Month: October 2004

History and the Internet

[via Shrikant Patil] The Economist asks: “Will charging based on content come to the internet? The history of transportation offers clues.”

In a recently published paper, Andrew Odlyzko, a professor at the University of Minnesota, divines lessons from the history of transportation to explain the telecoms industry’s attraction to price discrimination, and what it may mean in future. Of course, in general telecoms, companies already exploit variations in what customers are willing to pay for digital bits, depending on whether they take the form of a cable television programme or an SMS text message. On the internet, however, charging according to content would mark a big change.

On the net, discrimination might mean one price for web and e-mail traffic, another for instant messaging and still others for telephone calls, music and films. Is it likely? Mr Odlyzko hopes not, although history strongly suggests that the temptation exists. He thinks that price discrimination might not be in telecoms companies’ interests after all. Unlike on canals, toll roads and so forth, internet capacity is abundant. Internet service is therefore a commodity. Simpler, flat-rate pricing, he argues, is likely to increase usage: discrimination would turn some users away.

Indeed, he says, distinguishing between different types of traffic would mean so much technical rejigging that the openness of the internet would be destroyed. Because the internet is decentralised and simply priced, it is cheap for many other networksrun by big companies, universities and telecoms firmsto connect to it. This in turn gives the internet a great capacity for innovation. Price discrimination could jeopardise all this. While content delivery does lend itself to a closed network, connectivity does not. Open networks are likely to win because they can attract more revenues from users, Mr Odlyzko says. Is this wishful thinking? History, as he shows, is full of examples of successful price discrimination. The telecoms companies may yet think it worth a try.

Gladwell on Ketchup

Malcolm Gladwell of “The Tipping Point” fame is one of those people who has to be read whenever he writes something. His new book “Blink” is due out shortly. Meanwhile, here’s his latest: “Mustard now comes in dozens of varieties. Why has ketchup stayed the same?”

There are five known fundamental tastes in the human palate: salty, sweet, sour, bitter, and umami. Umami is the proteiny, full-bodied taste of chicken soup, or cured meat, or fish stock, or aged cheese, or mothers milk, or soy sauce, or mushrooms, or seaweed, or cooked tomato. “Umami adds body,” Gary Beauchamp, who heads the Monell Chemical Senses Center, in Philadelphia, says. “If you add it to a soup, it makes the soup seem like its thicker–it gives it sensory heft. It turns a soup from salt water into a food.” When Heinz moved to ripe tomatoes and increased the percentage of tomato solids, he made ketchup, first and foremost, a potent source of umami. Then he dramatically increased the concentration of vinegar, so that his ketchup had twice the acidity of most other ketchups; now ketchup was sour, another of the fundamental tastes. The post-benzoate ketchups also doubled the concentration of sugar–so now ketchup was also sweet–and all along ketchup had been salty and bitter. These are not trivial issues. Give a baby soup, and then soup with MSG (an amino-acid salt that is pure umami), and the baby will go back for the MSG soup every time, the same way a baby will always prefer water with sugar to water alone. Salt and sugar and umami are primal signals about the food we are eating–about how dense it is in calories, for example, or, in the case of umami, about the presence of proteins and amino acids. What Heinz had done was come up with a condiment that pushed all five of these primal buttons. The taste of Heinzs ketchup began at the tip of the tongue, where our receptors for sweet and salty first appear, moved along the sides, where sour notes seem the strongest, then hit the back of the tongue, for umami and bitter, in one long crescendo. How many things in the supermarket run the sensory spectrum like this?

Power on a Chip

Technology Review writes:

Gas turbines powered much of 20th-century technology, from commercial and military aircraft to the large gas-fired plants that helped supply U.S. electricity. But these days it isnt the hulking machines in the labs museum that capture [Alan] Epsteins enthusiasm. Instead its a jet engine shrunk to about the size of a coat button that sits on the corner of his desk. Its a Lilliputian version of the multiton jet engines that changed air travel, and, he believes, it could be key to powering 21st-century technology.

Though the turbines blades span an area smaller than a dime, they spin at more than a million revolutions per minute and are designed to produce enough electricity to power handheld electronics. In the foreseeable future, Epstein expects, his tiny turbines will serve as a battery replacement, first for soldiers and then for consumers. But he has an even more ambitious vision: that small clusters of the engines could serve as home generating plants, freeing consumers from the power grid, with its occasional black- and brownouts. The technology could be especially useful in poor countries and remote areas that lack extensive and reliable grids for distributing electricity. A comparison to how the continuous shrinkage of the integrated circuit drove the microelectronic revolution is tempting. Just as PCs pushed the computing infrastructure out to users, microengines could push the energy infrastructure of society out to users, says Epstein.

Epsteins immediate goal, however, is to use these miniature engines as a cheap and efficient alternative to batteries for cell phones, digital cameras, PDAs, laptop computers, and other portable electronic devices. The motivation is simple: batteries are heavy and expensive and require frequent recharging. And they dont produce much electricity, for all their size and weight.

The Mind of an Inventor

Newsweek has an interview with Evan Schwartz, the author of “Juice: The Creative Fuel That Drives World-Class Inventors.” Says Schwartz about inventors: “One quality that stands out: it’s the ability to find new problems that no one else even sees. The conventional view of inventors is, they’re good at solving problems. It’s really finding problems. Max Levchin was an expert in cryptography. Everyone thought there needed to be a secure way of paying people on the Internet. There were dozens of start-ups that failed because their solutions were so complicated. They required you to download a cryptography application onto your desktop and run the program every time you wanted to pay for something. People didn’t want to do that. So he came up with PayPal, where all the security features reside on a server, and the customer just sends an e-mail. He saw this problem in a completely different way. That’s what inventors do. They ask: how can I make this better?”

Finding Partners

Dave Pollard writes: “would hazard a guess that, both in business and in our personal lives, ‘finding people’ is our most inefficient process, the one we waste the most time doing ineffectively, and the one we do the worst job at. This is another instance of ‘the cost of not knowing’ — Who is the best supplier to repair your furnace, or advise you on managing your business, who are the best people to go into business with, what is the best community of people to live in and with, and, of course, who is Mr. or Ms. Right to spend the rest of your life, or at least the rest of the week, in the romantic company of.”

Dave has some interesting ideas on how to make the process more effective.

Taming the Email Inbox

Michael Hyatt has some suggestions [1 2]:

Contrary to popular opinion, there is not a law that says you must answer every e-mail as it is received. In fact, this is a sure-fire way to kill your productivity and end up becoming a slave to e-mail rather than using it as a tool to accomplish your work on your terms. One simple way to do this is to schedule specific times of day to work on e-mail.

The most unproductive thing you can do when it comes to e-mail is to read the same messages over and over again. This has the effect of doubling, tripling, or even quadrupling your workload. Instead, you should read each message once, then decide what to do with it. Read-decide. Read-decide. This is the pattern of effective e-mail processing. The goal is to end up with an empty inbox daily or, at the very least, every couple of days.

Economist IT Survey

The Economist writes that “the next thing in technology is not just big but truly huge: the conquest of complexity.”

Steven Milunovich, an analyst at Merrill Lynch, another bank, offers a further reason why simplicity is only now becoming a big issue. He argues that the IT industry progresses in 15-year waves. In the first wave, during the 1970s and early 1980s, companies installed big mainframe computers; in the second wave, they put in PCs that were hooked up to server computers in the basement; and in the third wave, which is breaking now, they are beginning to connect every gadget that employees might use, from hand-held computers to mobile phones, to the internet.

The mainframe era, says Mr Milunovich, was dominated by proprietary technology (above all, IBM’s), used mostly to automate the back offices of companies, so the number of people actually working with it was small. In the PC era, de facto standards (ie, Microsoft’s) ruled, and technology was used for word processors and spreadsheets to make companies’ front offices more productive, so the number of people using technology multiplied tenfold. And in the internet era, Mr Milunovich says, de jure standards (those agreed on by industry consortia) are taking over, and every single employee will be expected to use technology, resulting in another tenfold increase in numbers.

Moreover, the boundaries between office, car and home will become increasingly blurred and will eventually disappear altogether. In rich countries, virtually the entire population will be expected to be permanently connected to the internet, both as employees and as consumers. This will at last make IT pervasive and ubiquitous, like electricity or telephones before it, so the emphasis will shift towards making gadgets and networks simple to use.

UBS’s Mr [Pip] Coburn adds a demographic observation. Today, he says, some 70% of the world’s population are analogues, who are terrified by technology, and for whom the pain of technology is not just the time it takes to figure out new gadgets but the pain of feeling stupid at each moment along the way. Another 15% are digital immigrants, typically thirty-somethings who adopted technology as young adults; and the other 15% are digital natives, teenagers and young adults who have never known and cannot imagine life without IM (instant messaging, in case you are an analogue). But a decade from now, Mr Coburn says, virtually the entire population will be digital natives or immigrants, as the ageing analogues convert to avoid social isolation. Once again, the needs of these converts point to a hugely increased demand for simplicity.

The question is whether this sort of technology can ever become simple, and if so, how. This survey will analyse the causes of technological complexity both for firms and for consumers, evaluate the main efforts toward simplification by IT and telecom vendors today, and consider what the growing demands for simplicity mean for these industries.

The Magic of RFID

ACM Queue has a special issue devoted to RFIDs. “A technology called RFID (radio frequency identification), which is relatively new to the mass market, has exactly this characteristic and for many people seems a lot like magic. RFID is an electronic tagging technology that allows an object, place, or person to be automatically identified at a distance without a direct line-of-sight, using an electromagnetic challenge/response exchange. Typical applications include labeling products for rapid checkout at a point-of-sale terminal, inventory tracking, animal tagging, timing marathon runners, secure automobile keys, and access control for secure facilities.”

Blogs and Market Research

McGee writes:

In the marketing research context, blogs are a disruptive technology. Instead of having to generate data by way of surveys or focus groups with whatever artifacts the process introduces, blogs provide direct visibility into customers. Instead of having to connect potentially artificial samples back to the actual market, now you have to filter real market behavior, interpret it, and make sense of it. That presents two challenges to market research functions. First, market research staff have to develop new skills. For that, they would do well to pay attention to Dina. Second, management of market research needs to spend some quality thinking time about what to do with access to this new kind of market data.

The opportunity that blogs introduce into the marketing research equation is to create the opportunity to identify and run multiple micro-experiments in the market. Those that succeed get the resources to scale, those that fail generate some useful data and are quickly shut down. There are challenges, of course, especially given how quickly ideas spread in a connected world, but that should be offset by the speed with which experiments can be identified and run. Worth thinking about.