Some thoughts on gun issues

I posted the following as a comment to my brother's comment about gun control. He's a boarder patrol agent. Basically he commented about how allowing guns (in the right hands) can save lives. He also argued that if you take guns away from most people only criminals will have them. As most of you know I love to shoot guns. I've shot all sorts of guns from pistols to an AR15. I think it's fun and a good way to enjoy some time with your friends. That being said, here's my comment to him.


"Alright, I've been hearing a lot about how gun control won't fix the problem. You know I like shooting guns and do believe that we should be able to own guns. Now, I think that there needs to be some level of gun control/additional checking before gun purchases are made but I'm not exactly sure what that is. Secondly, simply saying criminals won't follow the law isn't a suitable answer either because there's no completion of the thought. If criminals won't follow the law, why are they criminals in the first place? What do we need to do to eliminate their supposed need for the gun to commit said dubious act?

I believe that to truly eliminate (or greatly reduce gun violence) we need to address the root cause, gun control alone won't work. We have to address the reasons for the criminality. Those include, poverty, inequality, drug addiction, sale of drugs, unemployment, being a convicted felon and so on. All of these causes have significant interaction effects. You can't separate sale of drugs from drug addiction and drug usage is higher in impoverished areas. So, this indicates to me that we need to address the root cause issue behind poverty and drugs. The extralegal crimes related to drugs include things like murder over turf wars and the sort of activities you're involved with as a boarder patrol agent, smuggling, etc... We as a society have direct control over what is a legal and illegal drug. We have control over this - it's a matter of do what we consider the right thing to do about drugs.

The other obvious area we need to address is mental health, which has a different root cause than the others. Many people can't afford the mental health they need because we as a society don't value mental health very well and many insurance companies think it's a waste of time.

In my mind I think that if we want to address the true root cause behind gun violence we need to address poverty, drugs, and mental health. Unless you or anyone else for that matter, is willing to seriously consider fixing many of these issues, then gun control is one of the few options we have to address it. It's a failed option from the start because it's a band aid. In my opinion all gun advocates need to pull together and push for reform on those social issues I outlined to keep guns ownership legal as you think it should be. Otherwise we are doomed to repeat this sort of cycle."

Yes, this is something of a rant, but I think we need to really consider what we value as a culture and how we decide to address an issue like gun control. The events at Sandy Hook and other locations in the past 2 years around the world are horrible.

Patent threatening how websites protect users

I just found this article on Ars Technica about a patent troll, TQP, that threatens the very way encrptions occur on the internet. In fact, this patent based on the single picture, is extremely dangerous. The article claims that the company has sued hundreds of companies, including 100 in the past 12 months. This type of behavior needs to stop. Effectively this patent could be used against any website that uses even the most generic encryption method. The patent is based on a pretty generic frame work and likely is significantly overly broad.

Historically, I've had serious issues with many software patents especially when it comes to web services. This one looks incredibly bad and hasn't made it to any sort of trial yet. One of my problems with this patent is the fact that it uses a very generic "encryptor/decryptor" block, which as long as there's a counter and psuedorandom number generator involved in the method to use it, could be impacted. This seems like a rather logical method for transmitting and setting the encryption key.

I personally think that anything that targets a user ability to protect their data is the worst of the worst. In the world we live in today, exploiting something that was likely given to the general community without a second thought then a method to "apply" it, is wrong, because it was given to the general public to ensure our data was protected.

That's one of the most beautiful things about the open source movement. These technologies which can benefit users in many levels, business, personal, government and the interface between the three, are developed because they solve a problem for that community. In many cases these technologies are created by businesses, but by license mandate are required to be given to the community for free. Should this be considered a waste of money by the company creating it? Should they be able to make money off of it? No and Yes. Here's how they can make money off of the technology they give to the community: use it to provide secure services to your customers. If the customers are using a platform that you don't own, ensuring that they are able to access their information they are giving to you is in your best interest.

This is one of the reasons we need to support the EFF initiative to modify software patents. Check that out here: https://defendinnovation.org/

Apple and Quality

I know I'm not always the biggest Apple fan on here. But there's one thing I have to admit, they typically come out with a really well put together product. If they don't, they are fairly quick about providing a free solution - such as the case for the iPhone with the antennae issues. However, this version doesn't seem to be along the same lines. There's the issue with iOS maps, which is pretty terrible, but there's also another problem with the sapphire lens selected for the camera causes a purple tint and light flaring. Their solution is to simply point the camera away from the light and that this is normal behavior.

This type of quality issues in a product like this leaves a lot to be desired for some pretty obvious reasons. For a lot of people the cell phone is their only camera. I almost never take pictures, but when I do, it's on my cell phone. If the pictures are defective by "design" then this is going to be a huge problem. I'm sure that the Instagram filter won't look right when you add that to the picture as well.

I think that these two issues are starting to indicate a trend with Apple for the beginning of a decline in the perfectionism that most users associate with Apple products. To some extent it was never there the way people like to think that it was, but there was a lot of perfectionism that went into the designing and material selection for the phones.

You could argue that the tint is similar in defect type to the antennae issue, but I think this is different because the camera is such an integral part of the phone. Apple has been developing cameras for years whereas the antennae issue was related to a new skill set, an external antennae.

The next concern for Apple fans, is that the phone is their core product and they really dropped the quality in some ways. Without proper maps, the quality certainly suffers, users are used to the correct maps at a touch of a button, not seven. Will these issues prevent iPhone fans from buying this phone? No, I don't think so. I think it might push some people away if they were on the fence about getting the same phone, again. I think the larger risk is in the long term. If Apple continues to produce the same products but continues to have quality issues with some expected features on a phone then Apple will begin to lose customers in droves.

For the iPhone6 Apple needs to come out with a different feeling phone, if they do, any issues like camera or whatever will be masked by the fact that it's totally new. People will flock to it again. If Apple doesn't come out with a new feeling and has issues, I think that will give more people pause about the whole company. We're a year or two away from the iPhone6, so that may be premature. Customers and analysts aren't friendly to stagnating firms. Apple surely doesn't want to be in that group.

Apple v Samsung: iJury

As most of you are aware Apple crushed Samsung in it's suit. Every patent of Apple's was upheld and Samsung owes Apple just a touch over $1Billion. This is going to do a great deal to chill innovation. Many other people are commenting that these patents and the idea of copying isn't new and that Apple has stolen a great deal themselves. In one discussion with an author at the Urban Times, he seemed to argue that the theft of these ideas is more honest than copying and that Apple was a better company for doing so. Well, there's a major flaw in that idea, the theft of an idea is essentially copying the idea, the only difference is you act as if it was always yours and that you didn't copy someone else.

One author thinks that one billion is a small price to pay to be the second largest mobile manufacturer in the world. While I understand the thinking behind this, sure they copied a great deal from Apple and it only cost them a portion of what it could have cost. However, this is a short sighted view. The manner in which Apple has attacked Samsung isn't going to stop and will likely intensify. The ruling in San Jose wasn't the only ruling that came in yesterday. In Korea a judge ruled that both companies were infringing each other and banned both products from being imported to the country. The judge also found that Samsung didn't copy and in the UK a judge also said that Samsung didn't copy and wasn't cool enough to be confused with an i Anything - ordering them to post it on their website.

The idea that Apple's design for the phone's desktop being unique is a bit absurd. They simply changed the way the buttons looked, but there had been interfaces that were extremely similar for years. I had a Sony Cliq PDA in 2001 and 2002 and some of the way that product looked was similar to the iPhone. Apple repackaged things extremely well. Judge Koh did not allow Samsung to present all the information to the jury related to prior art, which certainly didn't help Samsung's case (Samsung released it to the public though).

The other major issue with this case is the idea that laypeople can really understand the issues with patents. They are difficult to understand, written in legalese and intended to be so broad that they can be interpreted in many different ways. I've read through several patents and they quite frankly are confusing and in many cases don't convey the information they are required to convey (how to manufacture or build whatever is patented).

For a patent to be valid it only has three conditions to meet: Novel, which means that nothing like it has been done before; Non-Obvious, which means that (originally) that an expert in the field wouldn't see this as a natural extension of previous work; now it must be non-obvious to a layperson; the final one is the possibility of industrial application, this means that the technology must be useful in some way. Many of Apple's patents do not meet the threshold for the first two, novel or non-obvious. Now of course people that disagree will argue that in hindsight these patents are obvious because Apple did such a god job at inventing them. I disagree primarily because many of the patents are reapplication of ideas from the computer to the smart phone.

I'm extremely worried about the future of innovation in light of this ruling. I think that there will be serious repercussions and whatever comes out of this will be terrible for consumers.

Finally check out this video discussing what Apple has invented:

Complexity and politics

I've been reading a book called "Rethinking the Fifth Discipline" which is something of a treatise on organizational theory and complexity. The Fifth Discipline, is about creating a learning organization. Where the organization has naturally built-in processes that encourage learning through challenging mental models. What's that mean? Well, anytime we approach a problem we have our own set ideas about what's right and wrong with the problem. This leads us to develop specific solutions based on that perspective. When working in an organization these frameworks, perspectives or mental models can lead to conflict. Developing a method of resolving differences in these mental models is paramount to allow a company to move forward.

One of the ways to resolve these differences is to expand everyone's perspective of the problem. To allow some of the scope to expand to generate a bigger picture. In other words, allowing people to see the forest for the trees. We know that we have a dead tree in the middle of our forest, and our actions to get that tree out may have negative impact on the rest of the forest. If one of the solutions was to burn down the dead tree, there could be some serious implications to the rest of the forest if we did that without really thinking about it. Working to resolve the differences may highlight the fact that we're in the middle of a drought right now and that burning that dead tree would likely cause the entire forest to go up. This of course would be the worst thing we could do.

This way of viewing problems has several names, including complexity theory and systemic thinking. I believe that we have a serious lack of system thinking in our government today. There are two areas that have struck me as the most obvious and these involve the courts. The first is the continued assault on women's rights in many different states. These state governments are slowly picking at pieces of reproductive rights of women when choosing to have an abortion or not. In some cases, the ruling is extremely narrow and seems to intentionally avoid looking at the full system of problems. The one shining light example against this is the ruling that has kept open a clinic in Mississippi. The judge realized that if this law was allowed to stand it would have closed the only legal clinic for abortions.

The other area that is a cause for concern is the recent PA ruling on Voter ID requirements. While on the face it seems like it's fairly straight forward. I mean why shouldn't there be a law requiring you to show a proper state ID, but then why isn't a voter registration card considered a valid ID? Couldn't this resolve the issue? The other factor that doesn't seem to be considered, is the systemic efforts to make it more difficult to acquire state ID throughout the country, such as Wisconsin closing DMV locations or reducing hours - by the way Wisconsin's voter ID law was ruled unconstitutional.

Through taking a systemic view the efforts in total indicate an effort to reduce or control the ability of the electorate to vote. While the law itself may make sense on the surface, viewing the entire system displays the total efforts and would indicate that a different ruling should be considered. This is the similar type of issue that there is with the Citizen's United ruling. With a very narrow focus and inability to look at the full system a ruling that has dramatically changed our political landscape is seen to make a great deal of sense.

The Philosopher CEO

In my group at work, we have been accused of having a group of philosophers and a group of doers. This is typically mentioned with some serious disgust. As if having a group of people thinking about how the business is run is a bad thing. I think part of it stems from the idea that this means that they aren't doing anything productive or value added for the company. The perception is incorrect of course. The "philosophers" are actually a process improvement methodology team that provides course development, course training, mentoring for Lean Six Sigma certification, continual guidance for projects in flight and manages projects themselves. There are only two of them. That's a tall order to be honest.

But the idea of a philosophy group really got me thinking. Would it be a bad thing to have a group that looks at the ethical, moral or sustainable behavior of the company? I lump sustainability in with the morality and ethical question, because in a lot of ways sustainability is not looking to be a social issue and is another way of looking at the ethics of recycling and energy usage. I've talked about morality and MBA's specifically in my last post. Singling out the MBA crowd might not have been the fair as there is no reason why engineers couldn't behave in unethical ways, there's no requirement for engineers to take ethics courses.

Why does this matter? Well, we've seen a huge number of seemingly unethical choices coming out of companies. In some cases they may have been selected in a harmless way. For example the new MacBook Pros have a glued on battery, the choice may have been made to reduce the amount of time it takes to secure the battery. Putting a fast acting glue on the battery may have accomplished this, while screwing in the battery would take more time. This selection could have been made without the consideration of the repairability or replacability for components within the laptop. However, since this is Apple I'm talking about here, I find this unlikely. The next question would be, was this choice unethical? From a sustainability perspective it could be construed in that manner, which iFixit does do just that. The computer also lost its environmental certification by using the glue and some of the other design characteristics. This design also continues with Apple's decisions to make it more difficult to upgrade or do anything with their product once you've bought. This increases the number of times you have to purchase their products and exasperates the throwaway culture of many other products.

Consumers are also starting to become more aware of the unethical behavior of companies. We've seen this with the recent banking scandals, we've seen this with the investigation into Foxconn and we're likely to see it moving forward in other sectors. We're starting to hear about more unethical behavior in the ag industries, in regard to their treatment of animals or in the case of Monsanto basically suing farmers when seeds of their crops land in their field. The increase in consumer awareness through the increased usage of social media and other social networking tools is going to significantly increase both information and disinformation about these topics.

It is likely that there will be an increase in the number of watch dog organizations in existence and more reliance on government agencies, like the Consumer Protection agency in the US now. The banks have argued for a long time that these regulations are unnecessary as they can regulate themselves. We do know that profit pressures can prevent ethical behavior and encourage unethical behavior. Perhaps it's time that every organization has an Internal Affairs organization similar to what the police have. I do not believe that these organizations are perfect and can become corrupt (or have the appearance of being corrupt), but I think that they can be useful.

Penn State is going to have to set up an organization like this. I think for the University this was going to be required for them to even have a chance at ever regaining their credibility. The records for that group need to be wide open for everyone to view. I think this type of office needs to be in any publicly traded company. It will ensure greater transparency, allow watch dog groups and consumers to choose the actual ethical companies and these groups would be auditable. This could be a certification process similar to ISO9001 (a manufacturing document control quality system), where the members of the team are given ethics training in a wide range of topics including morality and then are expected to train the employees of the company, CEO included.

By creating organizations such as this, companies can greatly clarify how their behavior is ethical and moral. Once several large companies create agencies like this other companies will be shamed into doing it as well. Thus increasing the number of Philosopher CEOs out there.

Colorado, guns and society

Horrible tragedy has struck Colorado. We still don't understand what caused this man to do this. This is also the second piece on mass killings and guns that I've written in the past year, the Norway tragedy was only a year ago. There was some discussion after that about the ease of access of weapons in the US, but with the alleged gunman in Colorado using an AR-15 there most certainly will be discussions of re-instating the assault rifle ban that lapsed early in the Obama administration.

Let's first take a look at some of the history of the US before moving onto anything else. The Right to Bear Arms comes from the bill of rights amended to the constitution of the United States. The reason the founding fathers created these rights stems from the injustices the colonies experienced under British rule. Preventing gun ownership caused hardships for the colonists as they were fighting with the Indians, protecting their live stock and hunting for food. Distances were much greater at the time, so you needed to be able to fend for yourselves. The founding fathers also were revolutionaries, obviously, as they had just overthrown Britain. Jefferson, in particular felt that the citizens had the right to overthrow their own government. The ability to overthrow the government is predicated on the ability to fight against the government. The right to bear arms is paramount to this capability, hence it is an essential right in our Constitution.


A lot has changed in the past 200+ years. Weapons technology is at a level that our founding fathers never imagined. Our explosives are smaller and more powerful than theirs. The sheer number of people would be mind boogling to them, as we have stadiums that can hold more people than all the population of Philly in 1776 and Houston has nearly as many people in the city as all of the 13 colonies did in 1776. The amount of damage we can inflict and the number of people that can be impacted as exponentially increased.


What has not kept up with our ability to kill and our population are our institutions. Organizations like the NRA push for looser and looser gun laws as they feel that is an unalienable right. However, they do not take on issues that lead to increases in gun violence such as prohibition of drugs (increases violence) or mental health concerns. In the United States we look at mental health issues as something to be kept quiet and to have a mental disease is to be stigmatized. These prevent people that require help from seeking the help that they need. Plus, the cost of mental health care is extremely expensive. In many cases insurance companies don't want to pay for the cost of seeing a psychiatrist or will limit the amount of treatment a person can receive. Addressing the actual problem will do more for protecting gun ownership rights than any glib quote such as "You can take my gun from my cold dead hands" we need to understand the underlying root cause of the massacre and fix that. 


The other concern that we should all have in regard to controlling weaponry is the importance of having access to weapons when overthrowing a dictator. In the past 2 years we've seen many types of revolutions. Ranging from the completely peaceful to the extremely violent in Libya and Syria. In each country access to foreign weapons are making the difference for the rebels, but for the rebels to even reach the point where the international community stepped in to help them, required weapons to start the civil war. Whether we like it or not, that is the reason why the founders included the right to bear arms in our constitution. 


What we need to do as a society is to look at where our values stand. Do we feel that we should treat addiction like a crime, or like a mental health epidemic? The need for gun ownership can drop once drug issues can be dealt within our legal system instead of requiring extralegal remedies, such as killing the person that is taking your turf. Looking at how we deal with bullying and other mental health issues can prevent another Columbine or Aurora from happening again. I'm going to close this post with an interview with Marilyn Manson in Bowling for Columbine. Regardless of what you think about the man himself, or his shock rock, he is an extremely articulate speaker and asks us to look in the mirror when these tragedies happen. Our society causes them, our society can fix them.

MBAs, Ethics and Morals

Yesterday on Facebook I started quite the little discussion after posting a discussion about MBA education based on an article on Bloomberg. The author of the article, a professor at the University of Chicago Booth School of Business. Essentially the article argues that the method used to discuss ethics results in amoral education. What this is saying isn't that they are teaching a lack of morality, it's that they aren't teaching the actual moral result of these choices in a way that makes it clear that one option is moral while the other is not.   Without explicitly stating which option is moral or immoral, it can create ambiguity (we know that business people hate uncertainty) and the illusion that either one of the options could be moral.

Why does this cause a problem? First, not many people actually have any education in ethics to begin with. If someone put together a list of 8 must take classes ethics would be somewhere around 100. Ethics courses aren't easy and they make you really look at how you think about things, figure out why you think that way and try to make you change the way you think. They aren't always successful, but ethical thinking is like critical thinking, the more exposure you have to it the more you are able to practice it. The second reason why this is a problem, is that many people going into business school may have less scruples, be willing to take advantage of people or are amoral. Not everyone is, but we know from research that business leaders tend to have personality traits of psychopaths. We also know that in games like prisoner's dilemma business leaders act the most ruthless (same goes for economists). The only question is the direction of causality. Does business school create these types of people, does it exacerbate these personality types or do these people go into business already behaving in these manners? I don't know the answer to that question.

While I was in the Netherlands I listened to a seminar that discussed the way that ethics is taught within the Dutch military. All new recruits must go through ethics courses and then every so many years they are required to recertify on the ethics course. The goal is to bring in new officers with a sense of ethical norms that can prevent atrocities and allow officers to do the right thing when they need to. Of course the military believes there is a fine line between creating a thinking solider and a solider that ends up in analysis paralysis because they are going through too many ethical situations in their mind. The goal of the education is to ingrain many of these ethical situations so reaction is more instinctual even for the ethical choice.

I believe that there is a similar balance that needs to be considered in business. What are the social norms for ethical behavior in many institutions? Well, I think that this really does depend on the institution and the environment that they are in. I think there are no ethical norms within the big banks, which has been played out over and over again with the sub prime, then LIBOR and now HSBC's money laundering. Perhaps the ethics are there, it's just considered ethical to make as much money as you can without getting caught doing something that is obviously screwing someone over. The question becomes, can a truly ethical MBA graduate come into an environment and succeed? I think that they will be able to do well compared to your average person, but they will quickly be out shined by their unethical colleagues.  These are businessmen, they understand incentives well, so they will adjust their behavior based on their incentives. This is a normal and rational thing to do.

Are there ways to instill more ethical behavior at companies? I think there are ways. Some are through legal changes, which lower the bar for what is considered a crime when it comes to fraud and unethical behavior. This would either drive the behavior more underground (likely) or change some of it. Other ways would be through forcing a cultural norm where these companies are punished through lack of investment and loss of business. This one has a coordination issue. Many people have no qualms about ethical issues that would use a service like this. Additionally, the sheer number of firms behaving unethically makes it unrealistic for a person to buy ethically made products. I wrote about this at the Urban Times, noting that Apple is being singled out when the entire industry behaves in this manner.

Ethics needs to be taught at many different levels, it encourages critical thinking and self reflection. Developing ethical leaders in all respects of business and politics should be a goal of all universities. However, ethics courses are being cut and many people just don't see the value in them.

You always have a choice

The phrase "You always have a choice" is extremely prevalent in super hero movies. Ranging from Batman Begins to Spiderman 3 to Wolverine. In whatever situation you're in, you can do the right thing do the wrong thing or through brute force come up with an alternative that you can force to occur. This really epitomizes the rugged individual and the ideal American to some extent. No matter how down on your luck you always have the choice to be or do something better. The GOP really pushes for this, where many of the candidates argue that they were self made men. I think this is also the root cause for a typical response to the 99% protesters (or someone asking for an increase in minimum wage) - "Get a job." If the choices are get a job, or not work, the C -brute force response now is - "start your own company" or "make your own job."

Before, you assume I'm just bashing the GOP, this also comes from the left. The environmental movement also assumes this is possible in regard to personal behavior and reducing your carbon footprint. In many cases they assume that it's easy for people to change their behavior, because they want to protect the environment. If we wanted to we could drive less, we could buy the less impactful light bulb, we could turn off our computers at night, etc, but people are lazy or don't care.

So, are the GOP and environmentalists right? We're all lazy and don't want to make the right choices? That we don't want to work or that we don't want to do what's right for the environment? I think that for the most part neither is true. You will find freeloaders or people that protest saving electricity by turning on as many lights as possible. However, most people don't behave that way. So what's the problem? Why do we have uneven unemployment in some areas, why don't we all work to save the environment?

It goes back the the choices we can make. One of the big assumptions in economics is that the work force is mobile, that when there's unemployment in one part of the country people move to where the work is. However, we saw that in the US that isn't true with this recession. The only people moving were migrant workers which may have been illegal. Why? Why wouldn't someone with no job in California move to another state to find a job? Well some of it comes down to their ability to move. If they own a house and the choice is to lose everything end up in deeper debt because selling your house (if you could sell it) would leave you hundreds of thousands of dollars in the hole with nothing to show for it, do you really have a choice?

In this way our choices are bounded by our situations. A woman may want to drive less because she wants to do what's best for the environment, but she has a difficult choice. Move closer to work so she could walk and take her children out of a great school and move them into a lower quality school. I think it's a no brainer which one she would choose. However, let's say that the schools are the same, her children may not want to move because they'd have to make all new friends. The gains would be very minimal. There are a lot of costs to moving closer to work even if everything else would stay the same. This case also assumes that there's only one driver. In many cases this choice would involve two people and the trade offs for one driving farther could complete negate the benefits of moving.

Unfortunately, I don't believe that we are able to make whatever choices we want. Our choices are constrained by the circumstances we live in. There are ways to work around these constraints to improve our ability to make choices, but that is not easy and certainly not free. When we make policies that impact choices and make assumptions about people's ability to make choices we need to be aware of these constraints and work to remove them.

Cash reserves, risks and innovation

In my last post I discussed the large cash reserves that companies have been holding since the 2007 recession. As I mentioned there are several reasons for this, some of it has to do with lack of R&D investment. R&D is an expensive investment. This requires both train scientists and equipment to conduct the research. In addition there are extra requirements for technicians and other employees to support the R&D effort. This isn't cheap. As we can see in the bottom half of the chart all types of research funding has decreased recently.

R&D is not a certain thing by any stretch of the imagination. This is why companies are paring with universities to share the burden of R&D. Universities are doing much of the basic and applied research, while industry is developing it into product. This is where the money is and the greatest amount of certainty. You can't really blame companies for this, but they need to work to develop their own technologies regardless of the work being performed at universities. To compensate many companies do engage in corporate venturing. This is where they fund a start up to conduct research and get a product to a certain position and possibly buy that company after a certain maturity point, set up an exclusive license or license the technology once it's mature. This reduces the large company's risk exposure.


The final piece that has increased since the late 80's has been the amount of litigation due to patent infringement. In 2011 the amount of money spent on patent litigation was $29 Billion. That is a lot of money. That's a quarter of the money that Apple has in it's reserves. We also know that Apple is one of the largest spenders on litigation. I know there are a lot of Apple lovers out there, but they could have invested that money into more products and reduced their risk of a flop with the next iPhone. We all know that iOS6 was a major disappointment for many people, spreading their revenue stream into more sources with some cool research could mitigate any fall out from that or if iOS7 is more of the same. 


Litigation is such an outsized risk because it can lead to your entire firm being shut down by a non-producing entity. This reduces the incentives for innovation and increases the incentives for hoarding cash.

Business Cash Reserves and Innovation

I found an article on MarketWatch that discussed the fact that the private sector is, in fact, doing just fine. As the author mentioned, this didn't go over very well whenever Obama mentioned it a few weeks ago. However, he's right. Companies as a whole are doing extraordinarily well (see graph below), but normal people aren't seeing it. I've discussed this before in a Future of Employment post.

As you can see from the graph Corporate profits are at an all time high. We also know that investments are still occurring in new equipment. We know from the numbers that companies aren't hiring. I think that the GOP would argue that this is because of regulation uncertainty, which they are contributing to. From what I've seen the Democrats don't really have any sort of good explanation for the lack of hiring. The author of the MarketWatch article claims that companies aren't spending money on new employees because they are returning most of it to stock holders through dividends or stock buybacks. The data supports this perspective to some extent. Part of it could be the fact that many companies are automating, outsourcing and offshoring all contribute to some level or another.

I think that it's a combination of these factors plus one other factor. This was added as something as a throw away at the end of the article, but it really stuck with me. "Corporations may be intensely profitable, but they have no profitable ideas about what to do with the vast sums they earn." This comment is extremely important, especially when you couple that with the article that the Washington Post just published about the difficulty of PhDs finding jobs. 


These researchers are the core of the future for innovation at companies. If companies aren't hiring these scientists, despite the fact that many claim there are skill gaps, then they are unlikely to innovate moving forward. My old roommate in the Netherlands, Brian, told me that the Holst Centre where he worked created 3 jobs for every employee at their research center. I've seen similar numbers in one of my courses as well. 


In this case the trickle down effect actually works. You hire researchers and they need to have technicians building equipment, which needs to order parts and raw materials to build those components. Which requires additional labor elsewhere. While 3 for 1 may not seem like the greatest ratio, those other workers typically make good money and will end up spending money elsewhere.

Innovation drives the economy. Companies need to look at how they manage risk, especially if they are sitting on huge reserves of cash. Putting more money into research for their field can lead to huge disruptions in technology and could lead to an increase in market share.

I will talk more about these risks in my next blog.

Europe in the Driver's Seat

Today I woke up to wonderful news. CERN has discovered the Higgs Boson particle, the so called "God" particle and the EU parliament has voted against ACTA. This is a great day for science and for freedom of expression.

What do these mean? Well, the Higgs particle is supposed to be the particle that gives everything else mass. It is the actual building block that everything in our universe is supposedly built upon. Why do I say supposedly? Well, the discovery is with a 5 sigma confidence. This is a really good, but in many cases they like to have 9 sigma. What does that mean in layman's terms? So most testing is looking for a probability of less than 5% that this could happen by pure happenstance, or random error. This means that 95% of your data bear out the test your trying to answer. This happens around 2 sigma where sigma represents a standard deviation. Most products are made with safety specifications around 2 sigma, maybe three sigma (99.73%). The values that we're talking about are so high, that you're starting to get into the range of lottery winning (or plane accidents for that matter) likelihood for 5 or 9 sigma. With such high confidence you actually start to run into a greater likelihood of missing the actual signal than for it to not actually be there. You are being so strict on your data requirements that something that actually is the real signal is ignored by your data set.

Does this change my daily life? No not at all. We won't be able to do anything functional at this level for more than a century if ever. We're still working on the results of Einstein's theories and how to apply them. We haven't really gotten quantum computing working or any of the other cool things we're working on (teleporting light and particles for example). However, it does give us a greater understanding of how the universe works and we've had to develop a lot of new technologies to detect these particles. The technologies could be very useful in the future for completely unrelated applications.

ACTA is a very different story. I've talked about it in the past and mentioned how much of a risk it was to the openness of the internet and to our society as a whole. The largest political body in Europe has decided to reject ACTA. The vote wasn't even remotely close. Our hard work has paid off and the treaty is effectively dead. In the US it hasn't been ratified by the Legislative branch and is really only going to be between the US and Morocco, which really isn't going to be very effective. This is fantastic news and I'm extremely excited about this.

Unfortunately, we can't just take a break, we have to keep working on the main reason why these laws are even brought up for vote in the first place. The USTR is currently negotiating the TPP which is starting to be viewed in a similar fashion as ACTA. I believe that we're on the right path for stopping these types of legislation and treaties.

Way to go Europe in two major things.

Evolution and Innovation

Apparently I published this before I meant too. Anyway, today in Techdirt, they published a discussion on copying, innovation and evolution. Basically, a biologist argued that we are evolutionarily predisposed to copy and use group learning to develop new tools. What this means is that instead of going out and developing something out of the blue we first have to see what someone else has done and then we copy whatever they did, then in a parasitic way, make marginal improvements on the original. We're nothing but freeloading copiers that make things a little better.

Techdirt completely disagreed with this point of view. They argued that simply copying something or a part of something doesn't mean you're freeloading. You can add a great deal to something to the point that whatever you copied simply becomes a part of a larger whole.

Anyone should know from my writing that I support Techdirt's perspective. This comes from several several different arguments. The first is from the evolution of technology. If you ignore some of the human motivation behind the changing technology itself and focus on the selection process, you can see that technology changes through incremental adjustments. These changes are selected by the market or in primitive societies by the end result of an improvement. Spears that last longer, less energy expended on making new spears, spears that can be thrown farther, less danger from the animal being killed, or sharper shovels, less energy spent gathering food - more food. This selection process is a very natural process. Additionally, there would be some specialization of skills even at this point in our history. Some people would have been better at making spears and in a collaborative environment, because there were no patents and sharing was for the best of everyone, many people could experiment with new spear designs. This innovation while based on copying is a very real form of innovation that likely lead to gradual improvement over a great deal of time.

The second argument that supports innovation after copying is the argument of Cesar Hidalgo, which argues that looking at what countries are currently producing you can see a relationship with their innovative ability. By looking to see what technologies they import and export you're able to see how well they have developed scientifically and in the manufacturing world. For example you can expect to see more advanced products come out of a country if they got into producing fertilizer very early in modern times. This typically leads to a general chemical industry which can lead to pharmaceuticals and semiconductors. Why? Well developing a strong base in chemistry with fertilizers can be expanded into drugs and as a base for semiconductors.

How do new countries move into these fields? Essentially, they have a knowledge transfer from a country that is already doing it. This can be done in two ways, one is the easy way: have a multinational company set up a manufacturing then R&D facility in your country. This allows a direct flow of knowledge on how to manufacture the material, which increases the rate of copying. Would allow the country to be a fast follower but will still require significant time for them to eventually innovate on that technology. Having an R&D facility would increase this rate, because local scientists would have already been trained on how to innovate in that field. They would have already been doing research in that industry and would more easily be able to innovate if a spin-off was created (or if the state nationalized that part of the multinational). The second manner is much slower: repatriating of knowledge workers. This is essentially what has happened in Taiwan and India. Educated Indians or Taiwanese returned from the US and created spin-offs and became professors at the local universities. This isn't always successful.

Saudi Arabia is trying to develop a third way, which is having some success. They are recruiting experts from around the world to develop their own universities and companies. This is having mixed results and education and industry needs to pay attention to these attempts to see how well it plays out in the long run.


Copying is extremely important in education and is required to develop new industries in a country. Technology evolves through copying previous technology, recombining with new learning from other fields and from experimentation within the current field. Without copying there cannot be innovation. The more people participating in an economy where innovation through copying is rewarded, the greater our culture and the greater or technological evolution will be. Biology needs to take a lesson from Evolutionary economics.

Texas Repulicans

Yesterday the Texas Republican Party released their platform. It's terrifying. It starts out innocently enough saying that they plan to uphold the constitution and that everyone is created equally. However, that's the end of the good stuff. As I tweeted out yesterday there's a portion that says that they do not support teaching children critical thinking or anything that could lead them to question their current belief system or parental authority.

I can't think of a better definition of science than critical thinking, questioning current beliefs and authority. When a scientist makes a discovery that doesn't conform to the current scientific paradigm(program) accepting the results for the experiment REQUIRE these abilities. Looking at the faster than light neutrino fiasco of the past year is a perfect example of this. Scientists saw a result that was highly suspect (faster than light speeds), but they were willing to accept it, if it passed enough tests. They were critical of the results, didn't accept it on face value, they were willing to question the current paradigm (relativistic physics) and the authority of nearly 100 years of work based on that paradigm.

This is also a case of biting the hand that feeds. Texas's growth has been fueled through science, technology and research at businesses. With Houston as the center of the oil world, which is driven by better science of getting oil out of the ground, new technologies to do so and the research for increasing the conversion rates from crude oil to gasoline and other goods, you'd think that Texas would understand why it's important to have scientists. While Texas doesn't have as many Tier 1 research universities as California (3 vs 9) these three are extremely powerful and wealthy. UT is the 3rd richest in the country and Texas A&M is the 10th. They are both research powerhouses in the academic world. Creating policies that negatively impact the education system that feeds these schools is only going to hurt their abilities to compete in the future.

The Texas Republicans also want to "Teach the Controversy" with equal air time for every side of the argument. In this case when they get to evolution I hope the controversy they discuss is the recent disagreement between Evolutionary Biologists Richard Dawkins and EO Wilson, because that's the biggest one going on in Evolution right now. However, I know this is not what they mean. They plan to teach the "controversy" of creationism in science class. This is as dangerous as not teaching critical thinking.

If you couple the lack of critical thinking with teach the controversy approach, you have a recipe for disaster. You create students that are unable to really understand the differences and take what the teacher believes at face value. If the "biology" teacher is a creationist (which has happened in some states) then they will not adequately teach evolution and the students will not understand why creationism is wrong and evolution is scientifically accurate. They will be unable to critically reason the differences. This is a terrifying prospect.

These are not the only areas that Texas Republicans are showing that they are out of touch with the youth of America. The DailyKOS has further analysis  a lot of the bad policy stances that are coming down the road in Texas from Republicans.

Upholding of Citizen's United

Today, the Supreme Court of the United States (SCOTUS), upheld the controversial Citizen's United ruling of two years ago. I've written about some of this in the past and I've talked to many people about the implications of this. However, there are two major tenets in this ruling that matter. One: that you cannot limit the amount of money spent during a campaign because that restrict free speech. Two: that two separate groups can raise funds and use their right to speech without corrupting the political candidate. Additionally, there were some ground rules that were established as to when you are considered breaking this ruling and in violation of the law. One of these is that the two groups cannot coordinate their strategies and that the two groups must remain independent of each other. 

In this most recent ruling, the SCOTUS essentially has stated that there hasn't been any reason to revisit their previous ruling and that it now also applies to states. This is important as Montana had laws on the books that limited the amount of money that could be donated. This law was put into place to fight corruption in 1912.

This ruling is difficult because on one hand, at what point can you limit the amount of money someone wants to spend of their own money on political speech without restricting freedom of speech? If someone is willing to let you put ads up and pay money for it, isn't it your right to do so? That part of the ruling is really difficult to argue with. However, The part that isn't hard to argue with is the lack of independence. This has been pretty well displayed during the Republican primary. Without some of the mega funders campaigns effectively folded. Santorum is a prime example of this where his primary doner pulled out and that ended his campaign. Was this person willing to fund him because their views aligned extremely well or was Santorum changing his views to align more closely with the doner? We'll never know to be sure, but it's likely that there was conversations between parts of the campaigns and the doner.

In the US we will likely continue to have huge doners and this will likely continue unabated until we are able to pass a law or constitutional amendment to make this sort of donation illegal. Many liberals argue that the 1st amendment for free speech wasn't designed to allow the wealthy to say whatever they want. That it was to give an equal voice to everyone. Sadly, media is run by people that wish to make a lot of money. Until we figure out a better way to disseminate political information that is unfiltered, we will likely continue to have the same unbalanced views portrayed.

Climate change more than melting ice caps

Yesterday I heard a report on NPR about how climate change is interacting with natural wild fires. I found an article about the paper, which was published originally in Ecosphere, which discusses some of the long term impacts of the climate change on wild fires. To do this, the group used 16 different climate models which ranged from very favorable emission numbers to catastrophic emissions numbers. This allowed for a wide range of different types of human activities and reflective climate changes in the area to be tested. This is important as it gives the article much more validity than if they had simply decided to use the worst case, or best case. Of course, there will be people that will argue that man has nothing to do with the climate and we aren't impacting it. However, that's sticking your head in the sand. We know we have impacted the climate in the past (hello Acid Rain) and have actually fixed it though changing our behavior (Acid Rain again).

Just using the climate models isn't enough to really predict how and where wildfires will occur in the future. The wild fire itself had to be modeled as something where the conditions it could exist in can be tested. The group decided to model wild fire in the same way that movement of animals are modeled. Under certain circumstances it's likely that an animal group will move into a specific type of environment. This is based on the amount of water, the amount of vegetation and the temperature. Wildfires need the exact same resources to exist. However instead of being lush and moist, the area needs to be dry, but with enough water to have had plant growth to a certain size.

By combing the two techniques the team was able to show that the West is going to be burning a lot more frequently than they are not. This of course creates a serious problem. People like to live in those areas. People don't like to leave their houses when there are disasters, which means that we're going to have more people burning, like the one in Colorado.

The authors, in the NPR interview, argued that this means we need to learn how to live with wildfire in the same way that we've learned how to live with floods and earthquakes. How can we do that though? It is likely to be more difficult than flooding because you can't just build a mound of dirt as a ridge to prevent fire from moving further. With water you can do this with varying success. With fire, that mound of dirt will eventually grow grass on the mound and would just as easily catch fire. Even stone walls would be passable as a strong wind could blow embers over the wall or heat the wall to the point of material catching on the other side.

These are issues that we will have to resolve in the next 10-30 years. This seems like a long way off, but time has a habit of sneaking up on you and before you know it we'll be having wildfires like we had in Texas last year and are having in Colorado and New Mexico now. I'm glad we're aware of the extent of the risk now though.

Lean as a tool for new and mature companies

Today, I finished the book "The Lean Startup" by Eric Ries. Despite the focus on entrepreneurship, I think this book has applications at many levels. First though, I must say that I've been using Lean for several years and I walked into this book with an understanding of Lean and how  to apply it at a company. What does Lean mean though? Well, it certainly doesn't mean cutting staff, reducing the amount of money you have or anything along those lines. It's a methodology for managing projects, processes and products. It does this by basing decisions on actionable data.

What is actionable data? Well, it's data that you can do react to quickly if the data is showing trends. This could be a positive trend or a negative trend. If you see something going well and a process is improving over time, (which is abnormal processes typically go out of control over time) then you want to understand how and why it is improving. If it is getting worse over time, you want to understand why and work to improve the process. This isn't just for machines but also for business processes.

Once you have valid metrics there are several different things you can do. You can simply jump in and try to fix whatever problem is there or you can take a different track. The other track is to do some root cause analysis of the situation. This is called the Five Whys. This is a series of questions that ask Why to understand the real cause of the problem. In one case you may have had a new employee upload something to the production server and it kills the production server. Understanding why might not be as simple as saying, don't do that again. First you might want to know why the action of the employee took down the server, was it something he did that no one else would have done or was it something else. As you dive down you may realize part of the problem was lack of training but there were issues that would have arisen eventually from someone else. This deeper understanding allows you to make changes at multiple levels rather than installing knee jerk reactions.

That's a reactionary use of Lean, some other interesting uses of Lean have to deal with experimenting with your product. Ries argues that most companies wait to long to engage customers and put too much effort into the first version of the software. He argues that a company should create a minimum viable product that can be tested to get the basic point across of the end product. Doing this early allows for experimentation with customer feedback. In the software world this is pretty easy to do. You can get to something that early adopters can use and then test changes. As you can route different users to different versions of your website for the product you can have slightly different tests to see what increases the metric that matters. Getting people to continue using your product, but you need to have very targeted metrics to understand what is actually happening with your software. If you use the incorrect metric you will do a lot of work that isn't driving usage and isn't driving your revenue.

If you decide to change the way users interact with your GUI, it would be useful to have a goal metric to truly understand if the GUI is an improvement over the previous GUI. This could be tracking the number of clicks it takes to get to an important function. The number of times the user uses your product, the number of times a new user uses the product, but stops using a specific GUI. Once you see your metric moving in the correct direction and you can be sure that it is the result of your changes, then you should end you experiment understand why the users reacted the way they did and try to learn what you should test next.

The early goal is rapid experimentation with purpose and data to back up the decisions you make. These techniques will work with any company, but will also be very successful for a startup.

Ex-Pat Entrepreneurs

This morning on KUT I heard about a plan here in Austin to encourage Mexican Nationals to start companies based in Austin. This initiative is being pushed by the Hispanic Chamber of Commerce and Austin's IC2, an incubator. I think this is a great idea. This will allow a great cross pollination of ideas between Mexico and the United States. Bringing together people with great ideas leads to more interesting ideas. This is something I really loved about my Master's program. I was continually surrounded by people with big ideas, vision and energy.

I think that this idea also can help Americans see that people in other countries can have and do have, fantastic exciting ideas that can drive technology, the economy and employment. With our US-centric view of entrepreneurship and venture capital we tend to overlook this. It's not fair and it short changes potential collaborators, because we assume that Americans have the best ideas.

This collaboration also shows that resources in America can be used to help develop entrepreneurship within a community of immigrants. We have seen some of this with Silicon Valley and the Indian and Chinese populations there, but we have not see it with another community in the US or with a Latin American culture. I think that this experiment will be useful in spreading knowledge and developing future entrepreneurs in Mexico to the south.  It will also likely lead to an increase in entrepreneurship within Mexico over time. It will not happen immediately, but a group of these entrepreneurs will eventually move back to Mexico and will start companies there or at least subsidiaries in their home country. This will produce more legitimate work for Mexicans in Mexico that could offer wages that can compete with the drug cartels and develop a larger business community.

This type of growth is important for Mexico, as it will increase the amount of resources for Mexicans to develop their own businesses. It will increase legitimate pressures on the government to fight corruption and make efforts to reduce the impact on organized crime on the government. It will provide employment for highly capable graduates from Mexican universities which will continue to drive improvement for the country.

Most of this is a decade or two in the future, but there will be a great deal of benefits for both Austin, the Hispanic community in the city and for Mexico. Austin will benefit, because it will continue to grow as entrepreneurs will bring more money in, more jobs and new ideas.

The Mexican nationals will fuel increase knowledge sharing between the US and Mexico and will act as de facto ambassadors for their home country. They will educate people on the real Mexico and show Austines that Mexico has a great deal to offer besides amazing food.

Stuxnet, Flame and security

First of all, I'd like to thank all my readers, I've had over 10,000 views in my first year of blogging. That's amazing and is so many more views than I expected to ever have. Thank you for making it well worth my time to blog!

Recently a friend of my asked me to comment about the latest cyber attack, Flame, uncovered by Kaspersky, a Russian security firm. It's still not entirely certain who unleashed the attack, but at the time I argued that it could have been Israel acting alone as they have a very capable tech sector. They put out high quality software, they have security experts and they have some serious R&D from US companies like MS and Intel.

Flame targeted Iranian computer systems, very much like Stuxnet did. At the time, it was unclear who released Stuxnet, which attacked Iranian centrifuges. It could have very easily been Israel acting alone or with some help from the US. Being a realist I fully expected the US to be involved, however I did not expect Obama to have issued the order himself. Based on history it is equally likely that Flame was initiated by the US as well.

Flame targeted data being sent over the internet such as PDF, Office and AutoCAD data and did not actively attack anything like Stuxnet did, according to Kaspersky. However, this doesn't mean that it's not being used by a spy agency. It's also interesting to note that the infected computers are all outside of the US, which indicates that it could very easily be a US spy agency as they are not usually allowed to spy on US citizens.

These two programs leave me with a great deal of concern, because "the Pentagon has concluded that computer sabotage coming from another country can constitute an act of war, a finding that for the first time opens the door for the U.S. to respond using traditional military force." Does this mean that if Iran responded with military force that our own Pentagon would argue that they were justified? I don't think they would, but essentially they already have.

Aside from the risks of war it also gives greater leverage for a regime like Iran's to argue for a more suppressed internet. They can now without any worry claim that they are doing it for national security. They are doing it for that reason, their centrifuges have been attacked (Stuxnet) and their people are being spied on (Flame). In addition other repressive regimes will likely use Flame as justification as a crack down on the internet. There may also be repercussions for Microsoft as Flame exploited a weakness within their auto update.

This also raises other concerns about what other types of cyber programs Obama has given the OK to. As he is the most technically savvy president we've had since the rise of the Internet, I think he fully understands the choices he is making. With Bush it may have been argued that he didn't really understand as well what he was approving as he doesn't have an in depth knowledge of how people use the internet and how systems interact with technology. He also wouldn't have a good understanding of how viruses like this could turn against their creators. In this case Obama should. He should know that once in the wild a worm can mutate in a way that could turn against the people that released it and that we could destroy ourselves.

I think that these actions will weaken our position in any negotiations with Iran and possibly other countries that we have pushed for a more open internet. They could, rightly perhaps, argue that we only want the internet open, so it's easier for us to infiltrate.

I don't believe that's the reason. I believe that the internet is the an amazing tool that has improved people's condition to at least some extent. It has allowed for freer flowing of knowledge, but it can be used for wrong just as easily as any other media or communication tool.

Tracking the right metric

Last week I wrote about the Facebook IPO and how I felt that for the company the shift to stock price metric tracking was a big deal. I said that there has been a shift from what Facebook was and could be to the broader public to how all of its actions impact the stock price for the company. Today, in an article on Forbes they published an article about the impact of what you measure and how it impacts later choices. One of the things they didn't mention was how frequently this measure or metric is reported. These all matter.

Looking at Facebook, I think it's rather clear why Zuckerberg has publicly stated that he doesn't care about the stock price of the company. Stock price is continually reported and when major milestones are passed, either in the positive or negative, everyone is talking about it. Apparently, Facebook dipped below $30/share today. Is this the end of the world? No, but it does mean that a lot of people have lost a lot of money.

Let's look at stocks. Do they truly reflect the value of a company? I, personally, don't think so. There are so many factors that shift the price of a given stock in a week, that it's impossible for the value of the company to fluctuate in such a manner. However, the price of a stock does impact what a business is able to do. Companies are able to leverage their stock values for loans and interest rates, which means that a company can suddenly gain or lose market capital if the stock market swings for something completely unrelated to them and investors sell of their stock.

Despite the fact that, at best, there's a loose correlation between the actual value of a company and the price of its stock, CEOs are held accountable to this metric by investors. Now, maybe some CEOs do ignore the value like Zuckerberg plans on doing (I've heard Jeff Bezos from Amazon does), however, when it's continually reported and discussed it likely will change some behavior even if the CEO does their best to ignore the stock price. Even if the CEO does ignore it, in many cases the board or the investors will not. They may take serious action if the CEO does not work to ensure that their metric, stock value, continues to increase.

However, this may drive the wrong behavior. Tracking the wrong metric may be answering the wrong question. What increases our stock price may not be the same answer to what keeps our company competitive. A company that reduces work force to cut expenses for the end of the year, may seriously be hampering their ability to compete over the next few years. The change will likely bolster the performance of the stock in the near term but will likely lead to greater drops in the medium or long term.

Company management should not solely be measured on stock price alone and neither should a company. As much as I dislike Facebook and Mark Zuckerberg, Facebook is a company that actually has more value than simply its bottom line. It is able to create new networks and new places for activists to work. Now is this likely to continue? I don't know. Could another company come along and beat them at it? Definitely. That's why Facebook bought Instagram and will likely buy other companies that could threaten their market space.

Facebook, IPO and valuing a company

This week we've been hearing about the debacle that was the Facebook IPO.Which has revealed that some of the underwriters for the IPO were doing shady things. Matt Taibbi believes that this indicates that there are essentially two markets. One for the insiders and one for the schumcks, the every day investors.

Why is this important? Well, based on the discussions I've read online, there's a lot of concern of the validity of the whole IPO process, the valuation methods of companies and how investors think of companies. The valuation of Facebook had a great deal of discussion before the final IPO price of $38/share, this was partially driven by two articles that came out. In the first one it was mentioned that GM was pulling it's account because "Facebook ads don't work." The other article of note relates that researchers found that 44% of Facebook users will NEVER click an ad. This research is important because some of the valuation is based on the conversion rates of ad views to ad clicks. On average Facebook was only able to earn around $4.34 per user. The valuation of $100 billion puts the life time earning potential per user at $100 (at 1 billion users). This is pretty low, but at the same time, if only 560 million users ever click ad, that pushes means the people that do click ads need to be earning Facebook roughly $200.

MIT Technology Review discusses how this is an unsustainable growth model for Facebook. Essentially, Facebook will begin to drive down the cost per view for their advertisers to try to increase their total revenue. This falls into the race to the bottom mentality that crushes industries. Advertisers will be able to say to any website, why should we pay you x amount per ad when we only pay Facebook y there is no way that you can get me more views than Facebook. The only way that a site could get more revenue if they can show data for a higher click through and conversion rates than Facebook. That might be tough. The Review article argues that this will eventually kill Facebook and a lot of the ad driven website business models.

The other aspect of the IPO is a difference in the way that business and technology media are reporting on Facebook. Things have shifted from all the non-business related activities to focusing solely on this aspect of Facebook. This will likely shift over time, but I believe that these considerations will be discussed in any article related to Facebook. If Facebook wants to remain a haven for activists it will be difficult if there are potential suits over people being activists. There will be an increase of risk aversion within the "owners" of the company as there will be influence from investors.

Zuckerberg has said that he plans on doing what is best for the long term and try to ignore the demands of investors. He might be able to do that because he still owns 57% of the voting rights for the company. However, it will be difficult for him to avoid the influence of the discourse of media outlets. Even if he gets all his news from his friends on Facebook, there will likely be articles posted that will give him news about the company and things that he probably won't want to read.

Essentially, discussions will shift from being about the risk of privacy for users to how changes to Facebook will impact investors bottom line. I don't think this is healthy for businesses, consumers of Facebook or the general public. There are other things companies do that are unrelated to investors that are important for society as a whole. The Facebook coverage really indicates that we don't look at businesses in a long term sustainable manner. We need to change this if we want to save capitalism.

Religion, Morality and political stances

This morning on KUT (local NPR station) there was a local interview between the KUT host and an author of a book that discussed how religion has been playing a larger role in the public forum in the United States and that people are basing their political stances more and more on religion. I am skeptical of this for several reasons. First, the morality these stances are based on are sometimes dubious at best even within the religious context. Secondly, some of these moral stances aren't actually based on teachings in the specific religion, but are much more cultural in origin than religious.

Let's look at the first issue. There are many issues that we can examine to see if the validity of the moral stance. How about the death penalty. Many Christians (not all) strongly support the death penalty. This stance clearly violates one of the Ten Commandments (thou shall not kill). Supporting this type of policy is not congruent with this belief. In addition, it conflicts with the belief that all life is sacred, which is the argument against abortion. I personally don't agree with either stand, I'm against the death penalty and pro-choice (by which I mean I support the woman's right to choose if she wants to be pregnant or not).

I arrived at these moral stances outside of the Christian frame work. I find that life is sacred since we only have one. Ending a person's life for whatever reason is a horrible thing. It destroys everything that they are and could be, it destroys their potential. Now some people may think that this is ok in the case of people that are beyond help, but who defines "help"? Or perhaps it's ok to kill people that are more committing horrible crimes against other people and they can never be reformed. Well, first there's a lot of things we need to look at as to the why they were doing what they were doing. We should investigate what changes we can do and what sort of environment we want them to be living in after the we've given up on them.

In terms of abortion, it's a trickier matter than the death penalty. However, women should have control over their on bodies and when/if they ever want to have children. Sure killing a fetus is killing a possibility, but every time a person has sex there are thousands of possibilities that are destroyed by a condom or other birth control. It's just a matter of time and why you chose to stop the pregnancy. In some case the baby can destroy the potential of the mother or could end up being a huge drain on society. These can cause larger issues than if the fetus was aborted when the woman wanted it to be aborted.

Issues of morality may not be easy, but there are also moral issues that happen to conform to a specific outlook on life. In the case of gay marriage, this is more of a cultural issue than a religious issue. The very book that proponents quote as the reason for denying this right is ignored on a routine basis (eating shellfish is a killable offense). Marriage has long been something sanctioned by the state and has a level of cultural normalcy that has moved it from the realm of religion alone. In some states it's possible to be married through time spent living together and getting it approved by a Justice of the Peace. Marriage is a way that cements a relationship in your own mind, the mind of your community and with the state. A civil union doesn't have the feeling of importance and smacks of differences in rights and demotes a person to a second class citizen.

There are definitely some policy stances that could easily be seen to be rooted in religious beliefs such as supporting welfare, turning the other cheek, being a pacifist and giving your money to the poor and needy. However, there are many people that are against abortion and against welfare. These wildly different stances  for a Christian smacks of a cultural belief structure driving many of these policy stances rather than their religious beliefs themselves. This doesn't mean you aren't a Christian or that have to be against abortion and for welfare, but it means you should be honest about the source of your morality in regard to your policy stances. You need to look inward and really investigate why you stand for something and why you're against something. Look close enough and you may find that it's due to your social and cultural influences rather than your religious beliefs.

Is Scientism the problem?

I just finished reading an article in The New Republic which argues that history and the humanities are knowledge too. At times it felt like the author was yelling at his brother begging to be noticed. Personally, I feel that in general the author is correct, that history and humanities do plan an important role and can be considered as knowledge. However, the author makes one glaring mistake, he is equating the unified theories of everything in physics with everything, where it typically means a combination of all physical laws within physics both particle and cosmic, which would then move into chemistry and likely into biology. However, this type of theory of everything would stop there. It couldn't really combine natural selection as functions of chemicals in a specific manager do not necessarily mean a truer understanding of evolution. It would be able to explain how phenotypes are changed with genotypes, but not why one genotype/phenotype pair was selected over another without an understanding of the specifics of the environments at a time. A true theory of everything at that level would essentially be a simulation of the universe. It would be impossible to model in a series of equations beyond the fundamental laws of physics.

For the evolution of biological systems you have to understand the natural history of the world that the organisms develop and evolve. This is why when you read Sagan, Dawkins or any other biologists or cosmologist they argue that if you rewound the tape of history you'd get a different present day. Some things may have happened just slightly different enough and you'd have no humans. The understanding of the history of our world allows us to understand where the future of it is going.

In the same way, history does matter. There are branches of economics, such as evolutionary economics that use complexity models and work to ensure that the history of events are included in their models. What the major difference between typical theories of history and psychology and newer models of economics and complex systems of physics, is that we're able to test them using simulations. It is likely that in the future we'll be able to do the same thing with history. This will give us a deeper understanding of why our societies have developed as they have. One heavily contested aspect of evolution, which is mentioned in the article, is cultural inheritance, which is where the theory of memes came from. This approach doesn't suggest one type of people is better than another or one lifestyle is better than another, it simply says that in the environment that the culture resides it's more capable of surviving than others. This can go down deeper to smaller niches within the culture and how well they adapt to their environment.

Other aspects the author argues discusses is the differences in the acceptability (or perhaps the perception) of radical paradigm shifts in science compared to the humanities and history. He mentioned specifically Freud in psychology and Galileo in physics. He argues that Galileo was able to make changes in physics because he tackled an "easy" problem that had minimal level of complexity. He went after the theory of gravity and how objects fall at the same rate while Freud went after the entirety of the human psyche. I agree there is a difference of complexity, however the key differences between Galileo and Freud is that he was better able to explain the state of the world and when new scientific theories were produced they continued to explain what Galileo found but with more accuracy and expanded on them. When Freud was discredited it was more like discrediting Alchemy than going from Newtonian physics to Relativistic physics.

The key difference between many theories in humanities and in the rest of science is the lack of continuum between two major theories. Yes, Relativistic physics completely obliterated the value of Newtonian physics and created a new world (universe) view, but it solved the same problems or proved that many of the old problems were only problems because the theory wasn't complete enough.

The key that needs to be remembered in either science or humanities is that all models are wrong, but some are useful. Freud was wrong in how he looked at the human psyche, but his models allowed other theories to be tested and used and likely spawned Neuroscience and the bridging between neuroscience and many of psychological problems.

Continual improvement, Innovation and Modularity

I've been reading Internet Architecture and Innovation which has gotten me to think a great deal about system's architecture and innovation (shocking I know), but it has also gotten me to think about continual improvement as well. The perspective that Schewick takes for innovation in a system is actually based off of stock options. If you aren't aware there are two types of options. Each is used in a different circumstance to sell at a certain price or to buy at a certain price. This has been used in some innovation theories for a while it's called real options, or taking financial options and using them in a similar situation in real life. The differences is that it's a go/no go choice instead of buy/sell. In terms of innovation it would be a choice between pursuing a new innovation in a system or not. For example. Let's say you have a watch and you are trying to improve the time on the watch. Using the reals option approach you could figure out how much money you'd have to have for a return on your investment in the innovation, per watch, and figure out how many different types of crystals you would test to improve the timing mechanism. Another example could be a car, where you're trying to reduce the drag on the car, which could dramatically change the full shape of the car. Whereas with a watch you may only be changing the crystal. 

Essentially, what this means is that you have two different ways of innovating within a system. Change the full system (car) or change a single module of the system (watch). Reducing the drag on a car could require a full system overall, because you'll be changing the size of the front end, which could impact the maximum size of the engine (or shape of the engine), or could impact the maximum headroom of the vehicle. So, you could have a radically different looking vehicle from model to model. In fact we can see this if we look at the evolution of the car (below). This change is extremely expensive and requires a huge amount of work. It's not likely that a company would pursue multiple designs beyond the drawing board or initial mockups. It would simply be too expensive to build multiple prototypes that are fully functional.

Evolution of Lamborghini

With watches you could have the exact same watch with several different materials to ensure the watch keeps proper time. In terms of watches there have been several radical innovations, including the wristband and digital. However, if the watch is not digital, the changes in some parts of the watch are extremely easy to test and compare on the market. For instance many pocket watches use rubies to protect the metal pieces in a watch from rubbing against each other. In this case it's possible to test many different gems to protect the components, it's also extremely cheap and if something fails completely it would never move into production. However, you could test hundreds of types of gems (sizes or whatever), at a significantly lower cost than testing many different full system designs.

So what's the difference between the two? In this case we're changing a full system compared to a module within the full system. Of course changing the gear structure of a watch would require a full redesign, but there are many parts that can be changed independently. In many aspects this can happen with a car, but there are limitations as well.

This modularity allows designers to innovate on separate aspects of the product without decreasing the quality of the overall system. This same idea can be applied in other business settings in terms of rapid and continual improvement processes. Many business processes are systems that integrate many different groups and aspects. Splitting the system into modular components allows continual improvement on many different aspects of the system at the same time. This modularity decreases the cost of improving individual aspects of the system as well as allows for more improvement projects throughout the system. 

Why would the costs be lower? Well, as I mentioned with the watch, it's cheaper to test different components for the gems, time keeping crystal and face glass than to test a change in drag for a car. The change in drag could require changes to the seat heights, new design for the windshields, possibly an entirely new chassis. In the case of reduced drag, if the design works you may have to redesign all these other components. In the case of the watch finding out that the new glass face doesn't work wouldn't impact which crystal works best. This reduces the costs for testing the improved system.