Equif*cked: The end of credit reporting as we knew it

After Equifax’s epic data breach this week, I did the only sane thing a consumer can do. I froze my credit. When I got to freezing my Equifax credit report I received a failure notice.

Maybe Equifax should have taken their systems offline before the hack.

As of this week, the open credit report should be a thing of the past. And it will change Equifax’s business dramatically. Having been compensated for letting companies access our private credit data, Equifax, Experian, and TransUnion will also be charging consumers to keep their information accessible when they want it to be. This is the so-called “freeze” on a credit reporting account.

Unfortunately, Experian’s protection scheme is deeply flawed, it’s insecure, and we should not have to pay these companies to do their job. We should not be the guardians of the data they store, turning access on and off to control when our credit is visible to companies.

The credit reporting agencies are turning their poor security regimes into an excuse to collect more money from consumers. A radical rethinking of the credit reporting system is due, and the time has come.

And now that it is here, Equifax is already failing to provide consumers with the ability to freeze their accounts.

The General Is In

I like the job title suggested by the quote below: Maker of Contributions Others Can’t.

“Expert-generalists study widely in many different fields, understand deeper principles that connect those fields, and then apply the principles to their core specialty.” But, you may wonder: wouldn’t this force Musk to learn at a surface level only and never gain true mastery? Contrary to the jack-of-all-trades myth, “Learning across multiple fields provides an information advantage (and therefore an innovation advantage) because most people focus on just one field… Each new field we learn that is unfamiliar to others in our field gives us the ability to make combinations that they can’t.” Musk applies this multi-disciplinary approach in order to disrupt the automotive world and achieve otherworldly breakthroughs in rocketry.

Late last year, after years of an increasingly complicated description, I decided on a new response to the question “What do you do?” — which for many people can mean, “How do you earn that living, or wear that suit, or obviously not own a suit but drive that car?” There’s an examination of bone fides going on. The question can be completely innocent, as when the neice’s boyfriend at family Christmas says, “I work at [deleted for protection of neice’s boyfriend], it’s a big consulting company. Do you know what I am talking about?” “Oh, yes,” I responded. And he did as I would have, after a brief pause, and redirected the question, asking me, “What do you do?” Therefore, he can be part of the family, because if he’d launched into an explanation, well, it would have been a poor example of soft skills.

My answer to the “what do you do” quandary is that I am in the business of being me. If pressed for details, I add that I create new combinations across several different domains. The list of domains has been progressively complicated, so I usually stop there and ask what my interlocutor does with their time.

No comparison to Elon Musk intended, we are both citizens of the United States and the planet, equals before the law and not much else. However, I believe this expert-generalist skillset represents more than the path to business titancy, it’s the keystone of complete works of creativity, business and technical innovation at every scale. I know it has been the basis of my career, and remember with gratitude the first times people recognized, nurtured and leveraged my learning skills. It taught me more about more processes, systems and stories. Having started a writer I became a “portfolio careerist” in the mid-90s.

Now I am in the business of being me.

Expert-Generalism is the basis of future careers and lives, not to mention many current and fabled startups not-quite-Muskian, in deference to the fact that the era of the multi-founder is just starting. The smartest CEOs I’ve known are essentially generalists. Some are truly generalists while others began as deep domain experts and added business, strategic, economic and political skills. The smartest ones are all expert-generalists.

Expert-Generalists are also the backbone of great local service experiences, because they can tie together a thriving on-demand small business community with incredible personal presence, soft skills, and expertise. The edges of the network are about to come to life with digitally managed personal and professional services as small business and solo workers become integrated into the logistics and planning platforms that have been the sole domain of the enterprise for decades. New combinations of value will be breaking out everywhere, out of necessity as much as a taste for progress.

A few people with an idea can change an industry and be testing the concept on the cloud in a few days, targeting their local market or the world. It is not necessary to start at scale. Uber certainly didn’t. Local is where an idea can be proved, then grown. Local is also where the action will be as a result of the collapse of credibility of authority in media, marketing, government, Wall Street and much else, likely too much else.

We’ll find the anchor point in local experience, built of people augmented by software. The economics of local on-demand have not been worked out. Experiments are breaking out all over, though some have run afoul of the law because they are frankly radical. Even the collapse of American democracy is possible these days, but I pledge to work with my neighbors to see that we are all happy, enjoy a fair wage that ensures they and their children are well-fed and educated.

All of us will acknowledge that.

The New York Times‘ Thomas L. Friedman recently described a new class of jobs he dubbed “STEMpathy” work. These are people augmented by software, the network and mobile devices, as well as extensively networked homes and automobiles. This includes everyone who doesn’t feel secure in their jobs today. We feel this way because we know the changes coming include AI and robots. Friedman correctly points out that “heart” is at the core of all work experience. There will be robots. We do need to change our skills, though not to be beggared at the gates of globalism.

Eventually, the question of how ordinary people will earn livings to buy the products made by businesses will become the foremost question in society. I suspect that will involve an intense local focus. Cities and states are already responding to the 2016 election by focusing on their quality of life, local values, and, strangely, the people. Marketers are seeking the holy grail of one-to-one engagement with customers. As everything becomes more virtual, it is increasingly important to be personal. There’s a lot of money in human contact and connections.

We can have no idea when that will happen, especially given the growing authoritarian movement. When the break comes, there will be a Great Re-deal, which does not have to mean a mass redistribution of wealth. Instead, it could come in a general adjustment of the compensation for work, which will lead to fair returns for all the work that contributes to the creation of great wealth and small prosperity: A thriving economy.

At that time, there will be many more specialists than today, working in science, technology, mathematics, medicine, and management. There will be more expert-generalists managing them. There will be many more expert-generalist laborers, sellers, makers, doctors, dentists, plumbers, as well as delivery, installation, maintenance and support people, working and living in the same community as those specialists.

We’ll all be grateful that expert-generalism isn’t something only Elon Musk can do. I’m confident he’d agree.

Source: How Elon Musk Uses His Learning Superpowers To Master Information, Clean Technica  https://cleantechnica.com/2017/01/03/elon-musk-uses-learning-superpowers-master-information/

Shiller’s insight is generalizable to all markets, perhaps into biology

A few years ago I had the good fortune to interview Robert Shiller of Princeton University (Listen to the audio interview.) His name will probably be familiar to you. Shiller won the Nobel Prize for Economics, along with Eugene Fama and Lars Peter Hansen of the University of Chicago this past week. Shiller is an influential economist whose housing index is a valuable leading indicator of home prices. We spoke about documenting human capital.

He’s also the man who coined the phrase “irrational exuberance” that described the behavior of investors during the dotcom and housing bubbles. The upshot of this is that there are huge variations in the price of an asset compared to its intrinsic value, but that prices will return to an average price over time. In the long run, the markets win, which was the contribution of Shiller’s co-Nobelists, Fama and Hansen.

I’ve been thinking about bubbles. They seem to occur at the outset of every market, a bubble unto itself, in essence, that will make or break a new industry. It is clear a market can be organized around anything, and within any market there is opportunity to profit by jumping aboard. Within those nascent markets, firms act like individual investors (and firms) that drive exaggerated valuations. I think this describes all fad behaviors and the market organized around them. Likewise, as a vet of the trade and financial press, I’ve seen whole industries form around, and that intense activity dissipate, a market as it grows until it reaches maturity. From inception to maturity, markets act erratically. Investors put money into the wrong places, and at the same time more investors enter the market, exacerbating the chaos of early growth. Some bubbles actually die out, like the pet rock of the gasoline automobile, but others become part of the sedimentary history of an economy.

This occurred to me because I read about the explosion of scientific papers published annually, which is resulting in very high degree of findings which cannot be reproduced. Eugene Samuel Reich, writing in Nature this week, quoted Henk Mode of scientific publisher Elsevier:

He notes that some institutional rankings, such as the Academic Ranking of World Universities, compiled by Shanghai Jiao Tong University, give explicit weight to the number of Nature and Science papers an institution has produced — making it likely that some universities would then begin to rank prospective faculty by the same measure. “There is more and more evaluation, and a need for researchers to prove their quality,” Moed says. “Journal reputations play a role, and that role has increased.”

That is the description of what happens in the early stages of growth, too, as intermediary players pile into a new market. Publishers of key data and news fructify around the mass of investors in the market, whether for dotstocks or housing derivatives or, as I see here in Washington State with the nascent marijuana market. All the missed investments will be recaptured by the market aggregator that eventually triumphs. This is why the greatest wealth is almost always from a reorganization of the economy, not simply innovation. The Walton and Gates fortunes, for example, come from aggregating markets in the wake of early broad innovations, which are consolidated and made normal, in the sense the product becomes a commodity.

The chaos at the core of the market, where the most investment exists in the form of capital and labor working in close order, is also analogous to the hot center of a bee colony, where the queen and the genetic investment exist in a perpetual swarming, while the bee colony as a whole maintains an equilibrium. In markets, the rapid early growth will end, consolidation will occur, and prices will settle down to at or near their intrinsic value, so that the only action in the markets come as long options chains.

Shiller’s insight will be discovered to be richer by each generation for millennia to come.

What’s that widget?

You might have noticed the new widget in the right sidebar. It’s a new kind of game from Jambaz, a Luxembourg-based developer I’m helping out with early testing. The idea is simple: Take the wisdom of crowds and turn it into a game.

You see, crowds are not amorphous and homogeneous things, but collections of ideas and leaders. Breaking crowds down into groups that are more familiar with particular topics will yield better insight into business, political and social performance. I think this kind of prediction market competition, which is essentially what any market is, will be useful across a variety of dimensions of analysis.

In this case, you can compete with me by logging in and adding your own daily sentiment about the companies listed. At the end of the “game,” in two weeks, the results will be published and whomever is best at anticipating the performance of the stocks will be recognized.

This kind of mechanism, though simple, can be applied to long-term assessment of the prospects and performance of a company, its products and so forth, not to mention political candidates, policies and their effect on a target population.

I’m looking forward to seeing where Jambaz takes this.

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A better word than “feed”

Am at one of those meetings you’re not supposed to blog about. Question raised as a statement: If you can come up with a better word than “feed,” let me know….

Well, seems like we want a word that reflects the vitality of information. We want it to be resonant with “feed” because people get that idea of a subscribed data stream. I propose bleed, we ooze data all day long, like a slow-bleeding cut and we’re all acting like data vampires much of the time.

There’s a Rolling Stones tune, “Let It Bleed.” Works, given the setting.

Wondir full of answers

Wondir, a service that links people’s questions to answers provided by others, including domain experts, has launched a new version of itself and, so far, I like what I see. John Battelle covers the high points very well, so let me add a couple thoughts:

  • The service can be embedded into third-party pages as a crawler displaying recent questions being asked. This is a very clever approach to distributing access to intelligence. Allen Searls, who works at Wondir, has an crawler on his Wondering blog.
  • Unlike About.com, for example, which gathered experts under contract, Wondir may distribute compensation (initially they offer just good feelings and the pride of answering questions well) to all comers; I think that’s a vastly superior approach for experts, who can accrue revenue based on time they contribute once there is a clear economic model—it’s certainly far better than working for a company almost 10 years and then seeing it sold for almost a half-billion dollars without the guides getting a significant share of the liquid value created.

Check it out.

Art marries science and you get deep insight

Edge: THE MATHEMATICS OF LOVE: A Talk with John Gottman:

A scientific approach to the study of families and relationships makes a real difference. The reason for us getting all these significant effects changing up to 75 percent of couples, in a very short time period, is because all we’re doing is studying the people who cope well and how they’re different from the people who don’t cope well; in this case it’s about relationships. It’s not rocket science, it’s very simple science, like observing how stars and planets move. Primitive science. And with that knowledge, with good information, people just take it and use it and run with it. So it’s a matter of really changing what people know.

This is an interesting perspective, very like what we believe we’re beginning to suss out of data with Persuadio’s tools. What I particularly like about this is the statement that it is “very simple science,” which I believe is true of many of the discoveries we’re going to make about human systems as more and more data is collected and analyzed.