As one of the most important paradigms of recurrent neural networks, the echo state network (ESN) has been applied to a wide range of fields, from robotics to medicine, finance, and language processing. A key feature of the ESN paradigm is its reservoir --- a directed and weighted network of neurons that projects the input time series into a high dimensional space where linear regression or classification can be applied. Despite extensive studies, the impact of the reservoir network on the ESN performance remains unclear. Combining tools from physics, dynamical systems and network science, we attempt to open the black box of ESN and offer insights to understand the behavior of general artificial neural networks. Through spectral analysis of the reservoir network we reveal a key factor that largely determines the ESN memory capacity and hence affects its performance. Moreover, we find that adding short loops to the reservoir network can tailor ESN for specific tasks and optimize learning. We validate our findings by applying ESN to forecast both synthetic and real benchmark time series. Our results provide a new way to design task-specific ESN. More importantly, it demonstrates the power of combining tools from physics, dynamical systems and network science to offer new insights in understanding the mechanisms of general artificial neural networks.
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