Lunch Talk: Internet and the brain.

(7/9/12. Newsweek.) The brains of Internet addicts, it turns out, look like the brains of drug and alcohol addicts. In a study published in January, Chinese researchers found “abnormal white matter”—essentially extra nerve cells built for speed—in the areas charged with attention, control, and executive function. A parallel study found similar changes in the brains of videogame addicts. And both studies come on the heels of other Chinese results that link Internet addiction to “structural abnormalities in gray matter,” namely shrinkage of 10 to 20 percent in the area of the brain responsible for processing of speech, memory, motor control, emotion, sensory, and other information. And worse, the shrinkage never stopped: the more time online, the more the brain showed signs of “atrophy.”

tags: 10x, internet, payload, niche construction, psychology, brain, social

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

The market side of breakthrough technology and business model.

The latest numbers from Asymco show that Apple, with 9% global share of physical mobile phones, has 75% of industry profits. All other manufacturers are fighting each other, supplying the market with commodity devices and services.

For more detail, see CNET.

Simply put, the iPhone ecosystem has no substitutes.

tags: mobile, innovation, apple, breakthrough, niche construction

Leadership principles in hi-tech.

John Riccitiello, the CEO of Electronic Arts, describes his two principles of leadership:

(Nov 26, 2011. NYT) - So you’ve got to find a way to be incredibly consistent, so when other people repeat the same thing it conjures up the same picture, the same vision for everyone else.
...people are afraid, and you need to paint a picture that everyone can buy into, even though you’re not even sure yourself it’s going to work because you’re trying to see to the other side of a technology transformation. And if you’re not confident, then they remain scared. 

And the second thing is that if you were a key contributor to a process of bringing a great product to market, not only were we going to support you, but my No. 1 job is to get the blockers out of the way so your product can find a marketplace.

Very similar to Steve Jobs' "reality distortion field" and Jeff Bezos' long-term bets, which is also a form of making people believe into a certain future. 

tags: niche construction, control, infrastructure, virtual

$20M investment per job created?

There's an ongoing debate about the causes of the slowdown in productivity of American workers, beginning some time around mid 1970-s. The chart below shows trend vs actual productivity since the post-WW|| recession. (the chart below is from an MIT Tech Review article - click to read.)

The IT productivity paradox is often cited as one of the major reasons.

The productivity paradox (also the Solow computer paradox) is the peculiar observation made in business process analysis that, as more investment is made in information technology, worker productivity may go down instead of up. Before investment in IT became widespread, the expected return on investment in terms of productivity was 3-4%. This average rate developed from the mechanization/automation of the farm and factory sectors. With IT though, the normal return on investment was only 1% from the 1970s to the early 1990s.

Recently, economist Tyler Cowen wrote a book on this topic - The Great Stagnation, which I'm in the process of reading. In the meantime, it's important to note that heavy IT investment does not create a lot of jobs. Here's how Apple's new datacenter looks like from a job creation perspective:

(Nov 24, 2011. Washington Post) - Just off Startown Road, on the edge of town, Apple recently completed a massive $1billion data center to help power its cloud computing products.
Total new full-time jobs running the facility: 50.

A trillion-dollar question would be, What kind of innovation creates local jobs? For some reason, I have this vague association between our times and the times of the 18th century agricultural revolution in England. On one hand, the revolution produced a breakthrough in food production; on the other, it displaced hundreds of thousands of peasants [and their children] who had to move to the cities in search of work. Where would all the displaced factory workers go now? Social networking?

tags: innovation, destruction, niche construction, trend, economics, system

Biz models: technology as entertainment.

In the entertainment industry there's a concept of a movie release window. First, the movie is released in  theaters, then on DVD/Bluray, later on TV, after that on pay-per-view or online. Each  release captures a certain slice of audience, depending on people's willingness to wait out the rush to see the latest and greatest. In economics terms, it is an instance of price discrimination.

Steve Jobs, the late CEO of Pixar and Apple, learned from the entertainment industry how to create a media event out of a high-tech product launch. The introduction of iMac, iPod, iPhone, and iPad were deliberately staged to create a rush to Apple stores, theaters of Apple consumer experience. Now it appears, Apple is  borrowing the release window business strategy as well.

Nov. 4 (Bloomberg) -- Apple Inc.’s iPhone 3GS model is more than two years old and shunned by gadget snobs, and yet it’s turning into one of the company’s bigger weapons against devices running Google Inc.’s Android software this holiday season.

The move pits Apple’s iPhone against bargain Android phones, without much damage to the company’s profit. That’s because Apple gets cost savings from using older, cheaper parts. And though the device lacks some of the whiz-bang features of the 4S, such as the voice-activated assistant Siri, it’s still better than rivals of the same price, said Roger Entner, founder of market research firm Recon Analytics LLC.

“Apple can shovel them out by the millions,” he said. “What free phone or even $50 phone is going to be more appealing to consumers than an iPhone 3GS?”

On the subject of business models, we can also see how the world of entertainment is taking cues from high-tech as well. Compared to movies, sitcoms are becoming more like technology release versions - 1.0, 1.1, 2.0, and etc. Studios leverage  fan "installed base," just like software companies do with their products.
As I noted two years ago, sequels make the most money for Hollywood. With an increased role of video streaming over the Internet, sitcoms are an improvement version of this business model.

tags: media, niche construction, business, model, 10X, control, entertainment, information

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

Creativity: exploring human potential

Economist Paul Romer and journalist David Brooks talk about innovation, norms and rules that promote new ideas and institutions; e.g. startups achieve cultural change by creating or discovering empty spaces where old rules do not apply.




tags: creativity, creativity, niche construction, startup, information, economics, innovation

Toward a new model of social change

I just wrote a big post about Malcom Gladwell's article in The New Yorker, but somehow this blogging software ate it all. $^####! What a disappointment.

I don't feel like rewriting it all, but here's a brief summary:

Malcolm Gladwell believes, based on historical research, that major social change is brought about by highly committed groups with strong ties, while today's social media (Twitter, Facebook, etc.) encourages creation and maintenance of low-commitment weak ties. In his words, the social media "makes it easier for activists to express themselves, and harder for that expression to have any impact. The instruments of social media are well suited to making the existing social order more efficient." Therefore, it's an improvement of the existing system, but not a creation of a new one.

I agree with his current assessment, but let's compare this situation to the rise of cities, where a large number of weak ties, eventually, played an important role in creation of various groups with strong ties. The social media of today can't enable us to produce things together within the social media itself. Using a metaphor, it still hovers above the world of real goods and events, touching but not changing it. With one major exception, of course, for the hacking culture, capable of creation of a wide range of new ventures inside the hovering space itself. To me, this is a strong indicator that the emerging social infrastructure will produce a major change, the timing of the change or its exact nature is difficult to predict yet. I'll speculate more about it in my subsequent posts.

tags: control, efficiency, evolution, infrastructure, network, niche construction, s-curve, social, system

Time to resurrect privacy? At least for children.

Last spring, by the end of the Principles of Invention (BUS 74) class I taught at Stanford CSP, a group of students identified an online privacy and security as one of the more important problems to address in the near future. A recent Zogby poll sponsored by Common Sense Media confirmed the students' assessment:

...three out of four parents say that social networks aren’t doing a good job of protecting kids’ online privacy. The poll finds that 92 percent of parents are concerned that kids share too much information online, and 85 percent of parents say they’re more concerned about online privacy than they were five years ago. The Zogby International poll also finds that 91 percent of parents think that search engines and social networking sites should not be able to share kids’ physical location with other companies until parents give authorization.

A large part of the problem is that people have very little knowledge and control over how the information gathered by social networks is being used and where it ends up eventually. Somehow, we've created an environment where others know a lot more about you than yourself. But, unlike a relationship with the doctor, teacher or lawyer, this personal information asymmetry is governed neither by trust or law. It is as if every time you talk to a friend somebody is eavesdropping on your conversation. Phone companies are prohibited from doing this, but social networks are not.

tags: control, information, social, network, detection, constraint, niche construction

... is power

Remarkably, the Forbes' list of most powerful women tops Michelle Obama, a woman who married the right guy, rather than, let's say, Lady Gaga, who rose to power, whatever the Forbiates think it is, through her own efforts.

tags: selection, niche construction, information, control

An article in NYT about how market for electronic chips evolved toward ARM, a company that today rules the world of low-power processors for mobile and other devices:

“Apple and the Newton made the company exist,” said Mike Muller, one of the founders of ARM and its chief technology officer. “The Newton never went anywhere, but it got ARM started and gave us some credibility.”

Dealing with hand-held devices and cellphones forced ARM to operate under severe power restrictions. It chased milliwatts, while Intel chased horsepower.

Mr. East and other ARM executives point to the difference in the companies’ business models. Intel designs and manufactures its own PC and computer server products, commanding about $50 to $1,000 for each chip. ARM chips, by contrast, are made by a handful of contract chip manufacturers and cost 65 cents to $20 each. ARM earns pennies or fractions of a penny off each chip through its licensing deals.

tags: 10x, 3x3, evolution, environment, mobile, niche construction

Toward a personal brand

Just wanted to capture a thought that today's social networking infrastructure provides
1. a platform for personal branding based on reputation;
2. a marketplace for digital goods.

Therefore, we should expect emergence of completely new kinds of commerce, including money, development tools, transaction mechanisms, and etc.

Background reading:
Gallup: "The Value of Personal Branding. July 23, 2009.

Science Magazine: Markets, Religion, Community Size, and the Evolution of Fairness and Punishment. Science 19 March 2010: Vol. 327. no. 5972, pp. 1480 - 1484 DOI: 10.1126/science.1182238


tags:  10x, tradeoff, problem, solution, social, information, money, market, niche construction, infrastructure, payload

What's good for information is good for Google.

The buildup of internet infrastructure continues across the world:

The Unity Consortium, which consists of Google, Bharti Airtel, Global Transit, KDDI, Pacnet, and SingTel, has nearly completed the testing of the $300 million project. Internet users in Asia will start seeing faster Internet speeds over the next several months from the new cable, which has the potential to create a 7.68Tbps (terabits per second) connection under the Pacific.

In the meantime, Australia Pushes to Ensure New Built Homes Have High-Speed Internet Access.

Get ready: 3D videoconferencing is coming to a screen near you.

tags: information, infrastructure, google, internet, niche construction, distribution, video, 10x

Content as Software - 2

This is a follow-up to my yesterday's post about Content as Software (CAS).

Recently, Steve Jobs said that, despite abundance of Flash-compatible content, Apple is not going to support Adobe Flash on iPod or iPad. In his words, Flash is a CPU hog. Google expressed a similar view. Why is it so? Is one of the most popular web platforms going to die in the mobile space due to turf battles, or there's something else going on here? Is CPU hogging the only problem with Flash, or are there other reasons why it is going nowhere? To find answers to these questions, I looked up Flash timeline and compared it side-by-side with browser technology developments.

Remarkably, evolution of Flash looks like a continuous effort to overcome web browser deficiencies. First, it was a simple animation engine that allowed developers to embed dynamic content into static HTML pages. Then, media play-out and limited, but certain, scripting capabilities followed. At the time, web authors could not rely on consistent browser behavior beyond the very basics. In terms of browser as an application platform, Microsoft supported ActiveX in Internet Explorer (Windows-only), while Mozilla pushed JavaScript in Netscape and its open source descendants. MP3 audio was handled by a separate browser plugin, so it was difficult, if not impossible, to use most popular media to create a coherent browser-based web experience. On top of that, session management had to rely on cookies and annoying pop-ups, which could be easily disabled by the user. If you as a developer wanted to have a live page or stream content, you had to rely on Flash to provide a stable platform for your application.

Later, more video codecs, a full-blown object-oriented scripting engine (ActionScript), and web services integration layer were added to Flash. In 2007, after the acquisition by Adobe, new versions, Flash CS3 and beyond, could run whole applications inside its own application, had integrated support for Photoshop and other Adobe graphics manipulation products, 3D animation, and etc. The software has become a software platform that itself runs within a browser application that runs on top of a sophisticated windowing operating system, either Windows, Mac OS, or Linux.

A PC with plenty of electric power, processing power, memory, and storage space can easily afford this behemoth. A smartphone (or an e-book) cannot. And it doesn't need to, because its operating system, rather than a web browser, runs user applications. The OS, be it iPhone OS or Google Android, provides a consistent set of APIs that developers can rely upon when they write their code. Since browser on a mobile phone is no longer "The Web Application", but rather one of many web apps, there's no need for Flash to be a media presentation intermediary. The hog can be slaughtered.

Sales of smarphones are predicted to outnumber PCs by 2012. Unless a dramatic change in Flash architecture for mobile devices happens, the product is going to die a slow death. It's not about Steve Job's ego or his design preferences. Rather, it's about the process of creative destruction of obsolete technologies and business models.

tags: 10x, payload, information, mobile, content, software, cloud, system, evolution, niche construction, social, network

Content as Software (CAS)

An increasing number of providers are discovering that packaging their web content as a mobile application is a very attractive business proposition. The same content that is free on the net can be sold for real money when delivered through an iPhone app. NYT has a story about two such apps: Zillow (real estate) and Yelp (business recommendations). Both of them have a location-based component, which makes a lot of sense for people who have a purpose while on the go.

It's easy to predict that delivering content as software (CAS) will grow in popularity among users and providers. First, people are willing to pay for mobile apps; second, content providers have greater control over presentation (browser-independent implementation); third, CAS screens have a greater focus than PC, both time- and space-wise, which enables insertion of highly-relevant ads, including video. All signs point to a new stage in the development of internet commerce. For example, in the nearest future travel guides will stop being books and become integrated mobile apps.

tags: 10x, payload, information, mobile, content, software, cloud, system, evolution, niche construction, social, network

Toads and innovation

Toads are one of the most common species in the world. The 2/5/2010 issue of the Science Magazine published an article about traits that have helped them proliferate throughout the continents over a relatively short period of time. Here's a summary table from the paper (click to enlarge):

The second part of the table shows that successful toads are quick to take advantage of temporary favorable weather conditions (e.g. small pools of water); produce a lot of eggs (most of them die later); minimize investment into their offspring.

Let's switch our focus and think about snippets of ideas (idealets) instead of toads. Today's communication environment encourages extremely short messages: twitter, youtube, blogs, and now google buzz. Attention span is getting shorter, competition for attention intensifies. Therefore, just like with toad larvae, producing a lot of idealets that ride hot media events and don't require much effort must be a winning proliferation strategy.
The only problem is: toads don't build cultures and cities that last hundreds of years. They live within an environment that is dealt to them by superior powers. This means that companies creating environments stand to benefit immensely from letting info-toads to reproduce and proliferate. They just need to find the right information taxation formula. Google found one - relevent ads - but there must be others.

tags: diffusion, strategy, infrastructure, niche construction,

...and the pursuit of communications

Infotainment has become more valuable than food and gas:

by 2004, the average American spent $770.95 annually on services like cable television, Internet connectivity and video games, according to data from the Census Bureau. By 2008, that number rose to $903, outstripping inflation. By the end of this year, it is expected to have grown to $997.07. Add another $1,000 or more for cellphone service and the average family is spending as much on entertainment over devices as they are on dining out or buying gasoline.

via NYT.

With food and gas there's a natural limit to how much you can (over)eat and drive. With information it's only the time when you are not asleep. We can pack a lot of bits from 3D movies into those hours.

tags: information, entertainment, distribution, payload, economics, niche construction,

Beginnings of a tsunami.

That real-time collaboration is a thorny problem. It can be difficult to permit multiple people permission to edit the same document at the same time while ensuring one person's changes don't interfere with another's work. And showing simultaneous work complicates a service's user interface, too.

"With Google Docs it takes about 5 to 15 seconds for a change to make its way from your keyboard to other people's screens," the site [EtherPad] said. "Imagine if whiteboards or telephones had this kind of delay!"

We are witnessing the emergence of a new Payload. The web started with HTML, then moved to XML, and now we are entering the "Scripts+Data Streams" phase. All elements of the system, including browsers(script execution environments), servers, routers, and pipes will have to change to accommodate this step of the system evolution. Mobile devices are probably in the best position to take advantage of the trend.

In any case, whatever they say about cloud computing is just a small facet of what is coming to the world near you.

tags: computers, information, payload, evolution, problem, performance, software, niche construction

Twittering for living

Amazing facts about biological evolution of cuckoo chicks:

... an extremely short incubation period, which ensures that the cuckoo chicks usually hatch before the host's chicks.
...having killed its rivals, the cuckoo chick must stimulate an adequate rate of feeding by its host. It appears to accomplish theis task by behaving as if it were the equivalent of a whole brood of its host's chicks. It does so by emitting a rapid begging call that mimics the begging sounds, as well as the calling rate, of a complete brood of its host's chicks.

Niche Construction, p 11.

tags: evolution, biology, niche construction,