Archive for the 'Business' Category

The way the Gates mind works

Tuesday, July 31st, 2007

Bill Gates took a kind of victory lap in the press on Monday, with dueling big pieces in the Times and the Journal marking his steadily advancing separation from the company he started three decades ago. While the Journal concentrated on the role that Craig Mundie will take over from Gates — as Microsoft’s long-term software thinker — John Markoff’s Times piece featured some choice quotes from the soon-to-retire founder himself.

First, there was Gates the Google-baiter, adopting a role he has played a lot in recent years:

“How many products, of all the Google products that have been introduced, how many of them are profit-making products?” he asked. “They’ve introduced about 30 different products; they have one profit-making product. So, you’re now making a prediction without ever seeing the software that they’re going to have the world’s best phone and it’s going to be free?”

Then there was Gates the true believer in software:

The center of gravity in the computer industry has dramatically shifted toward software, he said. “Why do you like your iPod, your iPhone, your Xbox 360, your Google Search?” he said. “The real magic sauce is not the parts that we buy for the Xbox, or the parts that Apple buys for iPhones, it’s the software that goes into it.”

Finally, there was Gates the slightly tongue-tied global debugger:

Mr. Gates insists that his new world of philanthropy will be just as compelling as software has been. “I’ll have also malaria vaccine or tuberculosis vaccine or curriculum in American high schools, which are also things that, at least the way my mind works, I sit there and say, ‘Oh, God! This is so important; this is so solvable,’ ” he said, “You’ve just got to get the guy who understands this, and this new technology will bring these things together.”

If that’s the spirit that has inspired Gates to use his fortune for good causes, then one should probably not complain. But there is something so very naive about this richest-man-in-the-world’s can-do engineering spirit.

Problems? You’ve just got to get the “guy who understands”! Give him the right technology! And all will be well.

Those darn irrational voters

Monday, July 30th, 2007

Nick Kristof’s New York Times column today (behind the pay wall, alas) summarizes the findings of a book by Bryan Caplan titled “The Myth of the Rational Voter: Why Democracies Choose Bad Policies.” Kristof quotes this summary of the book’s thesis, in Caplan’s words: “This book develops an alternative story of how democracy fails. The central idea is that voters are worse than ignorant; they are, in a word, irrational — and vote accordingly.”

What are the ways in which voters are “worse than ignorant”? Kristof summarizes Caplan’s complaints of “systematic error” in voter rationality: Voters share “a suspicion of market outcomes and a desire to control markets.” They have “an anti-foreign bias,” evidenced by an unwillingness to embrace free trade wholeheartedly. They share “a neo-Luddite bias against productivity gains that come from downsizing or “creative destruction.’” And they have a “pessimistic bias, a tendency to exaggerate economic problems.”

Gee, it sounds like the real problem Caplan has with the voting public is that they don’t agree with the program of conservative economists!

There are a couple of ironies here.

There’s something hilarious about a market-oriented economist complaining about “irrational” behavior. Free-market theory depends on the notion that market participants are rational actors; if they’re irrational, then the whole theory collapses — the market doesn’t behave predictably. For classical economics to work, we need to trade in the populace and get us a better one. The whole thing reminds me of Brecht’s sarcastic suggestion that “the government dissolve the people and elect another.”

But let’s not knock the rabble so fast. Those voters may not be so irrational after all. Free-market economists wish that voters whose jobs are threatened by foreign competition would somehow become farseeing altruists, and trust that the general benefit that free trade provides might eventually lift their boats sometime after the same tide put them out of work. But these “ignorant,” “irrational” voters insist on trying to protect their jobs. The nerve! Why should they think it’s all right to act in their own short-term self-interest? Oh, right, it’s only CEOs and hedge-fund investors who have the economists’ blessing for short-term, self-centered thinking.

Personally, I’m reasonably comfortable with the pro-free-trade argument. But you won’t find me sneering at those who sense that the dynamic of the global economy is not doing them or their families any good.

Caplan is an economist at George Mason University, which (among many other things) is a center for conservative libertarian thinking. His Web site includes a “Libertarian purity test” and his “intellectual autobiography” is replete with references to Ayn Rand — so his perspective, while blinkered, is hardly surprising. But I wonder why Kristof presented the economist’s ideas so uncritically.

Dave Winer: we need an open identity system

Monday, July 23rd, 2007

On Sunday at Wordcamp, Dave Winer chatted entertainingly about “The past, present and future of Web publishing,” and pointed toward a handful of areas where the Web needs some hard work.

One is “future-proofing” our blogs and other content. If, as several speakers at Wordcamp argued, the stuff we’re writing today –even the most ephemeral stuff — is going to provide a window onto our era for future generations, what can we do to insure that it will survive, in a world where file formats and physical media have a short shelf-life? No answers here, but it’s a criticial question.

The other need Winer pointed to was an open identity system — a repository for simple account information that different Web services can rely on so you don’t have to leave your identity scattered across a billion different sites. A lot of people are talking about Facebook in these terms, but that seems hugely premature, since today Facebook’s idea of “openness” is strictly one-way (it’s the roach-motel approach — data can check into the Facebook world but it can’t leave very easily). There have been lots of long-simmering discussions and slowly bootstrapping formats in this area, including OpenID, but none has yet achieved critical mass.

Winer suggested that Twitter’s open API offers a potential path toward such a system, one that he’s already experimented with via his Twittergram project. On the one hand, he said, it would help if some company that already had a vast pool of registered users would open up their service; on the other hand, he noted, the big companies — Yahoo, Microsoft, Google — best positioned to do this are the least likely to make such a move.

I wonder, though, whether we might ultimately end up with the long-dreamed-of identity system as a by-product of some company’s loss in the big Web wars of the late 2000s. Think back a decade: the reason we have a great open-source browser platform is that Netscape got trounced in the commercial battle by Microsoft, and, with little left to lose, decided to release its code for free. It took more than half a decade after that for Firefox to emerge in its present form, but now it’s a central piece of any open Web infrastructure.

I think it’s possible that, over the next few years, if we end up with a social-web business battle that, say, Yahoo or even Microsoft feels that they can’t win under current rules, a big company might decide to make its identity system truly open — or somehow merge it with an already-evolving open-source approach to the problem. As Winer said, that could be a game-changing move — one, I’d argue, as significant as the release of the Netscape code. It won’t change things overnight, but in 5 or 10 years we might end up with the useful system Winer outlined.

Slaves to the inbox

Thursday, July 12th, 2007

My latest Salon article is “Empty thine inbox” — a piece about e-mail overload hitched to reviews of three current books: “Send,” an e-mail etiquette guide by David Shipley and Will Schwalbe; Mark Hurst’s “Bit Literacy,” which outlines a methodology for personal-information management; and Mark Frauenfelder’s “Rule the Web,” a treasury of tips and tricks for taking control of, and enjoying, one’s online life.

The piece takes a brave stand against the injunction to maintain strict inbox hygiene:

My inbox is not a desk that must be cleared. It is a river from which I can always easily fish whatever needs my attention. Why try to push the river? Computer storage is cheaper than my time; archiving is easier than deleting… Do we really want the job of in-box attendant and e-mail folder file clerk? The mess is Augean scale, the job Sisyphean futile.

One other angle on this subject that I did not work into the article comes from Ducky Sherwood, who wrote books on how to handle e-mail burdens some years ago (and who also has a great resource page on all things email):

I’m a bit bothered by an implicit characterization that “email is the problem.” This isn’t fair to the medium. Your problem is that lots of people give you stuff to do. (”Read my message” falls into the category of “stuff to do”.) People have been overwhelmed by the amount of stuff that other people give them to do since long before email.

Nielsen vs. Andreessen on blogging

Wednesday, July 11th, 2007

Over here, first, in this corner, we’ve got usability guru Jakob Nielsen. Nielsen is telling us that smart people will forget about blogging and write articles. Blogs, says Nielsen, are a dime a dozen. If you want to “demonstrate world-class expertise,” write long, in-depth articles that you can get people to pay for.

“Blog postings,” says Nielsen, “will always be commodity content: there’s a limit to the value you can provide with a short comment on somebody else’s comments.” Note how the definition has shifted without notice: all blog posts have somehow become “short comments on somebody else’s comments.”

As the article continues, Nielsen explains that his advice is aimed at the person who wants to establish that he is the number-one expert among the thousand bloggers in a field. This quantitative focus is awfully crude: among 1000 specialists, who’s to say there is a “number one”? By what measure? You’re going to find a whole range of sub-specialists and eccentrics, deep-niche experts and synthesizing generalists. But Nielsen’s analysis is built around this sort of comparative ranking. He maintains that, since blog posts are so variable in quality, a blog will never do a good job of showcasing your expertise. If you want to be top dog, make sure your barks are long and full of detailed research.

But Nielsen’s tract isn’t actually about how to become a “world-class expert” or even how to broadcast one’s world-class-expert-hood. It’s about the most efficient way to get people to pay for your content. Nielsen starts from the assumption that your goal isn’t self-expression or persuasion or enjoyment or anything besides customer acquisition. People won’t pay for blogs; therefore, blogging is a waste of time.

But no blogger I’ve ever heard of has actually tried to charge for content (tip jars are the closest anyone’s come). No one seems to want to do so; it runs counter to blogging’s DNA. Long, in-depth articles are a wonderful thing; who would dismiss their value? But Nielsen blithely dismisses the value in 999 out of a thousand blogs. He doesn’t seem to understand that, most of the time, that value is created not in hope of finding paying customers but, simply, for love.

Now then: here, in the other corner, we have Marc Andreessen. He’s the guy who whipped up the first popular Web browser for personal computers. In 2003 he rashly dissed the need for blogging, saying, “I have a day job. I don’t have the time or ego need.”

But he’s come around, and in the past few weeks he’s poured a huge amount of thought and energy into an impressive new blog. Yesterday, in a post titled “Eleven lessons learned about blogging, so far,” Andreessen wrote, “It is crystal clear to me now that at least in industries where lots of people are online, blogging is the single best way to communicate and interact”:

Writing a blog is way easier than writing a magazine article, a published paper, or a book — but provides many of the same benefits.

I think it’s an application of the 80/20 rule — for 20% of the effort (writing a blog post but not editing and refining it the quality level required of a magazine article, a published paper, or a book), you get 80% of the benefit (your thoughts are made available to interested people very broadly).

Arguably blogging is better because the distribution of a blog can be even broader than a magazine article, a published paper, or a book, at least in cases where the article/paper/book is restricted by a publisher to a limited readership base.

Andreessen obviously isn’t writing his blog with any intent to try to charge people for it (as one of the founders of Netscape he presumably doesn’t need that kind of change). I doubt, either, that he is blogging in order to be known as the one-in-a-thousand expert on anything. So Nielsen would tell him, don’t bother — don’t waste your time.

Andreessen doesn’t look likely to heed such counsel. Certainly, as a tech-industry celebrity, he’s had it relatively easy in attracting attention and readers. But he’s hardly coasting. His posts, in fact, look suspiciously like the long, in-depth articles Nielsen advocates; they just happen to be posted in blog form.

From what I can tell, Andreessen is blogging because he finds it fun. Because it connects him to a wider group of people who share his interests. Because it gives him a chance to think out loud and tell war stories and give advice. And because, having started, he can’t stop writing (long, in-depth) posts.

It looks a lot like love.

Facebook needs work

Wednesday, July 11th, 2007

I am by far not the first to point this out, but it bears repetition: Facebook has some big problems with its matrix for defining relationships among friends.

The first generation of social networks were mocked for offering only a simple binary choice of “friend” or “not friend.” Facebook — which started as a network for college students, but opened its doors to the world a few months ago, and is now growing like mad — isn’t much of an improvement. But at least it lets you fill in some blanks and better define your relationship with particular friends.

Each time you confirm a “friend request” from someone on Facebook, you’re confronted with a screen that asks for details. This is the list of options:

How do you know [this friend]?
Lived together
Worked together
From an organization or team
Took a course together
From a summer / study abroad program
Went to school together
Traveled together
In my family
Through a friend
Through Facebook
Met randomly
We hooked up
We dated
I don’t even know this person.

This is a great list if you are 19 years old. It is pretty much useless for the rest of us. And even if you try to use the “worked together” feature, you will get tripped up.

For instance: I know a developer named Jake Savin because he worked at Userland during the period when Userland and Salon ran a blogging program together. Jake just sent me a “Friend request” and asked me to confirm that we “worked together.” I’m happy to do this; but Facebook seems to believe that “worked together” can only mean “worked together at the same company” — so if I confirm Jake’s request, Facebook seems to think I’m saying that I, too, worked for Userland. Which is ridiculous. There’s no tool by which one can express the many shades of relationship as they exist outside of a campus environment.

Facebook has garnered enormous attention from the media and from developers since it opened its platform to allow other companies to build “Facebook applications” that add new capabilities to the Facebook system. But Facebook’s social-networking design needs some basic plumbing work. Before some other company plunks down a few billion for Facebook’s hotness — or before the investment bankers take it public — some basic upgrades are in order.

The case of the disappearing Amazon reviews

Tuesday, July 10th, 2007

Dreaming in Code has sold particularly well on Amazon.com, which does not surprise me. Given the subject matter, the book was bound to appeal to buyers who shop online, and Amazon is the dominant player in the online bookstore market.

I’ve also been pleased to see the profusion of customer reviews on Amazon. As of about three weeks ago, we had 33 reviews posted. Most were positive, a handful were negative; either way, each one meant that some reader cared enough to take the time to post their reactions, and that meant a lot to me.

Then something weird happened about ten days ago. Suddenly, Amazon showed only 10 reviews. Two dozen reviews posted between mid-February and the end of June had simply disappeared. In the time since then, a couple of new reviews have joined the total, but the missing reviews have not reappeared.

I’ve been building Web sites long enough, and worked with software long enough, to imagine a variety of different scenarios for what might be causing this. Whatever happened, this is something that Amazon ought to be concerned about — these glitches are rarely limited to a single page; there’s likely sporadic data loss in multiple places. Amazon runs a gigantic Web service that a lot of people depend on. It has even recently gotten into the business of offering back-end data storage services (Amazon S3) to other Web companies and individuals. So I trust they’ll be pursuing this issue. They ought to have this data somewhere from which it can be restored.

I’ve asked my publisher to look into the matter. I also contacted Amazon through their bottom-of-the-page feedback mechanism. The good news is, I actually got a response; the bad news is, it was feeble — I think the customer-service rep. simply looked up the page, saw there were a dozen reviews, and reported such back to me. I could do that from the comfort of my home, thank you!

Amazon was one of the very first businesses to understand the value of what the Net industry now calls “user-generated content.” Customer reviews are the heart of its operation. The most basic compact between a Web service and its users is, “If you contribute something of value, we promise not to lose it.”

UPDATE Mid-afternoon Wednesday: The reviews appear to be back. Thanks, Amazon.

Facebook, AOL, and crumbling walled gardens

Friday, June 29th, 2007

In a phrase that will deservedly pass almost instantaneously to meme-hood, Jason Kottke says “Facebook is the new AOL.” Facebook has persuaded lots of Web services and sites to build applications on its platform, but the proprietary, walled-garden approach will ultimately grow tiresome:

As it happens, we already have a platform on which anyone can communicate and collaborate with anyone else, individuals and companies can develop applications which can interoperate with one another through open and freely available tools, protocols, and interfaces. It’s called the internet…

Kottke points his post back to an observation by Meetup’s Scott Heiferman about the AOL/Facebook parallel. But I also caught echoes of Jon Udell’s post back in February about “social network fatigue”:

Recently Gary McGraw echoed Ben Smith’s 1991 observation. “People keep asking me to join the LinkedIn network,” he said, “but I’m already part of a network, it’s called the Internet.”

Dave Winer has been writing lately as well about social-network overload and the usefulness of arriving at a single, interoperable standard for identity:

Marc Canter and many other people think I’m full of it when I say the right number of identity systems for each user is 1. But I am right. And I know it…Here’s a hint. How many email systems do you use? RSS systems? Web systems? The correct answers are 1, 1, and 1.

This is a hugely important topic — subset of a larger one that I expect to devote some energy to writing about in the future. The common theme here is the centripetal force of the Internet. We start with services that help people do something important but simple (like: use email, build a web page, start a blog); those services fight for share by walling themselves off; eventually, the service that gets in the way least wins the most users, and those users are able to conduct their activities on the open Net.

Hollywood vs. Napster, post mortem

Thursday, June 28th, 2007

From Rolling Stone’s obituary for the music industry, June 19, 2007:

Even worse, the record companies waited almost two years after Napster’s July 2nd, 2001, shutdown before licensing a user-friendly legal alternative to unauthorized file-sharing services: Apple’s iTunes Music Store… Rosen and others see that 2001-03 period as disastrous for the business. “That’s when we lost the users,” Rosen says. “Peer-to-peer took hold. That’s when we went from music having real value in people’s minds to music having no economic value, just emotional value.”

From my column in Salon, July 27, 2000:

What will be the impact of the court-ordered shutdown of Napster? These projects — small, underground efforts that grew unnoticed in the shadow of Napster the company — will be flooded with energy… From the recording industry’s point of view, it is slaying one enemy only to seed the field with a thousand new opponents — opponents who are, not incidentally, its own best customers…

The recording industry is in for a long, fruitless siege if it sets out to shut down each little Napster clone or slap a writ on every individual who uses Gnutella. Ultimately, if it wants to stop people from engaging in Napster-like behavior, the only thing that could work would be to shut down the Internet itself. Good luck.

Instead of going to court, of course, the music industry could be figuring out ways to use Napster to sell more music. After all, here’s a piece of software that cultivates people’s taste for new music and that appeals to the most dedicated fans. What a sales opportunity!

But by treating Napster as the copyright antichrist, the industry is simply insuring that the vector of Internet technological development will move rapidly toward a lawsuit-proof, free-for-all distributed network of file-sharing…

Conversations with corporations

Saturday, June 23rd, 2007

This is getting interesting!

John Battelle has posted a reasonable defense of the Federated Media “conversational ad” scheme that I discussed earlier. (And it strikes a healthily non-defensive tone, too, which is awfully hard in such a situation.) He argues that he views “commercial publications” as conversations between three parties: authors, audiences and advertisers.

Well, OK. You know who the authors are; they sign their writing. You know who you are, as a member of the audience. But who, exactly, is the advertiser? That is the problem with Battelle’s formulation, as I see it.

Blogging presupposes a notion of direct communication between writer and reader, where there is no editor or intermediary bureaucracy between the two, and where the reader, as often as not, is also a blogger, ready to respond — to participate in the “conversation.”

But this advertiser-as-conversationalist thing, I’m still having a hard time with it. If you look at the “People Ready” conversation page that FM and Microsoft created, where, exactly, is Microsoft joining the conversation? I see lots of names here, but no name representing Microsoft. If you click through to the “About People Ready” page, you can read stuff like, “Microsoft sees a better way to unlock the potential of every person.” But, er, who exactly is Microsoft?

In a comment posted on Jeff Jarvis’s blog, Battelle elaborates:

Is it somehow illegal for companies to be part of a conversation? I really find that presumption offensive. Why can’t companies, which as the Cluetrain reminds us are just made up of people, be part of a conversation, and invite leader into that conversation?

I have only one problem with this argument: A corporation is not (pace the late 19th-century legal doctrine that held corporations to have the same rights as individuals) a person. There are plenty of individual people who work for corporations. (I do, too.) And when they post in online forums or start blogs or do anything that they sign their name to, I’m very happy to have a conversation with them. But that’s different from “companies being part of a conversation.” I don’t know how to do that. And I really don’t see that happening with the “People Ready” campaign.

A deep irony here is that Microsoft, of all the big tech companies, has a long and proud record of promoting blogging among its engineers and executives. I’ve learned a vast amount by reading them, and their presence online — including the famous Robert Scoble (who weighs in on this controversy here, and who of course has long since moved on from Microsoft) but extending far beyond him — has changed my understanding of the company and the people who work for it. Microsoft is already part of a panoply of real conversations on the Web. That makes this “People Ready” construct look all the more artificial.

UPDATE: More from Matthew Ingram:

If I’m talking to a bunch of people in a bar, and an advertising guy working for Coke comes up and tries to change the subject to the idea of “refreshment,” and says that he plans to tape-record my comments and use them on a billboard, then I am going to react pretty negatively to that idea. That’s not a “conversation” the way I would define it.