Steve Jobs. RIP.

from http://apple.com

 

Bloomberg video about Steve Jobs.

The soft steps of computer revolution.

Wired: The demise of the scroll bar

The scroll bar’s disappearance is symbolic of a larger shift: replacement of the mouse-driven conventions of the 1970s graphical user interface with the multitouch navigational techniques of iOS.

I believe it's a bigger shift than just an interface change. The nature of information we are working with is changing as well.

tags: interface, system, synthesis, payload, information

World War Two 3D photography

A BBC video showing how the Royal Air Force used 3D photography to discover German V-1 and V-2 rocket launchers. It's amazing how they used millions of photos for producing accurate 3D intelligence about Hitler's secret weapons.

At the time, rockets were unheard of and the biggest problem was how they were to search for something they didn't know what it looked like. It's an ancient problem, posed two thousand years ago by Plato in the Meno dialogue.

Meno. And how will you enquire, Socrates, into that which you do not know? What will you put forth as the subject of enquiry? And if you find what you want, how will you ever know that this is the thing which you did not know?

tags: detection, problem, solution, scale

Steve Jobs vs Thomas Edison

Author Vaclav Smil says Steve Jobs is no Thomas Edison:

Some 130 years after Edison’s remarkable creation of the electricity system, there still remains no doubt about the fundamental and truly epochal nature of his contributions: the world without electricity has become unimaginable. I bet that 130 years from now our successors will not be able to say the same about Apple’s sleek electronic devices assembled from somebody else’s components and providing services that are not fundamentally different from those offered by competitors. I have no doubt that the world without iPhone or iPad would be perfectly fine. ( h/t marginalrevolution.com )

И знал лишь
	бог седобородый,

что это —
	животные
		разной породы. (В. Маяковский.)

I think Edison was a much better inventor than Jobs, but Jobs is a much better innovator. In other words, Edison invented a lot of stuff but most of his inventions, including DC-based electricity, didn't scale. On the other hand, Jobs didn't make any first-order inventions, but the systems he put together are used and will be used by everybody on the planet.

In my opinion, 130 years from now people will think our biggest innovation was social networking because it created a new way for humans to interact over space and time. Just like the Edison/Westinghouse/Tesla electricity system, it will have become a key infrastructure element of the civilization.

tags: invention, innovation 

A 2% rule?

The economics of Zynga is amazing. 98% of people who use the service get it practically for free, and the company still makes a lot of money. The only comparable examples I know of would be Newcomen's steam engine where 99% of energy was not utilized for useful work, and the patent system, where estimated 98% of patent applications are commercially useless. Other candidates include online ads, but I don't know exact numbers.

As Zynga said in its SEC filing, the top 2 percent of loyal players are crucial to its success, as those players are “whales,” or the company’s biggest spenders. They play three times more than the average player.The top 2 percent play Zynga games for 120 minutes per day, compared to 40 minutes for an average player.

The data reveals that Zynga’s user base of more than 265 million monthly active users are playing games almost as much as the top hardcore gaming franchises.

In social games, Zynga has more than 60 percent of the overall market. While hardcore franchises such as Call of Duty and World of Warcraft are played for longer durations, Zynga’s Ville games are played four times more frequently. Zynga also takes advantage of those frequent sessions by constantly serving up marketing messages to stir up engagement, cross-promote  its other games, and handle transactions.

tags: games, economics, efficiency, synthesis, business, model, internet

Creativity Barrier of the Day: Functional Fixedness

...problem solving may in some instances be delayed through the "functional fixedness" of solution objects. That is, owing to his previous use of the object in a function dissimilar to that demanded by the present problem, S [a person] is inhibited in discovering the appropriate new use of the object. [ R.E. Adamson - Journal of Experimental Psychology, 1952]

Functional fixedness was originally demonstrated in a 1920s experiment by Karl Dunker and later reproduced by R.E. Adamson at Stanford (1952). In the experiment, the task before students is to attach the candle to the wall, so that when the candle is lighted its wax doesn't drip on the floor.

When thumbtacks were provided in a box, only 40% of students figured out that the box could be used as a tray attached to the wall. The control group got thumbtacks and the box separately, and their success rate was 86%.

The difference in problem-solving outcomes was determined by people's fixation on the functionality of the box as a container rather than its possible use as a tray.

tags: psychology, creativity

Green energy: beyond the hype.

It appears grid-scale energy storage is nearing a breakthrough: 

A new battery developed by Aquion Energy in Pittsburgh uses simple chemistry—a water-based electrolyte and abundant materials such as sodium and manganese—and is expected to cost $300 for a kilowatt-hour of storage capacity, less than a third of what it would cost to use lithium-ion batteries. Third-party tests have shown that Aquion's battery can last for over 5,000 charge-discharge cycles and has an efficiency of over 85 percent.
The company has now received $30 million in venture capital to step up manufacturing of its sodium-ion batteries.

Once the storage problem is solved, renewable energy sources will make a lot more economic sense. This particular technology is very suitable for off-grid solutions needed in the developing world.

tags: energy, source, tool, system, synthesis

Problem-solving in action.

Some time ago I mentioned that to produce a high quality solution, inventor has to break laws of conventional thinking. For example, despite the fact that the so-called first principle of economics states that "everything is a trade-off," breakthrough inventions destroy rather than enforce trade-offs.

Today, I've found another instance of "inventing by breaking the law." This time it relates to formal logic. Here's what Bertrand Russell writes about one of Kant's laws of thinking:

Let us take as an illustration the law of contradiction. This is commonly stated in the form 'Nothing can both be and not be', which is intended to express the fact that nothing can at once have and not have a given quality. Thus, for example, if a tree is a beech it cannot also be not a beech; if my table is rectangular it cannot also be not rectangular, and so on.

In contrast, classical TRIZ requires the problem-solver to break this law by formulating the problem as a dilemma: element X has property A, and element X has property anti-A. At the same time we  focus on useful and harmful functions provided by the element, which allows us to escape from the constraints imposed by the existing implementations.

Just the other day, when I was working with a client on a problem considered to be almost insolvable, we did find a solution by systematically applying the dilemma-busting rule. Psychologically, it was very difficult. But once we managed to overcome the inertia of taking the existing implementations for granted, the solution became almost obvious.

Though I can't disclosure the client's solution, I can show a case study from my Principles of Invention class. Here's an example of a real-life technology dilemma I solved to get US Patent 7,529,806.

tags: trade-off, dilemma, problem, solution, philosophy, logic, invention

A trillion dollar question.

I wonder what happened in China at around 2000. Was it the decision of the Olympics committee to award Beijing with the 2008 Summer games?

The chart is from The US Energy Information Administration.


tags: s-curve, synthesis, energy, entertainment

Invention of the Day: Toaster.

I started reading Adapt, by Tim Harford, a book about problem-solving in a complex world. In the introduction he shows that even simple devices like toaster are made up of mind-boggling number of technologies we take for granted. Re-inventing the toaster from scratch is a daunting task.

I agree with his thought, but we must understand that today's toaster and the toaster as it was originally invented over a hundred years ago are very different devices. Re-inventing is a totally different task than inventing, just like synthesizing a baby in a vat is different from conceiving and giving birth to one. The outcome sought in both cases is the same, but background technologies used for achieving it are at different levels of maturity. 

Below is the picture of one of the first commercially successful toasters created by General Electric. Note the screw-in "plug" at the end of the wire. It's a piece of Edison's lasting legacy in the world of electric appliances (see my earlier post).

Thirty years from now the USB wire connector on the iPhone will probably look as ridiculous as the light bulb plug on the toaster.

tags: invention, problem, solution, interface, tool

Problem-solving through insightful learning

An amazing chimp uses water as a tool to get food.

A systematic study of creativity in animals was pioneered by Dr. Wolfgang Kohler. His most famous experiment involved a chimpanzee who figured out how to make a telescoping stick to reach for a banana lying far away from the cage.

In 1917, Kohler published The Mentality of Apes (1917), where he described his experiments and proposed the concept of Insightful Learning, a process of problem solving by manipulating information about objects in one's mind. His work lead to the Gestalt theory of creativity.

tags: psychology, creativity

Beyond the Web.

Infrastructure build-up is a precursor to a major technological expansion. The construction of the cloud and proliferation of high-performance networking shows that we are moving beyond the web, as it was envisioned by Tim Berners-Lee. (Also of note is the gradual abandonment of WiFi, a PC-based wide area networking technology).

Wired:

Google has begun building its free high-speed network, which promises speeds of 1 gigabit per second for both downloads and uploads using fiber-optic lines to the home. "We believe the uplink capacity is the real game-changer here," Lo said. "We're going to light up our customers in the first half of next year."

Wireless

Sprint's 4G LTE network would give the carrier a network on par with Verizon's, supplying the nation's third-largest carrier with an additional selling point beyond attractive pricing plans and an unlimited data offering. By employing LTE technology, it will be able to tap into a larger pool of vendors already racing to build 4G devices and equipment at a lower price. The additional network will also allow Sprint to offload some of its 3G data traffic onto 4G, relieving a growing burden.

Underground

The New York Metropolitan Transit Authority turned on wireless service in four subway stations in Manhattan Tuesday, marking the first time a straphanger could reliably use their cellphone while waiting for their train.

...the same capabilities have been available in other cities including San Francisco and Boston.

tags: infrastructure, distribution, s-curve, system, growth, mobile, evolution

Invention of the Day: Supermarket.

On October 9, 1917, Clarence Saunders received US patent 1,242,872 for a new kind of retail store. His key idea was customer self-service, a concept that is alive and well today after almost a century of shopping innovation. Here's a quote from his patent application (reads like a description of a modern IKEA store):

The object of my said invention is to provide a store equipment by which the customer will be enabled to serve himself and, in so doing, will be required to review the entire assortment of goods carried in stock, conveniently and attractively displayed, and after selecting the list of goods desired, will be required to pass a checking and paying station at which the goods selected may be billed, packed, and settled for before retiring from the store, thus relieving the store of a large proportion of the usual incidental expenses or overhead charges, required to operate it, all as will be hereinafter more fully described and claimed.

A photo of his original Piggly Wiggly supermarket in Memphis, Tennessee (below).

tags: invention, business, model, problem, scale, patent, innovation

Too much progress.

Reuters reports that a recipe for scientific success is turning into a recipe for economic disaster:

Some 12 million people worldwide are diagnosed with cancer each year and that number is expected to rise to 27 million by 2030. The cost of new cancer cases is already estimated to be about $286 billion a year, with medical costs making up more than half the economic burden and productivity losses account for nearly a quarter, according to Economist Intelligence United data cited in the report.

A paradox of modern healthcare is that specialization increases costs, a trend opposite to what is going on with other major products and services.

tags: health, evolution, medicine, problem, solution, s-curve, infrastructure, economics, 10X

Healthcare as a social network.

New sensors, many as easy to apply as a small bandage or stick-on tattoo, can wirelessly track body heat, heart rate, perspiration and other vital signs and send the information wirelessly to a mobile phone, tablet or computer.

10-15 years from now this technology will go mainstream. It will produce large amounts of very useful health information that can be analyzed to prevent lifestyle-related diseases: from heart attack to diabetes to carpal tunnel syndrome. Since no doctor today can process that much information, we should expect a revolution in healthcare services. Or rather than expect, we should start making it happen.

Also related: Reality Mining.

tags: health, source, detection, system, s-curve, problem, 10X, cloud

The dark side of innovation.

Amazon is making Kindle-compatible e-books available at libraries.

The introduction of the Kindle, the biggest-selling e-reader, opens up library e-books to a wider audience, heightening the fears of publishers that many customers will turn to libraries for reading material. If that happens, e-book buyers could become e-book borrowers, leading to a potentially damaging loss of revenue for an industry grappling with a profound shift in consumer reading habits.

Innovation is called "Creative Destruction" for a reason: it relentlessly destroys business models built on older technologies. If you see a major wave of innovation coming, this means a major destruction is underway somewhere else. People who happened to be on the wrong side of innovation are going to lose big in the process of restructuring. In his book The Great Stagnation, Tyler Cowen argues that America has been stagnating (since the early 1970s) because there was not enough innovation. I think it is a bit misleading.

Edison's most important invention.

In 1890,  10 years after the introduction of his longer-lasting light bulb, Thomas Edison came up with the idea of a screw-in socket.  Before that, asking "How many engineers does it take to screw in a light bulb?" would make no sense whatsoever.
This basic socket design outlived all other light bulb technologies. Even today, 120 years later, the latest and greatest LED lights are manufactured according to the standard based on Edison's original idea.

tags: invention, problem, interface, control point, system, patent

And the world's best user experience creator is...

A data-driven view on Steve Jobs' design contributions to user experience:

Steve Jobs is cited as an inventor on 313 patents and is the first listed inventor on over 10% of them. Almost all are design patents, running the gamut from MP3 players to power adaptors to the stairs in the Apple Store. Pretty interesting for someone with no formal design or technical training, much less the CEO of a major corporation.
...
Designer Jonathan Ive was named as co-inventor on 64% of those 313.

Design patents cover non-functional ornamental aspects of the implementation. They are used to protect functionality-related aesthetics of the product: the look, the feel, the touch. Here's a couple of examples of Steve Jobs' patents:

(D638,835. Electronic device with graphical user interface  -- looks like iPhone 4):

(D641,021. Keyboard):

 

Compared to utility patents, the process for getting design patents is short and inexpensive. You can align it with the launch of a new products, so that copycats have harder time to sell knock-offs 1-3 years after the initial introduction. A good strategy for a market leader in consumer products/services.

tags: patent, apple, innovation, creativity, interface

The ancient roots of modern misconceptions.

Finally, I have found the philosophical origins of the common view that our abilities, including creativity, are predetermined at birth. In Lecture 2 of "Great ideas in psychology" Professor Daniel N. Robinson mentions that the idea goes back to Plato's Republic, a highly influential philosophical treatise written about 2,400 years ago. Here's the paragraph I believe Robinson refers to:

Citizens, we shall say to them in our tale, you are brothers, yet
God has framed you differently. Some of you have the power of command,
and in the composition of these he has mingled gold, wherefore also
they have the greatest honour; others he has made of silver, to be
auxillaries; others again who are to be husbandmen and craftsmen he
has composed of brass and iron; and the species will generally be
preserved in the children.

Nevertheless, Plato did not see this as a Nature vs Nurture issue. Rather, he believed that education was essential to the development of one's natural abilities.  Though over time, his Nature & Nurture approach turned into today's Nurture vs Nature debate about IQ and general intelligence factor.

tags: creativity, philosophy, psychology

Internet weather forecast: cloudy, with lots of smartphones.

Transition to Internet cloud is becoming unstoppable. One of the strongest indications of impending massive growth is concerted industry efforts to standardize a new technology. By standardizing, market players try to turn a unique technical solution into a commodity so that they can ship boatloads of cheap substitutes as well as complimentary products.

Today, the Open Virtualization Alliance, a standards consortium of companies focused on server-side virtualization, announced new membership numbers - 200 from 65 three month ago. According to CNet, the key issues they are trying to address:

• Economics--VMware [the dominant virtualization vendor] currently controls pricing. Having a credible choice gives customers an ability to negotiate with their vendors. An open alternative gives more leverage.
•  ...They [VMWare] are also seeing customers moving from testing private clouds to starting to deploy automated, standardized infrastructure at scale.

Even if the consortium does not succeed for a while - standards always take time - the standardization effort itself shows that:
a) the technology works and many people know how to produce it;
b) the technology scales, i.e. it can be deployed in a large number of instances;
c) the need to scale the technology is real.

In addition to that, Microsoft announced that Windows 8, its next generation OS will be more virtualization friendly than Windows 7, and [separately] the company is in discussions with Comcast and Verizon to enable video streaming to XBox. Again, the intent is to make the cloud cheap and scalable.

tags: cloud, system, s-curve, infrastructure, information, computing, 10X, growth, source, microsoft, internet

Laughter as pain (and creativity?) management

NYT reports Dr. Dunbar and his colleagues at Oxford, England, have determined that laughter is a form of pain management:

The results, when analyzed, showed that laughing increased pain resistance, whereas simple good feeling in a group setting did not. Pain resistance is used as an indicator of endorphin levels because their presence in the brain is difficult to test; the molecules would not appear in blood samples because they are among the brain chemicals that are prevented from entering circulating blood by the so-called blood brain barrier.

Being originally from the Soviet Union, I can attest that political jokes did help ease the pain of absurd ideological rules and regulations.

— Является ли коммунизм наукой?
— Нет. Если бы он был наукой, его бы сначала попробовали на собаках.

-- Is the theory of Communism scientific?
-- No. If it were scientific they would test it on animals first.

On a more serious note, laughter might also help in solving difficult problems. Studies show that fear and frustration, two psychological conditions often encountered when we face a tough challenge, cause physical pain. If laughter is a natural pain killer, then an occasional joke can reduce stress and improve group creativity.

tags: creativity, psychology, problem, science, brain, biology

Fast-paced TV cartoons leave children mentally exhausted:

"When children have to process a lot of information very quickly, it is difficult to process because it's unusual. In this case [SpongeBob episodes] a lot of things are happening that can't happen in real life," she explained. "We think it leaves them mentally exhausted -- at least for a short time."

This is one of the conclusions from a study published this week in Pediatrics. It appears to be consistent with the research that shows adults suffering mental fatigue from interacting with fast-pace media (I wrote about it earlier).

The difference between books and video is that we lose control over the pace of events. Even when an adult reads to a child, the child still has a chance to slow down the process, e.g. by asking a question. The same is probably true about interactive, but not real-time games. What's particularly bad about fast-paced "out of control" media experiences is that for many people they define what a mentally challenging activity should be. In other words, high-speed brain processing becomes confused with hard mental work on solving a difficult problem. The same way creativity is being assessed by what one feels about the idea (the so-called "aha!" moment), instead of the value of the outcome.

tags: creativity, mind, brain, psychology,

The web is dead. Implications for e-commerce.

The low quality of recommendations was one of the problems we looked into during my Summer '11 BUS 74 Principles of Invention class. The class did not select it for the problem-solving session, but I felt the topic was important to the next generation of e-commerce. My intuition was that the traditional web-page + links + search approach was not going to work in the social networking space (the web is a dying media). Here's more evidence for that.

Gallup published a study that, in their opinion, debunks what they call Social Media Myths. One such myth is that consumers can be moved to purchasing decisions by brand-sponsored campaigns.

 

I can see that young unmarried people, i.e. the most desired target demographic, is mostly influenced by parents, friends, and experts. In the social world it boils down to just friends. Therefore, any effective ad campaign should target "circles", getting one or two members of the circle evaluate the promoted stuff. Having a campaign page or twitter account is a waste of effort.

In contrast, I think a product page [or reference application] on Amazon is a great promotional tool because it captures practically everybody in top influencer categories.  Getting people to cross-post their reviews ("Like", +1, etc) to Facebook or Google+ would be an excellent way to influence purchasing decisions. You may even want to create a dedicated "Shopping" circle so that your friends don't get mad at your spamming. Thinking along similar lines, Google's purchase of Zagat also makes sense.

Conclusion: web page promotions, created either through the traditional web, Facebook, twitter, or Google+ are ineffective. Consumers prefer accounts of immediate experience to product descriptions developed by an interested party.

For the philosophical logic behind this thinking, you can further read Bertrand Russell's The Problems of Philosophy, published in 1912. Chapter 5 talks about the difference between what he calls acquaintance and description.

tags: social, networking, commerce, internet, control, facebook, course, detection

Why building cars is not fun?

NY Times recently pointed out the vast difference in jobs and market value between information and manufacturing companies

Facebook has about 2,000 employees worldwide. Google has about 29,000. Even in its new, slimmed-down state, General Motors, a decidedly less valuable company, has about 200,000 employees.

What escapes this analysis is that hundreds of millions of people work for Facebook and Google for free. That is, Facebook is built around users creating its content; Google is built around people searching free content created by others. Gaming is another area where millions of users spend innumerable hours on building free stuff: virtual farms, cities, worlds. Sometimes they even pay their own money for doing that. But nobody wants to design or build cars for General Motors for free. The next breakthrough in social networking will probably come when we get the online community to produce sellable electronic stuff beyond virtual gold. Just 1% of the total effort could produce huge value.

VBeat: :

Game publishing company Electronic Arts‘ newest social game, The Sims Social, has passed social gaming supergiant Zynga’s Farmville and now has 36 million monthly active users just under a month after its launch,

Electronic Arts is now the second top Facebook app developer with 77.8 million monthly active users. Its well behind Zynga’s 273 million monthly active users, but it’s much further than the next closest social game maker Wooga, which has nearly 40 million monthly active users across all its games.  Before The Sims Social launched, Electronic Arts had around 29 million monthly active users, according to AppData.

tags: games, social, networking, commerce, economics, market, technology

Brief notes on America Invents Act

Goodwin Procter, LLP published a good summary of the changes the pending America Invents Act brings to the current patent law. If you are interested in the subject, read the whole article - it's quite short. To summarize even further (bear in mind I'm an inventor and IP licensing professional, not a lawyer):

10 days within enactment
- fees go up 15%;
- for additional $4,800 you can expedite examination of your patent application, so that a final disposition will provided 12 months after granting the application expedited status.


12 to 18 months
- First-to-File (18mos) - application priority will be determined by the filing, not invention date (same as in Europe now).
- Third parties (12mos) will be able to submit materials or objections relevant to an application, either 6mos after its publication, or 9mos after the patent is granted.

With regard to practical invention/IP work: a) you have to file sooner and do a better job at elaborating your idea; b) you have to monitor competing IP development efforts and intervene when necessary.


tags: patents, control

Creativity is no longer an option.

The Economist (Sep 10, 2011) has an interesting article on the relationship between global trends and unemployment in the US. This paragraph in particular attracted my attention:

Michael Spence, another Nobel prize-winning economist, in a recent article in Foreign Affairs agrees that technology is hitting jobs in America and other rich countries, but argues that globalisation is the more potent factor. Some 98% of the 27m net new jobs created in America between 1990 and 2008 were in the non-tradable sector of the economy, which remains relatively untouched by globalisation, and especially in government and health care—the first of which, at least, seems unlikely to generate many new jobs in the foreseeable future. At the same time, says Mr Spence, the mix of jobs available to Americans in the tradable sector (including manufacturing) that serves global markets is shifting rapidly, with a growing share of the positions suitable only for skilled and educated people.

If you look at the "Creative Crowd" chart below, you can see that mass manufacturing processes (upper left corner) simply moved overseas where pay rates for routine labor are lower. First, the creation of a highly effective shipping industry that started in the 1950s, and then the addition of inexpensive communications in the early 2000s, lead to a situation where exchanges between the right and left parts of the chart became very easy. The housing bubble of the 2000s masked the fact that in the US not being entrepreneurial and/or creative  means competing with people who live on $100/month.

tags: creativity, business, model, process, scale, 10X, commerce

Stop digging ditches. Invest in clouds.

The world of books, including basic technologies and business models involved, is undergoing a major change. According to CNet:

Amazon is reportedly planning a Netflix-like subscription service for e-books, in a move that would be another perk for Amazon Prime subscribers.
The Wall Street Journal reports that Amazon is in talks with book publishers about subscription access to a library of e-books.

It's quite possible that for certain schools and cities it would be less expensive to contract with Amazon than build and maintain public book collections. Quiet study rooms that libraries provide today can be also replaced with interactive online lessons, etc.

I wish that instead of using stimulus money on roads and powerlines, which are elements of the 20th century infrastructure, we spend our taxes on broadband access and building new educational tools. Rather than forcing Amazon to collect state taxes, the governments should work out deals with the company to provide communities with access to knowledge.

Mr. President, do you hear me?

tags: education, information, distribution, business, model, cloud, 10X, bet, infrastructure

Amazon: making long-term innovation bets.

Jeff Bezos, the Amazon CEO, talks about his company's approach to invention and innovation:

we started working on Kindle almost seven years ago….  There you just have to place a bet. If you place enough of those bets, and if you place them early enough, none of them are ever betting the company. By the time you are betting the company, it means you haven’t invented for too long.

If you invent frequently and are willing to fail, then you never get to that point where you really need to bet the whole company.

We are stubborn on vision. We are flexible on details…. We don’t give up on things easily. Our third-party seller business is an example of that. It took us three tries to get the third-party seller business to work.

Most of our customers shop with us from desktop or laptop computers, but people have a different posture with tablets,” he said. They “lean back on their sofa. People leaning back on their sofa, buying things from Amazon, is another tailwind for our business, so I’m very excited about that.

via venturbeat.com

Tablet is going to be a huge boost to e-commerce and many other ways of content creation/consumption. The sooner the Internet sheds shackles of the browser,  the better.

tags: 4q diagram, bus75, course, bet, innovation, strategy 

Organizing the world's users.

Google acquires Zagat, a service hosting user reviews of local businesses.

Having free content is essential to Google's search-related advertisement model. As people switch to social networks and apps on mobile devices, more and more content is streamed to them directly from the service providers. As a result, the share of free quality searchable information continues to decline. Since Apple controls in-app ads on iPhone, Google needs content; the more, the better. They already have Youtube and Maps, which they  favor heavily in their searches. There's no doubt in my mind that Google's acquisition of Zagat is another attempt to stay relevant in social/mobile networking. Therefore, the answer to CNet's question, "whether the company will give the information it owns preferential treatment over information owned by others," is Yes.

In the world of mobile social networking, organizing information means organizing users as well. And you can organize them and their information only if you have access to it.

tags: social, network, information, advertisement, model, business, google

How many posts a day does it take to maintain interest?

Research from bit.ly shows that a link shared through social media stays of interest just a few hours:

The mean half life of a link on twitter is 2.8 hours, on facebook it’s 3.2 hours and via ‘direct’ sources (like email or IM clients) it’s 3.4 hours. So you can expect, on average, an extra 24 minutes of attention if you post on facebook than if you post on twitter.
The surprise in the graph above is links that originate from youtube: these links have a half life of 7.4 hours! As clickers, we remain interested in links on youtube for a much longer period of time.

A simple calculation shows that to keep people consistently interested in a feed, you have to generate interesting posts at least 5 times a day.

But for a news site, the magic number is 24*60/5 = 288. That is, news links become not that interesting only just 5 minutes of sharing.

In many ways this is a self-fulfilling prophecy. To keep people interested you have to produce a lot of new content, but as you do so the older content disappears below the horizon of attention.

tags: information, attention, 10X, payload, social, network

Invention of the Day: Virtual guest of a real event.

Bill Gates and a dozen of other people from Microsoft invented a virtual guest:

From the US Patent 8,012,023 issued today:

... a virtual reality generation component that emulates real-life activities of a guest that is remotely viewing a spectator event that takes place outside of a virtual environment into corresponding virtual activities of a virtual guest representation in the virtual environment;
....

The idea is to let virtual and real guest mingle during a spectator event. The figures from the patent (below) show a bunch of bio sensors, but the physical can also be a brain reader too.

 

The best part of the patent is that it references our ( Mike Schmitt and I) 2002 patent application, where we claim a system that allows external spectators watch and participate in online games.

tags: games, virtual, social, information, biology, patent, example, ideality

Trade-off of the Day: Creativity vs Self-Control

A few years ago there was a research article showing that simple walks in a park, sleeping, gardening, and meditation restore people's thinking and self-control abilities, while a walk on a busy street does not. The key to restorative brain activities is low requirements for attention.

Today’s world presents numerous challenges to maintaining one’s focus. It offers a plentiful supply of interesting but unimportant stimulation, whereas many important stimuli lack interest.


Thus, people must ignore much of what surrounds them. This act seems to require frontal and parietal brain mechanisms that mediate cognitive control and are susceptible to fatigue.


In order to replenish these resources, a person should engage in activities high in soft fascination that will activate involuntary attention in non-conflicting ways.


...what makes an environment restorative is the combination of attracting involuntary attention softly while at the same time limiting the need for directing attention.

Watching TV or browsing the web are not restorative activities because the media is designed to draw our attention.

Along the same lines, two days ago, NYT published a general interest article: Do You Suffer From Decision Fatigue? Among other things, it talks about how our brain resources are depleted by attention-demanding tasks, with self-control being one of the more important ones.

Since problem-solving and willpower draw on the same resource, it probably makes sense that people come up with creative ideas, i.e. experience an aha moment, in soft fascination environments. How can we break the trade-off and improve our creativity? One way would be to routinize creative efforts, so that they require minimal involvement of will power. Another, would be to intersperse information acquisition (learning) or focused thinking/writing with low-attention activities, e.g. walking in a park, etc. One more, engage in free-form, divergent thinking "what if" exercises, e.g. "if we could solve any problem, which problem would be worth our blood, sweat, and tears?"


tags: creativity, psychology, trade-off, dilemma, separation, reverse brainstorm, brainstorming, control

Radical Innovation vs Dismal Science

Economics is often called the Dismal Science not because its track record in predicting major recessions is dismal, but because it rightly predicts depressing economic outcomes. Here's the latest installment from marginalrevolution.com:

- Imagine a farmer whose farm produces 100 bushels of wheat. He hires 10 workers to bring in the wheat, paying each of them 9 bushels. Thus, each worker carries 10 bushels, the wage is 9, the wage bill is 90, and the farmer earns 10.

- Now suppose that due to climate change or a swarm of locusts the farm only produces 90 bushels of wheat. The farmer doesn’t want to reduce everyone’s wages, however, because that will reduce morale so he fires one worker leaving nine.

- Each worker now brings in 10 bushels, as before, and is paid a wage of 9, for a total wage bill of 81 leaving the farmer with 9 bushels. The unemployment rate is 10%.

- The unemployed worker doesn’t want to be unemployed and offers to work for less, a lot less, say 5 bushels. The best the farmer can do in response to the lower wage offer by the unemployed worker is to fire an employed worker and hire the unemployed worker at the lower wage.

Pretty dismal, huh? One solution to the problem, besides a long-drawn march toward equilibrium, would be for the fired worker

Google's secret weapon discovered: Copy-Paste.

Here's the latest from the social networking battlefield.

In an attempt to find the difference between Google+ and Facebook, a consumer tracking study discovered that Google+ innovators did an excellent copy-paste job:

During their research, EyeTrackShop found that both social networking sites work almost exactly the same.

The pictures below show how user eyes scan the page. Looks like one of those "Find the difference" puzzles in children books.

Facebook

Google

Invention of the Day: Air Conditioning.

Invention of air conditioning can be claimed by several people. But one person in particular, inventor and entrepreneur, Willis H. Carrier turned the technology into a highly successful business.
 ( this 6 min video clip is from a NOVA documentary)



You can trace the evolution of his thoughts and business models through his patents: from A Method for Heating and Humidifying Air (US Patent 854270 filed in 1906), to air conditioning of movie theaters in 1934 (see below).

From a theory perspective, note how the system "flips", from grafting the new technology onto old solutions, to accommodating and making it incredibly successful through building it right into the infrastructure.

tags: niche construction, invention, evolution, innovation, business, youtube, history, technology, problem, s-curve

2025 business headlines: Wal-Mart files for bankruptcy protection

WSJ reports:

...surveys by retail consultants, analysts and brand experts now find that Wal-Mart's aura of price leadership has faded since the recession, because customers who searched for better deals sometimes found them at competitors such as Dollar General Corp., Aldi Inc. and Amazon.com Inc.

As I wrote two years ago, Amazon had become Wal-Mart on steroids because it can aggregate consumer demand in real time. Probably, they can even optimize delivery costs, since their model does not involve inefficient consumer driving to and from the store. Add to the battle new shopping technologies and brick-and-mortar model looks increasingly vulnerable, unless the government steps in and prolongs the agony by imposing online sales taxes. Fundamentally, Amazon shop is open 24x7 and it can deliver in the most convenient form, physically or digitally.

P.S. it is also interesting that, for example, Google can rip off Apple, but Wal-Mart cannot rip off Amazon. 

tags: innovation, information, commerce, business, model, control, s-curve, efficiency, aggregation

@ $730K per patent, Google buys Motorola.

Whatever the business wisdom behind buying one of the worst mobile handset manufacturers in the world, Google's acquisition of Motorola is great for patents. Assuming, generously, the value of Motorola hardware division is $0, Google paid about $730K per patent in the deal. On the per patent basis, this is 50% more, than in the Nortel auction won by Apple, Microsoft, and others. Now Google will have a free hand at ripping off Apple design and business strategies, hiring Apple's designers, and so on. Add to it Google's cloud capabilities, with Youtube, Docs, gaming, etc., and you get a very strong challenger, both in the consumer and enterprise segments. It might be a bit too early to sell Apple stock short, but the competition in the mobile world has be come a lot less lopsided. Unless, of course, Google suffers from the Not Invented Here syndrome, and tries to create its own brand of smartphones.

From an innovation theory perspective, this event is also significant because it confirms that Open Innovation does not have a working IP model, except costly patent acquisitions. Free software and open technology is great, as long as it does not involve a major commercial success.

tags: innovation, patents, growth, software, business, model, mobile, control, battle, theory

A simple test to discover your inner mathematician.

A new study from the John Hopkins University shows that performance on Approximate Number System (ANS) test is a good predictor for people's math abilities at school. ANS is not a uniquely human trait; it is also present in other mammals including rats. Click on the link ( leading to a NYT page) to test your own primordial number sense. You'll see something like this:

Trade-off of the Day: Ease of access vs Security.

From MIT Tech Review:

Employees using such gadgets to connect remotely to company servers and e-mail accounts can boost efficiency; but the practice also creates security challenges. Companies will have to learn how to overcome those challenges for the distributed office of the future to succeed.

Breaking this trade-off will enable the next wave of internet (for the lack of a better word) innovation. tags: mobile, internet, control, trade-off, information, cloud, breakthrough, growth

VCs pull out of clean tech

More bad news for "green":

Now many venture-capital firms are going back to their roots. Dozens recently stopped making initial investments in clean technology companies, according to Dow Jones Venture Source. Many that continue to invest in clean technology are shifting to areas such as energy efficiency, which includes low-capital projects such as software for monitoring and reducing energy consumption, according to an analysis by the Cleantech Group. The money that still goes to the solar industry is now directed to companies with small capital requirements. Globally, nearly seven-eighths of clean-energy funding—including financing for wind farms—goes to established technologies, says David Victor, director of the Laboratory on International Law and Regulation at the University of California, San Diego. "We're on the cusp of a severe challenge for energy innovation," he says.

One just can't build a new business model and a new technology relying on government subsidies. The scale of commercial introduction is the key difference between governments' involvement in early Internet development in the 1970-80s and the 2000-10 attempts to deploy green energy across the US and Europe. That is, the Internet was developed on the scale of an extended R&D proeject and did not compete with any mature large-scale existing commercial offering. In contrast, green energy had to compete with very mature, highly efficient commercial technologies. Internet was a new Betting Ground while green energy was positioned as a Better Mousetrap, prone to a failure even with huge subsidies (see the 4-Q diagram below).

tags: energy, business, trade-off, efficiency, synthesis, 4q diagram

Technology glitches in famous movies. Take 1.

I'll be giving a guest seminar at UMich, Ann Arbor this fall and it's about time to start working on some thought-provoking questions for students. For example,

1. "In this Charlie Chaplin episode, which technology(-ies) that we take for granted today failed to support a business model successfully implemented in the world of Matrix?"

2. "If successfully implemented, which problem, still highly relevant today, would the invention address?"


The questions are probably on the easy side, but should be a good way to engage people in the discussion about tech and biz models.

tags: video, technology, business, model, failure, example

Invention of the Day: Epidermal Electronics

Science Magazine reports on research that found an invisible way to attach electronics to the skin:

Known as epidermal electronics, they can be applied in a similar way to a temporary tattoo: you simply place it on your skin and rub it on with water (see video). The devices can even be hidden under actual temporary tattoos to keep the electronics concealed. Rogers and his colleagues have separately demonstrated that they can add other useful features to epidermal electronics. Solar cells could one day power the devices without an external source; meanwhile, signals recorded by the devices could be transmitted to a base station wirelessly with antennas. In the long term, Rogers believes the technology could provide an electronic link to the body's most subtle processes, including the movement of enzymes and antibodies, to track the path of disease. "

On one hand it's a more or less traditional patch, though an ultra-thin one. On the other, they have figured out a way to customize electronic circuits according to a particular behavior of body surface:

Place the components and wires too close and they will stiffen the device, making it liable to tear. So Rogers's group uses a computer program to predict all the stresses and strains that arise with different designs and then picks the one that keeps elasticity at a maximum.

All together, should probably help in longitudinal studies by making patches less cumbersome to wear.
 
tags: trade-off, 10x, control, dynamic, medicine, information, detection

Is Google+ or Zynga the new color TV?

Social networking is approaching a characteristic S-curve saturation at the top. E-mail, Search, and online news have already peaked.

The next generation of social networking technologies will probably follow a slower adoption path, maybe similar to Color TV vs Black&White TV. The good news is that the Internet-3 revolution is only starting.

Source of the TV chart: Dr.Henry C. Co, CalPoly. 

tags: information, internet, networking, s-curve, social, system, 

Visa as iTunes for credit card phones.

This shows the incredible power of a dominant market player to force innovation upon its customers:

As of October 1, 2015, Visa will shift liability of fraud to merchants instead of card companies. Since dynamic card authentication offers better fraud protection, most merchants will opt to upgrade their terminals instead of having to deal with fraud charges. Fuel merchants will have an extra two years before liability will shift for terminals at self-service gas pumps.
 

Visa controls risk allocation within the payment system, which allows the company to be very flexible when new business models emerge. For example, to get a foothold in e-commerce, Visa promised web merchants that it will absorb credit card fraud losses. This approach let Visa enter a growing market for internet transactions and accelerate consumer adoption of the technology. Now, that it is in a controlling position, the company can start shifting risks back to merchants. Or at least Visa can make a very credible threat of the action because it knows, due to its access to all information about transactions, where the actual risk is.

With the right application on the wallet-phone, it can easily implement elements of social commerce too, including special deals, coupons, location-specific services, etc. - either directly, or as a backend service to merchants and banks.


tags: business, model, commerce, control, deontic, payload, risk, value, mobile

The secret of income inequality in the US.

This first chart shows the relationship between income inequality and test performance on prose literacy. In the US, people who are bad at written and verbal communication skills are at a huge disadvantage. The second chart shows that in the US and China family plays the most important role in educational achievement and, as a consequence, in future earnings. 

Source: http://www.jstor.org/stable/27647039. The role of cognitive skills in economic development.

The Bear and the Gardener. Old tale, new style.

Inception, the movie, is getting closer to being a reality. It's not only the ads, but the whole web experience across multiple sites can be presented to you according to whatever algorithms back-end data analysts can think of. Since they can't really customize it to an individual, the services tend to pigeonhole you into some kind a slot that has marginal relevance to what you actually need. For example, when I'm logged into my Gmail account the "helpful" service determines that I occasionally use Russian in my correspondence and modifies search results accordingly. Did I ask for it? Of course, not!

We almost took on this problem at the last day of BUS 74 this summer, but the class chose a different subject for the invention session. Too bad...

Besides Google, Facebook, and LinkedIn, other companies are getting into the data-scraping game.

Social logins are not only a way to streamline registration processes, but also an opportunity for websites to glean extra data about their users. Social logins are keys to an existing profile, which potentially provides age, sex, location, preferences and more. All of this data can be leveraged in marketing and advertising.

Janrain’s social login works as more than just a registration tool. The company also offers a suite of back-end services for harvesting and utilizing user data.

“Janrain Capture” scrapes and stores profile data in the cloud and allows companies to share social profiles across select web properties and partner sites.

The title of this post refers to "The Bear and the Gardener", a fable by Jean de La Fontaine, which according to Wiki "warns against making foolish friendships."

The moral of the story is expressed in its last two lines:

A foolish friend may cause more woe

Than could, indeed, the wisest foe.

I guess certain negative side effects of social networking were well understood way before Google, Facebook, and Janrain.

Mobile stalemate: Apple vs Google vs RIM.

Half a year ago I wrote about data on smartphone market share, which looked like that:

Google Android - 43.6%
Apple iOS - 26.2%
RIM - 24.2%
Microsoft - 3%

9 months later, market share distribution didn't change much, except Google lost few points to Microsoft:

Google Android - 40.1%
Apple iOS - 26.6%
RIM - 23.4%
Microsoft - 5.8%

Google's growth of 5.4% over last quarter seems like a seasonal variation caused by different release schedule from hardware OEMs. It would be interesting to see revenue margins for those phones/subscribers. Google is not making any money on the OS itself, only on app sales, ads, and subscriptions. Apple is making money on phones, apps, ads, subscriptions, media - songs & video, and accessory licensing - cables, connectors, car interfaces, etc. In addition to that, Apple sells iPods and iPads, which are not included in the market share data.
Putting it all together, I think in the mobile space Apple is a much more dominant force than Google. I also wonder how the whole enterprise market is going to work out. Microsoft will probably make a big push for it, trying to grab a share from RIM.

tags: mobile, business, information, apple, google, microsoft, evolution, market, control point, software

Creativity quote of the day.

From the Nobel Prize lecture by Andre K. Geim (Physics, 2010).

...poking in directions far away from my immediate area of expertise could lead to interesting results, even if the initial ideas were extremely basic. This in turn influenced my research style, as I started making similar exploratory detours that somehow acquired the name ‘‘Friday night experiments.’’ The term is of course inaccurate. No serious work can be accomplished in just one night. It usually requires many months of lateral thinking and digging through irrelevant literature without any clear idea in sight. Eventually, you get a feeling—rather than an idea—about what could be interesting to explore. Next, you give it a try and, normally, you fail. Then, you may or may not try again.

The beginning of the real green revolution.

Electric cars and less expensive batteries begin playing the role of dynamic storage that can respond to variations in supply of local solar or intermittent wind energy. It's far from a breakthrough, but it's a good first step.

The system uses the Leaf charging station to draw from the car's lithium ion batteries and feed current into a home's electricity distribution panel. The 24 kilowatt-hours of energy storage in the Leaf is enough to power an average Japanese home, which uses about half the energy of an average U.S. household, for about two days.

If a person pays a higher price for electricity during peak times, it's possible that charging a battery at night and drawing on it during peak times could save consumers money. That's the vision of many battery companies which envision home energy storage as a way to store energy from the grid or solar panels.

The problem with Nissan's proposed setup is that after the car battery is drained, e.g. during a blackout, it becomes useless for transportation too. Not good. They need a source of cheap and/or intermittent energy that would be wasted if not stored in the battery.

In system terms, they have to solve a synthesis problem, not just graft Leaf onto an existent grid. Maybe they should make a deal with Google to build distributed local storage infrastructure.


tags: innovation, synthesis, storage, s-curve, source, control, energy, 4q diagram, environment, trade-off, breakthrough, example

9 billion people by 2050.

The July 29 issue of Science magazine is a special issue on population. The charts below show some interesting story lines.
Something incredible happened in the 17th century. Just by looking at the chart on the left you can see that population growth started taking off. By 1800, we reached 1B people, and kept growing ever since. Neither wars, nor epidemics could arrest the trend.

The right chart shows projected numbers for the next 40 years. Seems like India is going to take the lead on population growth among economically developed countries.
Source: Science 29 July 2011:Vol. 333 no. 6042 pp. 540-543. DOI: 10.1126/science.333.6042.540

Another article talks about most prevalent chronic diseases (NCD) today and projections for the future. Based on those pictures, I can guess that somehow in the 17-18th centuries humans managed to develop resistance to infections diseases, either through natural and/or social immunity. The latter we call science and medicine, but it also should include business methods for running large scale public health services and hospitals.

 

Being poor kills.

Source: Science 29 July 2011: Vol. 333 no. 6042 pp. 558-559. DOI: 10.1126/science.333.6042.558


tags: medicine, history, technology, business, distribution, control

Investment in chidren: the earlier, the better.

While looking for data on the effects of standardized testing on human creativity, I found in Science (DOI: 10.1126/science.1128898) an interesting graph showing return on education for disadvantaged children.

The caption below the figure reads:

Rates of return to human capital investment in disadvantaged children. The declining figure plots the payout per year per dollar invested in human capital programs at different stages of the life cycle for the marginal participant at current levels of spending. The opportunity cost of funds (r) is the payout per year if the dollar is invested in financial assets (e.g., passbook savings) instead. An optimal investment program from the point of view of economic efficiency equates returns across all stages of the life cycle to the opportunity cost. The figure shows that, at current levels of funding, we overinvest in most schooling and post-schooling programs and underinvest in preschool programs for disadvantaged persons. Adapted from (3) with permission from MIT Press.

People invented branch grafting in gardening to solve the problem of getting "strong roots" fast. We don't have anything like that to improve the lot of poor kids. Will digital books help solve this problem? Probably not, but it could be an element of the solution.

Another thought: this pattern might work for regular kids too. That is, investing in early stages of development can be very efficient, but not obvious enough for a quick fix - it just takes years and years before the results become visible.

tags: education, problem, information, control, health, system, synthesis 

References: James J. Heckman. Skill Formation and the Economics of Investing in Disadvantaged Children. Science. 2006 Jun 30;312(5782):1900-2.

Technology is better than sex?

The results from rigorous scientific studies in

xkcd

and The New Yorker

tags: information, social, network, psychology, communications

Facebook Credits, the reserve currency of the future.

Facebook and Zynga are taking great strides in making social commerce a reality:

Because Facebook appears to favor Zynga more than other game developer, including through an unusual growth-target agreement, those two companies seem to be just about joined at the hip.

A year ago, Zynga’s chief executive Mark Pincus told employees that Zynga planned to expand beyond Facebook and start its own Zynga Live web site as a portal for its own social games. That never happened because Facebook cut the deal on Facebook Credits with Zynga.

Zynga already has enormous advantages over other developers on Facebook, with more than 264 million monthly active users on the social network, more than the top 15 other game companies combined.

If this partnership is a long-term cooperation game like the one Intel and Microsoft played in 1980-2000, Google will have a hard time catching up with this freight train. Facebook Credits represents a new transactions technology, which has a chance to become a platform for new commercial applications beyond games, e.g. video conferencing, content sales, etc. You can see Netflix's cooperation with Facebook as an example of a possible Zynga-like play in a different entertainment domain.

Can you finance a Facebook revolution with Facebook Credits? ;)

A couple of diagrams to illustrate the transition from social networking to social commerce.

tags: games, facebook, commerce, virtual, deontic, payload, platform, 4q diagram, social, control point, business model