@T: ALWAYS THE TWAIN

GOOGLE WAVE IS RELEASED THIS WEEK. Here are some videos:

TWAIN LIFE

I’ve been a wee bit busy these last few weeks:

(1.) Putting a trademark application together.

(2.) Sanity checking some guidelines on entrepreneurialism for some friends.

(3.) Sourcing furnishings for a friend’s new apartment.

(4.) Meeting search and advertising people.

(5.) Contributing to the shaping of the BBC’s documentary production on the 20-year history of the Web.

Let’s just say that since my involvement on the BBC project, the production team have clearly put the need to include a wider and deeper demographic of contributors onto their “to interview and source from” list. I’ve been championing these:

* women who are contributing not only to tech companies like Marissa Mayer of Google, but who also have a history of genius and revolutionary code work like Adele Goldberg who along with Alan Kay did amazing innovations with smalltalk => Squeak;

* teenagers who — contrary to absurd neuroscientists’ unnecessary patronization about how the Web is destroying their brains and concentration — are flourishing with these new technologies and some are even US$ million tech entrepreneurs;

* silver surfers who contribute a tremendous amount with their wisdoms and their wit to help us youngsters understand more about Life, open us up new resources (like musicians, authors and sports stars of yore) we should educate ourselves about because it’s fun and good-to-know, and who kindly temper our exuberance when we’re being a wee bit silly; and

* non-Anglo-Saxon contributors, e.g. from South Korea, since the Web is supposed to be a global village online and it’s important to benefit from the insights of others; the WWW is as much the property of Asians, Africans, South Americans, Slavics, etc. as it is of the US of A.

During various conversations I also managed to point these facts out:

(1.) Bill Gates, Steve Jobs, Sergei Brin, Larry Ellison etc have been surfing for DECADES and we haven’t seen any evidence that it affects their concentration or brains in a negative way, have we?

(2.) Chris Anderson’s theory of free is flawed and so is Rupert Murdoch’s one with its paywalls.

Without going into all the economic arguments I presented — I quoted a paper I wrote when I was 20 that included analysis from Alfred Marshall, JK Galbraith and CW Mills about the inclusion of advertising as a cost premium — to essentially decimate any Mickey Mouse economic theories about Moore’s Law pushing down the cost of circuit boards and transistors, essentially resulting in a zero cost scenario.

The “Free Web” is unrealistic, unsustainable and it’s also not capitalism at its optimal but rather communism at its worst because it implies people will contribute their content for free indefinitely and don’t have household bills or their children’s education to pay for.

The “Pay to Play” model is also unrealistic, unsustainable and it’s extreme capitalism because it creates a chasm of digitally entitled and digitally deprived (or as JK Galbraith coined it “the haves and have-nots”) which only serves to exacerbate societal inequalities rather than resolve them.

(3.) The definition of “digital native” as being someone born after about 1990 who hasn’t known a world without technology and ‘digital migrants” as being someone born before 1990 is…….inaccurate since the PC was commercialized around 1974, so there’s an entire generation of people in their 50s and 60s who are digital natives! People like the fathers of the Internet (Tim Berners-Lee, Vint Cerf, Larry Brilliant, Tim O’Reily et al).

Moreover, by the USC’s definitions, Mark Zuckerberg would also be classified as a “digital migrant” since he was born in 1984 which is a full SIX years before 1990. See? So that’s an example of classifications having plenty of room for error, so we can imagine how it might propagate even with semantic stacks!

TWAIN’S WEB ECONOMY

In my model of how the Web should work, there would be legal requirements as a condition of platform providers being allowed to operate:

(1.) Allocate a % of their online gross revenues towards charitable causes and every company has to commit to a program of sending their employees to work for at least 4 weeks in an NGO/socially deprived area/public service.

(2.) Incentivize and reward content contributors via monthly micropayments — whether it’s a review / recommendation / any comment requiring skill they’ve made which is considered by other users to be of value;

(3.) Innovate new ways to include their communities in the design of products+services which result in companies having smarter inventory systems rather than over-producing and causing climate change issues, then doing hard sell/excessive advertising which doesn’t even result in bottom line sales at the end!

Now those measures, if implemented, would be TRULY DEMOCRATIZING AND WOULD ENGENDER GOOD CAPITALISM wherein each of the participants is conscious of their larger role in the ecosystem of the Web and of society as a whole.

THE WEB NURTURES OUR BRAINS + CONSCIOUSNESS

Personally (and I’m saying this from the experience of someone who’s used technology since pre-teen), I haven’t experienced any reduction in my ability to read, concentrate, contextualize or quote reams of reference sources to substantiate my position simply because I’ve been using the Web for more years than Google’s been around!

This is what I noted in one discussion on the issue of concentration:

“Wrt your comment: “This way of life doesn’t promote vision, planning, long-term strategizing, tenacity,” I have to respectfully disagree. Leveraging tools like Facebook, Twitter, email and IM can facilitate all of those things. It’s a matter of the HOW, not the what.

It’s like this: those tools are a fishing rod. If we hook an old boot or a minnow instead of sweet, giant salmon it’s not the fault of the fishing rod. It’s the fisherperson’s lack of knowhow and skill. It’s their inability to read the terrain, factor in weather conditions and position themselves in a spot to concentrate and catch the salmon. It’s also their inability to seek the wisdom of others who may have fished before (and in that spot). The fishing rod can’t read their minds. They control it, not vice versa.

Now, I’ve worked directly with CEOs on strategies so let me also share this. Some of the CEOs of the 1950s to 1970s generation are technologically illiterate. They can’t (and so don’t) navigate their ways around email systems; they have their 20-something PAs print materials off for them. They delegate the management of their time and their attentions to those PAs. They read reports long-hand rather than as 140 character tweets. They’re also not on their own corporate networks or IM channels. They have few of the so-called “sources of distraction”.

Yet some of them are incapable of vision, planning, long-term strategizing, tenacity, those sorely needed skills you noted — as is evident in the global financial crisis or any Chapter 11 bankruptcy and corporate failures. They also suffer from information overload from those stockpiles of longhand printed out reports, books and even short 2-page executive summaries.

Likewise, the Anthony Edens, Joseph Stalins, Robert Mugabes and (some would say George W. Bushes) did not have the Web or technology to distract them and look what they achieved. Vision? Planning? Long-term strategizing? Inflation in Zimbabwe surged past 230 MILLION PERCENT by October 2008. Eden triggered the 1956 Suez Canal crisis. Stalin is said to be responsible for the deaths of upwards of 10 million, predominantly in Ukraine caused by the famine conditions his policies produced. In China, of course, we have Pu Yi the Last Emperor of China who had no technology distractions; however unlike his illustrious predecessors like Liu Bang (who in 206BC created the Han Dynasty, the first one to embrace Confucianism, strategy and educational and technological innovation), Pu Yi had no vision.

Reaching even further back, Rome and other ancient civilizations fell not because they were distracted by technologies. They fell either because of natural disasters or man-made causes stemming from arrogance, complacency, conceit, narcissism and hubris — the very same hubris that’s said to have infected the banking sector in recent years.

What it all boils down to are not the tools, the education or the experience alone, but the JUDGMENT. Judgment derived from rationale, ego and emotion.

There are technical whizz’s who can have 6 Bloomberg screens flashing constantly at them, a messy desk and they still make a spot-on stock call (every single time). Then there are others who have clean desks, get distracted and lose millions. Meanwhile, there’s another set who can sometimes tune in and out of their attention spans; sometimes tidy up their desks, sometimes call it right, sometimes are grossly wrong.

In a previous thread, I asked the question of whether it’s possible to isolate the Web and its tools (Facebook, Twitter, etc.) as the originating source of distraction or whether the inability to concentrate is also attributable to a priori Web changes in education systems, the proliferation of media (print billboards as much as online spam), the migration to magazines and snappy articles, television and fast-editing and also the advent of mobile technologies. Even the lack of conversation around a family dinner table can affect our abilities to concentrate. Fewer and fewer families sit down for an hour over dinner and simply converse and care.

How is that affecting our abilities to sit still, contemplate and concentrate?

Let’s also make this anecdotal observation and ask the scientists to source and analyze the empirical evidence. Bill Gates, Steve Jobs, Larry Ellison, Michael Dell, Michael Bloomberg, the Google founders are all long-term technically “plugged in” to this “living in two dimensions,” and must get more emails, IMs and so-called “sources of distraction” than most. Yet they managed to remain focused and to increase the value of their companies and the knowledge repositories of their staff.

In my own case, I don’t treat tech tools as distractions. I take my fishing rod and aim for the sweet, giant Salmon of Wisdom (bradán feasa).

:*).

Hopefully, I’m not going to lose concentration or consciousness any time soon since there’s a lot I’d like to contribute.

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In case anyone’s unfamiliar with the salmon mythology, please refer to ‘The Boyhood Deeds of Finn MacCumhal’:

• http://www.luminarium.org/mythology/ireland/finnboyhood.htm

Friends who read this blog will know that I learnt the story about the Salmon of Wisdom / Knowledge  when cuil launched since that’s the story they regaled the tech sector with. Obviously, I applied it in a completely different way from the cuil team — LOL!

DOCUMENTARY WITH ME: QUOTES

The documentary in which I appear will be shown this coming week on a movie screen. Some of the quotes from the film used to market it are:

This week opens with the sad news that more British soldiers have lost their lives in the run-up to the elections in Afghanistan and the political hot potato/soccer ball which is the US healthcare reforms bill. The contrast between honorable men dying for their countries and in protection of the principles of democracy with dishonorable ones campaigning with smear and fear tactics about “evil and Orwellian NHS” could not be starker.

So here are the inspirational people for this week.

(1.) NHS workers

According to the NHS Information Service, as at September 2008 there were 1,368,200 staff which represents a 28 percent increase compared with 1998. That’s a positive sign that investment and employment opportunities continue to be made in the NHS. Yes, it’s unfortunate the system isn’t as efficient as it could be and that resources get stretched to what seems to be breaking point before recovering back to shape (or at least flexing to accommodate the additional increase in patient care). Importantly,

THE NHS DEMOCRATIZES HEALTHCARE FOR THE HAVES AND HAVE NOTS.

It’s not Orwell that that certain strata of US politicians should educate themselves about. It’s JK Galbraith, David Lloyd George and Aneurin Bevan.

The fact is that not all of us can afford to fly to the best specialist clinics around the world. Likewise, not all of us have access to a Harley Street doctor who charges GBP150 per hour for a consultation or a private dentist who costs GBP100 for a simple routine check-up. The majority of people cope with average annual household income of around GBP30,000. With this, they have to pay towards the education and raising of children, weekly bills (rent, food, electricity/gas) and other expenditure (home, travel and the odd vacation). At the extreme ends of the superrich-poverty line there are those who have to survive on less than GBP5,000 a year. That does not leave much space for private medical insurance or healthcare.

We’re also talking about elderly and infirm people who may not have relatives who can afford to take care of them or pay for their health services.

Instead of wasting US$1 million of voters’ money to produce an advert attacking the UK’s NHS, those American politicians would have spent it more wisely donating it to their local cancer hospital to pay for staff, equipment and patient care.

(2.) Usain Bolt

A different athlete from Roger Federer (a showman more than a gentleman), yet Usain Bolt is just so inspiring with that showmanship and audacity!

A phenomenal sprint to break the 100m world record at 9.58 seconds and we’re all waiting to see him smash the 9.50 barrier next!

Today the FT is carrying a forum discussion on Queen Elizabeth II’s question, “Why did no one see this crisis coming?” Some of the comments are spot on and some are grossly wide of the mark and delve into all sorts of irrelevant macroeconomic theories about the roles and forecasting perspicacity of economists.

* http://blogs.ft.com/arena/2009/07/28/economists-what-is-the-point/

* http://www.ft.com/cms/s/0/21c911f6-7b66-11de-9772-00144feabdc0.html

Incidentally, the reply provided to the Queen was:

“A failure of the collective imagination of many bright people” who were all “doing their job properly on its own merit.”

LOL, a diplomatic and charming platitude albeit not one which helps us to collectively accept fault, learn from mistakes or progress towards implementable solutions.

TWAIN’S ANSWER

Firstly, banking is not about imagination. It’s about facts, numbers, analysis and decision-making (including sometimes misinformed judgment by those with sign-off power). It’s about bottom lines, value propositions, growth potentials, hedging strategies, risk management and product innovation. Unfortunately, few bankers will have the imagination à la a Steve Jobs, a Steven Spielberg or a Tim Burton to envisage the potential horrors, carnage and devastation of portfolio and value decimation, and also how to create a much more beautiful scenario of wealth creation triumphing over the financial carnage.

[Besides which, bankers are trained to deploy words like "resizing" rather than carnage so already this shows lack of verbal imagination.]

Secondly, not all bankers are bright — although the ones who are are seriously brilliant, dynamic in their intelligence and phenomenal. Meanwhile, some may be academically highly qualified (every Ivy League / Oxbridge / Tsinghua / INSEAD / Bocconi MBA under the sun), yet unfortunately they may also lack common sense and a commitment to ethical corporate social responsibility even if they’ve studied it and passed the academic exams.

My great friend GC and I recently discussed how Harvard MBAs have created their own code of ethics:

* http://www.thecrimson.com/article.aspx?ref=528381

* http://www.businessweek.com/bschools/content/jun2009/bs20090611_522427.htm?chan=bschools_bschool+index+page_the+mba+life

Thirdly, not all bankers do their own jobs properly. For example, I’ve inherited investments which were poorly due diligenced, burning cash at unacceptable rates, had barely any business model and an underperforming management. As soon as the investment was under my responsibility that changed. I’ve also read internal and external management consultancy reports which were so nonsensical it made me put a freeze on buying them.

My colleague (Harvard, Cambridge) put into my evaluation review that I’m “prodigious, highly competent and have excellent collaboration skills” but this isn’t true of all bankers and even I have my odd moments where I don’t meet my own high standards — like the time a Director of Compliance almost derailed one of my negotiations through his own misinformation and ignorance, and I became a lot less charitable in my collaboration with him. Still, I managed to make a successful case for our Legal Counsel’s nomination to the newco’s executive board, so my annoyance didn’t last long. LOL.

Most importantly and relevant to how economists missed the signs of crisis is this: economists in banks get nowhere near the information which really matters — the balance sheets on whatever transactions and bond issuance are being included into the risk management systems to comply with various Basel II, international GAAP and regulatory body requirements.

That’s not the economists’ fault. It has to do with Chinese walls between business units and lines of responsibility. Chinese walls are oriented to protect confidentiality but they may also exclude information being passed to enable business units to risk manage and do their jobs. It’s the way the system is: needs improvement, work-in-progress.

Anyway, only a handful of people in CEO-Chairman’s Office may get clearance to that confidential analysis, so there’s actually little chance of any economist anywhere being able to accurately call the crisis — even if some may be being celebrated by the media as economic sages.

The media itself has some failings in its role as the Fifth Estate, to help us keep society in check and optimally functioning, wrt the global financial crisis. Some of the opinions from their business journalists have been laughable, although there have also been some excellent coverage too — such as by the New York Times and the Washington Post.

Interestingly, in one of the FT links, Galbraith is quoted:

JK Galbraith remarked that one of the greatest pieces of economic wisdom is to know what you do not know. Regulators and supervisors did not know complex financial products and processes, or the impact of low economic volatility on risk management systems.

(source: http://www.ft.com/cms/s/0/21c911f6-7b66-11de-9772-00144feabdc0.html)

I’d place an addendum to Galbraith: “An economic wisdom is to understand that to achieve perfect information for properly functioning capitalism, as proposed by Adam Smith, it’s our responsibility to find the information we don’t know and to assimilate it into our systems.”

This takes us towards building context, clarity and consensus views in a truly democratic, open and capitalistic model.

Anyway, what’s the solution to prevent future global financial crisis of this ilk? Simple: build a consortia platform involving the banks, the governments and the regulatory bodies on an international basis to share and flag bubble build-ups.

Is it do-able? Yes.

Does the technology exist? Yes.

Will it synch with the vested competitive advantage interests of different groups? Yes.

How can I be confident about this? Well, you see all the institutional trading platforms out there from Equities to Fixed Income to IR-FX? Who wrote some of their investment proposals, negotiated terms of agreement, got weekly updates from their CEO/CFO/CTOs, was involved in writedowns/reinvestments and knows how their technology works and interconnects on a cross-organizational basis?

Yes, yours truly. My sole stipulation now would be that anyone who wants me to be part of project managing the build would have to remunerate me extremely well for my knowhow.

Plus that no one’s allowed to comment on my prettiness* and just lets me get on with the project.

FINANCING VIA SOCIAL NETWORKS

The FT also carries this article on how some tech entrepreneurs are crowdfunding by leveraging social networks:

* http://www.ft.com/cms/s/0/c037ae5c-7b92-11de-9772-00144feabdc0.html

This is not a new concept, it’s how some independent film producers have been raising up to GBP1 million to make their features. What the article points to is how difficult it is in the current environment to raise new capital, especially in Series B and C rounds for development financing.

Ergo, tech start-ups would be well advised to abide by Sequoia Capital’s points about conserving cash and not burning it on poor marketing strategies.

My observation from crowdfunding via socnets which is different from the VC approach is that:

(1.) It triggers issues relating to compliance with FSA/SEC/Consob etc. rules regarding investment advice and protection of investors’ interests.

(2.) Social network investment is more likely to be a one-off transaction whilst the VC is more likely to repeat reinvest.

(3.) VCs and their network of investors tend to be able to bring expertise and contacts to the company which people on a social network merely taking a “punt” of GBP10 or less may not be able to offer.

(4.) The administration involved is different. With crowdfunding there are more investors to update and the paperwork may not be of a regulatory standard.

(5.) VCs have a more established path to institutional investors which is important if your strategy is likely to involve plans for floatation or acquisition by a media giant.

Anyway, it’s a personal choice: go with a handful of VCs and investors you meet face-to-face where you can develop deep and longer-term relationships of trust or go with many kind-hearted strangers on a socnet whom you may never meet face-to-face because of geographies and get to know each other better online.