Easy Access: Mail Order Keys

A late night tonight after returning from speaking at another Creative Currencies Chiasma warm-up event, this time in Glasgow but just time for a quick post.

More than a few folk have had issues with keys in the Bitcoin world. But such concerns are nothing new. I suspect that even Charles Chubb and Linus Yale, Sr. might have been somewhat concerned if a business such as KeyMe had been knocking around in their respective days.

KeyMe has an iPhone app that lets you upload a photograph of your keys and upload them to the company’s servers. After that, you can get a new set 3D printed and sent out to you immediately – or even have them cut in one of their vending machine in New York while you wait. Of course, it raises all manner of questions about security (how hard can it really be to simply steal someone’s keys briefly to photograph them for nefarious purposes)? For users there must surely also be an echo of that slightly uncomfortable feeling that anyone who uses a password manager synced via the cloud must also feel periodically.

Wired had a good article on the business a few months ago. The convenience of being able to immediately rescue yourself from a lock-out situation is obvious. But I couldn’t help but think of the parallel with handing someone your private keys to act as a custodian of your Bitcoin funds. The only difference is, in this case, you don’t just risk the money. Because of course, someone might just use the service to relocate other valuable items of yours to which you’re likely to have a far greater emotional attachment than boring old, fungible money.

This brings me perilously close to the 3D printed gun/Defense Distributed debate. But it’s already way too late so maybe another time.

I’ll leave you with this quote from the Wired article that sums up the power of the technology:-

“If you lose sight of your keys for the better part of 20 seconds, you should consider them lost,” says Jos Weyers, a Dutch lockpicking guru and security consultant. “If you find them later, consider them a souvenir.”

Create For The Fans, Not For The Mainstream

In many walks of life, for those engaged in traditionally ‘creative’ pursuits or more formulaic fare that continues to be served up during the course of a ‘standard’ working day (whatever ‘standard’ might mean), there’s usually a choice that has to be made. It’s one of focus. Should you aim to produce something that the masses will flock to? Or focus on pursuing the niche, a much smaller group yet one for whom your work has the potential to be viewed as truly significant?

Counterintuitively, there’s a strong argument that the greatest potential lies with the latter group if you’re looking to scale. Of course, no-one is saying you should be designing bespoke products that can only ever be used by ten men in, say, the Outer Hebrides alone. But in modern digital business, it’s almost impossible to somehow produce mainstream success unless you first build a small group of passionate and engaged customers, users or fans who like what you’ve done so  much that they’re desperate to go out and tell others on your behalf.

I’ve always been a fan of Kevin Kelly’s classic ‘1,000 True Fans’ which remains, for me, one of the most important articles for anyone looking to build success across a digital platform. And Seth Godin has today written something with very similar sentiments which is well worth a read.

Godin points out that mainstream success only occurs when those people who are infrequent purchasers of your type of product – the majority – finally pluck up the courage to buy what you’re selling. For such people, making this type of purchase is rare and they therefore have far fewer spaces to buy what you’re offering. So they rely (consciously or not) on the noise of the informed super-fans to guide their decisions. And this is precisely why mainstream success is so difficult. If you usually only buy one book a year, which one will you choose – do you opt for an unknown niche literary work or simply plump for the next Harry Potter?

Critical mass and the concept of a tipping point remain the source of plenty of debate. But Godin warns us away from blindly trusting those any business that is focused on seeking out mainstream, blockbuster hits alone. Look closely and you can see examples from across all forms of culture – just think about the glut of movie reboots, formulaic music productions and even suspiciously similar novel artwork that floods the market following the success of an outlier.

As an artist – and Godin has long argued that anyone who does their best work is an artist, no matter the field – your goal must be to delight those who you can inspire to spread your work. Because you can’t do it alone. And in today’s world,  it’s even more clear that copying a blockbuster success rarely leads to something as valuable.

Look for the niche and own it.

Bitcoin Recap: Five On A Sunday

Another packed week in Bitcoin land. When isn’t it? So this week I thought I’d recap on five big stories that caught my interest over the last week. Maybe that’ll be of interest to some people who read this blog but don’t spend every waking hour perusing the crypto-press and forums like, ahem, “others I know”…

Mastercard. Oh dear.

Last week, we watched the Western Union v Bitcoin meme spread online. This week, we watched a rather spirited attempt by Matthew Driver, President (South East Asia) of Mastercard to dismiss the value of crypto-currencies provoke a similar kind of response.

With Mastercard actively petitioning the legislators in Australia for increased regulation (whilst Australia’s largest Bitcoin startup CoinJar was already announced the relocation of its headquarters to the UK due to the onerous nature of the existing regime), it was unlikely that Mastercard were ever going to be treated kindly by the Bitcoin faithful.

However, cut through some of the more simplistic criticisms of the multinational financial services organisation and read through Samual Patterson’s line by line response to Mastercard. It’s a valuable exercise in pointing out the areas in which Mastercard appear to have fundamentally (wilfully?) misunderstood the technology.

And, of course, the cynical out there might see why a company that has come under fire for tracking its US customers’ purchases and selling the data to advertisers  might see (perceived) anonymity to be something of a problem.

HSBC. Oh dear.

Back in August, I asked Daniel Masters from Global Advisors Bitcoin Investment Fund to come up to Edinburgh to speak at the inaugural Scottish Bitcoin Conference that I was organising. A good account he gave of himself too. GABI were just going live on the world’s first regulated Bitcoin hedge fund. Since then, it’s been interesting to watch Jersey really make a play to become a world-leading Bitcoin location.

And then last week, HSBC pulled the plug on its banking relationship with Global Advisors, the Jersey-based hedge fund that runs GABI. The indications are that the risk profile of being associated with a Bitcoin business were perceived to be too problematic for the bank. As Danny writes on LinkedIn, it appears that “innovation is indeed well supported so long as it doesn’t impinge on the prospects of HSBC collecting fees”.

Now, whether this just represents one turkey that doesn’t want to vote for Christmas or not, it’s particularly galling for many within the Bitcoin community. Few are unaware that HSBC paid out $1.9 billion to settle a case in 2012 in which they’d been shown to be “lax in money laundering” (to put it extremely charitably – the US Senate investigation stated that they’d been a “conduit for drug kingpins and rogue nations”, with criminals depositing money in boxes specifically designed to fit through the tellers’ windows of Mexican HSBC branches).

HM Treasury Consultations Closes

The deadline passed for HM Treasury’s Digital Currencies Call For Information on Wednesday. A number of submissions were made and you can check out the UK Digital Currency Association’s submission here. From my involvement, it’s clear that the two key areas are a call for light-touch regulation under existing laws and a plea for the Treasury to ease one of the biggest problems that UK Bitcoin startups face today – securing banking relationships with existing financial institutions that don’t suddenly get closed with no notice being given.

BitLicense Comments Published

Within the next couple of weeks, all manner of hell will break loose online when the final draft of New York’s BitLicense gets published. To recap, in January, the New York Department of Financial Services held a hearing into Virtual Currencies. Initially positive, New York listened to entrepreneurs, investors and other knowledgeable individuals from within the Bitcoin ecosystem. Benjamin Lawsky, Superintendent of Financial Services for New York then came out with the idea for a BitLicense for digital currency businesses. Draft regulations were published and comments were requested – to an almost unanimous wave of criticism.

Lawsky tweeted this week that all 3,746 comments received had been published with the final regulations coming out later this month. If you want to read through some of the commentary, here are some highlights: the Bitcoin Foundation (and here), the Chamber of Digital CommerceBTC ChinaCoinbaseBoostVCCircleUK Digital Currency AssociationAmazonBitPayRipple LabsWalmartWestern Union – not to mention Chris Odom’s response.

It’s hard to say which way this will go. However, the impact of getting this regulation wrong for New York at this stage (and I have no idea how someone can regulate something correctly – in the sense of being comprehensive and flexible enough to cover the technology as it continues to evolve), could be severely damaging. I suspect UK regulators are watching with as much interest as the rest of us.

ChangeTip Raises Funding

Finally, let’s end on some really positive news. ChangeTip, a business that has gone from niche to mainstream in the last couple of weeks announced $3.5 million in seed funding led by Bitcoin investment pioneers Pantera Capital. I’m a big fan of the Pantera team, I think they’re doing a great job (their daily BitFlash update service is both free and valuable – sign up here) and I thoroughly recommend you take a read through their most recent Bitcoin Letter to really learn more about the importance of tipping within the overall Bitcoin ecosystem. Well done to the ChangeTip team.

That’s it for this week. As ever, there’s plenty of other stories – a week sometimes feels like a month in Bitcoin Land – but these are the ones that stood out for me.

Now. Let’s see what this week brings.

 

The Future Of Digital 2014

If you’ve got time, it’s worth clicking through the 120-odd slides on the Future of Digital 2014 put together by Business Insider. Nothing particularly out of the ordinary but a good high-level overview of the trends.

Here’s a few highlights:-

  • 3 out of 7 billion worldwide are now online
  • Consumption of media is collapsing across TV, online, radio and print – and rising rapidly in mobile
  • Money follows eyeballs – so it’s going mobile
  • Wearables continue to grow – albeit not at a level that was previously hyped
  • Cars are increasingly connected to the internet
  • The average owner spends an hour a day on their smartphone (is that all?!)
  • More than 25% of all internet traffic is mobile
  • Global sales of tablets have hit a wall
  • Apple are losing the war: Android run 85% of the smartphones and 65% of the tablets in the world
  • Android is now more popular with developers than iOS
  • Android will soon overtake iOS in app revenue
  • The key digital media trends are: Mobile, Social, Video, Programmatic, Native
  • PayPal powers $30 billion in mobile payments
  • Google’s Chrome browser remains the most popular by far
  • The Internet of Things will see 20 billion connected devices by 2020

Out of Context in Evernote

I’m a huge fan of Evernote. After Google, I probably rely on the company more than any other throughout the course of my daily digital life. And like increasing numbers around the world, I trust them heavily to back up my brain. But I’m just not a huge fan of their Context product.

If you don’t use Evernote, let me explain. I usually write directly into Evernote – meeting notes, blog posts, whatever – in addition to saving articles that I need to return to at a later date. Using the service is a no-brainer when you can rely on it to sync perfectly across platforms (well, usually; it has had the usual challenges that face any tech company growing at rapid speed). However the company recently decided to ‘reward’ premium users by surfacing a number of (hopefully) relevant articles in the space below your writing space.

Now, I’m not entirely sure but I *think* that previously they’d surface other notes that you’d made and saved yourself. Presumably they used some form of fairly simple word recognition algorithm that just scanned your collected content. And of course that could be useful – on occasion. It was rare that I actually click to open the suggestions but occasionally it was interesting to realise that I’d written/saved an article months earlier on a similar topic. No big deal. Little benefit for me in practice but, with minimal interruption, no complaints from me.

However, at the start of October, Evernote introduced Context. The company now surfaces relevant ‘high quality’ content from selected media partners, such as LinkedIn and The Wall Street Journal, within that space.

There’s a couple of immediate problems here. Suddenly noticing external content pop up within your own personal safety deposit box immediately creates dissonance. Whether it’s relevant is neither here nor there. And in the same way as there was uproar when Google finally admitted that it was scanning all your emails to serve you advertising within Gmail, there are inevitable questions about privacy. How much of your data are they sharing with third parties to provide this content?

For customers with sensitive personal information (despite the warnings, people still use cloud services like Evernote and Dropbox to store this sort of data), the real concern is that this information is being shared without permission. Evernote have now clarified that this is not the case but there’s no doubt that the public are becoming both more wary and more vocal about such issues.

Evernote position is that they are providing additional content because it is valuable context that will help you work more efficiently. But to a premium customer who is already supporting the service by paying a subscription, these suggestions at first glance look, to all intents and purposes, to be advertising. And don’t we usually pay to remove adverts?

It’s not all bad though. If you can get over the privacy concerns and get comfortable with the use of data, they’re bringing something that could be hugely valuable to workforces using the Evernote Business service. If you start working on something that a co-worker has already tackled and the product surfaces the relevant notes, you can see how many wheels will avoid being reinvented. Get it right – and Evernote have a real chance here given the quality of the search technology that they’ve built within their platform – and they could be onto a big winner.

But first, they need to allay those concerns. I don’t go to Evernote to find new knowledge. I go to Evernote to find the things that I’ve already filtered out as being valuable for me to store. Third party curation is something that necessarily should be happening outside my personal ecosystem.

I’ll not be going anywhere. Evernote remains a truly valuable resource and immensely powerful if used correctly. But whether it’s down to an issue of design, communication or a young algorithm, Context still has a long way to go.

 

Never Out Of Signal: The Rise Of Mesh Networks

As we become increasingly dependent on internet access, there’s still a big problem that needs to be solved with the advance of the internet of things. We’re going to need this internet connectivity for all these great ideas to take root and advance.

Within existing infrastructure, WiFi is now pretty much commonplace. But as soon as you head out onto the streets, even if you’re wealthy or desperate enough to have agreed to pay for half-solutions to the problem, you can never have full confidence that an existing WiFi signal will be good enough to guarantee you the flexibility that’s needed to carry out all of the things that you want to do whilst you’re on the go.

The world of mesh networking however presents us with one solution. Instead of relying on the traditional network in which access is for the most part controlled by large mobile telcos, each individual’s mobile phone (for example) now acts as a router that talks to all of the others around it. This creates a network that can support internet connectivity even when there is no public internet connection.

Another way to think about it is that the standard internet connectivity model uses a star topology. If you want to send a file from your laptop to another computer, you have to send it via a central router. But with a mesh topology, every node can create to every other node around it.

The potential of a system of decentralised connectivity that can deal with the many problems of poor connectivity – perhaps in a location that lacks the necessary infrastructure as a result of a remote location, an oppressive government or the aftermath of natural disaster or war – could prove to be transformative. Even down to the simple usefulness found in helping festival-goers get past an overwhelmed phone network that prevents them texting their lost friends, the value is clear.

This technology (Apple called this ‘Multipeer Connectivity‘) was included with iOS7. You probably heard about the rapid ascent of Open Garden’s Firechat app which exploded in popularity upon being used by pro-democracy campaigners in Hong Kong. Of course, it comes with the usual caveat in that circumstance. It is not secure from surveillance in any way a pretty significant weakness when you’re a protester that’s challenging an oppressive regime I think you’d agree (although this is currently being worked on by the company, I believe).

However, the point here is that the system doesn’t require centralised infrastructure. Allowing people to communicate without requiring internet access is a leap forward on many fronts. And of course the Firechat app still has value for those who are railing against centralised censorship – you can still get the message distributed, provided you’re willing to adopt the “I’m Spartacus” defence. And of course, you could always look at integrating mesh networks with Maidsafe.

There’s an interesting company called Veniam that have come out with a hugely ambitious vision.  Given the fact that people move around yet still need to effortlessly maintain connectivity in the course of their travels, they plan to connect the ‘internet of moving things’ by turning vehicles into WiFi hotspots  And it’s more than simply a big idea – they’ve already managed to equip more than 600 vehicles in Porto (including commuter buses) to show the potential of a smart city in action.

The really fascinating time will come I suspect when these systems are also collecting vast amounts of data about the current status of urban settings as they become continually denser. The rubbish bin that notifies a passing rubbish truck when it’s nearly full provides one example. In many ways this starts to bring the reality of the Trade Net closer, where self-driving cars (using Bitcoin microtransactions, of course) are negotiating in milliseconds to gain right of way on the roads, clearing traffic jams instantly. Or drones are delivering your requirements on demand.

There are significant issues to consider once we overlay our towns and cities with such coverage  (personal data, security and surveillance immediately jump to mind) which is why it’s so important I belive that we start to think about these issues very seriously now. But provided we find a way to tackle such issues (which we face in any event), the potential benefits from mesh networks could be hugely valuable. After all, anything that facilitates communication in a disaster zone must have a very significant contribution to make in the future.

 

 

Global Trends in 2015

Like many, I’m a sucker for those “look take a look at what’s on the horizon” type of posts. December’s always the month that these things start to really appear with a vengeance and the presentation from Global Trends is as good a place to start as any.

Here’s a few areas that stood out to me. I’ve partly picked these out of general interest but mainly it’s because I think that they reinforce a few of my own thoughts about key themes that every entrepreneur who’s looking to build a business in a growth area should at least be aware of.

1. Images hold more power than text

Not news in itself but it does reinforce this renewed interest in visual communications technologies (Oculus Rift, anyone?). In some cases, the technologies are developing to help us interact with the real world but in others, virtual reality will continue to gain traction.

2. The data security risk will worsen

Breaches will continue to happen more regularly and with increasingly serious repercussions. The problem will worsen significantly as the rapid advance of the Internet of Things eats up all manner of additional personal data. The battles for privacy, freedom and security will continue online, with the defence being strengthened I have no doubt by the hard work being carried out by my friends at MaidSafe.

At the same time, efforts made to access and index the Deep Web will continue apace. Those parts of the world wide web that are not indexed by conventional search engines contain a vast quantity of data that is several orders of magnitude larger than the surface web and remains untapped. A potential treasure trove of information appeals to many around the world for different reasons. But the potential to use such ‘big data’ to develop new solutions to existing problems is likely to attract people looking for new opportunities.

3. The battle for increasingly scarce resources heats up

As we collectively leave our own individual trails digital exhaust to be exploited by marketers and identity thieves, the demand (and, on the flip side, reward) for reducing waste by combining recycling, green energy and new business models will drive new ideas within what is being called the Circular Economy.

4. The rise of impact capitalism

More people will seek to invest their money in a way that delivers a measurable environmental and social impact, and not simply just a financial return. Crowdfunding and peer-to-peer lending models will continuing to grow apace in order to tackle significant challenges that the market has previously ignored when left to its own devices.

My favourite example here has to be Watsi, the Y Combinator company that’s created a healthcare crowdfunding platform that lets you directly fund medical care for individuals in developing countries.

5. Working life continues to evolve

More people are responding to high unemployment levels with an entrepreneurial mindset, increasingly out of necessity. Self-employment and ‘on-demand’ working patterns will become commonplace with larger businesses becoming more open in general to collaboration with individuals.

6. Healthcare changes

More progress will be made this year in the field of personalised medicine designed for individual use, the tracking of health indicators using data captured by wearable devices that will increase diagnostic efficiency and the continued integration of robots (albeit without the AI of science fiction novels at this stage) into care and treatment cycles. Out of many fascinating areas, early-stage experiments into bioprinting will continue – using 3D printing technology to print body parts.

7. The rise of the city state

With the continued growth in population putting ever-increasing pressure on food and electricity supplies, cities are facing rapidly expanding populations – and therefore growing in importance as they seek to protect and provide for the demands of their residents. With more than 50% of the world’s population living in cities (there are currently 28 megacities with over 10 million people), the mayors who rule these cities will find their roles increase in significance. At the very least, they’ll have a significant role to play in tackling global issues, as cities currently produce 70% of all global harmful CO2 emissions in a world that needs such levels reduced drastically within the next 20 years.

8. Intelligence

And of course the debate will continue over whether robots are going to continue to close the gap on humans – and the existential threat to humanity that this development in AI may cause. Many of the predictions in the deck are likely to come to fruition well beyond 2015 but the meshing of machine intelligence with neuroscience, genomics and biotechnology provide no end of ideas for researchers and computer scientists to continue their collaborations.

Collaborative Consumption

The Sharing Economy has really been gaining steam over the past few years. With Airbnb increasingly building mainstream awareness beyond purely tech circles and Uber’s rapid march towards a multi-billion dollar valuation in the short time since its inception in 2009 (despite being beset by recent scandals), it’s clear there’s a substantial societal shift taking place towards new business models.

I read an interesting article today by Rachel Botsman, author of “What’s Mine Is Yours” and thought leader in the field of Collaborative Consumption, in which she challenges a few of the myths surrounding the area.

I’ve always had an interest in watching the exodus from centralised organisations to technology-driven distributed networks of individuals (which partly explains Bitcoin’s appeal for me) and the ‘sharing economy’ clearly personifies one aspect of this. However, it was also interesting to read the argument that the terminology that we all use has, she believes, been twisted out of recognition. We all talk of the Sharing Economy – but the reality is that participants are not actually sharing at all (in the conventional sense of the word).

When we let people borrow our unused bedrooms, all that’s taking place is simply a rental transaction. This new raft of businesses is being built that use technology to connect supply and demand that would otherwise remain unfulfilled. But at its core, this activity is entirely different to the concept of ’sharing’, she argues. That word by itself comes with its own ideology and implied altruism. However, when we ‘share’ a room, we fully expect to get something in return.

Whilst she’s unsurprisingly critical of the values and culture at Uber, she also points out that pretenders with big plans to disintermediate an industry by simply providing an ‘on-demand’ service do not fall automatically within the classification of the collaborative economy. In other words, it’s not just removing the middle man – it’s more accurately about unlocking idle capacity.

In Botsman’s recent work, she’s identified five key areas with assets that are ripe for disruption together with the solutions for each area (here in brackets):

  • waste (efficiency)
  • complex experiences (simplicity)
  • redundant intermediaries (direct exchange)
  • limited access (shared access)
  • broken trust (transparency)

The explosive growth of the collaborative economy comes partly from the fact that it is replacing traditional asset-heavy business models with ones that are asset-light. The classic example from her talk mentions the fact that it took Hilton Hotels 93 years to get 610,000 rooms in 88 countries. Meanwhile, it’s taken Airbnb just 4 years to amass 650,000 rooms in 192 countries.

I love the example of Goodgym. It’s a platform that connects people who are seeking the motivation to go running with old people who would benefit from regular visits (albeit from lycra-clad sweaty visitors). It’s also fascinating to see that she has identified Financial Services as being an areas where so many of the drivers behind the collaborative economy are present. I couldn’t agree more. As an example, here’s a list of some of the areas that are developing fast, together with a few company names for context:

Botsman’s last point is, I think, key here. Whilst the inroads made by the collaborative economy are scary to many incumbents (statistics abound of the taxi industry losing two-thirds of its revenue to Uber and other upstarts in a period of less than three years for example), don’t forget the way that innovation inevitably plays out.

In the early days of Napster, the music industry tied itself in knots trying to restrict the competition by legal assault. By focusing on where the ball was, rather than where it was travelling to, they completely missed the fact that a new wave of demand has arisen from consumers who wanted to share and buy songs electronically. iTunes would never have had a chance of success if the incumbents hadn’t been asleep at the wheel.

I intend to write far more about the sharing, sorry, collaborative economy moving forwards. In the meantime, treat this as an early collection of ideas and go and watch Botsman’s talk.

 

The Creative Currencies Chiasma 2015

I had great fun tonight giving a talk at #include2, the first kick-off intro event for the upcoming Creative Currencies Chiasma that’s taking place in Edinburgh in Feburary 2015.

Chris Speed  Chair of Design Informatics kicked things off by setting the scene with a few insightful comments about the nature of value in society. I rattled through a Bitcoin 101 for an audience of students, academics, entrepreneurs, the Bitcoin faithful and who knows who else – always impossible to know where to pitch it but hopefully there was enough to engage a few people to start to question some of the potential.

After I sat down, it was great to see a representative from the so-called “traditional” financial sector, Dave Barnes from RBS, give a talk in which he ran through the mechanics of Bitcoin. Great to see engagement from the banking sector. The more people that understand and get involved in the debate, the better the debate becomes in my view.

Last but by no means least, it was the turn of Joe Lindley who’d driven up from Lancaster with his fascinating Bitcoin radiator conversion. He’s basically pimped a bitcoin miner by adding a wall radiator which is being powered by the heat generated from the computer. Great idea! He also dropped plenty of nuggets in his talk that I need to go and investigate further, particularly around the whole concept of Design Fiction – in other words, using fictional scenarios in order to envision possible futures for design. I sense a big overlap with the concept that science fiction has the power to predict the future.

A really enjoyable event and what’s more, there’s another one next week, this time in Glasgow. Meantime, I’d encourage everyone out there with an interest in this area to seriously consider applying for the Creative Currencies Chiasma 2015 itself. Hey, you get 2.5 days of solid time to generate ideas in Edinburgh, with hotel and food paid for and a potential prize of £20,000 at the end of the process for the winning team to develop any ideas.

We’re all aware that there’s a talent gap in Bitcoin at the moment. It’s a situation that’s likely to get worse before it improves given the likely growth cycle. Design is absolutely one of the areas that’s crying out for more talent within the industry. So if this sounds like it could be of interest to you, please do apply. Ignoring everything else, it’s be a huge opportunity to get your foot in the door in a sector that’s likely to explode with demand over the coming few years.

Good luck!

We’ve always done it this way

Ever heard someone utter this gem when you’re at work?

Maybe even you? Be extremely wary. Treat it as a red flag.

Why?

Time for some wisdom from the website of Jeff Bridges:-

  1. Start with a cage containing five apes. In the cage hang a banana on a string and put stairs under it. Before long an ape will go to the stairs in order to climb up and reach the banana.
  2. As soon as he touches the stairs all the apes are sprayed with cold water. After a while, another ape makes an attempt with the same result —all the apes are sprayed with shocking cold water. This continues for a few more times with each attempt.
  3. Turn off the cold water. Later on, if another ape tries to climb the stairs, the other apes —to avoid getting sprayed with cold water— will try to prevent the ape from climbing the stairs even though no water is actually sprayed on them.
  4. Now, remove one ape from the cage and replace it with a new ape. The new ape sees the banana and —not knowing of previous events— wants to climb the stairs. To his horror, all of the other apes attack him. After another attempt and attack he knows that if he tries to climb up the stairs, he will be assaulted.
  5. Next, remove another of the original five apes and replace it with a new one. The newcomer goes to the stairs to get to the banana and is attacked. The previous newcomer (of #4) also takes part in the punishment with enthusiasm.
  6. After replacing the fourth and fifth original apes, all the apes that have been sprayed with cold water have been replaced. Nevertheless, no ape ever again approaches the stairs in order to climb up to get the banana.

Why not?

“Because that’s the way it’s always been done around here”