Dr. Milgram proceeded to attach two electrodes to the John’s chest, turned the dial on the little box to “50V” and pushed a red button on the box. He felt an immediate, slightly painful, shock. Dr. Milgram then called in another young man who would be the student. John’s job was to teach this student every pair of words on this list. He would read one out, then the student would respond. If the student did not respond correctly, he would turn the dial up by 50V and press the red button. If the student did respond correctly, he would continue on to the next word in the list. The student then walked into the other room where he could be heard but not seen.

John felt a bit apprehensive about this whole situation but Dr. Milgram reassured him that this was safe. So he began with the first word on the list. The student from the next room answered incorrectly. John pressed the red button and the student made a sound that was barely audible. He turned the dial up 50V and proceeded to the next word on the list. The student again responded incorrectly so he pressed pressed the red button again. This time the student could clearly be heard from the next room. John pressed on. Turn up 50V and ask another word. This time the student got it right, John was relieved but that soon faded as the student from the next room cried out in pain from his incorrect answer.

At this point John knew something was wrong. He asked Dr. Milgram if we should check on the student, but Dr. Milgram assured him that the student was fine and said that: “The experiment requires that you continue.” John kept listing words and kept turning up the dials. Next 200V, then 250V. Dr. Milgram insisted that the experiment go on. “It is absolutely essential that you continue,” he said. 300V, 350V. “You have no other choice, you must go on,” pressed the doctor. Finally, he got to the last word which was incorrectly answered and 450V was applied. The student in the other room cried out in agony and quietly wept afterwards. Dr. Milgram thanked him for his time and showed him the way out.

For years after that incident John would be able to hear the cries of pain coming from that poor student. What had he done? How could he have inflicted so much pain on another person? Why did he listen to Dr. Milgram? Why did he do those terrible things?  Those were questions that alluded him for the rest of his days. ^[2]

1. [1] Although the story is fictional, this experiment was actually performed to see the effect that authority can have on an individual. Of course in the actual experiments, the subject (John) was told afterwards that the “student” was not actually being shocked but just pretending to be shocked.
2. [2] This story is a great example of authority and how it can influence us. I was originally going to write about how it’s dangerous to blindly follow heroes but then I started writing the above and it turned out pretty well. My original idea was that since I highly respect Warren Buffett, it’s important not to blindly follow whatever he says. The important point is to think. Always. One great way to get around that is to find opposing opinions by intelligent folks on whatever subject you might get blinded by and I was going to refer to a recent post by Professor Damodarn titled “The Buffett Plan: An apt name for a sanctimonious, hypocritical and superficial proposal.” I still might write something on this so look out.

Now’s what hard to imagine about this scenario is how the lemmings can possibly think to do this.  Sure, the first lemming might justifiably have to run off the cliff because he’s got no place to go — either get trampled by the crowd, or take your chances going off the cliff.  The next guy in line doesn’t fare any better because he’s got to follow the first one off the cliff, or else be trampled by the group.  The i^th rodent doesn’t know any better because he’s just sees everyone in front of him running and everyone behind him running, so what else is a rodent to do?  Now here’s the interesting part: what’s the last rodent thinking?  As he approaches the cliff he sees that everyone is jumping to their watery grave.  So he has two choices: join the charge to his furry demise, or stop and think about what comes next.  Guess what happens? ^[2]

That last rodent is infected with a particularly viral meme: the “they must know something that I don’t” meme.  They must know something I don’t know.  They can’t all be wrong.  They can do all your thinking for you?  There are countless papers, books and evidence of this social proof phenomenon happening not just in our furry little friends the lemmings, but in every imaginable human society that ever existed.

Looks like everybody on Facebook, Google+, Twitter, Tumblr and every other social networking site is getting ready to jump off a cliff.  What are you waiting for?

1. [1] Actually, this is a myth.  Click the Wikipedia link above to understand where it comes from.
2. [2] I got this story from a MBA Valuation lecture by Professor Damodaran where he was talking about markets and perception.

“Passion is your greatest love.  Passion is the thing that will help you create the highest expression of your talent.  Passion; interest; it’s not the same thing!  Are you really going to go to your sweetie and say: ‘Marry me!  You’re interesting!’?”
Larry Smith, TedxUW

If you have never heard Larry Smith speak, then I suggest you click on the link above immediately.  He has a way with words that seems to stir up that animal spirit inside of all of us.  It’s a pleasure to watch his performance both because of the content and his mastery of oral communication.  As Charlie Munger famously says: “I have nothing more to add.”

“Grind: Verb — Grind out; to play tightly and win consistently; playing in a manner that minimizes variance.”
Definition from pokerzone.com.

Romance sells.  Whether it be the boy wonder who makes millions playing poker, or the fearless founder who makes a billion dollar company from nothing.  The romance, the allure, the dream of making it big from the drab boring existence of the average sells.  And why shouldn’t it?  Everybody wants to be rich; everybody wants to be famous; everybody wants to believe that they are part of the select few that can achieve what has alluded millions before them.  And perhaps some of them can, but unfortunately most of them won’t.  And it’s not because they haven’t read all the books, haven’t listened to all the experts, or haven’t had the innate talent that is needed, but rather they won’t make it because they don’t know how to grind.

Grind doesn’t sell.  Grinding is boring.  Grinding isn’t fun.  Nobody dreams of grinding their way to the top — which is exactly why you rarely hear about it in best sellers.  Only those who have been through the grind really understand what it takes to get to the top; they also understand why so many fail.  There’s one kind of grind I’m familiar with and it deals with research (poker really isn’t my thing).  Sometimes I’m in awe of the breakthrough idea of other researchers that generates a 10x speed-up, or a 5x memory reduction, but what’s hidden from my view is the magic that made it happen.  After being in graduate school for a while, I think I’m starting to get it.  It works like this (for my sub-field):

1. Get/refine idea.
2. Write code.
3. Run some experiments.
4. See how it fails miserably (and hopefully learn something from it).
5. Rinse and repeat.

That’s it.  (Occasionally, I get a massive performance increase but usually that only happens when there’s a bug in my code.)  What I usually end up with is something totally different than my original idea (or at least perversely mutated).  And because of this, the performance usually improves.  Of course this is all hidden when someone just seems that I have a top publication on my CV.  What people miss is the excessive number of iterations I go through to figure out a good solution to the problem.  What they miss is the grind.

It’s surprising how much you can learn from poker.  Unfortunately, most endeavors don’t have such clear cut rules.  But a good lesson we can learn is that no matter what mountain you decide to climb, grinding is the best way to get to the top.

Reading, of course, is one of the most important ways to acquire knowledge but that comes with its own problems.  Figuring out what to read, how to get answers when the text is not sufficient and a general methodology for self-study by reading is definitely not straight-forward or easy.  It you have this figured out, you probably are well ahead of the curve.  However, for those of us still developing that methodology, the interweb (unlike in many cases) provides the solution: Khan Academy.

The site started by former hedge fund analyst with degrees from MIT and Harvard Business School, Sal Khan, makes short online videos teaching the fundamentals in a wide variety of subjects (e.g. mathematics, finance, biology, computer science, physics, current events…) — just the type of place for one to start acquiring worldly wisdom.  I’ve been using it for the past half year or so (32k energy points!) and I’m really enjoying it.  I’ve been particularly interested in the finance related aspects as my two courses economics really didn’t explain everything I wanted to know about fractional reserve banking or collateral debt obligations.

The beauty of the site is that Sal explains everything in simple terms, removing all the unnecessary fluff that usually gets attached when learning things formally in school.  He presents things in a more practical manner to give good intuition on the subject rather than drone on through formalities — and, trust me, I know a thing or two about unnecessary formalities (e.g. research papers).  His teaching style matches up with exactly how I believe most subjects (especially introductory courses) should be taught — focusing on understanding concepts, rather than focusing on all the little details.  It’s exactly the kind of place I would like to start when learning a new subject area.  What it is not, however, is a substitute for in-depth study.  To achieve a more useful level of knowledge, it takes much more than watching a few videos.  Actually doing some work, is usually a good starting place but that’s another subject entirely…

Learning just got a whole lot easier because of one man, his tablet and the interweb.  I’m incredibly skeptical of the yet unfulfilled revolution to education that technology promises to bring, but Khan Academy is definitely starting to turn the tide.

“No doubt the first requirement for becoming strong at go is to like it, like it more than food or drink, and a second requirement is the desire to learn.  A third requirement is to study it, using proper methods, patiently, little by little, without cramming… Rome was not built in a day.  It may not take years of devoted study to the exclusion of all else, but it does take effort piled upon effort to become strong at go.  The only ones who fall by the wayside are those, be they gifted or otherwise, who forget the word ‘effort’.” (emphasis mine)
Kageyama, Lessons in the Fundamentals of Go

Replace “Go” with any other skill and you have a fundamental law of “getting strong at things”.  It’s funny how technology tricks us into thinking that we can learn things faster — all of a sudden.  It gives us a sense that facts somehow are the same as knowledge, or that an almost endless encyclopedia is a replacement for an discerning mind, or more importantly that effort is no longer a requirement for getting strong.  Not everything is instant, not everything is digital, and not everything is easy.  Just the way I like it.

“I compare the process to becoming a vampire, your old self dies in a sad and painful way, but then you come out the other side with immortality, super strength and a taste for human blood.”
Jonathan Coulton, quoted in a blog post on Coding Horror

This is the coolest quotes on parenthood I’ve heard.  It’s hard to imagine what it’s like becoming a vampire, just as I’m sure it’s hard to imagine what it’s like to become a parent (not that Hollywood hasn’t tried to make either into a movie).  I guess it’s one of those experiences that is just so hard to describe until you’ve experienced it, like falling in love or having a close brush with death (again both topics romanticized by Hollywood).  Like turning into a vampire, parenthood probably isn’t one of those things that you should take lightly.  Even though it’s hard for us non-parent youngsters to understand, it’s nice to know that there still exist some things in life we can look forward to (and deeply dread).

1. Failure #1: Exclusivity
2. Failure #2: Grades
3. Failure #3: Lectures

Much of the discussion was talking about how Udacity might correct some of these failures and usurp the traditional forms of higher education.  I respectfully disagree — at least not according to the arguments stated.  One key aspect is missing from this model that the current model of higher education does really well: playing to incentives of the stakeholders.  Let me address the three points individually.

Grades
The biggest presupposition they make with any of these new models for higher education is that most students want to go to school to learn.  This is a commendable idealism but couldn’t be further from the truth.  I strongly suspect that the main motivation of students is to get a good job (high paying, growth opportunities, good location etc.).  If this is the incentive, then we should consider what is in the best interest of companies looking to hire graduates of these institutions.  Ideally, they want to hire the best candidate with a high degree of confidence.  Obviously this is not a simple task.  This requires evaluating each candidate for using strict hiring guidelines and processes.  This just doesn’t scale well when a single job may have hundreds of applicants.  Practically, employers need some easy measure to filter out candidates.  Yes, they might miss the diamond in the rough, but they save that time in hours and hours of filtering out poor candidates.  Enter grades.  Reducing your entire education to a single number or letter average may seem disheartening to the poor student who has toiled to achieve a respectable degree, but it’s dead easy to filter out people.  Below B+, out.  A+, interview immediately.  Everyone else in between, look at their resumes.  Like it or not, the purpose of grades is exactly to reduce your talent, ingenuity and performance to a single number so that you can be binned.  It’s obviously not accurate, nor precise, not to mention rife with abuse, but it’s the trade-off for how easy it is to use.

Exclusivity
Like any fashion retailer knows, your brand is one of the most important assets when you are trying to sell a high end product.  The same goes for a person, a company or a school.  If you brand gets diluted, its value (deserved or not) goes down.  This is precisely why many schools are exclusive.  If MIT suddenly accepted ten times the amount of engineering students, how would the quality of their out-going students fare?  My bet is that the average performance would greatly decrease.  This causes a huge negative effect on the brand that, in the end, does the school, alumni and graduating students a disservice.  It’s like if we produced ten times the amount of diamonds, that 1 karat ring that you got your wife all of a sudden doesn’t mean the same thing (although it’s great for people looking to pick up a diamond).  Brand — and maintaining it — is an important factor that drives the incentives of everyone already affiliated with the university.  This means that for the most part, all these existing parties will want exclusivity over a diluted brand.

Lectures
As for the final failure of universities, I think the original article is spot on.  Lectures are a very limited way to convey information, but it’s still not clear if there is a scalable model(s) that works as well.  Giving an iPad to all students definitely is not the solution.  Some universities are already providing video taped lectures for students to view online but this is not the end all or be all of learning.  Most likely different types of material work best when taught in different ways.  I believe that this is an evolution that will (albeit slowly) incorporate newer technologies.  Lectures are mostly just an older model that scales well and does a decent job.  Newer methods are welcome and hopefully we can see some great innovation here.

Incentives, incentives, incentives…
Charlie Munger is one of my heroes, in part, because he has some much wisdom without any of the BS.  He’s a huge advocate of incentives and you should be too.  Most people talk about what should happen instead of what will happen.  It’s unfortunate that we don’t live in an ideal world, but that’s the reality.  The only way to make things change for the better is if we make policies, models, and rules that play off the natural human instinct to be swayed by incentives.  Of course, I haven’t talked about any solutions, I’m not sure I have any.  I’m just reminding you that regardless of whatever innovations, ideas, or ideology you have, none of it is going to have any relevance without somehow working incentives into the picture.

“However there are lots of ways round this little problem. One of them is doctoring the marks.  Except its not called ‘doctoring’ its called ‘scaling’ and its done by computer. You scale the marks until you get the nice binomial distribution of fails and firsts. You can turn a fail into a II(ii) with scaling. Probably you want to be generous because otherwise students might not elect to study your course next year and then your course will be shut down and you’ll be teaching Word for Windows. Scaling was universal and nobody except the external auditors (who were lecturers who did the same thing themselves) got to see anything but the scaled marks.”

One way to look at it is to view the system abstractly as an optimization problem.  If you have 10,000 undergraduate students per year trying to optimize their marks, all of which are funding (at least in part) the pay of the university and the professor in question, which goal is going to be optimized first?  One professor who wishes to maintain the high quality of standard, or the 10,000 (per year) undergraduates all trying to maximize marks while minimizing work?  Gone are the days when I think of university as a place solely for higher learning.  (Though it’s important not to draw broad strokes on the few who still are fighting the good fight.)

Knowing this, it’s almost crazy to think that one person can change such entrenched institutions as universities.  But perhaps that’s exactly what we need more of — crazy people:

“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.”
Think Different, narrated by Steve Jobs

So go on, get your crazy on today.

“Happy families are all alike; every unhappy family is unhappy in its own way.”
from Anna Karenina by Leo Tolstoy

This quote is  reminder that there is exactly one way to have a happy family — have everything go right.  On the hand, there are millions of ways in which a family can go wrong: attraction, personality, money, religion, and the list goes on.  I think this also applies more generally to what’s termed the Lollapalooza Effect where things conspire together to reach that critical mass where amazing things start happening.  Leave just one ingredient out and the magic doesn’t happen.  The corollary to this is that even if one thing is missing, there’s no rule that says you can’t fill in that gap yourself.  No one has everything going right from the start — they make it happen.

Happy families may be rare, but they don’t have to be.