Monday, May 29, 2017

On the Impact of Automation (Mark Zuckerberg, Best Buy, retailers and more)

  • Last week Mark Zuckerberg, during his Harvard University commencement speech, said, “Our generation will have to deal with tens of millions of jobs replaced by automation like self-driving cars and trucks. But we have the potential to do so much more together. Every generation has its defining works. More than 300,000 people worked to put a man on the moon – including that janitor. Millions of volunteers immunized children around the world against polio. Millions of more people built the Hoover dam and other great projects. These projects didn't just provide purpose for the people doing those jobs, they gave our whole country a sense of pride that we could do great things.” 
  • Also, the report “Retail Automation: Stranded Workers? Opportunities and risks for labor and automation” by the Investor Responsibility Research Center Institute said “The impact of significant reductions in retail workers may mirror the impact of manufacturing job losses. Retail sales at brick-and-mortar stores … are increasingly constrained as consumers shift to online shopping. At the same time, many parts of the country are experiencing upward structural wage pressure as concerns about income inequality are gaining political traction. Major retailers, including Macy’s, J.C. Penney, Kohl’s and WalMart, have collectively closed hundreds of stores over the last few years in attempts to stem losses from unprofitable stores. These headwinds are pushing retailers to rethink the traditional retail business model … this report argues that companies which use technology to support their workers are likely to benefit from long-term productivity gains. However, technology also has the potential to automate part of the sales process and render a range of jobs redundant. Taken together, store closures and automation technology have the potential to accelerate job losses in retail, an industry that employs approximately 10% of the total US labor force.”
  • During its quarterly investor conference call, Best Buy Chief Financial Officer Corie Barry said, "We believe there’s real opportunity to take waste out of the system through automation and there are places like our supply chain, there are places like some of our call centers, where we believe we have real opportunities to become more automated.”
  • While workplace automation is part of the pursuit of "faster/better/cheaper" solutions, current advances in robotics, artificial intelligence, etc may increae the pace of worker displacement.
  • Issues for technology, business and community leaders to address include 1) how will worker adaptation will be managed and 2) how broadly will economic benefits be distributed.    

Sunday, May 21, 2017

On AI, Machine Learning, VR, Robotics and the Cloud (JP Morgan, Google, OpenAI)

  • Last week, JP Morgan released “Big Data and AI Strategies: Machine Learning and Alternative Data Approach to Investing”, a report which said “over the past year, the exponential increase of the amount and types of data available to investors prompted some to completely change their business strategy and adopt a ‘Big Data’ investment framework. Other investors may be unsure on how to assess the relevance of Big Data and Machine Learning, how much to invest in it, and many are still paralyzed in the face of what is also called the ‘Fourth Industrial Revolution … As more investors adopt alternative datasets, the market will start reacting faster and will increasingly anticipate traditional or ‘old’ data sources (e.g. quarterly corporate earnings, low frequency macroeconomic data, etc.). This gives an edge to quant managers and those willing to adopt and learn about new datasets and methods. … Regardless of the timeline and shape of the eventual investment landscape, we believe that analysts, portfolio managers, traders and CIOs will eventually have to become familiar with Big Data and Machine Learning approaches to investing. This applies to both fundamental and quantitative investors, and is true across asset classes.”
  • Also, the non-profit AI research group, OpenAI, said in the note Robots that Learn We’ve created a robotics system, trained entirely in simulation and deployed on a physical robot, which can learn a new task after seeing it done once. Now, we’ve developed and deployed a new algorithm, one-shot imitation learning, allowing a human to communicate how to do a new task by performing it in [virtual reality]. Given a single demonstration, the robot is able to solve the same task from an arbitrary starting configuration.
  • Note: OpenAI’s backers include include Sam AltmanGreg BrockmanElon MuskReid HoffmanJessica LivingstonPeter ThielAmazon Web ServicesInfosysYC Research and Microsoft.
  • Finally, during its developer conference, Google announced that “Researchers require enormous computational resources to train the machine learning (ML) models that have delivered recent breakthroughs in medical imagingneural machine translationgame playing, and many other domains. We believe that significantly larger amounts of computation will make it possible for researchers to invent new types of ML models that will be even more accurate and useful.  To accelerate the pace of open machine-learning research, we are introducing the TensorFlow Research Cloud ... to support a broad range of computationally-intensive research projects that might not be possible otherwise."

  • Regarding JP Morgan’s comments  – As technology continues to reshape the financial services industry, it is worth revisiting a famous quote by Walter Wriston (CEO of Citibank / Citicorp from 1967 to 1984): “Information about money has become almost as important as money itself”.
  • Regarding Robots that Learn – this example of the integration of AI, virtual reality and robotics illustrates the future direction of product prototyping and design.
  • Regarding Google’s TensorFlow cloud – the battle for mind-share among software developers and researchers will require significant investments by firms including AmazonMicrosoft, FacebookApple and IBM

Sunday, May 14, 2017

"Nearly All Information, Communications Networks and Systems will be at Risk for Years"

  • Last Friday, U.S. Director of National Intelligence Daniel Coat’s comments to the Senate Committee on Intelligence included “Our adversaries are becoming more adept at using cyberspace to threaten our interests and advance their own, and despite improving cyber defenses, nearly all information, communication networks, and systems will be at risk for years … Cyber threats are already challenging public trust and confidence in global institutions, governance, and norms, while imposing costs on the US and global economies. Cyber threats also pose an increasing risk to public health, safety, and prosperity as cyber technologies are integrated with critical infrastructure in key sectors. These threats are amplified by our ongoing delegation of decisionmaking, sensing, and authentication roles to potentially vulnerable automated systems. This delegation increases the likely physical, economic, and psychological consequences of cyber attack and exploitation events when they do occur. Many countries view cyber capabilities as a viable tool for projecting their influence and will continue developing cyber capabilities. Some adversaries also remain undeterred from conducting reconnaissance, espionage, influence, and even attacks in cyberspace.”
  • In addition to potential threats from RussiaChinaIranNorth Korea and terrorist organizations, Coats noted that "Criminals are also developing and using sophisticated cyber tools for a variety of purposes including theft, extortion, and facilitation of other criminal activities. “Ransomware,” malware that employs deception and encryption to block users from accessing their own data, has become a particularly popular tool of extortion. In 2016, criminals employing ransomware turned their focus to the medical sector, disrupting patient care and undermining public confidence in some medical institutions.  
  • On Friday, the U.S Department of Homeland Security said it was “aware of reports of ransomware known as WannaCry affecting multiple global entities. Ransomware is a type of malicious software that infects a computer and restricts users’ access to it until a ransom is paid to unlock it.  Microsoft released a patch in March that addresses this specific vulnerability, and installing this patch will help secure your systems from the threat ...  we encourage all Americans to update your operating systems and implement vigorous cybersecurity practices at home, work, and school.” 
  • Also, Senator Ben Sasse, a member of the Senate Armed Services Committee said "This is big: around the world, doctors and nurses are scrambling to treat patients without their digital records or prescription dosages, ambulances are being rerouted, and millions of people's data is potentially exposed. Cybersecurity isn't a hypothetical problem – today shows it can be life or death. We'll likely look back at this as a watershed moment."
  • Note: Reports suggest that over 125,000 computers in +100 countries were impacted by the WannaCry ransomware last week, which included over twenty British hospitalsFedExRenault, Nissan, Telefonic,and Deutsche Bahn.  
  • As technology firms introduce new operating systems, applications and distributed solutions,  the slow pace of customer adoption along with reduced support for "legacy" systems creates security risks. For example, Microsoft stopped providing security updates for it Windows XP operating systems on April 8, 2014. However, in the case of WannaCry, Microsoft took an "highly unusual" step and provided patches for Windows XP, Windows 8, and Windows Server 2003
  • Minimizing the impact of cyber-attacks will continue to require many approaches including 1) installing security patches and software updates, 2) avoiding links and attached files in unfamiliar emails, 3) backing up data, 4) using encrypted services and 5) incorporating data security into the design of new technology solutions.  

Sunday, April 16, 2017

On the Mother of All Budgets (U.S. Defense)

  • Last week, after the U.S. dropped the Massive Ordnance Air Blast (MOAB) aka "Mother of All Bombs" in Afghanistan, U.S. Army Gen. John Nicholson Jr. said, “This was the right weapon against the right target … designed to destroy caves and tunnels, which ISIS-K have been using… it was the right time to use it tactically, against the right target on the battlefield … the weapon achieved its intended purpose."  NOTE: the MOAB 1) is the most powerful non-nuclear U.S. bomb, 2) weighs about 22,000 pounds and 3) has an explosive capacity of about 11 tons of TNT with a blast radius of about a mile.  Estimates suggest that each MOAB costs $16 million, from a program that spent $314 million to produce about 20 bombs.
  • In a quarterly report to the U.S. Congress (Jan.  2017), John Sopko, Special Inspector General for Afghan Reconstruction, assessed progress in Afghanistan (a region where the U.S. has spent over $117 billion since 2002) and said “Unfortunately in the nearly five years I’ve been traveling to Afghanistan, I first witnessed the United States put in way too much, way too fast. More recently, I’ve watched the U.S. remove way too much, way too fast. Policy makers both in Congress and the new Trump Administration should take note of this.”
  • In the Sept. 2016 report “US Budgetary Costs of Wars through 2016: $4.79 Trillion and Counting – Summary of Costs of the US Wars in Iraq, Syria, Afghanistan and Pakistan and Homeland Security” by  Boston University Political Science Profession Neta C. Crawford, said “As of August 2016, the US has already appropriated, spent, or taken on obligations to spend more than $3.6 trillion in current dollars on the wars in Iraq, Afghanistan, Pakistan and Syria and on Homeland Security (2001 through fiscal year 2016). To this total should be added the approximately $65 billion in dedicated war spending the Department of Defense and State Department have requested for the next fiscal year, 2017, along with an additional nearly $32 billion requested for the Department of Homeland Security in 2017, and estimated spending on veterans in future years. When those are included, the total US budgetary cost of the wars reaches $4.79 trillion
  • Regarding the MOAB – While some headlines associated it with nuclear bombs, the MOAB is equivalent to 11 tons of TNT, the “Little Boy,” bomb dropped on Hiroshima in August 1945 was equivalent to about 16,000 tons of TNT.
  • Regarding U.S. military spending – Given that U.S. military spending is greater than ChinaSaudi ArabiaRussiaUKIndiaFrance and Japan combined; the potential for inefficiency and corruption are likely to be large as well.

Sunday, April 9, 2017

On Twitter, the U.S. Government. Privacy and Free Speech

  • Last week, Twitter filed a lawsuit related to the U.S.  Department of Homeland Security’s request to reveal the identity for the anonymous account @ALT_USCIS, which posts comments about U.S. Citizenship and Immigration Services and Trump Administration immigration policies. The filing said “Adam Hoffman, an agent within U.S. Customs and Border Protection … [ordered] Twitter to produce certain records pertaining to the @ALT_USCIS account [and] Failure to comply with this summons will render you liable to proceedings in a U.S. District Court to enforce compliance with this summons as well as other sanctions.”  Twitter stated that “The CBP Summons is unlawful and unenforceable because it violates the First Amendment rights of both Twitter and its users by seeking to unmask the identity of one or more anonymous Twitter users voicing criticism of the government on matters of public concern.”
  • On Friday, the U.S. Government withdrew its action against Twitter and Esha Bhandari, an American Civil Liberties Union lawyer representing the anonymous user said, "Speaking anonymously about issues of the day is a longstanding American tradition, dating back to when the framers of the Constitution wrote under pseudonyms … the anonymity that the First Amendment guarantees is often most essential when people criticize the government, and this free speech right is as important today as ever."
  • The US Constitution’s First Amendment says “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

  • The action against Twitter is another example of the prominent position that social media platforms have in the debate about free expression.  
  • While “free speech” and “personal privacy” have encountered legal challenges in the past, the actions by the current administration will likely keep the U.S. judicial system very busy.
  • Finally, it seems ironic that the use of Twitter’s messaging platform may play a role in affirming, or changing the path forward for U.S. constitutional law.

Sunday, March 26, 2017

On Artificial Intelligence and Job Losses

  • Last week, U.S. Treasury Secretary Steven Mnuchin said “In terms of artificial intelligence taking over American jobs, I think we’re like so far away from that, not even on my radar screen … I think it’s 50 or 100 more years [away] … It’s taken jobs that are low-paying … We need to make sure we are investing in education and training for the American worker.
  • Separately, the White House report “Artificial Intelligence, Automation, and the Economy” from Dec. 20, 2016 said “Advances in Artificial Intelligence (AI) technology and related fields have opened up new markets and new opportunities for progress in critical areas such as health, education, energy, economic inclusion, social welfare, and the environment. In recent years, machines have surpassed humans in the performance of certain tasks related to intelligence, such as aspects of image recognition. Experts forecast that rapid progress in the field of specialized artificial intelligence will continue. Although it is unlikely that machines will exhibit broadly-applicable intelligence comparable to or exceeding that of humans in the next 20 years, it is to be expected that machines will continue to reach and exceed human performance on more and more tasks … AI-driven automation will continue to create wealth and expand the American economy in the coming years, but, while many will benefit, that growth will not be costless and will be accompanied by changes in the skills that workers need to succeed in the economy, and structural changes in the economy. Aggressive policy action will be needed to help Americans who are disadvantaged by these changes and to ensure that the enormous benefits of AI and automation are developed by and available to all.”
  • Also, the Pew Recent Center report “Public Predictions for the Future of Workforce Automation” March 10, 2016 said “Two-thirds of Americans expect that robots and computers will do much of the work currently done by humans within 50 years … but most workers expect their own jobs or professions will still exist in their current form in five decades”

  • Regarding Mnuchin view -  Many studies suggest that blue and white collar tasks are  being replaced by AI and automation more rapidly than Mnuchin’s expectations.
  • Regarding investing in education and training – With the rapid pace of technological inovation, policymakers face the challenge of determining what type of education and training should be funded to address the structural changes taking place in the job market.  

Sunday, March 19, 2017

On Autonomous Vehicles in California and More

  • On March 10, the California Department of Motor Vehicles (DMV) proposed new regulations for testing and deploying autonomous vehicles that would allow the vehicles to drive on the road without human presence and DMV spokesperson Artemio Armenta said “We have received numerous comments from companies, consumer advocates, local government and stakeholders to promote innovation and address public safety … this is a rule-making process, so the next step is making sure we get this completely right.”
  • Dan Gage, spokesman for the Alliance of Automobile Manufacturers said, “With federal statistics confirming that 94 % of all crashes involve driver error, getting more of these new technologies on our roads will help keep drivers safer, while also helping to avoid traffic congestion, reduce fuel use and save time and money,”
  • John M. Simpson, director of the Consumer Watchdog's Privacy Project said "The DMV's current self-driving car test regulations set a standard for the nation, requiring a test driver behind a steering wheel who could take over, and vital public reports about testing activities … The new rules are too industry friendly and don't adequately protect consumers … DMV needs to rein in Uber CEO Travis Kalanick and his renegade operations … Explicit truck testing rules are required immediately." 
  • Brian Soublet, DMV deputy director and chief counsel said “Both highway patrol and local areas need to know how to interact with the vehicles, and we’ve put out what we think are minimum standards … They need to understand how to know if the autonomous technology is engaged, how to pull it off the road, and some of the important things [such as] where to find in the vehicle who owns it and who is insuring it.” 
  • Separately, a recent AAA survey of over 1,000 Americans revealed that: 1) 78% are afraid to ride in a self-driving vehicle, 2) 54% do not want a self-driving vehicle near them while they are on road, but 3) 60% are interested in vehicles with autonomous features, such as automatic braking and self-parking


  • Recent tests of autonomous vehicles suggest that progress is being made, but safety issues continue to be encountered.
  • In addition, as Brian Soublet has highlighted, there are many dynamics  to address beyond the technology to enable the transition.  
  • Regarding consumer views - autonomous vehicles will improve over time and consumers will be more receptive as they increasingly experience the benefits of this class of technology.

Sunday, March 12, 2017

On Blockchains and Innovation in Digital Commerce

  • Last week the Harvard Business Review article “The Blockchain Will Do to the Financial System What the Internet Did to Media” said “The “killer app” for the early internet was email; it’s what drove adoption and strengthened the network. Bitcoin is the killer app for the blockchain. Bitcoin drives adoption of its underlying blockchain, and its strong technical community and robust code review process make it the most secure and reliable of the various blockchains. Like email, it’s likely that some form of Bitcoin will persist. But the blockchain will also support a variety of other applications, including smart contracts, asset registries, and many new types of transactions that will go beyond financial and legal uses … 
  • Unfortunately, the exuberance of fintech investors is way ahead of the development of the technology. We’re often seeing so-called blockchains that are not really innovative, but instead are merely databases, which have existed for decades, calling themselves blockchains to jump on the buzzword bandwagon … 
  • However, it is likely that, just as Linux is now embedded in almost every kind of commercial application or service, many of the ultimate use cases of the blockchain could become standard fare for established players like large companies, governments, and central banks”.
  • Separately, a blog post at Google’s AI focused health tech subsidiary, DeepMind said ”Imagine a service that could give mathematical assurance about what is happening with each individual piece of personal data, without possibility of falsification or omission. Imagine the ability for the inner workings of that system to be checked in real-time, to ensure that data is only being used as it should be. Imagine that the infrastructure powering this was freely available as open source, so any organization in the world could implement their own version if they wanted to … 
  • Over the course of this year we'll be starting to build out Verifiable Data Audit for DeepMind Health, our effort to provide the health service with technology that can help clinicians predict, diagnose and prevent serious illnesses – a key part of DeepMind’s mission to deploy technology for social benefit …
  • The ledger and the entries within it will share some of the properties of blockchain, which is the idea behind Bitcoin and other projects.”
  • Blockchain style solutions may be as transformational to global commerce as the World Wide Web’s Hypertext Transfer Protocol (HTTP) and Hypertext Markup Language (HTML), which changed the process of digital content creation and distribution.
  • These approaches will likely support programmable services and enhance our view of what digital assets are and how they will be used.
  • However, success will require 1) executing transactions in a secure and timely fashion, 2) providing services that are easy to use, 3) adapting to a growing community of users, 4) addressing cyber-crime and 5) confronting competition from incumbent players.

Sunday, March 5, 2017

On Uber's Bad Behavior

  • Responding to statements about sexual harassment from a former Uber engineer (Feb. 19), CEO Travis Kalanick said “I have just read Susan Fowler’s blog. What she describes is abhorrent and against everything Uber stands for and believes in. It’s the first time this has come to my attention so I have instructed Liane Hornsey, our new Chief Human Resources Officer, to conduct an urgent investigation into these allegations. We seek to make Uber a just workplace and there can be absolutely no place for this kind of behavior at Uber — and anyone who behaves this way or thinks this is OK will be fired.” 
  • Responding to a video by an Uber driver (posted Feb. 28), Kalanick said “By now I’m sure you’ve seen the video where I treated an Uber driver disrespectfully. To say that I am ashamed is an extreme understatement. My job as your leader is to lead…and that starts with behaving in a way that makes us all proud. That is not what I did, and it cannot be explained away … It’s clear this video is a reflection of me—and the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it … I want to profoundly apologize to Fawzi, as well as the driver and rider community, and to the Uber team.” 
  • Responding to a New York Times article (March 3) that said, “Uber has for years engaged in a worldwide program to deceive the authorities in markets where its low-cost ride-hailing service was being resisted by law enforcement or, in some instances, had been outright banned. The program … uses data collected from the Uber app and other techniques to identify and circumvent officials. Uber used these methods to evade the authorities in cities such as Boston, Paris and Las Vegas, and in countries like Australia, China, Italy and South Korea.”, 
  • an Uber statement said “This program denies ride requests to users who are violating our terms of service — whether that’s people aiming to physically harm drivers, competitors looking to disrupt our operations, or opponents who collude with officials on secret ‘stings’ meant to entrap drivers.”
  • Notes on Uber: 1) The firm's 2016 revenue was $5.5 billion, with a loss of about $3 billion, 2) it has raised over $11 billion in capital and debt, 3) the company has a valuation of about $65 billion.  

  • Comments by Uber investors Mitch and Freada Kapor (Feb. 23) are worth considering: “Uber has been here many times before, responding to public exposure of bad behavior by holding an all-hands meeting, apologizing and vowing to change, only to quickly return to aggressive business as usual … Investors in high growth, financially successful companies rarely, if ever, call out inexcusable behavior from founders or C-suite executives.”
  • Note: Mitch Kapor was founder of Lotus Development Corp.

Sunday, February 19, 2017

"Building Communities", according to Kuckerberg

  • Last week, Facebook CEO Mark Zuckerberg’s “Building Global Community” was posted on the company’s website with comments including “On our journey to connect the world, we often discuss products we're building and updates on our business. Today I want to focus on the most important question of all: are we building the world we all want?
  • Our job at Facebook is to help people make the greatest positive impact while mitigating areas where technology and social media can contribute to divisiveness and isolation"
  • Accuracy of information is very important. We know there is misinformation and even outright hoax content on Facebook, and we take this very seriously … Our approach will focus less on banning misinformation, and more on surfacing additional perspectives and information, including that fact checkers dispute an item’s accuracy”
  • A strong news industry is also critical to building an informed community. Giving people a voice is not enough without having people dedicated to uncovering new information and analyzing it. There is more we must do to support the news industry to make sure this vital social function is sustainable -- from growing local news, to developing formats best suited to mobile devices, to improving the range of business models news organizations rely on.” 
  • Connecting everyone to the internet is also necessary for building an informed community. For the majority of people around the world, the debate is not about the quality of public discourse but whether they have access to basic information they need at all, often related to health, education and jobs.”
  • we’re operating at such a large scale that even a small percent of errors causes a large number of bad experiences.”
  • As information technology expands its reach beyond business transactions, inventory management and customer relations, social networking’s role in validating and disseminating information is challenged by how “truth” is interpreted and how “communities” become increasingly homogeneous. In addition, “likes” and “shares” are not replacements for community activism

Sunday, January 22, 2017

On the Disruption of Artificial Intelligence - Notes from Davos

  • Last week, the World Economic Forum released comments about artificial intelligence in “The Global Risks Report 2017” which included: “Every step forward in artificial intelligence (AI) challenges assumptions about what machines can do. Myriad opportunities for economic benefit have created a stable flow of investment into AI research and development, but with the opportunities come risks to decision-making, security and governance. Increasingly intelligent systems supplanting both blue- and white-collar employees are exposing the fault lines in our economic and social systems and requiring policy-makers to look for measures that will build resilience to the impact of automation … Tasks such as trading stocks, writing sports summaries, flying military planes and keeping a car within its lane on the highway are now all within the domain of [AI]. As [AI] applications expand, so do the risks of these applications operating in unforeseeable ways or outside the control of humans
  • Comments from attendees at the organization’s annual Davos gathering included:
  • CEO Marc Benioff - “I think now about how artificial intelligence will create digital refugees and how people will be displaced from jobs, tens of millions of people across the planet, because technology is moving forward so rapidly … This is the moment, I think, when we have the highest level of anxiety because we can see advances in AI that are beyond what we had expected … It’s happening at a rate and a capability that we are worrying about how it will impact the everyman, the broad range of workers around the world … There is no clear path forward”,
  • Hewlett Packard Enterprise CEO Meg Whitman -  "Jobs will be lost, jobs will evolve and this revolution is going to be ageless, it's going to be classless and it's going to affect everyone",
  • Procter & Gamble CEO  David Taylor -  "If we don't own responsibility (for the problem of displaced workers), it's only going to get bigger", 
  • Microsoft CEO Satya Nadella - “Is the surplus [benefit] that is going to be created because of breakthroughs in AI . . . only going to the few or is it going to be more inclusive growth? That is a very pressing challenge … I think we’ve got to talk about how the surplus is distributed.”

  • Regardless of the concerns shared by some Davos attendees, the use of AI will become more pervasive as businesses integrate it into various products and services to improve efficiency and lower costs.
  • Those hoping that populist-driven policy initiatives will address technology disruption will likely be disappointed.

Sunday, January 8, 2017

"Alexa, How was the Consumer Electronics Show?"

  • Last week, as thousands of companies displayed their latest products in Las Vegas, comments from media outlets included:
  • WIRED - “Alexa Just Conquered CES. The World Is Next – You can’t walk the sprawling floor of the Las Vegas Convention Center without tripping over a speakeran appliance , or even a robot or two that supports Alexa. Amazon’s voice assistant is clearly the darling of CES 2017.”
  • Wall Street Journal – “Amazon’s talking, helping, sometimes wisecracking virtual assistant became a hit in 2016, built into the company’s line of Echo countertop speakers. At the big CES electronics trade show in Las Vegas this week, she started taking over all kinds of other gadgets.”
  • Billboard - “Amazon's virtual assistant Alexa is shaping up to be a regular fixture at this year's Consumer Electronics Show (CES), kicking off Thursday in Las Vegas, with the tech … in products ranging from power switches and vacuums to smart speakers for kids.”
  • Bloomberg - “Amazon has been partnering with prominent brands to rapidly expand Alexa’s reach. Echo users can order a pizza from Domino’s or check their balances on a Capital One credit card. In December, Wynn Las Vegas and Amazon announced plans to equip all 4,748 rooms in the resort with the Echo, enabling guests to control lightsroom temperaturedrapery and televisions via voice commands.”
  • Separately cover of The Economist stated “Now we’re talking – Voice computing Comes of Age”, with commentary including  ”Creative and truly conversational computers able to handle the unexpected are still far off. Artificial-intelligence (AI) researchers can only laugh when asked about the prospect of an intelligent HALTerminator or Rosie (the sassy robot housekeeper in “The Jetsons”). Yet although language technologies are nowhere near ready to replace human beings, except in a few highly routine tasks, they are at last about to become good enough to be taken seriously. They can help people spend more time doing interesting things that only humans can do. After six decades of work, much of it with disappointing outcomes, the past few years have produced results much closer to what early pioneers had hoped for.”

  • Alexa and other digital assistants, such as Microsoft CortanaApple Siri, and Google Assistant will facilitate the creation of new classes of applications in many markets. 
  • Concerns about the use of these services  include 1) increased exposure to cyber-crime, 2) erosion of privacy and 3) displacement of jobs.
  • As clever as these solutions seem, the market is still at an early stage of evolution.


Sunday, November 27, 2016

As the Film "Network" Turns 40 Years Old

  • On Nov. 27, 1976, the film “Network”, written by Paddy Chayefsky, was released. Its story satirized the rise of sensationalized television news and focused on Howard Beale (played by Peter Finch) who 1) was a failing network news anchor, 2) announced that he would kill himself while on the air, 3) was repositioned as the “Mad Prophet of the Airways” and 4) memorably expresses his frustration with society with the catchphrase “I’m mad as hell and I’m not going to take this anymore.”  
  • Beale also said “Television is not the truth, Television is a goddamn amusement park. Television is a circus, a carnival, a traveling troupe of acrobats. Storytellers, dancers, singers, jugglers, sideshow freaks, lion tamers and football players. We’re in the boredom-killing business. So, if you want the truth, go to God, go to your gurus, go to yourselves. Because that’s the only place you’re going to find any real truth. You’re never going to get any truth from us. We’ll tell you anything you want to hear. We’ll lie like hell.”
  • And … “Less than 3 percent of you people read books. Less than 15 percent of you read newspapers, the only truth you know is what you get over this tube. Right now, there is an entire generation that never knew anything that didn’t come out of this tube. This tube is the gospel, the ultimate revelation. This tube can make or break presidents, popes, prime ministers. This tube is the most awesome goddamn force in the whole godless world, and woe is us if it ever falls into the hands of the wrong people.” 
  • Note: The film won Academy Awards for best actor, best actress, best supporting actress and original screenplay.   
  • CBS CEO Les Moonves (speaking at a Feb. 2016 Morgan Stanley investor conference) about Donald Trump’s campaign said, “It may not be good for America, but it’s damn good for CBS”.
  • Financial Times U.S.  Managing Editor Gillian Tett last week said, “In political terms, a vote for Clinton seemed akin to eating spinachA vote for Trump, however, was more like eating ice-cream laced with whisky for breakfast — something that establishment people did not want to admit to.”

  • Regarding “news as infotainment” - The Internet has become the new television and the infotainment problem seems to have increased, extending across many media distribution channels.
  • Regarding Les Moonves’s comment – It is likely that his view is shared across the industry.
  • Regarding Gillian Tett’s comment – Making you “feel good (or less bad)” rather that considering “what’s good for you” continues to drive many business and political endeavors.

Sunday, November 20, 2016

The Challenges of Fake News, Algorithms and more

  • On Nov. 12, Facebook CEO Mark Zuckerberg said “After the election, many people are asking whether fake news contributed to the result, and what our responsibility is to prevent fake news from spreading. These are very important questions and I care deeply about getting them right. I want to do my best to explain what we know here … Of all the content on Facebook, more than 99% of what people see is authentic. Only a very small amount is fake news and hoaxes. The hoaxes that do exist are not limited to one partisan view, or even to politics. Overall, this makes it extremely unlikely hoaxes changed the outcome of this election in one direction or the other … That said, we don't want any hoaxes on Facebook. Our goal is to show people the content they will find most meaningful, and people want accurate news. We have already launched work enabling our community to flag hoaxes and fake news, and there is more we can do here. We have made progress, and we will continue to work on this to improve further.”
  • Addressing concerns about a fake story in its news feed, Google spokeswoman Andrea Faville, said “The goal of search is to provide the most relevant and useful results for our user… in this case, we clearly didn’t get it right, but we are continually working to improve our algorithms.”
  • On Nov. 17, U.S. President Barak Obama said “Because in an age where there’s so much active misinformation and it's packaged very well and it looks the same when you see it on a Facebook page or you turn on your television … If everything seems to be the same and no distinctions are made, then we won’t know what to protect.”
  • On Oct. 25, German chancellor Angela Merkel said “I’m of the opinion, that algorithms must be made more transparent, so that one can inform oneself as an interested citizen about questions like, ‘What influences my behavior on the internet and that of others?’ Algorithms, when they are not transparent, can lead to a distortion of our perception; they can shrink our expanse of information.”
  • Regarding fake news – Any automated process used to identify “fake” or biased news will likely introduce its own set of biased outcomes.  As a result, users should take a more active role in understanding the integrity of their news sources.
  • Regarding algorithms – Algorithms can help manage tasks ranging from the repetitive to the complex.  Requests for more checks and balances to improve system design and minimize biased logic will likely increase.

Sunday, November 13, 2016

U.S. Presidential Election: Selected Observations - and Moving Forward

  • German Chancellor Angela Merkel - "I offer the future president of the United States, Donald Trump, close cooperation."
  • German Foreign Minister Frank-Walter Steinmeier - "Nothing will be easier, a lot will be more difficult. We don't know how Donald Trump will govern America."
  • German Defense Minister Ursula von der Leyen - “Donald Trump knows that this wasn't an election for him, but against Washington, against the establishment”
  • Singapore Prime Minister Lee Hsien Loong - “Congratulations to President-Elect Donald Trump! His candidacy took many by surprise. At each stage, he defied expectations, and his journey has ultimately taken him to the White House … It has been a contentious, ugly election season, that has exposed a bitter divide in the American people. Many will celebrate this result, while others will understandably be surprised and disappointed.
  • Washington Post journalist Paul Waldman  - “While Trump managed to gain an electoral college victory, not only did he get fewer votes than Hillary Clinton … he got fewer votes than Mitt Romney in 2012, fewer votes than John McCain in 2008, and fewer votes than George W. Bush in 2004. … fewer than 26 percent of eligible American voters cast their ballots for the [Trump] … What’s also important here is how poorly Hillary Clinton did. She got 6 million fewer votes than Barack Obama did in 2012, and nearly 10 million fewer than he did in 2008”
  • Film maker Michael Moore -  “Everyone must stop saying they are "stunned" and "shocked". What you mean to say is that you were in a bubble and weren't paying attention to your fellow Americans and their despair.”
  • Beverly Gage - New York Times on ”LISTEN, LIBERAL: Or, What Ever Happened to the Party of the People?” – “The social critic Thomas Frank poses ... that liberals in general — and the Democratic Party in particular — should look inward to understand the sorry state of American politics. Too busy attending TED talks and vacationing in Martha’s Vineyard … the Democratic elite has abandoned the party’s traditional commitments to the working class. In the process, they have helped to create the political despair and anger at the heart of today’s right-wing insurgencies.” 

  • Regarding Trump - His supporters will find comfort in the potential to appoint U.S. Supreme Court judges, but the “drain the swamp” clean -up of Congress may fall short of expectations as he seeks to 1) reduce corporate and personal tax rates, 2) decrease government regulation, 3) promote pro-energy policies, 4) restructure trade deals, 5) change Obamacare and 6) increase infrastructure spending.
  • Regarding shocked Democrats – Examining why labor support has weakened, may be a good place to start in the “rebuilding” process.

Sunday, November 6, 2016

Approaching the U.S. Presidential Election - and Beyond

  • From Oct. 20 to 25, the Pew Research Center surveyed 2,583 adults about the U.S. presidential election.  Findings included: is the U.S. Presidential candidate 
  • patriotic” - Clinton (61%), Trump (61%), 
  • “a strong leader” – Clinton (52%), Trump (46%), 
  • has “poor judgement” – Clinton (56%), Trump (65%),
  • hard to like” - Clinton (59%), Trump (70%), 
  • has “respect for democratic institutions” Clinton (63%), Trump (43%).
  • Is the Republican party united (17%), 
  • is the Democratic party united (58%).
  • Singer Sheryl Crow, in her petition “Shorten the US Presidential Election Cycle” said, “By the time Americans go to the polls on November 8th, this Presidential campaign will have run over 600 days, kicking off with Ted Cruz’s announcement in March of 2015. This election cycle has been extremely damaging and has incited fear and hatred in a country founded on the beauty of our differences and the desire to lift each person, no matter race, religion, political party, or economic status, to reach his or her fullest potential. Countries across the globe have limited campaign seasons to as short as 6 weeks …  The American people have been extremely disrespected in this campaign season with the ugliness that pits us against each other and with nonsense and fear-mongering … We cannot sustain another lengthy slugfest like what we have witnessed for the past two years … “
  • Supreme Court Justice Clarence Thomas, speaking at the Heritage Foundation said, "This city [Washington, DC] is broken in some ways. At some point, we are going to have to recognize that we are destroying our institutions … [members of the government] aren't thinking things through … We have decided rather than confront disagreements and the differences of opinion, we will simply annihilate the person who disagrees.” 

  • It is easy to understand that an election cycle with 1) a protracted length of campaigning , 2) record levels of spending, 3) many surprising twists and turns, 4) concerns about FBI actions and 5) one too many Weiners - has resulted in voter anxiety and fatigue.
  • As the world looks on at the outcome of the vote, hopefully the road ahead is more constructive and less divisive.

Sunday, October 30, 2016

Uber: Labor Disputes and Air Transport Visions

  • Last week, comments by a London employment tribunal on the status of Uber drivers included:
  • “We have reached the conclusion that any driver who (a) has the App switched on, (b) is within the territory in which he is authorized to work, and (c) is able and willing to accept assignments, is, for so long as those conditions are satisfied, working for Uber under a ‘worker’ contract and a contract within each of the extended definitions”
  • “Any organization ... resorting in its documentation to fictionstwisted language and even brand new terminology, merits, we think, a degree of skepticism
  • "The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous” and 
  • “We are satisfied that the supposed driver/passenger contract is a pure fiction which bears no relation to the real dealings and relationships between the parties.” 
  • Separately,Uber released the report “Fast-Forwarding to a Future of On-Demand Urban Air Transportation” which said “On-demand aviation, has the potential to radically improve urban mobility, giving people back time lost in their daily commutes. Uber is close to the commute pain that citizens in cities around the world feel. We view helping to solve this problem as core to our mission and our commitment to our rider base. Just as skyscrapers allowed cities to use limited land more efficiently, urban air transportation will use three-dimensional airspace to alleviate transportation congestion on the ground. A network of small, electric aircraft that take off and land vertically … will enable rapid, reliable transportation between suburbs and cities and, ultimately, within cities.”

  • Regarding the labor dispute – Uber will likely appeal the findings as it defends itself from similar legal challengers around the world.  Consumers will continue to benefit from Uber’s “sharing economy” business model; while litigation, union activism and regulatory scrutiny will likely impact its profitability. 
  • Regarding on-demand air transport – “Jestons-style” air travel will require the development of new vehicle navigation systems and a significant upgrade to air traffic control infrastructures to manage the flow of these vehicles. Uber will also need to improving its relationship with varied government regulators.  

Sunday, October 16, 2016

Updates on the Challenges at Yahoo and Wells Fargo

  • Last week, commenting on Yahoo’s massive data breach and the potential impact on its $4.8 billion acquisition by Verizon CommunicationsVerizon General Counsel Craig Silliman said “I think we have a reasonable basis to believe right now that the impact is material and we’re looking to Yahoo to demonstrate to us the full impact. If they believe that it’s not [material], then they’ll need to show us that … We still have a significant way to go in terms of the information we need to get before we can make our final determinations”  and 
  • Verizon CEO Lowell McAdam said “we are still understanding what was going on and defining whether it was a material impact on the business or not.”
  • Statements from Yahoo included “We are confident in Yahoo’s value and we continue to work toward integration with Verizon” and “Due to the pending transaction with Verizon, Yahoo will not have an earnings call or webcast for its third quarter results.”
  • Regarding the controversial sales practices at Wells Fargo, the company said “Chairman and Chief Executive Officer John Stumpf has informed the Company’s Board of Directors that he is retiring from the Company and the Board, effective immediately” [and noted that Stumpf] “believes new leadership at this time is appropriate to guide Wells Fargo through its current challenges and take the Company forward.”
  • Regarding Yahoo – The lack of disclosure by Yahoo management about the breach will require Verizon to reassess many assumptions in its due diligence process of the acquisition.  Additionally, as some Yahoo mail users migrate to alternative platforms, the asset value of Yahoo is declining. Verizon management seems well positioned to seek concessions.  
  • Regarding Well Fargo – The firm’s controversial sales practices occurred under Stumpf's watch – and his testimony on the matter to the U.S Congress was not well received.  The new CEO (a Wells Fargo insider) will need to address continuing litigation as well as increased regulatory scrutiny.  

Sunday, July 24, 2016

As Facebook and Others Build and Internet in the Sky

  • Last week, Facebook's Global Head of Engineering and Infrastructure Jay Parikh announced “the first full-scale test flight of Aquila, our high-altitude unmanned aircraft. Aquila is a solar-powered airplane that can be used to bring affordable internet to hundreds of millions of people in the hardest-to-reach places. When complete, Aquila will be able to circle a region up to 60 miles in diameter, beaming connectivity down from an altitude of more than 60,000 feet using laser communications and millimeter wave systems. Aquila is designed to be hyper efficient, so it can fly for up to three months at a time. The aircraft has the wingspan of an airliner, but at cruising speed it will consume only 5,000 watts — the same amount as three hair dryers, or a high-end microwave."
  • "This first functional check was a low-altitude flight, and it was so successful that we ended up flying Aquila for more than 90 minutes — three times longer than originally planned … In our next tests, we will fly Aquila faster, higher and longer, eventually taking it above 60,000 feet."
  • Note: The test flight took place over Yuma, Arizona.

  • Facebook’s project is ambitious and will require more work and innovation – including providing solar power support for the aircraft (the test was powered by lithium batteries), achieving flight at 60,000 feet (the test was conducted at about 2,000 feet) and adding equipment to provide internet communication.
  • At the same time, Google’s Project Loon is exploring how to float balloons over 10 miles high to create a communication network that will connect with telecommunication service providers to increase Internet coverage. In addition, organizations such as OneWeb Satellites (backed by Airbus GroupQualcommVirgin Group and Bharti Enterprises), Elon Musk’s SpaceXBoeingDish Network and others are pursuing Internet strategies using various satellite technologies.
  • Bottom line: Many of these efforts are unproven and will have to be competitive with land-based Internet services. from a cost and performance perspective.

Sunday, July 17, 2016

Pokémon's Power, and Privacy Concerns

  • Last week, a Niantic Lab blog post said “Niantic set out on a path to change the way people interact with the world around them by creating the world’s first “real world gaming” platform. By exploiting the capabilities of smartphones and location technology and through building a unique massively scalable server and global location dataset, we have helped users all around the world have fun, socialize, and get more fit as they play and explore … We are pleased to announce that Pokémon GO, the next evolution of Real World Gaming, is now officially available on both the App Store and on Google Play Store in AustraliaNew Zealand and the United States. It will be available in other countries around the world in the days ahead.” 
  • Separately,  U.S. Senator Al Franken sent a letter to Niantic, Inc. CEO John Hanke that said “I am writing to request information about Niantic s recently released augmented reality app, Pokemon GO, which - in less than a week's time - has been downloaded approximately 7.5 million times in the United States alone. While this release is undoubtedly impressive, I am concerned about the extent to which Niantic may be unnecessarily collecting, using, and sharing a wide range of users' personal information without their appropriate consent. I believe Americans have a fundamental right to privacy, and that right includes an individual's access to information, as well as the ability to make meaningful choices, about what data are being collected about them and how the data are being used. As the augmented reality market evolves, I ask that you provide greater clarity on how Niantic is addressing issues of user privacy and security, particularly that of its younger players.” Note: Global downloads exceed 15 million

  • Niantic, Inc. was spun out of Google in October 2015 in partnership with Nintendo, and The Pokémon Company. While Pokémon GO is based on technology from Niantic’s sci-fi game Ingress (released in 2012), it is likely that the power of the Pokémon franchise is driving its broad global adoption.
  • Regarding Senator Franken’s letter, his privacy concerns more broadly apply to many other on-line playerspayment service providers and others in the commerce supply chain.
  • While Pokémon GO is viewed as an augmented reality market breakthrough, the augmented and virtual reality markets will continue to experience significant innovation.  

Sunday, July 10, 2016

Shootings, an Armed Robot, Social Media and More

  • Last week, in Baton Rouge, Louisiana videos captured the fatal shooting of Alton Sterling by police. In MinnesotaDiamond Reynolds streamed the aftermath of the fatal shooting of her fiancé Philando Castile.
  • Facebook’s Mark Zuckerberg said “The images we've seen this week are graphic and heartbreaking, and they shine a light on the fear that millions of members of our community live with every day. While I hope we never have to see another video like Diamond's, it reminds us why coming together to build a more open and connected world is so important -- and how far we still have to go.”
  • In Dallasfive police officers were fatally shot and seven other people were wounded. After hours of negotiations with a sniper, police deployed a Multifunction, Agile, Remote-Controlled Robot (MARCbot) to carry an explosive device near the shooter - which killed him. The incident may be the first lethal use of a robot by U.S. law enforcement and Dallas Police Chief David Brown said “We saw no other option but to use our bomb robot and place a device on its extension for it to detonate where the suspect was ... Other options would have exposed our officers to grave danger.”
  • Note: the MARCbot was initially designed to address life-threatening situations in Iraq.  Via the Pentagon’s 1033 surplus program, over 450 MARCbots have been deployed to law enforcement units across the U.S.
  • Tom Manger, head of the Major Cities Chiefs Association and chief of the Montgomery County, MD said “Since Ferguson, it seems like the media, in general, it feels like we’ve been under siege… I think police officers feel like there’s always somebody out there trying to get me in trouble, trying to catch me doing something, baiting me so they can be the next YouTube sensation. Every time they make an arrest, there’s three or four cellphones going. You can’t make an arrest, especially out in public, without people whipping out their cellphones.” 

  • Martin Luther King Jr. once said “The world seldom believes the horror stories of history until they are documented via the mass media” and recent events illustrate that the mass media now includes anyone with a smartphone and an internet connection.
  • Also, police enforcement organizations will likely increase their use remote control and semi-autonomous solutions to perform their duties – which may trigger more concerns about privacy, and the rush to more automation may introduce a variety of unexpected outcomes.