Wednesday, December 18, 2013

Wednesday, December 11, 2013

Tools that will help disrupt Healthcare

I've been reading this really interesting book on healthcare - it focuses on the potential Hows that healthcare can be disrupted. If you aren't sure what disruption and/or disruptive innovation is then check out my last blog about some of the industries where it's occurring and you're likely part of the disruption.

If you buy your own health insurance you may have noticed a new type of insurance. It was new to me whenever I joined my health insurance company in the North West. Neither AMD nor Samsung had similar plans so when I first signed up for it, I was extremely ignorant of what it was and just signed up for something that looked good. This type of insurance is called HDI w/ HSA.

HDI: High Deductible Insurance. This means that you'll likely have a high deductible (obviously) and will have to pay out of pocket.
HSA: Healthcare Savings Account. This is an account that allows you and your employer to make pre-tax contributions. You will also be able to pay for healthcare tax-free and accrue interest tax free as well. This is great in terms of how much money you actually gain from this. When you pay for a healthcare service like a Doctor's visit, you'll have to pay all $150, however, since you didn't pay taxes on that $150 you end up saving money. Further, your employer can contribute to this account in the same fashion as your 401(k) and your account will be invested in a similar fashion as a 401 (k).

Of course there are some draw backs to this type of health insurance. First, until you reach your deductible you're going to end up paying out of pocket. You could potentially have a deductible as high as $5,000 which is highly undesirable. Your employer might not contribute to your account, which places more of the burden on you, which sucks.

How can this contribute to disrupting healthcare? Well, you're going to start really shopping around for your day to day medical expenses. You're not going to go to a specialist unless you really think you need to. You're not going to go straight to the hospital for care. You're going to try to find another place to get the care you need. This will open up the possibility for care givers to provide healthcare in other fashions. This will potentially change the way that insurers will begin to pay out to providers as well.

There is also a push for Accountable Care Organizations, look for those as well, which are paid based on outcomes rather than the type of service being provided. These organizations will help disrupt incumbent firms and will likely capture the attention of insurance agents. I believe that in many cases this is where a lot of Exchange insurance programs are going.

Personally, I'm excited about the potential to work within an insurance company to disrupt the industry. I believe that there are changes that can be made internally, through educating on what metrics are and how to improve based on these metrics. I also believe that we'll be in a position to help enable providers to be more efficient and effective care.

Thursday, December 5, 2013

Continual disruption - still happening in TV and content

One of my favorite things to read about is innovation. For those of you that know me, that's not really a surprise. However, I think that there's a lot of misunderstanding out there about what "disruptive" innovation is. Most people think that apps that modify the way you do something is disruptive. For example, people have said that companies like Kayak and Hipmunk are both disruptors of booking travel. However, the true disruption came from travelocity or orbitz, whichever came first. These sites really did change the way the game was played for booking travel because they essentially cut out both the middleman (travel agents) and the airlines involvement in book flights. Anything beyond that has simply been sustaining innovations. These are innovations that are quickly co-opted by the existing incumbents as it's possible for them to do that. A more disruptive technology for travel would view the process holistically from the moment you booked the trip to the time to returned home from your completed vacation. The site would need to account for getting you to your destination without any sort of delays. In James Womack's book Lean Thinking, they point out the "value add" activity of a flight was only 3 hours, while the total waiting time was over 12 and they didn't include the effort it took to book the trip back in 1995. All inclusive it's likely to be much worse now. Especially the way that airlines measure "on time departure" (leaving the gate on time) which is different than our "on time departure" (taking off on time).

In a true disruptive situation you'll typically see the incumbents resorting to changing laws to keep their supremacy of the markets, we don't see this in travel at all. Where we do see this is in telecom and cable. The image below from Mashable pretty well explains why this is happening.

There's likely overlap between users of Netflix, Prime, and Hulu, but if I was cable TV I'd be running scared. I also would love to see this graphic if you add and specifically ESPN. I think eventually twitch will be disrupting ESPN and the traditional sports networks out there.

How are the cable companies using legal and technical mechanism to limit access to content on Netflix, Amazon, Hulu, and Twitch? First, the movie industries have absurd agreements with cable companies (providers) giving their services, like Xfinity from Comcast first access to content. In many cases this will translate into something earlier on the subsidiaries of those in terms of networks. Second, cable providers use their control over the network to throttle the internet speeds of these internet services. This is leading them to try to change the laws around net neutrality so that the cable providers don't just become "dumb pipes" that content is passed through but the users don't interact with.

I believe this also indicates that both cable networks and internet providers are being disrupted in a way that they don't understand. They are using every tool they have at their disposal to fight against the adoption of these services, but they don't understand what's happening. Consumers have hired comcast, verizon, and others to provide them a solid consistent connection to whatever content the user wants. Internet providers are trying to force themselves into a middleman role that the users don't want. When opportunities arise that will allow the user to experience content on their own terms. It's clear that cable TV is losing the fight and this will only accelerate as people purchase more tablets and devices like that. Chromecast (which allows people to display things from a laptop/tablet on their TV) is another disruption that Google is providing, Amazon has something similar for their Tablets (which will increase Prime usage by the way). The TV companies are losing and need to figure out new business models to stay afloat. This is where disruption is happening. Not in other spaces.

Sunday, December 1, 2013

Amazon's potential army of Drones - what's the point?

Amazon wants to deliver packages to you in 30 minutes via drone. While the convenience might be pretty awesome. I'm not sure how good of an idea this is going to be. I also think that this points to a broader push for Amazon. In the past Amazon has mentioned how they had plans to sell groceries locally and deliver rapidly. This is currently in beta test with only two cities involved, LA and Seattle. Depending on the size of these drones this will make delivery of groceries much easier and reduce the risk for goods to thaw while waiting for the resident to come home and get the groceries. Furthermore, if these drones are really good, Amazon could time the delivery of the groceries based on when the customer wanted them to arrive at their home. Let's say you place the order in the morning, but know you won't get home until around 6:30, you could ask Amazon to deliver the goods around 6:30 so you could just bring them in the house and start cooking.

A few years ago there were some rumors that Amazon was planning on going to brick and mortar stores while everyone else is going more web, web, web. These drones that are in the video do not look like they have the farthest range in the world, which means for a place like my home town about an hour north of Pittsburgh by car and if there was a distribution center in Pittsburgh (there's not, but there is one in Allentown), the drone would need to fly close to 120 miles per hour. That doesn't seem likely for these things. They don't look like they have the speed, they are clearly designed for shorter ranges than that. Additionally, implementing these drones would require significantly more distribution centers throughout the US. Distribution centers work best when there is a need for high volume, high speed, and high variety at least in many distribution models. However, if Amazon were to use retail stores as part of their distribution network and looked to use the stores as the location where the drones would send goods from, this makes a lot more sense. Retail stores aren't really there to be retail stores, but micro distribution centers.

This would impact the types of items that would be a candidate for Air Prime in many locations, for instance cities with Stores only would have a much smaller list of applicable items. Cities with distribution centers near by would likely have any item up for Air Prime that would fit on the drone.

This is still 4-5 years out from being deployed, so why is Amazon showing this off now? Well, bad press recently. There have been several articles that came out this past month about how horrible the distribution centers are in the US.

All said though, I think these drones point to continued interest in providing different approaches to brick and mortar stores as well as grocery stores. I think it will start out small and grow from there. Amazon will likely build out some stores first with a similar function to Best buy where you can pick up in the store. In later store deployments they will have options for Air Prime and pick up in store for certain items. It will certainly change things for Amazon workers and will change the way the distribution centers are managed. They may simply become hubs with a lot more being pushed out closer to the end customer.

Tuesday, November 26, 2013

Healthcare: the Value Stream of care

In Lean process improvement, one of the first steps you ever take is to walk the process. For manufacturing this means to go down to the floor where the product is made and walk with one piece from beginning to end. This provides the manufacturer insight into where there's a great deal of waiting for product to come, leading to idle workers, where there's a lot of inventory piled up - a bottle neck, if there's a lot of rework - fixing defects like re-etching a person's name on the back of an iPhone, and how the material flows around the floor. This works pretty well with doctor's offices too. You can draw a map to all the different places the Dr. walks, the nurses walks, and where the patient walks. Any transportation in a Lean system is waste, so reducing that is important.

Mapping value streams essentially take this to the next level. You map all the major steps that the material that goes into your product step through before and after you. This allows a manufacturer to see all the waste before and after them, enabling them to partner with their suppliers and customers to reduce waste and unnecessary processing. For example, many of us have worked retail. Some times when you do stocking you'll find shirts that are in bags that are in a box. This is non-value add because it's highly unlikely that the bag would protect the shirt from getting wet in the case of a flood. So, it's a waste of plastic for the bag, putting the bags on the shirts, and removing the bags from the shirts are all waste. Which increases the cost of a shirt. However, there's a beginning and end of the value stream likely starting with cotton and ending with the final sale to the customer. In the case of a can of cola, it takes 319 days from the mining of bauxite to the consumption of the cola with only a total of 3 hours of actual processing of the material (Lean Thinking, Womack).

Value Stream for a can of cola through bottling (Womak Lean Thinking)
Why such a long introduction? Well, the value stream for healthcare is completely different. The beginning is when you're born and the end is when you die. Otherwise, every activity you partake in impacts your health and the eventual cost of any episode of care. An episode of care is what happens when you directly interact with a provider, hospital, or health insurer. Arguably, these are the exception to your normal behavior and take you out of your normal routine.

Thinking about health in a value stream like this is non-intuitive for providers and insurers alike. As both have accounting practices and treatment plans that focus mainly on the episodes of care and minimize the remainder of the activities a member does. Thinking in this manner places more importance on preventative care, longer term plans for mental and physical rehabilitation, and care networks for long term diseases. This is a serious shift that is starting to occur in many insurance organizations, but aren't very effective yet. The most effective portion of those three are the networks of patients that have a similar disease, such as Crohn's Disease.

I believe that looking at care in this fashion will help redesign the manner that care is designed as it will focus on different portions. As my friend Rachel pointed out, behavioral health issues are typically undervalued in the value stream of healthcare. However, with this model long term care issues should be given priorities as they impact the highest percentage of the value stream. It would also force insurers and providers to look at addressing care holistically and providing the best care in the best way when they can. Sending patients to clinics that can quickly treat conditions as cheap as possible.

I'm extremely interested in how this will play out at my company as we think more holistically about value streams for health care. Checkout my last two blogs about health care:

Monday, November 25, 2013

Healthcare: Why do we need medical policies?

In my last blog post, I discussed how US health insurance companies decide what to pay for, what information they need to make decisions on paying for care, and some of the ways they go about making those decisions. I only briefly discussed why medical policies are required and why there's a lot of complexity around health care. I hope to shed some light on this and help people understand the difficulty that both Providers and Insurers have in dealing with the cost of health care.

First, not all diseases are equal. This one is pretty obvious, but I'm not even talking about how severe the diseases. That's vitally important of course, but even a "minor" disease can lead to long term impacts to quality of life because we don't know how to treat the disease. In some of these cases it might just be embarrassing, such as if I eat Gluten and I'm out and about the next day. I'll probably have some serious issues and won't be able to enjoy myself while I'm out. There are two reasons for that. One, it's not really obvious what condition I have. Two, there's no treatment to allow me to eat gluten other than "avoid" wheat, barley, and gluten. Which in many cases is rather difficult.

This brings me to the second reason why there's a lot of difficulty - it's difficult to even diagnose what disease people have. So, for gluten issues you have only a few options, one is a blood test to looking for an immune response to a gluten or to have a colonoscopy to see what sort of damage has been done to your large intestines. Because of this lack of precision, in many cases it can lead to the matching the wrong treatment for the right disease, vice versa, or wrong treatment for the wrong disease in the most extreme cases.

Precision of Diagnosis and Precision of Treatment matrix
In the above picture from "The Innovator's Prescription" it's clear which diseases are "better" to have, those in the upper right. While those in the lower left are much harder to treat and have less consistent outcomes. For anything in between the cost and quality of care is really dependent on the experiences of your provider. I believe that this is where insurance companies can add a lot of value. Using medical policies and partnering with providers they can artificially expand the experience of a provider through providing the latest scientific research and results for a treatment and disease interaction. This will help allow providers to focus on care while getting the latest medical news from their network of insurers.

This really puts the model on it's head as the provider can take advantage of the diverse networks they are part of to learn different components of research based on the focus of those providers. I think that a true partnership between insurers and providers really will drive down health costs.

This complexity is unfortunate, but is truly part of our human condition. One way to reduce costs is to increase the amount of research that pushes care into the upper right from the bottom left. Otherwise, it's difficult for an insurer to determine which providers are taking advantage of patients and which ones are honest. There's imperfect information on both sides and the patients pay for it in the long run.

Sunday, November 24, 2013

Heathcare: How an insurance company decides to pay for what

As many of you are aware, I've left the high tech sector and have moved to work for a Health Insurance company. Since my job is to analyze processes and improve them using Lean process improvement methodology, I have a pretty unique insight into the broader workings of my company - which will only grow as I expand Lean through more parts of the company. As a note, these views are my own and do not represent the views of Cambia Health in anyway. I believe that it's important to help educate the broader public about what happens when you want to have elective care or even while you've been admitted for care - either after an elective procedure or in an emergent case.

I know I'm opening a can of worms here, so I think it's important to note that these are truly caring individuals that want their members to receive the best care. However, they are also put into a tough position because health insurance is a contract and your employers negotiate types of care that will be paid for within your health insurance plan. Furthermore, as a way to control the amount of money the insurer pays they will "manage" the type of care that is being provided to a member. This of course is the part that people hate, my doctor says this should be done, so it should be paid for by insurance company! Well, yes and no.

In some cases your doctor may recommend a specific type of treatment that you actually need, but your insurance company won't pay for it! Why not? Well, there could be a few reasons. First, you may not actually have the benefit. For example many cosmetic procedures aren't covered and aren't part of your benefit package, or maybe you've already exhausted the benefit for instance number of days in a skilled nursing facility. Unfortunately, insurance premiums are based upon the amount of benefits that you could use and the total amount of risk that you are to the insurer. Which of course is difficult, because a person may need that care, but they didn't pay to have all of it fully covered. The other unfortunate portion is that most people truly don't understand what their benefits are, which makes this even more difficult. This of course goes back to Prospect Theory where insurance companies are acting as much more rational entities than their members, which leads to a definite imbalance of understanding and event potentially power in the relationship. Humans don't read all the contracts and Econs do - insurance companies are Econs extremely rational (in the economic sense) when dealing with contracts and risk.

The second case where an insurance company won't pay for a service relates to medical necessity. This is the part where providers get really upset with insurance companies. Essentially, this is a case where the insurance company is using a combination of medical research to create policies with criteria for procedures. So when you are trying to receive care, the Diagnosis is less important than the service that your provider selects for you. Diagnosis plays a larger role whenever the insurance company recommends alternative methods of care that lead to the same level of care but typically cost less - either to the member, insurance company, or both.

This requires the provider to submit clinical information to justify that procedure. Some of this requirement may actually drive up costs because the provider may have a great deal of intuitive experience with a specific type of diagnosis and knows that the best treatment is X. However, the insurance company requires that for procedure/treatment X that tests a, b, c must be run with results q, r, s. Based on the combination of the results the insurance company determines if that procedure is medically necessary or not. This works really well when there's very clear medical research and clear correlation between diagnosis and treatment. It doesn't work as well for less precise treatments such as behavioral health - which is much more trial and error and requires a lot of time.

Who creates the medical policies though? A combination of research clinicians, internal MDs, and providers - if they are insurance company specific policies. However, there are more general policies that are recognized and used for inpatient Medicare and Medicaid. These may have more input from the people using them. Policies take time to develop and typically lag the latest research. However, in many cases these policies may represent more knowledge about a specific treatment methodology than a general practitioner or even a specialist can know because of the breadth and depth of medical knowledge.

I will discuss more topics related to healthcare and how these impact costs over the next few weeks.

Saturday, November 23, 2013

Minimum Wage, labor, and economics

Last night on the twittars I had an invigorating discussion related to minimum wage, the mobility of labor, and the economics. The basics of the argument started over the fact that in MA minimum wage will be slowly going up from around $8/hour to $11/hour. $8/hour already is pretty good for the US where the federal minimum wage is closer to $7.25/hour - which is an annual salary of $15,080 (poverty line for an individual is $11,490/year). Obama is proposing to raise the national minimum wage to $10.10/hour or $21,008/year and MA's eventual minimum wage at $11,440/year. If minimum wage had kept up with productivity gains seen throughout the economy a study argues that the minimum wage should actually be $22/hour or $45,760.

The unfortunate thing about minimum wage jobs is that you typically don't work 40 hours per week, in fact places like Wal-Mart try to keep employees under 30 hours per week to avoid the requirement of paying any healthcare benefits (at least 1/3 of Walmart employees are limited to 28 hours/week). This requires minimum wage employees to have two or three jobs which creates an extra layer of uncertainty for scheduling of work and getting from one location to another using public transportation. (as a side note WalMart is holding a food drive for their employees)

Why don't they move to another location that pays better for a job though? There are a couple reasons, first moving is expensive. Even if you're renting on both ends a cross country move costs several thousand dollars. You have to put money up front for a deposit, go without pay for some period of time as you transition between jobs, you need to move your stuff, and finally, many places won't hire you if you don't live there, but you can't rent unless you have a job. It's even worse if you own a house, and the worst case is a house that's underwater.

Now, under utility theory all that won't matter because it's a sunk cost. It's the cost of doing business, all that matters is the amount of money you'll gain on the other side. Now, if we were all perfectly rational "Econs" that would work, however we're Human and we don't think that way. According to Prospect Theory we are extremely loss adverse and would much rather have a small chance at a with with a worse downside than a guaranteed downside. For example, we'd rather have a 10% of winning $0, but 90% of losing $1,000 than automatically losing $900. From Utility theory or expected value they are the same, but from Prospect theory they are very different. This drives our behavior when it comes to relocating for jobs, and is especially true when you're unemployed. Because your baseline is set at your previous salary, you'd rather wait and risk making no money than taking a job that's more than 10% less than your previous salary. From an "Econs" perspective this is irrational as you should take any job that's offered to you, because it's more than $0. This theory can be applied to corporations as well. They are risk adverse in many cases. In one way this manifests is through the controllable costs of employees salaries. In many cases managers will let employees go or hire employees at a lower salary than deal with something that's a sunk cost.

Prospect Theory FourFold, Thinking, Fast and Slow Daniel Kahneman
Furthermore, corporations are under pressure do to short term requirements of the market to continually beat the previous quarters. This pushes activities in to the lower right quadrant, which also negatively impacts innovation and employee salary.

Based on the rationality here, should we increase minimum wage? Based on both Utility theory and Prospect theory companies would dramatically reduce the number of employees they have to avoid a sudden massive loss. Companies should move or relocate elsewhere, however, many studies have shown this simply isn't the case. I think that this can be explained by something else that's unexpected, unemployment benefits help the economy grow. According to a Moody's study several years ago and another talk a single dollar of unemployment benefits creates between $1.64 - $2.00 of economic activity. This is because it creates demand that otherwise would have been missing. It's likely that the higher salary of people that are making minimum wage generates additional demand for goods and services that otherwise would have been unable to be fulfilled.

I believe, this is why Switzerland is looking into providing a living wage of $2,800/month or $33,600/year. It's a way of being both moral (not allowing citizens to starve and live on the street), but also stimulate the economy to continually grow. The idea of lower taxes is to put more money into the economy so people will spend more money. However, there are a lot of people out there that don't benefit from this all that much because they already pay little to no taxes (40% before 2007). Providing tax relief doesn't help this portion of the economy. Providing a higher minimum wage would provide relief for them, but a tax on corporations, but would be recouped through additional demand. A living wage provides relief, but a tax on the broader public, but would be recouped through additional demand.

In the first case, people are working and providing a service to a corporation for the salary they earn. In the second case, there's a higher chance of free loading - however I see no reason why you can't put requirements on accepting the money such as community service, using the money for education and training, or volunteering somewhere.

Do these thoughts address every issues we've seen regarding minimum wage? No, but it's helps frame the discussion a little bit and hopefully addresses some of the concerns. I believe that much of debate comes from non-rational sources, such as the economic theory you fully support. Prospect theory, Behavioral Economics, and Evolutionary Economics are disdained or unknown by Libertarians and Conservatives which paint a very different picture on the economic policies we should enact than neo-classical economics. Which puts this to something closer of a religious battle than a logical rational debate, because these theories are incommensurate with each other in the same way that Newtonian Physics and Relativistic Physics were to each other. It's either one or the other not both.

Edit: I miscalculated on the salaries for minimum wages. I have corrected them.

Monday, October 28, 2013

Intellectual dishonesty in corporate America, CEO Salaries

Apparently CEOs are upset that the Security and Exchange Commission is going to require calculation of CEO pay based upon median salary of all employees rather than Mean or average. They argue that this would burden them with unnecessarily complex calculations. This of course is an absurd statement. Let's do a thought experiment to walk through the difference between averages and medians.

You, a friend and Bill Gates get on an elevator, your current net worth is $100,000, your friend's is $200,000 while Bill Gates is somewhere near $60 Billion. The average net worth of the three of you would be $20 billion, while the median is $200,000.  The difference in ratio between these examples are staggering. In the example of averages, Bill Gates is only 3:1, while in the second example it's 300,000:1. Major difference correct? This example is specifically designed to highlight the massiveness of the differences between averages and medians.

As you can see in the chart above with a skewed distribution there will be a gap between the median and mean. We hear this routinely when people discuss home prices, they are always discussed in medians, because the average price of a home is positively skewed by millionaires in most cities. Like the one above.

So what would the difference in salaries be if salaries are calculated off of median rather than means? Well, let's use some real numbers, in 2004 the US the average annual income was: $60,528 while the median was $43,318 (source wikipedia). We'll look at the extremes for ratio difference compared to these numbers, the JC Penny CEO earned 1795:1 the mean worker, so his salary could have been: $108,647,760 for the Mean compared to $77,755,810 or $31 million less (obviously the mean and median salaries for JC Penny's employees are lower than the median or mean values for the US). On the lower end the CEO for Agilent Technologies earn a measly 173:1 or (mean) $10,471,344; (median) $7,494,014 or $3 Million more. 

Limiting CEO salaries based on the median means dramatically less money for the CEO. It also highlights disparity in numbers of people that are making really low salaries. I would imagine that for a company like McDonald's or Wal-Mart the median salary for employees is between 20-30k/year, which would drive down the maximum salary well down if the limit is something like a ratio of 100 (median of 25k*100 = 2,500,000). 

The true concern of the complexity comes from not the new method of calculating the maximum ratio a CEO can earn using medians - especially as it's built into excel (=average()/=median() ) and nearly all financial tools, but in the complexity of creating compensation packages to get around that law. If the law is strictly implemented where there is absolutely no wiggle room where all stock options, bonuses, and base salary cannot be above some set ratio on the median salary, then the only way to pay CEO's more is to shift that median up. This would impact profits and most likely profit margins. A way around this would be to outsource manufacturing and exclusively design in the US thus shifting up median salaries. It will be interesting to see how CEOs and leadership address this.

Otherwise they might have to make a lot less money per year and save shareholders a lot of money.

Sunday, October 27, 2013

How you feel at work

We know that work sucks most of the time. The question is why? My wife and I have been pondering this question quite a bit lately because of her high levels of stress. She's basically working all the time and has little expectation of being rewarded beyond a raise and the yearly bonus everyone gets based on the performance of her company. Being on call 24/7 with tools that consistently go down as a new employee immediately creates problems. No matter what you do you feel like you're a failure. This is where the quality of your manager can really step in to make you feel better about the job you've been doing. According to a Danish study this is what causes work driven depression, not the amount of work you've left to do. I completely agree with this. I know that I've gotten depressed when I've had minimal work to do and had been successful with my work because I had a bad manager (he was giving raises to the women in the group he obviously had a crush on). When your managers have poker faces and basically treat you the way they expect to be treated, no awards, recognition, and more work with less time for a job well done are causes of serious workplace depression.

The article doesn't really provide many ways to address these problems. However, from my experience I know that there are some definite ways to address this type of depression. First, look for co-workers that inspire you and can motivate you. Get peer recognition and make sure you recognize your peers that you feel are doing exemplary work. In many cases companies have spot awards - use them regardless if there's money associated or not. The recognition really makes people feel good. Furthermore, as more of your peers begin to show recognition it will actually put pressure UP to your manager to do the same. The manager will be the aberration of the group and will likely want to conform, especially if manager sees improvement in the organization.

Work with cross-functional teams. You are more likely to get rewarded when you work on projects with larger scopes. This provides several benefits for you, first you learn more about the organization than just your silo. Second, you are able to see how other leaders treat their people and if you like how a leader in a different group treats their people, you should consider moving in that direction. This will enable you to develop new skills and potentially learn the skills you need to get into a job you find more interesting and full filling.

Finally, if you don't find something that makes you happy at the company you're with leave. Not without another job lined up, but start looking for the types of jobs that you want and try to find out what type of manager you'd rather work for. In many jobs you can move around enough to learn what you like and what you don't like. I suggest moving around within a company, then looking elsewhere. Develop the skills you can while you're at your current job and try to find something you're excited about.

Many of the people I'm connected with on social media, such as the KBMOD crew have been able to do this, but not all of them have been able to. I hope they're able to do this soon, I know that my wife will be doing the same over the next few months. Work takes up too much of your life for it to suck that badly. Move on, if you had a failing review a company would do the same with you, why shouldn't you do the same if you're company's failing you?

Monday, October 14, 2013

Government Shut Down

The government shut down is bad mmmkay? This is one of the examples as to why I'm glad my wife didn't end up with a job at either a government research lab, government agency, university or any other place that relies on public funds to keep it's doors open. That's a lot of places. Between the sequestration and this shutdown, the US has turned into a horrible place for the sciences. However, it's alright for us to keep the NSA up and running, but not the people that watch the watchmen. Basically, our government has different priories than most Americans, which of course is no surprise - well at least different from myself. Losing funding for science is a huge blow, especially the fact that they couldn't continue to speak or publish any papers. It's disconcerting because our scientific research is what allows the US to stay ahead of the rest of the world in our economic output. The results of scientific funding from the '60s essentially gave rise to everything we're doing on the internet. The funding from ARPA that lead to ARPAnet and then the internet, inadvertently lead to the great work I mentioned in my review of Dealers of Lightning. Many of the members of the team at Xerox were funded by ARPA during their PhD's, their research at various universities, and in some cases even startups. This one government expenditure had massive positive impact in the one area of our economy that's going gang busters.

So what's going on with this shutdown? As this article points out the House did pass a budget, which is where all budget must start, however, the Senate didn't pass it and countered with their own budget, which happens fairly often. This leads to negotiation between the two chambers in Congress. The problem that we're experiencing in this case is that the "don't match" portion happens to be Obamacare. The House did not fund Obamacare at all, while the Senate naturally did (being held by the Democrats). This required that the House and Senate come together to reconcile their differences, which aren't possible to reconcile with everyone. Which is the Speaker's problem right now. Almost a week ago, there were rumored to be enough votes in the House to pass the Senate version of the budget - as Republicans were defecting to support the Democrats. The House refused to allow a vote to be called. Bills that don't have a chance to pass get votes all the time (many people have pointed out Obamacare repeal is a key example of that). So, I think that the article I linked above is a bit disingenuous either intentionally or is just intellectually dishonest. The author clearly knows what people mean by saying "law of the land." It means that as we have obligation within the law we need to pay them. The House, Senate, President, and Supreme Court weighed in and it's a legal bill. The House is unable to repeal it through legislative methods so created a plan to shutdown the government to stop the bill from taking effect - to defund the bill and "repeal" it that way. That's what they are doing and why.

The reasons for why the Republicans believe this would work is beautifully laid out in an argument using Game Theory on the Harvard Business Review: every other time brinkmanship was used, it worked. Go with the strategy until it doesn't work any more. The White House figured this out too and now cannot allow it to continue. Otherwise, the above author would be correct, the best way to kill a bill you don't like that passed through everything is to simply defund it later or shutdown the government until the other people meet your demands. Toss some spin on their to make it seem like the other side is unreasonable and boom, you've gotten your way again.

The problem with brinkmanship is that it's a zero sum game and if the government defaults, it's going to be terrible for everyone. The bulk of US voters blame the republicans, this could cause massive damage to even safe areas for the republicans. Are there better ways to deal with Obamacare? Yes, if it's as awful as the Republicans think it is, use that to get everyone out of office that voted for it. Run on that plank and push it to the hilt. If it kills jobs, causes people to go bankrupt use all that to get the Democrats out of office. Then once a majority is secured repeal the law. That's how government should work. Sure you can work to undermine the law while you're at it, but if you want to get rid of it, do it with votes so it's clear the people have spoken. This shut down is bad for everyone. Let's end it, figure out how to address long term debt, improve the job market, pay for more science, and address the structural problems we have as a nation. If Obamacare is a bad thing, we'll figure it out really quick and then deal with that fall out. We need leaders now, not children.

Saturday, October 12, 2013

New Economy vs. Old Economy - Creative Destruction

My last post on this the New Vs. Old triggered a far to brief conversation at work about creative destruction and when it's "right" for creative destruction to occur. I felt that this was an interesting tact for approaching this sort of conversation. My colleague pointed out that when new businesses challenge laws that are in place just because you have to question if that's "right" or not.

First, what is creative destruction? I wrote about this over two years ago, so I'll forgive you not remembering. Essentially, it's whenever new businesses figure out new innovative ways to provide a service or technology that causes the previous service to be obsolete. Today, it's more popularly described as "disrupting a market."

So, looking at creative destruction and the laws that spring up around a given industry I believe that on the extreme there are only two types of laws. Those that protect the consumer/public/end user/employee and those that protect the industry. That's not to say that this isn't a gradient where the impact of a given law flows from protecting the public to the industry or in fact does both.

For example, Copyright used to protect both the people that produce music and the public. It did this by guaranteeing a state sanctioned monopoly for a short time period and upon expiration the public would then own the work. This enable the creation of the music industry and helped artists grow and make money. It wasn't perfect for either party, but it worked fairly well. We all know of stories of starving artists that died and then their works became popular. Well, currently those works still make someone money and that isn't good for the public. Now copyright lasts as long as 70 years past the death of the original artist. This clearly is no longer protecting the public but is protecting the industry. I would argue that with how far the pendulum has shifted it'd be moral to try to push the boundaries of these laws and creatively destroy the industry. This is currently happening with the copyleft movement.

In the last blog I wrote about AirBnB and discussed Uber in the one before that. These are very different than the music industry. Most cab companies have something called a medallion, which is something like a certification of quality for the vehicle and the cab driver. These are very expensive and have essentially a dual function of protecting both the public and the taxi industry. Uber is challenging these laws because it is a "ride sharing" program where you hail a person going in the direction you are, pay them some money and move on. The purpose of the company is to reduce expense of moving around a big city like San Francisco, increase the competition of the market, reduce the number of cars on the road, and to make money a different way. Depending on your point of view it's breaking the law. It's being sued and will likely continue to be sued.

Is it "right" for this company to operate this way? Well, there's the argument that you don't have to use Uber at all, so if you're concerned about the safety aspect you're mostly covered. Since it's a personal vehicle the general public is at no more risk than if the car was driving around with one person rather than two. The person is already on the road and likely would have been anyway, so if they suck at driving you're no more or less safe. However, it's still possibly in conflict with the law. It's a new way to hail a "cab" and the taxi companies are having problems adapting to the competition. So is it right or wrong? In this case, I don't really know. I think that it's "Right" that a company is forcing taxi companies to evaluate how they do business and to challenge the laws that are in place to protect the taxi industry. I think there could be risks to the public, but they aren't huge.

There's another aspect that I haven't talked about in this model though. A company like Yellow cab has subsidiaries in many different cities. While Uber is an application and it's "cabs" are in any city where a person is a member. There's a huge network effect benefit for Uber, they need to do little to no extra work and they can grow into new markets. Uber doesn't control which markets they enter to some extent or how quickly they grow in a given market, they can grow as fast as the market can support the growth. Yellow Cab has a much different growth potential and can't enter new markets as easily. If Uber is able to service an under serviced area shouldn't we support that? Isn't that "right." Furthermore, with this rapid growth model it's nearly impossible to know what laws they are going to be in conflict with until it's already in the market. Ignorance of course is no defense, but it removes some of the intentional aspects of the creative destruction.

I think that there are certainly moral questions that need to be asked around new businesses and business models. We should continue to ask them and work to make sure that if a new company is disrupting and industry the result is equal or greater protection to the public and a balance between changing laws that protect incumbent industry and the new entrant.

Thursday, October 10, 2013

Review: Dealers of Lightning Story of Xerox PARC

This is the Third historical book written about a business. The first was the history of Bell Labs and compared to that book, this was a wild ride in terms of organization. It would bounce back and forth over the span of ten years, while Idea Factory (Bell Labs book) was a stately possession moving forward with time. I believe that the major difference was that while a lot was happening at Bell Labs, it wasn't crammed into 10 years. It occurred over 40 years or more, which allowed the author to pick and choose the people to follow. In Dealers of Lightning so much was happening at the same time with the same people and unique people that it forced the author to jump backwards and forwards through time.

Despite that, it really made me realize how much we owe to PARC researchers in the 70's for technology we have today. If you're using a tablet, one of the very first visionaries that created that concept was Alan Kay, he first envisioned it in the 60's and from what was described in the book, the iPad is pretty much true to his vision. Amazing to be honest.

Here's a list of things they made:
Object Oriented Programming
The First mass produced PC
The predecessor to Word
The original Desktop
VLSI, what has enabled the development of basically every semiconductor chip
The first Graphics Chip
Copy, Cut, and Paste
The right click
First Laser Printer
The predecessor to Postscript (Adobe)
A piece of software where you could edit text and pictures at the same time
A computer in 1982 that had 6000 Japanese characters and could type in 100+ languages and it's capabilities wouldn't be match again until the 90's

Dramatically influenced Apple, Microsoft, 3Com (Metcalfe founded this after leaving PARC), Adobe (2 PARC researchers founded this), and many other companies.

Xerox was a visionary company to fund a research agency like PARC. PARC was likely one of the last of its kind as well. There are very few companies that have a similar branch of research facilities that push basic and applied scientific research. I suggest reading this book, just so it helps you understand where the technology we all use and love came from.

I give this book 4/5. Well researched, great topic, difficult to write because of the concurrent activities.

Tuesday, October 8, 2013

New Economy vs. Old Economy - where the future is going

Yesterday I posted an article about AirBnB focusing on how it's upsetting entrenched businesses, neighbors, and has attracted the attention of the NYC AG. I had intended on having a much longer discussion but ended up going down the rabbit hole with that topic. I was influenced to do that article by an article in CS Monitor about the growing backlash against the sharing economy. That article did discuss AirBnB, Uber, and a few other sites. I suggest reading it.

While that article focused on the sharing economy, there's quite a few other companies that are causing problems for entrenched businesses because of the way they've structured their businesses. One of the most prominent companies doing this is Tesla Motors. Tesla has upset a just about every single car dealer in the US. Why? Well, as an attempt to encourage growth of multiple types of car companies the US and many states forced a separation between car dealerships and the manufacturer of the cars. This has worked extremely well for car manufacturers because they are able to push cars to the dealers and the dealers can get them for a discounted price and then sell them to their customers. The US is pretty unique in this approach - it's why there's those megadealers all over the place. Tesla is more closely modeling their distribution network off of Toyota where they build a customer for life and build to order. Toyota in Japan is so flexible they can meet an order and have it delivered within a week. Tesla has decided to have "showrooms" where people can look at the car try it out, but they can't buy it. They have to order it online. Car dealerships are pushing for legislation and suing Tesla over this. I believe that Tesla's model will work for many consumers but not all. It should be interesting to see how this plays out.

Another area that's interesting is, which has turned watching your friend play a video game into the next big thing that ESPN already missed out on. For those unaware, Twitch allows people to stream themselves playing video games and interact with their viewers directly by reading chat and talking to the chat or typing back to the viewers. Through this, games like League of Legends, StarCraft, DOTA, Street Fighter, and first person shooters has turned into a $20 million dollar industry just for tournaments. It's replacing how people watch "TV" and engage with the people that are watching. These tournaments are pulling 200,000 viewers on just about any given weekend with several thousand in person to watch the event. Each game type has their own celebrities, heroes and villains. It's still early, but it is going to pull people away from cable and from watching ESPN. I would not be surprised if ESPN began to show some of these events. It might take a few more years, but it's going to happen.

Finally, the other interesting area where the new economy is threatening the old economy is the Silk Road. The Silk Road was an online blackmarket that used Bit Coins as it's only accepted currency. It was wildly successful before its owner was recently arrested with approximately $80 million in BitCoin or about 5% of the total currency in circulation. This is the cut that this person made, which means it's likely that hundreds of millions of dollars flowed through the site selling drugs and other material. With it's collapse this market is likely to follow a similar path as the music pirating industry. Effectively there will be more security, less people will know what the Silk Road's replacement is (I heard about Silk Road about 6 months ago) and it might be more dangerous to use. From all reports Silk Road was relatively safe to buy drugs from as the drugs were simply mailed to the user and it cut out the distribution channel where a bulk of the violence occurs.

I think that these types of business models will likely continue to flourish, it's likely that we'll see a lot of new types of business models that build upon this. I'm interested in seeing what's going to happen.

Monday, October 7, 2013

New economy vs. old economy

With the rise of the so-called "Sharing Culture" there's been a recent upswing in the types of business that focus on connecting people point to point with others that can provide services that people need without a lot of the fuss of other intermediaries. There are, of course, a few pioneers in this type of activity, Napster, Kazaa, but also more "Legitimate" companies, such as eBay, PayPal, and Craigslist. These caused disruption, but not on a seriously massive level. eBay expanded the amount of people that could or would auction off their goods. It more likely impacted the amount of garage sales or donations to Goodwill. Craigslist did have a negative impact on newspaper's income - however newspapers were having other issues because people just weren't buying them, so it was somewhat moot. Now, however, there are companies springing up that are impacting much larger less "fringe" portions of our economy.

I first heard of companies like this while in the Netherlands where some of my friends were using Couchsurfing. Which connected people that were passing through an area for a night to two to crash on someone's couch. I don't think any money was exchanging hands. I believe that this site was a natural precursor for AirBnB, which has gotten in a lot of hot water lately. This site, for those unaware, allows people to rent out rooms of their house or their entire house for short periods of time. The idea is that the renters can use the stuff in the house and have a cheaper place to stay compared to a hotel. While the owners are able to rent out unused space. For instance, I could rent out my third bedroom if I wanted too.

A lot of people aren't happy with this notion. For one, it does violate a lot of zoning laws and people are pissed about their neighbors renting out rooms to god knows who. Secondly, it does violate those laws and New York City has decided to do something about that. They've asked for information on 15k users in the city. This will likely be a large blow to membership there. If users feel that they are likely to be hit by a law suit or forced to pay licenses to rent out the rooms, renting the rooms will be much less appealing. This of course will thrill hotels as they can continue to enjoy a higher cost.

Part of this stems from the fact that this is new and scary. People don't understand the change. Part of it comes from the fact that the city doesn't want people to do this instead of normal rental agreements which "protect" both parties in different ways. An AirBnB arrangement is very different and likely has a lower level of protection (mostly social norm based rather than legal based). Part of it probably has to do with money. The city likely earns less taxes from people renting rooms this way than from Hotels.

These types of differences are going to be occurring on a more frequent basis. We need to help steer the conversation as internet savvy folks and look into how we can create accommodations for both sides. I'm not saying for the hotels, I'm talking about for your neighbors and community. Work with them to help them explain what's happening, why it's happening, and what they can do to help develop the social norms for websites like AirBnB rather than destroying it before it has a chance to be successful.

I'm hoping there will be a lot more experimentation in these types of sites even if I never use them. I firmly believe that it's your house you should be able to use it as you see fit as long as it doesn't cause harm to other people. Having a two way conversation and educating the different stakeholders involved is crucial to ensuring the survival and continued experimentation in these spaces.

Saturday, October 5, 2013

The NSA, FBI, and Internet Security

Over the past few months we've learned a lot about how the US government looks at its own citizens. We've learned this through the actions of Edward Snowden. He's done us a great service by forcing a conversation that the NSA and FBI didn't want us to have. The NSA lied to the Senate recently by claiming that it never tracked US citizens through Cell Phones. We would never have known about these activities if it wasn't for Snowden.

Snowden was using email to send information back and forth between himself and Glenn Greenwald. Since email is in one of those fuzzy gray areas of the law around data retention and government access to it this has caused a bit of a problem. It make things more difficult Snowden used an encrypted email service called Lavabit. It's encryption was at such a level that when the FBI requested data from it, they were confounded and essentially attempted to blackmail (legally of course) the owner into handing over the encryption key. This would have effectively rendered the service these people were paying for worthless. They were paying to have their email traffic be secured from both public and private entities.

As we hear and more about how the US government has been behaving towards internet security, the more we're learning that the NSA and other US agencies are doing their best to thwart it. They have worked with the NIST and weakened the encryption key they developed. The problem with these backdoors is that if it's there for the "good guys" (whoever that might be) it's also there for the "bad guys" (whoever that might be). This isn't just general encryption keys, it's things that we use every day without using it. Whenever we are using any website that includes "https" we are using a basic encryption protocol called SSL. Think about when you're banking, you see the https. Google now allows you to use this when you send information to and from them. This encryption has also been broken by the NSA. This is our personal stuff and if it's broken by the NSA it can be broken by other people. Now does this mean we're likely to have a rash of new fraud cases or theft cases? No, as it's been compromised for some time. However, people do know about it now and this of course is a greater cause for concern.

What can we do about this? Well, first, look into more secure encryption methods. I wouldn't be surprised if Google and applications like HTTPS everywhere will change their algorithm in result. Second, contact your representative and your senator. I'm lucky my senator in Oregon is very vocal (Ron Wyden) not everyone is so please help inform your leaders. Third, buy from companies that you know haven't given up data to the NSA, don't use Facebook and the like and basically try to follow the great writing that Sean did several months ago over on KBMOD. He nailed it then and it's even more pressing than before to keep up with security.

Tuesday, October 1, 2013

Review of Without Their Permission

I was inspired to begin writing again by reading Alexis Ohanian of reddit fame's debut book, titled "Without Their Permission" for those that were regular readers and know me are aware of my interest in the startup community, technology, and activism during the SOPA/PIPA days. So reading this book happily fell into many of those interests.

First of all, this book was entertaining. It's a rather self aware book and in some cases the humor of it reminded me of Drew Curtis's book "It's not News it's Fark" which is a humorous book that really pokes fun at mainstream media. There's some of that in this book, but it's much more playful and selfaware of how important the media has been to Alexis's success.

During my Master's thesis research I read a lot of scientific studies that looked at the types of businesses, industries, education, and so forth of founders. Which really focused on the technical skills of the founders. This book didn't. Alexis wasn't the technical brains behind reddit, he was the "other stuff" that helped make reddit reddit. I believe that this is a fantastic view point to bring to the conversation on start ups, incubators, accelerators, etc... because it's something that's missing.

I have to say at first while reading the book I was really annoyed by the line "every link is created equal" because in any network this simply isn't try. Any unconnected link is equal, but as soon as the Internet is the Internet links become less equal because of interconnectedness of the Internet. At first this prevented me from enjoying the book because I was so focused on this, however after working 8 hours I forgot about it until it was mentioned later. I only bring this up, because a large portion of the book is spent discussing how important networking is to the success of a startup. It became clear to me that Alexis gets it.

I also found this book enjoyable because it is much less self congratulatory about the Internet entrpreneurs than other books such as Makers, the New industrial revolution, Micro Wikinomics and Macro Wikinomics which cover very similar topics and ideas. In fact any time it felt to be getting too overly optimistic Alexis would point out that everything comes from hard work. It's work that almost everyone can do, but it takes dedication.

Alexis points out a lot of successes that he's been involved with as an investor, which provide a lot of great anecdotal experience as well as a graduate's perspective from the Y-Combinator. I think these views are all helpful as we begin to look for more unique ways to fund startups beyond the traditional VC method.

Finally, I enjoyed the section about SOPA/PIPA which was interesting as I was actively involved on reddit and blogging to inform others about what was happening. Some of that included sharing the interviews Alexis did during that time period.

In general this book is definitely a great introduction to a more realistic view of Internet entrepreneurship from a successful founder, a great introduction to many unique startups out there that are very inclusive, and a great introduction to SOPA/PIPA for people that weren't paying attention.

Get out there and make something great happen.

Friday, June 14, 2013

Why now in Syria?

Today Obama announced that we're going to begin military aid to the Syria rebel group Supreme Military Council. Supposedly, this is because the Syrian regime has used chemical weapons on rebels and civilians. Despite the fact that we've repeatedly condemned Russia for seeking to aid the Syrian regime, we're going to do the opposite and arm the opposition which has a massive group of hardline extremists that will likely turn against the US as soon as they are in the position to do so. Furthermore, there are rumors, according to the UN, that the Syrian rebellion has also used chemical weapons. This combined with the fact that 93,000 civilians have been compared to the 150 killed with the chemical weapons usage makes me think that this is a shaky argument at best. I certainly hope we don't find ourselves arming a group that also used chemical weapons.

Before this announcement and continuing after, John McCain has and is calling for a "No Fly Zone" in Syria, while the Obama administration has declined to implement one because of Syria's air capabilities. However, it's been effectively confirmed that Israel has in the past bombed Syria. A no fly zone would preclude Israel from bombing Syria in anyway shape or form. In fact, when Russia wanted to enact a no Israeli fly zone, through providing anti aircraft weapons (only capable of hitting planes), the US condemned this as aiding the Syrian regime. It's also likely that those same systems would have been able to hit the majority of US planes as well as the Israeli Air Force, so we were as much protesting anything that would have prevented our Air Force from dominating the sky above Syria.

Based on the interviews I've heard, I don't think the end result in Syria is going to be a beneficial one for the US unless something magical happens. Where we arm the right people and they are the only ones we help and they automagically kick the Syrian Regime out of the country. It's not going to happen. Even after Assad is overthrown (if he is) it's likely that Syria will continue to be consumed by a civil war, which will likely be even more of a religious civil war than it is now. Now it's as much ethic based as not.

On Reddit, there's a meme that's arguing that the reason we entered Syria now is an attempt to distract the US media from the NSA and Prism debacles. This could be on the right trail. The news is dominated by the fact that we're supplying aid to the rebels, what the implications of these actions will be and what won't be. I think getting involved in another conflict in any manner isn't good for the US, especially if the side we backs fails, which it is still likely to do so. We've lost any moral authority we had with Russia in an argument regarding supplying weapons to either side.

I do not think that this will pull people away from the NSA issue, we're going to keep seeing it. I'm going to keep writing about it - I just wanted to post something about the hypocrisy of the US entering the Syrian civil war. The big story for this week and next week is still the NSA and PRISM. We are going to continue seeing new developments in this area and we need to keep our eyes on it. If we don't keep pushing this, it will become 'ok' through passive consent. That's not acceptable.

Monday, June 10, 2013

NSA and Edward Snowden

Today saw the unveiling of the NSA leaker, Edward Snowden, a highschool dropout that worked his way through sheer capabilities as a programmer. To me this guy is pretty amazing. He cares about the people that he could have put in harms way, he made sure that he did not release any information that would put anyone in harms way, even though he had the capabilities. He learned from Bradley Manning and worked to ensure there would be no risks of physical injury. He felt that these actions violated the constitution and decided to expose these deeds to the public even though he knew his life was over. He believes he's likely to be targeted by the US government or an agent, such as a member of the Triad gang (he's in Hong Kong), to be executed.

Not only he is clearly concerned, but the media seems to think that this is also true. My roommate was watching ABC news with Diane Sawyer and during one segue she mentioned that he may have left because he feared for his life and was likely in danger. Think about it. It's publicly acknowledged by our press, that it's likely a whistleblower might be killed by the US government. This is a US citizen that has a family history of serving (father a member of the coast guard and mother a legal clerk) the US government. He is afraid for his life because he believes that the US government would murder him. If he dies and his body is found the blame will automatically fall upon the government. Edward will not be able to answer phone calls, call anyone, and is essentially on his own to make it to a country that has no extradition treaty with the US. This is a travesty - the fact that many people believe this man is going to die within the next few weeks - killed by his own government without his right to a trial.

Why does what he said matter? A lot of people are talking about it being only Metadata - here's an excellent article explaining what would have happened if the British had meta data during the revolutionary war. It would have ID'd Paul Revere as a likely revolutionary based on his association. Knowing nothing else about him other than a few clubs he and 254 other people in Boston were members of it was possible to deduce the entire social network and who was at the center of the networks.

As I mentioned in my last blog post this network analysis would have caused the changes in my Facebook network to raise some red flags. I suddenly move to Europe (I didn't list Eindhoven has my city of residence it would have been inferred from my friends), some of my first connects in Europe on Facebook were 2 Colombians, 2 Pakistanis, an Iranian, and a Turk. These changes represented a major shift in my circle of friends. I had few non-americans as friends and no Iranians or Pakistanis in my network. Using the full history of my data they wouldn't have found much except that I liked to drink and wrote drunk posts on Facebook while in college. However, it's likely I would have remained someone to keep an eye on, and since then I've written numerous posts about Anonymous, LulzSec and other controversial topics.

Anyway, it's important to keep this in mind when selecting the companies you decide to store your information with, even if it's "only" metadata. Where you go, who you talk to, and what you do online are all representations of you and a lot of information can be gleaned from that.

What can we do? Vote all the bums out of office next go around for one. Start companies that only hand over encrypted data that the end users are the only ones that can decrypt it. Educate your friends, family, co-workers, and anyone politically minded you know. We need to drive change otherwise this will continue and will only get worse. At what point do we need to start worrying that the NSA/US Government will start killing your friends because of who they talk to and what they believe?

Thursday, June 6, 2013

NSA, Phone Records, and access to data systems

NSA - Nothing to See Anywhere around here. The past two days have been bad for the Obama administration for both leaks and for privacy concerns. It was leaked yesterday to the Guardian's reporter Glenn Greenwald whom a lot of people in the US aren't fans of because he sticks to his morals regardless of which party is in power. This leak showed something that really shouldn't be that big of a surprise to anyone. In fact, Senators are all like, what's the big deal this has been going on since 2007. This was originally just AT&T that was wrapped up in this, but everyone suspected other telecoms were involved. After that had come to light congress retroactively gave immunity to the telecoms, despite an ongoing law suit from the EFF - which was dismissed, although EFF filed another shortly their after.

Today was another turn of events where operation PRISM was unmasked, by both the Guardian and Washington Post. This system has direct access to major technology companies servers including Google and Facebook, although both companies deny this. Superficially, PRISM is intended to filter through to a majority of foreign based data. In this case it's seriously the slimmest majority - only 51% - a majority though, although in the US Senate you'd never know.

How are these things possible? Two major reasons, the Patriot Act and the "Secret" FISA Court. I use quotes around "Secret" because it's as "secret" as the drone program. However, we don't know what decisions are being made, we don't know what is being taken before the court, and we have no idea what sort of "do process" standards have been implemented in this court. If it's anything like the drone program it's likely just a few people sitting in a room talking about how bad terrorism is and data like the above to determine the guy needs to die. It's no way to run a democracy.

With the combination of the data in our phone records and our internet usage the NSA can create a massive time based network of connections between both Americans and Foreigners. Abrupt changes in the make up of a persons network with people from countries of interest likely flag them as a risk for interacting with Terrorist. Additionally, if a new pattern was detected the NSA would likely go back and look at historic data to try to understand why this new pattern arose and what they could do to predict future shifts in networks towards engaging with these groups of people. It would also lead the NSA to create models that could indicate how likely someone is to develop behavior patterns of terrorists after their network shifts from one sub group to different subgroups. Furthermore, it's likely that this information would be even more of interest if there's a full shift of members of that person's network towards more potential extremists.

We need to work to change this. The Senate knew about this and plans to hold closed door meetings to discuss it. These discussions should be public not behind closed doors. It's a disgrace.

Sunday, May 26, 2013

The word "Terrorism" has jumped the Shark

"You keep saying that word, I do not think it means what you think it means" - Princess Bride. Growing up terrorism meant something. It meant that someone out there could get to you in a very violent way designed to inspire fear in the general population. These events were rare, but horrifying. The first World Trade Center Bombing, Oklahoma City Bombing, The Unibomber, The Olympics bombing, the nerve gas in Tokyo Subway, etc... However, since 9/11 the word Terrorism has begun to change meaning. 9/11 of course was a terrorist attack and spawned may other attacks that were intended to cause damage and inspire fear in the populace. They worked, the US has spent billions of dollars in security measures that are ineffective at best, we've spent trillions of dollars on two wars, and who knows how many shadowy engagements using our special forces and drones.

It's had many other consequences, the no fly lists, the removal of passengers for speaking Arabic or most recently Russian, hateful actions against both Muslims and the religiously unrelated Sikhs - they have turbans therefore must be a terrorist! - and of course more attacks. The disturbing trend however is the lack of even handedness in classifying an act as an act of terrorism. We're seeing kids getting arrested and facing 20 years for making terrorist threats by posting rap lyrics on facebook. We have the Boston Bomber charged with terrorism (as he should be), but the guys with the guns in the movie theaters aren't being charged with terrorism.

Most recently in the UK, there was an attack with a machete on a solider that's being called Terrorism. Just yesterday there was an attack in France which happened in a similar fashion that's also being called terrorism. Does terrorism mean any attack on non-Muslim by a Muslim? Why are these not politically motivated murders or even assassinations? That is what they are, is that terrorism? I don't really think so. David Cameron is going to use these murders as an excuse to stamp out what he considers "hate speech" in the UK. Will this simply turn out to be an attack on Muslims in general?

Many of you out there are not fans of the blow back theory, where our actions in those regions are creating hostile agents that attempt to get revenge in any way possible. Initially, I was very skeptical of this stand point. However, as I've paid attention to the new more and expanded my sources of information, I completely accept this theory. I believe that there are clear parallels with the US response to hacking activities. The final piece of evidence I'll provide in support of the theory is this great short read by Juan Cole:  "Who's the Threat?" It's a simple chart showing what countries have invaded each other since 1798 and the numbers killed by the "terrorist regions" or the west. Put in this larger context, hearing about drone strikes would be terrifying - especially since you have absolutely no recourse if your brother is "collateral damage" to a strike.

With that in mind, I think it's paramount that we work to keep terrorism to mean an act of violence that's more similar to the Boston Bombing than a brutal machete murder which was more of an attack directed against the state than the people of that state.

Tuesday, May 21, 2013

Obama's DOJ assault on civil liberties

Obama's been really bad for privacy, due process, and discretion when it comes to a litany of topics. Many of these issues aren't really discussed in the mainstream media and it's beginning to really bother me. I take that back, it's been bothering me for quiet some time, but I'm going to be talking about it a lot more now. In fact, many of these issues have dated back to before this past election. I was extremely close to voting for a third party candidate for president because I find it repugnant that the US president would kill US citizens abroad without a trial by jury, because the Bush administration created a legal gray zone called "enemy combatant." I'm not a fan of conjecturing what our founding fathers think about modern day issues, however, I feel that this one is pretty obvious. People were being imprisoned and killed without trail under British rule. The right to a trail was to ensure this wouldn't happen to a citizen.

The next area that's really starting to disturb me is the efforts to shut down some types of DDoS activities. It was just discovered within the past few days that the FBI has backdoor access into a company that does DDoS for hire. Which likely means that they're used as part of the US Cyber Security Defense League of National Homeland Safetiness. It also means that anyone that uses a service like this can be tracked and arrested for using the service, if the FBI decides to - essentially if the FBI feels that the use would have been justified from their perspective the customer wouldn't be bothered. However, this isn't the case at all when it comes to teenagers, young adults, or whatever age you are if you're in Anonymous, Lulzsec, or just Kim Dot Com. According to a great Guardian article,, there's a general all out attack on people that decide to use the internet in new ways to do different things. These are people that are notifying others of risks to their own security. For example, Weev, was just sentenced to 3 years in prison for alerting AT&T that the had some email addresses associated with iPads exposed, sure he went through Gwaker, but this information was easily accessible and in plain text. This creates a risk to all security researchers, the people that are called "white hats" that are the good Samaritan hackers which find security exploits, inform the firm give them 30 days or so to fix the issue and then release the information into the public to force the fix. Many cases of hacking are "Black hat" hackers that are really up to no good, but as the generation younger than mine continue to explore the web there will be continued clashed of culture of what is right and wrong on the internet. To me, these prison terms (and attacks that lead to Aaron Swartz's suicide) is the old guard trying to assert authority in an area they don't understand and cannot control.

The final area of DOJ assault is on whistle blowers and journalists. I've long been an advocate for releasing more information to the public and applying more scrutiny to the government. The scandals with the IRS, Benghazi, and military leaderships only indicate we need more transparency not less. The Obama administration has taken the idea of national security needs to new heights and this has created a pervasive atmosphere throughout the US that governments can simply do as they please. For example New York City, which famously said privacy is off the table, refuses to respond to legally binding Freedom of Information Requests. They are simply ignored. If it's good for the federal government then it's good for state and city government! Greater transparency to the public is the only way to prevent corruption throughout the government. I believe the only reason we learned of the IRS fiasco is because it was a government issued report to the public. Otherwise, it would have been buried for years and we wouldn't have heard of it for some time, and even then there would have been a nasty fight over getting the information public.

Back to my main point of the assault on journalism - the DOJ secretly sopenaed phone records from the AP, then charged an investigative reporter from Fox as a co-conspirator which allowed the DOJ to access emails and other records skirting typical judicial oversight when dealing with the press. Furthermore, nearly all aspects of the US Government feel they can just access whoevers email they want without a warrant.

All of these things are setting really bad precedents and we need to hold people accountable to them. I know that many of you out there are apathetic towards voting. Instead of not voting, vote for a third party. Aside from Obama and the guy that ran against Lamar Smith, I voted third party for anything I could. I knew it wouldn't have much of an impact, but I'm starting to do that and I plan to continue to do so. I also plan to support activities to get money out of our government. You should too.

Saturday, May 18, 2013

Nintendo doesn't get fair use

In the YouTube community there's a bit of a kerfuffle over the fact that Nintendo has been doing two things. First, they've been taking down Let's Play videos because of copy right infringement. The second is they've been putting ads on those videos they aren't taking down. I don't believe that either of these should be allowed. As always, I'm not a lawyer - keep that in mind.

Let's Play videos are essentially play through of a particular game. Nintendo is claiming that they own the copyright to video because they created the content that is in the game, including the text, music, artwork, and characters. This is of course completely true. However, they don't own everything in the video. The person doing the let's play makes choices so, while the overall story arc is in fact the same, the manner in which the game is completed is unique and can happen in very different order. Which means if Nintendo owns the copyright of the way you play it, then it owns every possible way the game could ever be played. I could see that there's some logic to that argument, however, it's impossible to predict how the game will play out any given time and it also means that Nintendo also owns every time the player fails to beat the game and gives up.

If this was the only thing in the video, I'd say Nintendo has a decent argument, but even then it's something of a remix, because things are being changed, events happen randomly that aren't under Nintendo's control, they set the parameters for something to happen, but they couldn't predict a priori when something was going to happen or what items would be dropped at any given time - which makes the game different each time.

Furthermore, many of these videos have voice overs by the players. In many cases the players are talking about things completely unrelated to the actual game which Nintendo cannot claim as their own copyright. In many cases it is actually the YouTuber that is driving viewership to the video and not the game alone. Of course if you don't like Pokemon you're not going to sit and watch a 45 minute play through of Pokemon even if you find the person hilarious (or you might). It's the personalities that make these videos valuable as much as the Nintendo game material.

I also think that Nintendo needs to put this in perspective of other mediums that people do a similar type activity. Think of someone analyzing a film, a book, or TV Show - in all of these cases there are direct quotes, clips of the video or whatever with pausing and zooming and highlighting and whatever. In addition there is custom material that the specific critic ads to the video which makes it something new. This constitutes Fair Use. These reviews make the film more valuable because it draws viewers to the movie, the is the same for video games.

Nintendo doesn't understand this and it's likely to be contested, eventually Nintendo will lose this and will have lost a lot of good will from the gaming community. This will end poorly for Nintendo.

Monday, May 13, 2013

Trust and Networks

At work today, my team and I went through training on something called the "Speed of Trust" which essentially argues that the more trust an organization has the less costs there are associated with doing business. Not only are things cheaper, but they happen faster. I was actually pleasantly surprised, I'm typically pretty skeptical of things like this as a rule because I feel that they compress extremely complicated ideas down to a single scale to be measured on. However, with the facilitator's contribution of how the different types of powers interact with trust it became a lot more meaningful, even if there were so many platitudes provided by the author of the book during the videos that were shown.

I think that there's one area that was definitely missing from this topic that was only moderately touched on - Networks. There are plenty of network theories that discuss the obvious cost savings and accumulation of social capital in better ways than was covered in this discussion.

Social Capital is a way of measuring how much influence you have in a network. Unfortunately, the only networks that were recognized in this method are the formal networks that are created simply by being an organization. There was no discussion of how people can create informal networks that can have more influence on the organization than the actual formal network structures. For instance, if I want to change the direction of some project and I'm struggling within the project itself, I may try to use my formal structure of going up through my manager over to one of the managers of the people on the team. However, this is typically considered poor form, another option would be to discuss the topic with someone else that is influential and spend some social capital and have the problem resolved informally. These networks can influence the structure of organizations because people that are managers may not be the thought leaders in the organizations. When striving for change in an organization it is crucial to expend social capital on the most influential people - titlewise or otherwise.

Furthermore, these networks can enable anyone to generate more powerful ideas. As you discuss issues or ideas with many different people in the organization and include their suggestions or comments around the idea/issue it's possible to create significantly better ideas. Then whenever you've come to the point where you'd like to enact your idea, you've already built a coalition of support through your conversations and will have more successful ideas.

The Speed of Trust course was pretty useful to help determine how to address trust issues in an organization. It's important to identify where and how things are going wrong. However, I think it's important to keep in mind network theory to maximize the benefit of trust.

Saturday, May 11, 2013

Amazing artistic abilities unleashed through remixing

Most people have seen Macklemore's Thrift Shop video and if not, they've heard the song. Roughly speaking the song is about a guy who decides to do all his shopping at thrift shops because he finds it's better pricing for clothes that look as good or better than the clothes that are popular today and cost $50 for a T-Shirt.

The song was then covered by a band that specializes in big band styles music, which by itself is a pretty cool song. This was then remixed by some French DJs mixed with two different movies and turned into this awesome video, which I found on reddit once it got pretty popular on /r/videos.

 Through this evolution of Thrift Shop, it's pretty obvious something new is being made each time. In the "Granpa's Style" version the electropop sounds are replaced with a standup bass, a keyboard, and a jazz drummer plus a fantastic female vocalist. The video is simply a recording of them performing the song. In the final version of the video, it's so far disconnected from the original video that if you heard it alone, you could be excused for not realizing it was based upon Macklemore's Thrift Shop.

Not only is it bringing a new and interesting life to Macklemore's music, it's reviving two forgotten films that show off some pretty amazing dancing mixed with modern day video remixing that just adds a lot to the song. I think that the song along would be a lot less without the video.

Remixing are a good thing. We all remix things even if we really aren't aware of it. When you talk about a song or movie in a quote along while watching someone streaming a video game or sports game, you've remixed that experience. You've created something new. The context of the game you're watching triggered a memory that you associate with that movie, tv show, or song. Internet memes are all remixes and these highlight the need for more things to be entered into the public domain. No one wants the owners of "Grumpy Cat" to go around suing anyone that makes a meme using their cat. They've registered a trademark for Grumpy Cat, so it really could happen.