Zooming in on the landscape of the supply chain/graph we can make a very simple model of the firm. The firm has some skills which it plies by drawing inputs from suppliers and creating outputs for it’s customers. For example a lawn mowing business. On the supplier side a few employees, equipment suppliers, insurance, accountant, a bank, maybe a phone. On the customer side maybe a hundred customers. Not too much skill; mostly the skill of keep all these relationships functioning.

A demographer of this landscape might ask about numbers; then we could make plots to reveal patterns. For example consider the number of suppliers v.s. the number of customers. Some firms have huge numbers of customers but very few suppliers. When I was growing up there was a guy in my town who had this huge house on a small mountain; seemed he owned a single patent which he licensed out to companies all over the planet. Almost zero suppliers but millions of customers. Radio stations are another example of this kind.

Then there are firms with huge numbers of suppliers and customers. A fast food restaurant chain for example has lots and lots of employees, real estate deals, local legal & political connections, on the supply side along with numerous customers on the other. Or consider eBay with it’s huge pool of sellers who supply it with goods and it’s huge pool of buyers who receive those goods. Or consider Google with its huge pool of content providers v.s. its pool of eyeballs searching for goods.

How is the population distributed over this two dimensional landscape? That’s actually two questions. Where are firms? where is the money? If we look at firms counts I suspect you find most of the firms are down toward the origin. First world households, for example, typically have maybe a hundred suppliers but they have only small integer number of customers – i.e. most 1st world people are full time employed. If instead of counts, you look at the cash flow I assume you find that much of it is further away from the origin; at least that would be consistent with the distribution of wealth.

See also: design patterns for intermediaries, Ping/Polling, etc.

The bug report said that I should hand edit the database and then upgrade to the current version. So after many many more hours than I’d like I have switched on wordpress 1.5. The style sheets aren’t right yet. The captch for comments is much more obnoxious.

Oh piffle – the pages are now all showing excerpts instead of the entire entries and I don’t see a toggle that controls that. The most painful consequence of that is that none of the entry pictures are showing up on the main index pages.

As an aside you can detune the capcha to some extent by tinkering with the files in it’s “noise” directory.

I’m sure there are things broken; so fee free to, keep me informed.

Meanwhile, what happens to Walmart if the Chinese float their currency?

Interesting conversation going on in semi-public between Dave Winer and John Robb about getting credit for your work.

My personal take on this is that ideas struggle to get out and that we all work damn hard trying to help them. The way high tech markets are means that a lot of us end up holding a dirty shovel while other folks wander off with the bag of gold. The example that John and Dave are puzzling about is common. Most of us who work hard in this field will have that experience along with it’s near neighbors; for example Mr. What Could A-Beans. They don’t tell you that in school; but as Dave used to say “Dig we Must.”

The element of this pattern that seems to get my goat isn’t not getting credit. It’s watching fine rich complex ideas get turned into naive cartoons. Watching babies I’ve cared for get pinned to a wall and desiccated. For example I know a few dozen reasons why open source works. But then some actor comes on the stage and announces with great dramatic effect: “It is all just status seeking.” For few afterward the audience knows that’s the answer and the entire movement suffers as a consequence.

The cartoon phase is what happens as the ideas are repurposed to serve the goals of actors further down the supply chain. What Paul Krugman calls the “Policy Entrepreneurs.” Here’s a typical sentence that illustrates how he finds this species distasteful ” am also unable to pretend to respect ‘policy entrepreneurs’, the intellectually dishonest self-proclaimed experts who tell politicians what they want to hear.” These actors are no different than the rest of us; they are looking of a place to get some positive feedback. If you frame an idea in certain ways you get a commercially viable product. Frame it another you get a fat book deal. Frame it another you a durable notch in the belt of your reputation. Frame it as a open source project with sufficient worse-is-better affordances for other people to play and you create a bloom of activity that is really fun to watch.

A generous nature tends to give a lot of stuff away. If you get bitter about what the other guys do picking thru what your shovel leaves behind then it’s hard to remain generous. Hoarding isn’t pretty. In some market’s hoarding is best option; it’s a good thing when things are scarce. Ideas aren’t scarce.

We have all sat in the final meeting of a conference or the tail end of a dinner and had to suffer thru the thank you speech. One of organizers gets up and launches into thanking absolutely every person who did as much as think about unfolding a chair. On an on they go. But that’s exactly right. The generous stream of contributions that make a thing work needs to be matched with a similarly generous flow of credit.

So. Thank you John and Dave for all your work to reinvigorate authoring on the web. Your absolutely right. The web is not about watching, listening, reading; but it’s also about acting, speaking, writing.

Oh, and if it’s any comfort as soon as they allow cell phones on airplanes the whole market for golly gee business books will collapse.

I totally agree..

Utter bollocks. Mr Brolsma’s performance could only be described that way by someone with no capacity at all to recognize good comedy. The video is hilarious and, to anyone with eyes in their head, was supposed to be. It’s not earnest, it’s deadpan. I am sorry to say that Americans are renowned for their inability to grasp this distinction. Despite the article’s efforts to draw a parallel, it’s obviously a real performance, not a private bit of wish-fulfillment… it’s funny, you gobshites! And it’s meant to be!

Yesterday’s quiz was can you see the pattern here

Here you can buy 8-12 frogs legs. Here you can buy some sausages. You can get a thousand kinds of stamps over here. Need supplies for your revenge fantasies? Or maybe your ears are cold?

These all small online store running an open source software package called osCommerce.

If you search for “Powered by osCommerce” you get some very very impressive page counts; four and a half million pages at Google, eleven million pages at AllTheWeb. The real fun begins if you add niche products that your curious about. Sausage for example and you can get your safety sausage or your pewter sausage chain.

I wandered upon osCommerce because I was kicking the tires on Paypals’ developer network. Developer networks are a tool firms use to encourage a network of complementary products to appear around thier offering. There I came upon their list of this list of around 200 shopping cart or store fronts. Nice little example of a long tail. If you look at the other larger payment solutions you’ll see a similar list; for example at authorize net.

This illustration shows this business scheme. The payment companies, people like Paypal and Authorize Net, want a lot of shops to integrate with them. So they offer a developer network to attract the vendors who serve shop owners. Those vendors, the guys that make shopping cart solutions, join the developer network and use it’s services to integrate their offerings with those of the payment company. The more successful the developer network becomes the more this drawing begins to look just like the drawing that describes an exchange standard.

Which is probably because from an appropriate distance they are the same drawing. The work that a developer network does as it campaigns to attract developer members, get them to sign up, integrate, and succeed is identical to the work a standards body ought to do as it campaigns to drive adoption of it’s offering. Both the standards body and the developer network are attempting to define a platform (represented in these drawings by the line below the exchange or integration).

When I look at a group (a business, a project, etc.) one of the things I look for is how rich their set of connections is, their complements. One way to look for that is to find their developer network. Another way is to look at their customers. osCommerce is amazing because of the diversity of the store owners that use them.

I didn’t get a job once. Have I told this story? They had me in for the interview. But I think that was just because they wanted to tell me the bad news. My letter wasn’t folded correctly. There is, it appears, a correct way to fold and insert a letter into an envelope. The CEO told me this right at the beginning of my interview.

Later, a different job. It was my first day on the job and I cheerfully informed this company’s CEO that I was dyslexic. The look on his face would have frightened others. I’d seen it before so I shrugged it off. People seem to get over it. The next day they instituted a three writing sample requirement on all new hires.

I was terribly amused by a scene in the movie Lemony Snicket. One of the good characters is deeply committed to the value of good grammar. When the vile count forces her to pen her own suicide note she leaves a coded message in the text. Each letter of the coded message marked off with a spelling or grammatical error. Of course the evil person, like myself, would be blind to these.

I’m aware that this handicap drives some people absolutely crazy. Good news. In the best traditions of leveraging the contributions of the many I have now added a way you can scratch that itch. Below each entry there is now a “Typo” button. Hit it and you can send me your corrections! Talent Scrapping

Update: Two fixes so far on this one. Thanks!

The benefit of owning a standard is that you get to control the fate of it’s community of complements. With luck and hard work you can use your whatever you want to call it, (ownership, leadership, power) to do a number of things. You can use that control to shape where the market goes. You move the immovable, i.e. the installed base forward. That’s key because it helps you to avoid being displaced by tech. innovations. Of course in the best scenario, for you, you get to draw off a tax from the market that spins up around your standard. Owning the land a city is built on, so to speak, and charging some rent.

So you get land grabs, attempts to move really quickly to define a standard and get a community of complements to appear around it. For some entrepreneurial startups this is the whole business plan. It’s a pattern that can demand a lot of capital, so it’s synergistic with the VC approach. Sometime this approach goes like a firework and nothing is left but an echo. Sometimes you get the walking dead. Sometimes you almost make it. Palm is a beautiful example of almost making it.

So you get war. War to control the land where an market is emerging. The wars tend to unfold more slowly. To get a standards war you need some big players who are locked in. On the one hand they need a huge installed base that ties them down. On the other hand they must see that movement is inevitable. Finally you need a rich prize, or at least the impression that big prize is in play. It makes for interesting times. Handheld computing has just this structure.

So Palm managed what the other fast movers didn’t. The Newton didn’t make it. Go didn’t make it. Magiccap didn’t make it. The first N rounds of Microsoft’s tablets haven’t. None of the calculator companies crossed over. None of the phone vendors have managed much.

Palm created a standard for how to keep your handheld in synch with the rest of your junk. A rich network of complements emerged around it. They pulled off that rare success, the land grab.

But this that standard is the slow moving kind. The cell phone industry, in particular, but also the rest of the consumer electronics industry, have huge installed bases which they can’t walk away from. So they have to fight it out.

These gorillas’ response was Synch ML. Slowly but surely they have been winning. So it’s a forgone conclusion that Palm would be forced to capitulate at some point. And now they have.

It’s curious how what was once their treasure becomes their albatross. They need to force the migration of the existing community of compliments without laying waste to their installed base. Few companies know how to do that.

Here is a nice example of reaching a bogus conclusion. I’m a huge fan of positive reenforcement. Animal trainers know that a smart animal will withdraw and become devious if you if you try to train it using negative reinforcement. But it is trivial to prove that negative reinforcement is more highly correlated with improvement than positive.

Let’s train a pile of pennies to behave. Good pennies come up heads. Flip the pennies ten times. Divide them into two piles, the good ones and the bad ones. Now punish the bad ones. Beat them with stick. Repeat the experiment. Notice how their behavior improves! Now reward the good ones. Kiss them. Repeat the experiment. Notice how they appear to be slacking off! Clearly negative reinforcement works and positive reinforcement doesn’t.

The technical term for this is regression toward the mean. If the behavior is random the past performance doesn’t tell you anything about the future. But if you have a high performing penny you can be reasonably confident it’s performance in the future will be only average. In the stock market of pennies should bad pennies have depressed prices invest in them. That is counter intuitive, but only a variation on how we can reach the bogus conclusion that negative reinforcement improves performance.

Here’s an example of the bogus conclusion in real life. At one point the Israeli Air Force concluded that they should stop complementing the pilots that did well. They had noticed that afterward they would perform less well. They concluded they should continue scolding the poor performing pilots. They tended to do better. It’s an interesting example of thinking that the causality is due to what ever you did most recently.

In risky, aka random, situations – such as a warfare, experimentation, entrepreneurial activities, learning, etc. – your very likely to have an extremely strong component of random luck. In that case you can trivially fall into this bogus trap. In this environment you need only find the loosers, and beat them. Later they try some other random schemes to make things work and sure enough some will regress toward the mean. You pat yourself on the back for your deep understanding of behaviorism.

This isn’t an abstract issue. It goes straight to the question of how we design the systems we work inside. Let’s look at Brad DeLong’s recent posting on the tournament based architecture of the academic.

The process of climbing to the top of the professoriate is structured as a tournament, in which the big prizes go to those willing to work the hardest and the smartest from their mid-twenties to their late thirties.

I have a very poor opinion of tournament based systems design, particularly when rounds in the game are a huge chunk of a human life span. I think it’s pop-Darwinism. I think it leads to abuse of power by those who set the rules. I think it makes those who play in the tournament devious because their most highly leveraged approach is to work on gaming the system. I think this design drives out skill diversity and that has fatal consequences on the quality of problem solving. I could go on, but let me draw attention to something else Brad said.

Brad is primarily talking about how the tournament architecture of academia has some exclusionary effects. Not about all the reasons tournaments might be a lame design. He uses as a launching board the blood sport going on around Larry Summer’s recent comments about the women. Because Brad really wants to talk about something else he buries the sentence that clears the air so he can talk about what he’s trying to puzzle out.

And I say this as someone who thinks that Summers’s views on gender, genetics, and math achievement are almost certainly wrong, are unsupported, and should not be pushed forward by somebody who is twenty years beyond the stage of his career where you throw out lots of unfiltered ideas in the belief that what matters is the quality of your best one.

Right on bro.

But I notice how that sentence speaks to the question of tournament design viewed thru the lens of regression to the mean. It appears that there is a forgiving phase in the game when quantity of ideas is treated as a good thing. The phase is highly random. Presumably all your competitors in the game have very similar skills or even extremely similar in skill. How might you get that? Well, design the game design with a recipe that includes very standardized filtering schemes and then add a good dose of group think. Now, given a very uniform pool of players the winners of this tournament will almost surely very be positioned to undergo regression toward after they get the prize. Opps. They should become extremely careful to husband their high rank after they capture it. I.e. they probably ought to shut up; or at least they should stick to what has worked well in prior rounds. If the game is set up with lots of negative reinforcement and that is extra true for those of high rank then this design leads to an extremely conservative behavior being your best option – if your a winner in early rounds. Blogging bad; since it breaks the mouth shut rule. Tenure good, since it tempers at least a little the risk of idea generation in a highly negative reinforcement based system.

Since they generate far more losers as output than winners, systems based on tournaments are fundamentally about negative reinforcement

Now look at high tech. Open systems work to create a large surface where random experiments can take place. Some of these work out, most don’t. Notice how given that if you manage to have a success you ought to fear of regression toward the mean.

I’ve spent a half day twice at LinuxWorld here in Boston.

There are some traits that partition the universe of exhibitors. Big firms, little firms, and “dot orgs.” Hardware, Software. Developer facing, enterprise facing. The Developer facing fall into two camps; hardware and software. There are folks in booths, folks in stations inside somebody else’s booth, and then guys wandering around on the floor.

Generally I find the big firm booths lacking in authenticity; over designed booth furniture; bevies of bitter beautiful booth barista; huge lcd screens owned by power point; presenters who’s talk is feed into their ear from a tape player. Sometimes a gimick; for example Sun and AMD have a lan party setup. Well, it’s not a party it’s a contest and it’s obnoxiously loud. All it’s neighbors are pissed.

Redemption for a big firm booth is possible. Some of the firms have let out a big chunk of their real estate to stations occupied by their “developer partners.” These are typically just like little the small firms; except they are sitting at a station that lacks the authentic signs of a real firm – i.e. somebody eating in the back of the booth, the luggage, or better yet a child. This lack of authenticity meant I didn’t actually realize they were there for a while.

In a strange demonstration of some kind of emerging hierarchy of nobility I spent a while talking to a guy in a station at a huge firm who runs the developer network for mediums sized firm and then later in the space of the medium size firm I spoke to guys at stations he had provided them.

There is a lot of stuff going on around ‘thin client.’

I think my favorite booth was LTSP.org’s. They guys seem to mostly work in schools. Their problem; a huge pipe of misc. computers – old, donated, random – that they can’t bring them selves to give away. So they have given life to the thin-client network computer fantasy. Except this time it works. You get the feeling that if it has a CPU, a screen, and a keyboard these guys can make something useful out it. Disk? no way! I’d never notice etherboot.org before. This is such a hack! They replace the ROM on the ethernet card so that you can bootstrap off it, and then off the net. The traffic at both these booths was huge.

I had fun talking to buys who’s companies sell thin client hardware. They all have really fun surprising customer stories. Like the schools making useful stuff out of old junk these guys are really making people’s lives better in little insurance offices, auto dealers, etc. etc.

Lots of people say document management in their booth signage. I don’t think two of them are doing the same thing! I had a lot of fun talking to a guy who’s document management system has mostly gotten used to capture faxes, and scans of paper documents in small to medium sized offices.

I’m mostly not that interested in the enterprise facing vendors; but there is an trend there. When I used to go to Mac World you would see trends. Sometimes they were huge – like one year there were a dozen disk drive expansion vendors. The next year there would be two. The following year there would be none, or one. The trend I think you can see here is tools from small vendors to help solve what could be called the migration problem (moving from Windows to Linux for example) or it could be called the heterogeneous systems problem. I like the second term better. I think we are moving into a much more complex and confusing IT world. Lots of junk of various kinds. A dozen databases where somebody obsessive might prefer one. A hundred systems all jockey for screen space in front of the person getting the work done. Of course if there was nothing but time then we could integrate those hundred systems into one rational unified UI; but who’s got time? It’s much more fun to solve problems and move on to the next problem. Getting a pretty unified UI or master database schema is navel gazing.

So we get the hacks to assure documents of a given account number to pop up in the web browser when ever the call handling software receives a call. We get hacks to keep N different employee account databases in synch. Why N? Mergers, politics, expedience. Surely your not going to tell one division that they can’t install a system that gets them a huge productivity improvement just because it happens to integrate poorly with the LDAP directory you the parent company’s obsessive compulsive IT group has wedded themselves to?

The outlook substitutes market is looking healthy. Someday that’s going to totally disrupt the outlook/exchange network hub. But it’s only motivation right now is cost. CIO’s do not care about cost. They care about risk. They care about game changing advantage. They care about keeping a lid on diversity, aka chaos. Offensively, they are typical monopolists. So these offerings remain poorly impedance matched to the customers that have huge outlook/exchange installations.

There are a lot of offerings in the network monitoring space. Like all of software these show little correlation between features and price.

When I browse at these open source shows I’m always struct by how rarely my “man that’s cool” reaction is. During the first years of the Mac it was a very very common experience. Rich geographic database apps on the mac in 1986, for example. Or the constraint based drawing programs. Or the way that you could drop an object into a pallet and the pallet would learn that subset of the attributes of the object which were relevant to the pallet and create a new cell in the pallet.

I expected I’d see cool innovations in the network monitoring booths. But mostly not. There were some clever tricks for packing more info in the trend graphs; but not really surprising. Nobody seems to be making any progress on the hard problem – managing the alert population given the human failings of the recipients of the alert stream.

I did like the system that observes the OS call patterns of your application and then generates alerts when new things happen.

Nobody seems to be doing anything that creates collaboratively authored rule sets.

I’m always amused by how some booths are vicious in their lead qualification. They have one or maybe two questions they ask and if you don’t happen to give the right answer they ignore you and go back to talking to themselves. They have got that evil beast serendipity in a cage.