Category Archives: Business as unusual

A product I would really like to see…

I would love to have a set of noise-canceling head phones that could filter out bureaucratese and administrative noise from academic and other meetings, so that only relevant and interesting information reaches the wearer’s ears.

(Yes, I initially sent this to some collaborators as an April Fool’s joke. But eventually, this could really be done.)

As an academic and a technologist, I inevitably have to sit through many meetings of a bureaucratic nature, characterized by a low information signal-to-noise ratio, slow tempo and endless repetitions. As Brad Delong has described it, "an academic meeting is not over when everything has been said, but when everything has been said by everyone."

Imagine a collaboration with a good search technology company, such as FAST (now Microsoft) and a good headphone company, such as BOSE. Noise-canceling headphones work by recording the ambient sound picture and then filtering out noise (characterized by an irregular wave pattern), only letting well-modulated sound waves, such as voices and music, through.

It is a small step to strengthen this filtering by using advanced search technologies such as sentiment analysis, which applies automated semantic analysis to words and phrases. It is now mostly used to automatically evaluate blog comments, but it could be used directly on the audio patterns coming in, perhaps initially using speech-to-text conversion. Since administrative and bureaucratic language is characterized by many easily recognizable phrases and a high degree of repetition, it should lend itself well to filtering both in an initial phase and through collaborative techniques (easily implementable with a red "banish" button on the head phones themselves.) Personalization could also add value, by filtering out stuff you have heard before and only letting through things that are new to you.

Response time might be a problem, but professors are deemed to be a bit slow in their reaction to external stimuli anyway, so I doubt if anyone would notice any difference.

(Initial responses from my collaborators suggested dealing with this by skipping the meetings altogether, which I must admit is an attractive alternative. But not everyone can do that, and besides, there is always the chance that something might slip through the filter.) And imagine the market opportunities, for students, journalists, politicians, parents (at PTA meetings). Not to mention how this would put the final nail in the TV advertising coffin. I suppose seeing a movie such as Groundhog Day would be hard, but personalization would eventually fix that.

Ah, the dreams of reason…

Unintended consequences

How Michael Osinski Helped Build the Bomb That Blew Up Wall Street — New York Magazine

This is so good it just can’t be made up…

Good survey of web business models

image Box UK, has a very complete survey of web business models. My concept of business models (though for information content and services, not just services) on the web was four: Free, ad-supported, subscription or some form of micropayment (Skype, I would say, is the largest user of this concept, though they pull it off a regularly replenished account).

This site expands that classification a bit, including things like taking payemnt for physical products and letting the service follow the product (which more and more electronics manufacturers do). What strikes me is that there really is nothing new here – all the business models have been around since time immemorial, something the media industries of the world should take note of.

The answer for more and more of the granulated information providers of the world lies in moving either towards the user (becoming, essentially, an integrated part of the user’s information need, such as Bloglines) or to step further from the individual information consumer, becoming a source of content for others to fight over. Paying a license, of course.

Anyway, a good list, and a good survey. Check it out.

(Via Chris Anderson of Wired.)

In defense of serious journalism

James Warren delivers the best defense for traditional newspapers I have yet to read, in The Atlantic. Interestingly, he singles out The Economist as one of the outlets that have done well in the face of the online onslaught. In Norway, the same thing has happened – the few papers that see increasing circulation are the quality niche papers, such as Morgenbladet and the extremely left wing Klassekampen, both of them niche publications that to some extent have shed their political affiliation and instead opened for quality journalism with opinions attached.

I feel encouraged that this is the way forward. Why waste paper on anything that isn’t high quality?

Update March 16: Linked from the same page: The potential disaster for investigative journalism, another good article, by James Warren. Methinks we need to look into funding of investigative journalism outside the subsidy model. Funny, I remember giving a talk about the decoupling of ads and content to Dagbladet, a Norwegian newspaper that is now in dire straits, in August 2000, and by then this wasn’t even news…

Stewart, Cramer and ducking humiliation all the way to the bank

Like many others, I have been enjoying Jon Stewart’s skewering of Jim Cramer, CNBC’s money madman. But the New York Times has an interesting perspective interesting perspective on this: The media attention may be to Cramer’s advantage (as opposed to what happened to Crossfire when Jon Stewart appeared and exposed them for what they were.

Nevertheless, it must have been uncomfortable being up there, and deservedly so. But I do prefer this one:

Wolfram is at it again

Stephen Wolfram’s next project, the Wolfram|Alpha search "engine" (or, rather, answer to everything that is computable) is due out in May visit it here.) To me it seems like a combination of Google, CYC and, perhaps, Mathematica. It certainly is interesting and should do much for factual search, not to mention conversational interfaces to search. Nova Spivack thinks it is as important as Google. Doug Lenat (in the comment field to Spivack’s blog post) says

[…] it’s not AI, and not aiming to be, so it shouldn’t be measured by contrasting it with HAL or Cyc but with Google or Yahoo. At its heart is a formal Mathematica representation. Its inference engine is basically a large number of individually hand-engineered scripts for tapping into data which he and his team have spent the last several years gathering and "curating". For example, he has assembled tables of historical financial information about countries’ GDP’s and about companies’ stock prices. In a small number of cases, he also connects via API to third party information, but mostly for realtime data such as a current stock price or current temperature. Rather than connecting to and relying on the current or future Semantic Web, Alpha computes its answers primarily from his own curated data to the extent possible; he sees Alpha as the home for almost all the information it needs, and will use to answer users’ queries.

Another way of seeing it might be as the latest shot at providing answers by processing rather than storage – which fits nicely with Wolfram’s idea of computational equivalence – that the universe can be described by a simple set of rules, which as far as I understand it means that all complexity is only apparent, not real, and only so because we have not yet understood the underlying algorithms.

I just can’t wait to try it out – and to see what the impact will be on more storage-intensive search engines and their use.

Update March 12: This is garnering some serious attention for a service that isn’t even in beta yet…

Stimulus Bill Restricts Hiring of Internationals

This is going to help the US economy?

Under a recently passed amendment to the federal stimulus bill, companies participating in the Troubled Assets Relief Program—a government financial-rescue plan implemented last fall—will face more restrictions in hiring H-1B visa holders, foreigners with at least a bachelor’s degree and “highly specialized knowledge” in a particular field.

[…]

Firms that have accepted TARP funds would be required to demonstrate that they have made concerted efforts to employ and avoid laying off U.S. citizens before hiring H-1B visa holders, said Kevin Casey, the University’s chief lobbyist.

I can only repeat (almost) what I said in the comments:

As an HBS graduate who works with software and technology companies both in Europe and the US, I can only bemoan this measure as uniquely shortsighted – and very helpful to European and Asian software companies, who can hire graduates from top US schools. For mysterious reasons, the US don’t want them once they have been trained and can contribute to the economy.

The fact that large companies now are putting their software research and development (not maintenance ) centers in Canada (just across the border in Vancouver) or in India speaks volumes. On the other hand, it may make it easier for me to find people…

I think the best solution for the US economy is Tom Friedman and others’ idea to allow a few million Chinese, Indian or Korean immigrants, provided they buy a house. Talk about a shovel-ready project….

(Via Greg Mankiw.)

Update March 11: This is indirectly hurting American export of education (where there is an $11.2b trade surplus. I have heard similar from other academics recently. I suppose this is good news for the Norwegian School of Management (we’ll get more and  better foreign students since the USA offers a less attractive proposition), but still, this is bad news overall.

When nerds congregate

I am writing this (using my little Asus, which actually fits in a large coat pocket) from Ignite Boston 5, a meetup of techies of various stripes in the Boston area at a bar on Union Street close to Faneuil Hall, arranged by O’Reilly. The format is pretty simple: Get 250 geeks together (with another 250 waiting to get in) in a large bar, have Google buy everyone a free beer, and subject them to presentations on various subjects by volunteers that have been more or less carefully vetted. The result is a sort of geek stand-up-and-shout, with Powerpoint presentations. Right now a guy writing a book about open government and sharing of data – “democratizing data” – is giving the (rather good) keynote presentation, with 12 more, shorter presentations to follow. I suppose this is what Second Tuesday should have been if it hadn’t become all corporatish..

All in all, it is quite interesting to find an environment where being a geek is not only accepted, but kind of cool. Nevertheless, I am the only person with an open computer in this crowd, which is either an indication that I am an über-nerd or that everyone else is Twittering or blogging by iPhone. Oh well.

At least it gets me out of the office for a few hours. Much to be said for that.

I have been here for almost two hours, have seen the list of presenters – and though they are sincere, I think that’s it. For this time. Not that I didn’t like this thing, but there is something to be said for consuming new things in measured doses….

Viral phone flash

The Pomegranate phone looks great, until you start exploring it and find out what it really is.

Cheeky. But fun.

FASTForward 2009 – impressions from the first day

This year, FASTForward is in Las Vegas, which is quite a shock to the system. I haven’t been here since 1987, when I visited COMDEX and stayed at the Bally, then the largest hotel here. Now you can hardly see it for all the new and much bigger ones. (Las Vegas has changed in other ways as well, the business model is no longer “cheap booze and food, make it up in the casino”. Since most people no longer come here primarily to gamble, so a glass of red wine was $15 in the bar..)

The theme for the conference this year is “Engage your user” and the program builds on the one from last year, but with, it seems to me, fewer circuit speakers and more company examples, which is fine with me.

Don Tapscott: The Net Generation

First speaker out: Don Tapscott, actually a colleague of mine from nGenera, talking about his new book Grown up digital. Don is very optimistic about the net generation, in contrast to the many articles that have cropped up saying that the current net-addicted generation is the dumbest ever. The population in USA has gone from boom to bust to echo: The echo group is called the Net Generation, the digital natives. For the first time in history, kids are authorities (in relation to their parents) on something that is important. In contrast to their parents, when asked whether they want to be smarter or better-looking, two thirds of them answer “smarter” (except in England.) Are they coddled? 40% of them move home after university. but is this a bad thing?

HTML beaten by XML: Tapscott’s son created a Facebook community around Wikinomics, got 126 users in 7 countries in one day. Then the community started pointing out errors in the book and requesting participation from Tapscott himself. Company ad spending online is growing faster than time people spend online. Prescription: Don’t create products, create Consumer experiences. Don’ create place, create Anyplace. Don’t focus on price, focus on Discovery as a mechanism for price setting. Don’t focus on promotion, focus on Engagement. Marketer are losing control of the brand, which now needs to have integrity, or the influence network will kick in and trounce you on the social networks.

There are many things young people don’t know – so perhaps it is time to tear down these generational firewalls and get some mentoring going.

Clay Shirky: Here comes everybody

Five word summary of the book: Group interaction just got easier.

Example: Someone posts an HDR picture on Flickr and asks what the best software for this is. It balloons into a long and very technical discussion, with more photos. Happens every day, but is a very powerful technology that has profoundly changed how we interact. Since you can attach conversations to everything, every URL is a possible platform for interaction.

Another example: HSBC sold many students on penalty-free checking, but reneged on it during summer vacation, wanting to charge their customers 140 pounds. Didn’t count on Facebook. The information advantage of HBSC disappeared – one person found out how to simply move his money to another bank, posted it, and that was it. Then the thousand of Facebook users started to protest – and eventually HSBC caved in to this group of coordinated participants.

Information moves faster: The earthquake in Sichuan last year got reported immediately via qq.ch and Twitter. The last time something similar happened, in the 1970s, it took three months before the Chinese authorities would even admit it would happen.

Another example: Chris Avenir, student at Ryerson University, taking Chemistry 101. Started a study group on Facebook, 146 participants. And then he gets a note from the university saying he may be expelled because he was putting course stuff online, whereas he saw it as simply taking what he was doing in the real world online. This is a clash of metaphors: The university sees it as a media outlet, the students as regular social life. That is the wrong question to ask: Facebook is Facebook, not a manifestation of something else.

Crowsourcing: Howardsforums now has engineers from handset manufacturers sending their customers there. Companies look at this as a source of free labor, but fail to see the passion necessary – and the fact that they cannot, inside their companies, model the complexity and the uses of their products that takes place out there in the real world.

Example: Dogear, an internal service in IBM similar to del.icio.us, in that it let users tag and save URLs. It led to two research groups (one in England and one in the US) finding out they were working on the same problem and initiating collaboration.

How to get started with this? Amazon has lots of social applications, but have never had a strategy for it, nor a button marked “community”. Their social interaction tools have evolved through trial and error, which takes a tolerance of failure and a willingness to learn.

Dan Rasmus: Navigating the new world of business

Dan is Director of Insight in Microsoft (now, there is a title I have given to myself many times). His role is to look at changes in business and the workplace on a rolling basis. Quotes Schopenhauer: “The task is not so much to see what no one yet has seen, but to think what nobody has yet thought about that which everybody has seen.”

Microsoft uses scenario planning to try to make sure that investments will work in several scenarios as opposed to depend on one and only one future change. Key dimensions: Globalization vs. bordering, centralization vs. decentralization. Four scenarios: Proud tower, Border Friction, Freelance Planet and one more. [This was presented in a rather busy video.]  Credit crisis has a tendency to overpower everything, but we still have to worry about environment, mobile tech, and other things. Globalization is there in spite of “buy American”: A standard breakfast cereal has components from all over the world. How do you manage a workforce of outsourced people, freelancers and consultants?

Other examples: Data everywhere, placeless work (punctuated workday), need to be open to attract younger workers. Going towards a blended future, with blended jobs – such as “authenticity engineer”

Controlling Wall Street

Excellent article by Michael Lewis and David Einhorn on the deeper, yet not addressed issues of the financial crisis: The flawed checks, balances and incentives of Wall Street. Among the suggestions to fix: "Stop making big regulatory decisions with long-term consequences based on their short-term effect on stock prices."

Amen.

(Incidentally, Lewis wrote Liar’s Poker, so his coming book on this financial crisis is going on my shortlist right now.)

While the cat is out….

Gurcharan Das writes on the differences between India and China.

I just love the phrase “our economy grows at night when the government is asleep.”

(Also in New York Times.)

The efficient US auto industry

Fareed Zakaria makes it clear: There is an efficient US auto industry. It just isn’t in Detroit. Operative quote:

…there are 12 international car companies that have manufacturing operations in the United States. Collectively, they employ 113,000 Americans directly — even though that is less than the 239,000 at Ford, GM and Chrysler. However, those international car companies sell more cars than the Big Three and their customers love their products.

[…]

CNN: So you are against the bailout?

Zakaria: No. But the reasons the CEOs of Ford, GM and Chrysler present — that they will restructure, they are still competitive, they will change — are bogus; they won’t. The best argument for the bailout is that it is the most cost-effective jobs program that the government can run in the short term.

(Via Esteban.)

Here is a more philosophical piece by Roger Cohen.

Quote of the day

From a recently concluded teleconference on continuous business strategy:

Nagging is a core part of collaboration.

Ain’t that the truth….

Cisco does it again

Jim McGee comments on the case of Cisco (Fast Company article here, calling the company "socialist"), which seems to actually try to become a web 2.0 enterprise, whatever that might mean in the end. Cisco has always eaten its own dog food – back in the late 90s, I somehow bamboozled Pete Solvik, the CIO, into giving a talk to my students via teleconference. One of the things he stressed was the importance of being the first user of their own Internet technology. Back then Cisco was famous for serial buying of companies (for their technology) and for their extremely efficient internal procedures. It is one of the few companies I have seen that truly are strategy-driven, with strategy being an explicit choice and their vision and mission something distinctive.

The interesting thing here is that Cisco seems to be pulled in the direction of a higher-margin consulting company by its customers, which could leave it vulnerable to a low-end disruption from, say, Chinese home and SMB networking component companies powered by open source software. For those few companies that have been able to survive such a disruption, their survival has either been based on a move towards other places in the value chain (somewhat consistent with what Cisco is doing, it could be argued) or by a conscious choice to allow cannibalization by lower-margin products or services. In the cases I have heard of (such as Intel’s creation of the Celeron chip) this has dependent on top management with strong decision power and a long-term view of technology evolution. Could it be that decentralized management could make such a move, should it be necessary, harder for the organization to execute? Or,perhaps, easier, since at least the start phase can be done in a skunkworks fashion.

Nevertheless, Cisco is at it, again. I am looking forward to the rest of the story.

Posner and Becker: Let the Big Three go bankrupt

Both Posner (who has changed his mind) and Becker agree that the Detroit Big Three automakers should be allowed to go bankrupt rather than continue to suck up subsidies and produce cars the world market do not want. It is hard not to agree on principle, and in this case, also in practice.

The thing is, if the big three go bankrupt, this does not necessarily mean that Detroit is finished when it comes to producing cars. The designers, workers and machinery will be put to use – if nothing else, other automakers as well as entrepreneurs will come in, buy up the assets (free of dept), and start to compete by producing the most popular models, licensed models from other auto makers, or new ones.

The failure of the Big Three is complicated: A disastrous decision back in the fifties or sixties to make pensions the responsibility of individual companies rather than the government, short-sighted management, ossified unions, overfocus on automation (GM in the 80s), bad product quality, old-fashioned or just bad designs, short-term product development, financial rather than real innovation, slow product development (7 years per new model vs. the Japanese 3-4 in early 90s), too much focus on the domestic market, focus on what you can measure (such as parts commonality) rather than new customer needs and segments, political lobbying as marketing, and on and on and on….

Why not just let it die, and have something more sustainable (both in business and environmental terms) rise from the ashes?

Jobs for Detroit

Bob Cringely imagines what would happen if Steve Jobs ran one of the big three Detroit auto companies. For one thing, he would not design a car like the Chevy Cobalt, where you can’t reach the handbrake if you put the arm rest down.

Buffeting

The Snowball: Warren Buffett and the Business of LifeThe Snowball: Warren Buffett and the Business of Life by Alice Schroeder

Rating: 5 of 5 stars ( Goodreads review)

To succeed in business, be patient, look for value, be honest, and have cash in hand. And don’t think about anything else. In fact, be an unrepentent monomaniac. Warren Buffett has become the worlds richest man by making investments that he gets derided for at 10-year intervals, then, when the bubble bursts, he is a saint again…. Buffett is extremely good at making money – and has a rather impressive idea about what to do with it (keep investing, give it all away to someone who is good at giving away money, such as Bill Gates.)

The biography is an impressive work in itself. 838 densely written pages about a man whose personal life has been rather unspectacular (hamburgers and Cherry Coke, poring over stock lists and annual reports). Schroeder is a business writer and financial analyst, so she has real knowledge about deals and can write with authority on complicated cases such as Salomon Brothers. I would have loved to see her write a biography on Bill Gates with the same level of business detail, though we will probably have to wait another decade or so for that to happen.

(Incidentally, I once heard Buffett speak, at the Harvard Business School in, I think, 1991. He was asked about what he thought of the derivatives market, which was beginning to take off at that point, and said that if he was alone on a deserted island with 100 people and the only sustenance was rice, he wouldn’t have put 50 of them to work peddling rice futures….)

Recommended for the budding investor – and as a backgrounder on the financial crisis. It is up to date as of April 2008, which is rather impressive in itself.

View all my Goodreads reviews.

Ozzie and the cloud

Steven Levy, a tech writer whose every article I read if I can get my hands on it, has a fascinating Wired article about Ray Ozzie and his long march to make Microsoft survive and prosper in the cloud. Service-based computing can be a disruptive innovation for Microsoft, since customers become less reliant on a single, fat client (dominated by MS) and instead can use a  browser as their main interface.

I have used Lotus Notes since well before the company was bought by IBM, and always considered it to be a fantastic platform that is somewhat underused, chiefly because while its execution is great, the user interface is somewhat clumsy (getting better, but still) and it is hard to program for. As an infrastructure play for a large corporation, Notes is just great. As a platform for software innovation and innovative interaction, it leaves a lot to be desired. The question is – can Microsoft gain dominance in this market (Sharepoint seems to execute on that one), extend it to consumers (Vista is not a good omen here), and somehow find a business model that works? (By that I don’t mean one with it the same profitability as it has now, that just isn’t possible. But one that is somewhat profitable long-term?)

If anyone is going to be able to pull that off, it will be Ozzie. The article paints, as I see it, a very complete picture and tells me a lot more about the relationship between Microsoft and Ozzie than I knew. But that is usual with Steven Levy articles, ever since he wrote "Hackers: Heroes of the Computer Revolution" back in 1984.

Highly recommended. (And since I like long and detailed articles: this one is at 6900 words or more than 40,000 characters including spaces. Just a hint to my Norwegian newspaper friends, who thinks anything more than 7000 chars won’t be read by anyone.)

The oil rule: Whoever has the oil makes the rules

Tom Friedman, in his new book Hot, Flat, and Crowded, makes a pretty powerful argument that the US’s addiction to oil helps finance fundamentalist Islam and represses democracy. The main point: Having oil means dictators can finance repressive institutions (police etc.) and bribe the populace into apathy.

Here is a graphical telling of the same story:

World oil reserves chart

Looks pretty persuasive to me. Tom Friedman argued for a "patriotic" gas tax in the US back in 2001. Seems as good an idea now as it was then. (Chart from Daily Galaxy, via Jon Udell)

Tom also says that no country with more than 50% of its income from oil is a democracy. I am not totally sure of the numbers here, but I wouldn’t call Norway undemocratic. Update, thanks to Twit from mgjosefsen: Norwegian exports of oil and natural gas was 52% of total Norwegian exports in 2005. Share of GNP was about 25 %. We seem to be an exception, in other words.