Friday, September 24, 2004
Here's a scary technology. This would be bad enough by itself...but you need a keyfob to take it off?? We're on fast rewind to 1984; kids are just the beginning.
Glaciers melting rapidly.
Appeal to Authority
When you can actually write the legislation yourself, you've won. Of course, your opportunity cost of value-destroying tactics is value-creation, innovation...blah, blah, blah, you know the score.
The logical end-result is the DNA authenticator.
The logical end-result is the DNA authenticator.
1) One of life's simple pleasures is sitting in the top of a double-decker, right at the front, and just watching the city roll by.
At least, it used to be. I took the bus for the first time in a long time today and was shocked to see that there is now a nice big LCD screen covering most of the top front window.
Of course, this LCD screen is so stupid marketers can show you cheezy ads while they've got you captive. This is wrong-headed business thinking of the best kind. Alienating your customers by imposing massive costs on them (as the RIAA has so amply demonstrated) is not a source of long-term value creation. Consumers are not idiots.
2) I saw Lionel Richie in Knightsbridge today. And then I was humming 'Running with the Night' for like the next 3 hours.
Thursday, September 23, 2004
A nice bit about a recent killer-app-that-wasn't - MMS.
A nice bit about a recent killer-app-that-wasn't - MMS.
Massive radical, recombinative and value innovation happening to turntables. If you follow the market, you know this - but if you don't, this article is definitely worth a read, and a think about how these dynamics might get replicated in other CE markets.
TIC's - another fractional ownership model. Recommended.
Varian reviews a paper investigating whether cheap talk (aka chat-room messages) can predict stock prices. Interesting stuff.
China invited to meet G7. This is a big deal.
Experimental evidence for supersolids.
"...Interstate Bakeries Corp., which makes Wonder Bread and Twinkies, on Wednesday sought bankruptcy protection from its creditors."
The main driver, as I've argued before is a focus on the technics and finance of a good versus a focus on the good itself; or, as this NYT article argues:
"...Many food companies are interested in one thing - the most efficient route to extra sales. The more products consumers buy and the more of them they eat, the fatter the companies' coffers. And, alas, the fatter the consumers are likely to be, as well."
Of course, they haven't learned their lesson; they're still hard at work translating technics into marketing. Unfortunately, information in this market is easy to come by for consumers - they can simply check their waistlines. It's likely that the traditional food industry will continue to die unless they can learn from their consumers and use it to radically alter their strategy.
Cisco invests $32m in a China R&D center. Why?
"..Chambers said that over the next decade, half of Cisco's top 12 business partners and half of its main competitors would come from China. He singled out one rival, Chinese equipment vendor Huawei."
If ya don't already know.
A nice article illustrating the idiocy of the War on Drugs:
"...although opium poppy seeds are legal to possess and sell, "the live plants (or even dried, dead ones) fall into the same legal category as cocaine and heroin."
NYT has a nice piece about why jumpdrives have been so succesful - there's (obviously) a lot more to it than simply storage/dollar.
Value drivers, or why marketing 1.0 must die and be replaced with something more, well, human:
"...Two-thirds of online shoppers say they now buy over the Internet some of the things they used to get in store visits. Yet the percentage getting information or shopping online prior to visiting a regular store remains steady at 75%."
Will Wright interview.
Value destroyers: Gene flow.
Axis of Evil
A mother asks: For Whom Did My Son Die in Iraq. Either the Iraqi people's freedom or Halliburton.
Apparently, the new Emusic doesn't DRM the tracks it sells (via a subscription model). Presumably because it's largely indie suppliers aren't paranoid like major labels. The future of the industry? Yup.
Wednesday, September 22, 2004
The Irani blog protest was really, really cool. Much cooler than what our part of the blogosphere did with the memos. Orders of magnitude cooler.
"...The elastic IT organization combines the ideas behind just-in-time inventory planning and portfolio management. CIOs attempt to have just the right quantity of human IT resources, deployed precisely when and where they're needed most."
Link. Look, treating humans like humans earns you innovative and absorptive capacity. Treating humans like ledger entries earns you...nothing but incremental efficiency.
Which do you think will be worth more as India, China, Russia, start shifting away from price competition? Don't listen to your consultants. (Via the Outsourcing Weblog, which needs a shorter name)
Value drivers: Miss America ratings fall massively by 1/3.
Coming soon to you, courtesy of your friendly local Senator.
"...In late July, the Junk Fax Prevention Act was passed by the full House and the Senate Commerce Committee, and it is awaiting a Senate floor vote. The bill mirrors current law by banning unsolicited faxes, but makes explicit an exception for companies that have "established business relationships" with consumers or other businesses."
Go start fax spam business now.
Doctors start adding malpractice insurance charges to bills:
"...A malpractice surcharge, some doctors say, is simply one more access fee, although it is usually presented as voluntary to avoid running afoul of Medicare rules that prohibit such mandatory charges."
Litigation became taxation. What a surprise. File this under 'what your favorite law-blogger don't tell you'.
WiFi as substitute for 3G causes MNO's some big problems. Yeah, yeah, I know you knew about it for the last 5 years. The point is that with analysis like this:
"..."Head-to-head competition with DSL or public wireless LAN could kill profitability. Such strategies may fill 3G networks with low-margin internet traffic, leaving no space for more profitable services such as voice telephony, small-screen messaging and video content
...Several operators are experimenting with time-based and unlimited-usage tariffs. Such schemes may be simpler for users, but they inevitably jeopardize revenue per MB, and hence profitability."
it's no surprise they're getting killed - nobody wants to contract with firms whose strategy is simplistically measured by 'revenue per MB'; they want to contract with innovators who expand the pie, not keep it deliberately shrunk.
Net filtering. China, Iran, Saudi...now, Norway:
"...Starting next month, the Telenor ASA group will filter hundreds of sites that the national crime police, Kripos, deem to contain child pornography."
Note, the niche is not for Net filtering, but to defeat it (with min transaction costs).
Politics of the Day
Look, can we contrast, for a second, Dan Rather as insane liar with, say, Condi, Cheney, Feith, Wolfowitz as insane liars?
That's pretty much how the world sees it - lies that end in dead people
versus lies that end up in blog panics.
The only rational way you can equate Rather with Bushco is if human life has a very small price to you - which is exactly the complaint the rest of the world levels at America. Is this evidence?
A bit about MS's OneNote - I've never seen it, but it sounds less than spectacular and prone to the extreme messiness that MS apps generally create. The debate here is really between rich monolithic content versus thin modular content (which can scale and flex and become rich when aggregated). I think it's a nondebate - the Net tells us the latter paradigm's already won.
Wired has kind of a crazy article about how the gov is ready to subsidize - to the tune of $1bn - a switch to digital TV. It quotes lots and lots of talking heads, most of whom seem to be extrapolating growth rates based on now.
I'll just point out that that's silly; since this is a classic network market, growth rates will become increasingly exponential as more people make the switch. Of course, people won't make the switch until they've got a reason - switching costs are massively high, so a killer app (show, etc) is necessary.
But ultimately, remember, this issue is about the Replication Wars - it's in Hollywood's best interest for the gov't to subsidize this, given the Broadcast Flag.
Outfoxed to get CC'ed. Good - it could use some serious remixing, I thought the production work kind of sucked.
"Mobile phone detects bad breath". Uhhh...I guess it's a German thing.
"..."It's true. There has not been a major change in battery chemistry since lithium-ion," says Dr. Lawrence Dubois, vice president in the physical sciences division of SRI International, a nonprofit research and development company. "We are not seeing the doubling or tripling of battery life that we'd like."
Link. Yeah, I know you know about fuel-cells etc. This is just a reminder of the massive market niche awaiting the first mover.
Europe + tech = paranoia:
"..."It is much easier and less risky for a crook to steal money via Internet that to carry out a hold-up," Letherby said."
Uhh...spend some time in London.
Two weeks without Net reveals what people derive utility from.
Interesting speculation on Google to leverage Mozilla for GBrowser.
Ford signs big VoIP deal with SBC.
If you thought Blogversations was bad...check out Bzzzagent. The future of marketing is about honesty and authenticity. Really. It only sounds cheesy because you're used to a century of Madison Ave.
The real problems for Marketing 2.0 will be incentives. How do you stop Bzzagents from becoming cheezy referral marketers? How do you stop Blogversations from becoming cheezy product pitches?
The answer is in new kinds of massively distributed incentives embedded in massively multilateral contracts. An example is viral revenue, which creates webs of incentives across chains of consumers. We modeled a simple version of this in our licenses.
More Pointless Legislation
"...The legislation, passed by voice vote Tuesday, creates a crime of video voyeurism on federal property, such as national parks and public buildings."
Link. A better solution is Korea's, where phones beep when a photo's taken (I believe).
Not a bad piece about price competition from MVNO's giving MNO's headaches.
The Problems with Blogs, Pt 2
One of the classic experiments in behavioural economics showed that bubbles happen because of myopic (short-term) expectations. At worst, information cascades and mirages (where you ignore your own information and act on what you think your neighbour believes) take over and cause market failures (ie, Black Monday).
Now, and this is the interesting bit, blogs are not exactly 'fact checking your ass' - in fact, they're creating more and more myopic incentives and expectations. Bloggers are in a race to see who can catch what the fastest.
This is interesting to me because there's such a strong parallel with markets. Markets tell the truth - but only in the long term. I think blogs will too. But if that's the case, where is their comparative advantage over traditional media? I think it's in the transparency - not the truth-telling.
Which changes the value drivers, future market structure, etc. More on that later.
The bankruptcy economy - using bankruptcy as a strategic tool.
Interesting piece; I think the real point is missing though - that this is the last such tool in the hyperefficiency arsenal. It's the necessary and logical endpoint of a focus on efficiency at the expense of radical innovation. As Porter says, operations ain't strategy - because strategy is about long-term value creation.
Americans, it seems to me, are loath to place their sense of shared responsibility ahead of their self-gratification.
How's that for a view on Americans? With all the debate out there, here's a less statistical take on why SUVs are such a hot item.
The first 70-plus pages of his paper detailed the safety and environmental drawbacks associated with SUVs and the Hummer in particular, and drew parallels between these gas-guzzlers and U.S. positions on the Kyoto Protocol and Middle East foreign policy. But in the end, the author sounded a cautionary noteï¿½luxury can seduce even the well-intentioned.
Jain notes that Americansï¿½ dependence on cars really began in the boom years following World War II, when personal autos supplanted public transportation, suburban development created a commuter culture, and the government built thousands of miles of wide, easily navigable highways. The result: vast, sprawling metroplexes catering to cars. Today, Jain says, ï¿½if you live in the suburbs youï¿½re physically handicapped without a car. How are you going to get to work?ï¿½
But the source of our collective infatuation with the automobile isnï¿½t just utilitarian. Cars and trucks are marketed and widely embraced as icons representing sex, adventure, even patriotism.
Ah the influential strength of marketing (or perhaps just the naivete of Americans in general :)
I've lived in Tokyo for over two years straight now and have driven a car once - and even then it would arguably have been more efficient to take public transport. Population density makes a difference for sure, but so does government priority.
Politics of the Day
The desire to politick is influnced early, and socioeconomics makes a big difference. "Duh" you might say, but as an adult you have a responsibility.
ï¿½One could say that poorer schools are likely to create apathetic citizens,ï¿½ Starmanns reasons. Political apathy is one of the social-cognitive ï¿½loopsï¿½ identified by psychology professor Albert Bandura in his book Self- Efficacy: The Exercise of Control (1997). Simply put, powerlessness discourages participation, and failure to participate ensures lack of impact. But if educators effectively engage students in school government, students should come to see themselves as people who can make a difference.
Tuesday, September 21, 2004
Could solid state disk technology do, succesfully, what Steve Jobs couldn't do with magneto-optic storage technology?
Solid state disks (better put, mass storage) is a logical extension of the current trend in solid state memory development. Not only is solid state technology more robust, it offers the potential for very fast access times and high data transfer rates (due the lack of any mechanical moving parts). The problem is, current storage devices (Winchester drives) are cheap and reliable. For solid state to really take off, a killer ap will be required (as mentioned in the article).
Probably not news to anybody 'in the know'...
Legislators want to turn internet file sharing into a criminal offence. I.E. go directly to jail, do not collect $200.
This a little bit disturbing considering that the civil system has been set up to deal with cases such as this, where the law is not necessarily broken, but one side feels it has been wronged by the other.
Rafat chats with Martin Tobias. Interesting read:
"...I want Sony to stop being as*****s and get off the memory stick and ATRAC3 jihad.
...Digital music is not going to be a profitable business in itself for anyone in the value chain except the music labels and the hardware manufacturers...digital music will be (already is) a promotional good used to sell other stuff (sodas, hamburgers, cell phones, music players, etc.)."
Man, VC's are so falling behind the curve.
Got a comment asking me to clarify my stance viz American politics - cant find it now, so will respond here:
I think American politics suck, that the differences between the parties are minimal. I don't align myself with either party - I just call em as I see em.
Politics of the Day
Fafblog outdoes itself. Hilarious.
CBS vs bloggers redux. Funny stuff.
MS co-opting SenderID begins.
Wired releases a CC protected compilation CD. Look, I'm all for CC - but there is absolutely no business model around it. I mean, open-source in software is a big part of why outsourcing has vaporized the tech industry in the US.
Note, that doesn't mean there aren't strategic uses of open-source - just means it can't be the basis for a new industry (unless it's you like hypercompetition).
Steven Levy on price competition in digital music:
"...But the labels should understand that the nature of the digital world rewards price cutting much more than in the physical world."
Actually, I think this is one time when Levy is dead wrong - the evidence from micropayments suggests that, if anything, the digital world does NOT reward price competition. There are various reasons for this; my favorite is that unbundling reduces value for consumers in markets with heterogeneous preferences.
Will prices come down? Yeah - because no one built a new business model. Is it good for anyone? Not really.
Kottke's got more evidence of a Google browser. I think this is a bad idea, mostly because it will be almost impossible for it to be not evil. Of course, it's the most logical way to massively lock people into a large Gplatform.
Can someone tell me what is up with the Irani web protest? I can't figure it out, and it looks pretty cool.
Why do online papers want reg data? It's all about the (fundamentally misguided) model. In case you didn't already know.
Reed + Google in revenue-sharing talks. I'm not sure I get the deal entirely - I don't see Google's upside.
Economies of Scope
"..."It's all about taking charge and branding yourself," Hilton said. "I think we're living in a moment when having a career, especially a really glamorous one, is very sexy."
"...a new, permanent, multi-purpose coating technology that will prevent your spectacles, car windscreen or bathroom mirror fogging up ever again...
...University of Queensland physicists Michael Harvey and Paul Meredith developed this technology based upon thin films of nano-porous silica; this means that ï¿½the coating is a layer of glass full of tiny invisible bubbles, just like the foam on beer,ï¿½ said Mr Harvey. ï¿½Because itï¿½s made of glass itï¿½s as hard as glass,ï¿½ he said, giving the added benefit of a hard coating on items to prevent or reduce scratching. The whole production process is extremely simple, very low-cost and environmentally friendly."
How Innovation Happens
Radically higher-value uses for a technology take time to be discovered. Example: Botox may help tinnitis.
Discontinuities drive strategic thinking by radically shifting the landscape of performance space. The four most often though about: technological, regulatory, consumer needs, financial. Here's a nice example of a relatively slow but massive shift in consumer needs:
"...energy intake from such drinks in the United States increased 135 percent between about 1977 and 2001. Over the same span, energy intake from milk -- a far more nutritious beverage -- dropped 38 percent"
22nd amino acid reverse-engineered and biosynthesized.
By now you've heard about MS's Tivo'ing of radio. Analysts are saying it's not a big deal, as pointed out here. Don't buy it - it's a very, very big deal, because it destroys industry economics more than Tivo destroyed the TV industry's. It's not MS in itself that's important; it's the fact that this is another nail in the coffin of the traditional media business model.
MCI's looking for a buyer. Let the vaporization begin.
The First World is the New Third World
"...PARIS ï¿½ Americans abroad, whose votes could be crucial if the Nov. 2 presidential election proves close, are being denied access to a U.S. Department of Defense Web site designed to make it easier for them to cast absentee ballots.
The problem concerns blocks placed on access to the Web site of the Federal Voting Assistance Program, a Defense Department division to help expatriate American voters, including servicemen and women. The site's address is www.fvap.gov."
Interesting /. discussion about jargon in technology marketing, and whether tech marketing is a vital point for competitors to strike. I think it's pretty clear that the tech industry could use a dose of serious marketing. The problem is, as the /. thread points out, with the consultants: their ppt terms make it into firms' marketing materials.
Of course, the consultants use jargon to sell to the firm's C-level; whereas the firm often ends up using the same jargon in a misguided attempt to sell to completely different parties with different needs, and for whom the jargon is simply an entry barrier.
"...The first event for Advertising Week in New York City will be a ceremony to name five characters and five slogans to a new Madison Avenue Walk of Fame. They were selected from a field of 52 characters and slogans by a public vote on a Web site, sponsored by Yahoo and USA Today; about 600,000 people voted."
I find it absolutely sad that people let corporations control their public spaces - essentially letting corporates co-opt and charge rents for access to those spaces. But that's what consumer culture - a much bandied about but little understood term - really means. Just one of my many reasons for disliking nyc.
Monday, September 20, 2004
Green housing takes root in Oregon (via slashdot). This has huge potential to disrupt the real estate industry. It is my top pick for the Next Big Thing waiting to hit the North American economy.
A portrait of an Iraqi insurgent. Between guys like this and Cheney + his replicants, it is going to be a long, difficult few years. Lunacy breeds lunacy.
Apologies for the somewhat heavy political stuff below...
I missed Woot while I was away - check it out, it's pretty cool.
End the War
Juan Cole of the day (2):
"...In general, as you can tell, I deeply disagree with using helicopter gunships and warplane bombardment of civilian neighborhoods as key tactics in fighting urban guerrillas. If the LAPD bombed Watts to get at the Cripps and the Bloods, there would be outrage
It's language like that that the Dems need to use more.
Juan Cole says:
"...But given its goal of creating more polarization between the US and the Muslim World, it is entirely possible that the al-Qaeda leadership would prefer Bush, since they want to "sharpen the contradictions."
Axis of Fascists
An absolutely killer piece about the rise of the 'shadow' government. Highly, highly, recommended.
Many of my American readers will probably roll their eyes at this as alarmist nonsense. They've been taught since birth (like I was) that America is the land of the free. The problem is that this - now - really is how fascism starts
. Those of us who've spent significant time in the 3rd world understand, because we've seen it happen (ie, via reality manufacturing/propaganda tactics).
Try as we might, it seems literally impossible
to explain this to Bushites. It is - because they really do live in a different reality - one manufactured by different interests. Suffice it to say that the entire rest of the world is aghast at what Bush has done not just to Iraq - but more to America itself:
"...But what is so deeply disturbing about the current state of the conservative movement is that it has otherwise plainly adopted not only many of the cosmetic traits of fascism, its larger architecture -- derived from its core impulses -- now almost exactly replicates that by which fascists came to power in Italy and Germany in the 1920s and '30s."
Laws of the Machine
2) The machine exerts it's own sociality. A nice example of the Net accelerating the already-present shift from relationship to transaction in the real-world, as social structures get vaporized and then replaced by markets. Do we want really a hyper-market culture - where every relationship is just the future value of a series of transactions? I don't.
Blogs will begin to lose credibility as a necessary consequence of hyperpolarization. Just a thought in response to this post by Bainbridge.
The First World is the New Third World (Turrist vs Turrist Edition)
"..I'm gonna be blunt and plain; if one ever looks at me like that, I'm gonna kill him and tell God he died."
Jimmy Swaggart on gay marriage. Note: The Taliban actually used to do it - the Saudis and Iranis still
do. The irony would be funny if it weren't so Orwellian.
Googling old buddies brought up this article about Europe, VC, and just not getting it.
The cooling of science? I'd say not really - this is actually the cooling of distance and method, aka pseudoscience - think smartbombs and video games.
The First World is the New Third World
If you're a 'middle-class American' - move. Your future isn't looking very good.
"...Yet his kids -- his son is 26 and his twin daughters are 21 -- still live at home because they can't afford places of their own. None of them went to college, although his daughters had 3.8 grade-point averages in high school and his son aced the SATs. They're saving to go back to school -- eventually. In the meantime, they work. His son lays carpet and his daughters stock shelves in a warehouse."
The structural results of a century of myopia from those who should have been leaders. Not to mention the replacement of conversation with hyperconsumption.
Laws of the Machine
3) The machine exerts it's morality. Nice example - I Found Some of Your Life.
Betavote is really, really cool.
Apartment Therapy. Novelty, variety, disposability - the three properties of consumer culture. This, on the other hand, is a kind of hyperconsumption, which reminds me what it is about NYC that I think is so lame.
Tyson product placement deal with Viacom.
The Times thinks we're at a tipping point for adware and spyware - trust me, we're not; they're not going anywhere soon.
Nice piece in the Times talks about how the increasingly moribund games industry's focus on milking the last drop out of every license is costing it creative and fresh games. The basic problem isn't development costs (although those are growing fast) as much as marketing costs - the games industry is focused on predictable 'hits'; so it's entered the same winner-take-all marketing war that Hollywood and the record industry have. This naturally means publishers will only finance games they think will predictably be hits - that's why we're at Tony Hawk 5 or something now.
Something we hear a lot about - remember, last year, even the group Blackley helped build in order to create a new financing mechanism for this industry went under. So what kind of financing mechanism will work? That's the trillion $$ question - I think distributed ecs. of scale will take care of the games industry the same way they are taking care of Hollywood and the record industry (ie massively distributed production/vaporized entry barriers).
The NYT points out another problem:
"...According to one agent who represents developers but declined to be identified because he negotiates with the major game publishers, the industry is now controlled by managers who have a background in the packaged goods industries, rather than entertainment."
Hypercompetition forces eMusic to differentiate - it signs up a bunch of indie labels.
Geneballs. Mostly only important to see the target price this outfit has set: $30k. That is really, really cheap. It's unlikely they'll hit this target, but it gives you a hint of what's to come.
Kahle's suing to take orphan works out of copyright and into public domain.
"...Sports Illustrated readers overwhelmingly voted Mr. Bush the better athlete and sports fan, a conclusion the magazine's managing editor, Terry McDonell, finds baffling.
"Clearly Kerry is a much, much, much, much better athlete," he said, noting that Mr. Kerry has long played competitive hockey and also regularly snowboards, Rollerblades, windsurfs and kite-surfs.
"Kite-surfing," Mr. McDonell said, "is the hardest, most radical thing to do. It's what the most extreme surfers are doing."
Mr. Bush, in contrast, was a cheerleader, and not, Mr. McDonell notes, the kind that did flips. "It's like spirit club."
Hilarious. There's a sucker born every minute. Bush is better than Kerry at making people his bitches by scaring them. Via Digby, who is the closest thing you will find to a proper strategist for the Dems online.
Axis of Evil
As this guy points out, the cost of a Bush re-election is a likely reinstatement of the draft. Talked about, worth a reminder.
On another note, I left for about a week, came back...and the blogosphere has, it seems, been taken over by lunatic fringe conservatives...what gives?? Why don't the Dems fight back?
Sunday, September 19, 2004
Hyperpolarization in American society begins to take its toll on the judiciary. Personally, I think the idea of electing judges is just stupid.