What Trumps Email?

Fred Wilson writes:

I find myself text messaging more and more every day. It has replaced email as the dominant form of communication in my family. We all carry phones with us and texting gets an immediate or near immediate response while an email sits in my daughter’s AOL account along with dozens of spam emails she has no desire to wade through.

Spam has ruined email for the youth generation. They may adopt email at some point when they reach the workforce, but it will never be the messaging system of choice for them.

Maybe no single technology trumps email. Maybe its a collection of technolgies like texting, site messaging, and twittering that together provide a better alternative.

Monetising Online Via Video

Jeremy Liew writes:

Online video is hot and everyone is scrambling to figure out how to best monetize it. Google just launched their adsense for video product, Advertising.com has Instream, and there are a host of startups attacking the problem as well. I think these online ad network plays are very interesting, as are all the infrastructure plays betting on the underlying rise of online video.

I wonder though if online video is the best way for websites to monetize their traffic.

Platform Architects and Networks

N. Venkat Venkatraman writes:

Platform architecture is essentially network-centric. it involves coordination of modules (or sub-components) designed and delivered by different independent entities. So, while we may credit Apple for shifting the music industry to the network era, its success equally well depends on the broader ecosystem that it has orchestrated. Microsoft–despite succeeding in architecting the Wintel platform–has been unable to win with Zune thus far. Similarly, GM OnStar is a relatively closed (GM-centric) telematics platform that has not yet been adopted by any non-GM automakers for it to be considered a network-centric strategy while Microsoft is initially partnering with Ford Motor Company to launch a new dashboard OS. When Microsoft extends this experiment to deliver this functionality to non-Ford cars, it becomes a platform architect in the same spirit of Windows and Office platforms.

Platform architects earn revenue in two ways. There is direct payment from the users of the platform (e.g., Windows Vista or Office 2007, Sony PS3 or Xbox) or indirect payment from other parties involved in business transactions (e.g., advertising in the case of Google or transaction fee in the case of Visa or Amazon or eBay). The choice depends on network characteristics and customer propensity to pay for different features under different conditions.

Mobile Marketing

Marketing Pilgrim gives some tips from John Hadl:

# Determine goal: audience reach or customer engagement?Always step one. You can combine them into the same campaign, but if you dont know what youre trying to accomplish, how will you know if you succeed?
# Match brands with the right audienceKnow where your market is. If theyre not using mobile web, then why should you? And yes, the mobile audience does skew younger.
# Mobile application differencesKnow the difference between text messaging, the mobile web and mobile video.
# Match campaigns to available infrastructure and inventoryIs your site mobile ready?
# Capitalize on mobiles peer-to-peer communication abilitiesThats what cell phones were invented for, right? Give your audience the opporunity to share with a friend.

TECH TALK: Black Swan: Mediocristan and Extremistan

The ideas behind Mediocristan and Extremistan in Nassim Talebs The BlackSwan are worth exploring in more depth. Chetan Parikh has reproduced a table from the book which explains the differences between Mediocristan and Extremistan.

The Portfolio wrote:

N.N.T., who lives in New York and has taught at the University of Massachusetts at Amherst, previously traded derivatives on Wall Street. The academics who drive him to tears are the ones who have explainedor misexplainedhis old profession. They think that markets are from Mediocristan when in fact they inhabit Extremistan.

Say what? Mediocristan is the terrain of the ordinary, the part of the world that conforms to the bell curve. It answers to statistics and knowable probabilities. Height resides in Mediocristan. You may find one 7-footer on your block, almost certainly not two. Experience (and biology) enable us to frame the odds. Weight is also from Mediocristan. Pick any 1,000 people and their average weight will be close to that of the general population (even if you include the worlds fattest person). Personal wealth, however, is from Extremistan. For instance, the average wealth of 1,000 people will be very different if one of those people is Bill Gates.

This distinction is potent. In Extremistan, past events are a faulty guide to projecting the future. Gates may be the worlds richest person, but it isnt unthinkable that someday, someone (at Google, perhaps?) will be twice as rich. Wars also reside in Extremistan. Prior to World War II, the planet had never experienced a conflict as terrible. Then we did. Suppose you frequent a pond. Day after day you see swansalways white. Naturally (but incorrectly) you presume that all swans are white. World War II was a black swanhorrific and unpredictable.

The Financial Times added:

Taleb claims that there are too many extreme events in securities markets for such markets to be located in Mediocristan. The black swan of October 1987, when the Dow Jones index fell by about 20 per cent, was the first trigger for his personal reassessment. The event was simply outside the realms of possibility in classical statistics. Taleb would first substitute power laws and the mathematics of extreme statistics for the reassurance of normal distributions. But this still gives more credence to economists and financial analysts than he allows. Probabilities can be defined and predictions made only if the events that are the subject of the probabilities and predictions can be described. Donald Rumsfeld distinguished known unknowns and unknown unknowns. Statistics, old and new, deal with known unknowns. Talebs world is determined by unknown unknowns – black swans.

No one, he says, could have predicted the invention of the wheel or measured the probability that the wheel would be invented, because if you could do either of these things you would already have invented the wheel. The invention of the wheel was a black swan.

Arlene Goldbard went further:

Taleb argues convincingly that we treat far too much of our reality as if it were Mediocristan when in fact much of it often behaves like Extremistan, where there are occasional black swans (his name for the unexpected event and the title of his most recent book) among the white. So, for example, out of the many thousands of books, films and recordings released each year, a small number will account for the largest part of sales, and it is not possible to predict with certainty which of the many works released will find black swan-style success (or failure). Indeed, in any endeavor susceptible to notable, unpredictable exceptions, no amount of examining the past will enable us to foretell the future.

Whats going on here? Taleb discusses many factors contributing to our tendency to see our world as Mediocristan. There is the fact that our brains evolved long ago to deal with a world with many fewer variables, much less organized information, and a vastly smaller number of theories to explain them. The more complex any given situation, the larger number of examples you need to understand what is happening there. For instance, sampling the sales of a few dozen published books each year wont tell you much about the prospects of the thousands of others not sampled. Its just as likely as not that your sample would include one or more black swansunexpectedly huge winners or losersso anything you might conclude based on it would not be generalizable to the rest.

Tomorrow: More Reviews

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