Monday, August 31, 2009

Running a business and blogging is usually a zero-sum game

While there are definitely exceptions to the rule -- exceptions whom I would love to emulate -- in general it seems to be true that most serious executives at Silicon Valley startups have very little time for blogging. My personal experience is that it's also quite difficult to blog about the most interesting topics raised by startup life. Either the item is somehow closely tied to some proprietary insight or information, or the item will complicate a relationship with a major partner. Since we have *many* major partners at Zvents throughout the local Internet space, I am particularly sensitive to the latter.

I literally have at least a dozen topics of both business neutrality and general interest stuck on my bulletin board to get onto Onotech in the next few months. Perhaps I'll have time, or perhaps it will be a few months yet before I find an occasion to write again. In any case, rest assured that things are going very well at Zvents in the meantime.

Sunday, April 12, 2009

Obama grandstanding while Rome burns

You might have heard from the President that an historic opportunity exists today to refinance your mortgage. Rates are low, the sun is shining, and the green shoots of recovery are just around the corner.

In extensive prepared remarks, the most powerful man on earth took a break from puppy-choosing to inform the American people of the following:
"So the main message that we want to send today is, there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates. That is money in their pocket. And we estimate that the average family can get anywhere from $1,600 to $2,000 a year in savings by taking advantage of these various mortgage programs that have been put in place."
Let's take the high side of President Obama's numbers. 9 million people * $2000 equals 18 billion dollars in annual savings.

So in the midst of the biggest financial crisis of the past eighty years, the President of the United States just expended a precious media outreach opportunity to talk about a program with a maximum impact of about 3/2000ths of the annual American economy of $13 trillion. I hate to be so cavalier with billions, but that's not even a drop in the bucket.

This is insane.

Meanwhile public and steath bailouts such as a $300 billion loan guarantee to Citibank go undiscussed by the President. The increasingly dubious and never-ending AIG bailout has still not been adequately explained to the public by any public official, much less the President.

Talk about seriously misplaced priorities.

I know that Obama has only been in office about eighty days. I know that he's dealing with dozens, if not hundreds, of critical activities. But by any rational measure, the financial crisis is #1 on his list -- and probably #2,3,4,5 and 6 as well. It's that important.

So far he's blowing it. Come on, Mr. Obama. I voted for you because I expected better than this. If I wanted a crony-supporting, opaque, denial-ridden bailout of giant financial companies at the expense of the taxpayer and the common man, I could have voted for a Republican.

The American people deserve better than being patronized on the one hand and pillaged on the other. May we please have more change and less hope?

Sunday, March 22, 2009

Facebook vs. Internet: Advantage, Facebook

Jesse Stay's excellent post on the search potential of Facebook's Lexicon has inspired me to put down a few quick thoughts on Facebook's nearly unlimited potential to capture the future of what John Battelle calls the "database of intentions".

Google's extraordinary accomplishment is that they used superb statistical analysis to make some vague sense out of the complete mishmash that makes up the flat-text Web. But while that accomplishment is considerable, at the end of the day, they're still dealing with mush.

Facebook's great opportunity is that everything within Facebook is structured; and increasingly, users express their intentions against this structured data at scale in a way that can be very productively mined -- for product improvement, for user retention, for advertising. For insight.

Riddle yourself this: You have 200 Facebook friends. They are all pretty active. Does your FB feed actually show every single event from every single one of them? No, it doesn't. FB is algorithmically determining what is most interesting to you - dynamically - based on how much attention you pay to what those users do, and how you interact with them. Facebook knows how much you care about each of your friends. It knows whether you pay more attention to people near or far, to men or to women, to people you work with, went to high school with, or went to college with. It knows because you explicitly describe all those relationships, in a way that Google can never grasp no matter how world-beating its science and how vast its server farms.

Or consider the Lexicon graphs that Jesse highlights in his post. Google Trends can handily generate one of those for you from their painstakingly de-mishmashed dataset. But they can't tell you the demographic breakdown of that interest, because they don't know who's male and who's female. Nor do they know whether that interest is coming from people directly associated with the topic in question; for instance Ohio State, my alma mater.

Here's the Ohio State Lexicon graph, which I have annotated to show the precision of Facebook's read on the importance of a topic:
facebook lexicon "ohio state" - current version
Here's the term 'Football' as a proxy from the new Lexicon, which doesn't yet allow analysis of arbitrary search terms.
facebook lexicon "football" - new version
As you can see, FB could allow you to slice and dice the 'Ohio State' search by any number of associations -- male vs. female, by age, and whether the person had attended Ohio State. Google can't do that. No one else can do that, because no one else has assembled a gigantic graph of defined and structured entities within which users apply their attention and annotation.

The implications for local search alone boggle my mind
- that's food for another post.

It's worth noting that Lexicon is really, really slow right now. My hat is off to FB for making it work at all -- I assume that some implementation of Cassandra is behind the current Lexicon, and one reason they may not be allowing open-text searching in the new Lexicon is because while they're pushing the envelope developing it, they're crunching big batch jobs on a limited set of terms in Hadoop for the more sophisticated analysis presented there. Zvents has developed some pretty sophisticated internal analytics based on Hypertable, and I'm familiar with the challenges that this sort of slice-and-dice presentation presents -- they are considerable.

Google has taken the statistical analysis of flat text about as far as it can go. The question is, what next? Powerset attempted one approach, which was the semantic analysis of that same flat text. We'll see whether Microsoft and Powerset can make a go of that - the jury is definitely out whether it adds value in a computationally and commercially tractable manner. But in the meantime, my bet is on Facebook -- because the information potential of a structured system is vastly greater than that of a flat corpus, and it is far more tractable to parsing.

Internet, watch out. Here comes Facebook.

Monday, March 16, 2009

Reality Check of the Day: China v. USA

One of my great realizations from living in the UK for a couple years is just how utterly the U.S. media lacks any perspective on American military actions abroad. The 'abroad' is completely redundant, of course - unlike every other country on earth, aside from our distant independence and single civil war, the U.S. military has NEVER had military action that wasn't abroad.

This piece in Newsweek caught my eye:
"The confrontation last week between a U.S. ship and five Chinese naval craft was just the latest of many low-grade military clashes in the South China Sea, the site of numerous territorial disputes. It was eerily similar to the "Hainan Island" incident in 2001..."
But the punch line was the ending quote:
"This confrontation had been preceded by increasingly bold behavior on the part of People's Liberation Army ships and planes. "They seem to be militarily more aggressive," said Obama's new National Intelligence director, Dennis Blair..."
Um. Yeah.

For the reality-based coalition, here's a handy world map showing the location of the United States, China, and the 2001 and 2009 incidents between the U.S. and Chinese military:


Who, exactly, is being "militarily more aggressive"?

Monday, March 02, 2009

Greenspan 2004: Your house will cover your personal debt

I randomly found my grumpy notes on this whistling-past-the-graveyard gem from Sage Alan in February 2004, and thought it was well worth posting:

The finances of American households are in generally good shape even though consumers have increased their debt and bankruptcy filings have surged, the Federal Reserve chairman, Alan Greenspan, said yesterday.

In a speech to the Credit Union National Association in Washington, Mr. Greenspan said that an extended period of low interest rates and extra cash from mortgage refinancing had given borrowers flexibility to better manage their debts...

Consumer debt reached a record $2 trillion in December, according to the most recent figures from the Federal Reserve. That includes credit cards and car loans, but not mortgages...

[Greenspan] said that American households own more than $14 trillion in real estate assets and that mortgage refinancing and the rise in home values have helped to bolster consumer spending in economic hard times as well as better periods.

"Over the past two years, " he said, "significant increases in the value of real estate assets have, for some households, mitigated stock market losses and supported consumption."

Boy, he sure got that one right, didn't he?

Wednesday, February 11, 2009

Geography is Destiny: Religion

This fascinating images came my way via Paul Kedrosky:


I read Jared Diamond's "Guns, Germs, and Steel" a few years back, and am also familiar with Edward O. Wilson's population biology. The two have led me to believe that climate and geographic circumstance have a huge impact on social outcomes. And so when I look at that chart, I see that in the tropics, religion is common; and in the temperate zones and in the northern regions, it is far less common.

This does not have to be a direct causal relationship. There is a lot more poverty, disease, and tragically shortened lifespan in the tropics. There is more civil war in the tropics. But it can certainly be an indirect causal relationship, as people wracked by suffering brought about in part by the effects of their climate turn to the solace of the hereafter.

What a fascinating image.

Tuesday, February 03, 2009

Euro Update: Bond spreads widen

I just got back from a business trip to Europe, and I heard a lot of confirming evidence that the Euro is headed for serious trouble. I think that this also means that Switzerland is headed for serious trouble, because like Iceland, its finance sector is too large compared to its GDP; and without the Euro to flee to, a collapse might occur.

Here's the Bloomberg article via Clusterstock on BlackRock betting that the Euro will stay together.
Prices now reflect odds of between 10 percent and 20 percent that the euro-region will disintegrate following a series of credit downgrades from Standard & Poor’s this month, according to BlackRock. The difference in yields, or spreads, between the three nation’s 10-year bonds and those of benchmark German securities was close to the widest today since the euro’s debut in 1999.

“You have got to ask yourself at what point this becomes ridiculous,” Scott Thiel, head of European fixed income in London at BlackRock, which manages $1.3 trillion, said in an interview Jan. 23.
Actually I have to ask myself when it becomes inevitable, Scott.

That would be the BlackRock whose stock has fallen from 249 to today's 109, BTW.

Monday, January 26, 2009

Goodbye, Euro: Jim Rogers is 7X too optimistic

My top prediction for 2009 is the collapse of the Euro. I think it is a near certainty that within three years, the Euro will no longer exist in any real form, though its shadow may linger on.

The reason is simple: A currency is backed by a social contract ("the full faith and credit of the United States government", for instance) and there are wildly disparate social contracts within the Eurozone. As modern and emerging economies come under great stress, they will react differently according to their own social contracts -- and they will diverge, breaking the Euro. I broadly consider Europe to consist of four different social contracts:

1) Modern social democratic states: Germany, France, Belgium, Denmark
2) Feudal profitable states: Italy and Greece - ungovernable, despite being productive; little of their commerce is captured in their tax base, and their social contract is written at the local and regional level, not as a true nation-state
3) Emerging states with aspirations: Poland, Czech, Hungary
4) "Failure to launch" states: Ireland and Spain, whose economies rocketed from penury to prosperity over the past 20 years, but who are now being exposed as children of the bubble.

A rare public claim that the Euro will break apart came from Jim Rogers today; but his suggestion that it will take 20 years is lengthy bordering on the ludicrous. The Euro has only existed for 10 years; if you think it's under threat now, why would you possible imagine that its remaining life is twice its history? I think that less than half is more likely, and an implosion during 2009 is genuinely possible. I am told by a reliable source that there is already divergence in the debt terms and pricing available for different Eurozone banks, reflecting the early stages of this process. This trend is something to watch closely.

Bizarrely, having created this crisis, America may continue to benefit in an enormous theater of the absurd; there's simply no other plausible choice as a global reserve currency than the dollar in the short term, so despite our foolish and spendthrift ways, the dollar will continue to strengthen.

Thursday, January 15, 2009

The problem with partial transparency

Kevin Drum posted an interesting piece about the somewhat creepy public mapping of California Prop. 8 donors:
This sort of thing has been possible for quite a long time, of course, but it was inherently limited in scope because of the time and money it took. Technology has changed that: it probably required little more than a few hours of coding to create a map that identified every Prop 8 donor in the state. And that map isn't only in the hands of the folks who created it. It's out on the internet where it's practically begging to be abused by some nutball... I remain a bit of a privacy crank who hasn't yet been reconciled to the inevitability of David Brin's "Transparent Society."
In demonstration of his point, one of his commentators posted an even more creepy follow-up:
I'm in San Diego, and went poking around my neighborhood. Its San Diego, so sure enough there's a a handful of 500 and 1000 donations by various folks. But, there is one very large one. I thought that odd, so I saw the guys employer, googled him and sure enough, he went to BYU. Now he might not be a [Mormon], but all signs point to yes. In other words, prop 8 passed because [The Mormon church] got its members in Utah and elsewhere to pony over large sums of money.
As a guy whose political donation history and incredibly detailed personal information can readily be found by Googling my name, this sends a shiver down my spine. We joke about 'cyber stalking' and Googling our dates, but a lot of new social infrastructure has yet to be created to make this emerging transparent society work.

Most particularly, the entire point of Brin's great and prescient essay is that a transparent society only works if it's bilateral. In addition to the searcher being able to see you, you can see the searcher. I would be a lot more comfortable with the ease of access to this information, if it was equally easy for me to see that Joe Smith at 123 Main Street, Anytown USA, has been doing hundreds of searches on people in a particular geographic area.


That searcher information is quite trackable today (by Google) but it isn't public without a lengthy and expensive process of law enforcement powers and subpoena or search warrant, whereas the Prop. 8 and other political donor information is both highly trackable and very public.

That lack of symmetry needs to be addressed for a transparent social compact to work.