Why prediction is futile

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At Tuesday afternoon’s Web 2.0 Summit in San Francisco, Vinod Khosla, founder of Khosla Ventures, took the stage to discuss the difference between innovation and punditry. He started off by mentioning a 1986 study that forecasted that by the year 2000, there would be just under one million cell phones. They were off by 10,000%. There were 109 milllion cell phones in the year 2000. AT&T spent $1 million and then ended up scrapping its whole cell phone business based on this forecast. Why? Because the 1980 ‘mobile phone’ was the size of a cinder block.

He then moved on to a Berkeley study that followed 80,000 forecasts over the course of 20 years and found that “experts have about the same accuracy of dart-throwing monkeys,” said Khosla. “You don’t do unreasonable things by being reasonable.”

Twitter, for example, did not exist five years ago, Khosla added. Which pundit could have predicted that a 140 character tweet would ever take off the way it did, or that a series of 140-character tweets could outline the whole culture and character of a city, like San Francisco when the Giants won the World Series?

Things like Twitter are created by innovators, not pundits.

“In every generation, you’ve seen radical shifts…Almost certainly, the next big thing won’t come from Google, Facebook, or Twitter.” To drive his home point, Khosla pointed out the fact that in the 1980s, no one thought there would be a PC in every home, and in the early 90s, no one could have predicted that email would’ve taken off. Even more shocking, the iPhone didn’t exist before 2007. “Now, it is conventional wisdom,” said Khosla.

[Source]

So, what’s up?

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Dave Winer drew my attention to this. (It’s now noon in the UK, so there are three hours to go.) Dave, needless to say, has a theory about it. But I’m completely in the dark. As usual.

2.12pm:Just opened an email from my mate Andrew who says that it’s obviously the news that the Beatles’ music is finally being sold by the iTunes store. Now why didn’t I think of that?

Facebook’s über-communications platform

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Dan Gillmor takes a pretty sceptical view of Facebook’s new messaging system.

In a feature that Facebook thinks is great — and will thrill law enforcement and divorce lawyers — every conversation will be captured for posterity, unless users delete specific messages or entire conversations. Do you assume that the people with whom you communicate are saving every text message and IM? You’d better.

That’s only one of the things that makes me cautious about the service. Facebook’s privacy record is spotty enough already; trusting the company to archive and protect my communications? Not so likely.

Om Malik is much more complimentary:

Facebook has not only reinvented the idea of the inbox, but it has gone one better: it has done so by moving away from the traditional idea of email. One of the reasons why Yahoo and Google Mail have struggled to become entirely social is because it is hard to graft a social hierarchy on top of tools of communication. If you look at Gmail – it has most of the elements that are available in the new social inbox, but they are all discrete elements and give the appearance of many different silos, being cobbled together.

Facebook did the exact opposite – it imagined email only as a subset of what is in reality communication. SMS, Chat, Facebook messages, status updates and email is how Zuckerberg sees the world. With the address book under its control, Facebook is now looking to become the “interaction hub” of our post-broadband, always-on lives. Having trained nearly 350 million people to use its stream-based, simple inbox, Facebook has reinvented the “communication” experience.

The deadpan NYT report on the new initiative is here.

Forgetting the rest of the trick

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Bill Keegan, the Observer‘s economics commentator, tells a nice story about how the Labour Leader, Michael Foot, lampooned Sir Keith Joseph, Margaret Thatcher’s policy guru, in the early 1980s. Foot, says Keegan, gave

a virtuoso display in a speech which had both sides of the Commons in stitches. He was referring to Sir Keith Joseph, who had played the role of John the Baptist to Thatcher. Foot was speaking when, as now, the Conservatives were conducting a frontal assault on the fabric of British society. He had long tried to recall, said Foot, of whom the right honourable gentleman (Joseph) reminded him. It had suddenly come to him: in his youth, Foot had gone to the Palace Theatre in Plymouth on Saturday nights, where a “magician-conjuror” used to take a gold watch from a member of the audience, wrap it in a red handkerchief, and smash it “to smithereens”. Then, while the audience sat there in suspense, a puzzled look would come over his countenance, and he would say: “I’m very sorry – I’ve forgotten the rest of the trick.” Foot concluded: “That’s the situation of the government.”

Well, I suspect that is also the position of the present government. Thatcher at least had the excuse of fighting double-digit inflation. This government has invented an excuse – namely that the cuts are required to avoid the treatment that the bond markets have been meting out to Greece, Ireland and Portugal.