Nassim Nicholas Taleb and Antifragility

At the Royal Society on Thursday I saw Nassim Nicholas Taleb (Distinguished Professor of Risk Engineering at Polytechnic Institute of New York University) in conversation with Rohan Silva (Senior Policy Advisor to the Prime Minister) and Matthew Taylor (Chief Executive of the RSA).

The subject was Taleb’s latest book – Antifragility – which he hopes isn’t as simplified as his previous book (he seemed to dislike the fact that The Black Swan was bought and read in airports by people who subsequently misinterpreted it). I think he has succeeded, as at times I struggled to grasp his arguments.

Nevertheless, I’ll have a go at summarising it. The images below are taken from his slides, available alongside the audio of the event, at the RSA website.

I believe Antifragility draws on Prospect Theory (incidentally, Michael Lewis has recently written about Daniel Kahneman – one of the main proponents of the theory – in Vanity Fair). The thesis is that organic entities are fragile, and that potential harm is non-linear to the size of the event (see below). In fragile systems, potential losses outweigh gains.

Antifragility is the opposite of fragility – where gains outweigh losses (robust is something different). The parallel Taleb drew was:

  • Fragile – Sword of Damocles (risk of fall)
  • Anti-fragile – Heidegger Hydra (cut one head off and get two back)
  • Robust – Phoenix (stays stable)

To give an example, it is more harmful to jump once from 100m than 100 times from 1m.


This means that the unpredictability of Black Swan effects costs more when the size of the event is large.

Black Swan event

This means (I think) that risk is concave, and there is more pain than gain in an event. For instance, traffic is concave – it is fine to the point of over-leverage, when the cost of travel will suddenly massively increase.

Antifragile events are convex. Taleb believes that bottom-up structures are convex, while top-down dictated structures are concave. We cannot effectively design systems as we cannot fully understand them, and so there will always be more harm than good.

The result of this theory is that large events, large organisations and large governments should be avoided. “Too big to fail” is catastrophic, and Taleb is firmly in favour of smaller organisations – on a moral level (it smaller societies you are close to the result of your decisions and so may feel shame) and an economic level (the cost of liquidating one large bank is far more than the cost of liquidating ten banks one tenth of the size of the large bank).

Uncertainty makes mistakes costly, and thus both businesses and governments should remain small. Taleb suggested that if Tesco suddenly ran into difficulties then the government would have to bail out a supermarket. He feels the government should only intervene in things that can’t organise organically, and is thus advising the government on how to make its institutions smaller (such as splitting the NHS into localised, autonomous units).

Taleb also talked a bit about risk management, and said that the models were flawed as they don’t combine risk and growth –  to get rich you must survive. He feels slow and steady growth is preferable to high growth that cuts corners, since that will ultimately crash. He pointed out that perfect growth is Madoff, and that Greenspan and Brown’s attempts to end boom and bust have led to where we are now (he claimed that Brown was more dangerous than Blair as Brown thought he understood the world).

He also mentioned that within small systems, stresses can be positive. For instance, we fast to kill cancer calls. In exercise, we should combine slow and steady exercise (such as walking) with the occasional intense burst (such as lifting weights at the gym). Up to a point, what doesn’t kill you makes you stronger.

Taleb doesn’t see big as permanent – Google could quite easily disappear tomorrow. To get around organisations growing in size, he recommends a contract saying that if a business wants to have the option to be bailed out then they can never pay out bonuses. Since people will want bonuses, they will intentionally keep their business small in size to not require bail-outs.

He closed by saying organic organisations are perishable and that each day they exist their life expectancy drops by a day. Whereas non-perishable entities – such as ideas – increase their life expectancy each day. For instance, if an idea has existed for 25 years then it will exist for 25 more.

Ultimately, the talk was very thought-provoking but I’m not sure whether I agree with it or not. On the one hand, I can see the diseconomies of scale of large organisations, but on the other hand businesses will have become large through success. That success might have been random and unwarranted, but they nevertheless survived and so must have done a few things correct. Taleb appears to advocate limiting them in order to protect against the possibility of them failing and causing problems for the economy. This risk aversion and diversification may be prudent, but I’m not sure how fragile this system really is (particularly if it made up of bottom-up organisations).


The future of mobile at the RSA

I’m a big fan of the RSA, and should really attend their excellent events more often than I do. However, I did attend the Future of Mobile event last night.

Sadly, it was the least interesting event I’ve attended (though the standard is exceptionally high). The keynote – billed as an insight into what the next few years may bring in terms of new products and practices, new opportunities for creativity, collaboration and economic growth, the role of new communications in shaping social norms and behaviours, and the effect this will have on individuals, organisations and societies was little more than a corporate sales pitch. However, I did make some notes and the event was, on balance, worth attending.

The Keynote

The keynote speaker was Lee Epting (Director of Content Services at Vodafone). In her talk she referenced three Vodafone initiatives in the developing world, namely

  • M-Pesa – the mobile banking/money transfer service set up in Kenya
  • An M-Health initiative
  • Future Agenda – driving towards sustainability, such as machine to machine communications around load capacities or metering of utilities

Each initiative had its own uplifting video. Perhaps I’m being an overly sensitive Western liberal apologist, but I found the tone of the videos quite patronising and demeaning. The African people in the video may well have independently said things like “I feel like a real businessman now” or “And now I even know the real medical terms”, but they didn’t need to be included. If the video were on Western initiatives, they would have focused on the tangible benefits, not on trying to give us a warm fuzzy feeling about helping those less fortunate.

The majority of the talk was based upon initiatives in the developing world (which makes sense, since Vodafone and mobiles can bypass computers there, while in the developed nations they run the risk of commodisation into “dumb pipes”), but Lee Epting did finish on a few trends visible in our society

  • People tracking – she claimed that acceptance of this is accelerating. This may be true, but accelerating from a very small base. A minority may opt into location-based services, and ticketless transport may prove popular, but I’d say it would infiltrate by stealth. She also mentioned vehicle tracking and how it will help pricing for toll roads
  • Choice editors – we are becoming reliable news sources, so it is about curation as much as consumption

The responses

The speech was followed by two responses. The second was from Ralph Simon (CEO of The Mobilium International Advisory Group), who I’d previously criticised when he chaired the Harold Evans lecture on innovation. He’s much better as a panelist, since he basically just tells loosely connected anecdotes. He also has excellent enunciation. In his brief response he talked about Couch Surfing and how communications can amplify lives, but also shared clutter and how we need curators to navigate it.

A longer response was from Christian Lindholm, (Partner and Director at the convergence design agency Fjord) who made some fascinating provocations and was by far the best thing about the event.

  • Choice quotes include “The future is always here and now but someone we ignore it” and how “Humans are obsessed with objects”
  • He believes the Nokia 2110 simplified the phone and became the first hit phone, and that the iPad is the Nokia 2110 of computing. The iPad gives a power of mobility that the IT department can’t control. There is also a significant difference between the Wifi and 3G models. The Wifi comes from the pc industry and drains the battery. The 3G is energy-efficient and gives ubiquitous communications
  • A big thing in future will be the digitisation of the wallet. It needs a big disruption as elastic process innovation – adding chips to everything – won’t work since proper digitisation requires screens, profiles etc. The current “two-handed” analogue wallet is “retarded” but it makes sense for incumbent companies who are invested in producing cheap thin strips of plastic. In the question and answer session, he speculated Amazon might make a play in this area
  • He sees the next megabrand as Foursquare, what with every classroom at Harvard Business School already mapped onto it.
  • We need a new vocabulary for next generation communications. It is not multimedia, video, smart or other industry jargon but come from the users. This seems to be “facebooking”, which is aggregating all forms of content and creating an internet of people.
  • An internet of people means everyone will be on Facebook, since everyone will want to communicate. He sees Facebook negotiating privacy in the same way Google negotiates copyright – move the boundaries two steps forward, apologise and take one step back and gradually monetise it. He sees the openness of the web as the counterweight to Facebook or Google dominance and should be preserved.

Due to a late start, there was little time for questions. In the introduction to the questions, the chair Luke Johnson made a barbed comment about people playing on their mobile devices rather than listening to the speakers, and rather unfairly picked out one person in the front row. Personally, I was on Twitter throughout (don’t RSA hashtags encourage this sort of thing?) and the general tone of chat was similar to my thoughts – mild disappointment.

Final thoughts

Christian Lindholm and Ralph Simon both seemed to disagree with Luke Johnson’s contention about split attention being a bad thing. Simon quoted Brian Eno by saying the genius is being replaced by scenius. Though as Steven Johnson has recently written, perhaps the idea of a lone genius is a myth.

We may end up doing things less well than if we concentrated solely, but split attention and mass collaboration provide other benefits such as broader scope and more rounded influences. Technological advancement has got to the point where it is almost impossible for a single person to know everything about a particular topic – we need specialists and teams working together. I’m in favour of our new hyperlinked working practices – those arguing against are analogous to Socrates hating the written word, since he thought it reduced quality of discourse and dialogue.

So, in summary, it wasn’t an unmissable event and there wasn’t a whole lot on the future of mobile and its effects on society (at least in areas directly relevant to my job or my interests), but there were a couple of interesting nuggets I took away.

However, if you are interested in hearing more, an audio recording of the event is available here.


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Harold Evans on the Spirit of Innovation

Sir Harold Evans at the Strand Bookstore in Ne...

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Earlier today I attended a lecture at the Royal Society of Arts given by Sir Harold Evans entitled “The Spirit of Innovation”. During an extremely distinguished career, Evans has been, among other things, Editor of both The Times and Sunday Times (of London), Publisher of Random House and an author of several acclaimed books.

This lecture was chaired by Ralph Simon, co-founder of Zomba records and Moviso.

Click through here for links to the audio and video of the event.

In the lecture, Evans covered similar issues to those I’ve been reading about as part of my course, some of which I blogged about yesterday.

The crux of the lecture was the important difference between invention and innovation. Evans defines innovation as bringing an invention to use (i.e. commercialising it). He says that a scientist will have understanding, an inventor will have a solution but an innovator will have a universal solution.

An invention without innovation is a past-time. Essentially, many inventors are hobbyists, since an MIT study has shown that fewer than 10% of patents granted have had any commercial application.

Evans says that few scientists are able to turn ideas into a commercial impact. And historically, Britain has been very good at inventing but terrible at innovating. Coinciding with Channel 4’s broadcast of a series entitled Genius of Britain, focusing upon British scientific achievements from the past 350 years, Evans cited some of the great British inventions as

  • The electronic computer
  • The radar
  • Penicillin
  • The incandescent light
  • The microchip

However, British society failed to exploit these inventions, and they were ultimately superseded by American innovations that took the fame and fortune. Indeed, Evans mentioned that many Americans think Henry Ford invented the motor car.

Evans blames a fascination with the myth of the Eureka moment. Rather than a spark of genius, innovation requires active invention and improvement.This often means that investors overestimate the pace and underestimate the capital requirements of development, meaning that an inventor needs to have commercial acumen to succeed.

For instance, Edison was prone to self-mythologising about incandescent light bulbs, when in fact he had meticulously ran over 3,000 experiments. And then he had to convince people to use it, which effectively required a new electrical grid. Evans quotes Steve Wozniak as saying that getting an invention to marketplace is as important as the product itself.

Additional reasons for Britain’s relative failure include

  • Lacking the scale of big American companies in a big market protected by high tariffs and the Defence Department
  • Systemic opposition within Britain to both mergers and democratising ideas
  • Trade Unions – which Evans characterises as anti-meritocratic bodies looking to protect the status quo irrespective of change
  • Research and Development not being collaborative and systemic, unlike in America where people get to stand on the shoulders of giants.

However, Evans says that America is now struggling under its own weight. Bureaucracy and corporatisation are stifling innovation. Evans effectively championed bootstrapping when saying creative people should move away from bureaucracy to agile experimentation.

It was also mentioned at Israel is second only to Silicon Valley in the number of patents produced, and has more companies on NASDAQ than the entire EU. Evans believes this is down to a faith in technology to push things further, perhaps influenced by the compulsory national service Israeli citizens undergo.

The lecture was followed by a bizarre and disappointing question and answer session. There was only time for a few questions from the audience, due to Simon’s ludicrous format. Armed with a trusty PowerPoint slide, he read out several different forms of innovation, prompting Evans to recite rambling anecdotes tenuously linked to the topic. Simon then revealed a second PowerPoint slide, containing questions that Evans had largely answered in his lecture. Simon seemed unable to deviate from his format, and the session sadly petered out.

However, Evans’ final thought from his lecture has stuck with me. Genius is not enough; you need to go and do something.


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Connected: The amazing power of social networks and how they shape our lives

Nicholas Christakis speaks at the RSA on the power of social networks

“Connected: The amazing power of social networks and how they shape our lives” was the title of the talk given by Dr Nicholas Christakis at the RSA earlier. Due to rather poor time management, I didn’t make it to the event itself, but followed it online. This link should eventually have the video and downloadable audio of the event.

I’d recommend checking out the full talk, as Christakis is an engaging speaker and his theories make a lot of sense. Rather than recap the full session here, I’ll instead focus on a few areas.

The talk

The hypothesis of the talk (and book) is that social context plays an important part in our behaviour and attitudes, and our ties tend to form groups of likeminds. Things ultimately spread in networks.

In his data visualisations, he displayed his theories by using nodes to represent people, with lines acting as connectors.

The number three was a dominant theme throughout the talk.

Christakis noted that there are three theories in how things cluster.

  • Induction – Person A’s behaviour directly affects Person B, who then mimics Person A
  • Homophily – Person A and Person B both have the pre-existing condition independently, and group together because of this
  • Confounding – Person A and Person B are proximate, and share an exposure to an external factor

The confounding theory refutes the idea of network effects. Yet for network effects to be proven, the nature of the connections need to be understood:

  • Mutual friendship – where both person A and B are friends
  • Ego-perceived friendship – Person A befriends person B, but Person B ignores them
  • Alter-perceived friendship – Person B befriends Person A, who ignores Person B

Christakis argues that different relationships will have different effects. He notes that if we were to map our relationships, they wouldn’t form a uniform pattern like a regular lattice but instead vary across three dimensions

  • The number of friends/connectors per person/node
  • The interconnectedness of friends – are the nodes I am connected to also connected to one another?
  • The position within the overall network – is my node in the centre or towards one of the edge?

The final three of his talk is in degrees of influence. Christakis posits that we are not only influenced by our friends but also their friends and their friends’ friends. Three degrees of influence.

He believes that we should look at the networks, rather than the individuals, when formulating policies and strategies, because properties aren’t understandable when just looking at individual components. He used the (excellent) example of carbon. When carbon atoms are linked together in one way, they form graphite. When linked in another way, they form diamond. Two very different structures, with very different properties (And the one with more connections is more valuable).

Thus, he believes we live connected lives (even though he talked about part of it being a genetic trait) because the benefits outweigh the costs. We break off bad connections, and strengthen good ones. We create networks to spread and sustain good and desirable things – things we couldn’t as individuals.

My thoughts

I enjoyed the talk immensely, and would recommend people watch/listen to the full 75 minutes. I appreciated the depth he went into when attempting to determine causation, rather than just correlation. His argument was quite persuasive and of course it has repercussions on how we would be framing our objectives.

It’s got me thinking about whether the value of people within a network differs. Christakis claimed a network could shed its bad apples – I’m not convinced since a breaking of a first order tie doesn’t necessarily break the second order tie, where influence can still pertain. If we were able to break our ties and influence our networks, then surely only good things would spread, and not things like viruses or unhappiness. But notwithstanding, are some apples “better” than others?

Whether through Berry & Keller’s Influentials, Gladwell’s Tipping Point typologies or another example, people have attempted to segment the population in attempts to harness the spread of messages. But does the number, strength and position of connections impact on the value of that person, or is a person only as valuable as his or her network?

Instead could it be analogous to Belbin’s team role functions? A balanced team needs the whole range of roles and contributions in order to be successful. Would a network comprising purely of influentials become less valuable, due to the absence of other types of people to influence?

And so when we devising sampling structures or STP strategies based on their attitudes or behaviour, should we be attempting to create a proxy of individual positioning within a relevant network in order to predict the dynamic interplay of ideas and actions? I’m not even sure if this would be possible, but it would certainly aid our predictions on whether something is sustainable or not.


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Sir Ken Robinson on how finding your passion changes everything

I may not be at TED, but in the past few days I’ve had the pleasure of seeing two of the finest speakers to grace past events lecture in London. Following on from Clay Shirky at POLIS on Tuesday, Sir Ken Robinson spoke at the Royal Society yesterday on the subject of his new book – The Element. The event forms part of the RSA’s excellent series of debates on culture, politics and society that occur every Thursday lunchtime.

The core idea of the book is that most adults have no idea of their true talents, nor what they are capable of achieving. Some people go along in life with no sense of fulfilment, but people tend to do their best when they do something they love.

To be in one’s element, one needs to have a natural aptitude. Robinson provided one of his many great anecdotes to illustrate this – many of which are included in the book as interviews or case studies. Terence Tao, Professor of Maths at UCLA taught himself to read at age 2; passed a college entrance exam aged 8; finished his PhD aged 20 and was awarded the Field Medal (Nobel equivalent) aged 30. Safe to say he has a maths brain.

But being naturally good at something is not enough; someone also has to love it. If I’m good at maths but don’t like it, I shouldn’t continue just to meet people’s expectations. I should take part in what resonates with me most fully.

So rather than being about creativity, the book is about celebrating the diversity and multiplicity of talent. Sir Ken then reiterated the nebulous effect of the education system on encouraging this diversity. He believes – and I agree – that the distinction between academic and vocational education is a dreadful mistake. A story about a fireman who at school had been told he wouldn’t amount to anything then saving the life of that teacher proved this point quite nicely.

One of the arguments running through the book is that this “element” is necessary for human fulfilment as it is an essential part of knowing who we are. Bart Conner – the most decorated athlete in US gymnastic history – and his wife Nadia Comaneci now devote their lives to developing gymnasts in the Special Olympics, for instance. Conner’s mother encouraged his talents; and his talents then created opportunities. This is because our lives are not linear but organic. Education, on the other hand, is predicated on linearity. Robinson highlighted a recent LA policy paper “College begins at Kindergarten” to back up this point. Education should not be a mechanistic process but about creating a success that is synergistic with the environment.

He also pointed out several similarities in the “critical and severe” crises in both natural resources and human resources. Both line industry, serve massive commercial interests (e.g. the “false epidemic” of ADHD) and are often buried deep. Given that the old economic model has failed, now would appear an excellent time to instil community development based on diversity and not conformity.

The lecture closed with Sir Ken saying that at a basic level, education is about personal growth, it is part of the culture (and therefore needs cultural development) and is about economics. The book is a different conception of human possibility and an appeal to aim high.

After the speech (which was excellent), Matthew Taylor asked a couple of questions – one pertaining to the role that ethics and responsibility play in creativity. Robinson defines creativity as “the process of having original ideas that create value”. He re-iterated that it is a process and not a random act of inspiration, and that it needs to prove its worth. The financial crisis was not due to creativity but because people were not being critical and evaluating the usefulness of their ideas. He also pointed out that creativity isn’t the opposite to formality – instead a mixture of discipline and space to innovate are required (e.g. you have to learn an instrument before you can become creative).

Another question went back to the academic and vocational divide. Unfortunately people default to the way that they were educated – it may have worked for them because they are now in a position to make decisions, but it didn’t necessarily work for others. It is not just enough to know the discipline (and some policymakers may not even get that far) but about understanding the environment – great education needs great teachers. A video promo for The Blue School – set up by the Blue Man Group – was then played to show how learning and creativity can be encouraged within school.


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The Science of Lifelong Learning

On Tuesday evening I attended the lecture / debate “The Science of Lifelong Learning“, co-hosted by the RSA and the NIACE. The evening was centred on neuroscience and how understanding of its mechanics can impact upon education. The event was recorded, and I believe that feed will soon be uploaded here.

It was an enjoyable evening, though with over-running speeches the debate was sadly lacking and limited to a couple of rounds of questions (incidentally, this was the first panel where I’d seen questions asked in groups, rather than one at a time. Is this standard?).

If there was one overriding theme, it was an echo of Public Enemy – Don’t Believe The Hype. Neuroscience may aid an advancement in our understanding of how the brain works, but it does not work in isolation and cannot alone answer all questions.

The five speakers were a mixture of scientists and educators. Sarah-Jayne Blakemore (a neuroscientist at UCL) opened things up by looking at the “seductive allure” of neuroscience. Aids such as the Brain Gym are, apparently, sold on “facts that aren’t factual”.

She quoted a great study from Weisenberg et al (2008), which indicated that people became more satisfied with a “bad” explanation of brain activity once extraneous technical words were included. This was true for both neuroscience novices and students. Neuroscience experts were immune to this effect; amusingly, they instead felt the “good” explanation was less satisfactory when the neuroscience terms were included.

The takeout for the advertising industry is that products designed to improve intelligence will sell better if brain words are included in the description.

Despite the seductive connection between the mind and brain, Blackmore concluded that neuroscience can still be used effectively – e.g. we have discovered that the brain still develops within teenagers.

Usha Goswami, a neuroscientist from Cambridge, followed up by positing that creating optimal conditions for early learning makes our later learning more efficient, and increases the complexity of what can be learned. However, the ongoing environment has a bigger effect on development trajectory. This is a reason why continual learning is important (it can also help fight Alzheimer’s disease).

Paul Howard-Jones (University of Bristol) then presented evidence that training can improve targeted cognitive functions. While there is less evidence that this can transfer to non-targeted functioning, a recent study (Willis et al, 2006) suggested that reasoning tests in 74 year olds resulted in less self-reported functional decline in everyday life. Paul also had some very snazzy glasses, where the visual shapes projected within the lenses have been shown to enhance cognitive functions.

Andrew Pollard (ESRC Institute of Education) contended that there are four ways in which we can learn – formal workshops/training, personal support, a learning culture, and opportunities for self-reflection. He placed particular emphasis on the final point, saying that biography and history shouldn’t be overlooked. Learning needs to recognise the nature of phenomena; not just the brain but meaning and identity.

Matthew Taylor (Chief Executive, RSA) rounded off the speeches by agreeing that neuroscience is important but shouldn’t be overhyped. He also spoke about the extended mind and distributed cognition. The former refers to how external devices (e.g. a mobile phone) can extend our cognitive capacity while the latter relates to intelligence embedded in our social networks. He argued that learning takes place in groups, and that “collaboration is a meta-skill for lifelong learning”. Something our friends in social media will surely agree with.

A couple of interesting points also came out of the questions. Sarah-Jayne Blackmore said that different learnings have different sensitive periods e.g. social learning can continue for decades. Matthew Taylor noted that within schools, differing innate abilities meant that few could ever fall within a sweet spot of motivated learning and that assessment systems only added to the problem. Andrew Pollard named it the tragedy of the education system – feedback is not in a loop and so people cannot take it on board.

For further reading, see the blogs of Matthew Taylor and Tom Schuller, who chaired the evening.


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See Sir Ken Robinson speak

For those that live in or near London, I sincerely recommend signing up for the talk Sir Ken Robinson is giving at the Royal Society on the 5th February.

It is a free event and forms part of the excellent RSA Thursday series of lectures and seminars. Sir Ken will be sharing thinking from his new book – The Element – the point at which natural talent meets personal passion.

I have signed up and recommend you doing so by going here.

For those unable to make it, instead I suggest you either watch or re-watch his classic TED Talk from 2006 – Do Schools Kill Creativity? Follow the link to download audio or video and participate in the discussion, or watch the embedded Youtube video below.

The 20 minute speech justifiable won a standing ovation (not bad when you are sharing a stage with a former Vice President and the man that invented the Internet).

Some of the points he makes in his talk include

  • “It is education that is meant to take us into this future that we cannot grasp”
  • “Creativity is as important in education as literacy, and we should treat it with the same status”
  • “Kids will take a chance. If they don’t know, they’ll have a go”
  • “If you are not prepared to be wrong then you will never come up with anything original”
  • “The whole system of public education around the world is a protracted process of university entrance”

He is both hilarious and insightful when he talks about creativity and intelligence (diverse, dynamic and distinct), and he ends with an inspirational anecdote on the nature of success.

You will be hard-pressed to find a better way to spend twenty minutes online than watch the video, and I’m confident that the upcoming talk will prove to be just as worthwhile.


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