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.  

Sunday, July 3, 2016

Tesla, BMW, Intel and Mobileye- A Self-Driving Car Update

  • Last week, in response to a fatal crash involving one of its cars, Tesla announced “What we know is that the vehicle was on a divided highway with Autopilot engaged when a tractor trailer drove across the highway perpendicular to the Model S. Neither Autopilot nor the driver noticed the white side of the tractor trailer against a brightly lit sky, so the brake was not applied. The high ride height of the trailer combined with its positioning across the road and the extremely rare circumstances of the impact caused the Model S to pass under the trailer, with the bottom of the trailer impacting the windshield of the Model S.” Note: The functionality of Tesla’s Autopilot is more similar to cruise-control than to autonomous control – and requires the driver to remain engaged in the operation of the vehicle. 
  • Separately, BMW, Intel and Mobileye announced they would “make self-driving vehicles and future mobility concepts become a reality. The three leaders from the automotive, technology and computer vision and machine learning industries are collaborating to bring solutions for highly and fully automated driving into series production by 2021 … The goal of the collaboration is to develop future-proofed solutions that enable the drivers to not only take their hands off the steering wheel, but reach the so called “eyes off” (level 3) and ultimately the “mind off” (level 4) level transforming the driver’s in-car time into leisure or work time. This level of autonomy would enable the vehicle, on a technical level, to achieve the final stage of traveling “driver off” (level 5) without a human driver inside. This establishes the opportunity for self-driving fleets by 2021 and lays the foundation for entirely new business models in a connected, mobile world.”

  • Regarding Tesla – While the accident was likely caused by the tractor trailer, the technology is still evolving and there will be many challenging risk factors to consider in highway driving.
  • Regarding BMW, Intel and Mobileye – Their comments are helpful in understanding that 1) complete driverless vehicles are still several years away and 2) there will be various “levels” of technology solutions to be brought to market.. 

Sunday, June 26, 2016

On the U.K. Exit- Selected Observations

Last Thursday, 52% of U.K. voters want to “Leave” European Union and 48% want to “Remain.”  The news triggered significant volatility across global markets.

The following are selected views on the impact of the vote:
  • British Prime Minister David Cameron - “The British people have made the very clear decision to take a different path and as such I think the country requires fresh leadership to take it in this direction ... I do not think it would be right for me to be the captain that steers our country to its next destination,"
  • German Chancellor Angela Merkel - "We take note of the British people's decision with regret. There is no doubt that this is a blow to Europe and to the European unification process … [the consequences] depend on whether we -- the other 27 member states of the EU -- prove to be willing and able to not draw quick and simple conclusions from the referendum in Great Britain, which would only further divide Europe,
  • Germany vice chancellor and economics minister Sigmar Gabriel - “Damn! A bad day for Europe”  
  • French Prime Minister Manuel Valls - "It's an explosive shock. At stake is the break up pure and simple of the union ... now is the time to invent another Europe." 
  • Former US Treasury Secretary Larry Summers - “As suggested by the fact that stock markets in Italy and Spain are down almost twice as much as in the U.K., the prospects for Europe may in some ways be worse than for the U.K. There is the real risk of “populist exit contagion” in a number of countries…. The effects on the rest of the world will depend heavily on psychology. I continue to be alarmed …  I fear this possibility will lead to a freezing up of spending decisions particularly on the part of internationally oriented businesses.” 
  • Advertising firm WPP CEO Martin Sorrell - "This decision will create tremendous uncertainty, which will slow economic activity and decision making," 
  • Airbus CEO Thomas Enders - "This is a lose-lose ‎result for both Britain and Europe … we will review our UK investment strategy, like everybody else will."
  • Regardless of the rationale for the “Leave” vote (concerns about immigration, globalization, unemployment trends, etc.), increased uncertainty will likely dampen global commerce.
  • Scotland, and possibly Northern Ireland, may exit the United Kingdom, while maintaining EU membership, but other EU members may consider an exit.
  • It is unclear if the “Leave” political leadership is prepared to address the significant challenges ahead.
  • Bottom line: This is highly unpredictable and very unfortunate mess.

Sunday, June 19, 2016

The U.K.- Will it Stay or Will it Go?

Last week, as the June 23 vote by U.K. citizens to determine if they want to leave the European Union, a process referred to as Brexit, Prime Minister David Cameron said: “Here are five key reasons why I believe you need to vote to remain in a reformed European Union. 

  1. Jobs. British businesses rely on our deep links with Europe. Over 3 million jobs in the UK are linked to exports to other EU countries.
  2. On leaving. No alternative would give firms full access to the single market, without accepting immigration from the EU and paying into the EU budget. Every alternative would mean years of negotiations, uncertainty and risk for Britain.
  3. Travel. The EU delivers lower prices for Brits. The price of flights has come down by 40% and the cost of using your mobile phone in Europe by almost three-quarters.
  4. Trade. The EU is the UK’s main trading partner, worth more than £500billion a year – that’s half of our total trade in goods and services.
  5. National Security. The EU helps us to co-operate on crime and security. The European Arrest Warrant means over 7,000 suspects have been removed from the UK and we’ve been brought over 1,000 back to face justice here. 
  6. Jobs. British businesses rely on our deep links with Europe. Over 3 million jobs in the UK are linked to exports to other EU countries.” 
Note: while some surveys have suggested that a majority of UK citizens prefer to Leave the European Union, a NBC News/Survey Monkey U.K. poll last week reported that 48% of Britons want to "Leave" the EU, 48% want to "Remain" and 4% are undecided.

  • While a “Leave the EU” view may be driven by concerns about immigration, globalization and unemployment trend, recent Google Trends data suggest that voters may be confused - with top U.K. Google searches including ‘why should we leave/stay in the EU?’, ‘what will happen if the UK stays or leaves?’ and ‘what is ‘Brexit’?’.
  • Leave vote will likely trigger short term market volatility across many international markets, while weakening the structure of the European Union.
  • Bottom line: Global investors, business leaders and policy makers are all focused on the outcome of the June 23 vote. 

Sunday, June 12, 2016

On the Centralization of the Decentralized Web

  • Last week, World Wide Web creator Tim Berners-Lee, while speaking at the Decentralized Web Summit in San Francisco, said “[the internet] controls what people see, creates mechanisms for how people interact … It’s been great, but spying, blocking sites, repurposing people’s content, taking you to the wrong websites — that completely undermines the spirit of helping people create.” And also “The web is already decentralized … The problem is the dominance of one search engine, one big social network, one Twitter for microblogging. We don’t have a technology problem, we have a social problem.”
  • Separately, computer scientist Jaron Lanier, while speaking at the WIPO Conference on the Global Digital Content Market (April 20 - 22, 2016,) said “Right now a handful of people – those inheriting traditional monopolies like oil and the increasingly powerful big computer networks – have a giant chunk of the world’s wealth and it's having a destabilizing impact. While an oil monopoly might control the oil, it won’t take over everything in your life, but information does, especially with greater automation … If we expect computers to pilot cars and operate factories, the employment that is left should be the creative stuff, the expression, the [intellectual property]. But if we undermine that, we are creating an employment crisis of mass proportions."

  • Technically, the Internet and the World Wide Web are decentralized, but digital network effects have resulted in 1) winner-takes-all (or most) business models, 2) cultural silos and 3) diverse economic outcomes. 
  • At the same time, debates about the structure, bias and use of algorithms, artificial intelligence and automation are increasing.
  • The larger issue to address is how assets (both physical and digital) will be managed, traded, used and protected in an increasingly interconnected global community.

Sunday, June 5, 2016

Björk, Paul McCarthney, Virtual Reality and More

  • Last week, singer-songwriter Björk said: “I am delighted to announce the opening of Bjork digital exhibition at Carriageworks in Sydney.  It … is a further step into completing the full Vulnicura VR album which will come out soon. I feel the chronological narrative of the album is ideal for the private circus virtual reality is, a theatre able to capture the emotional landscape of it.”  HTC Senior Vice President Rikard Steiber (Virtual Reality) said “With Vive we are focused on bringing a fully immersive experience to our users, and this partnership with Björk felt like a really natural fit.”  Note: The VR exhibit will also support content on Samsung’s Gear VR headset.
  • Separately, singer-songwriter Paul McCartney released the first two episodes of PURE McCartney VR, a six-part series of virtual reality documentary where “fans will embark on a personal journey with Paul as he recounts memories and anecdotes related to various tracks, while sharing archived and never-before-seen footage.” Note: The content will be available in iOSAndroid, Gear VROculus Rift, HTC Vive and Desktop 360 formats.
  • Finally, Microsoft Executive Vice President Terry Myerson (Windows and Devices Group) announced at Computex in Taipei, China, “Today we focused on the next frontier – mixed reality. Providing devices with the ability to perceive the world, breaking down the barriers between virtual and physical reality is what we call mixed reality. Imagine wearing a VR device and seeing your physical hands as you manipulate an object, working on the scanned 3D image of a real object, or bringing in a holographic representation of another person into your virtual world so you can collaborate. In this world, devices can spatially map your environment wherever you are; manipulating digital content is as easy and natural as picking up a box or sitting at a table; and you can easily teleport into your next meeting or travel together as a team.
  • Regarding Björk and Paul McCartney - Their efforts should help develop a better understanding of 1) user expectations for virtual reality and 2) the advantages and constraints of various delivery platforms.
  • Regarding Microsoft -  As the realms of augmented and virtual reality merge, users will increasingly confront the question of how much “virtual” they want to incorporate into their “reality”.

Sunday, May 29, 2016

Commencement 2016: A Brief Survey

  • Barack Obama (U.S. President) at Rutgers University: “Gear yourself for the long haul. Whatever path you choose—business, nonprofits, government, education, health care, the arts—whatever it is, you're going to have some setbacks. You will deal occasionally with foolish people. You will be frustrated. You’ll have a boss that's not great. You won’t always get everything you want—at least not as fast as you want it.  So you have to stick with it. You have to be persistent. And success, however small, however incomplete, success is still success.  I always tell my daughters, you know, better is good.  It may not be perfect, it may not be great, but it's good. That's how progress happens—in societies and in our own lives."
  • Steven Spielberg (Filmmaker) at Harvard University: “Your intuition is different from your conscience. They work in tandem, but here’s the distinction: Your conscience shouts, ‘here’s what you should do,’ while your intuition whispers, ‘here’s what you could do.’ Listen to that voice that tells you what you could do. Nothing will define your character more than that.” 
  • Sheryl Sandberg (Chief Operating Officer - Facebook) at University of California – Berkeley: “Build resilience in yourselves. When tragedy or disappointment strike, know that you have the ability to get through absolutely anything. I promise you do. As the saying goes, we are more vulnerable than we ever thought, but we are stronger than we ever imagined.”
  • Jeff Immelt (CEO General Electric) at NYU Stern Business School: “You are entering a volatile global economy, the most uncertain I have ever seen. This is a world that needs better leaders, with new skill sets. The playbook from the past won’t cut it today. My advice for you as you enter this world is to be flexible, be bold, and don’t fear criticism."
  • Spike Lee (Filmmaker) at Johns Hopkins University: “After you leave here today, it’s gonna be real life, and real life is no joke. It’s real out here for the other 99 percent, for sure. Now it’s up to you, this new generation, to make it fairer, a just world. And it’s up to the graduating classes of 2016 to make it a better world for the 99 percent, who are daily being hornswoggled, hoodwinked, duped, rebuked, and scorned, double-crossed, incarcerated, profiled, starved, mis-educated, used and abused, and even shot down on our streets.”

Sunday, May 22, 2016

Uber's Self-Driving Car and Policy View on Technology Innovation

  • Last week Uber Technologies Inc. announced on its website: “If you’re driving around Pittsburgh in the coming weeks you might see a strange sight: a car that looks like it should be driven by a superhero. But this is no movie prop — it’s a test car from Uber’s Advanced Technologies Center (ATC) in Pittsburgh.
  • The car, a hybrid Ford Fusion, will be collecting mapping data as well as testing its self-driving capabilities. When it’s in self-driving mode, a trained driver will be in the driver’s seat monitoring operations. The Uber ATC car comes outfitted with a variety of sensors including radars, laser scanners, and high resolution cameras to map details of the environment.” 
  • Separately, U.S. Senator Elizabeth Warren, in a presentation at the New America Annual Conference, said “Across the country, new companies are using the Internet to transform the way Americans work, shop, socialize, vacation, look for love, talk to the doctor, get around, and track down a 10-foot feather boa—which was my latest Amazon search … 
  • The most famous example is the rise of ride-sharing platforms in our cities … The ridesharing story illustrates the promise of these new businesses—and the dangers. Uber and Lyft fought against local taxicab rules that kept prices high and limited access to services ... While their businesses provide workers with great flexibility, companies like Lyft and Uber have often resisted the efforts of those same workers to access a greater share of the wealth generated from their work. Their business model is, in part, dependent on extremely low wages for drivers ... 
  • For centuries, technological advances have helped create new wealth and have increased GDP. But it is policy – rules and regulations – that will determine whether workers have a meaningful opportunity to share in that new wealth.”

  • Regarding driverless cars -  Broad adoption will require understanding how to navigate the less predictable moves of pedestrians and bicyclists.
  • Regarding Warren’s comments – While she seeks to protect worker rights in the “gig” economy, the larger challenge is how to address the impact of displacing workers by advances in technology and automation. 

Sunday, May 15, 2016

On U.S. Commerce, Disappearing Cash and Cyber-Crime

  • Last week, the U.S. Department of Commerce said “analysis of recent data [July 2015] shows that Americans are increasingly concerned about online security and privacy at a time when data breaches, cybersecurity incidents, and controversies over the privacy of online services have become more prominent. These concerns are prompting some Americans to limit their online activity … it is clear that policymakers need to develop a better understanding of mistrust in the privacy and security of the Internet and the resulting chilling effects. In addition to being a problem of great concern to many Americans, privacy and security issues may reduce economic activity and hamper the free exchange of ideas online.”
  • Separately, SWIFT CEO Gottfried Leibbrandt, commenting on an $81 million theft from a Bangladesh central bank account at the New York Federal Reserve, said “At the end of the day we weren’t breached, it was from our perspective a customer fraud … I don’t think it was the first, I don’t think it will be the last."
  • SWIFT also reported “a newly identified malware found in a customer’s environment” and in both cases “the attackers clearly exhibit a deep and sophisticated knowledge of specific operational controls within the targeted banks – knowledge that may have been gained from malicious insiders or cyber-attacks, or a combination of both … in this new case we have now learnt that a piece of malware was used to target the PDF reader application used by the customer.
  • Note: SWIFT provides a financial messaging service to organizations around the world.

  • Regarding the Department of Commerce study -  It is likely that policymakers will continue to have diverse views data security issue, both how to address them and their economic and social impact. 
  • Regarding SWIFT – Because its system supports diverse organizations and technologies, it will only be as strong as its weakest link; which includes the people with access to its system.  
  • Bottom line: Network/data security is critically important to governments, businesses and consumers. Improving the current environment will require better software design (including using encryption) and better oversight of user access.

Sunday, May 8, 2016

How Will Artificial Intelligence Impact the Finance Industry?

  • Last week, at the Milken Global Conference in Beverly Hills,  Daniel Nadler, chief executive of finance analytics firm Kensho Technologies, Inc.  said “Analysts, young associates, vice presidents — anyone whose job is moving a column of data from one spreadsheet to another is going to get automated  … Those people are not going to have jobs.”
  • Also,  David Siegel, co-founder of quantitative hedge fund Two Sigma said “Most people in the bulk of the job market are not involved in super-high-value jobs … They are doing routine work and tasks and it’s precisely these tasks that computers are going to be better at doing,” 
  • Separately, a Financial Times article said that “Sentient Technologies, an artificial intelligence company, plans to open its experimental hedge fund using “evolutionary” algorithmic trading to outside investors as early as this year.” Antoine Blondeau, the firm’s chief executive officer said the asset management industry’s “transition will be slow. But at some point it will become a situation where the question will be whether one machine can outdo another machine, not whether the machine can outdo a human.”
  • Finally, in “Ghosts in the machine: Artificial intelligence, risks and regulation in financial markets”, a survey of 424 executives from financial institutions and fintech companies by Euromoney and Baker & McKenzie, it stated that finance was  “an industry rapidly seeing the potential benefits of AI, while being increasingly concerned about risk and the ability of regulators to keep pace … The most dramatic changes brought about by AI and machine learning within three years are expected to be in the areas of provision of creditasset managementtrading and hedge funds.” 
  • Artificial intelligence/machine learning will automate and disrupt many aspects of the financial industry, as well as other professional services – including accountinglaw and education.
  • Because information technology systems are susceptible to “garbage in - garbage out”, safeguarding against poorly designed algorithms will be important.
  • While many technology businesses should benefit from the AI trend, the accelerating pace of

Sunday, May 1, 2016

Encryption, the Blockchain and the U.S. Department of Defense

  • Last week, the U.S. Department of Defense posted a request for proposal for a Secure Messaging System which said: “There is a critical [Department of Defense] need to develop a secure messaging and transaction platform accessible via web browser or standalone native application … Legacy messaging and backoffice infrastructures, traditionally based on centralized, unencrypted hub-and spoke database architecture, are expensive, inefficient, brittle and subject to cyber attack. The overhead costs of maintaining such architectures is rising rapidly.”
  • The messaging platform would act as the transport for a cyptographically sound record of all transactions whether they be [military procurement requests], contracts, troop movements or intelligence … The benefits are broad and could even be applied to domains such as space.”
  • “With this messaging platform the business logic of the DoD ecosystem would be mapped onto a network of known entities using distributed ledgers. By doing this significant portions of the DoD backoffice infrastructure can be decentralized, ‘smart documents and contracts’ can be instantly and securely sent and received thereby reducing exposure to hackers and reducing needless delays in DoD backoffice correspondance.”
  • Regarding encryption -  While some government policymakers are concerned about encryption technology, which is increasingly used by AppleGoogleWhatsAppTelegram and others, this DoD request for proposal validates the view that encrypted data use will continue to expand.
  • Regarding the blockchain – The blockchain is a type of database popularized by Bitcoin.  The DoD’s focus on a “customized blockchain implementation” will likely address latency and scalability issues that have plagued some implementations.
  • Regarding commercial use – Given the DoD ‘s broad communciation reach in the public and private sectors, a successful development could reshape the markets for encrypted messaging and “smart contract” solutions

Sunday, April 24, 2016

Intel, AMD, Google and the Changing Tech Landscape

  • Last week, comments from technology firms included: Intel CEO Brian  Krzanich - “Strength in our data centerInternet of Things and programmable solutions businesses partially offset weaker-than-expected PC revenues … We are evolving from a PC company to a company that powers the cloud and billions of smart connected and computing devices … today, we announced a series of actions that will build on the strength of those franchises and accelerate our strategic transformation. These changes will reduce our global employment by about 12,000 positions by mid-2017.”
  • Advanced Micro Devices CEO Lisa Su – “We believe [virtual reality]  will be a key long-term demand driver for AMD, across both our consumer and professional graphics offerings, especially as content creators require more powerful GPUs to create fully immersive VR experiences … we are making excellent progress on our strategy to reestablish our presence in the data center market.”   Note: AMD also announced a partnership with  Tianjin Haiguang Advanced Technology Investment Co., Ltd. , which  will pay $293 million for technology and design services  for the China market.
  • Google CEO Sundar Pichai - "We've always been doing cloud, it's just that we've been consuming it all internally at Google, But as we've grown … we've definitely crossed over to the other side to where we can thoughtfully serve external customers … We've been investing in machine learning and AI for years, but I think we're at an exceptionally interesting tipping point where these technologies are really taking off … That is very, very applicable to businesses as well."
  • Regarding Intel -   As CEO Krzanich’s addressed the firm’s growth opportunities; the announced layoffs illustrate the challenge of realigning its resources with these business objectives.
  • Regarding Advanced Micro Devices -  As CEO Su affirms the view that semiconductor growth will be driven by data center/cloud growth, rather than PCs, its focus on graphic processors market could provide significant advantage in the emerging virtual/augmented reality market.  
  • Regarding Google – As CEO Pichai increases the firm's focus on cloud services and machine learning/AI capabilities, there is still a need to rationalize Google's varied development initiatives.

Sunday, April 17, 2016

Microsoft, the U.S. Government and Your Data

  • Last week, as leaders of the U.S Senate Select Committee on Intelligence released a draft of the Compliance with Court Orders Act of 2016.
  • Chairman Richard Burr said “I have long believed that data is too insecure, and feel strongly that consumers have a right to seek solutions that protect their information – which involves strong encryption … I do not believe, however, that those solutions should be above the law. I am hopeful that this draft will start a meaningful and inclusive debate on the role of encryption and its place within the rule of law.”
  • Vice Chairman Dianne Feinstein said “No entity or individual is above the law … The bill we have drafted would simply provide that, if a court of law issues an order to render technical assistance or provide decrypted data, the company or individual would be required to do so. Today, terrorists and criminals are increasingly using encryption to foil law enforcement efforts, even in the face of a court order. We need strong encryption to protect personal data, but we also need to know when terrorists are plotting to kill Americans.”
  • Separately, Microsoft filed a lawsuit against the U.S. Department of Justice that said “Over the past 18 months, federal courts have issued nearly 2,600 secrecy orders silencing Microsoft from speaking about warrants and other legal process seeking Microsoft customers’ data; of those, more than two-thirds contained no fixed end date … These twin developments — the increase in government demands for online data and the simultaneous increase in secrecy — have combined to undermine confidence in the privacy of the cloud and have impaired Microsoft’s right to be transparent with its customers, a right guaranteed by the First Amendment.”

  • As Senators Burr and Feinstein seek to strengthen the government’s approach to data access and Microsoft seeks to clarify and perhaps restrain the government’s access to data, a broader set of data privacy issues continue to be debated.
  • Given the complexity of data privacy, poorly crafted legislation could lead to unexpected outcomes.
  • Bottom line: regardless of how public policy is crafted, encryption technology continues to evolve and law enforcement will need to adapt.

Sunday, April 10, 2016

Robots; by Land, Sea and Air

  • Last week, recommendations from the Federal Aviation Administration's (FAA) "small drone" working group included 1) drones weighing about half a pound or less should fly without restrictions and 2) drones weighing four to five pounds can fly over populated areas but must stay at least 20  feet above or 10 feet away from people.
  • U.S. Senator Dianne Feinstein’s commented about drone regulation saying “Reckless drone use varies significantly in different states and even within a state, which is why we need to maintain the ability for states to set their own standards of drone operation … one in five incidents of reckless drone use nationwide has occurred in California, and densely-populated areas with critical infrastructure like Los Angeles and San Francisco need flexibility to enact rules that address their unique challenges.”
  • Separately, the U.S. Navy christened the autonomous warship Sea Hunter, which was developed by the Pentagon's Defense Advanced Research Projects Agency (DARPA). The 132-foot diesel powered vessel, which is still being tested, is designed to operate without human remote control.
  • Deputy U.S. Defense Secretary Robert Work said, "This is an inflection point … this is the first time we've ever had a totally robotic, trans-oceanic-capable ship."
  • Also, as part of the “European Truck Platooning Challenge”, twelve semi-automated “smart” trucks from DAFDaimlerIvecoMAN, Scania and Volvo traveled to Rotterdam, Netherlands - some trucks traveled over 1,200 miles, crossing four country borders.
  • Dutch infrastructure and environment minister Melanie Schultz van Haegen said “Truck platooning will ensure cleaner and more efficient transport. Self-driving vehicles also contribute to road safety because most accidents are caused by human failure.”

  • In the short term, the landscape for aerial and terrestrial automated vehicles will need to adapt to different regulations across, cities, states and countries – which may slow the pace of adoption.
  • In the longer term, the need for collision detection and avoidance will continue to challenge many robotic solutions.  Advances in sensor technologies will mitigate some of the risk, but adoption may be constrained to more structured use cases where the environmental variables are well understood.  

Sunday, April 3, 2016

The SEC on Start-Ups, Eye-Popping Valuations and Unicorns

Last week, comments from Securities and Exchange Chair Mary Jo White’s speech “Protecting Investors in an Innovative Financial Marketplace” included:
  • “It is undisputed that venture investing is not for the faint of heart … While the common refrain is that 9 out of 10 start-ups fail, an equally interesting statistic … is that 70 percent of failed start-ups die within 20 months after their last financing, having raised an average of $11 million. In other words, not only are these investments highly risky, they fail quickly too.”
  • “A current feature of the pre-IPO financing market  … that has gathered considerable attention recently [is] unicorns … I am speaking not of the creatures of fantasy, but of private start-up firms with valuations that exceed $1 billion. By one count, there are nearly 150 unicorns worldwide, many based here in Silicon Valley.  And, they do not appear to be an endangered species. One survey shows that there were 52 unicorn financings in the last three quarters of 2015 compared to 37 such financings over the 12 months that ended in March 2015.”
  • Beyond the hype and the headlines, our collective challenge is to look past the eye-popping valuations and carefully examine the implications of this trend for investors, including employees of these companies, who are typically paid, in part, in stock and options. These are areas of concern for the SEC and, I hope, an important focus for entrepreneurs, their advisers, as well as investors.”

  • Regarding startup failure – By increasing their focus on customer acquisition, rather than fundraising, start-ups will likely increase their potential for success. 
  • Regarding Unicorns –  As some successful start-ups avoid the scrutiny of regulators such as the SEC by remaining private, the term Unicorn will  continue to be embraced by market participants.
  • Regarding eye-popping valuations –  Asset valuation is always challenging and often only validated in hindsight -  and the investment process remains a mix of skill, art and some luck.  

Sunday, March 20, 2016

Spot the Dog, and Other Robot Stories

  • Last week, Pew Research Center's “Public Predictions for the Future of Workforce Automation” report said, “From self-driving vehicles and semi-autonomous robots to intelligent algorithms and predictive analytic toolsmachines are increasingly capable of performing a wide range of jobs that have long been human domains … The ultimate extent to which robots and algorithms intrude on the human workforce will depend on a host of factors, but many Americans expect that this shift will become reality over the next half century.”
  • Comments from the Georgia Institute of Technology on its “In Emergencies, Should You Trust a Robot?’ research include: senior research engineer Alan Wagner - “People seem to believe that these robotic systems know more about the world than they really do, and that they would never make mistakes or have any kind of fault … In our studies, test subjects followed the robot’s directions even to the point where it might have put them in danger had this been a real emergency.”  Professor Ayanna Howard -  “We need to ensure that our robots, when placed in situations that evoke trust, are also designed to mitigate that trust when trust is detrimental to the human.”  
  • Separately, Google announced it was selling Boston Dynamics, a robotics firm known for its impressive (and perhaps creepyvideos that demonstrated some of the capabilities of Spot, a robot dog and Atlas, a human scale robot. 

  • Regarding comments from Pew Research –  As an alternative to some dystopian views of robots, its research suggests a more pragmatic and perhaps positive view of the impact of technology innovation.
  • Regarding comments from Georgia Tech – its research suggests that 1) some humans are poor at assessing the quality of robotic guidance - at least in emergency situations and 2) robot designers must consider a broad set of use cases and user types.
  • Regarding the Boston Dynamics’ sale – Its impressive, and sometimes controversial, technology seems to be a victim of management conflictspoor strategic fit, and a lack of revenue growth. The loss of backing by the U.S. Marines, because its systems were too noisy, highlights the challenges of developing robotic solutions.