In July we’re holding our first conference at Percolate. It’s going to be called Transition and it’s meant to explore how the world, and specifically marketers, are dealing with the massive transition to software and systems. I touched on what this means for marketers in a blog post last week:
For marketers this means two things: First, as a core function of the business and owner of the message, this explosion in communications technology falls squarely in their wheelhouse and gives them new opportunities to prove their value to the organization. Secondly, to achieve this, marketers will need to rethink the way they operate as the core channels (local to global), audiences (millions to billions), and content (stock to stock & flow) they once worked through shifts under their feet.
But yesterday we went on to post our entire paper/manifesto on how we see the world changing and why marketing needs to change along with it. You can read the whole thing at the Percolate blog
, but here’s one section about the three phases of the last 25 years:
Marketing is in transition. But what happened? How did it happen?
Phase 1: 1989 – 2004
The shift started 25 years ago with Tim Berners-Lee and the founding of the World Wide Web. For the first time people and organizations were able to connect directly with each other. Marketers went out and built websites, email marketing lists, and (in)famously, banner ads to reach these customers.
A bevy of new companies emerged to help marketers deal with the various needs that surfaced in this period: Omniture for analytics; DoubleClick for serving banners; and, of course, Google for organizing the web and helping marketers reach the people searching it.
While the total number of Internet users grew by more than 30x during this period, 2004’s mark of 910 million users still only accounted for 14% of the world’s population.
Phase 2: 2004 – 2014
Ten years ago social built a layer on top of the web. Led most famously by Facebook, this layer provided a graph of relationships and interests that started to map the planet. Social presented a different set of challenges to marketers. Instead of just thinking about pushing messages, social created a participation architecture on the web that caused the enterprise to think about moving their service infrastructure into a digital environment.
As smartphone sales began to accelerate a few years ago, usage and engagement numbers in social skyrocketed. The growth of those companies followed suit. Facebook became only the second platform in history to pass 1 billion active users, joining the Fortune 500 in 2013. Today, across the Internet, there are nearly 3 billion total users, covering roughly 40% of the world’s population.
Phase 3: 2014 – 2019
That leaves us at today: The third phase. What started just over five years ago, with the introduction of the iPhone, has become a revolution that changed nearly every facet of communication for both individuals and enterprises. While it took us over 20 years to reach 3 billion Internet users, it’s predicted we’ll double that number in just the next five.
In the 1960s Marshall McLuhan theorized on the effects of the “global village,” a place where “everybody gets the message all the time.” In just five years that world will be a reality. For all the questions people may have about valuations of these new-media companies, what we do know is that for every additional 10 mobile phones per 100 people in a developing country, GDP rises by 0.5%. It’s hard to overstate the realities and excitement of nearly 100% of the planet being connected on the same network.
You can read the rest at the Percolate blog. And if you’d like to join us for the conference, you can find the details at TransitionConference.com.
I’ve been experimenting with posting around the web lately. This weekend was a post about first principles thinking on Medium and today it’s a post about process on LinkedIn. It’s based on a quote I gave to Digiday about what big brands can learn from startups:
I’ve been reading “Creativity Inc.,” the Pixar book by Ed Catmull. In it, he realizes at some point the goal became the process — the goal was not making great movies. That’s what happens inside big companies: The process becomes so locked into place that you forget what your actual goal is. It’s not to follow the process, but it’s to create a great product or deliver a great service and do whatever the brand is there to do. Inside startups, because they’re so much smaller and younger and the process is much less fossilized, you don’t have the chance to do that. What I’m trying to do at Percolate is make sure we never do that. I want people to think the process can change. Because it should.
Lately I’ve been talking a lot about Elon Musk’s idea of first principles thinking (finding the atomic unit of a challenge and building up from there) and I decided to write a bit about it over at Medium. Here’s a snippet about how it applies to working with designers:
What’s interesting, though, is I think you can apply it beyond just big problems to almost any challenge a company or product faces. I gave a talk at our recent DesignTalk event about how to work best with designers. I think encouraging designers to be first principles thinkers is key to getting the best work possible. By this I mean the best way to work with a talented designer is to define the core components of the problem and let them solve up from there. Encourage them to throw away existing solutions and instead solve the problem in a way that best suits the unique issues faced in this case. While the end solution might resemble something else that exists, by not applying analogical thinking you at least know that you’ve arrived at it because it is the best, not because it already exists.
I really liked this quote Martin Weigel posted from Stephen King (the marketing guy, not the horror filmmaker) on how marketing companies must evolve:
Marketing companies today… recognize that rapid response in the marketplace needs to be matched with a clear strategic vision. The need for well-planned brand-building is very pressing. At the same time they see changes in ways of communicating with their more diverse audiences. They’re increasingly experimenting with non-advertising methods. Some are uneasily aware that these different methods are being managed by different people in the organisation to different principles; they may well be presenting conflicting impressions of the company and its brands. It all needs to be pulled together. I think that an increasing number of them would like some outside help in tackling these problems, and some have already demonstrated that they’re prepared to pay respectable sums for it. The job seems ideally suited to the strategic end of the best account planning skills. The question is whether these clients will want to get such help from an advertising agency.
That sums up a bunch of stuff I’ve been thinking about/we’re trying to do with Percolate quite nicely.
I wrote a little thing over at Medium about what I’ve learned about how sales works from watching the great sellers on our team at Percolate. Here’s a snippet about how great sales people don’t run over barriers, they get to know them and figure out how to work with them:
What I mean is the best sellers don’t bowl clients over, they work with them, understand them, and ultimately make their way around every potential roadblock together, no matter how vague it might at first appear. This isn’t just about asking easy questions and listening for answers, it’s about being able to get beneath the surface and actually identify a core challenge or opportunity. In this way the same thing that makes a great seller actually makes a great product person: The ability to get beneath the surface and get the root cause of an issue. The challenge here is that it’s not always easy. “Whying” sounds a lot like “whining” for a reason, and that’s the core question you need to ask to identify true opportunities. While a great seller might make a client feel uncomfortable as they go through this process, they build trust in their desire to actually solve a problem instead of just selling whatever it is they have.
Yesterday I posted a few points in response to James Surowiecki’s New Yorker piece on the role of brand’s in a world of better information. I made a specific distinction between research-heavy products like cars and a product like soap or toothpaste, which people generally choose on brand alone. On Twitter someone asked whether that meant car brands are actually less valuable in this new world and I thought it was worth answering here as well as on Twitter.
First, the answer is no, they’re not less valuable even though research does even the playing field to some extent. But there are two important points about how people buy cars that need to be addressed. First, people generally choose out of a subset. If you want a “luxury” car you’re choosing between a BMW, Audi, or Mercedes. You don’t get to that point without brand. If you’re Kia right now, you’re advertising the hell out of your new car because you want to be in that decision set. While your ultimate decision may be purely on product merits (though it’s likely not), you have eliminated 99% of the other car options off brand alone.
Second, just want to reshare something I wrote a few months ago. This argument about brands is part of a larger anti-brand argument that’s best categorized by the quote “advertising is the tax you pay for being unremarkable.” Back in August I explained all the reasons this isn’t true and they still apply here.
This morning Felix Salmon tweeted James Surowiecki’s latest article about brands at me to see what I thought. Basically Surowiecki makes the case that brands are less meaningful in a world of information efficiency thanks to the web. His thesis, roughly:
It’s a truism of business-book thinking that a company’s brand is its “most important asset,” more valuable than technology or patents or manufacturing prowess. But brands have never been more fragile. The reason is simple: consumers are supremely well informed and far more likely to investigate the real value of products than to rely on logos. “Absolute Value,” a new book by Itamar Simonson, a marketing professor at Stanford, and Emanuel Rosen, a former software executive, shows that, historically, the rise of brands was a response to an information-poor environment. When consumers had to rely on advertisements and their past experience with a company, brands served as proxies for quality; if a car was made by G.M., or a ketchup by Heinz, you assumed that it was pretty good. It was hard to figure out if a new product from an unfamiliar company was reliable or not, so brand loyalty was a way of reducing risk. As recently as the nineteen-eighties, nearly four-fifths of American car buyers stayed loyal to a brand.
He then goes in to talk about cars and travel and a lot of other stuff that people spend a lot of time researching. In response I shot off four quick Tweets that I thought were worth sharing here:
1. Using a luxury brand (Lululemon) is fundamentally flawed. Luxury is all brand. You can fall as fast as you rise.
I understand calling Lululemon luxury is a bit of a stretch, but I think it’s pretty accurate. But the second part is really the point: However fast a company rises it can fall at the same speed. We’ve seen lots of businesses reach saturation and struggle and this isn’t necessarily what happened to Lululemon, but it could be a part of the picture. To solely say that it was based on consumer’s ability to do research seems odd. Seems like a classic story of a brand growing really quickly and then struggling to maintain it’s growth. Often those brands come back quickly and continue to grow, though, so the story is far from over.
2. Where is the evidence that suggests buying on non-research products has changed?
He touches on this a bit towards the end by writing, “This isn’t true across the board: brands retain value where the brand association is integral to the experience of a product (Coca-Cola, say), or where they confer status, as with luxury goods. But even here the information deluge is transformative; luxury travel, for instance, has been profoundly affected by sites like TripAdvisor.” But again, travel has always been a category that a lot of research goes in to. Anywhere people research, that research will move to the web. The fundamental truth of most products is they’re not research-driven. This is why CPG is always near the top of the largest ad spenders.
3. Research-heavy products (TVs, cars) have become much more price-efficient. Duh. Not sure there’s much to say here, but he specifically hits on how cars have been squeezed to be much more efficient. This is not rocket science and is a good thing for consumers. No debate here, just not a very interesting point.
4. Consumers have always been in control. There is more efficiency in the market now, but fundamentals are the same. This is the big piece. I’ve argued this often. Word of mouth always drove purchasing decisions. Certainly this is much more efficient, but I’m not sure I’d say it’s a sea change.
I was reading this speech from Andy Grove, Intel chairman, from 1998 and while the whole thing is a bit hard to read, this bit about strategic inflection points and competition was quite interesting:
Some key warning signs that hint that the change you are dealing with make a Strategic Inflection Point is when it is clear to you that all of a sudden the company or the entity that you worry about has shifted. You have dealt with one particular company or establishment as a competitor all your life and all of a sudden you don’t care about them, you care about what somebody else thinks. I have this mental silver bullet test. If you had one bullet, who would you shoot with it? If you change the direction of the gun, that is one of the signals that you may be dealing with something more than an ordinary shift in the competitive landscape.
Last week I wrote a piece on AdAge revisiting Stock and Flow. If you’re interested you should read the whole thing, but here’s a snippet:
To answer that question, let’s start with what’s changed. The core social platforms, Facebook and Twitter, have continued to explode. Mobile has enabled a host of new social platforms such as Pinterest and Snapchat to grow at breakneck speed. LinkedIn has added informational content like LinkedIn Today, LinkedIn Influencer and sponsored updates. Google has built a massive social system with the deepest mobile integration of any platform we’ve ever seen (thanks to Google’s Android mobile operating system). “Native” advertising has come to the fore. And search and social have crashed together: According to SearchMetrics, seven of the top eight signals in social now come from search.
Dr. Strangelove, my favorite movie ever, turns 50 years old this week. The New Yorker has a great story of just how frighteningly accurate the movie’s portrayal of poor nuclear security actually was:
With great reluctance, Eisenhower agreed to let American officers use their nuclear weapons, in an emergency, if there were no time or no means to contact the President. Air Force pilots were allowed to fire their nuclear anti-aircraft rockets to shoot down Soviet bombers heading toward the United States. And about half a dozen high-level American commanders were allowed to use far more powerful nuclear weapons, without contacting the White House first, when their forces were under attack and “the urgency of time and circumstances clearly does not permit a specific decision by the President, or other person empowered to act in his stead.” Eisenhower worried that providing that sort of authorization in advance could make it possible for someone to do “something foolish down the chain of command” and start an all-out nuclear war. But the alternative—allowing an attack on the United States to go unanswered or NATO forces to be overrun—seemed a lot worse. Aware that his decision might create public unease about who really controlled America’s nuclear arsenal, Eisenhower insisted that his delegation of Presidential authority be kept secret. At a meeting with the Joint Chiefs of Staff, he confessed to being “very fearful of having written papers on this matter.”
On Friday a rather long piece I wrote on content marketing went up over at Re/code. The point of the piece was to try to answer the three main questions we hear around the space: What is content marketing, why is it a big deal for brands, and how big could it really be? I did my best to answer all three questions and while I won’t reproduce the whole thing here, I did want to give a little flavor for a few of the points I made that I think you’ll find most interesting.
On the future of following brands:
The last note on the “why” question is around followers. For a while now, questions have been asked about why consumers follow brands, and what this means. Whereas at one time follower count was a meaningful metric for brands, it’s not any more. The major social platforms have a clear message to marketers: We have the scale and ad products to allow you to reach any consumer segment for a reasonable cost. The marketer’s job, then, returns to creating content that captures their attention and achieves the brand’s objectives, whatever those objectives may be.
On why mobile is so meaningful for the future of digital advertising and content:
What happens in mobile is that all the things that made up digital marketing over the last 15 years start to go away. That means no more flash, cookies, banners or Facebook sidebar ads. The mobile opportunity is about “native advertising,” which, in English, is just about the content and the ad being the same thing. To think about the market opportunity, then, you need to look at the market opportunity for the biggest social platforms (a.k.a. mobile media companies) in the world: Facebook, Twitter, and LinkedIn. (I’m leaving Google off for the sake of simplicity, but I think they belong in this group, as well.)
And, finally, my three big/almost-definitely-inarguable conclusions driving the growth of content marketing:
1. Massive amounts of consumer attention are moving to mobile social platforms.
2. Those platforms are made up of streams of content, and will offer brands increasingly impressive parameters for targeting unique groups of consumers.
3. For brands to be successful in reaching consumers, they will need to create engaging and on-brand content.
It seems relatively simple, then, that content — and therefore content marketing — sits at the center of the next phase of marketing technology, and offers a massive opportunity.
The whole thing is at Re/code.
Go read this whole interview with John Seely Brown. It’s awesome. Here’s a few of my favorite bits.
On content versus content:
Remember that image of the statue of Saddam Hussein being pulled down? Well, the photo was actually cropped. Those were Americans pulling the statue down, not Iraqis. But the cropped photo reinforced this notion that the Iraqis loved us. It reshaped context. Milennials are much better at understanding that context shapes content. They play with this all the time when they remix something. It’s actually an ideal property for a 21st century citizen to have.
That’s as good an explanation of what McLuhan meant by the medium is the message as I’ve read.
On creativity versus imagination:
The real key is being able to imagine a new world. Once I imagine something new, then answering how to get from here to there involves steps of creativity. So I can be creative in solving today’s problems, but if I can’t imagine something new, than I’m stuck in the current situation.
I really like that distinction. Imagination is what drives vision, creativity is what drives execution. Both have huge amounts of value, but they’re different things.
On the dangers of a STEM-only world:
Right. That’s what we should be talking about. That’s one of the reasons I think what’s happening in STEM education is a tragedy. Art enables us to see the world in different ways. I’m riveted by how Picasso saw the world. How does being able to imagine and see things differently work hand-in-hand? Art education, and probably music too, are more important than most things we teach. Being great at math is not that critical for science, but being great at imagination and curiosity is critical. Yet how are we training tomorrow’s scientists? By boring the hell out of them in formulaic mathematics—and don’t forget I am trained as a theoretical mathematician.
Not to talk about McLuhan too much, but he also deeply believed in the value of art and artists as the visionaries for society. I think there’s obviously a lot of room here and the reality of the focus on STEM is that we have so far to go that it’s not like we’re going to wake up in a world where people only learn math and science. But I think the point is that the really interesting thoughts that come along are the ones that combine, not shockingly, the arts and sciences.
Again, just go read the whole interview. It’s great.
I posted this over at the Percolate blog last week and thought I’d post here as well. It helps explain what I’ve been up to for the last few years. To all of you: Thanks so much for your support along the way. I really really appreciate it.
In trying to write up this post recapping 2013, I kept trying to come up with a way to define the first three years of a startup’s life. The first year is clearly about identifying the problem. We spent 2011 with a clear sense that there was a challenge to be solved in helping brands create content with technology (because James and I had lived it in our previous lives in the marketing world), but we still had to prove it was something we could solve and would drive value for our clients.
By the end of year one we had some great clients and a good sense for what needed to be done. From there we spent year two proving it. We started to build a bigger team and bring on more and bigger clients. By the end of year two (2012), we had seen real client success and continued to see momentum in the content space (especially from the big social platforms, who after Facebook’s IPO in May, 2012, were taken a lot more seriously by the business world).
Year three, last year, was about building out the business. We nearly tripled the staff in 12 months (we’re now almost 90 people), shipped an incredible amount of product, and brought some of the world’s best brands on board as Percolate customers. As a co-founder it’s a crazy and amazing feeling to walk into our office and feel the buzz of that many people working on delivering great marketing technology for clients. That our mission, to be the leading content marketing platform, has stayed the same, only makes things feel even better.
But, of course, the life of a startup isn’t about looking back. So what does year four (2014) hold for Percolate? I’d say this is the year we fully establish ourselves in the market. We’ve learned enough (both over the last three years of the company and the course of our careers), to know definitively that we are solving the number one challenge in marketing: How to create engaging, relevant content on a continual basis without throwing an unlimited amount of money against the problem. We also know that we have built the best product and team to solve the problem, so this year is about making sure everyone else knows those things, as well as continuing to bring top-tier service and features to our clients day-in-and-day-out.
Finally, the last note here is a gigantic thank you to all our clients, both new and old. Their support, guidance, and ideas, have really driven our product, and more broadly business, through the last few years. It’s a cliche to say that without clients you don’t have a company, but it’s also very true. So, to all of you who are reading this, thanks for all the support. We wouldn’t have made it this far without you and it’s our commitment to continue to go above and beyond expectations (surprise and delight as Kiva, our VP of Sales likes to say). Keep being awesome.
I really like this article on the closing of graffiti mecca 5 Pointz (I’m a huge graffiti fan in case you weren’t aware) and how maybe it’s not such a bad thing. It’s mostly quotes from graffiti artist/author Jay Edlin. Here’s a snippet:
The materials used in both graffiti and street art are not intended with long-term viewing in mind. Spray paint, ink, or wheat pasted paper don’t stand the test of time when living outdoors. Graffiti involves creating the work completely on the spot. The most a writer brings with him to a wall is a sketch…The adrenaline felt by kids risking their liberty shows through in the work.
Street art is more calculated and safer. Unlike graffiti art, street art can be made partially in a studio or using a printer and laptop. Street artists tend to have studios and assistants, which is unheard of for illegal graffiti artists. I don’t see that much of a difference between street art and studio art. Pasting paper on a wall illegally, or in graff’s version, putting up stickers, just seems less cutting edge or risky than the old subway writers and illegal street bombers.
Two mediums employed by writers—acid etching on glass and plexi surfaces and massive tags occupying entire building sides done with paint-filled fire extinguishers—have no studio parallel. I like that. What’s disappointing is that all the art stars who started out in conventional graffiti have sacrificed their letter forms in favor of figurative work that has a much greater commercial upside.
A few weeks ago my friend Nick sent me a link to this epic 12-part series on Dennis Rodman’s basketball prowess. While Rodman has been in the news for some interesting reasons lately, prior to that he was a basketball player unlike any we’ve ever seen and this series sets out to prove the point. I was especially part of part 2(a)(i) on “Player Valuation and Conventional Wisdom,” which has a nice explanation on the battle between the eye-test and math-test in sports:
Yet chances are he remains skeptical of the crazy-talk he hears from the so-called “statistical experts” — and there is truth to this skepticism: a typical “fan” model is extremely flexible, takes many more variables from much more diverse data into account, and ultimately employs a very powerful neural network to arrive at its conclusions. Conversely, the “advanced” models are generally rigid, naïve, over-reaching, hubristic, prove much less than their creators believe, and claim even more. Models are to academics like screenplays are to Hollywood waiters: everyone has one, everyone thinks theirs is the best, and most of them are garbage. The broad reliability of “common sense” over time has earned it the benefit of the doubt, despite its high susceptibility to bias and its abundance of easily-provable errors.
For awhile now I’ve been fascinated with the idea of serendipity. I was actually going to write a book on the topic but had to shelve it when we started Percolate. (A choice I’m very happy with, as tech industry > book industry.) Anyway, the core idea of the book was going to be that serendipity is something you can both encourage and design for. Because of that I read anything I see that talks about serendipity and was pleasantly surprised by this post on Medium by Stef Lewandowski on the subject. I’ll let you read it yourself, he hits on a lot of the things I’ve been thinking about, but wanted to share a word he introduced me to: “Zemblanity.” As he explains, “Zemblanity, a word coined by William Boyd in his book Armadillo in the 1980s, is the polar opposite of serendipity.” He goes on to quote the book for the full definition:
So what is the opposite of Serendip, a southern land of spice and warmth, lush greenery and hummingbirds, seawashed, sunbasted? Think of another world in the far north, barren, icebound, cold, a world of flint and stone. Call it Zembla. Ergo: zemblanity, the opposite of serendipity, the faculty of making unhappy, unlucky and expected discoveries by design.
I’ve definitely found myself in zemblanity at times and I usually have to read my way out. It’s nice to have a word to use in case it happens again in the future.
I wrote a reasonably in-depth post over at the Percolate blog on my thoughts on the marriage of Google+ and Android. Here’s a snippet:
As we all know, Google has very publicly announced its intention to build G+ into a massive social platform at any cost. For awhile I think many simply nodded and metaphorically patted Google on the head, as if to say, “sure Google, whatever you say.” However, as Android has continued to grow, I’ve noticed something very interesting: It seems that Google’s plan to turn G+ into a platform is to hitch its wagon to Android. With over a billion users it’s hard to argue with that strategy.
Don’t mean to go Bitcoin heavy around here, but just ran across this article about how Bitcoin is basically an API for money and found it fascinating:
Traditional money does have APIs, but they are closed. You can program the merchant API of the VISA network if you are a trusted merchant. You can send and receive FIX messages if you are a stockbroker or exchange. Regular people, however, don’t even have APIs into their bank accounts, let alone the broader economy. Bitcoin changes all that by not only offering an API for accounts (wallets) and transactions, but also making that API available to everyone.
This idea, providing an API for something that doesn’t have one, is one of the more fascinating to me and a space I expect we’ll see lots of activity over the coming years. This, more or less, is what the whole spime/internet of things/industrial internet is about: Giving things that couldn’t talk the ability to talk through APIs. Not surprisingly, I’m especially interested in what this means for brands and how they can build out their own APIs. A few years ago I wrote about Starbucks APIs and, in a lot of ways, we think about Percolate as providing a similar interface for brands by codifying it into the system and making it available to consume via API.
So I’m on a pretty good blogging role, but they’ve all been quite serious. So, to celebrate Friday, and a 5-post week, here’s an excerpt from the New Yorker’s New Year’s Resolutions for an Anteater:
That’s right, you guessed it, I’m gonna eat a shit ton more ants.
I’m gonna eat them off a tree.
I’m gonna eat them off a coconut.
I’m gonna eat them off one of those classy, slanted desks from an antiques shop.
I’m gonna eat them off a globe, off a paperweight, off a ship in a bottle.
I’m gonna eat so many ants, you would think it’s what I’ve been put on Earth to do, just Hoover up ants like the weirdest thing in the world.
It’s like God was like, “Well, I think I overdid it with the ants.” And then had the idea to send some insane, bulky creature down to take care of them. And that’s me.
I never finished Taleb’s Black Swan, but I vividly remember a point from the opening chapter about what would have happened if a senator had pushed through legislation prior to September 11th to force all airlines to install locked cockpit doors. That person would have never recieved attention or recognition for preventing an attack, since we never would have known:
The person who imposed locks on cockpit doors gets no statuses in public squares, not so much as a quick mention of his contribution in his obituary. “Joe Smith, who helped avoid the disaster of 9/11, died of complications of liver disease.” Seeing how superfluous his measure was, and how it squandered resources, the public, with great help from airline pilots, might well boot him out of office . . .
I was reminded of this as I was reading Tim Harford’s Adapt and this point about how we interpreted the US domination of the first Gulf War:
Another example of history’s uncertain guidance came from the first Gulf War in 1990–1. Desert Storm was an overwhelming defeat for Saddam Hussein’s army: one day it was one of the largest armies in the world; four days later, it wasn’t even the largest army in Iraq. Most American military strategists saw this as a vindication of their main strategic pillars: a technology-driven war with lots of air support and above all, overwhelming force. In reality it was a sign that change was coming: the victory was so crushing that no foe would ever use open battlefield tactics against the US Army again. Was this really so obvious in advance?
While I don’t agree with Paul Krugman’s Bitcoin is Evil post from the weekend, his next post on Bitcoin did include this nugget I had never considered:
It occurs to me that part of the disconnect is that Bitcoin solved a major technical problem, one that people had been thinking about for about 20 years, and we nerds just can’t believe that it doesn’t also solve an economic problem. The technical problem is double spending–if I have some digital money, it’s easy enough to verify cryptographically that it’s real, but if I give it to you, how can you tell that I haven’t also given it to someone else? Until Bitcoin, the answer was to have a bank that knew which coins were valid, so you’d present my coin to the bank, which would check its database and if it’s valid, cancel it and give you a new one. Bitcoin has its decentralized blockchain which is a very clever recasting of the problem so that the state of the “bank” is whatever the majority of bitcoin miners agree that it is. Getting enough of the miners to agree is known as the Byzantine Generals problem, and has a technical history of its own.
As simple as it seems, splitting out the technical achievement from the economic one is a really interesting way to think about it. I haven’t really spent enough time thinking about Bitcoin to have a strong opinion about it specifically, but I do think the idea of a crypto-currency not attached to a specific nation is something bound to happen. In a way, I feel like Bitcoin and Google Glass have a lot in common: Early experiments in form and style that signal what’s to come.
A few weeks ago I saw Malcolm Gladwell speak at an American Express OPEN event about entrepreneurship and his new book, David & Goliath. As part of the talk he mentioned while entrepreneurs are often viewed as financial risk takers, their greatest skill is often their ability to take social risks. Here’s BusinessWeek describing an article of his from 2010 (the full New Yorker article is behind the subscription wall):
While entrepreneurs want to minimize their financial risk, they’re often more willing to take social risks. During the housing bubble, people thought Paulson was crazy — including the people on the other side of his trades. Sam Walton, another of Gladwell’s examples, borrowed money from his in-laws rather than go to a bank. The willingness to risk reputation and social standing is “just another manifestation of their relentlessly rational pursuit of the sure thing,” he writes.
Anyway, I was reminded of the idea while reading this short piece about some research on the effect of informality on power. Essentially we see non-conformity as a sign of status:
Silvia Bellezza, a doctoral candidate at Harvard Business School, and Francesca Gino and Anat Keinan, two professors there, first studied the link between accomplishment and informality. They found that scholars who dressed down at an academic conference, eschewing blazers for T-shirts, had stronger research records, even controlling for age and gender.
Of course this kind of goes against Gladwell’s point, which suggests that the hardest part is the non-conformity … So not sure what it proves. But it’s interesting.
Just posted something new over at the Percolate blog that I thought might be worth sharing here. It’s my four tips for building community based on what I’ve learned from this blog (a community I’ve let lapse) and likemind. I’ll let you read the whole thing over there, but here’s point number 2, respond to everything and everyone:
This is something I (used) to do on my blog and with likemind and believe it had a huge impact. Real communities need to feel connection and your job is to be at the center of that. To make that happen everyone needs to believe there’s a real person on the other end. For likemind that meant emailing back every single person who signed up for the mailing list anywhere in the world. This started lots of conversations and generally let people know this wasn’t just another networking event.
I’m a really big fan of security analyst/guru/cryptographer Bruce Schneier. I’ve been reading his blog for years and actually got a chance to meet him in November at a talk he did for a very small room of us on the NSA and just about anything else anyone wanted to talk about. Schneier is one of the people Edward Snowden allowed access to his documents, which obviously gives him a particularly interesting point of view on the subject. His basic take was best summarized in three statements: (1) This isn’t overly surprising and won’t be going away anytime soon, (2) the very best thing that happened out of all this is that the private companies involved have been exposed and some, like Cisco, have seen their business fundamentally hurt, and (3), everything else aside the one thing to know about everything the NSA was/is doing is that it doesn’t work. The last is obviously the most damming (and Schneier is definitely not the only one saying this). This method of collecting everything with hope of finding something just doesn’t work as well as good, old-fashioned, detective work.
Interestingly I was talking about the Snowden/NSA stuff with a friend from DC who mentioned that the story hadn’t gotten a ton of coverage there (as compared to government shutdown or Healthcare.gov) because it’s perceived as an issue people don’t really have a problem with. Basically we have seen over and over again that we’re willing to throw away liberties for our “freedom” and to fight “terrorism.” Not much to say on this one, just an interesting take.
Finally, and actually the real point of this post, was to share two interesting quotes from an interview Schneier did with Motherboard. The first is about our general perception of what’s secure and what’s not:
Probably the biggest problem with the public’s perception of security is that things are secure as a default. We see this a lot in the voting industry. The voting machine companies will come up with an internet voting machine or electronic voting machine and the onus will be on the security company to prove that it’s broken. It’ll be assumed secure, and that’s just nonsense. When you see a new system, you have to assume it’s insecure, unless you can prove it’s secure. The public perception is reversed. “I have a door lock, it’s secure unless you show me you can break it.” That’s not right—it’s insecure unless you can show me that it is secure.
The second is on the sort of security threats Schneier finds most threatening:
I’m most worried about potential security vulnerabilities in the powerful institutions we’re trusting with our data, with our security. I’m worried about companies like Google and Microsoft and Facebook. I’m worried about governments, the US and other governments. I’m worried about how they are using our data, how they’re storing our data, and what happens to it. I’m less worried about the criminals. I think we’ve kinda got cyber-crime under control, it’s not zero but it never will be. I’m much more worried about the powerful abusing us than the un-powerful abusing us.
Consider this part of an early New Year’s resolution to blog more (I really am going to make a run at it in 2014). Anyway, over the holiday break I, along with many others I’m sure, was having a conversation about Healthcare.gov. I mostly mentioned all the stuff I wrote a few months ago (basically that the things that ruined the project seem to be all the regular stuff — scope creep, too many players — that ruins projects), but I also talked a bit about my disappointment with the media’s reporting of the story. Specifically, the inability to do any serious technical reporting.
The New York Times had the deepest reporting I read and that didn’t come close to actually explaining what went wrong. The story included laughable (to technologists) lines like this: “By mid-November, more than six weeks after the rollout, the MarkLogic database — essentially the website’s virtual filing cabinet and index — continued to perform below expectations, according to one person who works in the command center.” While I understand not everyone is familiar with a database, to call it a virtual filing cabinet and index only says to me that the author has absolutely no idea what a database is.
The point isn’t to pick on the Times, though. Rather it’s just to point out that as technical stories continue to pile up (NSA and Healthcare.gov were amongst the biggest media focus areas of the last three months), we’re going to have to get better at technical reporting. That I still haven’t read a decent explanation of what went wrong technically seems, to me at least, as a major disservice and a dangerous signal for society’s ability to keep up with technical change.
I wrote a little post over on the Percolate blog about Android and how they handle sharing. A snippet:
Overall I’ve been very impressed, but the point of this isn’t to do a review of iOS versus Android (specifically 4.3 Jelly Bean). That seems useful to do at some point, but for now I want to talk about “intents”. This is the function that allows one application to pass you to another for a specific action. The place you see this most is in the share intent, which allows you to hit share in any application and have access to all the other apps you have installed that you might want to share that piece of content on.
This, for me, makes Android feel a lot more social than iOS, which requires each application to hard-code in their sharing functionality (except for the Facebook and Twitter integrations which happen at the app level). This is awesome both from a user experience standpoint (I don’t have to copy and paste anything) as well as a developer standpoint (if you’re building apps you don’t have to make decisions on which platforms to put in/leave out and you can easily register your app as a share service and make it available inside other apps).
Read the whole thing.
Meant to post this last week, but didn’t get to it. Felix Salmon wrote a great post on how wine is one of the few things in the world you can buy for happiness. I’m fascinated by stuff like this:
The more you spend on a wine, the more you like it. It really doesn’t matter what the wine is at all. But when you’re primed to taste a wine which you know a bit about, including the fact that you spent a significant amount of money on, then you’ll find things in that bottle which you love. You can call this Emperor’s New Clothes syndrome if you want, but I like to think that there’s something real going on. After all, what you see on the label, including what you see on the price tag, is important information which can tell you a lot about what you’re drinking. And the key to any kind of connoisseurship is informed appreciation of something beautiful.
This is the messy part of branding. All those factors play into how we feel about brands, products, and just about everything else.
This critique of Zimbardo’s famous Stanford Prison Experiment is really fascinating. Basically the author, who writes intro to psychology textbooks, suggests that the experiment was flawed because it urged students to act in the way they thought typical guards and prisoners would act. Here’s an excerpt that captures it pretty well:
In a nutshell, here’s the criticism, somewhat simplified. Twenty-one boys (OK, young men) are asked to play a game of prisoners and guards. It’s 1971. There have recently been many news reports about prison riots and the brutality of guards. So, in this game, what are these young men supposed to do? Are they supposed to sit around talking pleasantly with one another about sports, girlfriends, movies, and such? No, of course not. This is a study of prisoners and guards, so their job clearly is to act like prisoners and guards—or, more accurately, to act out their stereotyped views of what prisoners and guards do. Surely, Professor Zimbardo, who is right there watching them (as the Prison Superintendent) would be disappointed if, instead, they had just sat around chatting pleasantly and having tea. Much research has shown that participants in psychological experiments are highly motivated to do what they believe the researchers want them to do. Any characteristics of an experiment that let research participants guess how the experimenters expect or want them to behave are referred to as demand characteristics. In any valid experiment it is essential to eliminate or at least minimize demand characteristics. In this experiment, the demands were everywhere.
I find stuff like this really interesting. I think most research is flawed in that it asks people questions they aren’t really prepared to answer and in turn forces them to come up with a conclusion. I thought about this a lot when I made Brand Tags and people were asking me to put up logos that no one had seen before so they could get feedback. I would always argue that this was measuring brand perception and if no one knew your brand they would just comment on your logo, which isn’t particularly helpful. Brands, ultimately, are the sum total of all the experiences one has and no one ever experiences one by just seeing a logo on a blank page. They hear about it, see it on a shelf next to another product, or any number of other contextual clues. Obviously this situation is pretty different, but I think it’s part of a very broad mistake research makes in not controlling for context (or lack thereof).
This Ars Technica story of some malware that can transmit itself even when all the obvious transmission vehicles (power, Bluetooth, Wifi) has been removed is mind-boggling:
Ruiu said he arrived at the theory about badBIOS’s high-frequency networking capability after observing encrypted data packets being sent to and from an infected machine that had no obvious network connection with—but was in close proximity to—another badBIOS-infected computer. The packets were transmitted even when one of the machines had its Wi-Fi and Bluetooth cards removed. Ruiu also disconnected the machine’s power cord to rule out the possibility it was receiving signals over the electrical connection. Even then, forensic tools showed the packets continued to flow over the airgapped machine. Then, when Ruiu removed internal speaker and microphone connected to the airgapped machine, the packets suddenly stopped. With the speakers and mic intact, Ruiu said, the isolated computer seemed to be using the high-frequency connection to maintain the integrity of the badBIOS infection as he worked to dismantle software components the malware relied on.
Last weekend I, like many others, read the New York Times story about the troubles with Healthcare.gov with great interest. The project was marred with things that any of us who have developed on the web have experienced working on a digital project with a launch date: Moving deadlines, late specs, different parties with different interests, and an ever-expanding scope.
The thing that was most surprising wasn’t that any of these things are at all odd, it was in fact how familiar they all sound. Take this, for instance:
Deadline after deadline was missed. The biggest contractor, CGI Federal, was awarded its $94 million contract in December 2011. But the government was so slow in issuing specifications that the firm did not start writing software code until this spring, according to people familiar with the process. As late as the last week of September, officials were still changing features of the Web site, HealthCare.gov, and debating whether consumers should be required to register and create password-protected accounts before they could shop for health plans.
As I was walking down Broadway a few days later I had a conversation with another Percolator
about why it was taking so long to finish construction on the street. If you’ve spent any time in New York (or just about anywhere else) you’ve wondered how a public works project could drag on for the seemingly endless amount of time it does. But then I started to think about Healthcare.gov and how easy it is, relatively, to build digital things instead of physical things. Assuming those same issues happen on the group (scope creep, competing interest groups, etc.), for the first time I felt like I could understand what was going on. Then when you start to layer on physical accessibility laws (ramps, etc.) and the fact that you can’t launch an alpha staircase (three stairs instead of ten), it all became pretty clear.
Now this isn’t to say there’s an excuse and we shouldn’t be able to complete these projects more efficiently, but at least I could see where the time goes (and feel grateful that I a) don’t make things that involve digging up the street and b) work in a world where we don’t have to deal with the nonsense).
Matthew Yglesias has a short little article about how J.C. Penny is killing wifi in their stores, one of the things Ron Johnson put in place during his very short tenure:
I can think of no better example of how Ron Johnson destroyed J.C. Penney than the company’s slightly ridiculous plan to offer free Wi-Fi in all its stores. That this was a bad idea is not the reason the store’s been struggling. But the fact that Johnson couldn’t see that this simply isn’t something his customers would have any real desire to take advantage of spoke volumes about the strategic errors happening in Penneyland.
I’m not sure this was such a stupid move by Johnson. Speaking to a guy at the American Marketing Association conference in New Orleans last week, he made the point that in many of these giant stores (he used to work at Target), the cell coverage is so bad that wifi is the only way to get coverage and potentially do something interesting with customers’ mobile phones in store. If we assume that mobile research will be an important part of buying in the future then it might turn out they’ll just have to go back and reinstall all that wifi anyway.
I’m incredibly proud of this blog post by James OB, one of the engineers at Percolate, about why he likes the engineering culture at the company. The whole thing is well worth a read, but I especially liked this bit:
The autonomy to solve a problem with the best technology available is a luxury for programmers. Most organizations I’ve been exposed to are encumbered, in varying degrees, by institutional favorites or “safe” bets without regard for the problem to be solved. Engineering at Percolate has so far been free of that trap, which results in a constantly engaging, productive mode of work.
My friend Philip James is riding his motorcycle around the world. He’s just passed through Mongolia and his account is amazing.
However, this is what I’m here for, and I weave my way slowly across the countryside. At times the going is fast, and I follow nomad tracks across the hillsides, at other’s it’s slow going as I navigate the bike over rocks, through sand, and deep mud. There are ancient valleys, mountain passes, and lots of rivers. Some have crude private bridges crossing them, other’s dilapidated bridges that have fallen into disrepair and seeming disuse. I either cross these at my own peril, or ride up and down the river bank looking for the widest and shallowest place to ride across. As I’m solo, I can’t take as many chances as groups can, and a spill in deep water would ruin all my gear, and maybe possibly even the bike’s engine. And so, when the river looks dicey, I stop, get off the bike, and wade across. My boots come up to nearly my knees, but the water typically washes over them. That’s fine, as I can easily ride through water two feet deep. Much higher and the wheels are fully submerged, and as the water comes over the seat, the air intake, exhaust and the bike’s main computer are all dangerously close to becoming submerged. With these crossings I spend much of the next week with sodden feet.
There is an interesting little article on innovation and Picasso over at Medium. Basically it suggests that radical innovation happens when the market is most receptive to it:
Sgourev’s analysis of Cubism suggests that having an exceptional idea isn’t enough: if it is to catch fire, the market conditions have to be right. That’s a question of luck and timing as much as it is of genius. The closest modern analogy to Picasso’s Paris is Silicon Valley in the early days of the dotcom boom, with art dealers as venture capitalists and entrepreneurs as artists.
This reminded me a lot of Duncan Watts’ research on influence on the web, where he concluded, “large scale changes in public opinion are not driven by highly influential people who influence everyone else, but rather by easily influenced people, influencing other easily influenced people.” In fact, Watts also used a fire to explain the dynamic in his conclusion:
Some forest fires, for examples, are many times larger than average; yet no-one would claim that the size of a forest fire can be in any way attributed to the exceptional properties of the spark that ignited it, or the size of the tree that was the first to burn. Major forest fires require a conspiracy of wind, temperature, low humidity, and combustible fuel that extends over large tracts of land. Just as for large cascades in social influence networks, when the right global combination of conditions exists, any spark will do; and when it does not, none will suffice.
The challenge, of course, as Watts points out in his research, is that consistently finding and predicting this environment is all but impossible. We may understand some of the factors, but the situation is just too complex to be anywhere near accurate. As much as we give credit to innovators who capture those radical moments, we also need to appreciate the role of luck in their success.
Good short article from Wages of Wins on the economics of doping in sports. On the A-Rod situation:
You may find yourself arguing: isn’t it costly for a player to sit out the games? If A-Rod is denied the 2014 season, he will give up some income, right? True–he might. But, the decision to break the rules and take the banned substances is really made based on the player’s expected benefits weighed against the expectedcosts. Nobel Prize winning economist Gary Becker introduced this principle in his paper Crime and Punishment: An Economic Approach (1965). The expected costs are equal to the penalty (i.e., the game suspension or ban) multiplied by the probability of getting caught and the probability of being punished (having the penalty applied). So, even if the 2014 ban holds, A-Rod will still have three years on his contract at $61 million (plus incentives for various homerun milestones)! From his public comments one gathers A-Rod is not expecting the penalty to be applied in full. So, no matter how you slice it up, A-Rod’s behavior–though illegal–was rational economically speaking. And, that is why tomorrow’s PED headline will be old news.
I’m a sucker for all quotes about how one thing or another was going to ruin society. Most of these are about media, but I couldn’t help myself when I saw this one about curiosity from an article on The American Scholar:
Specific methods aside, critics argued that unregulated curiosity led to an insatiable desire for novelty—not to true knowledge, which required years of immersion in a subject. Today, in an ever-more-distracted world, that argument resonates. In fact, even though many early critics of natural philosophy come off as shrill and small-minded, it’s a testament to Ball that you occasionally find yourself nodding in agreement with people who ended up on the “wrong” side of history.
I actually think it would be pretty great to collect all these in a big book … A paper book, of course.
I really love this quote which came from an article Umberto Eco wrote about Wikileaks by way of this very excellent recap of a talk by the head of technology at the Smithsonian Cooper-Hewitt National Design Museum:
I once had occasion to observe that technology now advances crabwise, i.e. backwards. A century after the wireless telegraph revolutionised communications, the Internet has re-established a telegraph that runs on (telephone) wires. (Analog) video cassettes enabled film buffs to peruse a movie frame by frame, by fast-forwarding and rewinding to lay bare all the secrets of the editing process, but (digital) CDs now only allow us quantum leaps from one chapter to another. High-speed trains take us from Rome to Milan in three hours, but flying there, if you include transfers to and from the airports, takes three and a half hours. So it wouldn’t be extraordinary if politics and communications technologies were to revert to the horse-drawn carriage.
This week’s NYTimes Magazine economics column is all about timesheets. While the whole thing is worth a read, I found the history of timesheets especially interesting:
The notion of charging by units of time was popularized in the 1950s, when the American Bar Association was becoming alarmed that the income of lawyers was falling precipitously behind that of doctors (and, worse, dentists). The A.B.A. published an influential pamphlet, “The 1958 Lawyer and His 1938 Dollar,” which suggested that the industry should eschew fixed-rate fees and replicate the profitable efficiencies of mass-production manufacturing. Factories sold widgets, the idea went, and so lawyers should sell their services in simple, easy-to-manage units. The A.B.A. suggested a unit of time — the hour — which would allow a well-run firm to oversee its staff’s productivity as mechanically as a conveyor belt managed its throughput. This led to generations of junior associates working through the night in hopes of making partner and abusing the next crop. It was adopted by countless other service professionals, including accountants.
I don’t know that I have a lot more to add than what Russell wrote here, but I like the way he described the challenge of describing something that is simultaneously happening the past and present (in this case, describing a soccer replay):
This is normally dismissed as typical footballer ignorance but it’s better understood when you think of a footballer standing infront of a monitor talking you through the goal they’ve just scored. They’re describing something in the past, which also seems to be happening now, which they’ve never seen before. The past and the present are all mushed up – it’s bound to create an odd tense.
I spend a lot of time thinking about building products (and, more specifically, building teams to build products). With that in mind I really enjoyed this rc3.org post about the seven signs of a dysfunctional engineering team, especially this bit about building tools instead of process:
Preference for process over tools. As engineering teams grow, there are many approaches to coordinating people’s work. Most of them are some combination of process and tools. Git is a tool that enables multiple people to work on the same code base efficiently (most of the time). A team may also design a process around Git — avoiding the use of remote branches, only pushing code that’s ready to deploy to the master branch, or requiring people to use local branches for all of their development. Healthy teams generally try to address their scaling problems with tools, not additional process. Processes are hard to turn into habits, hard to teach to new team members, and often evolve too slowly to keep pace with changing circumstances. Ask your interviewers what their release cycle is like. Ask them how many standing meetings they attend. Look at the company’s job listings, are they hiring a scrum master?
One of the thing I try to communicate to the whole company is that it’s everyone’s responsibility to build products. Products are reusable and scalable assets. While process is a product, tools are (almost always) better. I am working on a long and sprawling explanation of all my product thinking stuff, but that will have to wait for another day.
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