Specifically, he says that the wisdom of crowds is great at solving three types of problems — cognition problems which involve identifying a correct definitive answer, coordination problems which involve synchronizing our individual activities with others, and cooperation problems which involve acting together despite our self-interest.
However, for the wisdom of crowds to work, four basic conditions need to be met — diversity of opinion to bring in different information, independence of members from one another to avoid the herd mentality, decentralization so that people’s errors balance each other out, and a good method for aggregating opinions to distill the wisdom from the crowds.
Therefore, the wisdom of crowds fails when groups are too homogeneous, too centralized, too divided, too imitative or too emotional.
Speaking in the context of the dotcom meltdown, Jeff Bezos says that while it’s tempting to see the Internet using the California Gold Rush analogy, it’s more useful to apply the electricity analogy.
Both electricity and internet are thin horizontal enabling layers that go across multiple industries. The web applications we have seen so far are, in fact, similar to the first wave of electric appliances. For instance, just like web applications use the physical network infrastructure laid out for long distance telecommunications, the first wave of electrical appliances used the electric network laid out for the light bulb. So, it’s only to be expected that web applications, like the first electrical appliances, will include both life changing innovations and amusing failures.
I believe that Jeff Bezos’ conclusion in 2003 — “there’s more innovation ahead of us than behind us” — is equally valid in 2008, and that’s true for both the protocol/ platform and the application/ user interface layers. Which is a good thing, especially for those of us who missed both the dotcom and the web 2.0 booms.
Here’s a brilliant TED presentation by Hans Rosling on how to look differently at development indicators across countries and continents, using Gapminder’s trend visualization tool Trendalyzer –
I spent an hour playing around with Gapmindmer and discovered some interesting trends related to the diffusion of communications technologies in BRIC countries.
In all these charts comparing Brazil, Russia, India, China and United States, the X axis represents the income per person (in fixed PPP$) on a logarithmic scale while the Y axis changes. By pressing the ‘play’ button, you can see how the variable changes for these five countries over years.
Let’s start with the Y axis representing the number of cell phones users on a logarithmic scale. It’s fascinating how each country seems to stay close to the X axis until something happens and it rises vertically. It happens to the USA in 1980, China in 1986, Brazil in 1989, Russia in 1990 and India in 1994. As of now, these five countries have the biggest cell phone user bases across the world1 (China at #1 with 601 million, India at #2 with 305 million, USA at #3 with 260 million, Russia at #4 with 172 million and Brazil at #5 with 135 million).
