hi I have a confession to make
I am absolutely obsessed with
measurement I I just spent my life
trying to measure everything in fact one
of the happiest thing that I got this
week is that I got a new operating
system that can measure things so I
cannot be more exciting however I know
how you fail you must say well
measurement probably is the most boring
topic in the history of humankind and
and you know my wife tells me that
but I am obsessed with measurement
because I think we are lousy at it we
just for example don’t measure the
quality of our relationship we only
count when they break up when they have
a divorce we don’t measure the degree of
sadness
we mostly diagnose depressions
we don’t measure how we are polluting a
particular Lake we tend to wait until is
lost we don’t measure when a society is
upset we wait until they riot we don’t
measure for example human rights
violations we wait until you have
massive Exodus which is what is
happening to my country in Venezuela
right now we measure very very badly and
to me the fact that we have made some
good decisions in the past is mostly the
outcome of Locke but not of wisdom so
let me tell you – what are the type of
mistakes that I see happening repeatedly
first we tend to measure very
infrequently for example I go to the
doctor every year like most of you
probably go to the doctor and to be
honest it’s a horrible experience my
daughter she has been telling me for 21
years every single time she says Roberto
you are losing your hair yeah I thank
you I know you are one year older you
are fatter I mean I don’t understand how
telling someone that you are older all
clear and father will motivate me to eat
more my veggies I mean the sides
Oh chance we measure very infrequently
and we measure outcomes and that mostly
produce regrets is very difficult to act
when you only measure regret the second
problem that we have is that
unfortunately we tend to also measure
very extreme behavior
so not only late but very extreme
behavior so for example we don’t compute
the amount of consumption of drugs of a
particular city we don’t what we do is
we count how many kids enter the
emergency room with an overdose and now
they are related but they are not the
same we are trying to make an assessment
about the behavior of the average
citizen by looking at the extreme
consumers very unlikely they behave the
same very unlikely they respond to the
same messages the third mistake that we
tend to make is that we are almost
always dependent off of our perception
about a particular event to be able to
measure it
let me give you an example this is a
little harder but if you think about it
in 2013 almost every week in the news we
hear about a number of lives that were
lost of people escaping from Cydia and
it was almost like a comedown every
single week about what was happening
that horrible tragedy have you heard
about any person dying in the last six
months oh there are only three options
either we have no more human rights
violations in Syria they are holding
hands and singing Kumbaya my lord
kumbaya
yay either one all the boats don’t sink
or we are not paying attention because
we are not outraged anymore very
difficult to solve some of the deepest
problems of society if you require to be
outraged and surprised every single day
to be able to act the last one is that
we tend to concentrate on statistics
that even though they might be related
they’re truly not that meaningful
for example you know I ask the people’s
here from from registration how many
women they thought was today in the in
the crowd and they told me that you know
about 50% it’ll be less than 50% so
congratulations 47% that’s way better
than loser New York that has like 35 you
know so I know what to tell you but you
know you know if I I have companies that
come and tell me Roberto I increase the
number of women in senior positions
between 25 and 35 and you know my
reaction is well good for you that’s
great you are moving the needle in the
in the proper direction but then I
immediately ask do you treat them better
do you pay attention to them have you
created an environment where they can
flourish
or you just have in there like
collection items the second one is very
likely to solve the problems of
discrimination very likely and what is
worse about that is statistic is that it
gives a false sense of accomplishment I
got the women 245 genius you you afford
it a loser I’m sorry no chance that is
enough that doesn’t mean we don’t have
to increase the percentage of women in
corporate America we need to but if we
stop there we will not solve the deepest
problems which is the hostile
environment where they have to live
every single day we measure late only
extreme events we use the statistics are
incorrect and we use mostly perception
and only when we are upset is when we
pay attention we need to change this
dramatically this is a first issue for
the world let me talk about innovation
innovation is after all an economic
decision this is more or less what we
have been discussing today and
innovation is one of the areas which is
very difficult to improve the
measurement so I’m what I’m going to do
is to try to offer you an alternative
about how to think
but let me start first thinking about
innovation as this economic incentive
economic decision that is subject to
incentives and is subject to the way we
measure success and in fact we have had
many people today to talk about the
world success
you see truly what they mean is
commercial success a lot of times what
we do and one of the mistakes in
innovation is that we tend to associate
private benefits with social benefits
they’re not necessarily the same there
are many ideas that are very good for
the private sector and the way we do
that is we have an idea we embody that
idea and a product we actually
commercialize the product and we make
profits that requires a certain amount
of decisions and and capabilities to be
successful and you can make a mistake on
any part of the process and you will
fail but there are some ideas that just
cannot be embodied in a product we just
can’t can you imagine
poor Isaac Newton today invents a fear
of gravity well what do we tend to do
well you know when you are an inventor
the first thing that you do you tweet
now said guys I just invented the theory
of gravity super cool and then you know
somebody says you are a loser what are
you going to do with that bouncing balls
and you know when you pick up you know
when somebody installs you in Twitter
what you have to do we have learned you
have to reply you are a bastard
ungrateful I’m going to go to a venture
capital is to give me the money and I
will do something that crushes you with
the theory of gravity and the guy says
and then a VC says I am drunk right now
and I still think that your idea is
stupid you guys I’m going to create a
cryptocurrency called the graphic coin
the world and then LeBron James says the
theory of gravity is a hoax because in
the court I gravitate and levitate from
one place to the other loser two million
three tweets the fear gravity’s dead
poor I mean poor ice under it doesn’t
even dare to think about the theory of
relativity that one you cannot even
so not everything is for sale and some
of the greatest idea of that we need to
invent me to solve problems that we have
social benefits but not necessarily
private benefit unfortunately we need
this ideas desperately and for that you
need a different type of approach in
approach of of courage approach of their
daring the odds you need to actually
have faith that you will succeed to need
the tenacity that comes from the fact
that you know is badly measured that you
will not reap the benefits the second
problem we have in the problem in the
issue of innovation is that we measure
probabilities very badly we human beings
are very very small probabilities I
remember this was about 20 years ago we
were in the mall walking so my wife had
my son in a stroller and I was walking
holding the hand of my beautiful
four-year-old Alexandra so we’re walking
on the mall and my my daughter says dad
can we play hide-and-seek said of course
this is a largest mall in New England it
will be great there’s so many places to
hide so many places to think then
immediately we hear the voice stop that
by the way does my wife
stop somebody might kidnap my daughter
yeah you you have a point so anyway we
continue walking and I I made a mistake
and I started thinking I know I should
have not done that anyway so so I tell
my wife well if the issue is a
probability of of kidnapping what if we
hear on the speakers that a kidnapping
has taken place and that the kidnapper
has left the building
well because they are less kidnappers
and kids in the world that means that
the probability of kidnapping goes down
will you allow us to play hide-and-seek
then you are an idiot no no no no no
wait no no no what is there ten
kidnappings I mean can you imagine the
probability that an 11 will ever take
place after they announce obtained
kidnapping has taken place the
probability of kidnapping has gone down
to zero and then my extremely beautiful
daughter says yes ma’am listen to that
he is a statistician yeah but by the way
my daughter is a total nerd she
graduated from MIT so we are very bad at
evaluating small probabilities and what
we tend to do is we either only react or
overreact we do this every day and
almost all the crises in the world come
for because of that event in the United
States since 1995 all the way to 2006 we
thought that real estate prices were
never going to go down and during those
ten years you probably were right
planning 2006 things reverted and we had
a crisis
today in United States we are borrowing
and running deficits in the private
sector and in the public sector and we
are assuming that whatever paper we
issue the world will buy it and by the
way that’s true today that will be true
the next quarter that might be true the
next year put forever
no chance at some point in time someone
will figured out that we need to pay our
debt but we act as if that event will
never ever happen
so what occurs in reality is that
innovations that produce massive social
benefit that have a tiny probability of
succeeding are completely and absolutely
ignored disregarded we don’t even care
to search for them we’re under investing
in those ideas that are going to solve
the important problems of the world
things like discrimination human rights
violations human trafficking women
empowerment income inequality good jobs
education health care those require
tremendous amount of sacrifice and very
likely the inventor will not reap the
benefits I don’t want to leave you with
a negative message but actually with an
action and a challenge there are two
ways to deal with this one is to wait
for people to improve measurement and
I’m telling you I’m devoting my life and
many people are the borne in their life
to try to understand how we can measure
better but actually I don’t think the
world should wait for us
I mean we’re slow we’re academics and
you know we just take time you can still
take actions and I think that that’s
what important is to understand that the
reward system is different
I need people that are careless and
there are dreamers those I don’t know
you probably have made some of them we
call them teenagers okay
and as these extremely famous american
philosopher katy perry said yourself a
teenager dream that’s mostly what we
need in sum we have to differentiate
between success and fulfillment one of
the greatest privilege that I have RMIT
is that I have all this alumni that come
back over and over again to MIT and you
know one of the greatest things is they
tell me how I’d remember the job that
you told in one class and you know truly
I prefer to be remembered by my sense of
humor than by the content of the classes
but so but in some sense they remember
the jokes and that’s that’s a good thing
but the other part is that I find myself
talking more and more and more with some
of these incredibly successful
individuals and success in that in terms
of the things that we tend to measure
position power the amount of money that
they make the amount of influence that
they have there’s a very interesting
pattern many people that will be
successful
among those dimensions they don’t feel
necessarily fulfilled it is actually
very clear than in their lives there’s
something that is missing however every
single one that says that they have
found fulfillment they did find
themselves as extraordinarily successful
every single one of them
so my challenge to you is that you find
the inner teenager in yourself that you
grab that with one hand and you have a
ruler on the other and just go out and
measure the world
dare to dream carelessly because the
world is just waiting for people exactly
like you thank you so much
[Applause]
you [Music]
I am absolutely obsessed with
measurement I I just spent my life
trying to measure everything in fact one
of the happiest thing that I got this
week is that I got a new operating
system that can measure things so I
cannot be more exciting however I know
how you fail you must say well
measurement probably is the most boring
topic in the history of humankind and
and you know my wife tells me that
but I am obsessed with measurement
because I think we are lousy at it we
just for example don’t measure the
quality of our relationship we only
count when they break up when they have
a divorce we don’t measure the degree of
sadness
we mostly diagnose depressions
we don’t measure how we are polluting a
particular Lake we tend to wait until is
lost we don’t measure when a society is
upset we wait until they riot we don’t
measure for example human rights
violations we wait until you have
massive Exodus which is what is
happening to my country in Venezuela
right now we measure very very badly and
to me the fact that we have made some
good decisions in the past is mostly the
outcome of Locke but not of wisdom so
let me tell you – what are the type of
mistakes that I see happening repeatedly
first we tend to measure very
infrequently for example I go to the
doctor every year like most of you
probably go to the doctor and to be
honest it’s a horrible experience my
daughter she has been telling me for 21
years every single time she says Roberto
you are losing your hair yeah I thank
you I know you are one year older you
are fatter I mean I don’t understand how
telling someone that you are older all
clear and father will motivate me to eat
more my veggies I mean the sides
Oh chance we measure very infrequently
and we measure outcomes and that mostly
produce regrets is very difficult to act
when you only measure regret the second
problem that we have is that
unfortunately we tend to also measure
very extreme behavior
so not only late but very extreme
behavior so for example we don’t compute
the amount of consumption of drugs of a
particular city we don’t what we do is
we count how many kids enter the
emergency room with an overdose and now
they are related but they are not the
same we are trying to make an assessment
about the behavior of the average
citizen by looking at the extreme
consumers very unlikely they behave the
same very unlikely they respond to the
same messages the third mistake that we
tend to make is that we are almost
always dependent off of our perception
about a particular event to be able to
measure it
let me give you an example this is a
little harder but if you think about it
in 2013 almost every week in the news we
hear about a number of lives that were
lost of people escaping from Cydia and
it was almost like a comedown every
single week about what was happening
that horrible tragedy have you heard
about any person dying in the last six
months oh there are only three options
either we have no more human rights
violations in Syria they are holding
hands and singing Kumbaya my lord
kumbaya
yay either one all the boats don’t sink
or we are not paying attention because
we are not outraged anymore very
difficult to solve some of the deepest
problems of society if you require to be
outraged and surprised every single day
to be able to act the last one is that
we tend to concentrate on statistics
that even though they might be related
they’re truly not that meaningful
for example you know I ask the people’s
here from from registration how many
women they thought was today in the in
the crowd and they told me that you know
about 50% it’ll be less than 50% so
congratulations 47% that’s way better
than loser New York that has like 35 you
know so I know what to tell you but you
know you know if I I have companies that
come and tell me Roberto I increase the
number of women in senior positions
between 25 and 35 and you know my
reaction is well good for you that’s
great you are moving the needle in the
in the proper direction but then I
immediately ask do you treat them better
do you pay attention to them have you
created an environment where they can
flourish
or you just have in there like
collection items the second one is very
likely to solve the problems of
discrimination very likely and what is
worse about that is statistic is that it
gives a false sense of accomplishment I
got the women 245 genius you you afford
it a loser I’m sorry no chance that is
enough that doesn’t mean we don’t have
to increase the percentage of women in
corporate America we need to but if we
stop there we will not solve the deepest
problems which is the hostile
environment where they have to live
every single day we measure late only
extreme events we use the statistics are
incorrect and we use mostly perception
and only when we are upset is when we
pay attention we need to change this
dramatically this is a first issue for
the world let me talk about innovation
innovation is after all an economic
decision this is more or less what we
have been discussing today and
innovation is one of the areas which is
very difficult to improve the
measurement so I’m what I’m going to do
is to try to offer you an alternative
about how to think
but let me start first thinking about
innovation as this economic incentive
economic decision that is subject to
incentives and is subject to the way we
measure success and in fact we have had
many people today to talk about the
world success
you see truly what they mean is
commercial success a lot of times what
we do and one of the mistakes in
innovation is that we tend to associate
private benefits with social benefits
they’re not necessarily the same there
are many ideas that are very good for
the private sector and the way we do
that is we have an idea we embody that
idea and a product we actually
commercialize the product and we make
profits that requires a certain amount
of decisions and and capabilities to be
successful and you can make a mistake on
any part of the process and you will
fail but there are some ideas that just
cannot be embodied in a product we just
can’t can you imagine
poor Isaac Newton today invents a fear
of gravity well what do we tend to do
well you know when you are an inventor
the first thing that you do you tweet
now said guys I just invented the theory
of gravity super cool and then you know
somebody says you are a loser what are
you going to do with that bouncing balls
and you know when you pick up you know
when somebody installs you in Twitter
what you have to do we have learned you
have to reply you are a bastard
ungrateful I’m going to go to a venture
capital is to give me the money and I
will do something that crushes you with
the theory of gravity and the guy says
and then a VC says I am drunk right now
and I still think that your idea is
stupid you guys I’m going to create a
cryptocurrency called the graphic coin
the world and then LeBron James says the
theory of gravity is a hoax because in
the court I gravitate and levitate from
one place to the other loser two million
three tweets the fear gravity’s dead
poor I mean poor ice under it doesn’t
even dare to think about the theory of
relativity that one you cannot even
so not everything is for sale and some
of the greatest idea of that we need to
invent me to solve problems that we have
social benefits but not necessarily
private benefit unfortunately we need
this ideas desperately and for that you
need a different type of approach in
approach of of courage approach of their
daring the odds you need to actually
have faith that you will succeed to need
the tenacity that comes from the fact
that you know is badly measured that you
will not reap the benefits the second
problem we have in the problem in the
issue of innovation is that we measure
probabilities very badly we human beings
are very very small probabilities I
remember this was about 20 years ago we
were in the mall walking so my wife had
my son in a stroller and I was walking
holding the hand of my beautiful
four-year-old Alexandra so we’re walking
on the mall and my my daughter says dad
can we play hide-and-seek said of course
this is a largest mall in New England it
will be great there’s so many places to
hide so many places to think then
immediately we hear the voice stop that
by the way does my wife
stop somebody might kidnap my daughter
yeah you you have a point so anyway we
continue walking and I I made a mistake
and I started thinking I know I should
have not done that anyway so so I tell
my wife well if the issue is a
probability of of kidnapping what if we
hear on the speakers that a kidnapping
has taken place and that the kidnapper
has left the building
well because they are less kidnappers
and kids in the world that means that
the probability of kidnapping goes down
will you allow us to play hide-and-seek
then you are an idiot no no no no no
wait no no no what is there ten
kidnappings I mean can you imagine the
probability that an 11 will ever take
place after they announce obtained
kidnapping has taken place the
probability of kidnapping has gone down
to zero and then my extremely beautiful
daughter says yes ma’am listen to that
he is a statistician yeah but by the way
my daughter is a total nerd she
graduated from MIT so we are very bad at
evaluating small probabilities and what
we tend to do is we either only react or
overreact we do this every day and
almost all the crises in the world come
for because of that event in the United
States since 1995 all the way to 2006 we
thought that real estate prices were
never going to go down and during those
ten years you probably were right
planning 2006 things reverted and we had
a crisis
today in United States we are borrowing
and running deficits in the private
sector and in the public sector and we
are assuming that whatever paper we
issue the world will buy it and by the
way that’s true today that will be true
the next quarter that might be true the
next year put forever
no chance at some point in time someone
will figured out that we need to pay our
debt but we act as if that event will
never ever happen
so what occurs in reality is that
innovations that produce massive social
benefit that have a tiny probability of
succeeding are completely and absolutely
ignored disregarded we don’t even care
to search for them we’re under investing
in those ideas that are going to solve
the important problems of the world
things like discrimination human rights
violations human trafficking women
empowerment income inequality good jobs
education health care those require
tremendous amount of sacrifice and very
likely the inventor will not reap the
benefits I don’t want to leave you with
a negative message but actually with an
action and a challenge there are two
ways to deal with this one is to wait
for people to improve measurement and
I’m telling you I’m devoting my life and
many people are the borne in their life
to try to understand how we can measure
better but actually I don’t think the
world should wait for us
I mean we’re slow we’re academics and
you know we just take time you can still
take actions and I think that that’s
what important is to understand that the
reward system is different
I need people that are careless and
there are dreamers those I don’t know
you probably have made some of them we
call them teenagers okay
and as these extremely famous american
philosopher katy perry said yourself a
teenager dream that’s mostly what we
need in sum we have to differentiate
between success and fulfillment one of
the greatest privilege that I have RMIT
is that I have all this alumni that come
back over and over again to MIT and you
know one of the greatest things is they
tell me how I’d remember the job that
you told in one class and you know truly
I prefer to be remembered by my sense of
humor than by the content of the classes
but so but in some sense they remember
the jokes and that’s that’s a good thing
but the other part is that I find myself
talking more and more and more with some
of these incredibly successful
individuals and success in that in terms
of the things that we tend to measure
position power the amount of money that
they make the amount of influence that
they have there’s a very interesting
pattern many people that will be
successful
among those dimensions they don’t feel
necessarily fulfilled it is actually
very clear than in their lives there’s
something that is missing however every
single one that says that they have
found fulfillment they did find
themselves as extraordinarily successful
every single one of them
so my challenge to you is that you find
the inner teenager in yourself that you
grab that with one hand and you have a
ruler on the other and just go out and
measure the world
dare to dream carelessly because the
world is just waiting for people exactly
like you thank you so much
[Applause]
you [Music]
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