A Blog by Jonathan Low

 

Dec 26, 2015

What Was Fake On the Internet This Week: Why This Was the Final Column

It may be that we have so successfully curated our own self-confirming and self-reinforcing digital narratives  that we believe almost everything that supports our predispositions and almost nothing that disputes them. In that scenario, either everything is fake - or nothing is. JL

Caitlin Dewey comments in the Washington Post:

Institutional distrust is so high right now, and cognitive bias so strong always, that the people who fall for hoax news stories are frequently only interested in consuming information that conforms with their views — even when it’s demonstrably fake.

Bikes, Bowling Balls and the Delicate Balancing Act That Is Modern Recycling

Reflect on some of the weird stuff you gave and received. Now think about how it is going to have to be disposed of when you're done with it. Yeah, even weirder. JL

John Timmer reports in ars technica:

A lot of technological innovation has gone into figuring out how to take a chaotic mix of items and separate it into relatively pure streams of materials. But being able to do so isn't enough—it has to be made into a sustainable business. So today, a lot of the innovation that is taking place in the recycling industry must dually focus on the economics.

How Google and Disney Are Preparing For the Business World To Come

After the past two decades, managers and employees could be forgiven for believing they had embraced all the change and disruption they could handle.

But a glimpse at the actions of some of the biggest names in business suggests the pace and intensity may grow exponentially. The infamous 'butterfly wings' effect of chaos theory are becoming stronger in a more connected world. JL


Geoff Colvin reports in Fortune:

Disney’s Star Wars: The Force Awakens just had the greatest opening weekend of all time. But the world barely noticed that Disney’s stock price plunged about 5%. What gives? While most people were watching the box office numbers (or the movie), investors were focused on big-picture strategy. Ford and Google met earlier this month to discuss the idea of self-driving cars (which) was widely dismissed as impossible only a decade ago

For Today's Customer Service, 'People Are Our Most Important Asset' Better Not Be Lip Service

Welcome to the day after Christmas. Many organizations are so focused on their pre-holiday sales that they forget it's the way they handle the disappointment and frustration of the less glamorous, more difficult post holiday rush that may define their relationship with customers.

And, as the following article explains, effectively training and motivating employees is just as important - if not more so - than all the technological innovations crammed into the system. JL

Micah Solomon comments in Forbes:

At too many companies in too many industries, “People are our most important resource,” is the most cynical of platitudes. But in a customer service-intensive business, no truer words could ever be spoken. You can’t even come close to creating a customer-centric organization until you learn to effectively recruit, retain, and develop employees.

The World's Data Will More Than Quadruple In the Next Five Years

Awesome. Now all we have to do is collect, manage and interpret it...JL

Quartz reports:

Data is expected to double every two years for the next decade, hitting 45,000 exabytes in 2020.

Dec 25, 2015

Amazon's Complete Retail Domination in One Tiny Chart

Domination accelerating. Photo may not be appropriate for children enjoying their free Prime one-day delivered presents. JL

Jason Del Rey reports in re/code:

Amazon accounts for a quarter of every new $1 of growth in all of retail, including brick-and-mortar sales.

Apple's Ecosystem Got Harder To Leave Than Ever This Year: Expect More of the Same Next Year

Resistance is futile. JL

Andrew Cunningham reports in ars technica:

Apple is worming its way into every crevice in your digital life—your car, your doctor’s office, your wallet, your house. With iOS 8 and OS X Yosemite, it also deepened the links between its different product lines, making it easier to bounce information around among your various Apple devices.

10 Classic Christmas Songs Written By Jewish Songwriters

 Oy. JL

Sarah Karlan reports in BuzzFeed:

'White Christmas,' 'Rudolf,' 'Let It Snow,' etc

A Hedge Fund Billionaire's Plan To Close the Wealth Gap By Ranking 'Just' Companies

The idea of a 'social index' measuring 'the new wealth of nations' has been bruited about for decades. It has never gained much traction because of the suspicion held by those who have wealth that this is just another income transfer scheme. That attitude was most ferociously articulated by economist Milton Friedman, who argued that a corporation's most important purpose was to make profits for shareholders.

The idea that doing well by doing good now gets more respect due to the perception that it is in businesses' self interest to promote a more affluent society (which will then buy its products and services in greater volumes), measuring 'just' companies will be insufficient if capital controlled by billionaires like Mr. Jones is not deployed to support those that are so ranked vs those that aren't - even if there is a short term cost to investors. That will probably be the only true test of the concept's efficacy. JL

Alessandra Stanley reports in the New York Times:

Just Capital will rank corporations on how “justly,” they treat employees, society and the environment. The idea is to laud companies that offer better pay, happier workplaces and greater transparency — and perhaps shame others to follow suit. This kind of moral index, Mr. Jones said, “could not only impact investors, it could impact consumers, it might impact the way companies hire, the way people go and work with companies; it will impact boardrooms.”

Where To Say Merry Christmas versus Happy Holidays

Merry Holidays?! JL

Andrew Lewis and Paula Djupe report in 538:

.‘Tis the season for some to take offense when a store clerk says “happy holidays” instead of “merry Christmas,” or when a coffee chain converts to plain red cups.

Economists Argue That Giving Gifts Is An Inefficient Reallocation of Resources

Yet another reason why calculating the value of intangibles deserves greater respect.

Merry Christmas. JL

Josh Zumbrun reports in the Wall Street Journal:

Anyone who has had microeconomics knows that an income transfer, as opposed to a gift in-kind, gets you to a higher level of utility. Putting theory under the tree is another matter.

Dec 24, 2015

Record Breaking 100 Million Americans Traveling This Holiday Season

Sounds like fun! Remember to take your Xanax. JL

World Property Journal reports:

Nearly one in three Americans will take a trip this holiday season, with 100.5 million expected to journey 50 miles or more from home. This represents a 1.4 percent increase over last year and the seventh consecutive year of year-end holiday travel growth. The year-end holiday travel period is defined as Wednesday, December 23, 2015 to Sunday, January 3, 2016.

All the Ways Christmas Tries To Kill You

Preparing is hard enough. But that taking down and putting away - both mentally and physically - will get you every time. JL 

Leah Libresco reports in 538:

The National Electronic Injury Surveillance System  has specific codes for Christmas-related injuries. Nearly half of all Christmas-related injuries (47 percent) were the result of a fall while decorating or putting decorations away.

The Amazingly Persistent - and Successful - Sidewalk Christmas Tree Salesmen of New York

How strange corners of the global economy provide another testament to the enduring strength of the human spirit. JL 

Rosie Cima reports in Price Economics:

Selling trees on the sidewalks of New York City in the dead of winter. Why? The short answer: Money. Christmas trees in New York City are a peculiar market. A salary plus commission after a certain quota for the month, which comes out to considerably more than a month of working a full time job for $20 an hour. For a lot of the flexibly employed people selling Christmas trees, it’s enough to live a couple months of the new year without having to work.

Why Google Is Testing Signing Into Your Account With Just Phone, No Password

It's for your protection and benefit, of course! It makes phishing that much harder. And, yes, it is does theoretically make buying stuff with your phone that much faster - as well as being another way of keeping you inside the Google ecosystem so you're not tempted to use competitors' devices or networks...JL

Emil Protalinski reports in Venture Beat:

One advantage to this new way of signing in is the protection against phishing (the attempt to acquire sensitive information such as usernames, passwords, and credit card information by masquerading as a trustworthy entity). Because the phone becomes the password, so to speak, users can’t exactly hand their device over via a text message, email, or err … over the phone

How Walmart Has Learned That Clutter Sells

Commerce follows life. After all, what are closets for? JL

Paco Underhill reports in the New York Times:

Walmart decided it needed less cluttered-looking stores, so it cleaned out its aisles and tried to streamline its merchandise and in-store promotions. They were wrong. Sales declined, resulting in more than $1 billion in lost revenue. Stuff went back into the aisle and sales went back up. Ron Johnson, a veteran of Target and Apple, tried to streamline the stores of J. C. Penney. Sales dropped 25 percent, and Mr. Johnson was out of a job the next year.

Gadget Overload: Are Gizmos Losing Their Appeal?

Five of the six gadget makers in the Russell 300 are down this year, including GoPro. And it's not just the fun little guys: Apple is down 3% for the year.

The issue may be that people are finding they have enough - even too many - gadgets and are tired of lugging around all the specialized equipment plus their supporting dreck like multiple power cords.

With household incomes flat or down for the majority of consumers across most of the developed world, it may be time for a pause meaning those declining unicorn valuations are not just a financial technicality. JL

Matt Krantz reports in USA Today:

Investors are clear on which gizmo makers are worth owning: None. It's been a bust of a year for investors in gadget makers. Five of the six consumer electronics stocks in the Russell 3000, including camera maker GoPro (GPRO) are down this year. They're not down a little. An equal-weighted index of the stocks is down more than 21%.

Dec 23, 2015

Last Minute Gift Idea: Autonomous Weaponized Robots

For that hard to please member of the family who doesn't have control issues? JL

Noel Sharkey reports in the Wall Street Journal:

Autonomous weaponized robots are already being used by the military to patrol borders, and a Texas company has created a drone to hover over private property and, without human instruction, fire a Taser dart to keep a potential intruder under shock until the authorities arrive. Imagine facial-recognition capability. Don’t forget: They can be hacked

Why Google and Ford Would Choose Each Other To Team Up For Building Self-Driving Cars

For those besotted with Tesla or the notion that no traditional US auto manufacturer is cool enough to develop the first commercially viable autonomous auto, it is worth remembering that Henry Ford was arguably the dominant entrepreneur of the industrial age and that Ford Motor Co. pioneered many of the innovations that made contemporary business and life possible.

It also bears saying that creating a multidimensional global manufacturing, marketing, distribution and service business is just a tad more complicated and risky - no disrespect intended - than search. The reality is that both companies bring tangible and intangible assets to this effort - and both can learn from each other. JL

Catherine Shu reports in Tech Crunch:

Google gets a partner to help it handle the expense and hassle of actually manufacturing autonomous vehicles, especially if it plans to make cars available for personal ownership as well as transportation systems. Google has said (it) plans to work with “top-tier OEMs” instead of keeping everything in-house and will find partners to build cars. Ford (gets) an edge over rivals.

US Supreme Court Hears Growing Number of Class Action Lawsuits Pitting Companies Against Consumers, Workforce

The current US Supreme Court has consistently ruled in favor of business over the rights of consumers, workers and individuals concerned with everything from privacy, to financial matters to safety.

Increasing challenges from industries as diverse as technology and food processing continue. The question now is whether the court has gone too far in one direction - and will do something about it - or stay the pro-business course they have set. JL

Richard Wolf reports in USA Today:

If the corporate defense side gets what they’re asking for, class actions involving privacy or violations of the wage and hour laws will shrink dramatically, and in many cases become impossible.

California Approves Flywheel, the App That Makes Taxis Work Like Uber

Attitude matters. It just may be that Uber's confrontational and arrogant stance with regard to governments all over the world is that those governments are now only too happy to level the playing field for its competitors. JL

Andrew Hawkins reports in The Verge:

Cab drivers have long complained that taxi owners' failure to innovate helped facilitate Uber's rise to prominence. A smartphone in every car is the only way to advance the taxi industry, and we now have a mobile platform that can replace every expensive and outdated piece of taxi hardware.

It Must Be Christmas: Because Target Is Losing Customers' Data. Again.

Sounds like some people are not going to have a relaxing holiday with the family. JL

Timothy Geigner reports in TechDirt:

Target app’s Application Program Interface (API) is easily accessible over the Internet. An API is a set of conditions where if you ask a question it sends the answer. The Target API does not require any authentication. The only thing you need to parse all of the data automatically is to figure out how the user ID is generated.

Sticky Sales: Or, Why Don't Retail Prices Change Continuously?

An important question posed just in time for holiday sales. Given all the data at our disposal about consumers and their reaction to advertising, promotions, sales events and the rest of the marketing oeuvre it should be possible to change prices continuously and instantaneously in order to optimize outcomes. But are the data maybe suggesting that isn't all we really care about?  JL

Phil Davies reports in fedgazette:

Economists are interested in sales, not because they want cheap stuff (well, maybe they’re as partial to a deal as anyone), but because price flexibility—how quickly prices adjust to changes in costs or demand—is crucial to understanding how fiscal and monetary policy affect economic performance.Temporary markdowns barely respond to changes in costs and economic conditions, suggesting that monetary policy generates only muted change.

Dec 22, 2015

Are Social Engagement Metrics a Proxy For Awareness?

Awareness is a means, not an end, so even if social engagement metrics are a indicator for it, the benefit is not necessarily established - or even apparent. JL

Katie Paine curates a discussion in The Measurement Advisor:

Beware of spurious correlations. I have difficulty understanding where the physical act of clicking or the writing a few thoughts ‘engages’ me fully cognitively or affectively in an issue, brand, or whatever.

The Reasons Microloans Won't Solve Poverty

Microfinance was everyone's feel-good anti-poverty program: it's a capitalist approach which funds individual initiative rather than relying on massive government giveaways. It captured the zeitgeist in that it encourages a form of peer-to-peer lending enabled by the internet. How cool.

But the data, so far, suggest little change in the recipients' lives. It is possible that there has not been enough time to see the changes wrought, but it may also be that the design and terms of the microfinance movement need to be adjusted to make it more effective, assuming that improving lives, not ideological purity,  is the intended outcome. JL

Ben Casselman reports in 538:

Microlending programs had little to no effect on participants’ income or financial well-being. Studies find no evidence that borrowers are, on average, hurt by the loans. But they don’t appear to be helped much. None of the studies found statistically significant increases in household income or spending. Four of the six found no change in food consumption.

How Big Data Can Reduce Risk and Improve Insurance Margins

The advantages are that big data may provide insurers with the information to better price their product and offer consumers more coverage for less risk. The danger is that the information will be abused and customers charged more due to the asymmetric application of knowledge to the insurers' advantage.

The broader availability of data means that, on balance, there is more transparency in the market. The question then becomes who is better able to optimize its value. - the public or the industry. Business would seem to have an advantage, but entrepreneurs entering the industry may use the same data to level the playing field. JL

Bernard Marr comments in Forbes:

A way to more accurately assess risks? Big Data technology – genetic profiling and behavioural analytics – give us the chance to draw an empirical distinction between when ill health is caused by bad choices, and when it’s down to genetic factors beyond our control. (But) ethical concerns, such as privacy, need to be taken very seriously.

Google and Facebook Are Open Sourcing AI To Better Compete

To paraphrase the band Dire Straits, 'money for nothin' and ideas for free.' JL

Cade Metz reports in Wired:

Open sourcing hardware designs can help reduce the cost of the machines. If more companies start using the designs, manufacturers can build the machines at a lower cost. And if more companies use the designs to do more AI work, it helps accelerate the evolution of deep learning as a whole—including software as well as hardware. So, yes, Facebook is giving away its secrets so that it can better compete with Google—and everyone else.

Will Labor Laws Ever Catch Up With the Gig Economy?

The search for 'the middle way' is as fraught in labor classification for the gig economy as it is in taxes, guns, income inequality, discrimination and a host of other contentious societal disputes. The challenge is that much of the debate about these issues is based on moral - and emotional - beliefs, not on a pragmatic search for a negotiated solution.

In the case of the employee vs contractor dispute at the heart of the gig economy discussion, sensible proposals have been suggested to provide more protections than are currently offered, but fewer than most people prior to the decline in household incomes (which accompanied the beginning of the dotcom-cum-financialized economy era) were accustomed to believing was their due. And that most of those affected still think should be a right.

Labor law may begin to address the inequities - which are also inefficiencies negatively impacting productivity - but the solution will probably arrive via idiosyncratic company-by-company compromises - or  a wholesale political change whose advent does not appear to be on the near horizon. JL

Gillian White reports in The Atlantic:

We don't have a rich and deep government-provided social-safety net. If we look to the government as the place the social-safety net is going to come from, we'll fall short. At least for now, industry and workers will have to figure out a way forward on their own, while regulators and laws play catch up.

Dec 21, 2015

To Infinity and Beyond: Disney's Strategy For Buying the Future of Childhood

In financial terms, Disney has purchased a contract on the storytelling future at the heart of global childhood. And it is monetizing that investment. JL

The Economist reports:

What has set apart Disney is its determination to put storytelling at the heart of its business, and its ability to get its hands on new characters capable of bringing fans back again and again. Disney is making a fortune and safeguarding its future by buying childhood, piece by piece

How the Economic Fate of America's Regions Declined Relative to New York, San Fran and a Few Other Coastal Enclaves

The accompanying chart shows how incomes have declined in regions outside New York, San Francisco, Washington and a few other coastal cities.

The reason, as the following article explains, is that policies favoring concentration of wealth have benefited not just a few individuals, but a few specific areas. And what is curious is that these changes have not helped areas of increasing political power like the Southeast, the Plains states and the Rocky Mountain West.

Money goes where it's owners want it to go - and it isn't tied down by traditional loyalties. JL

Phillip Longman reports in Washington Monthly:

Geography has come roaring back as a determinant of economic fortune. Throughout most of the country’s history, American government  pursued policies designed to preserve local control of businesses and to check the tendency of a few dominant cities to monopolize power over the rest of the country. Each of these policy levers were flipped in the opposite direction, usually in the guise of “deregulation.”

Blackberry Turnaround Plan Gains Traction

Wait. There's a real Blackberry turnaround plan? Does nothing in tech ever just die? JL

David Crow reports in the Financial Times:

Some analysts expect BlackBerry to sell off its handset business once its software division has sufficient scale.

Signs That Silicon Valley's Cash Party Is Coming To an End

You mean this time it's not different? JL

Ari Levy reports in CNBC:

Private cloud companies are being valued at 11.8 times revenue, down from a peak multiple of 15 earlier in the year. IPOs remained weak, with tech companies going public at the slowest rate since 2009, and most of those that hit the market failing to reward late-stage investors.

Is Amazon About To Enter Air Delivery, Taking On Fed Ex and UPS?

You shouldn't start a war unless you're quite sure you can win. France and Germany both learned that lesson the hard way in Russia in two successive centuries.

But in business, when you think it may make financial and strategic sense - and you think you're smarter and more efficient than everyone else - management may be tempted.

Amazon has always embraced risk despite Wall Street's aversion to uncertainty. And Amazon has demonstrated that, more often than not, it has the brains and the operational chops to finish what it starts. Whether this venture is deemed 'bold' or 'foolhardy' will depend on the outcome. JL

Jay Greene and Dominic Gates report in the Seattle Times:

Amazon is fed up with the third-party carriers being a bottleneck to their growth.
That has led Amazon to consider handling more of its own delivery. The company has approached several cargo-aircraft lessors to line up planes. Leasing 20 jets would be a significant expansion of an Amazon trial operation out of Wilmington, Ohio

Why Collaboration Is the New Competitive Advantage

In an era driven by change and disruption, it should not be surprising that even the nature of competition is evolving. It used to be that competing was a competitive advantage. Whoever accumulated more, won. But just like the algorithms that power so much of the decision making process, life has become more complex.

So despite decades of Marlboro Man-inspired, 'my way or the highway' bombast, the lone cowboy on the white horse is about as relevant to contemporary decision making as his saddle and spurs.

The reality, as the following article explains, is that optimization in a financialized economy doesnt have much time for myth, sentiment - or ego. When you're working as much with machines as with humans, the facts have to add up. And success demands that leaders and their organizations learn to work with who or whatever can optimize desired outcomes. That may require a broader mindset. But in a networked world, the results justify the shared credit. JL

Greg Satell comments in Digital Tonto:

The premise of Porter’s competitive advantage— increase the whole by optimizing each of the the parts in isolation—has become untenable. Machine intelligence is replacing human cognitive power much like machines replace(d) muscle power a century ago.  What drives value is the ability to collaborate with both humans and machines. In the past, we could dominate by accumulating resources and driving efficiency, but now agility and interoperability rule the day.

Dec 20, 2015

The Beatles Entire Catalogue May Begin Streaming - Christmas Eve

"Let it be"  Yeah, right. JL

Andrew Flanagan reports in Billboard:

There's a strong indication that fans will be able to hear "Hey Jude" on Thursday, Dec. 24. (Keep an eye out for whether Liverpool's most famous sons unseat Justin Bieber's streaming record.)

Inconvenient Questions About Artificial Intelligence

Knowing who to be afraid of - and why - is not getting any easier. JL

Izabella Kaminska comments in the Financial Times:

Do the interests of an elite club of Silicon Valley billionaires really align with the interests of humanity?
Cynics might suggest this is mostly an attempt to stop the advantages of artificial intelligence being monopolised by a single corporation or person.

How Data Can Predict Which Cops Might Commit Misconduct

There are data available and they can predict, inexorably, where the problems may lie. The challenge, as in most organizations, is whether management really has the will - and the courage - to follow where the data lead. JL

Rob Arthur reports in 538:
The data show that officers who rack up many complaints are more likely to end up having a complaint sustained, suggesting they really are bad cops. Officers with a history of one or two complaints in 2011-13 have a 30 percent to 37 percent chance of receiving a complaint in the following two years. Repeaters — those with 15 or 20 incidents — are certain to have a complaint against them in 2014-15. There is a clear signal in the data of the bad actors and, whether they are going to commit misconduct.

How Corporate Culture Impacts the Employee Experience

'Culture is what people do when no one is looking.' Herb Kelleher, founder, Southwest Airlines. JL

Jacob Morgan comments in Forbes:

The three experience environments that all organizations much focus on are: physical, cultural, and technological.Some common themes start to emerge, namely around the role of leadership, open collaboration and communication, transparency in the workplace, embracing vulnerability.

Humans Keep Slamming Into Driverless Cars, Exposing Conceptual Design Flaw

The flaw? Well, engineers being engineers, as creative and innovative as they may be, tend to believe in rules. Especially for driverless automobiles.

Humans, as we all know, have a rather more flexible relationship with the law, especially when they are behind the wheel of a car. So putting the two together on the same road can, evidently, introduce a conflict of perceptions that is occasionally more tangible than intangible. JL

Keith Naughton reports in Bloomberg:

The vehicles have racked up a crash rate double that of those with human drivers.
The glitch?
They obey the law all the time, as in, without exception.

Tail Wagging Dog? Apple Rejigs Top Ranks Amid Wall Street's iPhone Nerves

Apple seems unassailable: revenues continue to grow, its initiative in China going smoothly - and it has captured approximately 90% of the global profits in the entire mobile phone market.

Which has simply increased the paranoia of the investment community, focused as they are on whether such growth can continue. And perhaps more to the point these days, whether the company can guarantee that, because in this economic environment, any hint of uncertainty is considered tantamount to failure.

So Apple's executive reshuffle was probably less about operational efficiency than about reassuring querulous analysts that it was taking their concerns seriously. Talk about the tail wagging the dog...JL

Tim Bradshaw reports in the Financial Times:

Wall Street analysts again become anxious about whether iPhone sales can continue to grow over the coming year. Apple has seen huge growth in the scale of device production, particularly the iPhone, which grew shipments by more than a third last year.