When you hear a prediction, it’s helpful to ask 2 questions –
(1) How much of this prediction is based on logic vs. belief? Belief plays a big role in the outcome of predictions. Moore’s law, for example, held true in part because Gordon Moore’s belief became a self fulfilling prophecy.
(2) Once you have a better understanding of the belief, it is then worth asking – how much of this belief is driven by the predictor’s incentives?
For example, it is common to hear venture capitalists predict the death of incumbents because of AI. It is also completely aligned with their incentives.
Predictions are guesses about the future. They can be useful when we understand which ones have true signal.
Very few of them do however.
And the two questions above help us eliminate a fair bit of noise as we attempt to parse the signal from the noise.
