Category Archives: Digital reflections

Alan Kay and the state of computing

There is an interesting column in Fortune about Alan Kay and how he decries the state of computing (via Slashdot).
I have only met Alan Kay once, in 1989, when he gave a talk at the Norwegian School of Management showing videos of a virtual seabed (with self-guided fish swimming about) and a truly impressive video of his little daughter (still in her diapers) using an Apple Macintosh. She was so small that she had to hold the mouse upside down and use the mouse ball as a trackball.
The opinions of Alan Kay (and I must caution that they are filtered through the columnist, David Kirkpatrick, here) on the state of computing makes me think of a number of things:

  • Every media technology (just remember radio and TV) is seen as a vehicle for education, creativity and human development, and then ends up, at least for a while, as a fairly mundane and seemingly mindless extension for what one did before. For instance, desktop publishing, word processing and email are automations of existing technologies – blogging and wikis are truly new ways of communicating and creating, which take advantage of new attributes of the technology
  • In computers, we have been hampered with the vendors seeming inability to transfer the infrastructurial aspects of one technology generation to another – when the PC came, it didn’t include the good things of the mainframe, when new, user friendly applications come along, they lack the depth and technical strength of prior applications – I just wish the computer science field was better at putting words to its principles, making them simpler to understand and to automatically implement. However, we are getting there – and much of the lack of creativity is really the lack of deep tools
  • When Alan Kay says that companies should be simulating their corporations with computers (or, as my friend Richard Pawson likes to say, every business simulation should have a “Make It So” button), I actually think at least some corporations are doing that. Wal-Mart’s RetailLink, UPS’ and Fedex’s direct interactions with customers, and of course Dell’s pull-based configuration system can be seen as early implementations of this. So can come of the more advanced ERP systems, such as I2. Perhaps. At least they are moving in the right direction.
Things are happening, but too slowly, and Alan Kay, of all people, is certainly the person who has the right to say it.
Time to go and get creative…..

Translation of Cory Doctorow’s speech on DRM to Microsoft Research

Since I liked the speech, can use it in my teaching, and want to show what Creative Commons licensing can do, I decided to translate Cory Doctorow’s speech on DRM to Norwegian (text here).
This is a quick translation – I have not linked it fully, formatting is rather basic, eErrors and omissions are entirely my fault. Of course, everything is always better if read in the original language……
Update July 12: Added lots of explanatory links and fixed quite a few errors – thanks to (among others) Martin Elster.
Update July 13: Replaced text with link to entry in Norwegian blog.

OR – the hidden science

Virginia Postrel has written a great little intro to operations research in the Boston Globe (which, incidentally, must be the world’s best “local” newspaper.) Brad Delong and Virginia seem to have started a discussion about the links between OR and productivity.
OR really is the hidden science, but with this and other articles it may be possible to reawaken interest for it. I am, for a number of complicated reasons, president of the Norwegian OR Society (as part of heading the IT group of the Norwegian Polytechnic Society.) This is an honorable title (previous presidents include Kristen Nygaard, Turing prize recipient) but NORS in itself does not have much activity at all. Anyone interested in reawakening it?

This review should matter

John Stuckey has written a good review of Nicholas Carr’s Does IT Matter? in ACM Ubiquity.
Carr’s 2003 HBR article (called “IT doesn’t matter”, an aggressive title that the content did not reflect) and even the book is rather tiresome. One thing is that this discussion is a repeat – in 1990 it was Max Hopper (a man with real IT pedigree and understanding) with his “Rattling SABRE: New ways to compete with information” (Harvard Business Review (May-June): 118-125.), in which he made an offhand remark that owning the technology didn’t matter any more and got flack for it. Hopper was right, of course (though he managed to get a few more years out of owning SABRE). So was Mata, Fuerst and Barney, who analyzed the competitive impact of IT (Mata, F. J., W. L. Fuerst, et al. (1995). “Information Technology and Sustained Competitive Advantage: A Resource-Based Analysis.” MIS Quarterly 19(4): 487-505.) arguing that it was not technology, but the way you use it, that matters. Not to mention Erik Brynjolfsson‘s many excellent articles on the measurable effects of the technology (see, for instance: Hitt, L. and E. Brynjolfsson (1996). “Productivity, Business Profitability, and Consumer Surplus: Three Different Measures of Information Technology Value.” MIS Quarterly 20(2): 121-142.)
That Carr should get so much out of repeating the tired old truth – that it is not the technology, but how you use it, that matters – in a sensationalist packing in 2003 just indicates how shallow the understanding of technology is with investors and many managers. As one manager told me during the go-go dot-com years: All the investments we see in IT now are not really in IT – they are in misdirected marketing, buying market share you can neither defend nor make money on.
Oh well. Plus ça change…

Blackbored – the disappearing future of technology in learning

According to Red Herring Blog, Blackboard.com is now worth over $.5b. Truly depressing. The best thing that can be said for their product, a course management system for universitities, is that the competition is even worse. Why anyone would want to value a company that sells shoddy software to universities (not known for willingly parting with huge sums for stuff they can either do themselves or get cheaply somewhere else,) is beyond me. Software-as-service is an excellent concept (not that Blackboard compares to salesforce.com, since they license software much as anyone else,) but the business model is shaky in the long term. The last time it was bandied about it was called ASPs, and it didn’t work then either. The reason is simple: Software concepts are copyable, and ideas spread, so prices fall until you no longer make money unless you manage to establish and defend some sort of network externality. For course management systems, the only direct network externality I have been able to find is in plagiarism detection – and even there it is only slight, as the effect of plagiarims is mostly preemptive.
So why don’t I like Blackboard and other course management systems? Here is a list (modified from this talk):

  • All they aim to do is put paper-based courses on-line – without no vision of what teaching should be like beyond Powerpoint slides. They justify this by saying they need to pander to technology virgins – saying that to facilitate learning and increase acceptance they have to use the tired metaphors of “classrooms”, “group areas”, “documents” and other hogwash. Hobgoblins of little minds, I say.
  • They dumb down the user interface for the course creator (and for the student, I should add) to unusability, and justifies this by talking about user-friendliness and how the system can be used by almost anyone with a minimum of training. That is well and good, but it is now 37 years since Smalltalk 67 was invented, with a graphically oriented object browser, and since I manage not one course, but about 10, I would very much like to do that in an interface that allows me to behave like a technologically competent and moderately literate adult, rather than forcing me into dealing with an interface designed for an airline check-in machine catering to moronic, alcohol-marinated charter tourists.
  • They are built on a systems architecture that, while using a relational database, does not let the capabilities of the database show through to the user, thus treating every course as a separate entity with ensuing duplication of content. So I end up with 6 different copies of an article because I have 6 courses, and an updating nightmare

  • They are not built to interface effectively and intuitively with other systems. This is rather odd, given that the data for the one task that justifies a course management system – namely, identity management, that is the linking of student to learning material – comes not from the course management system itself but from student administration systems

  • They arrange everything into courses, not making any allowance for the course creator or creators to have draft areas, repositories of learning modules, conditional access to course material or alternative interfaces to, say, non-students.

In short, Blackboard and its ilk are bad systems, because they do not have the capability in them to drive use of IT in teaching forward. All they do is take half a step, and in doing so, making sure we won’t get further.
This is an area where open source/free systems really ought to shine, where componentization, blogs, wikis and a rolling technological evolution – including, as the report Thwarted Innovation: What Happened to e-learning and Why by Robert Zemsky and William F. Massy says, evolving a dominant design for learning components – is critical. But it won’t come from the commercial providers. We have to do it ourselves. For instance, what if MIT took their OpenCourseWare initiative and created a way for people to specify their courses in the same format, even creating learning components by themselves the same way they do it?
Boy, wouldn’t that be fun…..

Eyeballing the circuit switched network

Bob Cringely is going against the grain, as usual (and quite refreshingly so, too), in his recent column on why telcos should keep their circuit-switched network. I am not sure how this is done in the US, but at least in Norway, the seemingly circuit-switched POTS network is actually fibre-based and packet-switched in the background, the only circuit-switched bit being the “last mile”, so I am not sure how his arguments would work here. To me it seems, like it does to Techdirt, that this is an argument for telcos hanging on to their dying technology as it is being disrupted – though the “super-customer” forcing the incumbent to hang on to the old technology seems not to be there.
Anyway, the interesting part is Bob’s argument that it should be possible to reduce the bandwidth needed for sending video by mimicking the protocol of the optic nerve, which according to Bob has a capacity of 100 Kbps. Now, I am no expert in optics or anatomy of the eye, but it occurs to me that one of the reasons the eye can do with relatively limited bandwidth is because so much filtering takes place before the picture gets transmitted. When I look at a movie, I don’t take in the whole picture at once – I focus on some part of it, and am only dimly aware of the rest. I do this by positioning my eyes towards what I am looking at and then focusing it – in the process selecting just a few bits of all millions of “bits” the world insists on sending towards me in analog form. What I focus on comes through in glorious detail (at least when I have my glasses on) and the surrounding stuff is out of focus (and there are different physical sensors in the eye to handle this – two protocols, if you like).
Now, since no two people focus on the same part of the video picture through a movie, you either need to send the whole picture with the same quality, or you need to establish some form of two-way communication, so that only what the eye actually will look at will be transmitted towards it. So in other words, to send video down a 64Kbps connection, you need it to be two-way, with almost zero latency. Moreover, you would need one connection for each viewer.
The eye selects what to see, in communication with the brain. The world, which sends images to the eye, has unlimited bandwidth. I may be wrong, but in order to send video over 64K, as Bob proposes, it seems to me we need to extend the selection properties of the eye into the server rather than the send the whole image into each person’s home – and communicating eye-tracking with focus information from each individual viewer back to be processed in time for the image to be selected and transmitted in optimized format seems to me to be a formidable challenge, circuit switching or not.
So, to me it looks like packet switching is the way to go, also for technical reasons. A second argument is that telcos make money when users talk to users, not when they connect to a central feed (that is the domain of broadcasters, and for telcos normally only a way to get users to subscribe to their network, until talking to each other takes over for talking to a central source). And packet switching allows for video-to-video sharing (legal or not). That is the future, and whether the telcos and broadcasters make the transition, I don’t know and I don’t care. I know I, as a user, will. The circuit switched network will not.
Update June 30:
David Isenberg has a rather more direct take on this in his “I[diot], Cringely“.

Blogs and Wikis as Corporate Collaborative systems

Together with Jay Williams (who, incidentally, I have now worked with for three years and only seen in person once – I didn’t know what he looked like until April this year) I did a Concours Group CIO Staff Meeting on collaborative systems yesterday. One of the parts was a discussion of blogs and wikis in the corporate space – what can they be used for and how do you manage them? Some thoughts:

  • To make shared self-publishing work within a corporation, you need a purpose (why are you doing it, aside from self-expression) and a shared set of norms and values. According to this article in Business Week, Microsoft now has let loose blogging within the company (made visible through Channel 9), but (at least as far as I can see) with no stated purpose and the only rule being “don’t be stupid”. Where is the purpose, and, though that may not be visible on the outside, where is the space for development of shared understanding of what is OK and what is not?

  • Blogging and wikis (incidentally, the latter I think will be most important in the short run) is emerging as tools for corporate use very much like the Web did in 1994: As something that is first done for academic reasons, then by individuals, then by corporations. In the process, a number of expensive knowledge management and content management tools will disappear.

  • The chief problem for IT shops will not be the technology (that is trivial, especially since much of the management is taken care of through simple forms of version control) but the softer parts of the equation: How do you establish a culture for sharing and for making your (half-baked) ideas visible? Unless IS has a voice (and I have seen a number of IS departments hiring communications people lately) it will have little power to manage the use of the tools. Shared spaces are managed through norms rather than rules, and the usual remedies of user access restrictions and various meta-data based automated rules will be counter-productive.
I look forward to a lot of corporate Wiki’ing and many internal blogs – both are examples of how our uses of the technology are catching up with the technology’s capabilities. (In other words, both have no counterpart in a paper-based world, unlike email, databases and mailing lists.) They will evolve, they will be used inside corporations, and someone will make money on adding the corporate flair that makes those of us who execute for a living comfortable in the knowledge that we are in control. Or seem to be.

Tablets tabled for a while?

Simson Garfinkel is right on the money when, reflecting on the Tablet PC Nonrevolution, he says that “it seems that tablet PCs spend a large part of their lives serving as traditional laptops, with the stylus snug in its holster while the keyboard gets a vigorous workout.” Definitely my impression and experience as well.
I have a Toshiba T3500, which is a Tablet PC with a keyboard and a swivel screen. When deciding which model to get, I was torn between the tablet model and the sleek M100, an “executive” machine without tablet functionality, but lighter, with a slightly better screen, and slightly larger keyboard.
Do I regret the choice? I am not sure, I have used the drawing functionality of the tablet a bit, have tried to enter and edit text (still too clumsy, as Simson says), and have occasionally surfed in tablet mode, especially when reading long documents on the web. Playing FreeCell using a pen was great, but I have deleted that game to up my productivitiy a bit…..
The technology is not quite there yet – kind of like Windows 2.11, which gave an inkling of what would come (with Palm playing the role of Apple), but with too slow response time and not enough well-behaved programs. OneNote needs to be an integral part of Windows, the editing facilities need to be more intuitive (backspacing with a pen is too cumbersome, I want to scratch things out) and the drawing format must be more integrated into file formats, especially in Powerpoint. (I tried making a “handwriting” presentation in Powerpoint, to illustrate using new technology in traditional ways, but the drawing interface was too cumbersome and lacked pressure sensitivity. Pasting in things from Windows Journal took too long….)
Aside from that, the Toshiba gets suspiciously hot and has developed a rattle in the fan. Time to back up and call Toshiba customer service…..

XP WiFi problem

Eirik Newth mentions having trouble with failing XP WiFi connections, and Wired writes about the same thing.
I had the same problem: If my wife turned on the her Toshiba laptop, running XP Home, at the same time I had mine on (running XP Tablet), or vice versa, our home WiFi connection would disappear (though reported as fine by XP and Toshiba’s networking software). Our children’s computers, running older versions of Windows (2000 and 98) were not affected. This problem had me stumped for a few months, with my wife and I hollering to each other about needing to get on the net. In the end, the solution was upgrading the WiFi router (from a 3 year old Linksys 10Mb to a rather newer Linksys 54Mb) and now the connection is rock steady. Still, the lack of support or even mentioning of the problem (attributed loosely to driver problems) was very irritating, as were the constant search for finding updated drivers, BIOS, networking configurator software etc.

Disruptive technology in progress

Last week, Bob Cringely wrote about how you could reprogram a WiFi router to become the neighbourhood ISP, thanks to a small software house in Sweden. This week, he details the reaction, with the story of an entrepreneur that took him up on the idea, a VoIP company that got interested, and a pretty nifty idea to provide semi-mobile communications for homeless people in San Francisco.
This is literally how disruptive technologies come about – someone comes up with a cheap way of providing good-enough service, initially serving a market that nobody else cares about. If it is good enough for the homeless – the ultimate mobile person, at least within the confines of a city – it should eventually be good enough for us regular users. As said by FCC Chairman Michael Powell – if you are an incumbent PTT, you ought to be terrified at this point…….

Calendar collusion complexity

Simson Garfinkel disusses the emerging standard iCalendar in the latest version of TechReview. While this may go some way in exchanging data between calendars, I fear that calendar standardization and exchange is still some way off – chiefly because of lack of functionality on the client side. Our requirements are simply, still, too complex for the software.
The chief problems lie with weak handling of privacy rules, especially when the user of the calendar crosses domains. For example: I use calendar software, and work for two organizations that also use it – the Norwegian School of Management, and the Concours Group. I also have a family life, with wife and children that demand calendar coordination. Being able to synchronize all this would be simply wonderful – but the functionality is not there yet.
For example: At the school, we share our Lotus Notes calendars – except I don’t because I don’t want my private activities to be broadcast to all and sundry. Notes does not support a default setting where an outside user could only see the time, not the content of an entry. That would mean that for every entry I put in, I would have to change the privacy setting manually – so I don’t bother. My calendar is therefore closed to outsiders, and and people who want to know whether I am available will have to call my secretary. If it was possible to set default “private” – so that outsiders could see what time I was busy but not what I was doing – I would share my calendar in an instant.
A further problem comes when you cross domains – for instance, I would like to have a calendar where I could have a setting of “Concours” (where Concours people could see both time and content, others only “Concours business”), “NSM” (ditto for my academic colleagues) and “family” (guess what). I realize I can do that for a single calendar client – but sharing the settings reliably across clients and networks is just not possible.
A third aspect is that time zones tend to be badly implemented in between-calendar standards (if not in all clients), and since I work in many different time zones, I frequently run the risk of misunderstanding timing for teleconferences and such.
The solution, of course, is constant vigilance and a great secretary. And constant search for a calendar client where the depth of the software matches the complexity of the life of the intellectual mercenary.

e-t-a-o-n-r-i Spy and the F.B.I.

The following story by Les Earnest is one of my favorite pieces of writing on codes and cryptography – and is worth repeating for the uninitiated. Les Earnest has also written a number of other interesting accounts of early computer systems and organizational dyfunctionalities associated therewith – but let’s start with this one:

Continue reading →

Moore’s law in practice

Wikipedia is updating its servers after a very successful drive for contributions. The page describing the hardware of Wikipedia is very interesting, especially the list of transactions per second, which is very similar to what SABRE (American Airlines famous CRS) had in the early 1990s (about 250 transactions per second). Highly unscientific and all that, but SABRE was the largest real-time system (unless, I think, you count the SACs SAGE system) in the world at the time and Wikipedia is a non-profit, run-by-volunteers encyclopedia.
It is easy to see the effect of Moore’s law on your own laptop or in the proliferation of single computers, but Wikipedia is a demonstration of the concequences for centralized computing. Neat.

Don’t buy Gevalia coffee

I just received a spam from Gevalia coffee (PDF here) – courtesy of spammer Optinrealbig, who tells me that I receive that message because I somehow have registered for it. I have never registered to receive junk mail about coffee, of course (in fact, I have never registered that email address for anything).
But how to get rid of this problem? I can, of course, follow the link to opt out of something I have never opted in for. But I think we need to simply hit back. As long as advertisers pay spammers, spam will proliferate. So here is my suggestion: Boycott any identifiable company that use email marketing, opt-in, opt-out or not.
So please, fellow bloggers and Internet users:
DO NOT BUY GEVALIA COFFEE!
Their seemingly legal use of email marketing encourages pollution of inboxes all over Internet. Just get some other coffee. It’s easy….just spread the word!
(update below)
Update Aug. 8 2006: Before you start posting comments here, note the date of the initial entry – and read Will’s comment of Aug. 8 2006.

Continue reading →

Paul Graham with new book

Wired has a review of Paul Graham‘s new book Hackers and Painters. The book is (apparently, since I haven’t read it yet) a collection of Paul’s essays, some of which have been available on his (stylish and minimalistic) web site for some time. Paul Graham, of course, should be a hero to every Web user for his popularization of the “Bayesian” spam filtering technique, now employed in Mozilla and almost every other email reader.
I haven’t managed to get hold of the book yet, but Paul’s essays are great – and you really can’t beat a quote such as “If you think you’re designing something for idiots, odds are you’re not designing something good.” Far too many applications today are user-friendly rather than usable (Blackboard, which I currently suffer to reach my students, is one example, though less bad than ClassFronter, which is too awful for words and what grade school teachers in Norway are forced to use).
So this just might be a book to get. Or, at least, a reason to go back to Paul’s site (which does not offer an RSS feed) and reread some of his excellent writings.

Set it and forget it

When in San Francisco a few weeks ago, I bought a Buffalo Linkstation which I finally got around to install. Before buying it, I had a lot of trouble finding out whether it would work in a European context, even calling tech support at Buffalo. They said it needed a 110V connection, so I resigned myself to having to get a transformer. Then it turns out that it is 110/220 autoswitchable, so basically it was just plug it into the power slot, connect it to the router – and presto, 120Gb of file server. Truly a set it and forget it device, now hidden away in my home network closet. Excellent.
I haven’t tried out its print server facilities yet, but will do shortly. In the meantime, European friends, this is the thing to get for your small network the next time you are over in the States. It is not available this side of the pond – or at least not in Norway, as far as I know. And Buffalo said they were not going to sell it in Europe (then again, they told me it only would work in the States…..).
This is, incidentally, my first “production” Linux computer – that is, the Linkstation runs on (as far as I know) a limited version of Linux. (I have had a few PCs with Linux to play with, but haven’t really used them.) At the recent CIO Staff call on Open Source, this way of using Linux – device frosting – was seen as one of ways Linux will make it into the mainstream. The TIVO is running on Linux in the same fashion – so you may run Linux and not even know it.
Ahhh. Technology. Sometimes it Just Works.

Moore’s Law and economics

Bob Cringely is arguing that Moore’s Law will slow down, not as a consequence of technology limitations but because further extension after a certain point becomes too expensive. So, rather than demanding a faster processor, just get more of them – or perhaps it is time to start fiddling with software to make it faster again.
Makes sense to me – interestingly, this is one of the chief threats to Dell Computer, whose business model is founded on customers demanding technology that is up to date and customizeable. When the demand for more processing power diminishes, so should the demand for customizability – people can add stuff to their computers rather than getting new ones. Will take some years, though, but the signs are definitely there.

Software as bottled water and the importance of open file formats

The CIO Staff call on open source software (previously blogged here) turned out to be a lively and very instructive teleconference – it is my distinct impression that Open Source software is turning into a real factor in corporate IT, and that the next year will see some very interesting developments that should give a number of proprietary software vendors reason to start thinking about their value proposition. There are a number of large international corporations that are trying out Linux on the desktop as a new standard, a number of software platforms and packages are expected to go open source, and the legal situation (which, indidentally, is the major reason for delaying open sourcing of existing stuff) is getting disentangled.
Bill Vass had an interesting analogy to open source software: Bottled water. You can bottle your own water if you like, but if you buy it from a company you get the guarantee that it is OK by their standards. And you get someone you can sue.
Most of all, I think the difference between Open Source software and free software (i.e., that one is not necessarily the other) is increasingly understood in large corporations. Secondly, the very key point that having open file formats – and everyone toeing the line and not creating proprietary or undocumented extensions to them – is more important than open sourcing of the programs themselves.
Other little tidbits:
– beware of companies offering software that will only run under certain versions of Linux – that probably means they have proprietary extensions to Linux that can lock you in later
– indemnification is important – a serious Open Source vendor will guarantee you that their “IP is clean”, to quote Eirik Chambe-Eng
– China has purchased a staggering number of Linux “seats”
– The development model works in some cases – the spell checker for openoffice.org was proprietary for a while, until a Taiwanese university wrote oen (in several languages) as a graduate CS student excercise
– otherwise, don’t expect the community to develop the software for you (but they will do QA)
– Linux is showing up in a number of devices, such as the TiVO or the Buffalo Linkstation – one question is whether this furthers the development of the software, since most users of these devices won’t even know that they are running Linux
To me, this looks like the year of Open Source and Linux. Or maybe next year, again. But this is definitely coming…..

How to start a business (the Stephenson version)

My students persistently demand instruction in how to write a business plan for a startup company. I think their demand is fair – in fact, I think every MBA student should write at least two full business plans during their MBA program, simply because doing so requires them to think through most of their course literature and how to apply it to a practical situation. Nothing like exercise…
Which gives me the problem of how to teach them to do it. There are the usual sites that provide outlines and examples, of course, but for a number of reasons (including that it is never to late to teach people to read) I tend to give them an excerpt from Neal Stephenson’s brilliant novel Cryptonomicon, in which my favorite (and not altogether facetious) description of a business plan is given (page 238ff.):

Epiphyte Corp.’s business plan is about an inch thick, neither fat nor skinny as these things go. The interior pages are slickly and groovily desktop-published out of Avi’s laptop. The covers are rugged hand-laid paper of rice chaff, bamboo tailings, free-range hemp, and crystalline glacial meltwater made by wizened artisans operating out of a mist-shrouded temple hewn from living volcanic rock on some island known only to aerobically gifted, Spandex-sheathed Left Coast travel bores. An impressionistic map of the South China Sea has been dashed across these covers by molecularly reconstructed Ming Dynasty calligraphers using brushes of combed unicorn mane dipped into ink made by grinding down charcoal slabs fashioned by blind stylite monks from hand-charred fragments of the the True Cross.
The actual contents of the business plan hews to a logical structure straight out of the Principia Mathematica. Lesser entrepreneurs purchase business-plan-writing software: packages of boilerplate text and spreadsheets, craftily linked together so that you need only go through and fill in a few blanks. Avi and Beryl have written enough business plans between the two of them that they can smash them out from brute memory. Avi’s business plans tend to go something like this:
MISSION: At [name of company], it is our conviction that [to do the stuff we want to do] and to increase shareholder value are not merely complementary activities — they are inextricably linked.
PURPOSE: To increase shareholder value by [doing stuff].
EXTREMELY SERIOUS WARNING (printed out on a separate page, in red letters on a yellow background): Unless you are as smart as Johann Karl Friedrich Gauss, savvy as a half-blind Calcutta bootblack, tough as General William Tecumseh Sherman, rich as the Queen of England, emotionally resilient as a Red Sox fan, and as generally able to take care of yourself as the average nuclear submarine commander, you should never have been allowed near this document. Please dispose of it as you would any piece of high-level radioactive waste and then arrange with a qualified surgeon to amputate your arms at the elbows and gouge your eyes from their sockets. This warning is necessary because once, a hundred years ago, a little old lady in Kentucky put a hundred dollars into a dry goods company that went belly-up and returned her only ninety-nine dollars. Ever since, the government has been on our asses. If you ignore this warning, read on at your peril — you are dead certain to lose everything you’ve got and live out your final decades beating back waves of termites in a Mississippi Delta leper colony.
Still reading? Great. Now that we’ve scared off the lightweights, let’s get down to business.
EXECUTIVE SUMMARY: We will raise [some money], then [do some stuff] and increase shareholder value. Want details? Read on.
INTRODUCTION: [This trend], which everyone knows about, and [that trend], which is so incredibly arcane that you probably didn’t know about it until just now, and [this other trend over here] which might seem, at first blush, to be completely unrelated, when all taken together, lead us to the (proprietary, secret, heavily patented, trademarked, and NDAed) insight that we could increase shareholder value by [doing stuff]. We will need $ [a large number] and after [not too long] we will be able to realize an increase in value to $ [an even larger number], unless [hell freezes over in midsummer].
DETAILS:
Phase 1: After taking vows of celibacy and abstinence and foregoing all of our material possessions for homespun robes, we (viz. appended resumes) will move into a modest complex of scavenged refrigerator boxes in the central Gobi Desert, where real estate is so cheap that we are actually being paid to occupy it, thereby enhancing shareholder value even before we have actually done anything. On a daily ration consisting of a handful of uncooked rice and a ladleful of water, we will [begin to do stuff].
Phase 2, 3, 4, . . . , n – 1: We will [do more stuff, steadily enhancing shareholder value in the process] unless [the earth is struck by an asteroid a thousand miles in diameter, in which case certain assumptions will have to be readjusted; refer to Spreadsheets 397-413 ].
Phase n: Before the ink on our Nobel Prize certificates is dry, we will confiscate the property of our competitors, including anyone foolish enough to have invested in their pathetic companies. We will sell all of these people into slavery. All proceeds will be redistributed among our shareholders, who will hardly notice, since Spreadsheet 265 demonstrates that, by this time, the company will be larger than the British Empire at its zenith.
SPREADSHEETS: [Pages and pages of numbers in tiny print, conveniently summarized by graphs that all seem to be exponential curves screaming heavenward, albeit with enough pseudo-random noise in them to lend plausibility.]
RESUMES: Just recall the opening reel of “The Magnificent Seven”, and you won’t have to bother with this part; you should crawl to us on hands and knees, and beg us for the privilege of paying our salaries.

Moreover, the purpose of the business plan inside the company is nicely explained – this is the way it is supposed to be in real life, as opposed to the way it frequently is, where the business plan goes into a drawer after the monez has come in. After all, the only thing you know for sure with a business plan is that you will rewrite it (p. 240):

To Randy and the others, the business plan functions as Torah, master calendar, motivational text, philosophical treatise. It is a dynamic document. Its spreadsheets are palimpsests, linked to the company accounts and financial records so that they automatically adjust whenever money flows in or out. Beryl handles that stuff. Avi handles the words – the underlying, abstract plan, and the concrete details, that inform those spreadsheets – interpreting the numbers. Avi’s part of the plan mutates too, from week to week, as he gets new input from articles in the Asian Wall Street Journal, conversations with government officials in flyblown Shenzen karaoke bars, remote-sensing data pouring in from satellites, and obscure technical journals analyzing the latest advances in optical fiber technology. Avi’s brain also digests the ideas of Randy and the other members of the group and incorporates them into the plan. Every quarter, they take a snapshot of the business plan in its current state, trowels some Maybelline onto it, and ship out new copies to investors.

Beryl, mentioned twice in these excerpts (Avi is the CEO, incidentally, Randy is the programmer and one of the main protagonists of the novel) is an important person, and someone perhaps more difficult to find than the more showcasey CEO types. To often, she is missing from the startup company – especially in Norway, I should note (p. 187):

A woman comes into the room, burdened with tote bags, and beams an apology for being late. Beryl Hagen looks like a Norman Rockwell aunt, an apron-wearing, apple-pie-toting type. In twenty years, she has been the chief financial officer of twelve different small high-tech companies. Ten of them have gone out of business. Except in the case of the second one, this was through no fault of Beryl’s. The sixth was Randy’s Second Business Foray. One was absorbed by Microsoft, one became a successful, independent company in its own right. Beryl made enough money from the latter two to retire. She consults and writes while she is looking for something interesting enough to draw her back into action, and her presence in the room suggests that Epiphyte(2) Corp. must not be completely bogus.

(Incidentally, here is an interview with Stephenson where he talks about the novel and the business plan.)

So – do you have a business plan according to these specs, that everyone in the company understands and have contributed to, and someone experienced to hold the pursestrings? Seems like you’re in business….

Open Source business models

Open Source as a commercial strategy is interesting – on April 29, I will (depending on travel schedule) participate in a Concours group teleconference on the use of Open Source by large companies. Leading the call will be Jay Williams, and the featured guests will be by William Vass, Vice President, Corporate Software Services, Information Technology, at Sun Microsystems, and Eirik Chambe-Eng, CEO of Trolltech.
Eirik previously participated in a Polytechnic Society meeting I organized on the use of Open Source, and showed a sophisticated understanding of when Open Source works and when it doesn’t. Dan Bricklin, in a recent essay on starting a software company on Open Source, discusses this question as well.
To me it boils down to the depth of the software (what people chose to do with it, meaning to what extent they are locked into it and have an incentive to further develop it,) uncertainty about how it is used (so that there is value to the developing company of having rapid and good feedback from users,) and to what extent you can identify whether the software has been used or not (for instance, Moveable Type can readily identify whether someone has been using their software, as well as the nature of the use; Trolltech can see whether their libraries have been used in commercial software and enforce their license that way.)
My thoughts are not yet well developed on this subject, so I am looking forward to the teleconference. Provided I can make it.