Sunday, 1 November 2009
She wanted to bring her push-along tricycle, so we need to follow a route suitable.
We consulted the map and made a decision to follow 'the yellow route', because it was suitable for wheelchairs.
I then blindly and obstinately stuck to this 'yellow route', despite by-passing numerous alternatives that were clearly better for the tricycle. We had made our decision and needed to stick to it!!!
That's how quick plan's and decisions loose their context!! Especially if you're not very bright.
I discussed with a friend of mine on Friday new economic models involving micro commodity transactions within facebook games and online worlds such as world of warcraft (with real sweat-shops based around accumulating artefacts and characters - i.e. https://gamersloot.net/).
Similar stories I thought.
Wednesday, 3 June 2009
I received a letter from my local hospital today (Friday) saying:
"We are writing to confirm your appointment (for the first time - ed) on Monday" (I was due to be in Scotland on Monday).
I wouldn't be too upset, but it was part of a very worrying programme of treatment, for an appointment I had been waiting for for 6 weeks. There was a particularly laughable clause in the letter saying....
"It is important to us that you have received a choice of date and time for your appointment.....
If you do not attend your appointment.... you may be referred back to your GP"
Crikey, not much time to exercise my choice.
That weekend, we had a picnic, with some hard boiled egg.
I noticed the following helpful warning inside the lid of the egg-box:
That was close.
These two incidents are related. Technology allows us to force data upon other people. In a way, under advisement from lawyers, that allows us to feel that we have protected ourselves from litigation.
Consequently we either increase anxiety, or burden of activity, for an enormous number of people.
If we were to measure the negative psychological impact (in lost dollars, of course) of these defensive mass-market campaigns, and compare it to the savings they generate for society, my guess is that they would be in at least a 10:1 ratio.
Its a shame though, but I guess we'll never know!
There is one thing to do differently.
If you have to do something that is to help improve the lives of other people through the production of information, by all means, involve lawyers, but limit their fees at the start of the project to £500.
Thursday, 21 May 2009
Tuesday, 19 May 2009
So I was very interested to see the level of effort and information that had been put into the toilet compartment of said service to ensure this didn't happen to any unlucky visitor.
A very large sign, saying don't use the toilet unless you have locked the door:
And a detailed '5 point plan' to follow to ensure the door is, indeed, locked.
Why should such a simple task require the rail company to put so much effort into explaining it?
I think the answer lies in the functional design of the door buttons themselves....
A more appropriate user interface might be apparent. Indeed, the extra flexibility of the available 'use cases' of this design could only be useful for people with tasks in mind that are not necessarily what the rail company would find acceptable!!!
The Psychology of Everyday Things was recommended to me as a read on this subject a few weeks ago. Written in the mid-80s it talks with great clarity on this subject, and is now compulsory reading (so I understand) for any design engineer. If it were really absorbed and followed by humans with design responsibility none of the above would be the case.
In fact, it so commonly is the case that we tend to be delighted beyond words when we encounter something that is well designed for humans to use. Oh, and quite prepared to spend money on it.
So why arent we surrounded by well designed objects that add to the spiritual quality (or at least dont subtract) of our lives.
One reason is that its hard. But we have done many very hard things (men on the moon, etc).
The answer may lie in our business vocabulary:
- Time to market;
- Cost income ratio;
- Business model.
Sunday, 26 April 2009
"When every individual person labours a-part, and only for himself, his force is too small to execute any considerable work; his labour being employ’d in supplying all his different necessities, he never attains a perfection in any particular art; and as his force and success are not at all times equal, the least failure in either of these particulars must be attended with inevitable ruin and misery. " (David Hume, A Treatise of Human Nature" (1739)):
These are two views on the division of labor. One speaks to its necessity for a wealthy and productive society, and the other to its destructive impact. I think the creation of Finance as an industry is an example of the former, whereas the creation of Risk Management as a sub-industry of Finance is an example of the latter.
Why do I think this? Well, it is to do with the separation of decision making, reward and responsibility.
Investors often talk about 'taking risk'. We choose to either 'take risk' or 'not take risk'. And responsibility for making a good decision lies with the decision maker.
To seperate the measurement or management of risk, from the decision to take the risk itself, not only confuses the responsibility, but dis-empowers the actors in the decision.
And creating adversarial environments between risk and profit (as most banks do) only puts risk in the junior position.
Therefore I think risk management is a discipline, not a profession. And as with mathematics, all should be literate and responsible in its practice. Risk cannot be delegated like Law, or Carpentry...
But worse than this is the scale such a division of labor between decision makers and 'professional reviewers' allows. Partly because it requires less training to reach 'competence' in one of the divorced skills, but also because of the sense of safety that such an organised and professionalised environment creates.
The failure then of risk managers (and I count myself very much in this) is that they, as individuals, submitted to, and encouraged this organisational slight of hand.
Wednesday, 22 April 2009
Over the years the physical implementation of this abstraction has itself become more and more abstract. On an individual machine the concepts of messages, processes, threads and serialization have allowed developers to build programmes that emulate the everyday language of life, through things like design patterns (producers, consumers, singletons, swim-lanes etc).
Technologies that are being created for the entire network of all computing power is assembling its (ingreasingly prosaic) nouns:
I think there are some missing, which relate to how data is moved
Which might be Zephyrs, Hurricanes, Eddies, TradeWinds etc...
But these types of metaphor allude to something that might be important. They are forces that we do not control, and indeed, we are at their mercy sometimes. In the technology world, we do direct these forces, but they require active input and deep thought to get right, and we are balancing strong forces, bridging the void in the difference of two large numbers.
In the human world we constantly make decisions about storage, communication and travel.
Sometimes we travel by airplane to the source of the data (face to face meetings transmit enormous amounts of data over a short distance) and sometimes we are content with text messages.
Cloud is part of an evolution of technical metaphoric language, and each baby step brings us closer to being face to face with our-selves...
Saturday, 18 April 2009
I am sitting at my lap top writing this blog, chatting occasionally with my partner who is watching TV on the sofa, with tweets flashing in the top right of my screen, the odd beep of emails arriving and my blackberry sitting at my right hand (as always).
On radio four the other evening I heard Seamus Heaney saying he refused to have an email account, because letters were overwhelming, but text was something he used a lot, and had even learned to use predictive text (he is well into his 80s and recently had a stroke).
So we do lots of 'Communication' but sometimes these modes of communication don't suit us and sometimes they do. Text has taken off hugely because there is synergy between the technology and our desire to remain in touch with little emotional input. But amplifying this emotional shyness with technology doesn't always prove beneficial. We have all heard the story of redundancies delivered or relationships ended by text. So the technology beckons us over the line to cowardice in a painless way.
Twitter is another new communication phenomena. Until recently I would have loudly said it was a wasteful phenomena, encouraging pointless and trivial flirtations with 'almost communicating'. But I was ignoring an important truth about communication.
If its popular, it is important.
And I think it is a new way of communicating that doesn't have an analogue in the analogue world (ie email = letter, text = telegram, blog = essay). However, I think the next great advances in technology and communication will not be in new forms of communication, but in bending these forms into our service. Today, we are dominated and overwhelmed by information and are being communicated at, and to, in ways that don't obviously enhance our lives.
Allowing people to move between creative media, to collaborate, share and filter, using tools of their choice, to invite silence or hubub, in global teams or splendid isolation, or both in sequence, in ways that enhance our emotional and spiritual well-being, are aspirations that entrepreneurs today are working towards.
Sunday, 12 April 2009
One of the best ways of understanding how all our debts were accumulated is to look at the gross foreign current liabilities of our banks. These rose from £1,100bn in 1997 to £4,400bn this year (again, about three times the size of our annual economic output).
This only tells part of the story. If we want to know to what extent foreign investment in our banks has contributed to our UK based debt binge I think the following ratio would be more instructive:
I tried briefly to find the denomiator on google, but coudln't.
Anyone have any ideas where to find it?
Thursday, 9 April 2009
Nicolas Taleb's Editorial in the FT yesterday is food for thought. ( http://bit.ly/XVis )
Its a rehash of his black swan book, but with compressed messages and intensity.
One clause that stands out for me is the last:
10. Make an omelette with the broken eggs. Finally, this crisis cannot be fixed with makeshift repairs, no more than a boat with a rotten hull can be fixed with ad-hoc patches. We need to rebuild the hull with new (stronger) materials; we will have to remake the system before it does so itself. Let us move voluntarily into Capitalism 2.0 by helping what needs to be broken break on its own, converting debt into equity, marginalising the economics and business school establishments, shutting down the “Nobel” in economics, banning leveraged buyouts, putting bankers where they belong, clawing back the bonuses of those who got us here, and teaching people to navigate a world with fewer certainties.
Then we will see an economic life closer to our biological environment: smaller companies, richer ecology, no leverage. A world in which entrepreneurs, not bankers, take the risks and companies are born and die every day without making the news.Smaller companies, richer ecology, no leverage, equity.......
This is important stuff. But in this country (and probably everywhere) we lack the mindset and the infrastructure to really achieve this.
For many people small is cold. Small is lonely. Small is scary.
So we need to make it fluffier. Communities of small businesses can be improved. But not incubators in universities. Please no. That is a step too far! Too safe, too fluffy.
London has small enclaves of entrepreneurs, but is mostly dominated by the society of hedge funds and investment banks. Now is the time to change this (are you listening Boris!?).
We need more places like http://www.onealfredplace.co.uk (check it out! Beats the pants off a serviced office).
Also we need to reduce the risk. At the moment equity goes into premises. Equity goes into Financial management. Equity goes into PR. It goes into infrastructure. And this is wasteful. Investors and politicians need to find ways of making this more efficient. I will be working on this with my small fund. So less equity to do the same thing means less risk, and more entrepreneurs. Simple!
Entrepreneurs should always share the downside. That's what makes it work. But the downside shouldnt involve having your family kicked out onto the street. That is not sustainable capitalism.
Unfortunately, and on the subject of housing, leverage has put us in a place where bricks, mortar and labor worth £150k costs £1m. This crazy mis-allocation of capital really needs to be reversed as part of building a sustainable capitalist society.
/* End Poorly Reasoned Rant */
Sunday, 8 March 2009
This is the fairly straightforward message that we receive through our media and its not hard to understand why. The diagram below is a 'toy model' of the banking and 'shadow banking' system. It shows the investment process, of $1 in true capital being 'geared' as it goes through the sausage machine of the fund management industry, with banks pumping in debt at every step. By the time you reach the private equity investors on the sharp end there is a lot of cash to play with. The size of the deals these guys were doing was truly mind-boggling. What is important to understand however, is that no bank, at any point would have had to agree to lending at leverage ratios of 64:1. In fact, in this fairly tame example, no credit committee would have seen ratios above 4:1. What they would call responsible lending!
However, what if the masters of the universe wanted in the private equity business wanted even more cash to play with. One thing you could do is ask the banks to lend more, but there is an even easier way to do it. Introduce another layer of fund Managers. Lets call them 'fund of fund' managers.
Wow! Thats really cool. Now what you've got is leverage of 256:1!!! And still not irresponsible lending by the banks. That's what you call financial engineering.
The really difficult problem with this situation is that its not anybody's fault. These transactions happen all over the world. In different domiciles, and in hundreds of different institutions, and every individual transaction feels like a sensible, and low risk proposal.
The reality is of course much more complex than this, but its possible to see through this simple example how cheap money gets sprayed into the world of business. It was Milton Friedman who said
"... if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government."
Hmmmm. Sounds a lot like fund management too.
The problem now is what do we do about it?
Gordon Browns suggestion is to extend regulation to the fund industries. The regulators have failed to oversee banks though, so its hard to see how that will make the system more robust.
I think a more sustainable long term solution is to restrict and regulate the total supply of debt to the fund management industry, but by controlling banks, not funds.
This would require a much more pro-active, data driven approach from the regulators. This is not the same as having banks fill out more reports however.
With the approach of cloud computing and enhanced grid analytics we do now have the technological capability to do this. But it will require a very far sighted and energetic set of regulators to do this. Not least because the implied deleverage is probably a very difficult political pill to swallow.
Especially for Gordon.....
Saturday, 7 March 2009
So it is fun to read what is commonly called 'futurology' as a way to challenge one's ideas of how our commercial ecosystem will evolve.
An early influence on me was Lyall Watson, who died last year aged 69. He wrote a series of books ('Supernature' being the most famous) that discussed supernatural phenomenon and spent sometime considering the likely future evolution of the human race. One essay I recall reading was comparing the complexity of the global telecommunication network to the complexity of the human brain. It was a kind of enjoyably gentle 'nuttiness' that would provoke good after dinner conversations. Not serious though, only useful in the same way as science fiction might be to a working scientist.
It is into the same camp that I would put Raymond Kurzweil, only perhaps replacing humor with hubris. One of Raymond's books, 'The Singularity is Near' talks at great length on the idea that the constantly accelerating rate of technological change will soon become self sufficient, and human beings will become a passenger to technical evolution rather than a driver. It is not a good read though, combining the dullness of a (selective) technical survey with a poor simulacrum of 'Godel, Escher, Bach'.
In fact, in a 2007 interview, Douglas Hofstadter, the author of GDB compared his ideas to a blend of very good food and "the craziest sort of dog excrement".
Well, he said it, not me!
So it was with some surprise that I read of the creation of The Singularity University.
The role of the singularity university is to take a series of 10 super short modules in 'high technology' such as nanotechnology, specialise, and then do a project, all in the space of 10 weeks.
The faculty has a few Engineers and Scientists on it. It also has Aubrey de Gray, Chairman and Chief Science Officer of the Methuselah Foundation, of less certain acedemic pedigree, and a bunch of 'chief evangelists' and venture capitalists.
So its not really a university.
Then what's it for? The SU website declares its mission as follows:
A number of exponentially growing technologies (bio, nano, AI, info, etc.) will massively increase human intelligence and capability and fundamentally reshape our future. This concept, known as the technological Singularity, as advanced by Ray Kurzweil, warrants the creation of an academic institution whose students and faculty will study these technologies, with an emphasis on their interactions, and help to guide the process for the benefit of humanity and its environment.
Vint Cerf (Google's Chief Evangelist) says:
Creating a network of future world leaders across the range of exponentially growing technologies addressed by Singularity University will have profound implications.
So its more like a mission control for members of the 'Kurtzweil club' sent forth to save man-kind.
There is no doubt that the problems we all face today are verging on the insurmountable, but I do find it strange that such a dubious group of 'free thinkers' should be given credibility in this way, with state backing from the United States Government (they are part funded by NASA).
Tuesday, 10 February 2009
Banks are on trial. As Galbraith puts it: 'the world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version'.
And we have seen a very unstable set of wheels falling off.
The men on trial in front of the commons select committee today stand accused of greed that has destroyed the wealth of a nation. But a moment of introspection is called for here. These were men of phenomenal integrity and drive. I have never been a great personal fan of Sir Fred Goodwin, but his enormous talent should not be underestimated. So the question for capitalism now is not how do we punish these men (although that might be an essential part of the healing process) but how do we ensure we waste less of the human capital represented by truly great people who inevitably become caught in the ancient trap of hubris.
This is not really a comment on technology, but the flow of capital is really the heart-beat of innovation. It is the process whereby society decides what ideas to proceed with and which ones to leave in the ditch.
I still think capitalism is the best idea we've got....
Thursday, 5 February 2009
Despite the snow a few people made the trip to Millbank and for me it provided a glimpse of where the computing hardware industry is going.
The vision is to make computing power a bit like money or electricity (especially in that there will probably analogous issues of 240/120v, USD/GBP, European US plugs, etc).
A pure commodity that can be bought, sold and exchanged in an automated market place, allowing businesses to expand and contract without the fixed cost of investment in computing assets.
This Blog will track my thoughts as I try to get a handle on the impact of this and other (probably randomly selected) technological changes to my world.