Tag Archives: Business

We know that NSA is hurting tech companies – that’s a good thing

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Snowden leaked his documents a year ago. We’ve been getting a slow trickle ever since. However, some of these documents are getting date and surely the NSA is doing more stuff than they had in the past. That being said, they are continually being surprised by a new document that’s released or another. They clearly haven’t fully figured out the full list of documents that Snowden managed to take. Furthermore, they haven’t learned anything by not changing the techniques that they currently use. The NSA should have systematically shut down every program that could have been possibly leaked and moved onto something different. They haven’t, which means that they don’t really feel they need to change anything unless we force them to acknowledge that they’re doing something Americans (and the rest of the world) don’t want.

Today the guy that founded Netscape (a Silicon Valley Venture Capitalist) thinks that the fact the Edward Snowden released these documents hurt US technology companies. He thinks that because we now know that the US government does bad things with OUR tech company’s technology before it reaches a customer is hurting our companies. He blames Snowden. This is the most assinine thing I’ve ever heard. Marc Anderssen should be pissed off at the US government and praising Snowden because NOW US tech companies can DO something about it.

This is what a good manager or leader does. They support and acknowledge the fact that a person raise the attention of a problem, used them to address the root cause of the problem, and move on to the next problem. This is what Lean process improvement is all about. You NEVER shoot the messenger, you shoot the root cause of the problem eliminate it and make sure it never comes back. Saying that Snowden is a traitor because he highlighted the fact that the US government is taking good companies work (Cisco) and add malware is counter productive. We need to know when anyone government or otherwise is intentionally trying to break the internet. I do not believe that Mr. Netscape believes that the person who leaked the TransPacific Partnership is a traitor – when they essentially highlighted a similar problem.

I also believe, that labeling Snowden a traitor implicitly removes any blame from those companies that are being harmed by the US government. In many cases those companies have bee fully complicit with not just the US government, but “rogue” states (Iran, China, and other oppressive regimes) as well as companies (like Comcast, TWC, etc..) through enabling deep packet inspection (which allows anyone to snoop at anything you do. All of these have to have been enabled by a US technology company. These companies found a benefit to their benefit by doing this.

Now other companies, like Google, WordPress, and others are trying to get around both of these by encrypting their data. I actually suggested this as a tool to get around data caps or fast/slow lanes (if all data is encrypted you can’t slow or speed up traffic). This will inherently force a more net neutral internet (baffling deep packet inspection) and defeating much of the tools of the NSA.

All of these are good things. We know this because of Snowden. We know that tech companies need to address problems that the NSA and other government agencies have caused. This is a cause for celebration not condemnation. We need more people like him so that the internet can continue to thrive and be an economic driver. Don’t blame the messenger, if the US government is hurting US tech companies, we need to know so we can stop that from happening.

Driverless cars aren’t without ethical quandaries

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While driving home the other day I was thinking about the new Google Driverless car stuff that I’ve seen. It’s an interesting looking vehicle, see it below. Apparently, one of the reasons why Google went fully autonomous was that people would be first hyper vigilant, then so lazy that they completely trusted the car in any and every situation.

Google’s fully automated driverless car

I believe it’s likely that the first round of driverless cars won’t be fully automated. Data will eventually show that the fully automated cars are perfectly safe, but we’re a paranoid lot when it comes to new technology. I also think that there are definitely risks with a fully autonomous car in regard to hacking and spoofing the system. I have a feeling that will become a game with hackers to try to trick the car into thinking that a direction is safe when it is actually not. To continually combat these risks Google will have to make it very easy to update the software, possibly while driving, as well as the hardware. I believe this is one of the many reasons why Google just announced their 180 internet satellites that they will be launching soon.

However, I think that the best of intentions will likely lead to some serious issues for Google and law makers in the next few years. For some of them an author at the Guardian wrote a few of them. That being said, I think that the first cars will not be fully automatic until enough data comes into show they are safe going highway speeds consistently. I think that this will lead to issues for Google.

One of the things that is missed in the Guardian article above is that if you’re an Android user, those very things could happen already. Your phone already tracks not just GPS but also nearby cell towers, so you could very easily subpoena either Google or your cell provider for records of your whereabouts. However, the interesting thing that Google talks about in regard to safety, is that drunk driving will be a think of the past.

As I mentioned before I think that there will be a manual mode and I think there will have to be one for a while because of definite hacker threats. You’d need to override. I also think that this would require a mechanical switch that literally overrides the system. The system would still run, but would not be able to override the human driver. Maybe I’m just paranoid, but I don’t think that anyone can create a truly secure vehicle like this and if one is compromised then all of them would be under the exact same risk.

Now, let’s say a guy goes out drinking. Google knows where he is. Google knows that he took pictures of his shots Instagraming “#drinktilyoublackout!”. Google also knows that he texted a few friends through Hangouts fully integrated texting capability. Furthermore, he tweets to @Google “Getting Black out drunk no #DD #DriverlessFTW”. This guy then gets into the car, switches it to manual override for whatever reason gets in an accident, who is at fault here? Clearly the guy that’s driving right? Well, if he had a fully automated car with no other option he’d not hurt anyone. Google knows everything he’s doing. Google knows everywhere you go already because of how their devices work. The difference is now that they can control where you’re going and how you get there.

Is Google responsible for building a car with a manual override that could save people’s lives in other instances? Is the State responsible for mandating that Google put in that switch? Should Google have built in safety measures that make the user go through a series of actions or prove the driver is capable of overriding the car?

I think that we need to hash out all of these before these cars are allowed on the road. I also think it’s going to be vitally important that we understand what happens with that data from all our cars, who can access it, and if we really have any privacy in a fully automated car like that. Simply by participating in our culture with a cell phone we’ve already eroded our privacy a great deal in both the public and private realm. Driverless cars will further impact that and will likely end up being a highly political issue over the next several years. Taxis, Lyft, and Uber will be out of business – the Car2Go model will beat them out any day of the week if the cars are autonomous. Direct to customers, like Tesla is pretty obvious. Lots of changes are going to happen through these cars.

We can’t just let this happen to us, we need to make decisions about how we want to include driverless cars in our lives. They aren’t inevitable and definitely not in their current incarnation.

Digital control gone too far

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So my wife and I drove down to Modesto for this weekend. I wanted to test out using my phone with my car’s Sync, because I noticed it had a USB connection. I tried to start playing Pandora and my car told me Sync was unable to play protected content through this device. Let’s think about how absurd this is. I have an auxilary input into my car, so I can easily use a headphone jack to play the exact same music through the car speakers. The only difference is that I lose the ability to use the on steering wheel music controls. Digital copyright maximalists have decided that to allow microsoft to use Sync they must limit the devices that can play protected content. How assinine. This means that it is now les safe for me to play music because I can’t use the dash screen to see what music is playing or other controls to keep my eyes on the road. I own both the car and the phone and I’m paying for Pandora through ads. There’s no logical reason that I shouldn’t be able to use these products in this way.

This is a bit of a first world problem sure, but the same idea that is limiting my ability to use products that I own how I want them is shaping the rest of the internet and controlling how media (digital or print in some cases) can be used and consumed the world over. One of the more famous cases of late is the story of a guy that bought a book from Thailand and sold it in the US. The got sued because apparently that’s might not have been legal (supreme court thankfully ruled in his favor) another one is the idea that any software is merely a license and not actually a product that you own. In this case Autodesk sued a guy that was selling an old copy of AutoCAD that he’d never opened, on the grounds that he bought a license and the terms of service (which they can change at any time without you knowing or re-agreeing to) said that he was unable to transfer this license. This wasn’t a digital download it was a physical disk with the content on it.

I believe that because the US market is becoming saturated in many regards for these types of technologies, these companies are looking to turn these aging platforms, technologies, and content into a continual revenue stream. Instead of risking money to innovate they are turning into monopolists that are exhibiting rent seeking behavior. They must do this to keep their stocks from falling. Even the fabled internet companies that are supposed to be different aren’t. Amazon has been accused of limiting access to drive book prices down from their suppliers. Amazon limiting access to books. Think about that. Can you think of anything more abhorent than limiting access to culture and/or knowledge to gain a greater profit margin?

Should companies make profits, by god yes. Should we enable companies that have innovative ideas to enter the market? Definitely, in fact it’s an imperative if we want to avoid rent seeking behavior. I’m not always a fan of Lyft, Uber, and AirBnB but they are making a serious effort to confront entrenched businesses, archaic laws, and meet an obvious market need. So, let’s work to enable market competition and limit monopolistic behavior. The former is good for everyone, while the latter only for those in power.

My thoughts so far on Piketty and corruption

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There are a lot of people that are arguing over Thomas Piketty’s new book, Capital in the 21st Century. I’ve been reading it, i’m about a third of the way through the book. It’s pretty interesting in the way only dry economics can be. A lot of people are both tearing it apart and praising the content. He’s done something really novel and that’s to create an economic theory around the accumulation of wealth and the impact on the return on capital on growth and vice versa. This naturally is causing some concerns because the findings are disturbing people. Financial Times has found about a 12 errors that they feel invalidate the results, however, their graphs aren’t really all that different. I’m not convinced you’d reach different conclusions based on the data Piketty has accumulated.

I’m more interested in the results in relationship to behavior it drives in reinvestment in capital that can drive further growth. Based on what I’ve read so far, the fact that growth is less than the rate of return on capital means that capital will not invest in innovation, but rather in goods that they can easily receive rents from.

What does this mean? It means that those with capital will invest in lower risk or safer places for their money. This means that they will buy land and houses which acrrue value and provide a steady income of new capital to be reinvested elsewhere. If you’ve ever read the book Rich Dad, Poor Dad, that’s exactly what the author proposes doing. Once you have enough money to buy a house, you buy one pay enough down and improve it to get a profit, leverage favorable taxes so that you can sell it and upgrade to a duplex and have two familie paying rent. Repeats until you’re able to buy apartments and continually expanding the number of people paying you to have money.

This approach works, but doesn’t really do much of anything to actually help the economy grow, it helps increase wealth as it’s own goal. This is how Donald Trump got rich. It doesn’t help the economy grow because it doesn’t provide new jobs it relies on others to create new jobs. Furthermore, as the population naturally increases and the types of jobs change more people will move into the area and will continually to increase rents. Further increasing the wealth of a wealthy individual. Sure, the person might be a self made millionaire and possibly a business owner around their real estate empire, but that doesn’t truly mean that they are adding more value to the economy than they are extracting, which may prevent growth.

This creates a serious risk to the people that use both the Wall Street Journal and Financial Times, because these book papers help support the wealthy get wealthier. They have a vested interest in seeing Piketty’s theories be disproven and discarded before policy makers have a chance to leverage them. I believe that this book along with the Origin of Wealth can point out ways to manage risks to our economy. Piketty’s theories are a purely macro economic construct, while the Origin of Wealth is a Micro theory that expands up through maro theory. I believe that Piketty’s theories help illustrate the impact of micro and behavior economic theories. We have inequality and it is unlikely to get better, unless we take action to change our policies and fight corruption.

I believe that the root cause of our problems relate back to a type of political corruption in nearly all our political bodies. Wealth is able to use their wealth to shape policies that create more wealth, while the poor are unable to do so. I think this is something that everyone can get behind regardless of your political beliefs. A true libertarian political body can’t exist with corruption any more than a complete comunist political body. Fighting corruption requires more than mouse clicks it requires people to act. People to force their leaders to be accountable for their actions. Inequality and power imbalances come through short terme thinking, political regimes, and historical choices. We can’t do much about the past, but we can drive change in our politics through voting, donating, action,  and through informing people.

Customers, Companies, and Power – imbalances drive inequities

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I’ve been in the process of buying a house for the past month. It’s been a rocky process. Some of it has been on us, but a lot of it has been on the side of the lender. The first problem came when they basically started the process they day we were supposed to sign. This precipitated a series of events that as lead to the fact that it’s unlikely for us to actually fund the house on the last day we possibly could. Furthermore, they have been rather cavalier about the fact that we can just move closing dates without a problem. Essentially their poor processes have required us on multiple occassions to modify a private contract. We’ve been punished again and again because of their inability to meet their obligations. This strikes me as a serious inequity, especially since it’s not a big deal for them that we essentially lost out on a full month’s of rent from the seller. We have minimal to no recourse to address this loss.  On top of this, they still get paid. In my mind they’ve provided little to no value in this process and have in fact simply added a great deal of waste. They should no be paid and in fact should pay us the loss in rent we should have received from their inability to meet deadlines.

This sort of behavior is rampant in industries and companies that are essentially monopolies. Either their customers are fully locked in to a specific company because it is expensive or difficult to extract personal data or some other technical issue or the customers have no other option. In either case the company is able to act with a great deal of disregard for their customers. The goal of the business then becomes to extract maximum rents from their customers not to provide maximum value to the customer. This can create existential issues for a company that undergoes this transition, because many of the people that made that company great are pressured and have the quality of their employment decline without understanding why. Essentially these folks still try to do the right things and in many cases don’t agree with their corporate leadership. In many cases, such as with a Telecom, it’s likely they are exempt from the full rent seeking behavior of the company.

Thinking about these things have made me really frustrated the past few weeks. My job is to help my company deliver more value to the customer so seeing these actions is increasingly frustrating and counter productive to Lean principles. If companies aren’t adopting principles that improve value for end customers, then what can we do? Well, I think that in each of these cases the root cause comes from two totally different policy actions. First many of the issues we’re having are designed to protect customers so we enacted policies to that end. While the other problem, rent seeking behavior comes from the lack of policies to protect customers.

In each of these cases different government actions have lead to different actions for end customers. In actually these painful delays for our loan may for many other people, truly protect them. However, in our case, they aren’t. In the case of push deregulation on telecom the result has been monopolies and behavior designed to continually take more money from their customers. In each cases, these derive from two different philosophies around the value of government regulation. I think these situations highlight the nuances in this area.

In the end it’s important that we have real conversations about the underly reasons for different policy decisions. We need to understand that there are imbalances of power between customers and companies. In many cases those companies will exploit them to their best advantage. Unfortunately, these imbalances extend to the realms of politics as well. This of course is another area where we have issues and will continue to have issues. It is unclear how to address these imbalances, i’m not confident that we’re going to be able to do this in the next few years. If we cannot address these issues I believe they will continue to get worse as the economy remains flat in it’s growth.