Archive for October, 2011

Innovators – A Dying Breed in the US (more like being killed off)

And bam! Like I said, China and India will be two of the emerging world powers when it comes to technological innovation. I had read an earlier article many moons ago that discussed Professor Vivek Wadwha’s findings with regards to his students’ desires to return to their homelands. At the time, the push against illegal immigrants were already under way and, as mentioned, many companies found this appalling. It wasn’t too hard to connect the dots and realize that we would be massively screwing ourselves in the global market. Sadly, there isn’t much one (or a few) people can do to get Senators to care about the well being of the US over their desire to get votes for reelection. Now we see the affects of our Government’s shortsightedness – China and India are indeed two of the fastest growing markets for tech and with a greater influx of bright minds from US universities, it won’t be much longer before we see their reliance on US “innovation” fade away. Perhaps that will be the wakeup call that slaps some sense into US Government and gets them to listen to engineers instead of self-serving lobbyists.

Then there is the epic student debt problem that haunts our youth. So not only are we driving away the best and brightest foreigners, but we are also fucking over our own best and brightest newcomers. Good job America! President Obama is trying to find a way to alleviate the pains of the recession on new grads by pushing for a bill to help with student loan debt. Now the big question is: will this be enough to push new grads into starting their own businesses? I personally believe that this is too little, too late and, combined with the influence huge corporations have over the government, will be one of the contributing reasons we will lose our dominance as technological innovators. And do the numbers back me up?

Just looking at past census data (2008), we know that a gigantic chunk of employment is by small businesses. Using even 500 employees as a cutoff instead of actual dominance and ignoring the fact that huge companies tend to have a higher percentage of non-US based workers, we still end up with about 40% of the population being employed by small businesses. That is a shitfuckton of people and doesn’t even account for unregistered entrepreneurs (i.e., the new grads coming out of college). Oh, and then there are the freelancers too. Can’t forget them. Using this as our basis for small business importance, it becomes strikingly clear that pushing for small businesses and fostering startup growth is crucial to keeping our economy alive. Entrepreneurs, in particular, are some of our best innovators and provide quite the buffer setting us apart from other countries. As our buffer slowly dies, it becomes much easier for large companies in other countries to compete with the US as those companies will have the resources to match our own local R&D departments (i.e., they are on even grounds for hiring the best US workers for R&D and have the additional benefit of being much more attractive to the best and brightest foreigners – those that got educated in the US and left to go home). Once this happens, the US is going to be in deep economic shit.

So what can we do about this? For one, getting the government to realize that idiotic laws like E-PARASITE (formerly known as PROTECT IP) and the ridiculous software patent laws will only serve to hasten our decline. Perhaps getting the government to follow through on some of the We The People is a non-superfluous way would be a good start. For example, this is the response from the many marijuana petitions. The arguments and justifications put forth are idiotic (and rather than usurp my own post, I will refrain from going through them in detail) and just out of morbid curiosity (cause I don’t even agree with the petition), I’ve signed this petition just to see what inane response they send out that won’t contradict what they just wrote (or I can just sign this one). Remember Us Government, when you try and use illogical arguments against the entire US populous, you will get some sarcastic assholes who will tear your argument apart with a counterexample. Or perhaps the government can listen to the 99% and stop shacking up and fucking with corporations (Occupy Wall Street anyone?). There is a lot wrong with our government and the combination of media explosion (YouTube, Twitter, etc.) and the recession has made it much more transparent that we are declining as a nation of innovators.

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David Stern Loves Money, Doesn’t Care About Fans or Competitive Balance

It’s official, David Stern doesn’t give two shits about the NBA or it’s fans.

“We’re going to have to recalculate how bad the damage is,” Stern said. “The next offer will reflect the extraordinary losses that are piling up now.”

If the negotiations were about anything other than money, then the losses incurred due to additional delays should mean nothing to the owners. Instead, the focus should be on just getting a deal done that reflects the state of the NBA at the time the CBA ended. To pile on additional “make-up” costs due to delays means the owners and David Stern are only concerned about turning a profit. The whole “competitive balance” argument is just a ruse. The owners realize they don’t have as much leeway with the public eye vs the players because fans aren’t falling for all the PR speak now (not after the players made another drop to 52.5%). So here is the definitive proof that David Stern (and the owners) is just putting up a front and only cares about money.

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Get ready to play the blame game! Management vs IT

So a recent article on Ars discusses the increased demand in IT workers. For those of us in the industry, it comes as no surprise that demand for internal staff would eventually bounce back up, BUT there is a downside to the increased demand of which we are all well aware. Once companies start hiring locally, the blame for any screw-up will be put on the newly hired team of insourced IT. Any grand successes will be awarded to the CEO/CTO/Management Team for their “brilliance” in choosing to move away from outsourcing.

That leaves us IT workers (sys admins, developers, designers, etc.) in a precarious position. Our next job may leave a black mark on our resume, bonuses are not guaranteed, and raises will be minimal. Is it then a wonder that the hiring trends (in terms of employee requirements) have shifted to:

  • Full-time work rather than contract work.
  • Fewer interviews rather than putting up with being grilled (Hey, company X! You aren’t the prom queen!).
  • Higher salaries. We aren’t idiots. We know demand is up because of the increased amount of hiring spam we get from recruiters (mine personally has more than tripled in the past year).

You see, IT workers are not idiots and, like most people, are not looking to be burned more than once; especially in this crap economy. A comfortable job, good pay, and long term safety are priorities for those that choose to work in corporate IT. If we wanted exciting highs! Awesome new tech! A chance to become rich! We sure as hell would not be looking to work for established businesses and networking with recruiters. Instead, we’d take our talents to startups and network with VCs.

For the businesses that finally understand that majority outsourcing DOES NOT WORK (some outsourcing is ok, but if you hit majority outsourcing for IT, you are fucked), you better realize that the fallout from betraying former insourced employees has created a enormous expectation gap. It is up to the CEOs, CTOs, Management Team, and HR to find a way to appease those that have been once (or for the unlucky, twice, thrice, etc.) burned. You are also negotiating with people who do critical thinking for their jobs. We know, nay expect, that you will be putting the blame on hiring insourced IT for any management fuck-ups that lead to a worse fiscal year. In fact, I’d be willing to bet that if a company’s revenue doesn’t increase after a two or three years of “investing” in insourced IT, management will draw the incorrect conclusion that insourced IT == outsourced IT. Guess what? Anyone who thinks that is stupid. If your fiscal reports just flatline, that means insourced IT stopped your falling bottom line. We bucked the trend and are in fact contributing greatly to the business. Any expectations for insourced IT to be saviors are unrealistic. Only in startups, innovative companies, and firms that invest heavily in research can IT actually make that type of impact. In most other places, we have no power to decide the direction of a company, the products, or in some cases, the technology we get to use! Doing better requires better decision making up top and for that, who should be blamed? Hmm…

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50% of New Users Stick with Google+

So there has been some talk about Google+ dropping in traffic by some 60% according to Chitika’s statistics. Looking at the graph and comparing it to the Google Trends info about Google+ leads to some fairly obvious and interesting conclusions.

Google+ 2011 Trends

First off, the info about those letters from Google Trends:
[A] Google launches Facebook rival ‘Google+’ – Sydney Morning Herald – Jun 29 2011
[B] Google+ social network membership tops 10 million – The Province – Jul 15 2011
[C] Google+ social network adds games – Ottawa Citizen – Aug 12 2011
[D] Google+ opens to everyone, takes fight to Facebook – Zee News – Sep 21 2011

If we use Paul Allen’s user base estimate (an interesting read), we can see that the second spike’s (point D) downward slope correlates to about a 14 million user base increase. This would be from Sept. 21st (the start of the traffic increase on Chitika’s graph) to Sept. 27th (the end of Chikita’s graph). Considering the estimate that there are about 50 million users after this spike, we can conclude that the user base shot up by 33%. Seeing as how new users will be posting several times more than established users, 33% increase of users causing a 60% traffic spike seems fairly reasonable. Of course, the result is that traffic will drop back down to normal levels afterwards. The most interesting points to then compare on Chitika’s graph are the average traffic numbers from before the opening of Google+ and the average traffic after the spike settled down. The numbers from the 18th to 19th seem to average out to 50 while the numbers from the 25th to 27th average out to about 60 on the traffic index.

So what do we know? A 33% increase in user base from 36 million to 50 million correlates to a 20% increase from 50 to 60 on the traffic index. So this new group of 14 million users ended up having a lower usage rate of Google+. How low? Well using these numbers, we can estimate that every 1 million users from the initial base results in 1.39 points on the traffic index. Meanwhile, every 1 million new users results in 0.71 points on the traffic index. That either means newer users use Google+ about half as much as established users OR only about half of those 14 million bothered to stay after seeing what Google+ had to offer. I’m leaning towards concluding that Google+ has a 50% retention rate as human behavior isn’t going to be drastically different in terms of site usage over a large sample size.

Another bit of interesting info is that if you compare the jump from release to their first peak at 10 million users (A to B) and to the spike in September prior to opening to the public (no doubt induced by rumors) on the Google Trends chart, you’ll see that the magnitude of the slopes are the about the same. Considering how the first 10 million users were invite only and the second coming of 14 million users were from open signups, I’d say Google wasted their buzz value (based on Search Volume Index). How much did they waste? If we estimate the Search Volume Index points for the slopes to be about 2, then it took about 0.2 points to get every 1 million users during invite only and about 0.14 points to get every 1 million users after opening signups. So Google squandered about 25% of their publicity buzz after their initial announcement.

Now let’s take my crappy statistical analysis a step further and say that had Google opened signups from the start (or after a 2-3 days of conservative initial testing), they would not have squandered their marketing and gotten a 25% larger user base with 100% retention/higher usage rate (1.39 traffic index points per 1 million users). That means prior to Sept. 21st, instead of 36 million users at 50 traffic index points, they’d have 45 million users at about 62 traffic index points. The following week would have simply continued the trend of signups and they would have hit the 50 million mark anyway. However, you can already see that their average site traffic would be much higher and their signup rate could have possibly accelerated after hitting critical mass instead of slowing down and needing the adrenaline boost of open signups.

The major counterpoints made by Facebook that lead me to this conclusion are the introduction of the better Group/Friend List feature, the much more clear (albeit still not perfect) privacy settings, and the more streamlined interface for managing what is shown to whom on your Facebook page. These were all pushed out in response to Google+ and seeing as how only 50% of users after open signups decided to stay, I’d say that Facebook made a very good counterattack. Stunting Google+’s effective retention rate by 50% is enormous and will guarantee that Facebook stays in the lead for quite a while (perhaps long enough to turn Google+ into a niche social network). All of this could have been avoided by Google if they opened signups immediately. The fallout of their closed beta period is resulting in the same backlash that I predicted: lack of engagement by newer users post open signup, lost momentum (though, not a total loss, just less efficient, and now they have to fight based on features. Features that, I might add, are easily copied by Facebook. Their more unique features, like Hangouts, also have to compete with established products like Skype and all manner of chat systems.

If Google+ ends up falling to the wayside, the wasted marketing due to not immediately opening up the service will be the primary contributing factor to its failure. I just hope that doesn’t come to pass as we consumers need competition in this space.

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Early morning goodness! 

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A Response To Senator Schumer

So this article by Cringely is a good read and finally prompted me to finish this article that I’ve been meaning to write after receiving a response from Senator Schumer about the PROTECT IP Act (more on this later).

A lot of people see and recognize the problem [of having no new frontier] but few have a solution. Personally, I think the US is partially fucked because the frontier that we could have gone into (or rather, should be currently exploring), the internet, has been blocked off by nonsense patent laws (why do you think this We The People petition is so popular – Direct Patent Office to Stop Issuing Software Patents), insane copyright/trademark issues, and overall government corruption that caters to lobbyists pushing for stronger “IP” laws in both the US and other countries. And no, that is not hyperbole. I really do mean the US government is corrupt in the sense that they cater to lobbyists. Of course people always suspected the power of lobbyists but it wasn’t until Wikileaks came about that these sources of corruption have become so public and have been revealed in a timely (meaning the issues are still relevant) manner.

Specifically for the topic at hand (IP laws), Wikileaks has shown that the US gov’t has strong armed some countries into implementing stronger DMCA laws and other IP related changes (e.g., Wikileaks Cables Show Massive U.S. Effort to Establish Canadian DMCA). Case in point: ACTA (signed by the US very recently) and PROTECT IP – both of which are horrible for entrepreneurs and small businesses. Hence why most promising startups are moving away from the US and the trend is happening faster than I predicted because of these idiotic laws/lawsuits. But do our representatives listen to us? Do they see the downward trend in the industry and realize why it is happening (the developers, myself being one, state it quite clearly)? I’d venture to say no because this is the scripted response I got from Senator Schumer when he replied to my email several months after Protect IP went to vote (sent in at the same time I wrote my article on PROTECT IP):

Dear —–:

Thank you for your contacting me in opposition to S.968, the PROTECT IP Act. Like you, I believe that consumers should have access to a vibrant and innovative online community to discuss their ideas and opinions. At the same time, we must not let the internet become a haven for intellectual property thieves.

The threat to intellectual property owners over the internet is clear. Every year, the US Chamber of Commerce estimates that copyright theft costs our nation about $58 billion in lost output, 373,375 in lost jobs, and $16 billion in lost employee earnings. These numbers present an unacceptable burden to US businesses. In addition, companies may be less likely to innovate because their products may be stolen by intellectual property pirates, creating a drag on the US economy.

The PROTECT IP Act addresses the problem of intellectual property theft online, but it also contains important due process protections to ensure that legal activity over the internet is not disrupted. As you may know, the PROTECT IP Act would allow the Department of Justice to file a claim against a website that 1) has no significant purpose other than engaging in or facilitating copyright infringement, circumventing technology controlling access to copyrighted works, or selling or promoting counterfeit goods or services; or (2) is designed, operated, or marketed and used to engage in such activities. A judge would have to find that a website is intentionally violating intellectual property rights of an American entity before he could issue an order against that site. I believe PROTECT IP Act would provide law enforcement and intellectual property holders additional tools to protect American intellectual property from websites while still ensuring the constitutionally protected rights of free speech and due process. The PROTECT IP Act currently is awaiting action on the floor of the Senate, and I will continue to monitor this bill as it moves through the Senate.

Thank you for contacting me on this important issue. Please do not hesitate to contact me in the future if I can ever be of assistance to you on this, or any other matter.


Charles E. Schumer
United States Senator

Please do not respond to this email. To send another message please visit my website at . Thank you.

Ouch! Talk about being paid off to spew shit that he doesn’t know anything about. The original mail I wrote to him was similar to my old post on PROTECT IP except without the profanity and stripped down to the most important factual points. His response doesn’t address a single argument I put forth and relies on “statistics” that were created by lobbyists strictly to push their own agenda. If you read the actual source of those numbers (here you go for your reading pleasure), you will see that they are based on very poor premises such as (and I’m only posting a few):

  • Some of their inane premises, specifically:

    1. Internal estimates of piracy losses compiled by each of the copyright industries.
    2. ConīŦdential estimates of piracy losses developed by others on behalf of individual copyright industries.

    4. Sales data by country and physical piracy rates for recorded music from the Recording Industry Association of America (RIAA) and the International Federation of the Phonographic Industry (IFPI).

    Seriously? Would you trust a study that uses non-biased data AND data whose methodology for being produced isn’t even revealed? It’s like writing your thesis without a bibliography and claiming yourself to be an unbiased expert in the field. Yeah, I think my professors would have flunked me if I tried pulling that on them.

  • Every download = 1 lost sale. Yeah… sure. You wish. There isn’t a single economist that believes that to be the case. There are so many reasons that this cannot be true, it’s mind boggling to see them use this assumption (e.g., some of these people don’t even have the disposable income, some wouldn’t even bother looking at media X because the cost is greater than their desire to check it out, etc.)
  • The double counting of losses using multipliers, taxes (counted in multiple ways), and the icing – employees’ lost earnings. Yeah right, like they would hire more people or give raises if piracy suddenly disappeared. Production of new works wouldn’t suddenly require more people nor would they suddenly start producing additional works – and this is giving the kind assumption that they produce things which they don’t because the RIAA, etc. are just representatives for production companies. The industries themselves, specifically the artists, see very little of the money that is collected. And that isn’t even accounting for how little money the RIAA, etc. seems to get.)

Being an optimist, I thought that my well thought out letter would have elicited a better response. It saddens me to see the direction my nation is going and worse yet, the time I take to read and understand these issues is probably 100 times more than the amount of time Senator Schumer puts into understanding these issues. This is disappointing on two levels:

  1. Senator Schumer is our representative and it is his duty to do what is best for America. I have yet to see a good argument as to how this would benefit anyone other than the richest people in the US.
  2. As someone who is fairly well read in this field (I’m primarily a web developer so this is a crucial part of my industry), I would assume Senator Schumer would need to put in a lot more effort to understand the nuances of these issues to fully comprehend the effects that will result from pushing for things like PROTECT IP.

I know our Representatives can’t possible dedicate time to all issues, but they shouldn’t allow themselves to be spoon fed complete bullshit from lobbyists. Our Representatives can always abstain from voting on an issue that they are not knowledgeable in. It would show better judgement (patience is a virtue after all, so take your time to do your due diligence), result in fewer knee jerk decisions, and perhaps (yes, remember I’m an optimist) allow for more sensible laws. So Senator Schumer, I put in my time, how about you put in some of yours?

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Steve Jobs – Condolences

I offer my deepest condolences to Steve Job’s family. To lose someone so young, especially one with young children, is a tragedy no matter how famous or obscure the person.

As a life long lover of technology, a developer, and someone who loves great design (aesthetic and functional), I am saddened by the loss of one of the premier leaders in the technological era. Humanity has lost a great innovator and hopefully Apple will continue to produce great new products even in the absence of Mr. Jobs. I say this not as a consumer of Apple products (The only Apple product I have is an iPhone 4. I primarily use Linux and Windows.), but as a lover of great technology. May his spirit forever live on as a part of Apple.


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