Category Archives: Trends

One Reason Startups Fail

Come on, people! At least try to make your apps more than punch lines for blogs like mine. Just days after posting about the shakeout among mediocre consumer technology companies, I see a review of three apps designed to help you split the bill with friends/roommates: Billr, SplitWise and OpnTab. As regular readers know, I think that any company with a name like Billr is destined to fail. When it’s an app that does nothing you can’t do with a calculator (which is built into your phone), then its chances of success are even lower. In addition, despite the savage failure of Blippy, the app that shared with your social graph the details of all your purchases, here we have the launch of Mine, which shares with your social graph the details of all your purchases. Venture-backed technology is at its best when it solves big problems. Three apps that help you divide by seven are not solving problems at all.

California & SF Voter Guide

Thoughtbasket readers, if you live in San Francisco, or in other parts of California, and haven’t had time to read up on all the initiatives and propositions on next month’s ballot, a friend of mine took the time to prepare a voter guide. I can’t vouch for his recommendations — I don’t agree with all of them — but his summaries are concise and amusing, which is a pretty good combo. Make up your own minds, of course, but this might be a useful tool.

Check out the quick voter guide at www.quickvoterguide.org

 

Outsourcing Parenting to Technology?

I was at an event the other night featuring a panel of education technology entrepreneurs talking about how their companies teach kids skills beyond the traditional three R’s of the school curriculum. For example, Class Dojo is supposed to use gamification to improve kids’ behavior, with the founder talking about the importance of improving self-control (the famous marshmallow experiment). EverFi teaches kids financial literacy and Mindset Works is meant to change the very mindset, or self-conception, of children.

Then I got home, and saw on TV that Verizon commercial in which a kid’s family can’t be at his French horn recital, but they can watch him via connected devices. It’s a sweet commercial, for sure, and someone sitting on my couch (not me) got a little misty eyed. But it got me thinking that maybe we are outsourcing too much parenting to our technology.

I mean, yes it’s sweet that the kid’s dad uses a tablet camera to watch the recital, but wouldn’t it be better if the dad were actually there? And to the extent that self-control can be taught, shouldn’t parents be teaching it rather than some technology company? Especially since most of these education tech companies are started by entrepreneurs, not educators or child psychologists (except for Mindset Works).

I’m not trying to criticize any of these companies or entrepreneurs, all of whom are doing good work trying to help kids. And I’m not criticizing parents or teachers who use these tools. I’m not even definitively saying that I think using these tools is bad. After all, leveraging technology is something that we all do. When I use Excel instead of green ledger paper, am I outsourcing my financial analysis to Microsoft? No, I’m just using a tool that makes me more efficient. So why does it feel different when it comes to parenting?

Perhaps I am just hopelessly retro, thinking that parents should manage kids themselves, instead of using every tool available. Perhaps it is because I am not (yet!) a parent, so don’t fully appreciate the desire to do everything you possibly can to improve your children’s lives. Or perhaps I fear that parents who outsource teaching their children aren’t using the found time to be with their kids, but on themselves. I can’t rationally pin down why this parenting technology makes me uncomfortable; it just does.

Readers, what are your thoughts?

Luck Drives Pop Music AND Wealth?

Yesterday’s Baseline Scenario (one of my favorite blogs) had an entry describing an academic paper which modeled how income gets distributed in a society and why income inequality is so strong in some economies. Based on the abstract of the paper, and on Baseline’s summary of the rest of the paper (yes, I am admitting that I did not read the whole paper), the model shows that a set of homogenous homes will diverge in wealth, with wealth accumulating over time in fewer and fewer households, based purely on exposure to “idiosyncratic investments” which have higher returns. And in this model, exposure to these investments is random: based on luck.

Clearly this paper is not the be all and end all of explanations. Equally clearly, the assumption of homogeneity does not match reality. What I want to point out here is the connection to Duncan Watt‘s work on the development of hit pop songs, which he shows is also based on luck. Please see my posts here and here regarding Watts.

It’s interesting that two different approaches to modeling two different things come to such similar conclusions: the distribution of success is essentially driven by luck, not skill. Again, these are models, not complete explanations. I, for one, would certainly like to think that my skill will lead to success. However, judging by my reader counts, that may not be the case. Regardless, I think it’s important for us all to remember the role that luck plays in much of what we do.

Education Trumps Entrepreneurship

There is a growing trend among universities to devote resources to studying entrepreneurship. This trend is primarily focused in the business and engineering departments, but it is spreading inexorably across campus. It seems as if everyone wants to create a new class of entrepreneurs. This impulse is understandable; after all, if you are the university that graduates the founders of the next Google, there are big donations in your future.

But this focus on entrepreneurship doesn’t come without costs. Universities generally don’t have limitless budgets, so if increased resources are flowing to entrepreneurship studies, that means resources aren’t flowing into other departments. At my alma mater, Stanford University (see below), our alumni magazine seems to be constantly writing about new initiatives to train entrepreneurs, but it almost never talks about a new program in English or history. I think that universities’ movement toward entrepreneurship has gone too far.

Not that entrepreneurship is a bad thing. If people want to start companies, that’s great. I’m happy that companies like Google exist. And Amgen, and Hewlett-Packard, and even General Electric, all of which were started by entrepreneurs. But notice that none of those companies were started by people who had studied entrepreneurship. In fact, they were all started before this trend in teaching entrepreneurship had even begun. It’s not as if this country had a serious lack of entrepreneurs before universities started training them.

But more important to me is the fact that there is more to a university education than just training for a future job, whether as an entrepreneur or engineer or ethicist. College is also about producing well rounded people, who can analyze life in a variety of ways, who are prepared to be good citizens of their country. And I’m not the only one who thinks that way. Thomas Jefferson founded UVA with the goal of “elevating the views of our citizens generally to the practice of the social duties and the functions of self-government.” John Adams thought that education was so important that he put it in the Massachusetts constitution:

Wisdom, and knowledge, as well as virtue, diffused generally among the body of the people, being necessary for the preservation of their rights and liberties; and as these depend on spreading the opportunities and advantages of education in the various parts of the country.

If people want to start companies, they will certainly do so. They always have. So let’s not waste their four years of college making them “better entrepreneurs,” as if we even know what that is. Let’s just make them smart, well-educated people, and the entrepreneurship will inevitably follow.

The University Isn’t Going Anywhere

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There is a lot of talk going around about how universities are broken, and Silicon Valley is going to put the Ivy League out of business. Certainly change is afoot, and continued tuition hikes at twice the rate of inflation are ridiculous. Online universities like Udemy and the Miverva Project are interesting, and may even succeed, depending on whether success is measured in teaching students or in making tons of money. But if success is measured in pushing the existing elite universities out of their current position, don’t hold your breath.

Kevin Carey wrote a piece in The New Republic saying how the roster of leading companies has completely changed over the last century but the roster of leading universities has not. American Cotton Oil is gone, but Harvard remains. Carey states that this is unsustainable; education should be as prone to disruption as business.

But there is a deep flaw in Carey’s analogy. Companies go out of business mostly because people no longer want their products. When was the last time you bought cottonseed oil, or film for your camera? But people still want what universities are offering, especially elite universities. Is education still valuable? Yes. Is a Harvard degree still valuable? Yes. I don’t want any cottonseed oil, but I sure want my kids to get a Harvard education and diploma. And as long as the desire for education and prestige remains (ie. as long as human nature still rules), the elite universities will remain so.

Can Congress Change Its Culture?

Cultural change is the recent theme here at Thoughtbasket; I discussed how a company might change its culture, and then how America might change some aspects of its culture. Today I want to look at a particular part of America: Congress. The U.S. Congress seems unable to solve any of the problems facing our country, and consequently has an approval rating of only 11 percent, which is the lowest ever. If a group is unable to complete the sole task it is given (governing, in this case) and thus is held in contempt by its bosses (voters, in this case), then that group probably has a culture problem.

The congressional cultural problem is that the entire institution values reelection instead of service (which is why incumbents are reelected more than 80% of the time). Power is more important than policy. Much like the corporation in my first post on this topic had a culture where everyone thought it was OK to be late for meetings, congress has a culture where everyone thinks that it’s OK to prioritize staying in office over doing the job you were elected to do, which is govern.

We can blame each individual congressman – and believe me, I do – but really, it is the institution and its culture that is truly to blame. Expecting some moronic ex-exterminator who only gets a two-year term to swim against a cultural tide of reelection is probably naïve. So, much like in my efforts to change cultural components in the US as a whole, we need a team approach. John Boehner + Nancy Pelosi = change?

I wrote last year about how John Boehner could be a hero by teaming up with democrats to pass substantive policy that would address the nation’s fiscal problems. Here is another opportunity for heroic action: he could rally all of congress, teaming with his arch enemies, to promote a culture of service instead selfishness.

Is Corporate Culture The Same As Country Culture?

I recently posted about corporate cultures, and how the only way a corporation can change its culture is from the top. Based on some of the feedback I received I’ve decided to expand my scope and explore a larger cultural change: how the United States might change some parts of its culture. For example, one aspect of America’s current culture that seems problematic is that we want all kinds of services (Medicare, Social Security, strong defense, good roads, etc.) but we want the lowest taxes possible. Those two desires are incompatible; a culture that emphasizes taking without giving will prove challenging in the long run.

In my prior post, I discussed that a change in corporate culture requires a CEO who is willing to push that change. In the case of a country, who might play that role? You would naturally think the president, but we know that won’t work. Plenty of recent presidents have talked about changing the culture, but none have succeeded. Hell, none of them could change the culture of a few hundred people in Congress, let alone a whole country. And that’s not really surprising; a country is not a hierarchical structure the way a company is, so people have no reason to necessarily follow what the leader says.

The president could try to lead by example, or by using the bully pulpit, but I can only imagine the furor  that would erupt  if a president (or governor, or senator, or mayor) announced that “OK people, your constant desire to get lots while paying little is complete crap; going forward we are all going to be more realistic.” No, that wouldn’t work at all.

What if all our leaders teamed up? Suppose a whole slew of politicians – national and local, democrat and republican, male and female – got together to announce an initiative aimed at realism. This could be risky, since taking a stand isn’t really what politicians do; they hate being out on limbs by themselves. But that is why they would team up with members of the other party. After all, as I noted in my prior post, cultural change requires leaders to actually lead. Then they could get business leaders on board; everyone from Warren Buffett to Charles Koch. Throw in some celebrities – nothing happens in America without celebrities – and then maybe we’d have something.

It’s possible that this is nothing but a pipe dream. Can we really expect politicians to team up in order to lecture voters? Probably it will never happen. But maybe we should expect more from our leaders.

Folder People vs. Non-Folder People

In reading reviews of the new Apple OS X (Lion), I was struck by how many reviewers mentioned the All My Files, Mission Control and Launchpad features, all of which display files and applications in a way so that users don’t have to organize their work in folders. I was reminded of when Gmail first came out, and everyone talked about how it didn’t have folders, because you could just search for whatever email you wanted to see.

This was alien to me. I have always organized my work in folders, both in my computer and in real life. When I worked in finance, each new deal got its own accordion file into which went a series of manila folders: due diligence, projections, legal issues, etc. So organizing my computer files and email into folders and sub-folders seemed completely natural to me. How else could you display your work on a computer?

Folders. Very neat, very organized. Even with a mustache.

And there I went, blithely assuming that everyone was comfortable with the folder metaphor. Sometimes I would look at someone’s computer where the desktop was a mass of unorganized icons, but I assumed that was an aberration; I must have just caught them in the middle of a crazy project.

It wasn’t until I read about computer scientist David Gelernter that I realized there might be other ways to look at your information. He developed something called Lifestreams in order “to minimize the time users spend managing their documents.” Lifestreams dumped the file and folder metaphor in favor of “a time-ordered stream of documents.” That seemed crazy to me – I would much rather look for documents “from Project Neptune” than “from sometime in 2003, which I think is when I worked on Neptune” – but it was clear that other people, even computer science people, didn’t think that way.

It appears that lots of people don’t think the way I do. Maybe most people. But whether the count is lots or most, clearly many would prefer to avoid the folder metaphor. To quote from one review of Lion, “The addition and prominence of “All My Files” is yet another vote of no-confidence in the user’s ability to understand and navigate the file system.”

So let’s add another dichotomy into which we can divide people: folder people vs. non-folder people. While improvements in search technology may eventually make this distinction obsolete, right now it seems like the non-folderites have the upper hand, with user interface designers catering to them. That’s fine, as long as folder capability still exists. But if that capability disappears, folder thinkers will have no choice but to rise up and let the Lifestreamers tremble. We have nothing to lose but our files!

More Tech Bubble Datapoints

Here are two more items showing that Silicon Valley is in the midst of another startup bubble:

  1. TaskRabbit, which has A) a dumb name; B) a terrible premise; C) the ridiculous idea that it won’t need to staff up in order to grow (because it has a terribly inexperienced CEO); and D) NO REAL BUSINESS MODEL.
  2. A WSJ article about how PR firms are now turning down clients and taking equity in lieu of cash compensation. Since the main value of PR firms is hiring cute young women who flirt with male reporters to ensure that their clients get press coverage, any time PR firms start feeling as powerful as VC funds (like they did in 1999), you know that you’re in a bubble.
  3. San Francisco apartment rents are skyrocketing, to the point that local real estate people are calling it a bubble.