for being brilliant?

Taleb makes pains to point out however that we are all susceptible to emotional thinking about random events. It's in our nature. And here, the book moves beyond being about investments or markets or the financial crisis or MBAs. It really becomes a book about philosophy. (Indeed there's a section about philosopher John Popper that I didn't really get, except that he's Taleb's favorite philosopher). Because we're not in control of our lives, Taleb favors a stoic disposition. Treat each fortune and misfortune with the same equanimity and you will have risen above the randomness of markets, weather, cancer diagnosis, car accidents and love. I'm not convinced about the philosophy, but I do appreciate the book's call for us to stop inventing stories where none exist. And in this sense, the book is very similar to Malcolm Gladwell's Outliers, reviewed below. We constantly hear stories about why and how this one person succeeded but rarely about how and why all the others failed. Because if we heard about the hows and whys of the failures we might come away with the conclusion that the successful person is just lucky. Taleb certainly would think so.

I can't quite recommend the book, if only because Taleb has (by his own admission) re-written it in a book called The Black Swan. I'll probably read that too in the hopes that someone took a stronger editorial hand in that one. If not, he's supposed to be coming out with a third book which will be the same stuff told in yet another way (again, to his credit, he admits this). So stay tuned for those reviews. In the meantime I might start thinking about things to post that aren't book reviews.