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#434772 Traditional Higher Education Is Losing ...

Posted on March 22, 2019 by Android

Should you go to graduate school? If so, why? If not, what are your alternatives? Millions of young adults across the globe—and their parents and mentors—find themselves asking these questions every year.

Earlier this month, I explored how exponential technologies are rising to meet the needs of the rapidly changing workforce.

In this blog, I’ll dive into a highly effective way to build the business acumen and skills needed to make the most significant impact in these exponential times.

To start, let’s dive into the value of graduate school versus apprenticeship—especially during this time of extraordinarily rapid growth, and the micro-diversification of careers.

The True Value of an MBA
All graduate schools are not created equal.

For complex technical trades like medicine, engineering, and law, formal graduate-level training provides a critical foundation for safe, ethical practice (until these trades are fully augmented by artificial intelligence and automation…).

For the purposes of today’s blog, let’s focus on the value of a Master in Business Administration (MBA) degree, compared to acquiring your business acumen through various forms of apprenticeship.

The Waning of Business Degrees
Ironically, business schools are facing a tough business problem. The rapid rate of technological change, a booming job market, and the digitization of education are chipping away at the traditional graduate-level business program.

The data speaks for itself.

The Decline of Graduate School Admissions
Enrollment in two-year, full-time MBA programs in the US fell by more than one-third from 2010 to 2016.

While in previous years, top business schools (e.g. Stanford, Harvard, and Wharton) were safe from the decrease in applications, this year, they also felt the waning interest in MBA programs.

Harvard Business School: 4.5 percent decrease in applications, the school’s biggest drop since 2005.
Wharton: 6.7 percent decrease in applications.
Stanford Graduate School: 4.6 percent decrease in applications.

Another signal of change began unfolding over the past week. You may have read news headlines about an emerging college admissions scam, which implicates highly selective US universities, sports coaches, parents, and students in a conspiracy to game the undergraduate admissions process.

Already, students are filing multibillion-dollar civil lawsuits arguing that the scheme has devalued their degrees or denied them a fair admissions opportunity.

MBA Graduates in the Workforce
To meet today’s business needs, startups and massive companies alike are increasingly hiring technologists, developers, and engineers in place of the MBA graduates they may have preferentially hired in the past.

While 85 percent of US employers expect to hire MBA graduates this year (a decrease from 91 percent in 2017), 52 percent of employers worldwide expect to hire graduates with a master’s in data analytics (an increase from 35 percent last year).

We’re also seeing the waning of MBA degree holders at the CEO level.

For decades, an MBA was the hallmark of upward mobility towards the C-suite of top companies.

But as exponential technologies permeate not only products but every part of the supply chain—from manufacturing and shipping to sales, marketing and customer service—that trend is changing by necessity.

Looking at the Harvard Business Review’s Top 100 CEOs in 2018 list, more CEOs on the list held engineering degrees than MBAs (34 held engineering degrees, while 32 held MBAs).

There’s much more to leading innovative companies than an advanced business degree.

How Are Schools Responding?
With disruption to the advanced business education system already here, some business schools are applying notes from their own innovation classes to brace for change.

Over the past half-decade, we’ve seen schools with smaller MBA programs shut their doors in favor of advanced degrees with more specialization. This directly responds to market demand for skills in data science, supply chain, and manufacturing.

Some degrees resemble the precise skills training of technical trades. Others are very much in line with the apprenticeship models we’ll explore next.

Regardless, this new specialization strategy is working and attracting more new students. Over the past decade (2006 to 2016), enrollment in specialized graduate business programs doubled.

Higher education is also seeing a preference shift toward for-profit trade schools, like coding boot camps. This shift is one of several forces pushing universities to adopt skill-specific advanced degrees.

But some schools are slow to adapt, raising the question: how and when will these legacy programs be disrupted? A survey of over 170 business school deans around the world showed that many programs are operating at a loss.

But if these schools are world-class business institutions, as advertised, why do they keep the doors open even while they lose money? The surveyed deans revealed an important insight: they keep the degree program open because of the program’s prestige.

Why Go to Business School?
Shorthand Credibility, Cognitive Biases, and Prestige
Regardless of what knowledge a person takes away from graduate school, attending one of the world’s most rigorous and elite programs gives grads external validation.

With over 55 percent of MBA applicants applying to just 6 percent of graduate business schools, we have a clear cognitive bias toward the perceived elite status of certain universities.

To the outside world, thanks to the power of cognitive biases, an advanced degree is credibility shorthand for your capabilities.

Simply passing through a top school’s filtration system means that you had some level of abilities and merits.

And startup success statistics tend to back up that perceived enhanced capability. Let’s take, for example, universities with the most startup unicorn founders (see the figure below).

When you consider the 320+ unicorn startups around the world today, these numbers become even more impressive. Stanford’s 18 unicorn companies account for over 5 percent of global unicorns, and Harvard is responsible for producing just under 5 percent.

Combined, just these two universities (out of over 5,000 in the US, and thousands more around the world) account for 1 in 10 of the billion-dollar private companies in the world.

By the numbers, the prestigious reputation of these elite business programs has a firm basis in current innovation success.

While prestige may be inherent to the degree earned by graduates from these business programs, the credibility boost from holding one of these degrees is not a guaranteed path to success in the business world.

For example, you might expect that the Harvard School of Business or Stanford Graduate School of Business would come out on top when tallying up the alma maters of Fortune 500 CEOs.

It turns out that the University of Wisconsin-Madison leads the business school pack with 14 CEOs to Harvard’s 12. Beyond prestige, the success these elite business programs see translates directly into cultivating unmatched networks and relationships.

Relationships
Graduate schools—particularly at the upper echelon—are excellent at attracting sharp students.

At an elite business school, if you meet just five to ten people with extraordinary skill sets, personalities, ideas, or networks, then you have returned your $200,000 education investment.

It’s no coincidence that some 40 percent of Silicon Valley venture capitalists are alumni of either Harvard or Stanford.

From future investors to advisors, friends, and potential business partners, relationships are critical to an entrepreneur’s success.

Apprenticeships
As we saw above, graduate business degree programs are melting away in the current wave of exponential change.

With an increasing $1.5 trillion in student debt, there must be a more impactful alternative to attending graduate school for those starting their careers.

When I think about the most important skills I use today as an entrepreneur, writer, and strategic thinker, they didn’t come from my decade of graduate school at Harvard or MIT… they came from my experiences building real technologies and companies, and working with mentors.

Apprenticeship comes in a variety of forms; here, I’ll cover three top-of-mind approaches:

Real-world business acumen via startup accelerators
A direct apprenticeship model
The 6 D’s of mentorship

Startup Accelerators and Business Practicum
Let’s contrast the shrinking interest in MBA programs with applications to a relatively new model of business education: startup accelerators.

Startup accelerators are short-term (typically three to six months), cohort-based programs focusing on providing startup founders with the resources (capital, mentorship, relationships, and education) needed to refine their entrepreneurial acumen.

While graduate business programs have been condensing, startup accelerators are alive, well, and expanding rapidly.

In the 10 years from 2005 (when Paul Graham founded Y Combinator) through 2015, the number of startup accelerators in the US increased by more than tenfold.

The increase in startup accelerator activity hints at a larger trend: our best and brightest business minds are opting to invest their time and efforts in obtaining hands-on experience, creating tangible value for themselves and others, rather than diving into the theory often taught in business school classrooms.

The “Strike Force” Model
The Strike Force is my elite team of young entrepreneurs who work directly with me across all of my companies, travel by my side, sit in on every meeting with me, and help build businesses that change the world.

Previous Strike Force members have gone on to launch successful companies, including Bold Capital Partners, my $250 million venture capital firm.

Strike Force is an apprenticeship for the next generation of exponential entrepreneurs.

To paraphrase my good friend Tony Robbins: If you want to short-circuit the video game, find someone who’s been there and done that and is now doing something you want to one day do.

Every year, over 500,000 apprentices in the US follow this precise template. These apprentices are learning a craft they wish to master, under the mentorship of experts (skilled metal workers, bricklayers, medical technicians, electricians, and more) who have already achieved the desired result.

What if we more readily applied this model to young adults with aspirations of creating massive value through the vehicles of entrepreneurship and innovation?

For the established entrepreneur: How can you bring young entrepreneurs into your organization to create more value for your company, while also passing on your ethos and lessons learned to the next generation?

For the young, driven millennial: How can you find your mentor and convince him or her to take you on as an apprentice? What value can you create for this person in exchange for their guidance and investment in your professional development?

The 6 D’s of Mentorship
In my last blog on education, I shared how mobile device and internet penetration will transform adult literacy and basic education. Mobile phones and connectivity already create extraordinary value for entrepreneurs and young professionals looking to take their business acumen and skill set to the next level.

For all of human history up until the last decade or so, if you wanted to learn from the best and brightest in business, leadership, or strategy, you either needed to search for a dated book that they wrote at the local library or bookstore, or you had to be lucky enough to meet that person for a live conversation.

Now you can access the mentorship of just about any thought leader on the planet, at any time, for free.

Thanks to the power of the internet, mentorship has digitized, demonetized, dematerialized, and democratized.

What do you want to learn about?

Investing? Leadership? Technology? Marketing? Project management?

You can access a near-infinite stream of cutting-edge tools, tactics, and lessons from thousands of top performers from nearly every field—instantaneously, and for free.

For example, every one of Warren Buffett’s letters to his Berkshire Hathaway investors over the past 40 years is available for free on a device that fits in your pocket.

The rise of audio—particularly podcasts and audiobooks—is another underestimated driving force away from traditional graduate business programs and toward apprenticeships.

Over 28 million podcast episodes are available for free. Once you identify the strong signals in the noise, you’re still left with thousands of hours of long-form podcast conversation from which to learn valuable lessons.

Whenever and wherever you want, you can learn from the world’s best. In the future, mentorship and apprenticeship will only become more personalized. Imagine accessing a high-fidelity, AI-powered avatar of Bill Gates, Richard Branson, or Arthur C. Clarke (one of my early mentors) to help guide you through your career.

Virtual mentorship and coaching are powerful education forces that are here to stay.

Bringing It All Together
The education system is rapidly changing. Traditional master’s programs for business are ebbing away in the tides of exponential technologies. Apprenticeship models are reemerging as an effective way to train tomorrow’s leaders.

In a future blog, I’ll revisit the concept of apprenticeships and other effective business school alternatives.

If you are a young, ambitious entrepreneur (or the parent of one), remember that you live in the most abundant time ever in human history to refine your craft.

Right now, you have access to world-class mentorship and cutting-edge best-practices—literally in the palm of your hand. What will you do with this extraordinary power?

Join Me
Abundance-Digital Online Community: I’ve created a Digital/Online community of bold, abundance-minded entrepreneurs called Abundance-Digital. Abundance-Digital is my ‘onramp’ for exponential entrepreneurs – those who want to get involved and play at a higher level. Click here to learn more.

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Posted in Human Robots

#434246 How AR and VR Will Shape the Future of ...

Posted on December 28, 2018 by Android

How we work and play is about to transform.

After a prolonged technology “winter”—or what I like to call the ‘deceptive growth’ phase of any exponential technology—the hardware and software that power virtual (VR) and augmented reality (AR) applications are accelerating at an extraordinary rate.

Unprecedented new applications in almost every industry are exploding onto the scene.

Both VR and AR, combined with artificial intelligence, will significantly disrupt the “middleman” and make our lives “auto-magical.” The implications will touch every aspect of our lives, from education and real estate to healthcare and manufacturing.

The Future of Work
How and where we work is already changing, thanks to exponential technologies like artificial intelligence and robotics.

But virtual and augmented reality are taking the future workplace to an entirely new level.

Virtual Reality Case Study: eXp Realty

I recently interviewed Glenn Sanford, who founded eXp Realty in 2008 (imagine: a real estate company on the heels of the housing market collapse) and is the CEO of eXp World Holdings.

Ten years later, eXp Realty has an army of 14,000 agents across all 50 US states, three Canadian provinces, and 400 MLS market areas… all without a single traditional staffed office.

In a bid to transition from 2D interfaces to immersive, 3D work experiences, virtual platform VirBELA built out the company’s office space in VR, unlocking indefinite scaling potential and an extraordinary new precedent.

Real estate agents, managers, and even clients gather in a unique virtual campus, replete with a sports field, library, and lobby. It’s all accessible via head-mounted displays, but most agents join with a computer browser. Surprisingly, the campus-style setup enables the same type of water-cooler conversations I see every day at the XPRIZE headquarters.

With this centralized VR campus, eXp Realty has essentially thrown out overhead costs and entered a lucrative market without the same constraints of brick-and-mortar businesses.

Delocalize with VR, and you can now hire anyone with internet access (right next door or on the other side of the planet), redesign your corporate office every month, throw in an ocean-view office or impromptu conference room for client meetings, and forget about guzzled-up hours in traffic.

As a leader, what happens when you can scalably expand and connect your workforce, not to mention your customer base, without the excess overhead of office space and furniture? Your organization can run faster and farther than your competition.

But beyond the indefinite scalability achieved through digitizing your workplace, VR’s implications extend to the lives of your employees and even the future of urban planning:

Home Prices: As virtual headquarters and office branches take hold of the 21st-century workplace, those who work on campuses like eXp Realty’s won’t need to commute to work. As a result, VR has the potential to dramatically influence real estate prices—after all, if you don’t need to drive to an office, your home search isn’t limited to a specific set of neighborhoods anymore.

Transportation: In major cities like Los Angeles and San Francisco, the implications are tremendous. Analysts have revealed that it’s already cheaper to use ride-sharing services like Uber and Lyft than to own a car in many major cities. And once autonomous “Car-as-a-Service” platforms proliferate, associated transportation costs like parking fees, fuel, and auto repairs will no longer fall on the individual, if not entirely disappear.

Augmented Reality: Annotate and Interact with Your Workplace

As I discussed in a recent Spatial Web blog, not only will Web 3.0 and VR advancements allow us to build out virtual worlds, but we’ll soon be able to digitally map our real-world physical offices or entire commercial high-rises.

Enter a professional world electrified by augmented reality.

Our workplaces are practically littered with information. File cabinets abound with archival data and relevant documents, and company databases continue to grow at a breakneck pace. And, as all of us are increasingly aware, cybersecurity and robust data permission systems remain a major concern for CEOs and national security officials alike.

What if we could link that information to specific locations, people, time frames, and even moving objects?

As data gets added and linked to any given employee’s office, conference room, or security system, we might then access online-merge-offline environments and information through augmented reality.

Imagine showing up at your building’s concierge and your AR glasses automatically check you into the building, authenticating your identity and pulling up any reminders you’ve linked to that specific location.

You stop by a friend’s office, and his smart security system lets you know he’ll arrive in an hour. Need to book a public conference room that’s already been scheduled by another firm’s marketing team? Offer to pay them a fee and, once accepted, a smart transaction will automatically deliver a payment to their company account.

With blockchain-verified digital identities, spatially logged data, and virtually manifest information, business logistics take a fraction of the time, operations grow seamless, and corporate data will be safer than ever.

Or better yet, imagine precise and high-dexterity work environments populated with interactive annotations that guide an artisan, surgeon, or engineer through meticulous handiwork.

Take, for instance, AR service 3D4Medical, which annotates virtual anatomy in midair. And as augmented reality hardware continues to advance, we might envision a future wherein surgeons perform operations on annotated organs and magnified incision sites, or one in which quantum computer engineers can magnify and annotate mechanical parts, speeding up reaction times and vastly improving precision.

The Future of Free Time and Play
In Abundance, I wrote about today’s rapidly demonetizing cost of living. In 2011, almost 75 percent of the average American’s income was spent on housing, transportation, food, personal insurance, health, and entertainment. What the headlines don’t mention: this is a dramatic improvement over the last 50 years. We’re spending less on basic necessities and working fewer hours than previous generations.

Chart depicts the average weekly work hours for full-time production employees in non-agricultural activities. Source: Diamandis.com data
Technology continues to change this, continues to take care of us and do our work for us. One phrase that describes this is “technological socialism,” where it’s technology, not the government, that takes care of us.

Extrapolating from the data, I believe we are heading towards a post-scarcity economy. Perhaps we won’t need to work at all, because we’ll own and operate our own fleet of robots or AI systems that do our work for us.

As living expenses demonetize and workplace automation increases, what will we do with this abundance of time? How will our children and grandchildren connect and find their purpose if they don’t have to work for a living?

As I write this on a Saturday afternoon and watch my two seven-year-old boys immersed in Minecraft, building and exploring worlds of their own creation, I can’t help but imagine that this future is about to enter its disruptive phase.

Exponential technologies are enabling a new wave of highly immersive games, virtual worlds, and online communities. We’ve likely all heard of the Oasis from Ready Player One. But far beyond what we know today as ‘gaming,’ VR is fast becoming a home to immersive storytelling, interactive films, and virtual world creation.

Within the virtual world space, let’s take one of today’s greatest precursors, the aforementioned game Minecraft.

For reference, Minecraft is over eight times the size of planet Earth. And in their free time, my kids would rather build in Minecraft than almost any other activity. I think of it as their primary passion: to create worlds, explore worlds, and be challenged in worlds.

And in the near future, we’re all going to become creators of or participants in virtual worlds, each populated with assets and storylines interoperable with other virtual environments.

But while the technological methods are new, this concept has been alive and well for generations. Whether you got lost in the world of Heidi or Harry Potter, grew up reading comic books or watching television, we’ve all been playing in imaginary worlds, with characters and story arcs populating our minds. That’s the nature of childhood.

In the past, however, your ability to edit was limited, especially if a given story came in some form of 2D media. I couldn’t edit where Tom Sawyer was going or change what Iron Man was doing. But as a slew of new software advancements underlying VR and AR allow us to interact with characters and gain (albeit limited) agency (for now), both new and legacy stories will become subjects of our creation and playgrounds for virtual interaction.

Take VR/AR storytelling startup Fable Studio’s Wolves in the Walls film. Debuting at the 2018 Sundance Film Festival, Fable’s immersive story is adapted from Neil Gaiman’s book and tracks the protagonist, Lucy, whose programming allows her to respond differently based on what her viewers do.

And while Lucy can merely hand virtual cameras to her viewers among other limited tasks, Fable Studio’s founder Edward Saatchi sees this project as just the beginning.

Imagine a virtual character—either in augmented or virtual reality—geared with AI capabilities, that now can not only participate in a fictional storyline but interact and dialogue directly with you in a host of virtual and digitally overlayed environments.

Or imagine engaging with a less-structured environment, like the Star Wars cantina, populated with strangers and friends to provide an entirely novel social media experience.

Already, we’ve seen characters like that of Pokémon brought into the real world with Pokémon Go, populating cities and real spaces with holograms and tasks. And just as augmented reality has the power to turn our physical environments into digital gaming platforms, advanced AR could bring on a new era of in-home entertainment.

Imagine transforming your home into a narrative environment for your kids or overlaying your office interior design with Picasso paintings and gothic architecture. As computer vision rapidly grows capable of identifying objects and mapping virtual overlays atop them, we might also one day be able to project home theaters or live sports within our homes, broadcasting full holograms that allow us to zoom into the action and place ourselves within it.

Increasingly honed and commercialized, augmented and virtual reality are on the cusp of revolutionizing the way we play, tell stories, create worlds, and interact with both fictional characters and each other.

Join Me
Abundance-Digital Online Community: I’ve created a Digital/Online community of bold, abundance-minded entrepreneurs called Abundance-Digital. Abundance-Digital is my ‘onramp’ for exponential entrepreneurs – those who want to get involved and play at a higher level. Click here to learn more.

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Posted in Human Robots

#432293 An Innovator’s City Guide to Shanghai

Posted on March 14, 2018 by Android

Shanghai is a city full of life. With its population of 24 million, Shanghai embraces vibrant growth, fosters rising diversity, and attracts visionaries, innovators, and adventurers. Fintech, artificial intelligence, and e-commerce are booming. Now is a great time to explore this multicultural, inspirational city as it experiences quick growth and ever greater influence.

Meet Your Guide

Qingsong (Dora) Ke
Singularity University Chapter: Shanghai Chapter
Profession: Associate Director for Asia Pacific, IE Business School and IE University; Mentor, Techstars Startup Weekend; Mentor, Startupbootcamp; China President, Her Century

Your City Guide to Shanghai, China
Top three industries in the city: Automotive, Retail, and Finance

1. Coworking Space: Mixpace

With 10 convenient locations in the Shanghai downtown area, Mixpace offers affordable prices and various office and event spaces to both foreign and local entrepreneurs and startups.

2. Makerspace: XinCheJian

The first hackerspace and a non-profit in China, Xinchejian was founded to support projects in physical computing, open source hardware, and the Internet of Things. It hosts regular events and talks to facilitate development of hackerspaces in China.

3. Local meetups/ networks: FinTech Connector

FinTech Connector is a community connecting local fintech entrepreneurs and start-ups with global professionals, thought leaders, and investors for the purpose of disrupting financial services with cutting-edge technology.

4. Best coffee shop with free WiFi: Seesaw

Clean and modern décor, convenient locations, a quiet environment, and high-quality coffee make Seesaw one of the most popular coffee shops in Shanghai.

5. The startup neighborhood: Knowledge & Innovation Community (KIC)

Located near 10 prestigious universities and over 100 scientific research institutions, KIC attempts to integrate Silicon Valley’s innovative spirit with the artistic culture of the Left Bank in Paris.

6. Well-known investor or venture capitalist: Nanpeng (Neil) Shen

Global executive partner at Sequoia Capital, founding and managing partner at Sequoia China, and founder of Ctrip.com and Home Inn, Neil Shen was named Best Venture Capitalist by Forbes China in 2010–2013 and ranked as the best Chinese investor among Global Best Investors by Forbes in 2012–2016.

7. Best way to get around: Metro

Shanghai’s 17 well-connected metro lines covering every corner of the city at affordable prices are the best way to get around.

8. Local must-have dish and where to get it: Mini Soupy Bun (steamed dumplings, xiaolongbao) at Din Tai Fung in Shanghai.

Named one of the top ten restaurants in the world by the New York Times, Din Tai Fung makes the best xiaolongbao, a delicious soup with stuffed dumplings.

9. City’s best-kept secret: Barber Shop

This underground bar gets its name from the barber shop it’s hidden behind. Visitors must discover how to unlock the door leading to Barber Shop’s sophisticated cocktails and engaging music. (No website for this underground location, but the address is 615 Yongjia Road).

10. Touristy must-do: Enjoy the nightlife and the skyline at the Bund

On the east side of the Bund are the most modern skyscrapers, including Shanghai Tower, Shanghai World Financial Centre, and Jin Mao Tower. The west side of the Bund features 26 buildings of diverse architectural styles, including Gothic, Baroque, Romanesque, and others; this area is known for its exotic buildings.

11. Local volunteering opportunity: Shanghai Volunteer

Shanghai Volunteer is a platform to connect volunteers with possible opportunities in various fields, including education, elderly care, city culture, and environment.

12. Local University with great resources: Shanghai Jiao Tong University

Established in 1896, Shanghai Jiao Tong University is the second-oldest university in China and one of the country’s most prestigious. It boasts notable alumni in government and politics, science, engineering, business, and sports, and it regularly collaborates with government and the private sector.

This article is for informational purposes only. All opinions in this post are the author’s alone and not those of Singularity University. Neither this article nor any of the listed information therein is an official endorsement by Singularity University.

Image Credits: Qinsong (Dora) Ke

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Posted in Human Robots

#431851 Bend it like Kengoro and Kenshiro

Posted on February 20, 2018 by Android

These Japanese humanoids can replicate flexible human-like movement during physical workouts like push-ups, crunches, stretches and other whole-body exercises, to help researchers better understand how humans move during athletic sports, aid in the development of artificial limbs and whole bodies, … Continue reading →

Posted in Human Robots

#431159 How Close Is Turing’s Dream of ...

Posted on September 28, 2017 by Android

The quest for conversational artificial intelligence has been a long one.
When Alan Turing, the father of modern computing, racked his considerable brains for a test that would truly indicate that a computer program was intelligent, he landed on this area. If a computer could convince a panel of human judges that they were talking to a human—if it could hold a convincing conversation—then it would indicate that artificial intelligence had advanced to the point where it was indistinguishable from human intelligence.
This gauntlet was thrown down in 1950 and, so far, no computer program has managed to pass the Turing test.
There have been some very notable failures, however: Joseph Weizenbaum, as early as 1966—when computers were still programmed with large punch-cards—developed a piece of natural language processing software called ELIZA. ELIZA was a machine intended to respond to human conversation by pretending to be a psychotherapist; you can still talk to her today.
Talking to ELIZA is a little strange. She’ll often rephrase things you’ve said back at you: so, for example, if you say “I’m feeling depressed,” she might say “Did you come to me because you are feeling depressed?” When she’s unsure about what you’ve said, ELIZA will usually respond with “I see,” or perhaps “Tell me more.”
For the first few lines of dialogue, especially if you treat her as your therapist, ELIZA can be convincingly human. This was something Weizenbaum noticed and was slightly alarmed by: people were willing to treat the algorithm as more human than it really was. Before long, even though some of the test subjects knew ELIZA was just a machine, they were opening up with some of their deepest feelings and secrets. They were pouring out their hearts to a machine. When Weizenbaum’s secretary spoke to ELIZA, even though she knew it was a fairly simple computer program, she still insisted Weizenbaum leave the room.
Part of the unexpected reaction ELIZA generated may be because people are more willing to open up to a machine, feeling they won’t be judged, even if the machine is ultimately powerless to do or say anything to really help. The ELIZA effect was named for this computer program: the tendency of humans to anthropomorphize machines, or think of them as human.

Weizenbaum himself, who later became deeply suspicious of the influence of computers and artificial intelligence in human life, was astonished that people were so willing to believe his script was human. He wrote, “I had not realized…that extremely short exposures to a relatively simple computer program could induce powerful delusional thinking in quite normal people.”

“Consciously, you know you’re talking to a big block of code stored somewhere out there in the ether. But subconsciously, you might feel like you’re interacting with a human.”

The ELIZA effect may have disturbed Weizenbaum, but it has intrigued and fascinated others for decades. Perhaps you’ve noticed it in yourself, when talking to an AI like Siri, Alexa, or Google Assistant—the occasional response can seem almost too real. Consciously, you know you’re talking to a big block of code stored somewhere out there in the ether. But subconsciously, you might feel like you’re interacting with a human.
Yet the ELIZA effect, as enticing as it is, has proved a source of frustration for people who are trying to create conversational machines. Natural language processing has proceeded in leaps and bounds since the 1960s. Now you can find friendly chatbots like Mitsuku—which has frequently won the Loebner Prize, awarded to the machines that come closest to passing the Turing test—that aim to have a response to everything you might say.
In the commercial sphere, Facebook has opened up its Messenger program and provided software for people and companies to design their own chatbots. The idea is simple: why have an app for, say, ordering pizza when you can just chatter to a robot through your favorite messenger app and make the order in natural language, as if you were telling your friend to get it for you?
Startups like Semantic Machines hope their AI assistant will be able to interact with you just like a secretary or PA would, but with an unparalleled ability to retrieve information from the internet. They may soon be there.
But people who engineer chatbots—both in the social and commercial realm—encounter a common problem: the users, perhaps subconsciously, assume the chatbots are human and become disappointed when they’re not able to have a normal conversation. Frustration with miscommunication can often stem from raised initial expectations.
So far, no machine has really been able to crack the problem of context retention—understanding what’s been said before, referring back to it, and crafting responses based on the point the conversation has reached. Even Mitsuku will often struggle to remember the topic of conversation beyond a few lines of dialogue.

“For everything you say, there could be hundreds of responses that would make sense. When you travel a layer deeper into the conversation, those factors multiply until you end up with vast numbers of potential conversations.”

This is, of course, understandable. Conversation can be almost unimaginably complex. For everything you say, there could be hundreds of responses that would make sense. When you travel a layer deeper into the conversation, those factors multiply until—like possible games of Go or chess—you end up with vast numbers of potential conversations.
But that hasn’t deterred people from trying, most recently, tech giant Amazon, in an effort to make their AI voice assistant, Alexa, friendlier. They have been running the Alexa Prize competition, which offers a cool $500,000 to the winning AI—and a bonus of a million dollars to any team that can create a ‘socialbot’ capable of sustaining a conversation with human users for 20 minutes on a variety of themes.
Topics Alexa likes to chat about include science and technology, politics, sports, and celebrity gossip. The finalists were recently announced: chatbots from universities in Prague, Edinburgh, and Seattle. Finalists were chosen according to the ratings from Alexa users, who could trigger the socialbots into conversation by saying “Hey Alexa, let’s chat,” although the reviews for the socialbots weren’t always complimentary.
By narrowing down the fields of conversation to a specific range of topics, the Alexa Prize has cleverly started to get around the problem of context—just as commercially available chatbots hope to do. It’s much easier to model an interaction that goes a few layers into the conversational topic if you’re limiting those topics to a specific field.
Developing a machine that can hold almost any conversation with a human interlocutor convincingly might be difficult. It might even be a problem that requires artificial general intelligence to truly solve, rather than the previously-employed approaches of scripted answers or neural networks that associate inputs with responses.
But a machine that can have meaningful interactions that people might value and enjoy could be just around the corner. The Alexa Prize winner is announced in November. The ELIZA effect might mean we will relate to machines sooner than we’d thought.
So, go well, little socialbots. If you ever want to discuss the weather or what the world will be like once you guys take over, I’ll be around. Just don’t start a therapy session.
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