Cobra Effect · People and organisations
Amara’s law
We overrate new technology in the short run and underrate it in the long.
7 cards, read aloud in 2:18, with a test and sources.
1999. Everyone agrees the internet will change everything by Tuesday.
Companies with no earnings are worth billions. A firm selling pet food by post advertises with a sock puppet and is gone inside two years. By 2001 most of that money has evaporated.
Then 2019 arrives, and it did change everything.
Shops, maps, money, friendships, the news, the job you do. It just took twenty years instead of two. Both crowds were wrong, in opposite directions.
Roy Amara had already named the shape of it.
Amara was an American researcher who led the Institute for the Future. We tend to overestimate the effect of a technology in the short run, he said, and underestimate the effect in the long run. Two mistakes, from the same mouth, about the same thing.
Why the short run fools us.
A demonstration is quick. Rebuilding everything around it is not. Electricity took decades to pay off in factories, because the factories had to be laid out again to use it properly. The invention arrives long before the habits, the rules and the plumbing.
Why the long run fools us too.
We picture the new thing dropped into the world exactly as it is today. But the world rearranges itself to suit it, and those knock on changes are the enormous ones. The motor car was sold as a faster horse. It rebuilt the shape of cities.
It cuts both ways, and both ways cost money.
Bet on the short run and you buy at the top of the noise. Dismiss the long run and you are the one on record calling it a toy. The excitement was real and the change was real. They just ran on different clocks.
A rule of thumb for the next great thing.
Ask what would have to be rebuilt around it before the promise could come true. Count how many years that rebuilding takes. Then be patient in public and sceptical with your money.
Sources
- Roy Amara, Wikipedia. The researcher who led the Institute for the Future and left behind one sentence about the short run and the long run.
- The Rise and Fall of American Growth, Robert J. Gordon, 2016. A long account of how slowly electricity and the engine actually paid off, and what that suggests about the technologies being sold today.
- Gartner hype cycle, Wikipedia. The same idea drawn as a curve, with a peak of excitement and a trough after it. Useful, and treat the curve itself as a sketch rather than a measurement.
Nearby ideas
- The planning fallacy. Why projects nearly always take longer than we plan.
- Hofstadter’s law. It always takes longer than you expect, even when you allow for that.
- The Lindy effect. The longer an idea has lasted, the longer it is likely to last.
- Tuckman’s stages. Why new teams have to fight before they can work well.
- The Robbers Cave experiment. Rival groups make peace when they need each other, not when they mix.
- The ninety-ninety rule. The last tenth of a project takes as long as the first nine.
- Span of control. Why a manager can only really lead a handful of people.
- Broken windows theory. Visible neglect invites more of it, though the crime claims are contested.