There are 2 parts to understanding why optical illusions work. Let’s talk about part 1.

Part 1

You wno’t bvleiee the tihngs you wlil cmoe acosrs in the nxet 10 mnitues

Can you read the above text? Why?

It dseno’t mttaer in waht oderr the lterets in a wrod are, the olny irpoamtnt tihng is taht the frsit and lsat ltteer be in the rhgit pclae.

We have to understand how our brains process information. Our brain is neither linear nor logical in processing information. And as we will see later, this plays a big role in optical illusions.

Can you see a triangle in the above image? How can you see a triangle when none exists?

Our brain fills in the gap while processing information.

Side note: Gestalt psychology is a rich field with lots of examples and details as to how our brains process visual information.

Part 2

So the first part to understanding why optical illusions work is how our brains process information. Let’s talk about the second part now…

Quick:
Think about a tool and a colour!

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….
….
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……..
………..
……………………..

Did you think of a red hammer?

About 75-80% of the people think of a red hammer when asked the question.

Over 95% of the people at least think of a hammer. While the colours may change. The second best option that people think of is a blue hammer. And the third best is a black hammer.

If you ask people: name a furniture item that has 4 legs?

The overwhelming answer will be “chairs”. Over 90% of the people will answer “chairs”.

Even though “tables” fits perfectly too.

This is the second reason to keep in mind: associative memory. We are all wired to pull out certain things from our memory when dealt with specific stimuli.

There are 3 shapes. A triangle. An oval. And a rectangle.

There are 3 shapes. A triangle. An oval. And a rectangle.

You’ll be given a word next. And you have to associate that word with one of these shapes. Which shapes do you think best fits the word. Ready?

Bank.

Which shape do you most associate with the word bank?

Did you say rectangle?

Most people say rectangle.

It’s the power of associate memory.

Side note: There is a whole field of matching personality with shapes called Psycho Geometrics. Some may call this a pseudo science, but it’s fairly interesting stuff.

The Logic

“The human visual system has evolved to compensate for neural delays by generating images of what will occur
one-tenth of a second into the future.” – Mark Changizi

Our visual system has evolved to predict things one-tenth of a second into the future. When light hits our retina in the eye, about one-tenth of a second goes by before the brain translates that into a visual perception of the world. Our brains have evolved to compensate for this neural delay. And it attempts to generate an image of what it will perceive one-tenth of a second in the future.

This is a very very important point. Optical illusions occur when what our brains predict does not match the reality.

From an evolutionary point of view, this makes sense. When a wild bear is chasing us, we have to run without paying detailed attention to our path. We have to make sure that we step our foot in safe places and not on sharp stones or snakes.

Funny illusions occur because:

1. The manner & order your brain processes the information in
2. Associative memory

In summary: optical illusions occur when what our brains predict don’t match the reality. And this prediction-reality mis-match occurs due to:

• how our brain processes information and
• how our brain calls on our associative memory

The Optical Illusions

Optical illusions can be categorized in 5 types. Let’s take a look at a few optical illusions.

Size

Which orange circle is bigger?

Did you say the right handed one?

Actually both the orange circles are of the same size.

But our brain predicts sizes based on the objects surrounding it. An object looks smaller if its surrounded by bigger things. Hence the illusion.

Which of the 4 men with hat in the photograph is bigger?

Again, all 4 of them are of the same size. Size changes due to the illusion of depth.

Curves and Angles

Here are 2 photos of the Leaning Tower of Pisa. Which tower is more leaning? The left hand side one or the right hand side one?#

Did you say the right hand side one? Are you sure?

If you take a closer look, the same image is placed side by side. The left hand side image and the right hand side image is the same. There is not even a slight difference. And yet, we feel that the right hand side tower is more leaning!

Why?

In this illusion (called the Hering illusion), we perceive the parallel lines to be unparallel. The intersecting lines give us a perception of depth at the point of intersection. And our brain overcompensates for this and makes the parallel lines look curved out in the opposite direction.

This above image (called the Zolner illusion) has 8 vertical parallel lines. But they don’t seem parallel.

And thats because our brains overcompensate their direction in the opposite direction than the one the angle that the slanting lines create.

The Cafewall illusion. All the horizontal lines are parallel to each other.

There are no intersections in the above illusion. Our brain overcompensates the curves because of the angle created between 2 squares next to each other.

This above illusion actually makes you think that the circles are moving. Especially if you move your head to and fro. But it is a static image.

Colour

The chess pieces in the top half of the image and the bottom half of the image are of the same colour. Don’t believe me? Let’s watch a quick video.

How we perceive colour of an object depends a lot on the colour of its surroundings!

Angle of Perception

What do you see in the picture above? 2 faces? Or a vase? (Hint: focus on the black portion to see 2 faces. Focus on the white portion to see a vase.)

Our perception depends a lot on our original angle of viewing.

In which direction does the lady above rotate? Clockwise? Or anti-clockwise?

Can you close your eyes and re-open to see if the lady changes direction?

Focus on the middle and the left lady first. Now focus on the middle and the right lady. Were you able to change directions now?

The original direction of rotation that our brain perceives in the first half a second will persist. Until you close your eyes. Or take help of colours, whose rotational direction can’t be faked.

Psychological Stimulus

There are a few illusions that occur because of a psychological effect. You literally see or hear things that don’t exist – because the stimuli is too strong.

Can you count the number of black dots in the image above?

The black dots keep on appearing and disappearing in this scintillating grid illusion. If you focus at the intersection, the black dot won’t be perceived. If you are too close or too far from this image, the black dots won’t appear. But otherwise, you will see black dots appear randomly all over.

This occurs because the stimuli at the intersections is just too strong because of the surrounding colours and design.

Finally, two more psychological effects are the Thatcher Effect and the McGurk Effect. Click the links to watch bizarre videos and get a shock!

The science of illusions is a rich field. And there are some awesome things that we didn’t cover. Things like shadow illusions. And super illusions that we get to see when we combine the above categories. Its a fascinating topic and my hope is that you are inspired to delve into it by yourself because of this blog post.

1

March 8, 1992. Accidents on Canada’s roads are 8% higher than average.

November 1, 1992. Accidents on Canada’s roads are 8% lower than average.

Why?

Daylight Saving Time.

On March 8, the clocks change for the summer. Most Canadians have one hour less sleep than usual.

On November 1, the clocks change for the winter. Most Canadians have one hour more sleep than usual.

Is sleep really that important?

You probably won’t die from sleep deprivation – but this might happen

White blood cells are the body’s natural defence against disease. When infections invade your body, white blood cells fight back.

If your white blood cell count drops, you’re more likely to get sick.

2007, São Paulo, Brazil. In a university laboratory, rats are forced to stay awake for 24 hours. Their white blood cell count drops by 20%.

What about the guy who stayed awake for 11 days?

December 28, 1963. Scientists have done little research into the effects of sleep deprivation. American high school student Randy Gardner decides to conduct his own experiment. From today, and with the help of two friends, he forces himself to stay awake as long as possible.

After two days, he has problems focusing. On day three, he is moody and angry with his friends and his speech becomes slurred. After four days he starts hallucinating and believes he is a famous football player.

Gardner finally falls alseep after 264 hours (11 days) on January 8, 1964.

Question: Who needs more sleep?

1. An athlete who has run a marathon?
2. A grad student who has completed an intense math test?

Answer: Astrocytes.

Okay, that’s not the real answer. The real answer is the grad student. But the reason for this answer is astrocytes.

Neurons use a lot of energy as they send messages and signals through your brain. But they’re unable to store energy themselves.

Astrocytes store the chemical energy needed for the neurons in your brain to work effectively.

Strenuous mental activity activates more neurons, depleting the energy stored in the astrocytes. Your astrocytes need to recharge. Only in sleep are the chemical reserves of astrocytes replenished.

People whose work requires strong mental focus need more sleep than those who do physical work. That’s why getting enough sleep makes you smarter.

How much should you sleep?

It depends on your age. Babies need to sleep 18 hours a day while adults need 7-8 hours.

However much sleep you need, get it at night you can. Staying awake at night messes up the hormonal controls of your body’s internal systems.

People who frequently stay awake at night and sleep during the day – whether because of their job or out of choice – are more likely to suffer from a range of illnesses, including some cancers. People whose jobs require them to work night shifts are up to 48% more likely to develop breast cancer.

The research linking staying awake at night and cancer is so strong that the International Agency for Research on Cancer has named shift work as a “possible human carcinogen”. This puts shift work in the same category as ultraviolet radiation and anabolic steroids.

Action Summary

• Get enough sleep.
• Sleep at night.

Benjamin Franklin was right when he said: ”Early to bed and early to rise makes a man healthy, wealthy, and wise.”

When you’re tempted to stay up late, think astrocytes.

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Bonus: How Sleep Helps You Problem Solve

Three groups of people are taught a technique to solve a particular math problem.

Then they’re asked to wait 8 hours.

Group A’s 8 hour wait is during the day, when they’re awake.
Group B’s 8 hour wait is during the night. They’re kept awake all night.
Group C’s 8 hours wait is also during the night, but they’re allowed to sleep.

After the 8 hour wait, the people in each group are asked to solve a series of math problems that let them apply the technique.

None of them have been told there’s a hidden rule which would allow them to solve the problems much more quickly.

People in Group C were more than twice as likely to discover the hidden rule than people in the other two groups.

Sleep makes you smarter.

Bonus Action Summary

• Creative block? Sleep on it.

10

1. Alexander’s Education

Would you refuse to tutor the son of a King?

Philip of Macedon has a young son named Alexander. When Philip announces that he is looking for the best private teacher in the entire kingdom to tutor his prince son, there is a huge beeline of teachers outside his palace.

Isocrates, who had studied with great philosophers such as Socrates and Gorgias puts his name forward. But is rejected.

Speusippus, who succeeded Plato at the Platonic Academy, puts his name forward. And is willing to quit his position at the Academy to teach Alexander. But he is rejected too.

Philip rejects many other teachers. Because he wants the best teacher for his son. And he has heard that the best teacher in the entire kingdom is Aristotle. But Aristotle does not put his name forward.

What’s more, when Aristotle is approached to be the tutor of the young prince, he flat out refuses!

Philip dangles a carrot in front of Aristotle: along with unimaginable riches, Philip would also rebuild Aristotle’s hometown of Stageira, which had been razed down. He would also free all the slaves who were citizens of Stageira before it was destroyed – so as to repopulate the town. But yet Aristotle rejects the offer.

Philip than uses the stick: Aristotle would be exiled if he did not teach young Alexander. And yet Aristotle stubbornly rejects the offer.

So finally Aristotle is asked: what are his demands? What would it take for him to accept the position of a tutor to young Alexander?

And Aristotle says: he wants complete control without interference in how he teaches Alexander. He would not come to the palace to teach Alexander. Alexander would have to come to him. And most importantly, he would not teach Alexander alone and in private. He would only teach the young prince if other students are in the same classroom as his.

This is unheard of. Not focusing your entire attention in teaching the next king? Giving other kids equal status as to the prince? But no matter what is done to persuade Aristotle, he does not budge from his demands. Let him teach Alexander with other students, or not at all.

Aristotle knows that without competition and challenges from fellow classmates, he would not be able to bring the best out of Alexander.

Everyone knows the greatness Alexander achieved. But not many know the greatness his fellow classmates achieved.

Ptolemy, Cassander and Seleucus were all Alexander’s classmates. They became Alexander’s generals and helped him in his conquests. But what happened to them after Alexander’s untimely death?

• Ptolemy founded the Ptolemaic Dynasty in Egypt.
• Seleucus re-united Persia and created the Seleucid Empire.
• And Cassander, perhaps the classmate who challenged Alexander the most, went on to rule Macedon and Greece.

Moral: Greatness rots in isolation. You need competition to bring the best out of you.

2. Alexander’s Quest to Find the Safest Path in an Uncharted Territory

Alexander’s generals are arguing over the best course of action to cross a hilly terrain. The path is uncharted. And the enemy could be lurking in hidden crevices anywhere. Or even worse, what if Alexander and the army came out just to find the enemy soldiers waiting for them on the other side?

So the generals are debating as to which uncharted path to take to reach an unknown territory. Everyone is disagreeing with everyone else. And Alexander’s usually smart generals can’t come to a decision.

So Alexander disregards all of his generals suggestions. Instead, he simply calls a poor sheep herder from that region and bribes him to show the safest route.

Moral: when in doubt, go to the the folks who have expertise in that particular problem, no matter how lowly they are thought of.

3. Alexander Earns His Soldiers Loyalty

Alexander is crossing the fatal Gedrosia dessert in Asia. This is the same desert where, legend has it, Queen Semiramis had lost 20,000 of her men. The desert is unforgiving. Scorching heat. Lack of food and water. It makes men drop like flies.

Even Alexander’s brave men are not spared. They start dying of dehydration in the 60 day march.

On one very hot tiring day, some soldiers find a little bit of water in a ravine in the desert. They fill it up in a helmet and take it to Alexander. But before drinking the water, the thirsty Alexander asks them: is it enough for all the soldiers?

The soldiers reply that no, it is not enough.

And so Alexander drains the water to the ground.

Moral: Do what is in the best interest of other people. Sacrifice for them and they will follow you.

4. Alexander and the Prophecy of the Gordian Knot

Alexander, along with his armies, reaches the city of Gordium in Phyria. There he is shown the chariot of the ancient founder of the city, its pole lashed to the yoke by means of an intricate knot. The knot doesn’t have any loose ends.

The Oracle has prophesied that he who unravels the knot will go on conquering entire Asia. Many have tried, and all have failed to unravel the Gordian knot.

At first, Alexander attempts to untie the knot like everyone else – by trying to find a loose end. But while others before him gave up when they could not find the loose end after hours of attempt, Alexander has different ideas. When it becomes apparent that there is no loose end, Alexander draws his sword and slices the knot in half.

Shortly afterwards Asia is united for the first time under his rule.

Moral: Sometimes it’s better not to get too tied up in a problem. Leap for a bold solution!

5. Alexander vs Darius

The year is 331 b.c. Alexander is still to become “Alexander the great.” Alexander has to fight a war against the king of Persia – Darius.

The war is very unbalanced and tilted in the favour of the Persian king Darius. Alexander’s army is outnumbered 20:1 in the battle against Darius. Furthermore, the Persian army is better equipped too. They have chariots and fancy weaponry.

Alexander realizes that it would be very hard to win against the Persian army. There is no way that Alexander could take on the might of Darius’ forces. So Alexander gives just one simple order to his soldiers:

KILL DARIUS.

Every soldier in Alexander’s force has one clear mission, one clear target: Darius. They go after that one target in full force when the war begins.

Their focus takes the Persian wing that protects Darius by surprise and Darius soon realizes what Alexander is up to. He flees to save his life. Seeing their commander and king run away, the other generals and soldiers flee too. And Alexander, with poor equipment and outnumbered soldiers, wins against the mighty Persians.

Alexander becomes “Alexander the great.”

Moral: Focus your energies. And you can move mountains.

9

1.The Story of Chelm Justice

Eons ago, there is a small town named Chelm somewhere in Europe. To bring order in the city, the people of Chelm elect an impartial judge. One day, filled with rage, the town cobbler kills one of his customers.

The cobbler is bought up in front of the judge who sentences him to die by hanging. This is really bad news for the town. One townsman gains courage to stand up and speak: “If Your Honor pleases, you have sentenced to death the town cobbler! He’s the only one we’ve got. If you hang him who will mend our shoes?”

“Who! Who?” cry all the other townsmen in Chelm together.

The judge thinks for a while, nods in agreement and reconsiders his verdict. “Good people of Chelm,” he says, “What you say is true. Since we have only one cobbler it would be a great wrong against the community to let him die. As there are two roofers in the town, let one of them be hanged instead!”

Action Summary:

• Be unique.

2. Michael Jordan vs Joe Kleine

Michael Jordan of Chicago Bulls Slam Dunking the Ball

Its 1996 and Chicago Bulls wins the NBA basketball championship.

• Michael Jordan earns $80 million that year (including endorsement deals).
• Joe Kleine – a player on the bench of the same winning Chicago Bulls team – makes a total of $272,250 that year.

Same winning team. But a difference of a whooping 293:1 in their earnings!

Action Summary:

• Be the best at what you do.  Because the difference between #1 and #2 is growing wider in all the fields!

(But what if you aren’t the best in your field? Read on…)

3. Boring Dennis Rodman vs Exciting Dennis Rodman

Dennis Rodman – another basketball player – plays for LA Lakers.  For years, he puts up impressive rebounding numbers on the scoreboard.  But yet he goes totally unnoticed.  And does not making his millions.

He is definitely no Michael Jordan.  Nowhere as good.  And nowhere as popular!

But one day, Dennis changes all that.  No he doesn’t magically become as good as Jordan.  But he colours his hair red!  The only basketball player to do so!

Dennis Rodman: Before & After. Black boring hair hid him in the pack. Red exciting hair made him rich and famous!

He colours his hair red and everyone starts noticing him.  The media start following him.  Pretty soon – he becomes very popular.  And earns millions of dollars worth endorsement deals! And also attracts the attention of Carmen Electra!

Still nowhere near as rich as Michael Jordan.  But he does a lot better than before!

Just because he took the courage to do something different, something unique and stand out from amongst the crowd!

Action Summary:

• Create your own personality.
• Do something bold and outrageous.  Something whacky.  To stand out from the crowd.

4. Manufacturing a Hit Car

Henry Ford’s Model-T that makes him the richest person in the world

Many folks mistakenly believe that Henry Ford invented automobiles.  But that is far from truth.  When Henry Ford started the Ford Motor Company, there are 14 other car manufacturers in the state of Michigan.  And 87 car manufacturers in the whole of USA!  Very stiff competition.

But while all the other 87 car manufacturers are trying to learn from each other to advance their field, Henry Ford takes a different approach.  He goes outside his industry to find ideas.

And an idea he finds from the meat packing industry!

Henry studies the Chicago meat packing industry to see how their productivity is so high.  And learns that each worker only does one specific narrow task. Workers don’t move. They stand in their station. And a pulley system is used to move the meat from one working station to the next where the worker would do his one specific task efficiently.

Henry Ford copies this assembly line system for the manufacturing of cars too. And revolutionizes the automobile industry – becoming the richest person living in the process too!

Action Summary:

• Look outside your field of interest. Most revolutionary ideas come from merging 2 fields.
• Copy hit ideas from other industries.

5. Manufacturing a Hit Comic

Kevin Eastman is brainstorming with his friend Peter Laird about comics in 1983.

While brainstorming, they ask a question: what could they do to improve their chances of coming up with a hit comic? And the solution they come up with is ingenious!

They start counting their inspirations.

1. Cerebus the Aardvark is a surprising cult comic of the time. Its about a pig superhero who drinks and cusses. But is very smart. Misfit animal superhero.

2. Ronin by Frank Miller is also a hit comic of the time. Ninja movies are doing well too. Ninjas.

3. Daredevil is another hit comic. It’s about a blind mutant whose other senses are heightened beyond normal human ability because of radio active exposure. Mutants.

4. The New Mutants is another comic they are inspired by. It’s about teenage mutant superheroes undergoing training.  Teenage mutants.

Eastman and Laird mix all of these 4 inspirations together. And come up with teenage mutant ninja misfit animals undergoing training.

They come up with Teenage Mutant Ninja Turtles!  Which becomes a huge hit!

Leads to:

Cerebus the Aardvark + Ronin + Daredevil + The New Mutants = Inspiration for the hit comic Teenage Mutant Ninja Turtles

Action Summary:

• Mix 3-4 hot trends and create your own hit.
• “Copy from one, it’s plagiarism; copy from two, it’s research.” – Wilson Mizner

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Kevin Eastman and Peter Laird took a loan to publish the first issue of Teenage Mutant Ninja Turtles. But they didn’t just sit and wait for the sales to roll in.  Instead, they took massive action and sent out 180 press kits to all the media stations!

Action Summary:

• Even hit products require backup from marketing.  Your product may be awesome.  But if no one knows about it, how will it ever become a hit?

7

In the 17th century, it is à la mode for scholars to attempt to outdo the ancient masters by scrawling brilliant commentaries in the margins of ancient works. The French lawyer Pierre de Fermat happily adopts this habit, writing mathematical theorems and proofs in the margins of ancient texts or on lone scraps of paper. Fermat describes these theorems in letters to his friends, without bothering to include the proof he claimed to have worked out. Fermat thus earns the reputation of an amateur mathematician who gives even Descartes a run for his money. Most of his theorems are eventually proven — or disproven — when his friends manage to pull together proofs Fermat left scribbled on scraps of paper and book margins.

Fermat becomes most famous, however, for a certain scribble left in the margin of a book that none of his friends could find the proof for. In this scribble, Fermat claims to have proven that a certain equation referred to by Greek philosopher Diophantus in the book Arithmetica had no solutions, and that he has found “a truly marvelous demonstration of this proposition which this margin is too narrow to contain.”

The Curiosity and Audacity of Being Ten Years Old

Over 300 years later, 10-year-old Andrew Wiles is combing the stacks at his local Cambridge library in search of new math problems to solve. The problems he tackles at school aren’t difficult enough to quench his thirst. Stumbling upon Eric Temple Bell’s The Last Problem, Andrew discovers the centuries-old enigma known as Fermat’s Last Theorem. Undeterred by the failure of many before him to prove this great mystery, Andrew nurtures an obsession with the theorem throughout his teenage years, and into college.

Forgetting About It

Wiles finishes school and became a researcher. He decides it’s time to take a break on the theorum. The tools he had at hand were 130 years old; what if the tools he needed were not even invented yet? Fermat’s Last Theorem remaines a fixture in the back of Wiles’s mind, but he decides to wait until the time is right.

Serendiptity and Determination

Eleven years later, the right time comes on a seemingly ordinary evening over a glass of iced tea. Wiles’s friend mentions that another mathematician has proved a connection between the modern Taniyama-Shimura problem and Fermat’s Last Theorem. Armed with a contemporary problem that held the key to his ancient one, Wiles goes back to work. For seven years, he works in secrecy and isolation, telling no one but his wife of the work that consumes him.

He describes his experience:

“You enter the first room of the mansion and it’s completely dark. You stumble around bumping into the furniture but gradually you learn where each piece of furniture is. Finally, after six months or so, you find the light switch, you turn it on, and suddenly it’s all illuminated. You can see exactly where you were. Then you move into the next room and spend another six months in the dark. So each of these breakthroughs, while sometimes they’re momentary, sometimes over a period of a day or two, they are the culmination of, and couldn’t exist without, the many months of stumbling around in the dark that precede them.”

A Final Solution

One morning in 1993, Wiles is alone in the house, leafing through a research paper. A single sentence abruptly seizes his attention, a sentence that refers to a 19th-century construction. Wiles spends the rest of the morning and most of the afternoon entwining this construction into the last stage of his proof. At tea time, he goes downstairs and explains to his wife Nada why he missed lunch: he has finally solved Fermat’s Last Theorem.

Wiles presents the lengthy proof to a level of fanfare and celebration quite unusual for a mathematical problem. However, a slight error in a pivotal part of the argument is soon revealed, and Wiles goes back to work. This time, he enlists help from Cambridge mathematician Richard Taylor to untangle and rectify the error.

The Final Solution

A year later, Wiles presents an error-free, 150-page proof.

Many have speculated whether this could be the proof that Fermat was “unable” to fit in the margin of his book. Alas, no one will ever know for sure whether Fermat had really devised a proof — but we can be certain that he did not take the same route as Andrew Wiles. Wiles’s techniques had simply not been invented in the 17th century.

Action Summary:

• Trying to outdo the old masters is all well and good, but it will take curiosity, audacity, serendipity, and determination.
• Dedication and perseverance are crucial to accomplishing impressive feats, but patience is valuable too when the time is not yet right.
• The final solution is not always the Final Solution. When you’re almost there, don’t give up.
• Sometimes we can’t go it alone; enlisting the help of others may be the move that takes you to the next level.

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Picture of Andrew Wiles is copyright C. J. Mozzochi, Princeton N.J. Used by permission.

This post is by creative writer Zoë Westhof. Explore writing, innovation, choice, and change at Zoë’s blog, Essential Prose

6

“When spiders’ webs unite they can tie up a lion”
~ Ethiopian proverb

The World’s First Criminal Hacker

In 1967 a New York banker hacks into his employer’s computer system. He installs a computer programme that shaves tiny amounts of money off customer interest payments and pays them into his own account. Each amount stolen is a fraction of a penny.

In a few years, the banker has amassed over $200,000.

The Most Powerful Force in the Universe (According to Albert Einstein)

Put money in a bank account and after 12 months you’ll be paid interest on that money. Wait another year, and you’ll be paid interest again. This second year’s interest is paid on the money you originally deposited, as well as on the interest you earned in year one. The interest that’s paid on interest is compound interest. It’s tiny to begin with, but over time it builds momentum and keeps your investment growing at a faster and faster rate.

“The most powerful force in the universe is compound interest.”
~ Albert Einstein

Here’s the power of compound interest. If you invest $100 per month between the ages of 20 and 29, then leave the investment to grow until you reach age 60, you’ll end up with more money than someone who invests $100 per month between the ages of 30 and 59.

Saving $1 Billion in Penny Coins

In 2004, Bank of America hires a research firm to work out how they can get more people to open bank accounts, and more money deposited in these accounts. Professional sociologists and psychologists are sent out to observe the every day behaviour of Bank of America’s target customers.

The researchers see that when most people go shopping, they get home and put any coins left over from the shopping in a jar. Over time, people collect this money and put it in a bank account, use it as kid’s pocket money, or give it to charity.

Noticing this almost universal behaviour, Bank of America launches a new account called ‘Keep the Change’. Every time a Keep the Change account holder goes shopping with their BoA debit card, the purchase is rounded up to the nearest dollar and put into the shopper’s savings account. BoA adds 100% to the total for the first three months, and 5% to the total thereafter.

The account proved hugely popular with 99% customer retention.

Since the 2004 launch, ‘Keep the Change’ customers have put aside their spare pennies to save more than $1 billion.

An Encyclopedia Written by Millions

2001. Wikipedia launches with fewer than 100 articles. Over the next 12 months, 50,000 people visit the site – fewer than 150 per day. However, visitors are intrigued by the idea that they can create and edit articles on the site. A high proportion of visitors contribute, either by submitting a new entry or updating current articles.

By early 2002, the article count reaches 20,000. In 2003, this has grown to 100,000 articles.

July 2006. Wikipedia is now growing so fast that it is physically impossible for a single person to read through all the updates and new articles, even if they did so at 600 words per minute, 24 hours per day, every day.

Today Wikipedia hosts over 5 million articles in more than 100 languages. Tens of millions of people visit every day, making over 500,000 daily edits.

Kaizen

Kaizen is Japanese for “continuous improvement”. It’s not just a word, but a philosophy of getting big things done in tiny steps.

In our instant gratification culture, we expect everything right now. We do not expect to have to work at things. We look at a masterpiece of art, or an innovative new business, and we are stunned, as if it had happened overnight.

“Little things add up to a big thing if you have enough little things. Given enough time, the steady drip-drop of water becomes an ocean. Given enough time, small regular deposits become a small fortune.”
~ Ian Newby-Clark

Action Summary

“Do not fear going slowly; only fear standing still.”
~ Chinese proverb

5

Most potential entrepreneurs dream of breakthrough businesses all their lives and never get started. On the other hand, those who have listened to their intuition often wish they took the plunge earlier.

When surveyed, entrepreneurs say 29 is the ideal age to start a business. The average age that entrepreneurs actually start a business is 35. They wish they’d started earlier.

There’s no perfect age to start living your dreams. Being too young or too old is no excuse. The perfect time to start is right now.

These people did.

Nola Ochs – The Energizer Student

1972. Nola Ochs is widowed on her wheat farm in the town of Jetmore, Kansas (population 1000). She tends to her farm with the help of her children. In 1978, she realises she wants more from life. Age 68, she signs up for a tennis class at the nearest community college.

Years pass. Nola works full-time on her farm and occasionally drives into town to attend a class. After ten years studying everything from agribusiness to the Bible, she’s told that she is one class away from an associates degree. All she must do is complete college algebra.

With an associates degree she is pleased but not fulfilled. College algebra will not be the end of her scholarly career. Several years later she decides to make the two hour trek to Fort Hays State University. Enrolling at age 94, she lacks only 30 class hours to earn a bachelor’s degree. In May 2007, at 95, she becomes the world’s oldest college graduate.

Is it time to sit back and enjoy the framed diploma on the farmhouse wall? Not yet. She’s started a Masters Degree.

Cliff Burgess – The Marathon Man

1993. Cliff Burgess is 55. He’s tired of his potbelly and vows to start walking.

Cliff hits the pavement in his suburban Texas town. A walk around the block turns into twice around the block. Walking feels good, but he knows he can pick up some speed. The weight starts to come off as he signs up for 5km and 10km races. In less than a year, he enters in the San Antonio marathon thinking of it as a training run in preparation for his first marathon – 42km (26.2 miles). He feels good during the race, and he crosses the finish line faster than expected.

Averaging 15 marathons per year, he completes his 100th marathon six years later at the age of 62.

Reaching 100 marathons isn’t the final goal. His running gives him an excuse to travel the world to add to his marathon list. He finds himself in Finland, France, Romania, China, Argentina, Brazil, 25 other countries, and nearly all of the 50 states of the USA in a record 15 years.

At age 70, he’s at Marathon #226 and counting. One of his finest highlights is qualifying multiple times for the runner’s dream: a bib number in the Boston Marathon. In April 2009, he will travel to Boston, Massachusetts for the fourth time to take part yet again in all the running glory.

“Nothing happens unless first we dream.”
~ Carl Sandburg

Action summary

• There’s never a perfect age to live your dreams. The perfect age is right now.
• Make your goal known. Travel one step at a time.
• Keep your dream alive. Long-term goals exist because they take a long time.
• Success and determination are intimate siblings. Talent is merely success’s distant cousin.

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In the 1960’s space race NASA invests billions of dollars in new technologies that will make American astronauts  first on the moon.

One important technology is a pen; the astronauts must record their findings. Ordinary pens can’t function in zero gravity (ink needs gravitational pull to move from pen to page), so over $1 million is invested designing a specialist space pen that works in weightless conditions.

At the same time, the Russians are also spending billions on space technology.  However, when it comes to writing in space, they decide to save money for more important research and opt for a simpler, cheaper solution.  They look around them for an answer that already exists, and they don’t have to look far.

Russian astronauts use a pencil.

NASA failed to remember this lesson.  As frustrated NASA scientists re-discovered recently, great ideas don’t have to come at great expense.  It’s often the cheapest solutions that work best.

“Our greatest lack is not money for any undertaking, but rather ideas.”
~ Robert H. Schuller

How to Measure Climate Change with Children’s Toys

NASA scientists want to find out whether melted glacial ice from the Arctic ends up in the ocean.  Installing their most sophisticated probes, they wait for data.  No data comes.  The probes are refusing to share their discoveries.

America’s space agency, one of the most well-funded scientific research groups in the world, has tried their best technology to solve a problem, and failed.

A meeting is held to find another way to collect the data.  Having exhausted every possible solution from their usual box of scientific tricks, the researchers must radically transform their approach.

Idea after idea is talked through, analysed, and rejected.  Then one scientist who has been sitting deep in thought whilst the others argue, speaks up:

“We could use rubber ducks.”

The room erupts with laughter.  Has he lost his mind?

The speaker’s face remains serious, and the laughter stutters to a halt.  He explains his idea, and after much deliberation, rubber ducks are accepted as the ideal solution.

The NASA scientists decide to put numbered rubber ducks on the melting glacial ice, with contact details and the promise of a reward attached.  If the rubber ducks are found floating out at sea, it is obvious that melted glacial ice ends up in the ocean.  If the rubber ducks are discovered in pools of melted ice between piles of snow, then it’s clear that melted glacial ice remains in the Arctic.

The rubber duck solution was backwards to NASA’s usual approach.  The scientists were stuck in the habit of solving problems by researching more advanced technology.  Before they came up with a solution, they were forced to realised that in following a well trodden path, they were looking for ideas in the wrong places.

“Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.”
~ Robert Frost

How to Destroy the Profit-Margins of Bicycle Thieves

In the UK, a bike is stolen every 71 seconds.  Bike makers know this. They also know that the fear of bike theft makes people think twice before buying a bike.  So they research more effective locks and chains.

The problem is that the strongest locks are the most expensive to make.  People buying bikes want strong but cheap locks.

Engineering student Phil Bridge approaches the problem backwards and comes up with a wacky but highly effective solution. Instead of designing a shiny-new superlock, make it unprofitable for thieves to steal.  Make the bikes very, very cheap.

Costing $25 brand new, and just $5 for a replacement frame, Phil’s bike is almost worthless and completely pointless to steal.  The low price is possible because the bike is made from recycled waterproof cardboard.

Action Summary

• The greatest ideas are often the simplest and cheapest, but not the most obvious.
• Key to being a good idea maker is creating ideas for which you have access to the necessary resources.
• When your usual problem-solving approach fails, turn the problem upside down, inside out , and back to front.

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American pen maker Paul Fisher spent $1 million developing a space pen that works in a vacuum, with no gravity, and at temperatures as high as 150°C and as low as -120°C.  The pen does not burn even in a 100% oxygen atmosphere.

NASA astronauts started using the pen in 1967.  Russian astronauts adopted the pen in 1969.

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Are you up for a personal experiment? Don’t worry; it’s a very easy experiment.

All you have to do is take a look around you and count all the things in blue you can see. Could be the jeans you are wearing, a pen, maybe the colour of your chair, the water cooler… count as many things as you can. Done? Now try to remember them while we take a slight detour…

The Detour

In 1953, a survey was conducted with the graduating class of Yale. The question in the survey?

“Do you write down your goals?”

The response showed that only 4% people wrote down their goals.

In 1973, 20 years after the initial survey, the researchers track down the surviving members of the class of ’53 to see how successful they were. And what they found astounded them. 4% people who wrote down their goals were worth more than the other 96% put together!

The research showed that writing down goals work like magic. But why does it work?

For the answer, let’s get back to our little experiment…

Back to the Experiment

Remember all the blue things you counted around you in your room? Are you ready to narrate them one by one?

Ok – now, without turning around, can you start naming the “brown” things you saw around your room 2 minutes ago?

If you are like most people and don’t have photographic memory, you won’t be able to name more than 2-3 brown things. But you’ll be able to name 8-10 blue things.

How come? Because before you turned around, you had a goal of counting blue things. And your mind was focused on counting blue things – not brown things. It filtered out all the brown things.

Writing down goals is nothing but a filtering device for your brain. You will focus more on the things you’ve written down as your goals. And you will jump on them when they present themselves as opportunities.

Action Summary:

• Write down your goals – monthly as well as long term goals – and you’ll achieve them.

• Read your goals list every day to help your brain focus better.

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In January 2004 Vegas magician-comedian Mac King stages the world’s largest ever game of telephone. To the first of over 600 players King whispers the words “Mac King is a comedy magic genius”. One hour and 614 whispers round the auditorium later, the final player whispers back to King the phrase he has heard: “Macaroni cantaloupe knows the future”.

On the stage, one of Mac’s security guards stood handcuffed to a locked case. Inside the case is King’s predicted result for the telephone game. A representative from Guinness World Records opens the case to find King’s prediction which is ’shockingly close to accurate’.

King is asked how he’d guessed right. “Magic,” he replies.

When rumours, ideas and even true stories pass from person to person, they gain a momentum and life force of their own. Once released into the world, ideas can take on new forms and meanings that their original creator never intended.

Most of us don’t have the magic touch to guess how this will happen or what changes will occur. Because of this, it can be difficult to tell when rumours are based on truth or falsehood.

Three true stories, one of European war reporters in WWI, one of an English pirate, and one of Canadian gold prospectors, illustrate this perfectly.

Rumour # 1: War Reporters

One morning during the First World War, people across Germany wake up to the news that the city of Antwerp in Belgium has been conquered. Readers of the Kolnische Zeitung newspaper are greeted with the headline: “Upon proclamation of the fall of the city of Antwerp, bells were rung” – explaining the celebration church bells they’d heard across Germany the day before.

French newspaper Le Matin writes their report based upon the Kolnische Zeitung headline. Le Matin’s article claims: “According to the Kolnische Zeitung, Antwerp’s clergy was forced to ring the church bells when the fortress was taken.”

The London Times repeats the report from Le Matin: “According to Le Matin, taking its information from Koln, priests in Belgium who refused to ring church bells upon the fall of Antwerp was removed from office.”

A fourth report in Italy takes its information from the London Times. Italian newspaper Corriere de la Sera claims: “According to the Times, citing information from Koln (via Paris), the unfortunate priests who refused to ring the church bells when Antwerp was taken were condemned to hard labour.”

Le Matin then follows up their initial report with an update: “According to information reported by the Corriere de la Sera, (via Koln and London), it has been confirmed that Antwerp’s barbaric conquerors punished unfortunate priests for heroically refusing to ring church bells by hanging them in the bells head down like human gongs.”

Unintentional misreading and deliberate misreporting led to stories that failed to even remotely resemble the truth.

Rumour #2 The Pirate

In the early 18th century, Captain Avery has a notorious reputation as a fearsome pirate who sails the high seas and plunders any ship that crosses his path. The renowned pirate historian Charles Johnson writes that Avery “made a great noise in the world and was looked upon to be a person of great consequence”. So famous is Avery that a playwright made a stage show so that all of England could relive his pirating adventures.

Rumours spread that Avery has married the Great Mogul’s daughter after capturing the ship she was sailing on. He is now royalty in India, master of a squadron of ships.

The truth is, Avery dies penniless in south west England without even enough money to buy himself a coffin.

It is true that Avery had once robbed a Mogul ship of diamonds and gold, although not that of the Great Mogul’s daughter. He also robs his crew of their share of the plunder, and runs away to America to spend his fortune. However, he can not sell the diamonds or gold to anyone for fear of being exposed as a pirate. He moves to England where he asks merchants to help him sell the treasure. The merchants give him a small deposit for everything he owns, saying they would send more money once they make a sale.

Avery never receives a penny more.

“The merchants were as good pirates on land as Avery was at sea”, writes Johnson.

Whilst all of England believes Avery is living the lavish life of a prince in India, he is actually dying the death of a starving pauper, homeless in his homeland.

Rumour # 3: The Gold-Diggers

In 1994 a small Canadian gold prospecting company called Bre-X announces a major discovery in the Indonesian rainforests on the Island of Borneo. Bre-X buys the land, and reports on the find get bigger and bigger, until it is the biggest area of unmined gold in the world.

North American newspapers continually report on the huge money to be made buying stock in Bre-X. Everyone wants to invest – retired people, financial gurus, even whole Canadian towns. Shares in the company, originally sold for a penny each, soars to almost $300.

As expectations crescendo to their highest point, the rainforests are exposed as barren. There is no gold there. Bre-X shares are worthless, and investors lose billions.

How To Never Be A Victim Of Rumours

What can be done to prevent our own lives following the fates of Captain Avery and Bre-X? How can we avoid being swept up in the momentum of rumour?

The answer is simple. But not easy. You need to have the discipline and the guts to follow your own path. And to swim against the current popular opinion.

“Never forget that only dead fish swim with the stream.” – Malcolm Muggeridge

The World’s Richest Man

It is 2008, the year of the great credit crunch. Warren Buffett, for the first time in his 77 years, is crowned the world’s richest man, now worth $62 billion.

How does Buffett reach this position? His whole life, he swims against the flow of rumours, widely accepted assumptions, and common knowledge.

At the age of 21, against the advice of his college tutor and his father, Buffett gets a job on Wall Street. Having the strength of character to know his own mind serves Buffett well for the rest of his life.

Buffet routinely buys stocks when others are selling and the market is in a pessimistic frenzy.

Buffett is one of the few people to see the risks of buying and selling derivatives during the early 21st century boom times. In 2003 he warns that derivatives are “weapons of financial mass destruction”.

Avoiding derivatives means that when the financial mass destruction finally arrives in the fall of 2008, Buffett has the money available to go against the flow yet again. Whilst the wisdom of the market is ’sell sell sell’, Buffett goes against widespread opinion and invests $5 billion of his fortune in Goldman Sachs. Buffett buys shares in the troubled bank at a rock bottom price, and negotiates a return on his investment ten times that of the ordinary shareholder.

Action Summary:

• Whenever reputations or ideas are spread as rumour, there is a danger of playing the telephone game.

• Question everything, especially if no-one else is asking questions.

• To be truly original, go against the flow.

• Build your own reputation based on your unique truth.

This above post is written by the awesome story teller and always fun play-maker – David Masters

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