Larry Page, reminiscent this past week of my view on innovation sandboxes and five yard safe zones for permission-free innovation:
“There are many exciting things you can’t do because they are illegal and not allowed by regulation,” he said. “That makes sense – we don’t want the world to change too fast.
Nonetheless, Mr Page said he wished there was a “small part of the world” where such laws did not apply, akin to the anarchic Burning Man festival, held in the Nevada desert every August.
“Technologists should have some safe places where we can try out some new things and figure out the effect on society and people without having to deploy it on the whole world,” he said, citing the limited progress of Google Health as an area where regulations constrained his ambitions.
Posted in Law, Policy, and Regulation 2.0 | Leave a Comment »
From Felix Salmon’s article about Bitcoin and digital currency more generally:
That said, credits in World of Warcraft are valuable enough that Chinese prison guards reportedly force convicts to perform monotonous tasks within the game for 12-hour stretches at a time, building up credits which can then be sold for many times the guards’ official salary.)
Perhaps more seriously, there is a great discussion of the relationship between a currency and commodity:
In reality, then, bitcoin doesn’t really behave like a currency at all. In terms of its market value, it looks much more like a highly-volatile commodity. That’s by design: bitcoins were created to be the most fungible commodity the world had ever seen – to the point at which they would effectively erase the distinction between a commodity and a currency.
But is that a good idea?
Dollars are a universally accepted unit of account: if something in the world has a price, it has a price in dollars. Dollars are not, on the other hand, physical commodities. The overwhelming majority of dollars in the world are deposited safely and electronically in banks: there’s something weird and self-defeating about the kind of people who keep their savings stuffed under the mattress. In Hollywood, if you show someone counting out huge sums of cash, that’s an easy way for the director to say that he’s a criminal.
Bitcoin was constructed to behave like a currency: it’s very easy to use bitcoins to pay for goods and services, especially if what you’re buying is in a different country. Right now, there’s literally no way to build a website selling some kind of service, and have a meaningful fraction of the world’s online population be able to pay you for that service. Bitcoin was designed to solve that problem; to be, in effect, thelingua franca of online commerce.
But it’s very hard to be a currency when you’re also a commodity, governed by rules of scarcity and subject to speculative attack. And it’s also very hard to be a currency – or even a commodity, for that matter – when you’re as smallas bitcoin is. Even now, at the top of a huge bubble, the total value of all the bitcoins in existence is the equivalent of about 2,000 standard gold bars– not remotely enough to revolutionize the global payments and currency systems as we know them. Given the choice between something old and solid, on the one hand, and something new and virtual, on the other, the market is still voting for the asset class which has proved its worth over millennia.
Posted in New Payment Systems | Leave a Comment »
Failure is really about failing in ambition rather than results.
One of my favorite quotes about ambition and “failure” is by Google’s Larry Page:
“His intelligence and imagination were clear. But when you got to know him, what stood out was his ambition. It expressed itself not as a personal drive (through there was that, too) but as a general principle that everyone should think big and then make big things happen. He believed the only true failure was not attempting the audacious. ”Even if you fail at your ambitious thing, it’s very hard to fail completely, he says. ”That’s the thing that people don’t get.“”
This is by the other search engine founder – Gabriel Weinberg of Duck Duck Go and it reminds me of Larry Page:
hinking back, a lot of my motivation has to do with a feeling that I’m on the cusp of something big. I pretty much always feel this way. If we just do x, y, z then this is going to be big. There is always something around the corner, within grasp.
For this to work you can’t be completely delusional, only partially. The difference is having a plan.
Of course plans change and things don’t always work out. That’s why picking an ambitious idea is advised; in a huge market almost everywhere you turn you are on the cusp of something big.
Posted in Creating Business Plans | Leave a Comment »
It’s easy to overlook sometimes that Bill Gates is a Tech Original Gangster. From an interview with Wired:
Wired: Peter Thiel, expressing his dissatisfaction with technology’s progress, recently noted, “We wanted flying cars, instead we got 140 characters.” Do you agree with him?
Bill Gates: I feel sorry for Peter Thiel. Did he really want flying cars? Flying cars are not a very efficient way to move things from one point to another. On the other hand, 20 years ago we had the idea that information could become available at your fingertips. We got that done. Now everyone takes it for granted that you can look up movie reviews, track locations, and order stuff online. I wish there was a way we could take it away from people for a day so they could remember what it was like without it.
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Bill Gurley follows up on his marketplace post with one on marketplace pricing. He used the term “rake” which is the commission or the amount skimmed off by the platform. The key, is:
If your objective is to build a winner-take-all marketplace over a very long term, you want to build a platform that has the least amount of friction (both product and pricing). High rakes are a form of friction precisely because your rake becomes part of the landed price for the consumer…
High margins also make it easy for your competitors to come in and disrupt or prevent your network effect by drawing others to competing platforms:
High volume combined with a modest rake is the perfect formula for a true organic marketplace and a sustainable competitive advantage. A sustainable platform or marketplace is one where the value of being in the network clearly outshines the transactional costs charged for being in the network. This way, suppliers will feel obliged to stay on the platform, and consumers will not see prices that are overly burdened by the network provider. Everyone wins in this scenario, but particularly the platform provider. A high rake will allow you to achieve larger revenues faster, but it will eventually represent a strategic red flag – a pricing umbrella that can be exploited by others in the ecosystem, perhaps by someone with a more disruptive business model. As Jeff Bezos is fond of saying, “your margin is my opportunity…”
Booking.com took a much more aggressive approach (perhaps because it was the only one available) . They started with a 10% “agency model,” which not only represented a lower rake, but also provided better cash flow terms to the supplier. As such, they were able to signup nearly every small hotel in Europe…
Gurley points out a nice twist, where you can get the supply side of the marketplace themselves to bid up the “rake” if they see value in doing so. This perhaps kicks in after the network has won in some sense. The archtypal example is Google Adwords. The only limitation to this, it has to be done in a way that does not turn off or cast doubt to the other side of the market, suppliers bidding for placement cannot destroy customer confidence in the recommendations that the platform is delivering. I suspect that in many markets, “pay to play” would undermine the platform itself.
It turns out that the average rake at Priceline Group is even higher today, as they allow merchants to voluntarily bid up their rake for better placement in the network (you can see this in the table above). This is one of my favorite marketplace business model “tweaks.” You start with a low rake to get broad-based supplier adoption, and you add in a market-driven pricing dynamic that allows those suppliers who want more volume or exposure to pay more on an opt-in basis. This way no one leaves the network due to excessive fees, yet you end up with a higher average rake over time due to the competitive dynamic. And when prices go up due to bidding and competition, the suppliers blame their competition not the platform (part of the genius of the Google AdWords business model). This also allows you to extract more dollars from those suppliers who desire to spend more to promote themselves (without raising the tax on those that don’t).
Posted in Marketplaces | Leave a Comment »
The theft of intellectual property is not the only motivation for cyber attacks. Indeed, while theft happens in the shadows and is often meant to remain in the shadows; political hackers are aiming to make a statement and to be noticed.
It is a statement that the weak can hurt the strong.
In recent weeks, the hacked AP tweet that announced the false news of a White House attack by a Syrian hacker “army” momentarily knocked off hundreds of billions of dollars of stock value. It was a demonstration of the reality and effects of the use of cyber attacks to conduct asymmetric warfare.
An example overlooked by many was the attack on Aramco last August that knocked out a vast part of its computer network. The attack took out over 30,000 computers, damaging hardware and software. It was intended to affect production. While this one largely was contained, as can be extrapolated by oil price spikes from production outages of minor players in the world of oil, a successful attack on Aramco would throw a much bigger wrench into the global economy.
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L.P. Jacks –
A master in the art of living draws no sharp distinction between his work and his play; his labor and his leisure; his mind and his body; his education and his recreation. He hardly knows which is which. He simply pursues his vision of excellence through whatever he is doing, and leaves others to determine whether he is working or playing. To himself, he always appears to be doing both.
Posted in Life | Leave a Comment »