kottke.org posts about Duncan Watts
In an analysis of the global financial system, Duncan Watts says that we should limit the complexity of these sorts of systems because "once everything is connected, problems can spread as easily as solutions".
Traditionally, banks and other financial institutions have succeeded by managing risk, not avoiding it. But as the world has become increasingly connected, their task has become exponentially more difficult. To see why, it's helpful to think about power grids again: engineers can reliably assess the risk that any single power line or generator will fail under some given set of conditions; but once a cascade starts, it's difficult to know what those conditions will be - because they can change suddenly and dramatically depending on what else happens in the system. Correspondingly, in financial systems, risk managers are able to assess their own institutions' exposure, but only on the assumption that the rest of the world obeys certain conditions. In a crisis it is precisely these conditions that change in unpredictable ways.
No one, for example, anticipated that an investment bank as old and prestigious as Lehman Brothers could collapse as suddenly as it did, so nobody had that contingency built into their risk models. And once it did fail, then just as the failure of a single power line increases the stress on other parts of the system, leading to further "knock on" failures, so too did Lehman's unlikely collapse render other previously unlikely failures suddenly much more likely.
This is essentially the same point that Nassim Taleb makes in The Black Swan re: Extremistan and Mediocristan.
Duncan Watts' research is challenging the theory that a small group of influential people are responsible for triggering trends as explained in Malcolm Gladwell's The Tipping Point.
"If society is ready to embrace a trend, almost anyone can start one--and if it isn't, then almost no one can," Watts concludes. To succeed with a new product, it's less a matter of finding the perfect hipster to infect and more a matter of gauging the public's mood. Sure, there'll always be a first mover in a trend. But since she generally stumbles into that role by chance, she is, in Watts's terminology, an "accidental Influential."
Perhaps the problem with viral marketing is that the disease metaphor is misleading. Watts thinks trends are more like forest fires: There are thousands a year, but only a few become roaring monsters. That's because in those rare situations, the landscape was ripe: sparse rain, dry woods, badly equipped fire departments. If these conditions exist, any old match will do. "And nobody," Watts says wryly, "will go around talking about the exceptional properties of the spark that started the fire."
I've previously covered some of what Clive talks about in the article.
Big-seed marketing. Instead of relying purely on viral marketing or mass media marketing alone, big-seed marketing combines the two approaches so that a large initial audience spreads the marketing message to a secondary audience, yielding more overall interest than either approach would have by itself, even if the message isn't that contagious. "Because big-seed marketing harnesses the power of large numbers of ordinary people, its success does not depend on influentials or on any other special individuals; thus, managers can dispense with the probably fruitless exercise of predicting how, or through whom, contagious ideas will spread."
Update: Full paper with data is here. (via atomiq)
Duncan Watts on the results of a study which show that a cultural product's popularity is partially determined by inital social adoption patterns. "This means that if one object happens to be slightly more popular than another at just the right point, it will tend to become more popular still. As a result, even tiny, random fluctuations can blow up, generating potentially enormous long-run differences among even indistinguishable competitors -- a phenomenon that is similar in some ways to the famous 'butterfly effect' from chaos theory." The effort to explain why popular things got popular is probably impossible...working your way back from effect to cause in non-linear systems is tough.
Harvard Business Review has compiled a list of breakthrough ideas for 2007. "Our annual survey of emerging ideas considers how nanotechnology will affect commerce, what role hope plays in leadership, and why, in an age that practically enshrines accountability, we need to beware of 'accountabalism.'" The first idea on the list comes from Duncan Watts, whose research shows that it's not so-called influentials who are responsible for driving cultural trends (as argued in The Tipping Point) but the presence of many ordinary people who are able to be influenced within a given social network.
If you happen to be in NYC on November 3rd, stop by Eyebeam in the evening and check out a panel that I'm on about criticism called "Everybody's A Critic, Or Are They?" Here's a description:
With 9 million blogs, umpteen online message boards, thousands of shows on hundreds of cable channels, and an increased number of magazines on the newsstand, the number of outlets for expressing criticism has never been higher and the barriers to would-be critics have never been lower. Is this devaluing evaluation or does the shotgun approach result in better criticism? YOU be the Judge!
Joining me on the panel are Emily Gordon, Village Voice film critic Michael Atkinson, and Columbia professor & author Duncan Watts. The wonderful Steven Heller will moderate and no doubt bring the conversation to a higher level. Details:
November 3, 2005
7:00 PM - 9:00 PM
540 W. 21st St.
New York, NY 10011