Facebook gets a patent for tracking user daily routines

This week the US PTO awarded Facebook US 9,094,795, titled "Routine estimation". The patent covers a technology for clustering user locations, e.g. using mobile device data, and deriving daily routine patterns related to the locations.

The technology also enables Facebook and third parties to connect location and social graph data with user activities, "likes", music played, and other personal or group information.

One can easily imagine a real-time map that shows swarms of users chugging along their daily routines and, once in a while, reminding them to do something different. Shop, for example...



In system model terms, Facebook solves a Detection problem, which is typically a precursor to solutions for Control problems, e.g. directing user activities based on detected patterns.

tags: facebook, patent, invention, distribution, control, detection

Social Media vs TV: kill or be killed

Advertisement dominates business models deployed by social media companies, including Facebook, Google, Twitter, Yelp, and a host of others. Although we think of them as technology growth companies, historically advertising revenues have been flat relative to the GDP *.

Web-based ads — most famously Google AdWords — grew rapidly not because they somehow generated new economic growth in the country, but because they helped TV kill newspapers, Craigslist.com being the early hero.

Now that newspapers are effectively dead, the only way for the ad-supported internet business to grow is to kill TV-based ads. While the TV industry fights it off with YouTube, Facebook, and Twitter, we should expect more video ads on our mobile screens. In the meantime, the likes of HBO and Netflix have to put a strong bet on content quality. Such a bet would be independent of the distribution media and would have a good chance for translating video streams and downloads into real growth.

* also see http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1399613 
tags: internet, video, data, packaged payload, distribution, content, media,

Scalable Innovation - Quiz (Session 3-3)

According to the PC Magazine (January 22, 2015),

BMW and Volkswagen on Thursday announced they are teaming up to create nearly 100 electric vehicle charging stations along heavily traveled roads on the East and West Coasts.
The companies are working with ChargePoint, the largest electric vehicle charging network, on the effort. The publicly available stations will be added to ChargePoint's existing network of more than 20,000 charging spots in North America, and can be accessed by anyone with a ChargePoint or ChargeNow Card, or with the ChargePoint mobile app.

Each station is expected to include up to two 50 kW direct current Fast chargers, or 24 kW direct current Combo Fast chargers compatible with BMW and Volkswagen electric vehicles, as well as many other models. When charging at a 50 kW station, the BMW i3 and the Volkswagen e-Golf can charge up to 80 percent in 20 minutes; at a 25 kW station it'll take 30 minutes.

Question 1: Does the data presented in the article imply the beginning of exponential growth of electric vehicle deployment in the US within the next 2-3 years? Why?

Question 2: Does the addition of 100 charging stations remove a key constraint to growth?

Invention of the Day: the Tea Bag

In our book, Scalable Innovation, Max Shtein and I introduce the concept of Packaged Payload, an element of the system that encapsulates an essential ingredient — mass, energy, information — that moves within the system. The Packaged Payload is critically important for the functioning of the system.

Paradoxically, most people don't see it in their everyday lives because engineers do a good job at hiding the functionality. For example, we can't see AC electricity because it's securely insulated within the wires. Also, we can't see data packages because they are transmitted over wireless connections. We can't see ocean shipping containers either because we buy products in retail, not in bulk.

Explaining the Packaged Payload to students and inventors can be a challenge; therefore, Max Shtein and I are always on the lookout for good examples. Today Max sent me several pictures — a Packaged Payload galore, as he called it — that make the concept easier to grasp. For example, in the picture above you can see chocolate milk and tea packaged in single-shot bags.

Remarkably, the tea bag was invented more than 100 years ago (US Patent 723, 287), but it got popular relatively recently when a new system of fast-food establishments, e.g. McDonald's restaurants, Starbucks Coffee shops, and others became a common place.

US Patent 723, 287, issued March, 1903.

The tea bag represents the Packaged Payload in a food distribution system. Similarly, many other food items are available for one-time use. All of them are standardized for mass production, delivery, and dispensation (see below).

Thank you, Max!

tags: packaged payload, distribution, system, example

Facebook's market power

The Facebook patent I briefly discussed yesterday points to a business and technology revolution, similar to the one that made Chicago a major commercial center in the United States in the 19th century. Back then, the proliferation of railroads helped move grain and cattle from small, scattered farms to large grain elevators and slaughterhouses. As the result, Chicago merchants benefited enormously from the new economies of scale. Similarly, Facebook enjoys enormous economies of scale by aggregating and processing huge amounts of scattered pieces of user preferences data. 

Furthermore, Chicago merchants developed a new standardization system that

...partitioned a natural material — a steer or a bushel of wheat into a multitude of standardized commodities, each with a different price, each with a different market (Nature's Metropolis: Chicago and the Great West, by William Cronon).

The new partitioning system allowed the merchants to sell their commodities to those consumers who were interested in a particular grain variety or beef cut and willing to pay the right price for the right commodity.

Similarly, Facebook has the ability to partition their user social graphs (and even individual users like you and I) into a multitude of parts that can be sold to advertisers and content providers for the right price at the right time and in the right place. The only difference is that instead of the Beef Chart of the 19th century they have the User Interest Chart of the 21st century.

tags: innovation, technology, control, packaged payload, distribution, scale, facebook, social, advertisement

Facebook latest patents - connectivity.

In 2012, Facebook bought a large patent portfolio from AOL for $550M. Now, we can see some of the results from the new owner. For example, here's five US Patents with the same title:

A couple of days ago, the US PTO office awarded the #1 on the list with a new set of claims. While the original invention was about establishing an alternative connection when setting a broadband link, the latest patent claims a broad concept of a mobile device with two connections. Arguably, the patent covers a smartphone app that first uses a low-bandwidth 3G connection, then switches to Wi-Fi.

1. A method comprising: establishing a first communications connection between a mobile user device and a host, the first communications connection enabling an application on the mobile user device to exchange data; establishing a second communications connection between the mobile user device and the host; enabling, using at least one processor, display of an indication that the second communications connection is established; and enabling the application on the mobile user device to continue to exchange data by way of the second communications connection.

For example, the claim describes a scenario when I start downloading a song on 3G, then switch to Wi-Fi to save mobile bandwidth. Not bad. After 10 years of lawyering, a black pig turns into a white swan.

In system terms, we have a Distribution element that has different Routes. The Control system selects a specific set, based on operating conditions, e.g. failure. Conceptually, this is no different from our favorite 19th century railroad analogy: if the Indians destroy one rail link try to ship your troops via another one. In a more sophisticated shipping system, heavy loads are shipped by sea; light ones by air.

tags: patent, example, distribution, control

Amazon patents - Content Management

Amazon continues its push into content management technology. Their  US 8,639,817 patent issued on January 27, 2014) is the latest in a series that covers delivery of digital media.

The patent applies (among other things) to delivering ads based on the original content. In their terminology, a first set of users consumes the "real" content, while a second set gets [relevant] ads. For example, Claim 2 reads:

In claim 3, they continue using the anticipatory approach we found earlier in their other patents, which cover delivery of physical goods.

With physical goods, Amazon describes a scenario where the system
1) routes packages to a general geographical location in anticipation of demand;
2) re-routes packages to a specific address, based on a customer order.

With virtual goods, Amazon patents a scenario where the system
1) delivers content to a content delivery network in anticipation of content demand;
2) delivers content to a specific user device, based on user requests or targeting logic.

In system terms, Amazon creates a smart Distribution network, which sits in between the content providers and users. We model the arrangement in Scalable Innovation, Chapter 25. Anticipating Control Problems. Because Amazon collects a lot of information about both content (Packaged Payload), users (Tool), and providers (Source), it has the ability to determine and anticipate consumption patterns. The patents are a strong indication that business value migrates from the Tool -- Source axis, to the Distribution -- Control axis.

Similarly, Facebook, Google, Twitter, NSA, and others sit between users and content providers (e.g. other users). Remarkably, Amazon doesn't cover social networking scenarios in their patents. Vice versa, Facebook doesn't talk about content management in their patents.

tags: patent, system, aboutness, distribution, control, business, value, amazon, facebook

The Odyssey: a 3,000-year-old techno thriller.

When people encounter new technologies they tend to create horror stories how the technology is going to mess up their lives. The Matrix provides a good example of a recent scare.
Stanley Kubrik's Space Odyssey 2001, filmed in 1968, goes further. It takes two new technologies — space navigation and artificial intelligence (AI) — and shows an astronaut on the brink of death caused by a combination of techs. The latest movie hit, "Gravity," is based on a similar premise.

As I read Homer's The Odyssey, the original 3,000-year old classic, I see a similar portrayal of the sea navigation technology, which the Ancient Greeks developed during the Homeric times. Odysseus, the main character of the story, cannot get home for 10 years because he upset Poseidon, the main sea god. He barely escapes Poseidon's wrath and all his crew dies in a shipwreck.

Another key character, King Menelaus, has his ship blown off course multiple times. He has to spend years in Egypt instead of Greece, unable to communicate with his loved ones. In most stories told by the Odyssey, seafarers are smashed by the rocks, swallowed by the waves, and torn to pieces by the winds. The danger is everywhere, and only the smartest and luckiest ones, like Odysseus himself, survive and prosper.

Eventually, the Ancient Greeks mastered sea travel and turned into a dominant force in international war and commerce. Few centuries later, they got overrun by the Romans, who developed a major innovation in transportation - the permanent road paved with stone. (Remember the old saying: All roads lead to Rome.)

Back to the modern times, it bothers me that we haven't had any good new technological horror movies lately. Are we running out of breakthrough innovations?

tags: innovation, distribution, control

Is China the new United States? Maybe

Over a hundred years ago (1902), the British witnessed the "made in the US" tsunami:

The average citizen wakes in the morning at the sound of an American alarum clock; rises from his New England sheets, and shaves with his New York soap, and Yankee safety razor. He pulls on a pair of Boston boots over his socks from West Carolina, fastens his Connecticut braces, slips his Waterbury watch into his pocket and sits down to breakfast . . . Rising from his breakfast table the citizen rushes out, catches an electric tram made in New York, to Shepherds Bush, where he gets into a Yankee elevator, which takes him on to the American-fitted railway to the city. At his office of course everything is American. He sits on a Nebraska swivel chair, before a Michigan roll-top desk, writes his letter on a Syracuse typewriter, signing them with a New York fountain pen, and drying them with a blotting sheet from New England. The letter copies are put away in files manufactured in Grand Rapids. (Source: The Grand Pursuit, by Silvia Nasar.)

And that was even before Ford's invention of the mass-production method!

The similarity with today's Chinese products in the US is uncanny. Except for the infrastructure, services,  and experiences, most of the stuff we use in our everyday lives is made outside of the US. Despite this production-consumption pattern, there's no Chinese brands among the top 100. Since branding is based on recognition, I bet, if they changed their alphabet or started using westernized name brands they would dominate markets for consumer products and services much sooner. (American and British names are very close and the psychological barrier to consumer adoption is extremely low).

tags: psychology, market, distribution, experience

Lunch Talks: (@TED) Reinventing cities.

How can we fit more people into cities without overcrowding? Kent Larson shows off folding cars, quick-change apartments and other innovations that could make the city of the future work a lot like a small village of the past.

tags: ted, lunchtalk, infrastructure, distribution

Lunch Talk: (@TED) Teaching surgeons around the world.

Laparoscopic surgery uses minimally invasive incisions -- which means less pain and shorter recovery times for patients. But Steven Schwaitzberg has run into two problems teaching these techniques to surgeons around the world -- language and distance. He shares how a new technology, which combines video conferencing and a real-time universal translator, could help.

Youtube link.

tags: education, lunchtalk, health, system, distribution, video

Deficit-Financed Economic Growth: Infrastructure vs Entitlements

The Financial Times has a blog post by John H. Makin and Daniel Hanson about sustainability of trillion dollar US government deficits. Their general conclusion is that the deficits are ok for now because of the current extremely low borrowing costs. One of their statements piqued my interest:

Eventually, the Federal Reserve’s QE programme of large government debt purchases at a current rate of $800bn per year, largely aimed at sustaining the growth of outlays on entitlements that do not support economic growth, will cause inflation to rise.

With regard to future growth, the current deficit spending differs significantly from the time of the Great Depression. In the 1930s, the US government borrowed money to build modern infrastructure, which during and after the World War II helped rapid industrial growth. At the time, entitlements were tiny and (self-)financed by the new Social Security tax. In contrast, today's infrastructure investments are small while entitlement payments are quite large. The only area of large-scale infrastructure build-up seems to be shale oil and gas pipelines. Will this be enough?


tags: economics, distribution, government, problem

Social Networking: a Bubblecovery?

An interesting perspective on social media's economic impact:

...the social media bubble has played a very important role in the U.S.' post-2009 "bubblecovery" or bubble-driven economic recovery. The social media bubble has helped to create nearly 500,000 U.S. jobs in recent years (a very high percentage of newly-created jobs) and has helped to launch a housing and commercial real estate recovery in hard-hit San Francisco and parts of New York City. The social media bubble has contributed to an explosion in post-2009 entrepreneurial activity, with the number of startup incubators tripling from 2009 to 2011. The social media bubble is also important, because it has been one of the few glimmers of economic hope that many Americans have had in recent years, especially for young aspiring-professionals who see few other appealing career options (1, 2, 3).

The recent election cycle may have contributed to the expansion because politicians of all parties embraced social media as a vehicle for delivering their messages. It's a relatively easy task to influence one's vote (i.e. to "buy" a political preference) through online tracking and ad targeting because the vote is free for the person to give. A harder task would be to convince one to buy a product or service online when s/he has to part with real money. Even Zynga with its freemium business model is having trouble.

tags: distribution, cycle, social, networking, business, advertisement

BMW: to Russia with Love.

BMW takes a page from Steve Jobs' ad manual in it's latest web campaign in Russia. In 2010, selling the iPad as Magical, Beautiful, Amazing, Steve Jobs started focusing on emotional response rather than technical features of a hi-tech product. In 2012, BMW sells its car claiming (in Russian) "We Invent Emotions."

In short, ad campaigns hack into human brains, presenting consumer goods as live objects that feel right. We no longer talk about features and benefits. It's all about feelings. 

tags: social, emotion, psychology, advertisement, distribution, control

Lunchtalk: (@UC Berkeley) Edison vs Westinghouse

Lecture 2, UC Berkeley History 124A. At 30:15 Professor R.C. Smith compares two great American inventors George Westinghouse and Thomas Edison.




tags: lunchtalk, distribution, invention, innovation

Facebook patents, July 2012.

	PAT. NO.		Title
1	8,230,046		Setting cookies in conjunction with phased delivery of structured documents
2	8,225,376		Dynamically generating a privacy summary
3	8,224,716		Methods and systems for facilitating the provision of opinions to a shopper from a panel of peers
4	8,219,562		Efficient storage and retrieval for large number of data objects
5	8,219,500		System and method for managing information flow between members of an online social network
6	8,214,457		Post-to-profile control
7	8,213,924		Providing distributed online services for mobile devices

#5 on the list looks most interesting. The original patent application was filed in May, 2004!
It's a good illustration that, in system terms, Facebook represents an instance of Distribution and Control.


tags: patent, facebook, example, social, networking, distribution, control

GE's Novel Battery to Bolster the Grid

Slowly but surely, the green tech revolution is beginning to bear fruit in places where electric grid cannot support 24/7 access to power.

(7/12/12) MIT Technology Review:

Yesterday GE officially opened a sprawling, $100 million battery factory in Schenectady, New York. The factory, which will eventually employ 450 people, makes a new kind of battery—based on sodium and nickel. GE says the technology, which is more durable and charges more quickly than lead-acid batteries, will make off-grid power generation more efficient and help utilities integrate power from a wide range of sources, including intermittent ones such as wind and solar power.

The first applications will be somewhat less ambitious. GE's first customer is a South African company—Megatron Federal—that will use the batteries to power cell-phone towers in Nigeria. Those are usually powered by diesel generators. Pairing the generators with the new batteries can help them run far more efficiently. "You save 53 percent on fuel, 45 percent on maintenance, and about 60 percent on diesel generator replacements," says Brandon Harcus, division manager for telecommunications for Megatron Federal. "For our Nigerian application, the savings are substantial, about $1.3 million over 20 years per cell tower. You use a lot less fuel and produce a lot less carbon."  

tags: control, storage, energy, distribution, synthesis, 3x3

Same technology, different S-curves, different results.

Using solar power in areas where there's no power grid, e.g. in Asia and Africa, looks a lot more promising and cost-effective than introducing the same solar power technology in mature energy systems in the US or Europe.

(MIT Tech Review, June 8, 2012). Diesel is a major source of power in south Asia and Africa, where many areas lack access to the grid and frequent blackouts prompt those who can afford it to install backup generators. These markets could help a solar industry that’s struggling with low profit margins due to an oversupply of panels. In turn, the lower prices for solar power could speed up deployment in poor countries by providing a more economical alternative to diesel-powered pumps and generators, and a much faster path to electrification than waiting for grid infrastructure.

One of the first economical applications for solar is replacing diesel-powered irrigation pumps, Gopalan says. These pumps don’t have to run at night, so batteries aren’t needed, keeping costs down. “The total available market in India alone is 15 to 20 gigawatts, and irrigation pumping is a massive application in all of Asia and Africa,” he says. For perspective, the current total installed capacity for solar power is 65 gigawatts, according to the management consulting firm McKinsey.

In Asia and Africa, introduction of the technology does not depend on infrastructure investment. Furthermore, as recent power outages in the US show, the bottleneck in the energy system is not power generation, but power distribution.  Also, Germany's introduction of "green" energy involves massive investment into new distribution lines. As a result, adoption of the same technology in different areas produces dramatically different economic outcomes.

This difference is obvious to me on the personal level as well. Every day I walk my dog by our local high school. Two years ago it used a government subsidy and a local bond to install solar panels to cover its parking lot. Paradoxically, during the summer months when the largest amount of solar power is generated, the school is not in session. Therefore, the power cannot be used locally and has to be distributed through the grid - with losses - to remote users. In other words, there's a fundamental mismatch between the power generation and the power use patterns.

In contrast, the MIT article cited above talks about a solar panel installation in Asia that feeds irrigation pumps. Because the pumps have to work the hardest when there's a lot of sunshine, solar-based power generation and power consumption by the pumps are almost perfectly synchronized. Therefore, there's no need to store or distribute the power - with inevitable losses - to other users.

As we can see, economic efficiency of the same technology is quite different in these two cases. Here in California, we face a trade-off: the "greener" the energy, the more expensive it is. Opposite to that, in Asia the trade-off is broken: the "greener" the energy, the cheaper it is. Clearly, the technology's upside is much greater there.

tags: s-curve, synthesis, growth, distribution, infrastructure, niche construction, 4q diagram, market

MIT Tech Review: What Facebook Knows.

MIT Technology Review has an article about Facebook's effort to study social aspects of information flows:

"For the first time," Marlow says, "we have a microscope that not only lets us examine social behavior at a very fine level that we've never been able to see before but allows us to run experiments that millions of users are exposed to." 

"The biggest challenges Facebook has to solve are the same challenges that social science has," he says. Those challenges include understanding why some ideas or fashions spread from a few individuals to become universal and others don't, or to what extent a person's future actions are a product of past communication with friends.

Once they've discovered the infrastructure of social interactions, Facebook and its partners will have the ability to inject information into key nodes (just like the doctors do when they need to anesthetize the patient.) Further, they'll be able to shape the infrastructure in certain ways to streamline information flows.

tags: distribution, infrastructure, interface, facebook, control

Germany's emerging electric power infrastructure.

MIT Tech Review discusses Energiewende - an energy revolution designed to put Germany firmly into "green."

This switch from fossil fuels to renewable energy is the most ambitious ever attempted by a heavily industrialized country: it aims to cut greenhouse-gas emissions 40 percent from 1990 levels by 2020, and 80 percent by midcentury.

To help replace nuclear power, they are racing to install huge wind farms far off the German coast in the North Sea; new transmission infrastructure is being planned to get the power to Germany's industrial regions. At the same time, companies such as Siemens, GE, and RWE, Germany's biggest power producer, are looking for ways to keep factories humming during lulls in wind and solar power. They are searching for cheap, large-scale forms of power storage and hoping that computers can intelligently coordinate what could be millions of distributed power sources.

Until large-scale, cheap storage is available, gas power plants, which can start up quickly and efficiently, will be the most practical way to cope with these situations. But there's little incentive to build such plants. Owners of gas plants meant to meet peak power needs can no longer count on running for a certain number of hours, since the need will no longer fall on predictable workday afternoons but come and go with the sun and wind.

Now energy companies are planning to install 10,000 megawatts of wind power as far offshore as 160 kilometers, at depths of up to 70 meters. Several 10,000- to 20,000-ton offshore substations will convert gigawatts of AC output to DC, which can span such distances without large energy losses.

Various economic think tanks predict that the country will spend somewhere between $125 billion and $250 billion on infrastructure expansion and subsidies in the next eight years—between 3.5 and 7 percent of Germany's 2011 GDP.

This is a much better designed economic stimulus than we've seen in the US over the last three years. It invests into a future infrastructure built with new electric grid technologies. Even if the project fails it has a chance to create a industrial base for an export economy that targets fast growing Asian countries.

tags: distribution, control, synthesis, build-up, energy, infrastructure