Book review: Enchanted objects

In my last post I briefly mentioned the book Enchanted Objects which is an interesting book about how the future of technology might go. I’ll tell you this up front, the book is biased without a doubt. You can tell this from the beginning. That being said, I think the bias is a fair one and not subtle and really, if you’re reading a pop technology book and you don’t expect bias, then you’re kind of an idiot. This book is pretty full of technoptimism, which if that’s you’re thing you’re going to absolutely love this book. I mean, it really gives some great ideas about how to take an ordinary object add an app to it, connect it to the cloud and other devices and it will realyl solve a lot of problems.

I think this is a really great approach for a limited scope of objects. Not to say that the scope of objects is small, but more that it’s limited to the scope of objects. In some ways, it’s small thinking. I don’t think that’s a limitation on the potential. No, David Rose (the Author) actually does a good job making arguments that this could be a massively connected network that could be part of an even larger network. He envisions using enchanted objects to help manage diabetes care in such a way that it continually informs doctors, patients, hospitals, and insurers of the status and well being of the patient. Even so far as to tell the patient what foods to eat when in the event of a diabetic shock.

The big holistic vision is there, but I really can’t but think that a lot of these ideas he covers, Ambient Orb for example, are really first world problem solving tools. His idea around a garbage can that will automatically reorder a good when you throw it out seems to push consumerism rather than conservation (to be fair he does talk about trying to turn the garbage cans in a neighborhood into a game where the “greenest” or smallest waste house wins).

The major problem I see with these enchanted objects, isn’t that there’s a lot of potential to make them, it’s more what is the additional value gained to the consumer by having these enchanted objects? Rose argues that we need to move away from the swiss army type devices, like a tablet which is an attempt to do everything, towards more specialized devices. For example an umbrella that connects to the local weather to glow and recommend taking it with you when you head out the door. I could see some value in this, living in Portland, Oregon, but I hate umbrellas so I’d never use it (too many of them have hit me in the eye, so i think they should all be destroyed). Other people likely will find value in this product. However, is that enough to make you buy the special one, or do you think that you’d just still buy the $10 one that when you lose it, you won’t morn its demise? Maybe a connected umbrella stand would be more appropriate.

I think the biggest problem with this book, isn’t the general idea. I think connected objects will happen and I think there is something of an air of inevitability around them. My largest concern, however, is the lack of concern over safety and privacy within these applications. It’s likely that this umbrella will have to have a GPS radio in it. Which suddenly means, I’m carrying about multiple GPS radios. My phone, my tablet, my umbrella, my watch, and probably my running shoes (so I can share my results on mapmyrun and then Facebook, of course!). All of these devices will likely end up following under the purview of law that will require them to store that data for some amount of time. In many cases, App designers also tend to requet access to a larger portion of a phone or tablet than they strictly need. This opens end users up to greater risk than really neccessary. If I bought a product, shouldn’t that information be under my control? If it’s free how is that company using my data once they requested access for it?

These answers are lacking. I don’t really believe it’s because the author doesn’t think they are important questions. I think he just doesn’t know how to answer them. He actually mentions some of these topics in the book, but doesn’t have a statisfactory answer to them. I would like to see him work with Evgeny Morozov to answer many of these questions. I think then, I’d feel more comfortable purchasing these enchanted objects.

I’d recommend this book to anyone in design, aspiring to be an entrepreneur, or that really loves technology. It’s not as blind in its faith in technology the way that “What technology wants” but it has the right level of optimism to help keep someone that is trying to change the world keep trying and to hopefully make the design of that product just a little bit more magical. I do plan on using what I’ve learned in this book to help with my projects and any sensor based device my wife designs on her side projects.

Overall, I give this book a 4/5 

Facebook, IPO and valuing a company

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

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

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

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

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

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