Jeff Bezos Explains the Narrative Fallacy and How It Leads to Oversimplified Stories

In the prologue to Brad Stone’s book, The Everything Store: Jeff Bezos and the Age of Amazon, Stone describes his first conversation in 2011 with Bezos about wanting to write a book about the rise of Amazon:

Toward the end of the hour we spent discussing the book, Bezos leaned forward on his elbows and asked, “How do you plan to handle the narrative fallacy?”

For a moment, I experienced the same sweaty surge of panic every Amazon employee over the past two decades has felt when confronted with an unanticipated question from the hyperintelligent boss. The narrative fallacy, Bezos explained, was a term coined by Nassim Nicholas Taleb in his 2007 book The Black Swan to describe how humans are biologically inclined to turn complex realities into soothing but oversimplified stories. Taleb argued that the limitations of the human brain resulted in our species’ tendency to squeeze unrelated facts and events into cause-and-effect equations and then convert them into easily understood narratives. These stories, Taleb wrote, shield humanity from the true randomness of the world, the chaos of human experience, and, to some extent, the unnerving element of luck that plays into all successes and failures.

Bezos was suggesting that Amazon’s rise might be that sort of impossibly complex story. There was no easy explanation for how certain products were invented, such as Amazon Web Services, its pioneering cloud business that so many other Internet companies now use to run their operations. “When a company comes up with an idea, it’s a messy process. There’s no aha moment,” Bezos said. Reducing Amazon’s story to a simple narrative, he worried, could give the impression of clarity rather than the real thing.

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