Why your decisions may not be as rational as you believe

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If you believe your decisions are rational, you’re probably not listening to reason. Hidden biases and faulty thinking unbalance the decision-making process without us being aware of their influence.

Who shot JFK? Was it Lee Harvey Oswald, alone in the Texas School Book Depository? Was it the Cubans? The Soviets? The CIA? Or could it have been Lyndon Johnson, who succeeded JFK and therefore had the most to gain? Since Kennedy’s assassination in 1963 a small industry has grown up dedicated to unravelling the circumstances of his death. According to ABC, in the last 50 years more than 2,000 books have been written on the subject. Each amasses an argument and presents the evidence to support its case. Or, more accurately, each begins with a conclusion and then seeks the evidence to support it.

We are Pleased to Confirm

This is an example of confirmation bias and it illustrates a startling flaw in our reasoning. A large proportion of our decisions are based not on a clear reading of the facts, but in hidden biases and dodgy reasoning. And if you think that only applies to our private decisions, think again. Decision-making in business can be just as irrational, and is subject to a whole range of factors that distort our better judgement.

In his book Thinking Fast And Slow, the Nobel Prize-winning behavioural psychologist Professor Daniel Kahneman notes that we have two modes of thought. One is logical, analytical and unhurried, and we’re aware of its gears grinding away whenever we approach a complex problem. The other is fast, intuitive and hidden from us. Bad decisions and the biases that drive them are a result of us thinking fast when we need to think slow.

[Read more…]

What makes a disruptive technology?

This article was first seen on – http://betanews.com/2014/08/12/what-makes-a-disruptive-technology/ 

black swan

According to Clayton M Christensen, author of The Innovator’s Dilemma, disruptive innovations are characterized by their ability to create entirely new markets rather than merely update existing markets with new products. They are black swans, rare events where new thinking and changing markets combine to create radical change.

A common example is the light bulb and Pearl Street Station — a major gamble by Thomas Edison. Within years of its development the kerosene lighting industry was all but non-existent, and the world was a brighter place. (The kerosene industry had similarly put an end to the whaling industry — thankfully — a few decades earlier).

Disruptive innovations also tend to involve making things simpler and cheaper than the alternatives, with unexpected results on multiple sectors. The motor car in the late 1800s was too expensive to be disruptive, but Henry Ford’s innovations in the 20th century made it cheap enough to replace the horse drawn carriage (and suddenly there were no more street dung collectors providing manure for farmer’s crops…)

My company, VisualDNA, sits at the intersection of (at least) four disruptive innovations that have arisen over the last five years and that are already making their impact on global society.

I believe that as these four innovations continue to evolve over the second half of this decade, they will create the perfect conditions for VisualDNA’s unique approach to understanding people to create disruptive change on a global scale, across all industry sectors.

1. Big data

Five years ago this term almost didn’t exist but it is now one of the fastest growing ‘most searched for’ terms on the internet (according to Google Data Trends). Analysts Wikibon predict this new sector will grow from almost nothing in 2010 to $50bn dollars by 2017. A report by PAC predicts big data will impact on every aspect of the global economy during the same period.

PAC also found that the fastest growing area of all will be in services to understand big data. Most big data is historical and transactional. Understanding personality, psychology and motivation are the missing ingredients that will enable deep understanding of intent and truly predictive analytics.

VisualDNA’s unique ability to engage users and turn their personality into digital form will be at the forefront of providing this vital information to power conventional big data.

2. Psychology

Psychology is undergoing a number of dramatic changes as new technology allows us to understand how the brain and personality are linked. Neuroimaging allows us to visually track the workings of the brain and identify how different responses and our emotions work at a chemical and neuron-level. Daniel Kahneman’s work on decision-making and behavioral economics is just starting to make itself felt in the mainstream and will become increasingly influential as real-time big data allows us to understand and model human responses at a macro level. Computer scientists are developing ever more sophisticated simulations and models of the brain allowing experiments and analysis to be performed, changing the way we see the brain and raising the possibility of truly understanding ‘what makes us tick’.

As this understanding develops, it will have a major impact on our understanding of people and how they behave. VisualDNA is already leading the way in understanding how individuals behave online, and through our partnerships and research we will continue to be at the forefront of these developments. [Read more…]

The Language of Feelings

In this inspiring talk, Alex the CEO and founder of VisualDNA, shows how today’s internet is powered by naivety.  People don’t understand the value of what they give away for free, i.e. their data.   Alex paints a picture of the foreseeable future where the ‘Internet of Feelings’ transforms our interactions between each other and suggests that from it all will develop a far better connectivity and understanding between people, and a better value exchange between services and their users.

Alex Willcock was recently described by The Guardian newspaper as ‘an Internet visionary’ for his leadership of VisualDNA, one of ‘Five British Tech Companies to Watch’. Alex and his team of 150 people based in London, have pioneered a movement to combine big data and psychology to deliver better understanding across the digital ecosystem including unlocking credit to tens of millions of people.

“Not everyone has a credit score, but everyone has a personality type”

unnamedBig data lends new Zest to banks’ credit judgments

By Patrick Jenkins

 

 

When Douglas Merrill left Google, he made the kind of move into financial services that many believe the tech giant itself may one day make.

Mr Merrill, the internet group’s former chief information officer founded Zest Finance to develop a simple theory: that consumers’ online behaviour can be a decent proxy for their reliability in managing money. “All data is credit data,” he once told the New York Times. “We just don’t know how to use it yet.”

Zest is one of a fast-growing coterie of financial technology companies – “fintech”, to use the jargon – that are aiming to revolutionise the way banks and other financial services companies operate.

Talk of fintech investment is all the rage these days, as banks try desperately to focus attention on a positive forward-looking agenda, and draw a line under the legacy woes. This is partly spin, of course. But investment in technology is also genuinely needed after seven years of crisis and post-crisis regulatory reform that distracted focus – and funding – away from the pipes and cables that make everything work. Who knows? Done right, it could even help prevent some of the scandals of the past. And, as with so much in the mass market internet world, it can claim to be an agent of democratisation.

Zest and companies like it claim that many people who have traditionally been denied credit – either because they lack a record of previous borrowing, or because that record is bad – will be validated by their broader approach to credit scoring. By using “big data” records sourced from individuals’ social network and internet footprints, typical credit scores can end up 40 per cent higher, Zest says. [Read more…]

eTail Europe 2014 – will you be there?

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This year we are sending our very own Edward Weatherall over to the Queen Elizabeth II Conference Centre in London to attend eTail Europe. Are you attending?

eTail Europe is a conference focusing on customers, multi-platform understanding and supporting retail industry growth.

Ed will pose and discuss a variety of significantly telling questions throughout the session, including; Why do we call people who walk into stores ‘customers’ and people who shop online ‘users?’ The session will also focus on how VisualDNA is leveraging 30 years of combined Psychology, customer behaviour and big data to change the perceptions that retailers have of their online customers – moving away from clicks, visits and basket values to personality traits and behaviours.

[Read more…]

Did you attend Psych London 2014? VisualDNA did!

Ed-at-Chinwag

Last week, we took part in the annual Psych London event hosted by Chinwag. Chinwag Psych is a full day conference covering psychology, neuroscience and behavioural economics. Its mission is to examine the rapidly changing disciplines and explore how they can be applied to business. From practical psychology-based case studies to cutting edge neuroscience, the day-long event was filled with thought-provoking presentations, panel sessions, informed Q & A sessions, plus plenty of time for networking.

This year, the structure of the day was determined by four key words: persuade, analyse, optimise and anticipate. Throughout the day, engaging speakers addressed questions such as ‘How can you be more persuasive?’; ‘When you’re designing a user’s experience, how do you know what’s working?’; ‘How can you optimise your current approach to get the results you want?’; and ‘What’s next?’ [Read more…]

VisualDNA in the news – Ed Weatherall in Retail Week

“Laura Heywood’s loyalty card feature highlighted the challenge of analysing multiple data sources for a single view of the customer: little wonder CMOs increasingly resemble CIOs these days.

For CMOs to have a chance of implementing their data insights these sources need to be brought together. By integrating our clients’ offline purchasing data with online behavioural data and self-declared psychographic data, we generate insights that can’t be found in any single data source.

With predictive analytics now making data more accessible and actionable for CMOs, big data will play an even bigger role in the battle to win and retain customers, so being able to actually use these data sources for marketing is key.”

Ed Weatherall, Director Business Development, VisualDNA

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Merry Christmas from VisualDNA!

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VisualDNA in the news – Ian Woolley, DataIQ magazine

Ian Woolley, CCO VisualDNA, interviewed in the latest quarterly DataIQ magazine:

“We think the market will move forward with brand preference and emotive data”

Full digital edition here (requires registration)

View PDF: VisualDNA-DataIq-2013

VisualDNA in the news – Ed Weatherall at Figaro Digital

VisualDNA Business Development Director Ed Weatherall spoke at Figaro Digital”s Digital Marketing conference last week.

In a wide-ranging session “The Intent Economy – Revealing the Invisible Truth About Your Customers”, together with Call Credit”s Paul Kennedy, Ed outlined how offline financial data can combine with online psychographic data to help casino marketers go deeper than demographics to develop a more complete “single view” of their customers.

Watch video.

See also: “Boys wear make-up and girls go to the pub on their own. It”s now much more about the tribes people belong to – their personalities and aspirations. It”s belief systems that actually hold people together.”

Full Ed Weatherall interview on the Figaro Digital website  – Editorial Article: Up Close and Personalised