Beliefs vs. Facts: Microsoft Cashback and How to Avoid Bad Decisions

Rob Enderle

I'm on a belief-vs-facts long-term rant that goes back decades. This has been covered in a number of stories lately both in reference to Microsoft and the iPhone and in reference to why we are easily led astray on political issues. One of the most common beliefs, which facts actually dispute, is that money is a good motivator. It isn't, yet it is common to see incentive programs ranging from commissions to the failed Bing Cashback program created as behavior modification tools.


Let's talk about this at two levels: First, we'll talk about why the Cashback program failed, and then we'll cover why this tendency, which is hardwired into all of us, is so dangerous.




The Bing Cashback program provided a delayed cash incentive if you bought certain products from certain stores and used Bing as the way you found both. It was designed as a customer-acquisition tool but the cost, even to an advertiser, was vastly more (up to four times more). It was difficult to set up and the benefits from the program were difficult to demonstrate. People would use the program for comparison shopping and to buy something, but it didn't seem to drive the kind of sustained customer use that Microsoft wanted. Adoption was slow and Microsoft has since decided to pull the plug. (A more complete history can be found here.)


But the premise was flawed -- that money would work as a good incentive to drive customers from Google to Bing. Both Maslow and Hertzberg (who was more on topic) in the 1950s and 1960s, through a series of studies, showed that money was a poor motivator. While their work was tied to employee motivation, the studies' findings can be applied more broadly. The problem is that money is an abstract of something, yet we are hardwired for things, not abstracts, and are motivated more by status than anything else. As one of my friends over at the Lifeboat Foundation (a group trying to save the human species from extinction) likes to point out, it is that status that got you the best mates, potentially more kids and a stronger genetic line.


Status is achieved through the way we are perceived, including the titles we hold and the people who surround us. Look at the open source movement and projects like Mozilla and Linux. People don't do any of this to get rich; they put in the long hours for little or no money for the status.


Money is simply too abstract, and given that it wasn't even given immediately, but at the end of a period, it wasn't applied in a way that would even maximize its own impact. A better program would have been one that recognized Bing users and ranked them based on the amount of money they saved, the brilliance of their search or some other metric, up to and including the chance to win or get a prestigious gift, tied to the desired behavior.


Beliefs vs. Facts


There is a book I think every one of us should read and re-read: "True Enough: Living in a Post Fact Society," by Farhad Manjoo, who was a tech reporter for years before writing it. This book highlights in lurid detail how easily we are tricked into believing things that are clearly false and how often folks in power take advantage of this.


This is why, after Consumer Reports listed the iPhone 4 as unsatisfactory, people believed Steve Jobs when he said it was no worse than any other phone and kept buying it. The facts didn't matter; the belief that the iPhone was great and magical overrode them.


I can recall a lot of folks who believed in the 1980s that "no one lost their job for buying from IBM" and watched that belief get trounced when the company almost went under. What makes for a popular blog isn't the accuracy of information, it is about entertainment and likability. It is about telling people what they want to hear, not lecturing them on what they should know.


For example, if you are a Democrat, you likely feel the current U.S. president is doing a good job because he is from your team; if you are a Republican, you likely think he is doing a horrid job because he isn't. The reality is that both might be wrong based on the issues important to them, but if neither will spend time to even research those issues, they are likely to vote against their own self-interests when the next election rolls around. There is actually a page that lists beliefs that are false that destroy our enjoyment of life, another that talks about common foundations for false beliefs ,and this very interesting one on how journalists inadvertently perpetuate false beliefs.


Wrapping Up: A Defense


As the last link above points out, part of the reason we tend to lock down and actually create false beliefs is the way we remember things. We don't store them like data on a hard drive, but refresh the memory and slightly alter it each time we recall it. That means even our memories can't be reliably trusted. In my case, this means I spend a lot more time on sites like Snopes before I pass on an e-mail with a "fact" in it than I used to and when it comes to vendors, I regularly ask for references I can call about a new technology or product.


We just saw Google fail in LA, much like Microsoft did with "scalability day" in the '90s, in an almost identical fashion to how Netscape failed with a Fortune 100 company using similar tools (the company went against my recommendation and most lost their jobs as a result). These failures were avoidable, but beliefs that Microsoft could do anything or open source solved all problems proved to be untrue and, in hindsight, dangerous.


If we know our beliefs are unreliable, my hope is that more of us will learn to regularly challenge them. It is my belief, and it is backed up by facts like the BP oil disaster, that our inability to value facts over beliefs will cause most of our pain as individuals and as a society. If we can address this one problem, both individually and collectively, we'll be a better species. If we just do it individually, we'll be better role models and people. It is my hope to become that. It is also my hope that we share that goal.

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