The Rubik’s Cube is an easy puzzle for those who know the correct ‘algorithms,’ or sequence of turns needed to align the coloured cubes – and a frustrating enigma for those who don’t. For a devoted few, the challenge is solving the puzzle as quickly as possible, which officially stood at 22.95 seconds for two decades following the first World Championship held in 1992. Interest in the Rubik’s cube waned but then something interesting happened. World record times began falling dramatically. At the 2003 World Championship, the record solve time fell just over a quarter to 16.53 seconds. Two years later, the record fell to 10.48 seconds, cutting another third off the time.
Fast forward to 21 November 2015, and 14 year-old Lucas Etter solves the Rubik’s Cube in 4.9 seconds. The significance of this feat may be lost on non-cubers. It’s a really big deal. For ‘cubers’ this was like Roger Bannister breaking the four minute mile in 1954 – it was an ‘unbreakable’ level, but this kid broke it. But seeing is believing, check out the video here. It will only take 15 seconds of your time.
So what changed in 2002? Clearly, 80s nostalgia played a role in resurrecting interest in Rubik’s Cube. But interest alone wouldn’t explain the leaps in solve times from 2003 through 2008. The big change was that the ‘algorithms’ for solving the Rubik’s Cube became increasingly accessible to anyone interested in solving it. In 1982, you would have had to track down one of a handful of books published on the subject (Conquer the Cube in 45 Seconds is a good one – 45 seconds!). In 2003, you could easily track down one of those books on Amazon.com. Today, you can find the solution in one of over 2.7 million webpages or 1 million videos posted on YouTube. Quite simply, with improvements in communication and sharing, the solutions became a commodity. Once that happened, the flood gates opened and individual cubers began organising and sharing their know-how on a massive scale. You may not be aware of ‘the Petrus System’ or the ‘Fridrich Method’, but enthusiastic cubers began developing and refining such techniques to make solve times even faster, building structures that people could pull from and adapt in order to decrease times even further – this culminated in a 14 year-old kid doing the seemingly impossible.
Knowledge vs. Knowhow
At a more general level, this process of accumulating knowledge is highlighted by MIT professor Cesar Hidalgo in his book, Why Information Grows (a fascinating rethink of economic growth through the lens of physics and information theory). He makes the distinction between knowledge – facts, figures, instructions or things you can get from a book – and ‘know-how’– the accumulated tacit knowledge gained through experimentation, interaction and experience. The difference between explicit and tacit knowledge is the difference between understanding that a violin is played with one’s fingers and a bow and actually playing a violin.
Hidalgo starts with a simple assumption borrowed from physics: that information is always physically embodied – from the transfer of energy in the collision of particles, to the order of the words in this blog. This physical embodiment of information has three significant implications. Firstly, units of information have finite capacity – the book Conquer the Cube in 45 Seconds, for example, has just one method for solving the Rubik’s Cube. Secondly, once a unit of information becomes standardised and widely distributed it becomes commoditised, e.g., the Fridrich Method became the most commonly used method for speed-solving the Rubik’s Cube after Jessica Fridrich published it online in 1997. And thirdly, units of information can be combined, ordered and reordered in ways to add value and overcome their individual physical limits. Here we can look at the 2.7 million webpages that present countless methods, tips, and tricks with which to experiment.
In Hidalgo’s words: ‘This finite capacity is what allows us to accumulate knowledge and knowhow and eventually to beget more information. But it’s also what makes it difficult. Because it transforms the problem of knowledge accumulation to a problem of network creation. If you are not able to sustain the network that allows you to accumulate knowledge, you are going to eventually be stuck with a ceiling – at some point you are no longer going to be able to accumulate any more information simply because you have reached the capacity of the units.’
Now reread that quote but substitute the word ‘value’ for ‘information’ and the implication for investors becomes clear. Sustainability and compounding of economic profits is not simply a matter of accumulating information – be it manufacturing plants, patents or people. It is also a matter of creating networks to organize, synthesize and expand information through social, organisational and process innovations.
At this point you’re probably thinking, ‘Big Data, obvious.’ However, I think the lesson we can take away from Lucas Etter is much less technical. His feat is more about social innovation than technical innovation. He didn’t break the record using a super computer. He broke the record because (1) a passionate community of cubers was willing and increasingly able to share their knowhow; and (2) because he practiced…a lot. Companies obsessed with Big Data should take note.
The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.