This week’s podcast is with Sam Seddon, who is IBM’s sports lead, so unsurprisingly, we talked a lot about technology, how we got to here and where it’s taking us. (GET THE PODCAST HERE)
Tasking about tech is often really just a proxy for a conversation about our personal relationship with the future. I can’t get enough of this stuff because it’s not about data or hardware but about psychology, and that means it’s about me. (Unofficial Rule: People who say, ‘it’s not about me’ are lying through their teeth). Some of the best writing on the psychology of the future comes not from the tech sector but the financial world, from people such as Charlie Munger or Howard Marks - the investor not the drug mule who wrote Mr Nice.
The first quote is Marks on the herd mentality, which is as clearly apparent in the sports business as any other sector:
‘The psychology of the investing herd moves in a regular, pendulum-like pattern—from optimism to pessimism; from credulousness to skepticism; from fear of missing opportunity to fear of losing money; and thus from eagerness to buy to urgency to sell. The swing of the pendulum causes the herd to buy at high prices and sell at low prices. Thus, being part of the herd is a formula for disaster, whereas contrarianism at the extremes will help to avert losses and lead eventually to success.’
And then this one, where Marks talks of the need to think in bets, aka probabilities.
"Successful gamblers—and successful forecasters of any kind—do not think of the future in terms of no-lose bets, unimpeachable theories, and infinitely precise measurements. These are the illusions of the sucker, the sirens of his overconfidence. Successful gamblers, instead, think of the future as speckles of probability, flickering upward and downward like a stock market ticker to every new jolt of information. When their estimates of these probabilities diverge by a sufficient margin from the odds on offer, they may place a bet”.
One of the themes of Marks’ work is to the simple sounding mantra of realistic expectations. Again, you only need spend a few minutes at a sports tech conference to get that South Sea bubble feeling. And as Marks notes:
‘The most dangerous investment conditions generally stem from psychology that’s too positive.’
The problem with much of the conversation around sport and tech is that it’s often framed in the boring binaries of art v science or instinct and creativity versus facts and reason. Data analytics is a fantastic tool, but nobody should make the mistake that it replaces the need for human decision making.
This is a neat summary from my favourite book on prediction, Nate Silver’s The Signal and the Noise.
“Data-driven predictions can succeed—and they can fail. It is when we deny our role in the process that the odds of failure rise. Before we demand more of our data, we need to demand more of ourselves.”