🌀🗞 The FLUX Review, Ep. 163

September 26th, 2024

Sep 27, 2024

“FCP-163” // Photo: MK with Midjourney

Episode 163 — September 26th, 2024 — Available at read.fluxcollective.org/p/163

Contributors to this issue: Erika Rice Scherpelz, Ben Mathes, Dimitri Glazkov, Neel Mehta, Boris Smus, MK

Additional insights from: Ade Oshineye, Justin Quimby, Alex Komoroske, Robinson Eaton, Spencer Pitman, Julka Almquist, Scott Schaffter, Lisie Lillianfeld, Samuel Arbesman, Dart Lindsley, Jon Lebensold, Melanie Kahl, Kamran Hakiman, Chris Butler, Wesley Beary

We’re a ragtag band of systems thinkers who have been dedicating our early mornings to finding new lenses to help you make sense of the complex world we live in. This newsletter is a collection of patterns we’ve noticed in recent weeks.

“Organizations are built on trust, and trust is built on communication and mutual understanding.”
— Peter Drucker

🔔💤 To wake, perchance to dream

Not every idea should be acted upon. When we test our dreams with our bodies, we call it sleepwalking. Chronic sleepwalkers risk serious injury because the body isn’t meant to act on fleeting thoughts. The same principle applies to innovation in large corporations.

Large companies risk sleepwalking when they test new ideas using established processes, technologies, or infrastructure. Their efficiency-driven systems are not equipped for the rapid experimentation innovation requires. Ignoring this gap and trying to innovate on a platform optimized for stability can lead to blindly walking into chaos and self-destruction. This isn’t just an operational limitation—it's a fundamental structural flaw. This is the realm of the innovator’s dilemma.

Where does this gap come from? In the grand tapestry of survival, nature has painted two distinct strategies: prolific r-selection, where life blooms in abundance with the hope that a few will endure, and prudent K-selection, where quality trumps quantity, nurturing a select few to thrive.

Humans, as K-selected beings, embody this selective approach. We move much of our risk-taking from the physical world into the mind, envisioning outcomes, seeing pitfalls, and refining strategies before acting.

Ideas in a large corporation are also K-selected. The established processes can only nurture a small number of ideas. However, as complex, multi-agent systems, large organizations don’t naturally excel at keeping rehearsals separate from reality.

Innovation requires inherently inefficient experimentation and is an r-selected strategy where failure is an inherent part of the process. Yet the vast infrastructure of large companies, designed for stability and efficiency, becomes a challenge when faced with the need for rapid experimentation. When corporations try to force innovation within their existing processes, this corporate sleepwalking leads to costly experiments weighed down by the pressure to succeed. It's a dangerous and inefficient way to approach innovation.

To escape this trap, large corporations need to wake up and embrace a different mindset when testing new concepts. As the innovator’s dilemma suggests, rather than trying to innovate within the boundaries of their core structure, they need to create separate, nimble environments—labs or beta initiatives—that operate independently. These spaces become the fertile soil where ideas can rapidly sprout, be tested, and—most importantly—wither away. These “r-selected substrates” provide the freedom and flexibility for experimentation, free from the constraints of K-selected corporate systems.

These experimental havens serve more than just innovation. They give companies the freedom to dream while keeping their core business stable and intact. Just as our minds serve as the proving grounds for our actions, these experimental spaces act as the crucible where ideas are forged and refined. These r-selected crucibles must remain isolated, operating independently from the “body” of the K-selected company. Only ideas that have survived the crucible of experimentation should get the deep nurturing of a stable environment.

We, as individuals, allow our ideas and dreams to experiment and perish in our minds so that we may endure. Large companies must do the same: keep ideas in r-selected spaces and avoid forcing them through the rigid body of the organization too early. Sleepwalking toward destruction is to be avoided—for both individuals and organizations alike.

🛣️🚩 Signposts

Clues that point to where our changing world might lead us.

🚏🏪 Cloudflare’s new marketplace will let websites charge AI bots for scraping them

The internet security company Cloudflare announced that it will launch a marketplace where website owners can sell the rights to scrape their site’s content to AI model creators. The feature is related to Cloudflare’s new “AI Audit” product, which lets website owners see who’s scraping their site and block or allow specific bots.

🚏🚛 Americans are moving from the South to the Rust Belt to escape climate change

Homeowners’ insurance rates have been skyrocketing in Florida as the state continues to suffer from flooding and hurricanes. As a result, many Floridians and Texans are decamping for out-of-the-way Midwestern states like Indiana, which are farther from the front lines of climate change. It’s part of a growing trend: in recent years, many Puerto Ricans fleeing hurricanes have headed to Buffalo, New York, and numerous Californians fearing wildfires have moved to the “climate-proof” town of Duluth, Minnesota.

🚏🎬 Amazon is launching an AI video generator for advertisements

Amazon’s ads division announced a new feature that lets sellers on the e-commerce platform create video ads with generative AI. “Using a single product image,” the tool will “[curate] custom AI-generated videos tailored to a product's distinct selling proposition and features” to “vividly bring a product story to life.” The tool will come at no extra cost to advertisers and create videos in just a few minutes.

🚏🇧🇹 Bhutan’s government holds over $800M in Bitcoin, almost a third of its GDP

Digital sleuths have revealed that the Bhutanese government holds $828 million in Bitcoin, which is a sizable amount for a country with under 800,000 people and a GDP of around $2.7 billion. While most countries’ Bitcoin hoards (including the USA’s) come from asset seizures, the small South Asian nation’s stash comes from a large Bitcoin mining operation that the government’s investment arm has spun up.

📖⏳ Worth your time

Some especially insightful pieces we’ve read, watched, and listened to recently.

AI, the God of the Gaps, and Our Quintessential Humanity (Samuel Arbesman) — Argues that, just like the “God of the Gaps” argument in theology (where God is everything that’s unexplained by science), our quintessential humanity is everything that only humans can do. As science explains more and more, religion wanes in importance, and AI starts passing the Turing test, what happens to our quintessential humanity?
Peer Review – A Historical Perspective (MIT Communications Lab) — Argues that peer review is not synonymous with the scientific method. In fact, it’s such a recent development that Watson and Crick sent a letter accompanying their double helix paper to the effect of “we and our colleagues at the Laboratory for Molecular Biology deem this appropriate for Nature,” and the journal editors simply complied.
Famed Polynesian Island Did Not Succumb to ‘Ecological Suicide,’ New Evidence Reveals (Science) — Uses archaeological evidence to counter the popular narrative that the indigenous people of Rapa Nui (Easter Island) deforested their island, leading it to become uninhabitable. While deforestation did happen, the island never had many people to begin with, and the locals adapted well to the deforested conditions before Europeans arrived.
Five Geek Social Fallacies (Michael Suileabhain-Wilson) — An evergreen collection of social patterns common in ‘nerdy’ social groups who, in an effort to distance themselves from the traumatic experiences of junior high popularity games, develop recognizable pathologies such as excessive tolerance of antisocial traits, enforced cliquishness, and a pollyannaish approach to social dynamics.

🔍🧱 Lens of the week

Introducing new ways to see the world and new tools to add to your mental arsenal.

This week’s lens: conceptual integrity.

Large products are built by multiple teams, sometimes spanning several organizations. Different features, UI flows, platforms, and backends may each be owned by separate teams with limited communication bandwidth. As Conway’s law suggests, this division can lead to fragmented products with inconsistent features and disjointed functionality without a unifying framework. Maintaining a unified vision is essential to ensure a coherent user experience.

Conceptual integrity, a term coined by Fred Brooks in The Mythical Man-Month, highlights the importance of coherence. Initially applied to software architecture, the idea is relevant across many domains: organizational design, product ecosystems, or any other scenario where different components benefit from a coordinated vision. Conceptual integrity ensures that different parts align with a shared vision and core principles. But what is conceptual integrity? How do you prevent it from being a vague “I’ll know it when I see it” concept?

At its core, conceptual integrity requires building a system around a unified purpose. Decisions and designs follow the same guiding principles. While Brooks initially positioned this as the job of a single architect, modern systems achieve it through collective effort. Shared frameworks, open communication, and strong alignment across teams allow for decentralized ownership without compromising unity.

Consistency and simplicity are also critical. When every part adheres to clear, shared rules, the whole becomes easier to understand, maintain, and evolve. Brooks emphasized reducing complexity to make systems user-friendly—a principle that still holds. Teams should have enough autonomy to innovate but operate within a framework that maintains overall coherence. These shared rules also allow for adaptability. Systems require flexibility, but this should not come at the cost of alignment. Teams can iterate and evolve components as long as they adhere to the shared principles, ensuring the system remains coherent even as it adapts to new challenges.

To work towards conceptual integrity, apply these principles, which are easy in theory but hard in practice. Start by creating shared guiding principles and frameworks that everyone follows. Foster consistent communication across teams. Leave room for flexibility and adaptation, but ensure it is reflected back into the shared guidelines. Together, these principles create adaptable, resilient, and coherent systems, no matter how complex the challenges ahead.

🌀🗞 The FLUX Review