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The marginal value of technology

William Preece, in 1878: "The Americans have need of the telephone, but we do not. We have plenty of messenger boys."

It's really hard to predict the impact of a new technology on a society. Many things that were meant to change the world (the segway) didn't and so many things people had no idea they "needed" all the sudden prove to be invaluable.  When I was a young IT guy I was asked if this new email system was a "toy", and why would I type a message instead of walk down the hall or call.  And Yet that's exactly what we do now, we send electronic messages many times to people we are in clear view of.  But why? I propose it's the marginal benefits of technology that we just overlook.   

Marginal benefits are so hard to see or quantify.   Take for instance the automobile, at first we might say, what major advances have been made in the automobile in the past 50 years?  They still get us from work to our kids soccer game so why hasn't something better come along?  Well the Model T was about $22,000 in today's dollars, about the same cost of a new sedan today.  For that though we get more comforts, like AC, safer cars and cars that go faster.   Most importantly cars last longer than they ever have.  They are more reliable than ever.   The average car on the road is now over 10 years old.   This means we can get to work without spending money on repairs, it means we can get places reliably and quickly.   Long lasting cars also means that there is a used car market whereby you might be the 3rd or 4th owner of a car.   This pushes the price of used cars into the affordable area for all members of society.  More cars, more people who can contribute to society, more people to buy goods and services, and visit friends and family.    The automobile has advanced and has helped to contribute to our GDP, through small advances over and over.  

The same can be said of other technology specifically what happens on the internet.   Could I mail something instead of email it?  Of course but it wouldn't get there as cheaply or quickly or more importantly without much effort.  Could I go to the store and buy a new book instead of download it?  Again yes but I'd probably buy fewer books, and thus read fewer books and be less informed.   How about buying a new car?  I mean I still have to go buy those right.   Only now with the internet to I have almost "perfect information"  I can know what I should pay, what the reliability of the model is and without leaving my chair know if there are any for sale within 200 miles of me.  This saves me time, money and makes me happier about my purchase.  I can now take those savings and invest or spend in different ways.   Almost every purchase can be enhanced by having access to the internet.   Sometimes its ease, sometimes price, and sometimes it's just making a smarter decision.   All of this happens millions upon millions of times every single day all across the world.  The marginal benefits are hard to see but they multiply and compound over time creating more productivity.  

Even the oft maligned social media channels have marginal benefits.   It's easy to point to stories that show marriages being destroyed or jobs being lost as a result of social media.  The part that's hard to see is those friendships which begin online and later become "real life relationships".  It's hard to see that millions of times a day people feel more connected to friends, family and co workers.  It's hard to see that almost 20% of job seekers found their job because of Facebook.   It's hard to see that you can maintain more connections than have ever been humanly possible.   All marginal benefits, little bits of benefit that multiply compound and add up over time, creating a sense of more connectedness and shared experiences.  

The title of this Blog is Lean, Nudge, Push, Change, Transform, primarily because I think the best changes are almost imperceptible.  They take place as little changes, one a time piled on top of one another.   I believe that our world is getting better, day by day through advances in technology of all kinds.   Any advance in communication will undoubtedly make lives better for us, mobile, social, photos, news.    The world is getting better and it's exciting that it is happening at such a breakneck pace, even if it happens in an invisible marginal way.  

Disrupting education- Beyond the facts of Education

This week I moved my oldest daughter into the dorms as she started her college journey.  When this happens to you, you'll find yourself doing a lot of reflection.  One of the questions that get asked a lot is college expense worth it, is it still the right way to educate people today.  Additionally, there's no lack of startups trying to disrupt the education space these days.   CodeAcademy, khanacademy, iTunes and all the open courseware projects are some of the more popular ones.  When I was taking part in the founder institute it seemed as though fully one third of the people there had ideas that revolved around education.    There's nothing more important to a society, country, worlds future than the education of the people.  Democratizing the information is ONE step in helping provide an education but the more I think about it I'm not sure it's the most important one.   

The following is a list is a think "traditional" based post secondary education does better. These are problems that need to be solved by those who want to change education. 

1. Having the information available doesn't mean it's going to be learned or even consumed.  

I think this is the biggest misnomer about education available on the internet.   Libraries have always provided people a way to educate themselves.  No, That's not video, and it's not interactive and there's lots of things libraries aren't but the information is there to be consumed.  Having the information out there just means I can learn that skill, task, subject TOMORROW because there's always tomorrow.  However, what's missing is  the public commitment, hard deadlines and social aspects of going to school help to provide social pressure to finish what you start.  Not everyone will finish but there's a very public aspect to enrolling and telling people that you can't go out to dinner because you have class in the morning.   There are people to be accountable to, classmates, teachers, family and friends and your bank account.  You've made a public declaration and dropping out means admitting that to people.  Dan Ariely has done a significant amount of work in this area ,  what he found it is students perform much better when they have NO say about what deadlines there are,  perform a little better when there are self imposed intermediate deadlines and worst of all when there's no deadlines.  

There's a lot that paying tuition, being required to show up every day and having your course of study planned out for that's unaccounted for today in the "you can learn everything free" startup culture.   This can't be overlooked, or understated.  Think about how many times you've liked to learn how to do something but haven't even taken the very next step.  Now imagine you did take the next step and find the online class that would teach you that but there's no fee, no one knows and there's no deadlines?   There's better chance than not it never gets completed.  There are many instances where people have successfully taught themselves things but this tends to be for those highly motivated, highly passionate people, not those in the fat part of the bell curve.   

2. There's more to being successful than book knowledge. 

One of the advantages is all the "intangible" aspects.  There's the learning how to deal with different people from all different walks of life, ages, belief structures and locations.   There's is the being exposed to all different subjects, topics and teachers.   It's about transitioning out of your parents house and into adulthood within the "safe" boundaries of an institution.  Are there other ways to do this? Without a doubt, however it's a benefit of post secondary education regardless. It's about learning who you are, what the world is like and developing your own style to deal with all of the above. 

3. Sometimes we need individual attention .  

If "the information is out there" why don't we just sit preschool kids down with a television and let them learn from that, then move them to a tablet and internet connection.  Why?  Right now current  environments provide ways to measure and identify students who need help or need things explained in a new way(although not as well as they should).    There are  still occasions when you have questions or don't know you SHOULD have questions.  Individualized training is still needed.   Teachers are there to answer those questions or to provide help when they see students struggling.  In a post secondary environment usually that help is greatly diminished inside the classroom but is still available elsewhere within the institution, during office hours, peer groups or tutoring labs. Many people give up in the process when they were really close to the answer.   Individualized training isn't well accounted for today on the internet.  It works great if you understand right off the bat, it doesn't work well if you don't and have few other resources.   I'll restate from an earlier paragraph, the people in the top quartile of the Bell Curve in a given subject don't need this help, but I'm talking about everyone else. 

4. Facts change- 

I heard it 10 times during orientation last week, facts change, what we teach you will change.   I think a topic based learning isn't really preparing people for jobs that require problem solving which are increasing in our workforce.   Teaching students to problem solve, work together, dig for information and assemble facts to arrive at a conclusion is something that we have to make sure we are doing.   It's fairly common to hear people say "the stuff I learned in college don't apply to my job".  There's still value in the process though, hopefully through the institution they learned how to learn, learned how to problem solve, and learned about all the things outside of facts that will help make them successful.    Yes I can go on the web and learn how to solve for X but I need to be able to apply that.   

The above isn't in defense of the status quo, in fact quite the opposite.  If people don't have to spend $50,000 to receive an education we'd be better off.  There are those that can't, won't or don't and for those cost is probably a contributing factor.   I say that the above are problems that need solving.  I think that there are great opportunities  now with technology to provide a wealth of choices there were never available before, also in the right setup you can have hyper individualized training because we are no longer bound by location.  In fact I think that the only way to "fix" education is to completely re create what it means   Most importantly how to create social pressure for people to both start and finish an education, then help them through the process along the way.   No we shouldn't just keep doing things the way they've always been done, and create a barrier to success.  We need to think beyond just the facts based part of learning. 

Productivity and Software

I read an article about 9 months ago in the Wall Street Journal that has stuck with me.   The author was Marc Andreessen, founder of Netscape, title Why Software is eating the world.   The title is one that is very sticky and the concept is easy to understand.  The Internet combined with Software and cloud or cheap computing is literally changing the world at a staggering pace.  The recent acquisition of instagram  reminded me of this, while much has been written about the price,  the fact that the team was made up of  less than 12 people that served more than 30 million users though hasn't been talked about enough.

I can not think of an example in the history of the world we could have such a small number of people provide goods or services to millions of people.   Software scales like nothing else the world has seen.  A good developer can write code that can serve 10 users or 10 million.   What's more is that through cheap distribution, on app stores, social media, and the web companies can be built with little capital, or at least very capital efficient.   All this comes together so that "software begins to eat the world".   Who today would like to invest in a CD or DVD printing business, or a company that does the printing of books or magazines, what about a travel agency, and the list goes on. Even brick and mortar retailers are downsizing their footprint as shopping moves online. Every day little by little software is replacing labor or physical goods in our economy.

Productivity has increased more than 4X since 1950.  That means that a worker today would just need to work 10 hours today to produce the same level of output of 1950.   I expect that pace will accelerate as more things that were once done in the physical world transition to online, shopping, banking, and even socializing. What's interesting to me as that it's probably imperceptible to most people.  Every day we are able to get more done with less and we don't really see it.   Most of the productivity gains can be attributed to technology and the software that runs it.   This is why it's important to have the best developers you can get, a good one can easily to the work of 5 average ones, and because the work scales there's lots to be said about getting the right people.

Increased Productivity is the key to our success as a country and as humankind and our economic standards of living.   It can "solve" many of our financial issues and provide a better quality of life day to day.   I'm hoping soon that things like software that drives our cars will come into existence freeing up hundreds of thousands of hours a day for people to work while commuting (assuming they need to commute in the first place).    So while software may be eating the world, it will be to our benefit.

In defense of tracking cookies

Recently there has been much concern about letting advertisers track you across websites to provide relevant ads.   Let me start by stating in NO WAY is it okay for google to bypass the user's setting in the browser to display ads.   Now that's out of the way my question is what's wrong with tracking cookies?   Especially if they are anonymous but even if they aren't .  Why wouldn't you want the most relevant ads displayed to you?

If I am planning on making a trip to Las Vegas, some relevant ads might be appreciated.   If I'm looking for a new refrigerator then coupons or offers related to refrigerators are something that I would like to see.   I'm in no way interested in diapers or strollers (our kids are grown) nor as a male would I be interested in cosmetics.   Those ads are pointless and annoying to me.    Yet an ad for the latest documentary movie I'm probably going to watch.   If you happen to be a fan of apple products you'd probably like to see apple ads.    

This is not only important for me it's important for the advertisers.   Ads and marketing are built in to the cost of the goods and services I use.   If those advertisers become more efficient with their ads  then those savings ultimately passed on to me through lower prices or better products.   It's great for the advertisers since they aren't wasting money.  It starts to put an end to the saying that "Half the money you spend on marketing is wasted you just don't know which half". 

  

For decades we have received either no charge or discounted services because of advertising.   Google provides many things I use every day for no charge,  search, gmail, chrome browser.   Every social network relies on advertising, and just about every service people use on the internet.  Even before that we received "free" television,  "free" radio, and discounted newspapers.   Even sporting events and and concerts are subsidized by advertisers.   In these traditional  media sources advertisers had to spend money on people they KNEW weren't interested in their product just to reach those that were.   Now with tracking cookies I can spend that money on those people who are likely to be customers.    Better for the advertiser, better for the customer, better for the site.   The internet will even to accelerate taking dollars from traditional media the more targeted the ads can be.  More advertising pouring into sites means more services can be there and be there for no charge. 

There is little reason that people should be concerned about this, quit being scared about the concept that some guy is looking at your site history and wants to come to your house to sell you something.   Tracking you across sites improves the internet. 

I finally cracked it

For more than a year now people have been speculating on an apple TV.  Not the plug in box but an actual display.  There's lots of reason for the speculation, the fact that they have been dabbling in this space with the apple TV set top box, they sell movies and shows on itunes and it's the last phase of the "digital hub" that  Steve Jobs envisioned.  To me though the most compelling arguments though is that if apple is going to continue to grow it will have to enter gigantic markets.   Given apple's size creating niche products won't move the revenue needle at their scale, and since no one is speculating they build cars, televisions make a lot of sense from a market size perspective.  Finally, jobs said in his recent bio that he wanted a TV that was easy to use and that he "finally cracked it".  

So what could apple do that would be a game changing?  My prediction is that they will partner with a one or two cable providers, let you connect your apple TV directly to the coax and eliminate the cable box, cable remote, DVR, DVD, and every other setup top box.  Other than power and cable it would not have ANY OTHER INPUTS.  Want to play games, use your ipad.  What about your DVD/Blue Ray player? Itunes. 

Here's why I think this will happen.

1. Apple doesn't have enough content to make a device without inputs so they'll need content from somewhere, most people aren't ready to completely give up cable.  I can't see an apple TV that has the same legacy connections today, since that's one of people's largest frustations. 

2. By partnering with 1-2 providers they can get the out of the box experience very "appley".  Plug it in, turn it on sign onto itunes and your done.

3. Limited rollout (think iphone) will create scarcity and thus people will want what they can't have.  Providers will fight to get the appletv, consumers will be asking their providers.  

4. Cable, internet, IPTV, music, games, will all be delivered seamlessly, you won't know/care if it the content is being delivered from the cable, internet, locally recorded, or via apps.   

5. Cable companies get to maintain the "status quo" of getting you to pay $100 and maybe more with easy subscriptions.   They can deliver content in the traditional multicast way or IPTV without you having to know or care, maximizing the value of their network.   Since this TV will only work on their system, you'll be locked in (again think cell phones).  Possibly they could even subside the sale of the device with long contracts.

6. It will create a differentiation for those providers who have it.  My guess is since AT&T did the iphone they'd do this deal, especially since they aren't the incumbent cable provider in most areas.   DirecTV is national but seems many apple fans wouldn't/couldn't put up a dish, therefore might not be the best first choice.

One device, one remote (your iOS device), no inputs, all Apple.

Early adopters left behind

Becoming the uber expert is fun.   Everyone at one time has been so good at something that  it seems they can answer any question related to it.  Over time though newer ways to do the same thing emerge, and the expert contends that they suck.   The old system is better, they say.   They move to discredit these improved methods claiming it's lacking in function, form or price.

As a new technology begins to emerge early adopters begin to gravitate to the latest "thing".   Home brew, hobbyists, and fans tinker around.   In fact almost all things that we now use as consumers were first part of the hacker culture.   As more and more people use the technology the methods to make things happen need to be lowered to make room for those who are less technical.  Usually for these advances raise all boats, meaning most everyone can benefit from the addition of tools that make it easier for the fat part of the bell curve to understand and adopt the technology.   Some of the best examples of this is transition from text based computers to graphical ones, special query languages (think google and their operators) to an easier to use interface, physical keyboards to a virtual one,  typesetting vs word processing and printing, content management systems vs html files only, farming vs going to the store, turning the crank on the car vs turning the key, oral tradition vs written words. 

Initially, early adopters shun this new way.  It's usually not better at first, but more importantly it's part of their identity.  They have become the go to guy/gal for how to make the complicated system work.   The early adopters become great at their craft, they become experts.  They have A LOT invested in learning all commands, systems, and specialized operators.  Only a select few, or chosen ones, can do the things they do.  While everyone else was ignoring the future they were investing in it.    In a way this stands to threaten their status as a gifted wizard of the technology.  They want to hold on to their way of doing things and their status, it's a defense mechanism.  

The early adopters say that the new system at usually lacks all the things that made the old system great, and to a point they are right.   The keyboard is better than speech recognition but slowly things are added that make it better and better.  Little by little bit by bit the new way begins to catch up with the old way, maybe even begin to pass it.  Now not everyone needs an expert to be proficient on this new technology, they can get by without an expert. The once uber expert might even be looked at as old school or out dated in their approach.   

At this point the expert can do one of a few things,  they can continue on in their old ways because there will always be someone who still needs an expert who remembers how to do it the old way.    They can reinvest and take what they know and adapt it to the new system becoming really valuable with a good historical grasp of things, or just learn something completely new.   The point here is that almost without exception despite how much they hate the change, society is better off.   The world is better off we all still don't have to grow our own food, can create their own website, and find things on the internet.   Progress has happened thanks to the efforts of the "geeks" but sometimes the geeks get left behind.