Monthly Archives: April 2008

Standards as Floors

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One of the many things I learned reading the literature on standards is how they tend to set floors on behaviors. I was reminded of that from this posting from Kevin Drum

I want to highlight a single passage from the Roger Lowenstein article that I blogged about below. It’s about how investment bankers create complex financial instruments that receive high ratings:

Credit markets are not continuous; a bond that qualifies, though only by a hair, as investment grade is worth a lot more than one that just fails….The challenge to investment banks is to design securities that just meet the rating agencies’ tests….”Every agency has a model available to bankers that allows them to run the numbers until they get something they like and send it in for a rating,” a former Moody’s expert in securitization says.

Go ahead and call me a rube, but is this for real?
This is a bit like being surprised that the lunch on your airplane flight bears no resemblance to what would pass muster as lunch at mom’s house. In fact I love that the airline industry at one point had to convene their industrial standards body only to set a standard for what counted as a sandwich; since some carriers handing out “sandwichs” while others were actually providing a sandwich. Of course once you set the standard everybody in the industry pretty quickly starts handing out the minimum meal that meets the standard.

This kind of gaming of standards is well standard. One way to temper the effect is to keep the rules fuzzy. It is oddly perverse that if you give the regulators wide latitude in their enforcement you can undermine this gaming; since the regulated players will then have to strive to overshoot the standard sufficiently to avoid the risk of failing to meet it. The players will then complain that the rules aren’t clear and that the regulators are capricious. Another trick is to make the standard a bit competitive so only top N% get the rating. The judging will give an element of fuzziness, and it also creates striving for improvement. But then tends to create demands for the judging to be more transparent – a proxy for the return of the bright line – in the name of fairness.

Attention Economy?

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I like to talk about leveraging the talent on the other side of the Internet, or talent scraping. That talent is only just recently discovered. We are in a kind of gold rush to figure out how to mine it. I’ve called that mining industry talent-scrapping, in part to suggest how it’s like a whale filtering plankton from nutrient rich waters.
Talent is usually considered scarce. But now it’s abundant. But now it is different in form than in the past. More diffuse. We used to concentrate it into locations, universities or cities, but now it’s just out there; on the other side of the net. So most of our intuitions are wrong about how to manage it or accumulate it.

We are in a curious situation where you have a choice between abundant talent v.s. scarce talent – but where we have very refined craft knowledge about how to mange scarce talent (think standardized testing, university diplomas, publication pipelines) v.s. very immature craft knowledge about how to tap diffuse talent pools.

That combo scarce-but-skilled vs. abundant-but-unskilled must be a common situation when a new option space break open. It is notable that their is scarcity on both sides of that equation; but they are of a very different nature. One is a resource scarcity, and the other is a lack of expertise – an information good.
When people talk about the attention economy I’ve tended to presume they were saying that attention is scarce. Certainly my attention is a limited resource. I certainly have a whole bag of tricks for managing that scarce resource.

Clay Shirky takes a run at this problem in a most excellent recent essay where-in he introduces the delightful term “cognitive surplus.” He gets there in a most marvelous way that is just hip slapping funny.

The idea of an attention economy is that there is some gross national product of talent out there. That it’s like the water supply of a big city, a pipe flows into the city of skill, and there is only a certain amount to be had – so you really ought to be careful what you spend it on.

I recall how when back in the 1960s there was a drought around NYC and people started talking about water conservation. We used to get a glass of water automatically when every you sat down in a restaurant and they stopped that. I recall hearing how silly that was since meanwhile the water authority came to discover that rivers of water were leaking from the system; entire pipelines were flowing hundreds of miles only be dumped into the Hudson.

To adopt Clay’s term cognition is the water of the attention economy and his point is that we just maybe we are pouring most of the talent on the planet into the abyss.

Talent isn’t scarce anymore, the real question is where the hell has all the talent been going all these years. Clay has some suggestions, and possibly most interesting to me was the hint that society in the past has struggled with this very same question; it’s “the idle hands – the devils playground” problem. And for God sake don’t miss the punch line at the end of his essay!

Misc. GAE Examples

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Some other amusing little hacks on Google App Engine.

I like LunchStr, for coordinating the office lunch expedition.

Dot and Simple Sketch reminds me of the sheep market, talent scraping example; which is recursive of course since google app engine is a fine example of developer network as talent scrapper.

Of course you have to have your standard little apps. Tinyurl clones: grulx.com, Links’R’US, and hurl.

There are some slightly larger applications.

And some larger ones, like a chat rooms provider.
One of the app team’s example apps makes Google an OpenId provider, app here – it’s only version 1, which is lame, even useless.

Most of the really complex stuff is still Google authored. Their directory is filling up fast, including some spam entries. They already have preferential attachment bias in their ranking.

Finally a complain! The user nicknames appearing all over these application are actually revealing people’s email addresses, just add @gmail.com. Feel free to star this defect complaining about how all these sweet little applications are revealing user-email addresses unnecessarily. (Did somebody say oauth?)

Sprunge – Neat toys showing up in Google App Engine

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Some fun things are popping up in Google App Engine.

I like sprunge (discuss) a tool for command line jockeys.  By example:

$ echo Hi there | sprunge
http://sprunge.us/eUdF
$ curl http://sprunge.us/eUdF
Hi there
$ uuencode foo.jpg < ost.jpg | sprunge
http://sprunge.us/WJHN
$ ls foo.jpg
ls: foo.jpg: No such file or directory
$ curl http://sprunge.us/WJHN | uudecode
% Total      % Received % Xferd  Average Speed    Time      Time        Time  Current
Dload  Upload    Total    Spent      Left  Speed
100  116k  100  116k      0        0  59640          0  0:00:02  0:00:02 –:–:– 68675
$ ls -l foo.jpg ost.jpg
-rw-r–r–  1 bhyde  wheel  86669 Apr 22 08:34 foo.jpg
-rw-r–r–  1 bhyde  wheel  86669 Apr 22 08:31 ost.jpg
$ cat ~/bin/sprunge
#!/bin/sh
exec curl -F ‘sprunge=< -' http://sprunge.us

Using uuencode made me happy!

Google App Engine

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It’s fun observing what people are using Google App Engine for.

Sprunge.us provides a pastebin service which you use from the command line.  For example I put this script in my PATH:

#!/bin/sh
exec curl -F ‘sprunge=< -' http://sprunge.us'

At that point you can post things by doing

#!/bin/sh
exec curl -F ‘sprunge=<-' http://sprunge.us http://sprunge.us/

Unhelpful

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shoebanging.pngLauren Weinstein posts about being accused of being unhelpful.

But a message from another privacy personality was as polite as it was disturbing.

The sender noted pretty much essential agreement with my arguments regarding the lawsuit, but strongly asserted that my post was “most unhelpful” by “undermining” efforts to bring Google into advocacy group consultations.

Solidarity has it’s function, and for many groups it is their most substantive source of power.  When opposing such groups divide and conquer can be a particularly effective strategy.
Lauren counters with a few of the standard counter points.

For example he labeling the shunning as “ad hominem attacks.”  One of the puzzles of group dynamics is how solidarity is maintained.  How does the group signals to a participant that he’s out of bounds?  How does it even negotiate the consensus about it?  There are always boundary keepers that will volunteer to do this function, and it seems they often over shoot.  The phrase party disciplinarian comes to mind.  No doubt the most vitriolic of the reactions he got were offensive attacks on his person rather than the topic under discussion.  When the full bore shunning takes place, the triggering issues fall by the way side.

My point here isn’t to dig into the issue.  My interest is in the group dynamics.

In the internet identity design space the group dynamics is what interests me most.  The ebb and flow of each group’s positions.    One of these groups is the loose collective of folks who I think self identify as Privacy Advocates.  Lauren is  a founder of that group.  That he has triggered their immune system makes this an interesting case study.
Lauren points out the Google, the other party in this particular dispute, is a group too; like Soylent Green it’s made up of people.  Of course Google is not a group of people in anything like the sense that the Privacy Advocates are.  While there some weak status and hence hierarchy in the PA community it is primarilly an open system from the get go.  They are a loose collective of reasonably like minded folks.  No doubt that movement could use a bit more organizational muscle, but as rebels against power it’s a tough sell.
Google, on the other hand, is a corporation – the entire design pattern of corporation runs contrary to open systems.  Presumably it struggles against that tendency, but the defaults are what they are.  Just to take one particularly small example, Google Apps reveals the email of any user who signs up for an application to the application vendor – it’s a choice, and they had to make a choice.  Their scale (their power) means that choice point is highly leveraged.

Scale, as usual for me, is the interesting part.  The Internet Identity standards battle is one of the few standards wars that deserves the nearly full blown military metaphor.  Armies, some of these groups are best treated as armies. The landscape under dispute is extremely valuable and some groups on the field are entirely focused on winning an owning that real estate.

That’s a polarizing framing, eh?  Groups, like the privacy advocates, who’s power, solidarity, is grounded in being rebels against these powerful, often mindless, armies are likely to view chatting with the enemy as traitorous.  It’s ironic though.  Lauren in making the argument that the other guys are made up of people is in fact appealing to a core value of the privacy advocates, e.g. that the individuals trump the group when making any design choice in this space.

One of the puzzles in this standards space is how hard it is to negotiate with any of these groups.  Most of them are not able to cough up a representative with whom you can negotiate.  The privacy advocates are the worst case of that.  There are dozens of people in that group with stature; but if you expend a few man months of effort negotiating with one of the his agreement doesn’t buy you the assent of the larger collective.  The privacy advocates aren’t organized in a manner that delivers a throat through which they can speak.  While I think that’s a good thing it makes the standards bodies prefer to ignore them.

But the other groups are just as awful.  Some of these are rent seeking.  Some of fear for their existence.  Some of them are playing property rights games.  Some of them send diplomats to the negotiation with false authority, since their senior management is uninterested in this standard’s battle.

To me it is a key point that the negotiations, and the battle, is between these groups.  Oh sure, there is an dialog between individuals that is critically important – since that’s were the design that actually works will be discovered.  Understanding the nature, culture, and motivations of these groups is the key.    In each of these groups there are a few people who are coming to see that they must work on the problem at this level.

For those people the hardest part is negotiating with their own people.

The Little People

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gulliver1.jpgI wonder if there is any data on the distribution of stock ownership for a large sample of public companies.  It assume it’s conventional wisdom that management can capture a large portion of the profits when the firm’s share holders are more diffuse v.s. when the  ownership is concentrated in a few hands.  I think I’ve seen articles showing that result.  This is, yet again, a question about the power-law distribution.  It would be fascinating to see some analysis of company performance versus how skewed the ownership distribution is.

This is analogous to yesterday’s point, via Bob Wyman, about how when a platform vendor successfully atomizes the size of the options created by his platform can improve his monopoly.  Large firms always labor to keep their complementary players commoditized; management presumably always labors to keep shareholder power fragmented; and anti-democratic movements always labor to keep group forming limited to the family unit.  It’s why we are suspicious of populism, and why I’m doubtful about the Deep Green’s enthusiasm for local.
It would be cool to have the SEC require reporting of the aggregate statistics of firm stock holdings.  Who knows, possibly that data is reported.  Say indirectly thru reporting of shareholder voting data.

Not too hot, not too cold.

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upset.pngThis posting by Bob Wyman is most excellent, do read it.

Platforms, it is often argued, create innovation.  They do that by creating large option spaces where third parties can bring their domain knowledge to bear.  It’s an efficient way to structure the search because domain knowledge is sticky, otherwise the platform vendor would do the search in-house.  The value created is then split between the platform vendor, the developer, and the end user who get’s his problem solved.

Developers select platforms for numerous reasons.  Developers, for example, switched their attentions from Microsoft toward the LAMP stack for lots of reasons.  Including the fresh option space the LAMP stack created, the impression that the value split around the LAMP stack would leave more on the table for them, and the discovery that Microsoft (“cut off their air supply”) couldn’t be trusted.

Much innovation that happens on top of a platform is too fine grain to be converted into value for the innovator beyond the intrinsic pleasures of inventing, having fun, and the extrinsic pleasure of solving the problem at hand.  For all of those the platform(s) involved can roll up the innovations into to the greater good – of the platform or the society, it varies.

Innovation comes in all scales.  Some of the smaller stuff is, well, just hacking.  Hackers, innovators, developers, entrepreneurs might be names for various scales.  Bob’s posting is more about entrepreneurs.  he highlights a kind of chilling effect that comes as you atomize the options on the platform.  It makes the platform stronger, empowers it’s winner take all nature.  More hacks to roll up to it’s greater good.

That in turn reduces the number of platforms, which drives away the entrepreneurs.  Since they are in it more for the exit strategy.  Fewer platforms means greater pricing power for the platform and lower valuations for the startups. He takes a swag at how one might go about managing that risk, i.e. how you might “reducing the anti-innovative power of the platforms.”

Note that, platforms as anti-innovative is the opposite of the usual story we tell about platforms.  Neat and right on.

Google App Engine

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milkwrecked.jpgFinally Google is revealing some of the means they will provide to allow third parties to run code closer to their assets. Last week was good for Python! Since, we learned that Google’s leading language for developers will be Python. While they assert that the platform is language neutral it certainly looks like only Google can “harden” and deploy a new language. The crowd demanded both an unknown language and Perl, the presenter flinched. That is going to be very rough on the long tail of languages.

I found the 1st and 2nd segments of their announcement videos interesting. Everybody got very nice hair cuts.

There is a lot of value in this offering and the “you don’t have too” theme that runs through out their patter is a strong way to present that. They really are taking a lot of pain out the developer’s job! So while they are probably encouraging the die off of a lot of interesting languages they are enabling a lot of tiny applications.

Their persistent store is cute (note you can’t write to the file system otherwise). I suspect this is a lock-in point, though the semantics of the store look reasonably simple.
In addition to writing to the file system, no pure TCP/IP interfaces, and no threads. Which reflects the nature of the underlying computer. Amusingly this is a non-preemptive computing model, just like the old Macintosh. You have to do all your work triggered by http requests, and those can’t run too long.

I’m fascinated by my emotional reaction to all this. While I’ve rationally seen this coming for a very long time. In fact I’m surprised it’s taken so long! It makes me sad to see the old craft skills become less necessary. It makes me excited to see the opportunities this opens up; it’s always fun with a large population is empowered to author software. That’s one of the big-hard-problems, letting more people be authors.

That kind of somewhat discombobulated emotional reaction in an expert is a good sign in a platform offering. This is going to be big and it is a nice counter point to Amazon’s approach.