Greek Complexity

Quote from a budding bureaucrat

I promise this is worth a read.

"Deep" engineering doesn't exist in Singapore, says Motochan, particularly in the context of new business formation. Ok, accepted, I guess.

And the solution?

Centralized and concerted effort with direct and appropriate KPIs needs to be adopted with regards to innovation and value-creation, across all government agencies. [...] Our kids need to feel passionate about IT and its explosive ability to create value, from zero to hero in a few years [...] Bring the fun back into engineering among our youth, and pull out all stops to attract the brightest engineers abroad, and we might just have a fighting chance at ‘genetically-engineering’ the birth of ‘deep’ engineering on our shores. Of course, we always have the alternative, which is to keel over and stop trying. But that would be very unbecoming of the Singapore Government, wouldn’t it? :)

You may begin crying now. Or laughing. Or both simultaneously.

Free wine? Deluxe home? $10K a month?

All of the above on offer and in return:

we’re looking for someone (maybe you) who really knows how to use Web 2.0 and Facebook and blogs and social media and YouTube and all sorts of good stuff like that — to tell the world about our wines and the place where we live: the Sonoma County Wine Country

say the folks at the Murphy-Goode Winery in California. Applications due June 5th, 2009.

And here I am plugging their message for them at no charge!

For the Ripplevox team

[shameless plug]

Ripplevox, pick me to trial StarHub’s BlackBerry® Storm™ smartphone because:

• Who better to review this than the guy who wrote these other reviews? (Let's not reference my book reviews too.)
• I'm already a pretty heavy mobile data user and I've used several phones and other gadgets over the last few years. So I know what works and I'll tell it like it is.
• I'd LOVE to experience a better touchscreen than the iPhone's
• I'm a Starhub subscriber, of course
• I love Ripplevox! Ok, that's just flattery :)
• Can I stop now?!

[/shameless plug]

Sixth Sense

This is by far, the most innovative interface I've ever seen and am likely to see for the next few years at least. And yet, it's conceptually so simple (execution is everything) that it's really not particularly expensive, far cheaper than what it cost them to put together those simulated scenes in The Minority Report. Plus it could be extended to several several applications (yes, that's two severals) using Internet-based plumbing that already exists today.

View the video and be wowed. And I thought the bit where he walks up to his friend was just hilarious.

Video from here.

And the Facebook debate continues

I read the title of one of Mike Arrington's recent posts and thought he was being sarcastic. Glory be, he's serious!

Mike relates user complaints about Facebook's interface changes to design by committee. That's wrong. Design by committee is before the fact, user feedback is after. I don't think any user is saying they can do a better job at designing the Facebook interface; they're just saying what they hate about what Facebook themselves have done.

So the broad ideas, vision, back-end architecture and all that is very much Facebook's job. This is NOT what users should be doing, ie users aren't involved in core design. Users don't design either Porsches or iPhones; expert designers do. What users can in turn do (generally speaking) is provide the market reaction. Give feedback on specific hitches and glitches that affect them. What Robert Scoble calls taking "splinters out of the experience".

Someone else comments on the same page:

Ignoring your users much of the time is the path to oblivion for a company. The examples cited about Porsche and the iPhone are examples of survivor bias. There’s probably 100 or 1000 examples for each of those where the idea and/or the company bit the dust.

How true. Case studies are one thing but can we look at the universe please?

MobileLeap

So since I complained about the lack of mobile-ready websites out there, it was just a matter of time before I discovered MobileLeap.

To understand how terrifically amazingly absolutely fantastically good this service is, first open your mobile phone browser and type in www.economist.com. Curse. Then try navigating the garbage layout that the The Economist inflicts upon mobile phone users. Curse again.

Then go to MobileLeap on your mobile phone browser and type in www.economist.com. Experience utter bliss as you now get a mobile-ready website generated on the fly.

Doesn't sound like much? Well, you're not following instructions then. Remember, open your mobile phone browser, Economist, curse, MobileLeap, happy sigh.

I've tried this with the BBC website too (another horror) and it works just as well.

Hat tip, ironically enough, to Kate Russell at BBC's Click.

The financial crisis and venture capital

A couple of days ago, I was chatting with an ex-entrepreneur who now acts as a consultant to technology start-ups.

We were talking about the current financial crisis and its implications on venture capital. His opinion was that VCs now need to recalibrate their return assumptions. Whereas VCs would typically have sought returns of many times their investment in the past, now they should look at relatively measly cash multiples of 2-3x.

That could be one possibility.

My perspective is that the ultimate providers of capital, LPs such as pension funds and endowments, would not be willing to accept lower returns from venture capital for the same (or higher) risk. Instead, they would apply correspondingly smaller proportions of their investment capital to this asset class, i.e., it is purely an asset allocation story. This will mean that fewer VCs will raise funds, the supply of funding will dry up and --in theory-- the multi-bagger exits will still occur.

Interestingly, that same evening, I read this on FT Techblog:

The massive over-capitalisation of the VC industry during the dotcom boomhas never been fully unwound... The sickness in question is spreading instead from the limited partners - in particular the big university endowment funds, which over-invested in all classes of private equity in the boom years. As other parts of their portfolios fall in value, they are being forced to cut back on private equity - including VC - to maintain asset allocation ratios. The money flow is being turned off.

Now the trick is to be among those few who continue to manage multi-baggers...

Book review: Freakonomics

Freakonomics by Steven D Levitt (Rating: ***¹/₂)

Yes, I finally read this.

I thought this book was only so-so. Perhaps all the hype surrounding it raised expectations too much but my problem with this was that it was a little dumbed down. Which isn't a bad thing in itself, it just means that the book targets a wide audience. But it wasn't for me. I don't want to have to wade through calculus when I read a book for leisure but it would be nice to be mentally challenged every so often. (Lest you think I'm being an insufferable know-it-all twit, read the book and judge for yourself!)

It's a book full of interesting anecdotes. You could pick it up, flip to any chapter at random and not be lost. Some would say that that's the beauty of it but I like my reading to be "progressive", if that makes sense. To be fair, the preface does say that the book has no overarching theme, no grand conclusions and all that, so it's not like I didn't have fair warning.

My other complaint about the book is that nearly all the examples written about are backward-looking. Meaning, look at some data and derive a relationship retrospectively. Implications for the future are few and far between, aside from the major one that intuitive answers aren't necessarily correct answers.

Overall, a good, accessible tome but without any blinding insights.

Awww, those poor bankers

Ok, so I reused this title. But this time it's another group with a misplaced sense of entitlement.

If you haven't been hiding under a rock for the past one and a half years, you will have an inkling of the fact that large banks, mostly in the Western world, have been having a heck of a time dealing with the credit crunch. Governments have provided bailouts, central banks have provided lifelines, strategic investors have lost lots of money... Yet after all this, some bankers think they continue to be entitled to the kinds of bonuses and perks (Citigroup's new jet?) they received during the good times. What nerve... The ones responsible for this mess should be subject to clawbacks and instead they ask for more.

Fine, that's still what one would expect. Ask, and if ye receive, take it.

What I definitely don't understand is people who are not bankers standing up and saying that bankers should continue to be paid their wildly exorbitant salaries. Lex recently argued that bankers needed to be paid their "massive bonuses" (their words) as long as they were properly structured to align bankers' interests with shareholders'. So are they saying that past bonuses were awarded willy-nilly with nary a structure in sight? They also say that the average bonus last year was "just $112,000". Here's another choice bit:

Troubled banks may struggle to attract talent if they limit compensation to base salaries that have historically been a minor component of overall compensation. Many of the best bankers, often already wealthy enough to retire if they wanted, simply may not bother turning up for work if that is all that is on offer.

More here.

To which I responded with a comment on their website. It's somewhere on this page (sorry, there's no direct link).

The average bonus was "just" $112,000? What world are you living in, Mr Journalist? I find this sort of statement completely offensive--and I work on the buy side not as a milk delivery boy. Pity the poor average banker in your universe who only made $400,000 last year and now finds himself on the street begging for $100 bills to wipe his tears away. For goodness sake, can't you find more worthy causes to champion?

Bonuses are awarded for performance, they are meant to be over and above base salary and they are meant to be (generally) discretionary. If the performance doesn't cut it, the bonus goes out the window. As it should in these times. This doesn't mean that we will have multitudes of poor bankers suddenly unable to feed themselves (unless they can only stomach caviar and champagne everyday). It will only mean fewer cocktail parties on private yachts. All the better.

Besides, if the average bonus is "just" $112,000 --and I don't believe that-- whence all this noise about pay caps not being appropriate? Why will all these "average" wage-earners suddenly bump up against salary caps?

And finally, who knows, once the rules have been reset, perhaps supply and demand will help even things out. If there aren't enough high-flying bankers available when the spigots are turned off, who cares? The ones left behind will by definition not be as greedy as the ones who leave. Bankers have always been a hugely overpaid bunch. Let the job market now adjust to a more reasonable equilibrium in this new reality.

And finally, if you read nothing else on this issue, then read this. Paul Wilmott demolishes the argument that bankers are properly incentivised in this article.

Book review: Metamorphosis

Metamorphosis by Franz Kafka (rating: ?)

There must be some cultural references, references to philosophy, politics or social issues that I didn't get, because I didn't understand this book at all. When I finished reading it, I had a vague sense of some sort of symbolism that I was missing, but when I referred to the back cover (which I'd avoided reading until I read the book itself), it said something about Kafka's style being one of juxtaposing the absolutely frightening with the absolutely banal. If that's all it is, then, yes, I understood the book. Which doesn't mean I necessarily thought it was a great read. I'm not rating this one: I still think I didn't get what Kafka was trying to do.

Google vs Yahoo!

The comparison's been done to death, mostly to Yahoo!'s detriment, and here's yet another: so both Google and Yahoo! decided a while back to allow users to opt out of customised advertising. Google explained their policy clearly and created a 3-page FAQ with 7 questions. And most importantly, they provided a big blue button labelled Opt Out at the top of the page. Yahoo!, of course, explained their policy too but as part of an 11-page press release complete with 9 footnotes. Egads. I didn't read the release (would you?) and now I have no idea how to opt out of Yahoo!'s advertising. No matter. I never use Yahoo! services anyway.

Dealing with a Great Depression

Does this remind you of this other post?

[via E@L]

Book review: Nice Work

Nice Work by David Lodge (***¹/₂)

I started reading this book thinking I would eventually rate it 4 or even 4.5 stars. Evocative prose, an understanding of human nature and societal issues, and a good start setting the stage for the main story. Plus the fact that it was short-listed for the Booker and had good reviews from some respected papers.

But it began to flag from that terrific start (a bit like the way I tend to cycle--full speed ahead for the first ten minutes and then barely hanging on for two hours). 4.5 dropped to 4 and eventually 3.5.

I don't generally like to leave off books halfway and this one certainly wasn't bad enough to do that. But gripping and compelling it stopped being about halfway through. It was as though Lodge had started with a very good broad framework for a storyline --issues he wanted to incorporate, characters he'd created, places he wanted to write about-- and had started work with enthusiasm and energy, only to begin wondering halfway through his story what specifically to say within his framework and how to say it.

The usage of tense puzzled me too. The first few chapters use the present tense to describe the present and the past tense to bring in history, which is a common literary device and works very well at the start of this book, but most of the rest of the book shifts to the past tense for no reason in particular, and the present makes a few appearances again towards the end, making one wonder how his tense choices come about at all.

The ending is awkward and unconvincing, as though Lodge contrived a way to tie up the loose ends and fulfil his obligations to his publisher --who no doubt paid a large advance based on the first two chapters-- and thereby put himself out of his misery.

I'm beginning to suspect professional reviewers don't really read the books they review.

Tata's gloom

Ratan Tata's letter to senior managers at all Tata companies

Valuing the network

i just came across this techcrunch post that attempts to refine the way in which social networks are valued. in a nutshell:

• ignore visitors and page views
• calculate internet spend per online user and multiply that by the number of users in a given network to obtain a valuation for the network
• compare these valuations to the value actually paid in recent transactions
• apply these multiples to the other networks you want valued to cross-check against the valuation obtained above

read the techcrunch post in detail if you like, then come back.

i think this methodology is a good effort and definitely much much better than valuing eyeballs alone BUT:

• the value of a network grows non-linearly as the number of nodes increases. we all know this. yet this methodology simply calculates values for various networks in a linear fashion
• this model doesn't account for cost structures, only taking (potential) revenues into consideration. which may seem a persnickety objection to raise, but if we're talking about spending hundreds of millions of dollars yearly for the larger networks just to stay alive, then it doesn't seem so inconsequential after all. (besides, costs can be more non-linear than revenues.) however, they're right in the sense that the number they come up with can be considered the revenue potential (not valuation) of a given network
• what someone else paid for a network... it's either a bit artificial/circular or completely irrelevant


• artificial because the logic runs like this: someone paid $x for that network, therefore i shall pay $y for this one and someone else will follow my lead and pay $z for that third one, and so on. but what if that first $x number was 'wrong'? shouldn't valuations be intrinsic to networks? how quickly can you say dotcombust?
• ...and possibly irrelevant because how i value something could be completely different from how someone else values it. this doesn't matter in an efficient market (~= public markets) where there are several investors both long and short waiting to pounce on mispriced assets but DOES matter in an inefficient market or one that's non-existent (i.e., private companies)

but what's the conclusion? is this exercise completely useless? not quite, but it's not the be all and end all either. it's just another data point to be considered.

in fact, there is one way to improve the methodology: apply it to public companies, compare the derived valuation to the valuation assigned by the markets and test the efficacy of this model that way (whether the public market valuation is itself 'correct' is a different debate altogether).

so which social network is public today? surprising but true: google. obviously, google isn't a 'social network' in the sense that most people mean it, but to all intents and purposes, this model is quite applicable to them. what do they do? they serve ads. what does this model do? it calculates the worth of online ad companies. besides, google owns youtube. guess what youtube is in the business of.