SBF, the end of social media, corrected forecast scores

Welcome to Nonrival, the newsletter where readers make predictions.

How it works

1. On Sundays, read the newsletter and make a forecast by clicking a link at the bottom.
2. On Wednesdays, see what other readers predicted and how your forecast compares.
3. Over time, you’ll get scores based on how accurate your forecasts are.

In this issue

• Social media forecasts, compared
• Update on scoring for Twitter and Senate forecasts
• Some thoughts on SBF & FTX

Programming note: No new forecast this coming Sunday as Nonrival will be off for Thanksgiving.

Thanks for forecasting. Send feedback to newsletter@nonrival.pub.

Social media isn't dying, but Facebook might be

On Sunday, Nonrival asked whether the social media era was ending and what the chances were that Facebook, Instagram, Twitter, and Snapchat collectively had more users* in February than in October. Overall, readers give that only a one-in-three chance of happening — you're mostly buying the end-of-an-era view and betting that these platforms won't grow. Notably, though, even readers who are predicting those platforms' decline think social media will keep growing. The gist here is a transition from one generation of social media to another.

Readers' reasoning

The case for these social platforms to shrink is, in a word, TikTok:

And the case that they'll see a resurgence:

*The question is looking just at Android users, worldwide, for data availability reasons.

How your forecast compares

• You didn't make a prediction by the Tuesday 9am deadline. Otherwise you'd be seeing your forecast here.

• The average reader forecast was 34%.

More pieces on the end of social media:

• ​"There will never be anything like Twitter again." Shira Ovide, Washington Post​
• ​"Social media networking is already dead." Edward Ongweso Jr, Vice​

Twitter layoffs & Senate midterms

​Last Wednesday's recap included forecast scores for the midterms and for Twitter layoffs. But there was a bug that prevented some users from getting their forecasts scored, and that meant everyone's percentile scores were a bit off. That bug has been fixed, and here are the updated forecast scores.

If you made a forecast for either of those two questions you should see your personalized scores below (if anything looks off please email newsletter@nonrival.pub). If not, you'll head right on to the next section.

​SBF and the 'outside view'​

Some thoughts on FTX and the psychology of explanation.

The implosion of FTX is full of shocking details. SBF is literally a character from a Michael Lewis book, and so many things about his company are just staggeringly unusual. We know this thanks to intrepid reporting by journalists, who are paid to establish the facts of what happened. The result of this process is typically a reliable account of the who, what, when, and where of a news event—four of the “five W’s” of journalism. But the fifth W is why, and it’s another thing entirely.

There has been speculation that maybe SBF did whatever he did because he’s a utilitarian or because he has some unusual opinions about expected value theory. Anything is possible, but this line of reasoning risks falling into a common cognitive trap.

The human mind overweights “recent, vivid, or memorable events,” as Don Moore and Max Bazerman summarize in their recent book Decision Leadership. We worry more about terrorist attacks than heart disease. That bias can cause us to dwell on the most outrageous parts of a news event—and the FTX story has too many of those to count. Vox’s interview with SBF alone has a dozen mind-bending moments; it’s hard to look away. But these details are not always the most reliable guide to why the thing happened.

To counter our bias toward the vivid and memorable, psychologists advise adopting what Nobel-winner Daniel Kahneman dubbed “the outside view.” Before focusing too much on the specifics of a case, simply ask: What usually happens? That starting point, sometimes aided by quantitative data, has proven to be one of the most valuable tools among seasoned forecasters.

What’s the outside view of FTX? In his book, Why They Do It, Harvard Business School professor Eugene Soltes concludes that white collar criminals “expended surprisingly little effort deliberating the consequences of their actions.” And “in many cases, it was difficult to say that they had ever really ‘decided’ at all.” Instead, they act based on intuition, fueled by the fact that the people they’re harming are distant. Most white collar crime is the story of “people just following their intuitions and primitive gut feelings.”

Then there’s the fact that people are more self-confident and self-focused when they have unconstrained power, as Julie Battilana and Tiziana Casciaro explain in Power for All. Not having to answer to a board of directors turns out to be a hell of a drug. I’ve been thinking about something the political scientist Gautum Mukunda said to me in March when I asked him about Putin’s decision to invade Ukraine. “Power changes who people are,” Mukunda told me. “It makes them more aggressive, more Machiavellian, more manipulative. For most people, it makes them worse.”

Maybe we’ll come to learn that SBF was deliberately operating based on some unusual philosophical perspective. But it’s also very possible that the why of his story isn’t that unusual. Someone experiences rapid success, gets in over their head, has very few external constraints on their decision making, and then makes some really bad choices in the hopes of covering it up. That’s not the end of an explanation, but it’s a start.

Note: SBF took an interest in forecasting through his philanthropy but has no financial connection to this newsletter.

Extras

• ​How language expresses confidence​
• ​Remote work is sticking around, despite layoffs​
• ​Startup founders should embrace good governance​
• ​Institutional investors ditching crypto​
• ​Predictions about AI​
• ​SBF and how hard it is to be rational​
• ​Annie Lowrey on effective altruism​
• ​"Creativity as an app"​
• ​The interest rate theory of everything​