Future for Search Startups

Bill Burnham writes:

A couple of months ago I had the pleasure of moderating a panel at TIECon on the Search Industry. Peter Norvig, Googles Director of Research, made one comment in particular that stood out in my mind at the time. In response to a question about the prospects for the myriad of search start-ups looking for funding Peter basically said, and I am paraphrasing somewhat, that search start-ups, in the vein of Google, Yahoo Ask, etc. are dead. Not because search isnt a great place to be or because they cant create innovative technologies, but because the investment required to build and operate an Internet-scale, high performance crawling, indexing, and query serving farm were now so great that only the largest Internet companies had a chance of competing.

One can imagine a world in the not to distant future in which an application designer can easily leverage the billions of dollars being spent by Google, Yahoo et. al., by having programmatic access to what is essentially a custom crawl list and a highly filtered index. In this way search engines, in some respects, may become an infrastructure layer not too dissimilar from the telecommunications networks and internet standards that they themselves are built upon.

Tim O’Reilly adds:

In my talks on Web 2.0, I always end with the point that “a platform beats an application every time.” We’re entering the platform phase of Web 2.0, in which first generation applications are going to turn into platforms, followed by a stage in which the leaders use that platform strength to outperform their application rivals, eventually closing them out of the market. And that platform is not enforced by control over proprietary APIs, as it was in the Windows era, but by the operational infrastructure, and perhaps even more importantly, by the massive databases (with network effects creating increasing returns for the database leaders) that are at the heart of Web 2.0 platforms.

Gladwell on Neural Networks

The New Yorker has an article by Malcolm Gladwell on “the formula” to figure out which films become hits:

The way the neural network thinks is not that different from the way a Hollywood executive thinks: if you pitch a movie to a studio, the executive uses an ad-hoc algorithmperfected through years of trial and errorto put a value on all the components in the story. Neural networks, though, can handle problems that have a great many variables, and they never play favoriteswhich means (at least in theory) that as long as you can give the neural network the same range of information that a human decision-maker has, it ought to come out ahead. Thats what the University of Arizona computer scientist Hsinchun Chen demonstrated ten years ago, when he built a neural network to predict winners at the dog track. Chen used the ten variables that greyhound experts told him they used in making their betslike fastest time and winning percentage and results for the past seven racesand trained his system with the results of two hundred races. Then he went to the greyhound track in Tucson and challenged three dog-racing handicappers to a contest. Everyone picked winners in a hundred races, at a modest two dollars a bet. The experts lost $71.40, $61.20, and $70.20, respectively. Chen won $124.80. It wasnt close, and one of the main reasons was the special interest the neural network showed in something called race grade: greyhounds are moved up and down through a number of divisions, according to their ability, and dogs have a big edge when theyve just been bumped down a level and a big handicap when theyve just been bumped up. The experts know race grade exists, but they dont weight it sufficiently, Chen said. They are all looking at win percentage, place percentage, or thinking about the dogs times.

Motorola and the Internet of Things

John Jordan writes:

Getting Motorola, which had lost prestige and shed thousands of jobs, to accept risk-taking has been a core aspect of Zanders mission. As a result of the companys focus, patent holdings, and coherent product footprint and market positioning, its hard to see a head-on competitor. Cisco has more wireline clout and a bigger set-top box presence after acquiring Scientific Atlanta but no WiMax or cellular business, much less consumer design expertise of the sort embodied in the RAZR. Tag manufacturers including Texas Instruments, middleware companies such as BEA, or identity managers like Sun or maybe Microsoft may well play important roles as components in the cloud from sensors through computing to people, but its hard to see any of these companies taking a leadership position. Many, many piece-parts will be required for anything resembling the science fiction vision to come to fruition, but given that personal communications and computing platforms, a variety of broadband networks, and sensors in many shapes and sizes will be involved, in the near term Motorola appears to have rebounded and assumed a leadership position in a market it is helping to invent.

FT on Danah Boyd

Financial Times calls Danah Boyd “the high priestess of Internet friendship.”

Through her observations, Boyd has become one of the chief thinkers of the MySpace age. Her work tells us about the people who inhabit this new world, what they do there, and why. Boyd says online social networks have become a vital space for young people to express themselves and build their personal identities. While adults worry about the culture and dangers their children are exposed to on the internet, she says that what parents think children do online and what they are actually doing is very different. She defends a technology that has repercussions far beyond teenagers and could change the way all of us order our world, interact with each other, get information and do business.

Goal-Free Living

Tom Peters has an interview with Steve Shapiro about his book published earlier in the year:

Goal-Free Living is the antidote to our achievement-oriented society. Basically since birth, we’ve been taught that we should be setting and achieving goals, and working hard toward goals. And for some people, that works. Some people enjoy a goal-oriented life. But for many people, all that does is create stress and dissatisfaction.

I’ve done a number of surveys on the relationship between people’s goals and their happiness. What I’ve found is that most people keep sacrificing “today” for “tomorrow.” They’ll set a goal, plan it out, work hard, achieve the goal, and then say, “Okay, that was great; what’s next?” They’re constantly striving to achieve these goals in the belief that life’s going to get better.

Goal-Free Living, quite simply, is having a powerful future that is a context for how you live your life today. That is, you get satisfaction today instead of achieving it in the future.

TECH TALK: Good Books: The Go Point

Decision-making is something we do all the time. Some are made almost sub-consciously, while others are made after great thought. I came across a couple of books recently which delve into the process of how we make decisions. The first is Michael Useems The Go Point.

Here is how the book is described [via Amazon.com]:

The Go Pointthe moment of truth when you have to say yes or no when its time to get off the fence.

Michael Useemthrough dramatic storytellingshows how to master the art and science of being decisive. He places you smack in the middle of people facing their go point, where actionsor lack of themdetermined the fates of individuals, companies, and countries.

  • Why on earth did Robert E. Lee send General George Pickett on an almost suicidal charge against the Union lines at Gettysburg?
  • How does the leader of a firefighting crew make life-or-death decisions, directing his peoplewith little information about weather patterns to guide himto go up or down the mountain? One direction means safety, the other danger.
  • Youve just assumed responsibility for a scandal-wracked corporation, a company teetering on the brink of disaster. What you decide over the course of the next several days will have consequences for thousands of employees and investors. How do you fulfill your responsibilities?

    Michael Useem makes you feel as if you are there, right in the center of the action. He was there: tramping up and down the mountain where firefighters made their momentous decisions; walking the battlefield at Gettysburg to see for himself just what General Pickett faced before making his ill-fated charge; going into a trading pit where million-dollar buy-and-sell decisions are made that affect fortunes of both the firm and the person making the call.

    Youll discover why some decisions were flawless, perfectly on target, and others utterly disastrous. Most of all, youll learn how to make the right calls yourself, whether youre changing your career, hiring an assistant, launching a product, or deciding on a potential acquisition or merger.

    Smartly written and offering unusual insights into the minds of decision makers such as General Lee, The Go Point will provide the guidance for you to move with confidence when its your turn to get off the fence.

  • 800-CEO-Read writes:

    [Useem] is the author of some of the best books ever written on leading, particularly Leadership Moment from the late 90s, a book which uses examples of people leading while confronted with real world situations. Yes, his credentials are impressive, and his view on leadership above par, but what also sets him apart from the pack of business book authors is his storytelling ability. Michael Useem is a damn fine writer.

    The Go Point continues his look at leadership, but focuses on that crucial decision-making point where we have to go and move forward.
    I found the story about the Colorado forest fire to be intense and riveting. To understand what the firefighters went through and to understand the decisions that were made, Useem walked the landscape with one of the survivors. He tells the tale and then points out the decisions and the errors that were made with too little information. He describes the tremendous stress of battling a raging forest fire and how that affects decision-making.

    Tomorrow: The Go Point (continued)

    Continue reading

    Reinventing Disk Drives

    Robert Cringely writes about the venture he is involved in:

    Two old friends of mine, Anil Nigam and Jim White, and their company, Antek Peripherals, Inc., had been working for years on technology for a sort of hyper-floppy drive using metal foil for the recording medium. At the time they were aiming their work toward digital cameras, but I asked if the same technology could be used in a non-removable form inside a computer disk drive? And if it could be used that way, what would be the effect on price, performance, reliability, and energy consumption? The answers were stunning: they could design new families of disk drives that held up to three times as much data in the same space, were more reliable, actually cheaper to build, and used 70-95 percent less energy to run than the current state of the art.

    For a data center operator, simply swapping disk drives could increase storage by three times while decreasing total energy consumption by a third. This is a huge attraction for big businesses and big hosting companies, not just because it lowers their electric bills but because it may mean they can avoid building more data centers entirely.

    YouTube’s Early Days

    GigaOm writes about a video talk by Jawed Karim:

    Problem was, nobody used YouTube. Karim shows another video of the YouTube boys sitting around pondering their existence. Nobodys going to watch this, they complain; This is lame. To try to attract viewers, the three figured the best thing would do would be to get hot chicks involved. So, Karim recounts, they posted an ad on Craigslist in Los Angeles promising attractive females $100 if theyd post 10 videos on YouTube. They got not a single reply.

    In June 2005, YouTube revamped, adding the four essential features that jump-started viral growth. 1) related video recommendations, 2) one-click emailing to spam a friend about a video, 3) more social networking and user interaction tools like video comments, and 4) an external video player.

    That sharp uptick of growth (which, included in todays YouTube traffic chart of the last two years, shows up as part of the flatline days) made it possible for YouTube to raise $3.5 million in November 2005.

    The Philippines and SMS

    textually.org writes:

    “The Philippines has become the first country in the world where mobile users spend more on data services than on voice, according to a leading research company,” reports The Guardian via Smart Mobs.

    “The average data revenue per subscription in the Philippines now stands at $3.90 (2.08) a month, compared with $3.50 a month for voice – meaning that data accounts for 53% of the total.

    The main reason for the Philippines figures is that texting is very cheap compared to voice calls, so subscribers use texts as their main means of communication and their spending on voice calls is very low. A text costs only about 1 peso (1.1p) compared to about 20 pesos per minute for prepaid voice calls.”

    MySpace Local Ads

    The Courier-Journal writes:

    A growing number of Louisville businesses are turning to the social-networking Web site MySpace.com to connect with customers, promote events and, ultimately, make money.

    Taverns, clothing stores and gift shops — many of them independently owned — are creating virtual profiles of themselves on the site as an informal approach to free online advertising.

    Mobile Banking

    The Economist writes about South Africa:

    About half a million South Africans now use their mobile phones as a bank. Besides sending money to relatives and paying for goods, they can check balances, buy mobile airtime and settle utility bills. Traditional banks offer mobile banking as an added service to existing customers, most of whom are quite well off. But Wizzit, and to some extent First National Bank (FNB) and MTN Banking (a joint venture between Standard Bank and a mobile-phone network), are chasing another market: the 16m South Africans, over half of the adult population, with no bank account. Significantly, 30% of these people do have mobile phones. Wizzit hired and trained over 2,000 unemployed people, known as Wizzkids, to drum up business. It worked: eight out of ten Wizzit customers previously had no bank account and had never used an ATM.

    If the transfer of money by mobile phonebetween countries as well as within themtakes off, it could have implications far beyond the salons of Soweto. In 2005, according to the United Nations, global migrants remitted $232 billion, of which up to 20% was lost on the way, mostly in bank charges or fraud. If cellular transfers could slash that figure, mobile banking would prove to be a good call.

    TECH TALK: Good Books: In Spite of the Gods (Part 2)

    The Guardian reviewed Edward Luces book in August:

    Several recent books have examined the savage inequalities between the country’s burgeoning, educated, urban elite and the shockingly poor who live in the vast hinterlands. Luce’s thoughtful and thorough book – ‘an unsentimental evaluation of contemporary India against the backdrop of its widely expected ascent to great power status in the 21st century’ – fits right into this category.
    He suggests the dichotomy of India in the book’s subtitle and later calls India’s rise ‘strange’ because, while becoming an important political and economic force, it has remained ‘an intensely religious, spiritual and, in some ways, superstitious society’.

    It is always difficult to structure a book like this one, but Luce manages well by breaking up the narrative into neat chapters, each dealing with a different theme and each capable of standing on its own feet. We are offered accounts of India’s ‘schizophrenic’ flourishing economy; its state machinery; its caste conflicts; the rise of Hindu nationalism; the dynastic nature of its politics; its relationship with Pakistan and its Muslim minority; its relationship with the US and China; the country’s experience of grappling with modernity and urbanisation.

    The Hindu Business Line had a detailed review of Luces book:
    The book concludes with a discussion of `India’s huge opportunities and challenges in the twenty-first century’. Judging by the living conditions of ordinary Indians, rather than by `the drama of national events,’ Luce is of the view that the country is moving forward `on a remarkably stable trajectory’. And, as opposed to China, India has given a higher priority to stability than it has to efficiency.

    “India is like a lorry with twelve wheels. If one or two puncture, it doesn’t go into the ditch,” is a quote of Myron Weiner that he cites. That way, China may have fewer wheels so it can travel faster, but “people far beyond China’s borders worry about what would happen if a wheel came off,” notes Luce, extending Weiner’s analogy.

    Though investors are deterred by the babus, institutional advantages such as `an independent judiciary and a free media’ may make India the proverbial tortoise that can overtake the Chinese hare, postulates the author. “India can also draw on a deep well of intellectual capital.”

    Yet, for those closer home, a word of caution is not to take our economic strengths for granted. “As the joke goes, `India never misses an opportunity to miss an opportunity’. It is also suffering from a premature spirit of triumphalism,” alerts Luce.

    Indias rise has just begun. There are a lot of things that can still go wrong. But I feel that for the first time, there is an optimism in people that tomorrow will be better than today. And that can make all the difference. My advice to those taking a flight to India this winter: pick a copy of Luces book and read it en route. It will help you understand India better.

    Continue reading

    Trial and Error

    Will Price writes:

    Start-ups, without any a priori knowledge of the customer need/problem, often project need and develop solutions in isolation and without the bearing of market reality – similar to Plato’s Allegory of the Cave. It is always best to ensure that inputs are a function of reality (light of the sun) rather than projection (shadows on the wall).

    My personal view is that the minimum number of iterations may be hard to quantify, however, I have observed that the best time to meet a company is ~T+6months. 6 months of commitment, iteration, and market reality seems to be the optimal balance between opportunity and trial and error.

    The maturity of the plan, product spec, pitch, value prop, team’s commitment, etc is exponential across time – the job of the early stage VC is to work out how much time and how many iterations and if a given company presents the optimal mix of both factors.

    Age of Infinity

    William Brandon Shanley writes:

    A paradigm shift is underway, and a bright, bold new post-material, post-scarcity era called The Age of Infinity is rapidly emerging.

    The Age of Infinity will be characterized by infinite power and potential that mirrors that nature of the universe: quantum computing, unlimited memory, nanotechnology, digital universe, virtual reality, free energy (zero point energy and myriad others), genetic engineering, life extension, AI, elemental transmutation, teleportation, infinite universal-human mind/consciousness — and much, much more. All of these vectors are pointing to infinity. And it will be quite a ride. If only we can make through the next 15-20 years. I am confident that we will.

    How can I make such claims about the future? Simply because these technologies and sciences are characteristics of the nature of nature and we need only unfold what already is and “ride the horse in the direction its going” to make them tangible.


    Knowledge@Wharton writes about a recent conference:

    The business of making loans to poor people in underdeveloped countries is itself entering a critical period of development, according to panelists at this year’s Wharton Finance Conference.

    On one hand, they said, foundations and other non-governmental groups have shown the private sector that there is money to be made in lending to some of the globe’s poorest populations. And, they acknowledge, only the private sector has the capital to do this at the necessary scale. But they also warned, at the panel and in interviews afterward, that the drive for profit could leave behind some of the neediest citizens — particularly those in remote rural areas — and thus defeat the enterprise. Meanwhile, as an indication that microfinance is indeed on the global agenda, economist Muhammad Yunus, founder of Grameen Bank in Bangladesh, was awarded the Nobel Peace Prize on October 12.

    Nintendo’s Wii

    The Economist writes about Nintendo’s new game console:

    Nintendo set out to reach beyond existing gamers and expand the market. This would involve simpler games that could be played for a few minutes at a time and would appeal to non-gamers or casual gamers (who play simple games on the web but would not dream of buying a console). They would be based on new, easy-to-use controls. And they would rely on real-life rather than escapist scenarios. This was not an entirely new approach: dancing games that use cameras or dance mats as controllers have proved popular in recent years. But Nintendo began to design entire games consoles around such ideas.

    he Wii is an attempt to apply the lessons of the DS to a fixed console that plugs into the television. Its key innovation is its wand-like controller, which resembles a simplified TV remote-control rather than the usual button-strewn joypad. Motion detectors translate the movement of the wand into on-screen action, making possible tennis, fishing and sword-fighting games. (Some games use an add-on controller held in the other hand.) The Wii can also display news and weather information from the internet, organised alongside the games as a series of channels. Old games from Nintendo’s back catalogue can be downloaded to draw in lapsed gamers.

    Mobile TV

    WSJ writes:

    If you live in Japan or South Korea you’ve already been able to watch the country’s main channels on your cellphone for up to a year, and it seems you quite like it. But the rest of the world is a little behind the curve: The first commercial rollout in Europe was in Italy in June, while trials have been launched elsewhere in Asia in places such as Vietnam and Indonesia in recent months.

    Once we get used to having TV wherever we are, on a screen that fits in our pocket, other similar video services won’t be far behind, such as TV programs tailored to the small screen. And, as Junko Yoshida, a news editor for the electronics weekly newspaper EE Times, points out, the mobile-phone industry was surprised to find in one trial that it might not just be about portability, but privacy. “A lot of people loved the ‘personal’ aspect of mobile TV,” she says, “so that they not only watched it in their commute but they even took a mobile TV to their bed to watch.”

    Engagament Metric

    Robert Scoble writes:

    Why should engagement matter to an advertiser?

    Well, as an advertiser I want to talk to an audience wholl actually DO something. Yeah, Im hoping to get a sale.

    Yesterday Buzz Bruggeman CEO of Active Words, was driving me around and told the story of when he was in USA Today. He got 32 downloads. When he got linked to by my blog? Got about 400.

    My audience was (and is) a lot smaller than USA Today, but the engagement of the blog audience got his attention.

    How could we measure audience engagement?

    Innovation Report

    Knowledge@Wharton has a special report: “As companies struggle to innovate in today’s competitive environment, they need to continually guard against adding to their “clutter” — the creeping impact of complexity on efficiency and cost-competitiveness. In this three-part special report, experts from Wharton and George Group Consulting discuss how management can approach this problem by thinking “ambidextrously” — that is, focusing on innovation and broad exploration while minimizing the impact of clutter on operational processes and costs. Also, in the accompanying podcast (with transcript), Mike McCallister, CEO of Humana, discusses balancing innovation and complexity in the health care industry with Wharton management professor Michael Useem and Stephen Wilson, engagement director in George Group’s Conquering Complexity practice.”

    MySpace and Facebook Challenges

    WSJ writes:

    Ms. Thompson belongs to a fringe of Internet users now renouncing MySpace and other social-networking sites — not in spite of their popularity, but because of it. That highlights a dilemma facing News Corp.’s MySpace and Facebook Inc.: While it takes a critical mass of users to make these sites work, having too many users alienates some, especially when they attract an ever-growing cacophony of advertising and in some cases, spam.

    There’s no question, however, that MySpace’s recent popularity has brought with it a proliferation of spam that has annoyed some users. Many advertisers take advantage of the “friend request” function and send out requests that are really just advertisements. And programs have cropped up that can automatically send mass friend requests to MySpace users — in short, a new generation of email spam.