Startup Iceland

We are not very good at estimates or forecasts, which I have consistently written about we make educated guesses… I say educated with a pitch of salt because we don’t know what we don’t know and what we know is very limited so why do we consistently fool ourselves with our estimates? Well, the answer is always in a book, did I mention that before? anyways, I have been listening to Dan Gilbert‘s book Stumbling on Happiness, if you have not read it you really should. It is a great book that explains the psychology and mechanics of  our Brain, our senses and everything else that makes us human. The gist is that our brain is built around perception of reality, it is a great make believe machine, a really smart and cunning wizard. I think Dan will do a better job of explaining this than I ever can. Here is a small excerpt:

When I was ten years old, the most magical object in my house was a book on optical illusions. Its pages introduced me to the Müller-Lyer lines whose arrow-tipped ends made them appear as though they were different lengths even though a ruler showed them to be identical, the Necker cube that appeared to have an open side one moment and then an open top the next, the drawing of a chalice that suddenly became a pair of silhouetted faces before flickering back into a chalice again (see figure 1). I would sit on the floor in my father’s study and stare at that book for hours, mesmerized by the fact that these simple drawings could force my brain to believe things that it knew with utter certainty to be wrong. This is when I learned that mistakes are interesting and began planning a life that contained several of them. But an optical illusion is not interesting simply because it causes everyone to make a mistake; rather, it is interesting because it causes everyone to make the same mistake. If I saw a chalice, you saw Elvis, and a friend of ours saw a paper carton of moo goo gai pan, then the object we were looking at would be a very fine inkblot but a lousy optical illusion. What is so compelling about optical illusions is that everyone sees the chalice first, the faces next, and then—flicker flicker—there’s that chalice again. The errors that optical illusions induce in our perceptions are lawful, regular, and systematic. They are not dumb mistakes but smart mistakes—mistakes that allow those who understand them to glimpse the elegant design and inner workings of the visual system.

The mistakes we make when we try to imagine our personal futures are also lawful, regular, and systematic. They too have a pattern that tells us about the powers and limits of foresight in much the same way that optical illusions tell us about the powers and limits of eyesight. That’s what this book is all about. Despite the third word of the title, this is not an instruction manual that will tell you anything useful about how to be happy. Those books are located in the self-help section two aisles over, and once you’ve bought one, done everything it says to do, and found yourself miserable anyway, you can always come back here to understand why. Instead, this is a book that describes what science has to tell us about how and how well the human brain can imagine its own future, and about how and how well it can predict which of those futures it will most enjoy. This book is about a puzzle that many thinkers have pondered over the last two millennia, and it uses their ideas (and a few of my own) to explain why we seem to know so little about the hearts and minds of the people we are about to become. The story is a bit like a river that crosses borders without benefit of passport because no single science has ever produced a compelling solution to the puzzle. Weaving together facts and theories from psychology, cognitive neuroscience, philosophy, and behavioral economics, this book allows an account to emerge that I personally find convincing but whose merits you will have to judge for yourself. Read More…

The reason I started writing this blog post is because of article written by Padmasree Warrior (that is such a cool name!), CTO of Cisco Systems in CNBC with the title “Innovation may spark economic revival: Warrior” referring to the Economist’s cover story- Has the Idea Machine Broken down?- well, Padma thinks that “Internet of Things” (IoE) and Innovation around that would help us get out of the economic malaise that we have seen around the world after the financial collapse. She does have a point, but my perspective is not so narrowly focused… I believe we as humans always Overestimate our chances for the next 3 years and grossly underestimate the next 10 years. For more details on why refer to the first paragraph I will leave you with classic dialogue

“Dorthy: You a very bad man!

The Great Wizard of Oz: Oh, No my dear, I am a very good man but a very bad wizard” from a classic movie

Related articles

• A Cat’s Reaction To An Optical Illusion Is Priceless (americanlivewire.com)
• Psychological Concentration Test: Optical Illusion (talesfromthelou.wordpress.com)