Narrative and Better Bets

One thing I love about Yobi (my job) is one of its core values: make smart bets. It’s one of those kinda reductive statements that requires a lot of context to be practically instructive, but fulfills its role in creating rhetorical focus. Everything we do is a bet. bets have risks, upsides, and downsides. Different bets interact and inform future bets. Given your portfolio of bets, what is your expected distribution of outcomes? Etc. These aren’t the capped ludic bets of the casino, where all probabilities are known and there are no inter-bet interactions. They are the bets of the natural world, where bets build on each other and can lead to compounding results. Some bets have catastrophic downside (mostly bad bets), and some have incredible upside (some good bets). Narrative has a critical role in bet making: most good options are hidden to almost everyone - imagine the startup opportunity, which relies on key recent tech advancements, changes in market dynamics, a coalescing of talent, a unique framing of the problem, etc. Predicting success (binary or degree) for this venture relies on a lot of information that simply hasn’t happened yet.

However, narrative allows you to abstract and achieve much higher leverage over the problem/world, like our evolved brains allow pattern recognition in our senses ¹. Every step up the intelligence ladder represents another filter to remove irrelevant information, enabling efficient and effective planning. It allows you to take a hopelessly detailed and complex situation, and recognize and distill its core risks or opportunities. It helps you draw a (fuzzy) arc through time to the vague but potentially very beneficial outcome. And practically, it lets you recognize a good bet when you stumble upon it. Narratives and their pursuit are themselves bet generating processes, making the intentional cultivation of narrative a precursor for doing things of substantial significance. I think this lens is also useful for separating narrative from its close relative understanding. Understanding is also a noble pursuit, but appears more passive in its nature and effect. Narrative is about drawing the line into the unobserved space, and updating it when you get there. Narrative is instructive about where to focus, about what matters, and it is anti-fragile ² to new information that disconfirms it, as we either discard it in favor of a new narrative, or build an even stronger narrative incorporating said new information.

Narrative is required for rising above random chance, in terms of achieving significant outcomes. In fact, back at the start of 2023 before joining Yobi, I had the opportunity to jump on the LLM train when it was starting to blow up. ChatGPT was starting to make real waves outside of “good enough” copy writing, and I even had significant experience in language modeling. But in the end I didn’t, largely due to the narrative I had cultivated. The technology was relatively mature at that point, and my opportunity to influence any company that was more than a barnacle on the back of the LLM whales was minimal. Yobi, on the other hand, aligned almost completely with my views on ML and its relationship with the market, and was still early. Yobi bet that we could achieve privacy preserving personalization with manifold learning, allowing that information (not data) to be brought to bear in many applications currently served by fragmented offerings. Insightful, high leverage, and not compelling to those that aren’t in the know. By comparison, LLMs and their derivatives? Obvious, high competition, with everyone and their mom’s racing to the gold rush.