Author Archives: riedl

Very nice article at Read/Write Web about eBay and its business model.  The theme of the article is that eBay as an auction site is going to continue to face tough competition, which it may or may not overcome … but that some of the other businesses of eBay are doing extremely well, and seem positioned for the end-game.  The author particularly calls out PayPal, which has been solving the problem of doing safe banking on the Internet one country at a time, and Skype, which has been growing 30-40% per year, as great businesses that are undervalued as part of eBay.

The PayPal argument is compelling to me: it’s a great business, and being part of eBay creates complicated relationship issues for eBay competitors who otherwise would be great supporters of PayPay.

Skype I’m less convinced about.  While I love Skype, and use it regularly, its present business model has two serious problems.  First, Skype is bizarre in that it is one of the few communications business to have an inverse Metcalfe’s law effect: the more people who use Skype, the less money the company will eventually earn — because Skype calls are free if both ends use Skype.  Of course, this is only a problem at the end-game, which is likely many years away, but it may be a fundamental problem eventually.

Second, Skype is in a business with relatively low barriers to entry.  They have the lead in the audio and video encoding right now, and have by far the best interface … but the telcos should be well-positioned to compete for the business if they decide to tackle VOIP in a big way.  It would be scary to be Skype and to face several of the baby bells coming fast for your business.

What do you think?  Do you want a chance to buy Skype of PayPal stock, or would you rather they stay safe in the eBay cocoon?

John

An article in Information Week discusses a call from the DoD for proposals to create “virtual parents” to talk to the young children of service men and women while they are deployed, and unable to talk in person.  Though I enjoyed Diamond Age as much as the next person, this idea seems completely bonkers.  Given the limitations on our understanding of AI and child psychology, it seems more likely we’ll do real damage than that we’ll create a positive experience for the child.  This seems to me a great example of the type of research that professionals should just refuse to do.

For the most part I’m a supporter of the view that knowledge for it’s own sake is valuable and should be pursued.  Further, it’s not implausible that eventually we’ll be ready to build applications such as the proposed one.  However, as Catherine Caldwell-Harris, the thoughtful critic quoted in the article, points out, there are plenty of other directions for researchers interested in this problem to pursue in the short-term, many of which are likely to bring short-term benefits, while moving the science forward.  For instance, a researcher might develop a system for teaching a foreign language to a young child.  Simulating a parent seems flat-out dangerous, though!

What do you think?

John

My friend Jamie Thingelstad has a blog about a new technology for RFID in the home, from a company called Violet.  The basic idea is that you get a small USB device for your computer and a collection of RFID tags.  You can then associate RFID tags with actions on the Violet web site.  The hope is that eventually people will come up with cool uses for this technology in the home.

The video is mostly underwhelming: very few of the apps are things that I can imagine using, mostly because they are no more useful or fun that existing alternatives.  One that might have some legs is the ability to put RFID stamps on postcards, so the recipient gets taken to a page with related content (e.g., pictures from your trip).  This app, however, suffers from a network effect: it’s only useful once lots of people have the readers, which will only happen once there are lots of useful apps.

It will be interesting to see where RFID technology for the home goes.  Nice to see the tools getting delivered … now it’s time to come up with the apps.

Any app ideas?

John

The Times Online has a terrific article about Nicholas Taleb’s reaction to the market crash.  Taleb is the author of The Black Swan, a very fun read about his theories of unpredictable events.  (It’s interesting that the ideas in the book come across as much more attractive than their author, who presents himself as unconscionably arrogant for someone whose strongest arguments are about the limitations of human knowledge!)

I found several things enchanting about the article. First, it’s amazing to an American that a professional athlete in Britain writes and thinks like Ed Smith does.  Our athletes mostly get in fights with their bodyguards in bars; they certainly don’t write with insight about major economic events.  Second, there are a number of wonderful quotes that strike at the heart of Taleb’s arguments.  We’ll go through those individually.

So is Taleb really against expertise, or is he simply pitting his own against that of the experts? He got this call right. The fall was forecast-able and he forecast it. It was not really a black swan.

This problem grabbed my attention while reading the book.  Taleb keeps attacking the ability of “experts” to know what they’re doing, all the while arguing that he himself knows exactly what he’s doing, because of his analysis of the limits of knowledge … but how can he — or we — know that he knows what he’s doing?  What evidence can be trusted, given the limits of all evidence to predict the future.  Taleb comes back to this point when he says:

But Taleb’s victory today is a pyrrhic one. “I wake up every morning at 2am, scared. I have made money on my bet that the financial world will go under. But now, if the banks go under, I can’t cash my money. If I follow my logic all the way through, I get scared.”

This point is the critical one for his reader: how far ought we to follow the chain of logic in predicting that astonishing disasters will occur with (unpredictable) regularity?  Ultimately some of the disasters will be ones we can’t recover from.  What about those?  It’s impressive that Taleb made lots of money by betting the economy would crash, but how does one short sell an ecological disaster, for instance?

A phoney meritocracy of people who got massively lucky and think they did it all themselves is a recipe for social disaster.

[later]

There is surely, for Taleb, an uncomfortable irony. Much of his present notability is due to his having made one devastatingly accurate prediction. Had he got his forecasts for the fall of banking wrong, the error would only have strengthened his general theory of black swans. But it would have undermined his popular reputation, which has never been higher. Now that really is luck. I leave him hoping that it may prove contagious.

Lovely writing about lovelier thinking.  Taleb is powerfully convincing about the limitations of human knowledge to predict outside of their sphere of understanding.  However, his theories aren’t powerful ones, like, say, chaos theory, that give us rich meta-theories from which to predict the overall structure of likely events.  Instead, they just tell us that very, very bad things are going to happen, and that their happening is completely unpredictable.  Fascinating ideas … but what should we do about them?

John

Cute cartoon that reminds me of Nathan Good’s paper with Joe Konstan (and others) on the timing of software license agreements.  It would be very nice if we could reliably change our mind, perhaps after the monster shows up.

John