Examining the NYT

Was turned onto a documentary about the NYT by Ebert:

The paper remains, as it has long been, the most essential source of news in this nation. “Page One: Inside the New York Times” sets out to examine its stature in these hard times for print journalism, but ends up with more of the hand-wringing that dominates all such discussions.

Indeed. Sadly for Ebert, he stumbles into a bit of hang-wringing of his own with a “kids these days!” kind of comment:

I suspect that at the bottom of the crisis in print media is a crisis in American education, and that many of today’s college graduates cannot read and write as well as grade-school graduates did a few decades ago.

That Ebert review was from last year and this post has been sitting in my drafts folder since then. I’ve finally seen the movie!

The documentary is about the NYT Media section, which is tasked with reporting on New Media / Old Media stories. Obviously this is happening at one of the great Old Media establishments so there’s an interesting kind of circularity about the whole thing.

But wait, there’s more. In this movie about Dying Media vs Disrupting Media which stars writers writing about the same subject from within the Dying Media, the main plot thread is a story about another newspaper company struggling with the same changing industry. The result of it all is this article by David Carr (Ebert’s favorite character in the film and mine) about the Tribune.

The tribune story is interesting. Sam Zell played the Murdoch card and tried to solve the paper’s problems by going downmarket, joking that he’d add a porn section if he could.

Obviously in hindsight this was the wrong strategy (the porn industry is doing terribly!). But it’s wrong in an interesting way. Zell tried to solve a technology problem with an editorial strategy.

Here’s my take. The news business has heretofore been made up of what we are discovering are three very different businesses:

  1. The distribution of information (and advertising).
  2. Research.
  3. The construction of narrative. Also called great writing.

The Internet clearly upended #1. Nothing much has changed about the others, though.

Yet everyone is worried that #1 is the only thing that anyone cares about, so is the only thing that advertisers will pay for. Without the subsidy of an information distribution cartel, what about all that great research and writing?

All pure information enterprises are being challenged by the Internet. Into this group I’d lump newspapers with academia and television. Are there more economies of scale available with this new technology? You betcha. Economics says that if incumbents are too slow to figure this out new entrants will steal their lunch. Those foreign bureaus everyone likes to point to as justification of the Newspaper’s Divine Right to exist? There’s an algorithm for that.

One thing that struck me about seeing the inside of the NYT is that its core is simply a bunch of (mostly) middle-aged white guys sitting around figuring out what is happening in the world and what it all means. The Internet didn’t change our appetite to pay someone to do that.

The Internet simply changed just about everything else. If they wanted to they could have tried to compete with Google or Wikipedia or whatever 20 years ago. But instead they chose the higher status ‘white guys in a room talking about world events’ as their business, not distribution of information.

Now they complain it’s a smaller business than they thought? Let me go get my violin.

The Innovator’s Curse

Great Cringely piece here.

If I were Apple, knowing that Samsung is the only other game in town (just as Sony was in the iPod days), I would use every method possible to slow them down.  Lawsuits show a sign of desperation frankly, and that is likely to be the case here.  Consumer electronics is characterized by commoditization and Apple had better get used to that fact…

The weapons available to Apple are, as they were for Sony in the Walkman days, difficult stuff like continuous innovation, building a brand and maintaining it (that is what I think this lawsuit is really about by the way), distribution, getting a lock on the supply chain, getting a lock on content, and very occasionally using the International Trade Commission and lawsuits.

Apple needs to do all of this and not just rely on innovation because, unfortunately, as Samsung and previously Microsoft have shown them, they can’t win on innovation alone.

…Samsung doesn’t have to do anything different. Samsung is the Borg.

It is easier to go on litigious autopilot than invent the next iphone or ipad. Bill Gates says the only way to make money in technology is to be the de facto standard. That means the optimal strategy is to push yourself to the max to build a monopoly, hire a pile of lawyers and ride it out.

The problem, incredibly, is that Apple’s competitive position isn’t as strong as Microsoft’s was in the early 90s. Without a motivated visionary at the helm, game changing innovation is very unlikely. Same happened at Microsoft, same happens at every tech company.

Innovation is an extraordinary thing best left to the small and hungry. Big companies are simply relatively much better at being a Borg.

Disruption Defined

In order to overcome the massive inertia associated with a dominant platform technology, two conditions must exist. First, there must be new, overwhelmingly important functionality that the old platform cannot support in a reasonable way. Second, the new platform must be able to coexist and interoperate with the old.

That’s Ben Horowitz.

What’s The Point of a Designation? (With a Venn Diagram!)

This is a fairly weak challenge to the pursuit of technical certification, but let’s start with it anyway:

I have come across a lot of my friends who aquired very nice percentage and received certificates though they have very minimal knowledge, or they have never worked on that particular technology. How crap is that, and now they are the proud owner of certificate, showcasing it proudly over their work desk. Ask them a very simple question on the technology that they have got certification, they would be for sure struggling to give answer to it. This is quite common, Certifications are being done only to get an extra point during their salary appraisals or job interviews. And I pity these corporate giants who would consider certification to be something remarkable.

How many out there would say, Yes certification is worth doing and it must be done to prove that you are good in a particular technology?

First point: if you’re an aspiring entrepreneur, stop right here. Stop reading, stop everything and go start building stuff. The longer you wait the harder it will be.

Second point: certifications are often required to work in a chosen field. That’s called occupational licensing and it’s often ridiculous. I’m going to concentrate on what real benefits certifications offer (in my experience) to the risk averse, hard working and ambitious. Doctors and lawyers need not read further.

I mentioned at the top the argument above is pretty easy to dismiss. Knocking something you haven’t actually tried? Striking down the straw man of heavily credentialed morons? Here’s a Venn diagram:

I did a fairly terrible job of scaling the image. The Red-only zone should be pretty tiny, the smallest of them all, really. Most people who spend the time and energy studying a topic do come away with some competence.

The deeper question is something anyone who spends a lot of time studying for tests should struggle with: is it worth your time? What does it get you?

Once upon a time I was at a dinner with a client who gave me some offhand advice: take some courses, they’ll teach you something, you’ll get an initialism for your business card and you’ll advance your career.

What terrible advice. I followed it, which I’ll get to later, but here’s what he should have said:

  1. Education is good, but remember its two functions: to teach you practical skills and signal your intelligence.
  2. Many certifications, unfortunately, are completely useless. By that I mean they teach you nothing useful and don’t signal a damn thing of any use to strangers.
  3. Most skills that will actually improve your job performance are best learned on the job. There is usually no good substitute for experience. Go help domain experts solve problems and effing pay attention. Study them.
  4. The most important skill of all? Check out this paper, which I’m actually reviewing for another blog post:

    In this study, measures of interpersonal and task-related skills were obtained from two groups of engineers: those nominated as “stars” by their managers and those nominated as “average”. Interestingly, the researchers found that the only distinguishing difference between the two was the stars’ interpersonal and affective skills. Specifically, the stars were better at developing rapport with coworkers and building extensive, loose networks of reliable problem solvers.

    Interpersonal skills. No certifications for that.

  5. Depressed yet? Well you should be. There is no reliable way to accelerate your career except to experience more. The only other possibility is to perhaps the change the trajectory of your career by changing the what kind of experience you get and how you respond to it.

NOW let’s talk about certifications.

Certifications work best as an introduction to a body of knowledge. Your goal should be enough understanding to follow a conversation between experts. Doesn’t sound like much, but this is incredibly important.

Imagine your mind dragging a net along behind it everywhere you go in life. You actually don’t have enough knowledge to properly interpret a lot of the experiences that pass through the net. Think of a certification as a way of shrinking the mesh of your net.

The second thing certifications can offer is the opportunity to work your ass off. Some certifications are really challenging to complete. Following my client’s advice I took a softball course, which has proven useless. The last module in it, however, was an introduction to finance which I really enjoyed (I was shocked – I HATED finance in undergrad and nearly failed it).

So next I tackled the CFA exams, then moved onto the CAS exams. Some would look at the amount of time I spent on these (over years and years) and shudder. Good. This makes them a fantastic signal of all kinds of qualities employers love.

But even the most grueling course yields nothing in isolation. What you want is the holy grail: high-value experience. By that I mean working with and learning from the best.

You see, the skills of the most incredibly skilled have afforded them prestige (always), wealth (often) and an extraordinary demand for their skills (always). They need help. And who are they going to pick? Putting nepotism to one side, they’re probably going to pick the highest status recruits, which means those with the strongest signals of quality.

I’m pretty fortunate to have a challenging certification available I can sink my teeth into. But programmers have an enormous expanse of open source projects they can attach their names to. And writers can always write, artists can, um, create, etc.

Certifications are ideal in mature industries where innovation is slow and the canon of skills relatively stable. In others, go online, the Internet has enabled quality signaling in just about any worthwhile pursuit.

But remember the iron law of education: if you don’t have to work hard for it then it probably isn’t worth your time.

The Twilight of Catastrophe Modelers

One interesting idea in Kevin Kelly’s *What Technology Wants* is that technologies undergo a life cycle where they are at first specialized and poorly designed (they just don’t effing work right) and progress to the point where they are ubiquitous.

I am reminded of that by this article on cat models (via Jim Lynch):

Speakers at several recent insurance conferences stressed the need for property insurers and reinsurers to develop their own independent views of catastrophe risk, rather than outsourcing their risk views to third-party vendors. But they differed on exactly how to get to there.

While experts observed that reinsurers and insurers are increasingly using multiple models to inform their views of cat risks (with the smallest insurers enlisting the help of reinsurance brokers to accomplish this), Peter Nakada, managing director of RMS, a Newark, Calif.-based firm, suggested that a multi-parameter view is preferable to a multi-model view…

“Pick one of the giant simulation things and then force the modeling firms to give you the secret sauce from inside the models,” he advised, suggesting that users can then select “multiple points of view on the parameters that run the model” to develop a range of estimates.

Nakada is fighting a serious rearguard action here. RMS overreached with their last update and modeled claims costs skyrocketed. Instead of recanting on their update (unthinkable), they instead downplay the importance of their technical view of the risk. And they’re right. But I wonder if they realize how much pushing the commoditization of their black box will fundamentally change their business.

Kelly would phrase it like this: what happens when open sourced cat models are ubiquitous? How does that affect the industry?

The day may well come when the ‘secret sauce’ of the cat models goes open source and the state of the art is free to all. In that world RMS goes from R&D shop to industry consultant. They’ll provide outsourced analysis and data cleaning services.

They’ll fight like rabid dogs to avoid the billable hour revenue model, since nobody gets rich in businesses that don’t scale, so they’ll need products. Maybe they’ll look to compete with ISO and offer some kind of master database of property values in the US, who knows.

Their heyday, though, is perhaps ending.


Let’s start with this assumption: entrepreneurs are the best leaders/managers a company can have. Most importantly, the entrepreneur that founded a company is the best leader that company will ever have, probably. Why is that?

Entrepreneurs come up with things that sell, they’re product people. For some reason, large companies can often come to be run by people who are good at many of the other things large companies do other than sell products: raise money, deal with regulation, institute internal processes, fire people, hire people, etc. Sometimes these skills need to be the focus over some time horizon. But be not fooled: these are secondary functions.

At best, an entrepreneur is a product person that views the company as an extension of his/her personal self. It’s not just the financial alignment that investors spend all their time worrying about, but an alignment of identity. Because of that, many of the secondary functions simply fall into place: you run the company’s finances like you’d run your own, which makes you (more) risk averse, which is basically good. You run the brand like you run your personal relationships, which, assuming you’re mostly normal with your own quirks (which everyone is) makes the brand accessible yet interesting. Et cetera.

Seeing a company as an extension of your self seems to me to be a kind of empathy. You feel pain when the company is hurt, you feel joy when the company grows. The pressure of having to care for this thing you created, which includes its people (think about the word company), provides a motivating force unlike anything else in our society.

So that’s what an entrepreneur is to me: a person with deep empathy for his/her firm and relentless focus on the #1 priority of any business organization: customers’ needs. Which, of course, is another form of empathy.

How To Scare My Wife

Tell her I really liked this blog post.

I want to start this new year with an admonition, for all those who are still working at a day job, and thinking that at some point they may want to run their own business, but who haven’t decided to do so yet.

Register a business, today.

It’s got all the hallmarks of encouraging (from my wife’s perspective) my most infuriating personality traits.

  • Open-ended project? check.
  • Might consume extraordinary amounts of time? check.
  • Doesn’t even exist except as a partially-implemented idea? check.
  • Probably won’t happen so all that time she’d spend stressing about me doing something stupid would be for nothing? check.

Why pull a single thread out of your shirt and let it hang there? Just because you want to remind yourself to get a new shirt some day? Just because you like doing stuff? What does that even mean? Stop being so stupid!

Now THAT’s Genius

In the five years since the iPhone launched, Apple created a total of 35,852 retail jobs.

Some of those jobs came from new store openings. The total store count went from 172 to 361, more than doubling. But the growth in employment was faster: from about 6400 to 42,200, more than quintupling. This is reflected in the total number of employees per store which increased from 37 in Q1 2007 to 117 in Q1 2012.

Apple has removed shelving, registers and almost all non-Apple merchandise. It has replaced the visible stock with tables on which rest products that can be used. If there weren’t any people in the store, the store would look almost completely empty, just an open space.

But that’s the whole point. The stores are designed to be filled with people. The stores have an open layout because it allows more people to be inside the store at the same time. And the more people the more employees.

Lots of good graphs at the link. The ability to drive foot traffic in Apple’s stores is no doubt related to their enormously popular products, but it is true that their stores always LOOK packed. Because they are. With customers and employees. Who are not on commission, by the way.

Indeed, the sheer number of employees in a store of modest size (117 employees on an average of about 8k sq. ft.) implies a brazen disregard for the economic orthodoxy of retail efficiency and incentives to sell.

Hype and branding. It’s a marvellously integrated offering, the Apple brand. THAT is evidence of the Steve Jobs genius.

How Medicine Might Change

Last week’s Economist had a few articles on how costs will be controlled in medicine. I’d summarize the higher-profile 3-page briefings can be summarized in one word: specialization.

Physician assistants in America can do about 85% of the work of a general practitioner, according to James Cawley of George Washington University.

Great, but this has nothing to do with technology and all to do with simple economics and… politics:

But any change will first require swaying the doctors. The American Medical Association, the main doctors’ lobby, greeted the IOM’s report with a veiled snarl. “Nurses are critical to the health-care team, but there is no substitute for education and training,” the group said in a statement.

The doctors’ power rests on their professional prestige rather than managerial acumen, for which they are neither selected nor trained. But it is a power that they wish to keep. The Confederation of Medical Associations in Asia and Oceania, a regional group of doctors’ lobbies, wants “task-shifting” limited to emergencies.

The pace of productivity increase in medicine needs to keep up with the pace of technological innovation, which in medicine, unlike in most other industries, increases costs. The power of new toys to create their own demand is something Facebook wishes it could share with medical device makers.

I’m far more excited about the second article, from the Technology Quarterly, on ‘open-sourced’ medical technology. What’s that?

Two medical physicists, Rock Mackie and Surendra Prajapati, are designing a machine to combine radiotherapy with high resolution computed tomography (CT) and positron-emission tomography (PET) scanning. Their aim is to supply, at zero cost, everything necessary to build the device from scratch, including hardware specifications, source code, assembly instructions, suggested parts—and even recommendations on where to buy them and how much to pay.

You can see some specs here, which looks like a work in progress. Could DIY instructions combined with something like additive manufacturing be cost-killing future of medicine?

Here’s another awesome idea from the same article:

More intriguing still is the Medical Device Co-ordination Framework being developed by John Hatcliff at Kansas State University. Its aim is to build an open-source hardware platform including elements common to many medical devices, such as displays, buttons, processors and network interfaces, and the software to run them. By connecting different sensors or actuators, this generic core could then be made into dozens of different medical devices, with the relevant functions programmed as downloadable “apps”.

The problem? The FDA is not set up to monitor this kind of thing and (probably) fumbles the approval process.

“In the 1990s we developed an excellent radiation-therapy treatment-planning system and tried to give it away to other clinics,” says Dr Mackie. “But when we were told by the FDA that we should get our software approved, the hospital wasn’t willing to fund it.” He formed a spin-off firm specifically to get FDA approval. It took four years and cost millions of dollars.

The FDA’s power is in the ascendent. In a way, this is good because it will help protect us. But remember that stories like this have happened:

An especially absurd example of device delay occurred to the Sensor Pad. The Sensor Pad is so simple it hardly justifies the term device: it is two sheets of sealed plastic that sandwich a silicon lubricant. With the Sensor Pad, a woman can more easily detect unusual breast lumps in a self-examination. Although the product is simple, it is quite useful and can save lives through early detection of breast cancer. The Sensor Pad was invented in 1986 by Earl Wright of Inventive Products and was submitted to the FDA for approval. The FDA, however, could find no other substantially equivalent product on the market and thus automatically classified the Sensor Pad as a high-risk, Class III device. Before being allowed to sell the Sensor Pad, Inventive Products had to submit a premarket approval application to the FDA.

There’s a bottomless pit of demand for event the most modest improvements on existing devices and tests. And then there are the big scary problems that we barely understand for which there is also unlimited demand for innovation.

Combine this with an unparalleled expertise bias in medicine (as evidenced by the FDA when at its worst) and you get some truly toxic economics. There is very little wikipedia/crowd-source/open source innovation in medicine right now.

Doesn’t that have to change eventually?

Guess That City

via MR:

The riches reflect a regional economy as resilient—and as strange—as any in the world. “We don’t make anything here,” Fuller says simply. […] is one of the few metropolitan areas in the country that have no significant manufacturing sector, placing it alongside Atlantic City, N.J.; Myrtle Beach, S.C.; Cape Cod, Massachusetts; and Ocean City, N.J.

The answer isn’t Las Vegas.

Here’s the answer.