Strategies for a discontinuous future.

Consulting & advisory, research notes, in the press, about bubblegen,
next wednesdays.

Saturday, December 04, 2004

Innovation Engine

Calculus, linear algebra, and basic stats - evangelical style. Absolutely...unbelievable. Highly, highly recommended.

So I guess when our country's full of engineers trained like this, since they won't actually be able to build anything (from a bridge to a logic analyzer) - we'll just pray for things instead.

-- umair // 3:53 PM //

Friday, December 03, 2004

Dot Com 2.0 - The Return of the Bubble

Catch27. Words fail me - this is so 1999.

-- umair // 7:37 PM //


Will this become the Starbucks of the next decade?

At first glance, I'd say no. I mean it's cereal. Something I have boxes of in my cupboards. Ah yes, but then I have cupboards full of coffee as well. But still there's something missing here....

Caffeine. Along with nicotine and heroin, the worlds most addictive substance. In fact, evidence suggests that Starbucks deliberately amps up caffeine levels in it's coffee - and it's competitors have likely followed. So if these purveyors of fine cereals start sprinkling a little cocaine on their product and market it as "icing sugar", they might have it made.

-- dhd // 6:47 PM //


Value Creation - What Does it Mean?

Something - let's call it innovation - which makes it economically possible to do and create either totally new things, or to do old things more efficiently. Here's a great example:

"...The industry is now so big that it is possible to build a hot rod entirely from new parts. And for purists who want old parts, the Internet has eliminated the hallowed junkyard crawl, once a rite of passage. "Places like eBay have just revolutionized the way we shop for parts," said Rob Kinnan, the editor of Hot Rod magazine."

If it sounds obvious - it's not. Mapping value shifts is notoriously difficult (if easy in hindsight). But understanding this process of value creation is the heart of not just capital formation, but also of killer opportunities and ideas.

-- umair // 6:36 PM //


Red vs Blue

"...US distributors of the film Merchant of Venice, which premiered in London this week, have asked the director to cut out a background fresco by a Venetian old master so it is fit for American television viewers.

...according to Mr Radford, there was "a very curious request which said 'Could you please paint-box out the wallpaper?'. I said wallpaper, what wallpaper? This is the 16th century, people didn't have wall-paper."

When he examined the scenes, he realised the letter was referring to frescoes by Paolo Veronese, the acclaimed Venetian 16th-century artist, which, when examined closely, showed a naked cupid.

"A billion dollars worth of Veronese great master's frescoes they want paint-boxed out because of this cupid's willy. It is absolutely absurd," he said."

Ha ha. That is hilarious (and little disturbing...come on, Cupid is NOT Satan).

Then again, there's also this:

"...MONTGOMERY - An Alabama lawmaker who sought to ban gay marriages now wants to ban novels with gay characters from public libraries, including university libraries.

...it could also include classic and popular novels with gay characters such as "The Color Purple," "The Picture of Dorian Gray" and "Brideshead Revisted."

Hmm. This is exactly how the Saudis built a culture of totalitarian religious fundamentalism across the Muslim world. Nice one!!

-- umair // 6:25 PM //


Preference Shifts - Death of Exurbia

Extreme commuting demonstrates the massively growing transaction costs to an exurban lifestyle.

-- umair // 6:21 PM //


Coordination Machines

choosetheblue. This should have happened before the election.

-- umair // 6:20 PM //


Blogging 2.0

Wavemarket - highly recommended. Interestingly, its the broadcasting - not the mobile blogging angle - that I think will be the most powerful, because it will let people make new kinds of ad-hoc networks (ie, for music, reviews, etc, on the fly).

-- umair // 2:52 PM //


Techdirt in WSJ piece about blog-mining as market research.

-- umair // 1:27 PM //


Link of the Day

MSN Spaces censors blog postings. Ha ha.

A perfect example of why we think MS has (in the long-term) had it - they have absolutely no user learning capability (and no managerial cognition, it seems, to back it up). I can actually NOT think of anything bloggers value less than being censored.

My prediction - this will race to the top of the blogosphere, create a huge buzz, probably a few press articles - and there will be absolutely no response from MS (except to mysteriously tweak some of the censorware). That's how we know they have no learning capability - they don't even listen to what the market's telling them. Amazing.

Of course, this is also the moment when blogging jumps the shark. So what's blogging 2.0 gonna look like? We're working on it...

-- umair // 1:24 PM //


Media 1.5

On-demand newspaper printing. I don't think the value prop works, but interesting.

-- umair // 1:22 PM //


Politics of the Day

"...Bush's new attorney general helped write the Patriot Act and supported torture."

In case you didn't already know.

-- umair // 1:16 PM //


Replication Wars

NYT piece on Snocap/legal file-sharing. Will legal file-sharing work? It's the wrong question. The real problem is copyright - it's completely inadequate for digital economics.

What's necessary for 'legal' digital media markets to explode are new licenses (which can enable the creation of new market structures) - CC's made one, but it's not commercial. You can check out our prototype for what we think such licenses will look like.

-- umair // 1:10 PM //


VC 2.0

Lionhead grabs a round from Add and IDG. Veeery interesting.

-- umair // 1:07 PM //


Strategic Moves

Nintendo expands horizontally into film production. I think this is a very, very good move - the market is growing massively, Nintendo has unique resources which translate nicely into rent-capture, and there's little competition (or at least plenty of room in the growing market).

I think this is the precursor of a shift away from hardware (minus the Gameboy, of course) - a trial run of such a strategy, if you will.

-- umair // 1:03 PM //


The Wizard of Oz

Michael Powell editorial in the NYT - makes you almost feel sorry for the poor guy, but nicely sustains a huge gap for disruptive media innovation, by forcing big old media to stay hidebound:

"...But we are not the federal Bureau of Indecency. We do not watch or listen to programs hoping to catch purveyors of dirty broadcasts. Instead, we rely on public complaints to point out potentially indecent shows. In recent years, complaints about television and radio broadcasts have skyrocketed, and the F.C.C. has stepped up its enforcement in response. Advocacy groups do generate many complaints, as our critics note, but that's not unusual in today's Internet world."

Bolding's mine.

-- umair // 1:00 PM //


Hammersley in the Guardian on Podcasting.

-- umair // 11:57 AM //


Corporate of the Week

GSK - for running forced trials on kids born HIV positive:

"...GlaxoSmithKline will be accused this week of backing drug trials in the US in which underprivileged children were forced to test Aids treatments against their will.

The trials have been taking place in New York under the auspices of the Administration for Children's Services, the body that looks after the welfare of children in New York City.

...the ACS is deemed to be the legal guardian for many HIV-positive children. According to a BBC2 documentary, Guinea Pig Kids, to be shown on Tuesday, the ACS has forced children to be involved in these trials, removing them from foster homes if the foster parent did not comply and even physically making the children take the drugs.

"...At Incarnation, if a child refused to take the medicines offered, he or she was force-fed through a peg-tube inserted into the stomach.

Over 23,000 of the city's children are either in foster care or independent homes run mostly by religious organisations on behalf of the local authorities and almost 99% are black or hispanic."

Needless to say, this is extremely disturbing. It would be nice if the beancounters that made this happen faced consequences - but I think it would be even nicer if GSK took a nice fat hit to shareholder value. It might be a good idea to short GSK for the next week or so.

Another point to note - this is another nice data point to support everyone's death of big private media hypothesis (since the Beeb broke the story, not the NYT or the Post).

-- umair // 11:43 AM //


Next Big Things

Backfence and the future of journalism.

Like I've argued before, I think the market will fragment into two big spaces - for high-quality publishing markets, and relatively low-quality open-source bazaars. I don't think there is room for a Backfence in the middle (unless it simply wants to be an ohmynews clone).

-- umair // 11:40 AM //


Social Machines

"...TOKYO (AFP) - Japan's growing elderly population from will be able to buy companionship in the form of a 45-centimeter (18-inch) robot, programmed to provide just enough small talk to keep them from going senile."

The beginning of the age of social machines. I think this is incredibly cool - but let's also not forget that the economics of such a market are absolutely staggering, because of massive, relatively wealthy aging populations suffering from an exponentially dropping quality of life (Via /.).

-- umair // 11:37 AM //


Economics of the War on Terra

"...Excluding oil, imports from Muslim countries have increased by just 3.2 percent since 2000, their growth suppressed by tariffs of 20 percent or more on key goods such as textiles, according to an analysis of U.S. trade statistics."

Helping countries stay poor doesn't exactly help end the kind of desperation and hopelessness that breed terrorism. IMHO, this is the real 'war on terra'.

-- umair // 11:33 AM //

Thursday, December 02, 2004

Printers go bio.

Vladimir Mironov, director of Shared Tissue Engineering Laboratory at the Medical University of South Carolina, is one of the scientists who has rigged Hewlett-Packard and Canon ink-jet printers to shoot out proteins instead of ink, and to capture tissue on specialized gel instead of paper.

-- dhd // 7:58 PM //


The Linux Machine.

Somebody's starting to get the picture. Novell released their linux desktop version 9. From looking at the evaluation version it looks feature rich and easy to use. In fact, it looks almost exactly like Windows with some distinguishing features. If lunux ever wants to compete with windows, it will have to continue down the road of providing the same features as windows (updates, media, browsing, messenger client) with the same user interface and file structure support. Novell is well on their way.

-- dhd // 7:39 PM //


Sun and Microsoft: Fixing Each Other's Flats?

I think this is mainly the effect of their realization of growing threat from Linux and Open Source. There is no reason, for example, that the storage stuff that Sun's doing with Microsoft's virtual disk or shadowing cannot be done much more cost-effectively on Linux. Yes, they have seen the enemy and they know that fighting between themselves would only make it stronger. Of course, there's the little thing about the massive leverage enjoyed by us Open Sourcers due to hugely distributed economies of scale. Note to SUNW and MSFT : why don't you make it even more entertaining for us and just merge?

-- Mahashunyam // 5:40 PM //

Wednesday, December 01, 2004

Globalization 3.0 : The post-outsouring economy

Fast Company | Offshoring Creativity

-- Mahashunyam // 10:43 PM //


Globalization 3.0

A Canadian amateur rocket scientist's web site inspires a couple of high school students in India to build a rocket. Cool!

Bangalore boys to launch rocket

-- Mahashunyam // 5:40 PM //


Dot Com 2.0 - Coordination Machines

thefacebook gets an NYT profile. Interesting stuff, not least because it tells us that finding what kind of information has value is tricky. A textbook case of less technologically advanced dominant designs emerging despite pundits' best guesses (ie, the technologically 'best' solution is rarely adopted by the market). In this case, faces have more utility for users than the assortment of personal info collected by other networking sites. Essential to keep in mind for future projects.

-- umair // 5:26 PM //


Limits of Hyperefficiency

Wal-Mart backlash begins - on the Street. That is, Wal-Mart takes a hit because it doesn't discount as much as expected.

Has Wal-Mart reached a hyperefficiency bound? I don't think so (and this doesn't mean it has) - the price floor will keep dropping - it's a just a discontinuous function. The real Wal-Mart backlash will begin when consumer preferences shift away from myopic evaluations of quantity - ie, give me the 'most' for my buck now - and towards a fuller evaluation of the consequences of hyperefficiency. It's happening slowly but surely.

A falling dollar and import substitution might help this trend hit the inflection point.

-- umair // 5:22 PM //


Link of the Day - News 2.0

"...Three years ago, under Mr. Edwards's guidance, LUN installed a system whereby all clicks onto its website (www.lun.com) were recorded for all in the newsroom to see. Those clicks - and the changing tastes and desires they represent - drive the entire print content of LUN."

This is fascinating stuff, because it speaks to the most pressing managerial question of the day: how do we make better strategies in a turbulent environment?

Technology can help - but it's only slowly emerging exactly how. This is a great example - leverage very simple tech to create a massive learning capability. This capability creates a competitive advantage in an environment which values flexibility and responsiveness over scale and price.

Zero-intelligence is where I think management needs to be - to let the market become the decision-maker (as Prahalad has implicitly argued). The reason this hasn't happened in the past is because extracting information about future preferences is notoriously difficult. Designing cars by focus group creates Detroit style crapmobiles.

But massively distributed and networked machines - whose output is instantaneous aggregate revealed preference at low cost - can let decision-makers get a much clearer read on what the market wants in the future, valued at now. Now what we have to do is build a set of tools that actually does this.

-- umair // 5:14 PM //


Dot Com 2.0/Social Capital Machines

Pitchfork Media gets deconstructed as arbiter of cool. What this bit misses is that while slashed transaction costs to consuming digital media create huge cool economies (ie, it's easy to become an arbiter of cool, since everyone can make their voice heard), the flipside is that the half-life of arbiters of cool must exponentially drop, since, concomitantly, the price of cool has become relatively cheaper. Put another way, there are no barriers to entry for the next Pitchfork.

The trick is to create them - my advice here is to exploit time compression diseconomies into markets for complements; ie, build up a massive learning advantage and leverage it to expand horizontally. Uhh...end geek out.

-- umair // 5:10 PM //


Replication Wars - Steam

Steamwatch is a natural response to the imposition of a total DRM regime. Unfortunately, although Steam is innovative, it sets the wrong incentives for users and hackers alike (ie, you're better off not buying more SteamPowered stuff as imitators choose not to SteamPower, and as the costs of DRM outstrip consumption gains). This is what SteamWatch rightly points out -it's a massive strategic error because more than anything, it exposes huge vital points for competitors to strike.

It is, of course, an effective short-term fix.

-- umair // 5:08 PM //


Dot Com 2.0/Coordination Machines

Citeulike is supercool for nerds like me and you.

-- umair // 5:07 PM //


Death of Brands

Lovemarks vs Cluetrain deathmatch. The signal thru all the noise is that Lovemarks are an initial attempt at emotion repositories, and Cluetrains are essentially search economizers.

I think Lovemarks are wrongheaded, but on the right track, because the Net creates Cluetrains whether or not firms want them - it's managing emotions authentically that is challenge for post-branding. Information is cheap; emotions are expensive; emotion management is even more costly.

-- umair // 5:04 PM //


Dot Com 2.0/Coordination Machines

Twinkler is very interesting indeed.

-- umair // 5:03 PM //

Tuesday, November 30, 2004

New Media

An overhyped term, but here's something actually new: a novel in Japan composed of a series of bbs postings. Wanted to post yesterday, but Blogger was acting up (Via Money not Art).

-- umair // 5:14 PM //


Art of the Day

Treewave makes music with obsolete digital machines. (Via NerdFilter).

-- umair // 5:10 PM //


Malware Markets

Market structures getting formalized. As predicted earlier this year. Read another article about this today but can't remember where. Next stage in the evolution is interesting to think about - obviously, competition is going to create an incentives for damage (to build reputation) and stealthiness (to grab valuable data). Since these are in conflict, this will be an interesting market to watch.

-- umair // 5:02 PM //


In The Future Everyone is an Everything

By now you know about WikiNews. Bear in mind that ohmynews did a similar thing quite a while back. You know the score by now - distributed economies.

Will it work? Yup. Will it destroy the news industry? Nope - we've already argued papers are going to become (winner-take-all) journalism markets. WikiNews will be like a journalism bazaar (to grab an overused metaphor) - teeming with activity, but with little qc.

-- umair // 4:57 PM //


Sterling on dead media. (Via WorldChanging).

-- umair // 4:56 PM //


Humour of the day

'Doofus' air travellers carry chainsaws, landmines

-- Mahashunyam // 3:31 AM //

Monday, November 29, 2004

Next Big Things - Markets Everywhere/Coordination Machines

Karmabanque is a market for corporate social responsibility and 'smart boycotts' (ie, boycotts + short selling + gains redistributed to stakeholders who realize losses from a corporate's actions). Very interesting stuff - highly recommended.

This realization doesn't fully capture the power of the market mechanism - information revelation - because it relies partly on an explicitly constructed rather than implicitly revealed 'boycott index'. Room for improvement.

-- umair // 1:39 PM //



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