Words. They have different meanings to different peoples at different times.
Words should all come with an asterisk pointing to a footnote highlighting contextual meaning and nuances.
For example; loyalty*.
* In the context of any personal relationship I use the world ‘loyalty’ to describe a trait of a person that is the opposite of a ‘fair weather sailor’.
Nothing more, nothing less.
If I was running Facebook I would start creating imaginary friends for users.
It wouldn’t be that hard with all that data and some simple algorithms.
And we all have overseas friends that we never see, so what would be the difference?
This would solve three problems; one, social status online; two, higher levels of engagement; three, these imaginary friends could make recommendations for products and services.
We all know recommendations are the very best way to push stuff.
Ultimately you could imagine that the collective of imaginary friends would represent God.
Maybe that’s what happened before last apocalypse!
And you may find yourself living in a trailer park shack
And you may find yourself in another part of the city
And you may find yourself behind the wheel of a large commercial entity
And you may find yourself in a beautiful house with a beautiful wife
And you may ask yourself
Well…How did I get here?
And the answer is invariably ‘on my bike.’
Flying not falling
Look where my hand was
Time isn’t holding us
Time isn’t after us
Same as it ever was…
Here’s an interesting video –
http://www.dailyliked.net/backwards-brain-bicycle/
This guy has made two modifications to a normal bicycle.
First, he has put gearing on the handlebars which replaces the usual direct drive.
Second, he has reversed the gears so a turn left on the handlebars sends the front wheel right and vice versa.
And he then shows that your casual punter can’t ride this bike very well, or at all.
In fact it took 8 months for he himself to learn how to ride it.
He claims that this process first required that he ‘unlearn’ how to ride a normal bike.
In fact the show is a bit of cheat because the thing that makes it so hard is the gearing ratio on the handlebar not the left-right thing.
Even if the wheel and handlebars turned the same way, anything higher than a 1-1 gear ratio would confuse your standard rider to the point of over-correction and fail.
If you tightened that gear ratio up to 1-1 or even tighter, a little concentration would be all it takes to get going on this thing.
Even so, his point is made. It’s hard to be bilingual in the body unless you learn from an early age.
That is we can run and cycle but might not be able to learn two ways of cycling.
Well some people can – say someone that can ride a bicycle and a mono-cycle.
Still there is a point. Doing new things with the body takes concentration to start, and repetition to perfect. And doing other similar activities at the same time might make the learning all that much harder.
Plus you are going to have to fall off a little to accelerate the learning process.
Unless of course you put a Segway-like gyro in the wheel to keep it upright. Here’s a link to one – http://shop-us.jyrobike.com/
If you added a gyro wheel then you simply couldn’t fall.
You could then learn to steer the bike first and then slowly turn the gyros down to get used to the balance.
It wouldn’t take too long to pick it up.
Sometime I think that the body is only slow to learn because of our fear of falling.
An epiphany that does not provide any real insight into the nature of reality or its interconnectedness is actually an apophany.
An example would be seeing Kevin Rudd’s head in a cloud, probably while lying on the grass after a few beers on a Saturday afternoon.
He wasn’t really there and even if he was there’s no real insight; all clouds sort of look like Kev’s head.
I saw Kev perform on TED recently; I suspect he was promoting himself to the UN as the global thought-leader on US-Chinese relations.
It’s worth watching just to see someone at the end of a political lifecycle, whose ego has collapsed into a black hole such that only an unedited and unfiltered longing for higher adulation can escape.
There wasn’t much gravitational pull I can tell you.
Here’s another insight into the Chinese working culture …
Two of my Chinese senior employees each talked to separate former colleagues at a recent trade show about what the same competitor is up to.
(this is a sneaky, nasty, lying, creepy, moral-free competitor company BTW).
They both came to me with the information from their respective former colleagues.
Unfortunately the information I was told was 180 degrees different from one conversation to the next.
Separately I pointed out to each of them that this meant that at least one of them was repeating information that was incorrect.
Whilst they could see the logic of this, they had no interest in either confronting each other to discuss it or taking the matter up with their respective former colleagues.
All of these scenarios were deemed too face-losing, embarrassing or confronting, and the avoidance of these emotions was deemed much more important than the good health of their employer.
So I pointed this logic out to them as well. In both cases they suddenly got lost in language and embarrassed laughter and basically ran away never to bring the matter up again.
So what is there to be learned this?
Obviously the inability to face up to such minor disputes can’t be good for business. It’s a penalty for having all that old face-saving stuff.
But more importantly, their concern for their employer runs pretty shallow. You don’t have to dig too far to find out where self-interest over-rules the interests of their employer.
Another example; some time back I was talking to some manufacturing plant operators in China (that spoke English) with the aim of getting them to highlight features of the software that they were using to run the factory which could be improved and/or that simply annoyed them.
Nix, not a single feature was highlighted. And there was to be no innovation entered into by us either on behalf of our customers if we couldn’t do some strategic product marketing ahead of time.
My Taiwanese colleague pointed out that fixing any software features or adding features hitherto unexpected wouldn’t change the operator’s salaries or the number of hours that they worked.
As is also the case in the West in the short term; but in the West I suppose there is some inbuilt reward system for innovators – career enhancement and the like. Or even just the satisfaction of being both first and right. In any case, pointing out areas of potential improvement would be valued by the bosses.
In China the ability to participate in the innovation process is right at the bottom of the list of things that bring on promotion.
In fact, pointing out problems (a key input for innovation) is actually seen as the sign of a trouble maker.
So how did the Chinese get such a large market share of the world’s manufacturing? Well primarily because they used cheap labour (and lots of it), cheap finance (from their farm reclamation scheme and others) and Western technology (acquired largely from manufacturing tool suppliers).
Although they are investing heavily in the development of new technology capability (primarily because the Western supply is drying up as they kill them with cheap local knock-off’s) I can’t see any signs of the Chinese investing in creating a culture that rewards innovation.
So unless they do this I can see China peaking at some stage in the future when their costs blow out and they can’t push an innovation culture right through their supply chains.
It’s not just about the source of technology you know!
Sometime in the last undefined period, in some unnamed city, a company that I have an interest in met with an ‘investor’. I went along as a fly on the wall.
(the shiftiness of all this is to prevent any accusations being lodged against me).
This ‘investor’ proudly wore the badge of a ‘venture capitalist’.
For the scientists amongst you the only analogy I can draw is this:
Imagine someone that has not completed a PhD, nor a research year in their undergraduate degree, not even an undergraduate degree, and in fact they hadn’t completed high school … easy to imagine I am guessing?
Now what would your response be if that person applied for a position as a post-doc?
Well, that is about the equivalent of these people calling themselves venture capitalists.
A general partner in a venture capital fund should have at least 10 years venture capital apprenticeship as both an associate and a principal in a partnership, together with a little ad hoc scholarship before wearing the label of a fully fledged venture capital. Prior experience would normally entail start-up entrepreneurship and/or a really good business/finance degree and MBA, plus a little corporate experience.
Anyway the meeting was so odd that is was actually quite funny. It certainly added to my collection of professional yarns.
And in case anyone thinks that taking money off such people would be like stealing candy off a baby, well that is true.
But dumb money always leads to dumb outcomes.
If you took funds off these guys you would then have them as shareholders and directors, and there will always be that critical moment when you are raising funds, selling the company or doing a big deal that these fuckers will screw you up completely through sheer ignorance, incompetence or fear.
Never fails.
Don’t you just love that period at the end of a flight when everyone is jostling to stand in the aisle?
This morning while standing and waiting I had full view of the smartphone of a forty something business drone in holiday mode.
He had received about ten texts in relation to the holiday that he and his wife were embarking on (from the texts I assume Melbourne-Sydney then Sydney-Canada).
All ten texts were encouraging and hopeful for the quality of the upcoming trip.
He answered every single one of them with anywhere between 4 and 10 emoticons. And nothing else.
Very odd, strangely efficient, and discouraging of further replies. I had to laugh.
Of Melbourne.
First, read this blog entry. Second, think about it. Third, forget it.
[Scene: State Library of Victoria]
Essentially it’s a large internet cafe with free WiFi, power plugs and no cafe.
The guy next to me had a bottle of coke on the table. He wasn’t drinking it. The lid was on.
A librarian came up and said that he had to remove himself and the bottle of coke from the library because of ‘heritage values’.
Really!
He was so shocked he didn’t know what to say.
I helped him out by suggesting that coke has been around since the 1880’s and must qualify for heritage status too.
Not funny apparently…
Or, Married at First Sight.
Brought to us courtesy of the Danes, this is the latest in the arms race that is reality TV.
As viewers have become accustomed to the shock and awe of last season’s hit, it seems that this season has to go just that bit further.
I’m telling you, next it will be suicide bombers.
In any case, notified by a tweet to the existence of Married at First Sight (I don’t actually watch TV), I checked out a couple of YouTube clips.
Still perplexed I turned to Wiki; “It features three couples, paired up by four experts, who agree to get married when they first meet. The couples will spend the wedding night in a hotel, then leave for a nice honeymoon. When returning, they live together for a month, where after they can choose to be divorced, or stay married.”
Oddly, this turned up the same day that our head political muppet was rabbiting on about the sanctity of the solemn union between a man and a woman. This to appease the swinging but still somewhat homophobic voters at the edges of the latest housing developments in the world’s most liveable city.
Here’s a thought folks – L’s, Red P’s, Green P’s, Black … 5 year renewal … 12 demerit points.
And like any good taxation system there’s no point in not collecting tax off anyone silly enough to make donations regardless of their sexual persuasion.
I wonder if Married at First Sight is going to slip in a same sex couple? I bet they don’t because it’s probably mostly watched by the same people that Abbott is trying to please.
I have been guilty of gutlessness.
It is gutless to shut up and not say what you really think or feel.
No matter how will intentioned the reasoning – to protect people, to keep the peace, whatever – keeping your thoughts and feelings away from those close to you is just a case of kicking the can down the road.
Eventually you get to a fork in the road and by then the can will have grown too big to kick.
Since I was very young, my parents have done just about everything together.
Eat, work, sleep, holiday, rest, everything.
24-7, 365 days a year, year in, year out.
They have very few friends and the ones they do have they see together.
Their overwhelming connection to the outside world is through ‘family’ and they do this together too.
Hobbies they have none. Some interests, yes, but these mostly entail the passive consumption of content.
They are very nice people with many great values and free of common faults, but in this one dimension I have no intention or interest in following their example.
In short, I will maintain my strong sense of individuality, continue my strong interest in understanding and explaining the world around me, always have close friends and seek new ones, and I will not let any personal relationship suffocate these values.
Here’s an interesting one. The Grattan Institute has done a study on rooftop solar in Australia and figured out that, to date, the benefits have accumulated to $9.4b but at a cost of $18.7b.
Hence the implied argument that we maybe should have never gone there.
The first thing to note is that most of that cost is upfront capital investment into a long term asset with almost zero operating costs that will continue to generate a benefit well past this snapshot in time. For the next thirty years in fact.
Also that capital investment came from both government (through subsidies) and personal pockets. If it hadn’t been invested in solar then it would likely have been spent on non yielding activities such as foreign cars and holidays, or in the case of the government on pork barrelling.
So the economic conclusions that they are trying to imply are quite erroneous.
Beyond this though, you fools, what price our environment?
Same paper, same day; the South Mississippi electricity group is building a new coal burning power plant where the carbon dioxide is captured and injected down old mines (so it can slowly leak out slowly over the next few decades).
The true cost? $247 per month per subscriber! Bad, bad juju.
Breakfast this morning was a toasted square crumpet topped with butter, salami and smoked cheddar.
Apparently this concoction is horrific to those that are preconditioned to drowning crumpets in short chain carbohydrates.
High Functioning Anxiety (HFA) sufferers have the ability to intellectualise around their condition to create a scaffold of self deception that means that they never have to confront their HFA.
As a closely affected third party you are damned if you confront the HFA sufferer; it’s normally a case of comprehensive denial AND shoot the messenger.
But if you don’t confront, you will be the victim of a form of Japanese water torture. Nothing is more soul destroying than watching someone you love waste their limited time on this planet.
Plus the symptoms of anxiety can be bloody annoying. Small things that build up day by day to a mountain of resentment.
Being successful in my line of work requires many skills.
The most effective of these are learned through mistakes.
You need to feel the truth and not just know it.
And when you feel the truth you have no doubts.
Of those with experience, most will agree.
Isn’t this also true of all things in life? From love through to death.
But even so the risk is that you let your truths be the referee of your own choices.
So I defer to Bob Dylan who sang, you’re gonna have to serve somebody.
Or something, or somewhat. It just can’t always be you or your truths.
Or else it’s the devil and not the Lord.
Trust: the trouble with little lies, fibs or omissions, is that they open the door to the imagination of big lies.
Faith: is the only solution, the practise of which requires humility, perspective, patience, good humour and good sleep. And maybe a little love as well.
There’s light at the end of the bridge.
[I have no idea if this is true]
I was told last week that the Reserve Bank is planning to replace our currency in a couple of years with new notes.
They will offer a two year period after which the old currency won’t be accepted.
The idea is to root out the billions of dollars of green notes that disappear into the black economy
You’d think they’d take the opportunity to add RFID receivers to the notes so they become trackable.
That bitcoin is starting to look pretty attractive!
My guess is the market for counselling to couples that are trying to repair their relationships is much bigger than that for couples that just want to split.
Couples that want to repair their relationship might do 6 months of weekly counselling whereas a couple that split might just reserve their cash for the pub.
Thus it would appear to me that most of the literature and talks on the subject have a hidden assumption that ‘repair’ is the desired outcome. Simply because this is the more lucrative market.
What most commentators don’t mention is that there must be times when the loss of self is too much, or the personalty mismatches too extreme, or when a new person genuinely offers much more.
I can’t imagine any a priori reason why the past has greater merit than the future, other than an attachment to invested (or sunk) emotional capital.
In my game of venture capital and start-ups we learn the hard rules of business without safety nets; one rule that we learn is that an attachment to sunk capital is one sure-fire way to fail – when practised by CEOs it gets in the way of the pivot, and it gets in the way of new funding when practised by shareholders.
Indeed, to succeed in start-ups one needs to remove all unnecessary risks (which takes great skill, mentoring and experience), have no emotional attachment to a particular outcome, be open to the ideas of others, and have both persistence and great luck.
I wonder if relationships aren’t in fact quite similar – all the four horseman and other behavioural insights for couples under duress are all about removing unnecessary risks; but even the best practitioners of these skills aren’t guaranteed a happy relationship if the sense of self is not satisfied, or if one party has not dealt with some major issues, or if there is not a sufficient degree of simpatico.
That is, removing all the behavioural risk patterns is a necessary but not sufficient requirement for a happy relationship.
I would add that an attachment to or a reliance on sunk emotional capital in a relationship may breed laziness which can be the seed that leads to a loss of self and eventually maybe the relationship.
Well intentioned people I know, but it appears that great psychologists needs better copywriters.
There’s no such thing as a free lunch.
I don’t know why but I’ve always wanted one of these. Now I do.
6am
Coastal drizzle
Relentless
Even the seagulls ignore
It’s harmless intent
An edge of light reveals
What no hipster dares know
It’s charm is not beauty
Because that’s a sin
Look east they say
Look east
New product idea …
A social media engine, Twitter or Instagram like, that only accepts entries deemed as poetry.
How? Write an algorithm that says “rewrite” when entries are substandard and not poetry.
Now that’s subversive!
In fact any messaging system really needs two options for positing, i.e. two ‘post’ buttons, one to ‘friends’ and one to ‘followers’. All friends are followers but not all followers are friends.
Every serious academic paper on the matter of patents starts with an introduction that says something like this:
“Patents provide for a period of commercial monopoly for an invention. The key benefit of this monopoly is that the investment into the inventive technology is de-risked and therefore, across society as a whole, the development of new products and services is accelerated. A side benefit is that the key details of the invention are made public knowledge, even further enhancing the rate of technology development in society”
This is the orthodox argument for the benefits of patents in the developed world. In less developed countries, patent systems only exist because they have been either ‘suggested’ to them by the developed world, or because they know no better. Often in the undeveloped world patent rights aren’t administered very well and enforcement processes can be scratchy.
Every now and again a particularly honest and astute author will add something like this:
“Studies that have attempted to elucidate the economics benefits of patent systems to nations have failed to generate unequivocal quantitative results.” Then they will go onto say that we should have patent systems anyway, supporting these statement by the use of qualitative arguments – there is no use biting the hand that feeds.
The difficulty in modelling economic systems with and without patents is two-fold. First, there isn’t a developed country without patents to compare to, and, secondly, patents are such a complex beast from an economic perspective that any modelling quickly dissolves into assumption central.
However, the question that really matters is not whether we should have patents. They are not going anywhere any time soon because there is way too much vested interest. Even the software folks that were dead against patents must have been slightly mollified by the recent watering down of the inventiveness threshold for software patents by the US courts. So even these guys are probably off the case.
Based on my experience there are obvious inefficiencies in the patent systems that can be fixed without even addressing the BIG issue of whether we should have patents or not.
For mine, the real questions are:
1. What should be the ‘inventive’ threshold for the granting of a patent? (i.e. what is patentable subject matter)?
2. Should the inventive step threshold be different for different areas of technology?
3. Who should be the final arbiter on what is inventive, the patent offices, the courts or others?
4. What period of exclusive patent rights is viable for each area of technology?
5. How do we homogenize patent rights and enforcement across the globe?
6. Do we allow companies to have a market monopoly or force them to license?
7. Should there be a global patent office?
8. Should the threshold(s) for patentability be much tougher than it currently is?
9. Should there be damages or injunctions for wilful patent infringement?
10. Should a non practising entity be able to enforce patent rights?
11. What other penalties should there be for patent infringement?
My answers – depends, yes, patent offices, depends, getting patent disputes out of the courts, license, yes, yes, yes but only after some sort of three-strike rule where the infringing party has refused to acknowledge mediated license negotiations, yes, company directors should have personal liabilities.
In detail:
1. . What should be the ‘inventive’ threshold for the granting of a patent? (i.e. what is patentable subject matter)?
Much higher than it is now is the right answer – more on this below. In my opinion much of what is being claimed in patents in this century simply shouldn’t be granted. The distinction between innovation and invention seems to have been lost in the ether. Over time the patent system has drifted towards the granting of patents for incremental innovations. With all the existing prior art it should be harder than ever to receive patent rights today but the opposite appears to be true.
Part of the problem is the process of patent examination. During patent examination the patent office pushes back on claims in light of prior art until they are satisfied that what is being claimed is novel – but at this stage there should be an independent re-examination for obviousness (to someone practiced in the art).
I would also like to see certain sorts of prior art rejected as being relevant. In the era of the internet it appears way too easy to find some throw-away ‘wishful thinking’ by some product forecaster that can be construed as foreshadowing a later invention. I would like to see some threshold for ‘reduction to practice’ for prior art, even if this is just a proposal, in order for prior art to be deemed relevant.
The courts seem to be able to set thresholds for inventiveness and this is done by judges, relying on so-called expert witnesses (often academics) naturally biased by their employment, that have limited experience in patenting, technology and markets, which is crazy. One of the issues is that during enforcement cases the courts get to see a lot more prior art than the patent office ever gets to see and then they use this to overturn patents and thus accidentally (or otherwise) re-setting inventive step thresholds. Removing the courts is the answer – more on this below.
I suspect that any successful effort to tighten up the thresholds for inventiveness would see the number of granted patents drop by at least a factor of 100. This is important; without such a decrease in the number of patents the rest of the suggestions below would be too cumbersome to introduce.
2. Should the inventive step threshold be different for different areas of technology?
And the answer is that in each field of technology a clear definition of inventiveness needs to be determined by way of example (case studies, precedent, call it what you will). There is no use attempting to come up with a broad and universal linguistic-technical structure of inventiveness for all areas of technology – it just doesn’t work. This proposed process of determining a field-by-field thresholds for inventiveness needs to be done some world-wide committee of genuine experts in each field, sort of like a standards committee.
3. Who should be the final arbiter on what is inventive, the patent offices, the courts or others?
We badly need to get the courts out of the patent world. The patent offices should be the ultimate determiners of what is inventive since this is their explicit expertise. The patent office should get to determine what is inventive when a patent is granted and they should get to review this when a case is in dispute and new prior art is discovered.
In addition to (a) the patent offices, we could have (b) the aforementioned world-wide standards bodies for setting inventive step thresholds (by way of precedent) in each field, (d) a commercial patent disputes mediating body, and (d) possibly a global umbrella body controlling all of these.
4. What period of exclusive patent rights is viable for each area of technology?
Just like the inventive step solution I believe the period of exclusive rights should reflect the differences between fields of technology. For example software breakthroughs can often be developed to products in less than a year and then be obsolete within five. Whereas a new drug can take 15 years of more to get to market. The same body that determines the inventive step threshold in each field could also determine the appropriate period of patent rights in each field.
5. How do we homogenize patent rights and enforcement across the globe?
Simply by getting the courts out the picture. Since the courts in each nation are not, and never will be similar in their processes there can never be a uniform global patent system until they are removed from the patenting world. Right now we have the silly situation where patent costs are accrued separately in each country and where patent rights are both granted and enforced differently in each country. It’s an expensive mess that just happens to favour large corporations with deep pockets thus disenfranchising the smaller tech companies that are the real engine room of inventive technology. The situation also allows countries such as Australia and China to allow parties to ignore patent rights when it suits them by having complex, slow, and very costly patent enforcement processes with limited damages for infringement.
6. Do we allow companies to have a market monopoly or force them to license?
The idea of a product monopoly in the 21st century makes no sense. We should allow for investment capital to follow all inventions so that product costs are brought down as quickly as possible and therefore the benefits of invention flow to society at large. Right now the world is in a race to counter climate change and the impact of diminishing resources – we cannot afford to put barriers in the way of technology development.
By this proposal the concept of wilful infringement would disappear altogether. Any party could invest in a patented technology even if that patent is not theirs, but in the knowledge that the likely commercial outcome would be enforced license fees which they can’t get away from. By this approach a market for patents as assets would flourish since income from license fees could be more accurately modelled and the general value of patents would increase (due to the higher thresholds for invention and easier to model license revenues). Creating a viable market for patents as assets would help fast-track general inventiveness over the current situation where there is a global over-investment into more trivial innovation.
7. Should there be a global patent office?
As stated above, yes. We need a global patent with low costs and much higher diligence in the examination process which would reduce later disputes. The US system of crowd-sourcing prior art during examination is a great one that needs to be adopted globally. Not only do we need a global patent office, we also need a global standards committee for setting the inventive step threshold and the patent term in each field of technology. And then also a patent disputes mediation group recognised under law in each country.
But as I said earlier, there is no point unifying the patent granting process if we still have the process where enforcement is left to local courts. What’s the point of having the same patent for every country if it is interpreted differently with respect to enforcement?
8. Should the threshold(s) for invention be much tougher than it currently is?
As stated above, without a doubt. Today we have the situation where there is a ‘long-tail’ of patent value. i.e. where a small fraction of patents have real value and the majority have negative value. There is a ‘stalled’ market-place for trading patent assets because no one knows which patents are the valuable ones. Where there is no market place it is generally the case that there is an asset class that is genuinely in trouble, reflecting a system that needs fixing.
9. Should there be damages or injunctions for wilful patent infringement?
There needs to be a quick global process for mediating alleged patent infringement followed by enforced licensing. Only if a party has been thrice warned for not paying license fees would the matter be referred to a national court for injunctions, enforced licensing and claims of damages. In that court there should be no process allowed for invalidating a patent; that would be reserved for the mediation organisation.
10. Should a non practising entity be able to enforce patent rights?
Of course. Universities, backyard inventors, patent acquirers and the like should all be able to invest in and license their patented technology. In a system where licenses are enforced this would be their sole path to monetisation of their patent rights, except for where a party ignores patent mediation outcomes or where they sell their patent assets.
11. What other penalties should there be for patent infringement?
For parties that ignore enforced licensing notices and that have been taken to court for damages and/or injunctions, the penalties should extend to personal liability for company directors, or even criminal charges (in every country). This would help stop all such bad behaviour.
Googling, I find there has been a little work on Social Media and Personality Typing.
But mostly it’s on using existing personality type models with an attempt to define people into categories by their social media use.
Here’s a new approach;
(a) Take a person’s complete social media (FB, Instagram, Linkedin, Periscope, Tweets, etc) input and consumption, and
(b) also take all the things that a person will do on the web, outside of social media, that can be automatically measured (such as purchasing, consuming information like wiki, and anything else).
(c) then use learning algorithms to look for patterns of relationships between (a) and (b)
We might find that there are groupings of links between the two and these might define new categories of personality types that are more discrete than the 19th and 20th century models that were thought up in an era before computers and when simplistic models were a necessity.
On Twitter I just saw the first slide of an IP presentation that read:
“IP Commercialisation: Protecting Innovation”
I demur. It should read:
“Innovation Commercialisation: Exploiting IP”
All the proof one ever needed that Australians gets the politicians that they deserve …
My blog entry of yesterday attempted to explain why injecting more funds into the Australian venture capital sector might just annoy the pigs and not teach any of them to sing. It has become apparent to me from some of the feedback that I received that I am going to have to be much clearer on the subject …
Say, purely for argument’s sake, that there are 1000 start-ups in Australia this year, mostly garagistas lurking around incubators.
Then assume this:
10 of these start-ups are potentially great companies, and another 20 are potentially OK companies, and the rest are zombies or write-off’s waiting to happen, no matter how much funding they get.
Then assume that the current Australian VC market can provide at most $50m per year to all of these start-ups, which will be divided up between the top 10 and also the next 20, and maybe a handful of the zombies too (because some of the VCs aren’t that bright).
That is the companies are getting a couple of million each, at best.
If that amount of VC funds jumps to $1b per year (say under a mandated golden visa scheme) then one of two things will happen:
1. A large number of $50-100m VC funds will be formed, or
2. A small number of $1b funds will be formed
My guess is number 1 because a lot of people who have never been VCs have already contacted me to see if I want to be part of a new VC partnership.
So we will have 10-20 VC funds chasing the same mediocre deal flow that we have today.
Each will need to invest in 10 or so deals in the first 4 years.
So there isn’t enough good deals for them all to invest in and the top 30 will be over-subscribed pretty quickly, and the rest of the funds will start pumping money into the zombies with the intention of trying to ‘fix’ them.
Thus the overall return on Australian VC, the average or the mean return to be specific, will be dragged down substantially by the expected zero return on all that money going into the zombies.
Once an asset class doesn’t return, on average, the required risk-adjusted IRR then it pretty quickly disappears or gets seriously re-structured.
And the VC guys that get their money into the top 30 companies will still under-invest because with that small $50-100m fund size they won’t be able to invest more than $5-10m in a deal. And they won’t be able to manage co-investment with more than 3-4 other Australian VCs without imploding under mutual loathing (they all end up hating each other for some reason).
Those top 30 companies which will each receive $15-30m over their start-up life and each will have a number of silicon valley competitors that are raising this sort of money; $150k incubator, $1m Seed, $10m Series A, $100m Series B, $1b Series C…
Is that clearer?
A bunch of corporate CEO types were hanging around the forum table this morning.
The speaker was spruiking all the latest social media tools for corporate B2B and B2C.
What followed was primarily a discussion on ‘privacy’ issues rather than the potential financial benefits of the social media technologies to the CEOs and their companies.
The spruiker responded that social media as a business tool is simply making consumers’ lives better by making sure they are offered better products and services.
However, the CEOs were all old enough to recall life without any sort of computers and they have a real sense of unease with respect to what they call the ‘privacy’ issue.
When pressed no one could really state a specific issue; it was just the vibe of thing.
Except one commentator who suggested that if a dictator ever got their hands on our country, replete with universal social media data extraction, then everyone would be fucked. His words not mine.
So there is a ‘worst case’ scenario to protect against at the very least, if he is right.
Being resigned to the fact that they will have to use social media tools, and being aware that social media may even change their business models, the CEOs mostly hoped that ‘legislation’ would protect against data misuse or abuse.
The spruiker noted that the existence of legislation did not necessarily imply that it is being enforced.
Further, I added that social media is international so national laws do not necessarily make a difference.
I suggested that if someone cares enough they would develop a technology that pollutes the databases where all that extracted social media information is stored. A simple cloud-based app that intercepts the data streams and supplements good data; this would do the trick.
Such rubbish data would render the databases useless as sources of data for legal enforcement against an individual and it would also create a ‘signature’ which would help detect misuse and abuse of data.
At this stage the spruiker was looking at me as if I was the anti-Christ.
I didn’t think the Gen Y’s had it in them – isn’t it odd how moral outrage can follow financial incentive?
[a social media commentator calls on government to fix the venture capital problem in Australia]
[a colleague asks whether he can send social commentator a link to my blog presumably to straighten him out on various misconceptions]
[my answer]
“Yes
but might I say that these types of people say these things because they are looking for a stipend out of the government money that they want put into the game, either directly or indirectly.
that is, they are predisposed to eat their own dog food.
and with such behaviour must come some cognitive dissonance that blinds them to uncomfortable truths.”
Gee, that sounds cynical but I can assure you it is not.
I love it that people care about these things. And if I did not care I would not share my opinions.
If I can convert just one influential person, or just make them look at things in what I believe is a more sensible fashion, then I will wear all the labels of “cynicism” that are thrown at me.
p.s. Some time back Patrick Cook gave me the go ahead to use this old cartoon of his in any way I like. He is a national treasure.
Man it was crowded on the pavements of George Street this very lunch time.
Resigned, distracted, disinterested … the throngs were crawling along at a third of my normal walking pace.
And then I found my solution, a bunny.
This particular bunny was a lanky Gen Y of Asian extraction with Hipster modality.
Tapping on his iPhone 6, headset on, and looking nowhere in particular he just cruised through there at a rate of knots.
His trajectory looked like a random tack, from starboard to port with seemingly unwitting points of inflection.
It worked; divinely, the crowds parted and this ambulance chaser got a free ride all the way to destination X.
All the experience lacked was the cognitive insight to snap or record the process in order to launch a social media storm and a viral fad.
In Australia we have a well-documented long-term failure to develop a venture capital industry. I did some of the documenting in fact.
Amongst people that care about such things it is often thought that injecting more capital into the industry will solve the problem. The thinking is that an injection of capital will ‘prime’ the pump and get things moving.
In fact the Federal government is about to launch into just such a new program by mandating that some of the Golden Visa money goes to VC and PE funds.
This approach of priming Australian VC with government-mandated cash hasn’t worked in the past so any new actions along these lines will have to claim that either (a) this time there will be much more money and hence the priming will be more ‘effective’, or (b) the money will be better managed by some miracle.
I have this disconcerting suspicion that injecting new capital into the Australian VC market will simply result in the usual disappointing outcomes.
When you have more capital chasing the same set of local deals the inevitable outcome is that lower quality deals get funded, and hence the ‘average’ return on venture capital drops.
The further the drop in the average returns, the less likely that institutional investors will want to come into the market. These guys are simply too big to play anything other than ‘reversion to the mean’.
Inevitably, once the mandate ends the investment dollars will dry up (as they have now) and most will be none the wiser.
The only plausible way to subvert this scenario is if all that new capital focuses not on investing in local deals, but on importing start-ups from all over the planet. Much as we import ‘Australian’ sports stars from the developing world.
Shenzhen in China is doing just this at the moment. They are offering cheap venture capital, as well as access to all their local talent and low costs, in order to attract start-ups to their environment from Europe and the USA.
With our high costs we can’t hope to compete with the Chinese on anything ‘hardware’ but we could play this ‘import the start-ups’ game in disintermediation areas such as marketing, fintech, enterprise-in-the-cloud and the like.
We would also need to start investing much bigger licks of money. To play in the disintermediation game each round of funding in a start-up needs to have an extra nought on the end. What we do now in Australia is double the last round in quantum.
Think of this as exponential growth versus linear growth in funding increments between rounds. One works and the other chokes.
A friend has just told me about her husband’s latest habit of buying socks with ‘lefts’ and ‘rights’.
She is right on the verge of divorcing him I would say.
Now this is a funny story …
One of my company’s sells manufacturing equipment primarily to Chinese manufacturing customers.
One of our sales from a couple of year’s back still has an $80k outstanding final payment from the customer.
So our agent in China approached the company that we believed currently owns the tool and a manager there has agreed to make the payment so long as he also receives a sizeable chunk of the $80k as an under-the-table payment.
When the subject was further examined it was discovered that the tool had in fact never reached the company the manager was employed by.
The tool had been bought by another company that had been sold to the company we are currently talking to, but the tool had been shifted out of the original company before the company was acquired. No one knew this.
So there is no bill-of-purchase or contract to refer to regarding the payment and no tool. BUT they are keen to go ahead with the deal anyway.
So it occurs to me that there is an opportunity for someone to make zillions of dollars in China this way. Just approach every manager with vapour-ware outstanding payments.
Now this is a cool idea.
A smartphone with an OLED or LCD screen on one side (as per usual) and a ePaper screen on the other.
Many functions of a phone don’t need high refresh colour displays and so the ePaper display allows the phone to be used as, say an e-reader with long term battery life.
The ePaper display can also show near static information such as calendar info, time and weather, and the like with very little battery drain – these displays only consume power when they refresh (change).
Currently its been made by a Russian company so we will need Samsung to get on board before we all get one.
New product idea … Data Dots for food.
Edible microscopic thingys that can be injected into food items or even animals and allow RFID scanning identification from production all the way through to consumption.
It would make all provenance and handling info available to everyone in the food chain, including the consumer.
I was just thinking today as to what a better form of government in the 21st century might be.
Then I had a brainwave. We could hand over taxation to the unelected Reserve Bank and thus make taxation non-political. They could decide how much structural debt makes sense (or otherwise) and tax according to some simple and articulated fairness principle. Step one would be to get rid of all the ridiculous hand-outs and complexities in the taxation system and move them elsewhere – more on this below.
Then we could get rid of the federal and state governments and create a bunch of sub-governments with specific expenditure roles in the following areas:
1. Defence, International Affairs & Public Order
2. Education
3. Health & Hospitals
4. Social Security & Welfare Services
5. Infrastructure & Housing
6. Industry and Regulation
The rest could be left to the free markets.
Rather than having two parties compete for control of the whole she-bang, we could have multiple parties competing for oversight of each of the 6 areas, based on their credibility. Once elected by an e-voting system, each of these sub-governments would effectively act as company boards in their area of management. They would work by hiring the CEO of the relevant public service and then influence and monitor the performance of their portfolio via the board process.
The boards of each sub-government would each have to tender to the Reserve Bank their budget for their term of office and the taxation money would be divided up in a competitive fashion according to the quality of their plans, economic impact and track record.
There would be an independent authority to monitor for fraud and incompetence amongst the 6 sub-governments and the Reserve Bank, with the freedom to sack any of these if required.
Reserve power would be held by the GG, elected unanimously by the leaders of 6 sub-governments and the Reserve Bank.
I have sort of tasked myself to take this blog a little more upbeat.
No matter how insightful, any idea that could be construed as cynical is going into mental garbage bin.
I will see how much I have left to say.
I just deleted the rest of this blog entry on iron ore accordingly. Geez, it’s going to be boring.
But I will say this. Oligarchical behavior by governments and large companies just might have genuine economic merit.
If so, it might be useful to formally embrace oligarchical behavior and then we would have the opportunity to perfect it free from the constraints of pretending it doesn’t exist.
I can’t see any a priori reason why we should see oligarchies as economically immoral.
See, that is upbeat! I’m looking for the opportunity and not focusing on hypocrisy.
.
There was a time when I could paint.
I checked and tactic and tic-tac are unrelated. Apparently there’s more than one way to get what you want
I guess this means that the Indonesia military and police don’t hire married women?
Yogi said that when you come to a fork in the road, take it.
The second last time I was in Shanghai, over a coffee at Starbucks I found myself chatting to the guy next to me, a slightly chubby corporate sales guy.
After a little while I asked him whether the little fluffy thing at his feet was his girlfriend’s dog.
No.
Was he by any chance gay?
No.
I queried his choice of dog in the context of his masculinity. Nicely, of course.
The answer came back laughingly – the thing is a chick magnet.*
* – this is my interpretation of two minutes of explanation
Every now and again, nothing. Blank. Zip. Just me and the stormy visage. And the cabbie whispering Hindi secrets into his phone.
Many people have noted that the quality of our politicians and our political discourse is heading ever south.
It occurs to me that this process started just around the time that the internet popped up for the masses.
Here’s a new hypothesis as to what happened…
First, on-line advertising started eating into broadcast media advertising revenues.
Secondly, broadcast media reacted by creating cheaper and cheaper content so as to remain profitable.
Thirdly, one of these cheap content options was ‘politics’. All the broadcast media needed was a few cheap-arse obsessive-compulsive commentators and ‘bingo’. And there were more of these than there were politicians, so supply and demand was in their favour.
Fourthly, and so started the over reporting all things political.
Fifthly, this over-reporting of politics put downwards pressure on the quality of fools willing to endure the minute-by-minute inane coverage of their efforts as politicians.
Sixth, eventually the politicians realised that the only way to get into power was to feed the content-starved broadcast media with ‘total opposition’ content. They needed cheap news and big headline content – bugger the facts and any eventual downside impacts.
So, assuming this hypothesis is correct, the slide in the quality of politics in Australia (and everywhere where there is more than one political party) will continue to fall until people stop using broadcast media as their primary source of political news.
Of course, even if they do stop using the broadcast media as their source of political news, the politicians will have to notice. And given that their average intelligence has diminished somewhat there might be some delay before this happens.
So what we need as an ‘index’ to measure this. Take the polling process and overlay it on the electoral process, and find out where all the key swinging voters are getting their political info and opinions from and turn this into a ‘political media index’.
And, hey presto, in no time sanity will be restored as the Gen Ys do their bit for humanity.
Ever wondered why Australian scientists are so devoid of creativity or entrepreneurship?
My hypothesis is that an INTJ culture in Australian science has evolved over a century or more.
INTJ referrs to the Myers Briggs personality type described thus:
“Often intellectual, INTJs enjoy logical reasoning and complex problem-solving. They approach life by analyzing the theory behind what they see, and are typically focused inward, on their own thoughtful study of the world around them. INTJs are drawn to logical systems and are much less comfortable with the unpredictable nature of other people and their emotions. They are typically independent and selective about their relationships, preferring to associate with people who they find intellectually stimulating.”
My hypothesis was somewhat confirmed today when I received an email from a former colleague informing me that, yes, I was right – CSIRO is an INTJ organization. Apparently someone ‘typed’ the place 20 years ago and the report is still lingering in the files.
INTJs don’t really like ENTPs (which is what the creative and entrepreneurial scientists are). They seem them as the enemy, as smart-arses, dickheads, loudmouths, attention seekers and the like.
So when a whole scientific culture gets dominated by INTJs what do you reckon happens to the ENTPs that happen to wander into research degrees?
They sense the mood and piss off to do other things of course. Hence further enhancing the INTJ culture in science in Australia.
INTJs don’t like insight, creativity, breakthroughs and the marketing that goes with these things. These are all characteristics of ENTPs – the enemy.
And there you have it. A very plausible and somewhat validated explanation as to why our scientists don’t win many Nobel prizes, hardly ever create start-ups, and exist in what is possibly the most boring profession in the land.
Today’s Sydney Morning Herald has TWENTY pages on the federal government budget.
TWENTY!
At best, the budget is a mind-fart dreamt up by a bunch of former university review types, with the primary goal of being re-elected against the mob with the different colour ties.
It’s a 12-month plan.
By the time it’s written, understood, and then introduced to parliament, argued about, defeated in the senate, ignored by bureaucrats, delayed by public servants & held up by external consultants, 12 months will have passed and a new one will be due.
The new one will be totally different to this one, as this one is totally different to the last one.
Looking at the last one, about 90% of what was projected to happen by way of budgeting never occurred for one reason or another.
And then Herald uses up TWENTY pages of good pulp mill product on the subject.
This must be because people are interested in the thing?
Why? It’s a mystery to me. But it clearly doesn’t help that the media covers the thing so intensively. Thirty years ago they did not.
Thinking further, the old-school broadcast media started doing this sort of stuff the minute on-line advertising alternatives emerged.
Essentially as the advertising dollars started drifting to the web (with all it’s wonderful measurability of advertising outcomes) broadcast media started looking for cheaper and cheaper ways of keeping people’s attention, in order to remain profitable on their reduced revenues.
The budget is but one example of a VERY cheap way to keep peoples attention. But not mine I am afraid.
Their online version is full of the same rubbish. You would think they would take the opportunity at their website to get great content from ‘anywhere’ and make it as attractive as possible to each viewer. Possibly even to curate the content for each user. I know they don’t do this because I am seeing a lot of ‘budget’ at their website.
I have no interest in ever running for any parliamentary position.
However, I do think there is an opportunity for an interested individual to start the ‘No Licenses’ party to run for senate in the various state governments, and maybe also in the Federal circus.
The general mandate would be to remove all trivial licenses for things like recreational fishing and hunting, and especially for upcoming intrusions into our daily lives such as licenses for cycling.
Going further, penalties for driving licenses should be wound back to days past with a removal of the points system and a zero removed from all financial penalties.
The goal would be to get control of the various senates and then to support the government of the day in return for these sane outcomes.
These actions would start the trend of removing the daily intrusion into our lives by a bunch of ego-maniacal non-practicing lawyers.
In fact, for the first few years there may need to be a mandate that the government of the day has to delete 10 laws for every new one it passes. It would take a few years but eventually we would be left with the ones that are actually enforced and that we truly appreciate.
Alongside the No Licenses Party there would be a GetUp style organization – call it RollOver – which harnesses the power of crowdsourcing to fund and publicize these issues.
Both the GetUp and RollOver folk want a better and more caring world; their hearts are in the right place. However they will differ in that the deluded GetUp types think that government should be responsible for every solution to every little problem, thereby making the problem worse.
Federally, the first target would have to be copyright – we would need to remove all support for foreign content owners. GST reporting would either be automated or, if not, annihilated. All that money spent on anti-terrorism would be redirected towards a free top-end holiday resort in the Pacific where potential offenders are sent. Military spending would be slashed and the world’s best hackers would be hired to ensure our defense and attack capabilities are in place. Company tax would be removed altogether but the higher income tax bracket would be increased accordingly. Fringe benefits would be a thing of the past as we go to a completely electronic currency. All electronic currency leaving the country would be subject to a flat tax rate. New large cities would be planned and built to take the pressure of the existing ones. Foreign investment in real estate would be stopped altogether and current foreign owners of real estate be given 5 years to dispose of their holdings in an orderly fashion. A lucrative patent box scheme would be offered to our corporates in order to encourage them to start inventing and innovating at the core of their operations. Some of that super money would be forcibly carved out for lending to business as super cheap working capital with a government guarantee that probably won’t be needed. Oh, and billions would be spent on public transport.
All we need is some tech-savvy missionary to take this one on – please forward this blog entry far and wide.
Now there’s a first, no special permissions!
Any start-up investor pitch in the West will include a projection of market share, on a global basis.
Starting at zero, the hockey-stick projection will show anything from 10-90% market penetration.
This is usually needed to justify the projections of increases in enterprise value, and on such projections are investment decisions made.
Investors use the traveller’s ‘packing rule’; they halve and halve again the market share projections to get the scenario that they use to tell their LPs why they made the investment.
In reality start-up companies achieve a huge range of market shares, the median of which has absolutely no mathematical correlation with their collective initially preferred scenarios.
There is a long-tail effect here; most start-ups achieve little or no market share and a handful get a market share that justifies their original investment.
The Chinese on the other hand do not consider market share at all.
They just start companies, make a product as cheaply as is humanly possible, and flog as much of it as they can through on-line channels and distributors.
This way they avoid telling lies to investors and they also save costs on business planning, strategy development, market reports, marketing in general, and the list goes on.
Bike lights are such a frustrating thing to buy.
Firstly, most rear lights on bikes are simply retarded – they stick out too far from the seat post and then you end up rubbing the things with your leg on every rotation. See exhibit 1 below.
The solution was developed by Knog (of Australia) – a low profile silicone job that is just wonderful. Unfortunately their RRP is around $25. See exhibit 2.
Now the Chinese has knocked off the Knog, but only for the front light, where they sell the same product for $3 instead of $25. See exhibit 3.
This is an example of the original Western product developer gouging their customers with gay abandon. Thank God for the Chinese – they know how to get the cost out of a product.
Knog developed this thing ten years back so they can’t argue that they are still recouping their R&D costs.
Unfortunately the Chinese don’t make a red LED version for rear lights. They seem to think that white LEDs lights are OK for both front and back lighting applications, which they are not.
I suspect this is because the Chinese don’t actually use bike lights (why would you?). Lacking this knowledge and of course not having any product marketing, white LEDs it is.
This is a case of selling something that you don’t understand. It’s generally the same outcome when a Chinese cafe gets a high-end espresso machine from Italy – it looks nice but don’t expect anything resembling a macchiato to come out of it.
Oh and I almost forgot.
Yesterday IÂ cycled my new old bike to work for the first time.
It’s a velodrome frame from the 60’s that I have turned into a hipster single speed city bike.
Well I don’t have a spare rear light yet for this bike. Just a reflector.
On the way home in the dark the cops pulled up next to me at the lights and one of them leant out of the window to tell me that I didn’t have a rear light.
I tried out Woody’s excuse – ‘It’s Earth Hour’. They laughed.
And then I said I was ‘onto it’ – I said I will buy one tomorrow and all that.
They seemed satisfied.
It’s amazing how human the police can feel when there’s no tax to collect.
(bugger, I just remembered there’s this useless little rear light on my helmet..)
My ISP is having a laugh – they emailed me this (see photo) just after they agreed to hand over our names and addresses to the Dallas Buyers Club LLC.
It’s quite ironic that the rights consortium behind the Dallas Buyer Club, a movie about a collective effort to bypass a price-gouging government-mandated drug consortium, is the leader in an attempt to enforce a price-gouging government-mandated digital rights consortium.
I tried it out and it worked.
Three out of three Australian business types think that the Chinese under-the-table payment model is terribly corrupt and bad for business.
But they have no trouble with financial planners getting paid commissions by the vendors of the products that they sell to their clients.
Go figure!
A while back I reported on the upcoming state-wide multiculturalism public speaking competition.
Well the beast is rolling and my daughter couldn’t give much of a stuff.
The only thing that motivates her to do anything is the potential embarrassment of a complete stuff up.
Run by the NSW department of education the competition is outlined at http://bit.ly/1Pc1VgZ
“The Multicultural Perspectives Public Speaking Competition was introduced in 1996 … Last year, 2,055 students took up the opportunity to practice their public speaking skills, heighten their awareness of multicultural issues, and improve their confidence.”
It’s an opt-in competition for the school and it costs $20 per student.
An adjudicator comes out to the primary school and …
“The adjudicators will make their decision based on the manner, matter and method the contestants employ in presenting their speeches. They will expect contestants to be confident and engaging speakers. The prepared speeches need to show an understanding of multiculturalism, and be well developed and interesting. Contestants are also expected to demonstrate a balance of personal opinion and information in their speeches, as well as a balance of humour and sincerity. Finally, adjudicators are required to give equal consideration to the prepared and impromptu speeches in making their decision.”
Then I suspect the winners get concentrated into inter-school pools of diminishing numbers until we are left with just our future politicians.
When Lola asked me to help with the prepared speech I was reluctant. She sometimes doesn’t mind showing her complete lack of interest in the process.
In this case it occurs to me that they would be well placed to separate the subject matter from the skill of interest.
That is, let them learn their public speaking skills by rabbiting on about something they actually care about such as Instagram, Nike shoes or Taylor Swift (Dad, that’s so yesterday…).
And then let them appreciate the complexities of multiculturalism by some written essay process, after some classroom immersion in the subject.
One thing I did learn in the process though. Her attention span for absorption of new and boring information is much better through the video process, compared to the reading process.
She’s good at reading stuff she likes, but for the other stuff, show her videos.
When people are discussing start-up companies there is often a disconnect around what is meant by a start-up.
In my view there are three categories of start-ups and discussing more than one of these without formal identification can lead to cross purposes.
The three broad categories are:
1. The disintermediation plays
2. The tech start-up
3. The science based start-ups
Other companies are started, eg franchises and cafes, but they aren’t startups in my books.
The disintermediation play has a single purpose – to cut out existing service providers in any distribution channel. It could be Uber with it’s $6b of investment in the taxi business, or your local self-funded pizza delivery start-up app. Using off-the-shelf and recently available IT technology, the development of the services may be completely outsourced. Most of the investment in these efforts go into sales and marketing in order to grab market share.
The tech start-up takes on real technology risk and can fail because the technology doesn’t work (to spec or at cost, or at all). In the modern era the tech start-up can sometimes look like a disintermediation play if it is in the web services/app space but is differentiated by, say, some big data algorithm development that can stuff up and provide no benefit. Alternatively the tech could be some new widget that takes a punt on replacing some existing consumer or B2B hardware. Generally, as soon as there is hardware there is considerable risk due to working capital issues and the hardware not working.
Science based start-ups are quite rare these days. Often based on university findings these ‘technologies’ can take years to find a market sector that cares (i.e. is often a technology looking for a problem to solve). Even when a problem has been identified, investment in such a start-up is ill-advised because the long time frame of getting the product to market and the risks associated with failure; these factors generally blow the IRR out of the water. Examples would be pharma (which is the most targeted of this category), and any of the former fiber-optic or laser start-ups of generations back.
The boundaries between the three types of start-ups can get blurred at times. Some start-ups pivot out of one category and into another when the going gets tough.
Investors usually stick to one category but sometimes spread across two in order to spread their risks.
Disintermediation plays are usually the cheapest to start. They have the lowest tech risk but also the highest market risk due to the massive global competition in each category. The winners in this space get good early traction due to great execution and then win by getting millions or even billions in investment to shove their capability down the throats of their customers. Incubators and accelerators are dominated by this sort of start-up. I suspect that technology in this space is evolving so quickly that it takes about 5 years, on average, for a technology solution to become obsolete and then the disintermediator is at risk of being disintermediated if they don’t continue to invest in updated technology solutions. My personal view is that the best founders of disintermediation plays have a deep experience and understanding of the market they are operating in.
Tech plays need good licks of early funding to get across the alpha prototype line. But they also have less competition as a rule and often need less investment than disintermediation plays to tackle the global markets they are taking on. Outside of silicon valley these deals have a difficult time getting funded at the moment because most of the risk capital is flowing to the disintermediation plays due to their apparent higher returns.
Science based start-ups are quite rare these days and often float along under the radar. Usually they run on the smell of an oily rag for years while they try and prove that the science can underpin some useful product or service that a customer cares about. These start-ups are the most likely to have meaningful patents. Investors in these types of start-ups are either bored, deluded or eccentric.
The purpose of any start-up is to rapidly develop the tech solution, create fast adoption and then also enterprise value, which needs to be crystallised through an IPO or a trade sale. The good start-ups work backwards from the end-point – that is, they have a vision of when they will list or who will buy them. And then they create a plan to execute to that point in the future.
Accepting this proposition, you will see why disintermediation plays are so attractive to investors compared to the other sort of start-ups. The only special skills needed are industry know-how, great sales and marketing, lots of capital and good luck. The other types of start-ups require additional skills, such as great management of the development of technology solutions, the risks associated with the technology not working, and the market not caring.
Apparently copyright for art works extends to graffiti art, quite independently of the legality of the creation process.
It’s an odd one; copyright prevents the reproduction of art works that are owned by no one. The right of reproduction remains with the creator no matter what.
And there’s no law against the wall owner destroying the graffiti art but there is a law against reproduction by others. That’s a bit skewy.
Now I wonder if the ‘remixes’ I did below are illegal or unlawful in any way?
In these I took some Photoshop cut outs from photos of street graffiti and worked them into some of my own photos.
According to random web info, the artistic use of copyright materials for collage is not explicitly legal even for fair use, and commercial uses are explicitly not allowed, no matter how small amount of a fraction of the original work is used in the collage.
There is a doctrine of de minimis that theoretically protects for minimal copying, but it’s vague and difficult to pin down.
It’s all madness – our IP laws need a complete rethink now that we have all this IT.
I just had an interesting debate about copyright as it pertains to downloaded video content.
I queried whether it was the viewing of a pirated video or the possession of it that was illegal, or both.
Imagine being sued for possession and arguing that you had never watched it.
Or claiming that you had in fact paid to see it at the movies anyway. So your copy was legal.
If possession was kept in the cloud this might resolve the issue of possession being illegal.
Since computing is moving to the cloud there is no reason why your torrent engine and data storage can’t both be hosted.
I think they should just give up and offer us all a $100 annual subscription that accesses all content.
That’s what I pay for my u-beaut encrypted VPN.
I am helping an old mate out at the moment. He is the head of IT and Engineering at one of our better tech universities.
They are moving their student engagement software into the cloud. All of it. Third party apps, interaction stuff, social networks, everything.
I suggested that they monitor everything they can about student habits of engagement with these cloud services; where they are, what they are doing, when in the day, which buttons are being pushed etc.
And if this data was correlated with student performance, the habits of the best students could be fed to all the students so they could as least replicate these in an attempt to improve themselves.
Me-thinks this is an interesting area of commercial opportunity.
Firstly, it’s not IOT because it’s humans that are being automatically monitored in a closed set. Let’s call it the Internet of Souls.
Secondly, it may look like a Big Data project with learning algorithms that are used to find the correlating patterns of interest, but it will be in real time, not after the fact. So I would call this Dynamic Big Data.
Thirdly, if the students received this data in real time and could immediately start modifying their behaviour in order to chase better marks then you would expect to see certain hallmark features of any closed complex system with direct feedback, e.g. oscillations, breakouts, convergence to a best solution, etc.
A truly interesting and quite Orwellian prospect.
The other day I wrote a blog on why we in Australia don’t have high-tech billionaires (or very little venture capital or virtually any high-tech exports, or ….), and the answer was because we don’t have a culture of making even the tiniest of the tiniest large investment risks.
This risk-adverse behaviour is across the board in all sectors except where demand and risk can be very accurately forecasted, say in the resources and agricultural sectors. Even here you will see very little counter-cyclic investment – they usually wait for a boom and then wonder why they lose out in the bust.
Today, courtesy of the Sydney Morning Fishwrapper, comes this corroboration:
“Other areas of corporate spending range from just OK to dangerously weak, as a graph in the Reserve’s latest monetary policy statement shows. The manufacturing sector’s output will decline at a rate of about 2 per cent a year in 2014 and 2015 and it will invest about $4 billion less than it did in 2012 and 2013, for example. Spending by utilities will also decline, and the huge financial sector will boost investment by only about $2 billion, even as it expands its output at a rate of about 4 per cent a year.
There’s nothing inherently wrong with companies sweating their assets, and boosting earnings by cutting costs, jobs, and investment. They become more productive in the process. The Reserve Bank notes, however, that investment is weakest in parts of the economy that have the weakest growth, and that is a classic low-growth trap.
Chief executives might get appointed for their leadership skills but there’s a tacit understanding that it doesn’t extent to investment leadership – investing to expand capacity before they are confident that demand will expand to soak it up, for example.
There is, however, a grey area on the border between not investing and investing. It is the place where companies might be prepared to chance their arm – to have a go. The Reserve Back hints pretty heavily in its latest statement on monetary policy that it believes many companies are in it, and not seeing it for what it is.”
Even with interests rate at historic lows, our corporate sector is not investing in growth. Why?
Well, on the surface you could argue that collectively they have saturated the somewhat depressed local market and don’t trust themselves to go for overseas growth (primarily because they know they will fuck it up as usual).
The local market is stagnant because they all believe it is – it’s a self fulfilling prophecy.
Also, their shareholders want dividends. They don’t want their listed companies to start withholding their profits to invest them in growth opportunities. They don’t trust them to do so.
As a result the management of these companies get trained and promoted based on ‘status quo’ business skills. I call this “sinecure-central”.
It’s a nation-wide cluster fuck of risk-adverse types right through the capital supply chain (from pensioners through to your ASX Top 20 CEO) implicitly relying on the distributed profits of our vast natural resources in order to stay in relative luxury.
And if our corporates won’t invest billions of virtually free capital into their own businesses where they can very accurately assess risk, in which scenario will any Australian start investing billions into risky high-tech business opportunities?
So Mike, there’s your evidence for why we don’t have any high-tech billionaires.
Apparently the next generation of USB technology will have enough power capacity to run a laptop.
Right then is when I want USB plugs discreetly scattered all over the house, some at head height, some on the ceiling, and some near the ground.
I wouldn’t mind the option of plugging in little USB light fittings with the option to change the look over time.
I would see the USB plug not only providing the power but also all the mechanical attachment requirements.
You’ve seen those USB plug in lights for laptops and kindles. Just imagine a range of properly designed house lights that could be plugged inÂ
No need for down lights then.
Oom, yacka, wurka
Oom, yacka, wurka
Oom, yacka, wurka
In the bad backlands of Australia
Many years ago,
The dark spirits were meeting,
Having a big pow-wow.
Oom-yacka-wurka
Oom-yacka-wurka
“We got a lot of trouble, Mate,
On account of your recalcitrance.”
“My recalcitrance? Why, what’s wrong with him?”
Smartphone:Â your unicorn won’t come back.
“My unicorn won’t come back?”
Smartphone: your unicorn won’t come back,
My unicorn won’t come back,
I’ve chased the thing all over the place,
Practised till I was blue in the face,
I’m a big disgrace to the metrosexual race,
My unicorn won’t come back.
The smartphone banished him from the tribe then
And sent him on his way.
Metrosexual: This is nice, innit? Getting banished at my time of life. What a way to spend an evening: sitting on a rock in the middle of the burbs with me smartphone in me hand. I shall very likely get bushwhacked.
(An animal roars; he shrieks back.)
Metrosexual: Get out of it! You nasty bushwhacking animal. Think I’ll make a nice macchiato. (Doing, doing, doing…). Good gracious! There goes a unicorn. I must have a practice with me smartphone: hit it right behind the left earhole. Now then, slowly back.
Gruff voice: If you point that thing at me, I’ll jump right on your head. (It chuckles and flounces away.)
Metrosexual: Innit marvellous? Got a land full of unicorns and I had to pick that one.
For three long hours he sat there
Or maybe it was four. Then an old old woman in a unicorn skin
Came a-knocking at his door.
“Well, I’m the local witch doctor, son,
Now tell me, what’s your trouble, boy?”
Metrosexual: My unicorn won’t come back.
“Your unicorn won’t come back?”
My unicorn won’t come back,
I’ve chased the thing all over the place,
Practised till I was blue in the face,
I’m a big disgrace to the metrosexual race,
“Don’t worry, boy, I know the trick,
And to you I’m gonna show it.
If you want your unicorn to come back,
Well first you’ve got to… talk to it.”
Metrosexual: Ooh, yes! Never thought of that. Must have a go, nyuh-huh! Excuse me.
Now then, slowly back… and press the green button.
(Photons and electrons whizz away; Sounds of a Marquis de Sade quote approaching.)
Metrosexual: Ooh my God! I’ve hit the wrong button. Eee-hee-hee! Can you do first aid?
Witch Doctor: Don’t talk to me about first aid, boy, you owe me fourteen chickens, you know, when
I learned you to talk to the Unicorn, you know, first things first.
Metrosexual: Yes, I know that, but I mean, I think on this occasion, you know, you could be a bit more perspective……….
Yesterday I was in a university meeting which included people that variably teach innovation and entrepreneurship, in the context of technology start-ups.
When I heard the words ‘innovator’ and ‘entrepreneur’ being used interchangeably I compelled myself, against every ounce of my being that was screaming at me to let it go, to attempt to explain that innovators and entrepreneurs are usually very different people with very different disciplines.
This was apparently news to them.
Innovators in the start-up world, I explained, are people that see problems that need fixing or identify opportunities that needs grasping, or that just like cool new technology, and come up with hitherto unexpected technology packages around these that they think the world should love.
Their core disciplines are technology and a little bit of product and strategic marketing. Sometime the good ones will have deep experience in the industry that they are disintermediating.
In the context of start-ups, an innovator is often the founder of a company and will end up as the CTO after a round or two of funding.
Entrepreneurs, on the other hand, are those people that typically replace the founders as CEOs after a round or two of funding.
Their core skills are; raising money off investors (the good ones have been VCs at some stage so understand the psychology of this beast), directing sales and marketing efforts towards global domination, hiring great managers to take care of the daily stuff, and selling companies to corporations or the public markets.
Whereas innovators are focused on what benefits their output can bring to the customers, entrepreneurs are focused on how much money they can make by getting start-up enterprise value up, and up, and then crystallised.
Now don’t get me wrong, sometimes you will find people that have all the skills and can be, or have been, both innovators and entrepreneurs.
But this is the take-home message in this missive, one cannot usefully practice at being an innovator and an entrepreneur at the same time. At any particular moment one has to choose which hat one is going to wear in a particular start-up.
A great entrepreneur will also ignore their own ideas and just assess and assimilate those of others. He or she knows that we cannot properly assess the risks in our own, lovely, lovely, ideas.
Back to the teaching caper.
Innovation skills for start-ups should be taught alongside Engineering and IT degrees so these guys at least have some means to look at the real world in order to identify opportunities that are worth working on.
Entrepreneurship should not be taught in universities at all. It should be learnt by apprenticeship, working with older and more experienced CEOs or investors. And the rest of the skills will be passed onto them, on an as needed basis when problems arise, by their group of trusted and experienced personal mentors.
After a lunch with the garagistas at the Slip Inn (of Princess Mary fame) I got back to my pub bike only to find a local reprobate going through the combinations on my lock.
“Mate, I know a bit about bikes and you couldn’t even give that one way.”
No reply. He was studiously ignoring me.
“You know there’s 10,000 combinations on that lock. You’ll be there all day and halfway through you’ll get this horrible thought that you’ve already passed the right combination but didn’t pull hard enough.”
I know, I’ve been there.
Still no answer.
“Mate, you can have it if you want. I can always get another one at the next chuck-out.”
Realising that he had in fact been happily ignoring the owner of the bike, he just scarpered.
There’s no grace amongst thieves these days.
While I was in China and New Zealand over the last month look what I missed!
Tony Abbot visited Rocco’s cafe at breakfast time right when I’d usually be there.
Apparently Joe Hockey was there too!
Sometimes life is just so unfair.
New word for the day #9564
A Garagista is a Gen Y entrepreneur that either wants to, or has founded a start-up.
Typically these will focus on disintermediating some existing service such as pizza delivery or football coaching using a web-based app.
The business so formed will have a website and an app.
They will tell investors that there is a big data opportunity lurking in the background in addition to the revenue they can earn from directly providing their almost free services.
They will self-fund the original alpha versions of their app and then seek investment to take over the global market.
There will be no new technology developed in their efforts; they will use off-the-shelf software tools for all their product development.
They will join an incubator with a hot desk environment.
On Friday afternoons they will drink 2 or 3 craft or imported beers (sometimes from Mexico) with all the other garagistas and maybe they will chuck around a nerf ball or play foosball.
Apple Macs and iPhones will dominate their personal device choices.
They will dream of becoming the next Uber or Facebook but most likely will go out of business or create a revenue stream suitable for near poverty-like existence.
Although garagistas will likely never go near a garage for any purpose other parking a car, the term garagista derives from the urban myth that start-ups are formed on the cheap by the use of a parent’s garage for free real estate.
The cheap real estate option of the garage has now been replaced by the incubator space. Although not as cheap as a garage, an incubator comes complete with a mutual appreciation society and avoids the issues associated with parents having to park their car on the street.
Just for completeness, the first genuine tech start-up was started by Hewlett and Packhard in one of their parent’s garage in Palo Alto in 1938.
It is highly likely that Hewlett and Packhard would have joined an incubator had one existed at the time.
So my daughter’s school have attempted to explain the purpose of the survey they sent out yesterday to parents regarding the ‘gifted and talented student registry’, where parents were asked to rate their kids exceptional talents (she’s a 10 mate, in every category!)
See below.
This is really just a register of wanker parents. And there’s plenty of these in the Eastern suburbs of Sydney. The very existence of a parent nomination process sort of confirms this hypothesis, no?
BAD is an acronym that describes how the Chinese are able to dominate some high-tech business sectors.
The guys at the Strategic News Service call it SAD, which stands for Steal, Amplify, and Dominate.
But I prefer to call it BAD which stands for Borrow, Amplify and Dominate.
The reason that I have changed the ‘Steal’ to a ‘Borrow’ is that the Chinese really don’t see it as stealing. More on this later …
This is the process that the Chinese often follow:
Firstly, a Chinese company gets their hands on a Western piece of high-tech kit, usually from a Chinese customer of the original Western supplier. The less software in it, the better, because this can be harder to reverse engineer.
Secondly, the Chinese company then makes cheaper copies than the Western original and sells these to Chinese customers (that just happen to do about 40% of the World’s manufacturing).
Apparently there is a Chinese Standing Committee that currently has 402 such economic sectors targeted for such ‘copying’ efforts.
There is an argument that the Chinese artificially amplify the domestic value of their copies by use of protectionist policies, ‘champion’ treatment to local suppliers, and rebranding of stolen IP, and related practices.
But in truth they win the local market by having much lower selling prices, and they usually have to overcome the perception of lower quality than the Western originals.
Finally, if and when they put these goods or services onto the global market at discounts of 50% or more, this can wipe out the Western suppliers that developed the IP in the first place.
This export to the West can in some cases be limited by IP enforcement but I have seen cases where the Chinese companies have taken care to file many improvement patents in readiness for such a battle.
I recently talked to the CEO of a Chinese company which is copying a $1m manufacturing tool that is sold mostly to Chinese manufacturers and originally from a high-tech European company.
Initially they got a hold of the product and they just copied it outright but using sub-standard and cheap Chinese components.
This first generation copy was rubbish and the Chinese customers bought one or two, but pretty much stayed with the proven European supplier.
But now these copies are pretty good and they have achieved this by using exactly the same components as the European supplier, many of which are Western sourced.
I asked the CEO of the Chinese company how he sells them so cheaply and he said it’s not so much the low labour costs or choice of parts (since they are using the same parts) but finance cost that gives him his pricing advantage.
They get working capital finance off a development bank to build, say, 50 tools all in one go (as opposed to 1 or 10) and ahead of customer orders. Therefore they can get all those bulk discounts from the parts suppliers. And they don’t have to pay the loans back until they sell the tools. It’s the sort of working capital we can’t but dream about.
As to ‘stealing’ – their brand logo (in Chinese only) reads ‘the very best copy of [insert European company name]’. When they were confronted by the CEO of the European company at a recent trade show in China the employees rushed over to meet their idol and asked ‘how can we copy you better?’
Lacking an enlightenment and centuries of indoctrination that intellectual property is in their collective best interests, the use of the word ‘stealing’ is somewhat mendacious. This is just a clash of cultures.
We in the West have had IP rights for so long that we can’t imagine a world where a state-granted implied right to a monopoly over inventions simply does not exist. The Chinese, on the other hand, despite having a patent system, can’t imagine why the state would prevent a technology being sold at the very lowest cost that is humanly possible.
I have had discussions with Chinese where I made the argument that the implied monopoly granted by a patent helps companies get higher margins, and thus enables them to invest more into R&D for technology improvements and lower costs. Usually, about half-way through these arguments I sort of stop believing myself. All I am doing is parroting the party line that we have been fed in the West forever, without questioning.
This argument would be a lot easier if the patent systems around the world were restricted to genuine breakthrough inventions rather than zillions of incremental innovations.
My personal view is that the challenge to the patent systems proffered by the BAD behaviour of the Chinese will end up causing a re-assessment of the threshold of what is, and what is not patentable. And not a moment too soon me thinks.
Even so, I can hear you say, won’t the Chinese then ‘steal’ even those ideas that are still patentable? Especially since these may be correlated to the most valuable product niches. All we will do is work harder and harder to get the Chinese to allow efficacious patent enforcement in China. This will happen anyway because they are also fast tracking their original technology development and when they dominate in this endeavour the patent system will be working for them and not against them.
By the way, when a Chinese company has copied another company’s product they haven’t ‘stolen’ anything under law. A patent is an option to enforce a technology monopoly right in court, and until a court deems that the patent remains valid and that the copying party has indeed infringed one or more of the claims in the patent, the use of the word ‘stolen’ is quite unjustified.
And just to add a little colour to this comment, in the UK over half of the patent enforcement cases that go to court result in the court invalidating the patent that is being enforced! In Australia more than 80% of cases where a patent owner is aware of patent infringement are never the subject of any type of enforcement activity because of the high costs, the super slow process, uncertain outcomes, risks of counter-suits related to unwarranted threats, enforced licensing and very low damages.
When we say the Chinese are unfairly ignoring patent rights I simply don’t buy it. In the West we also ignore them in many cases. Small companies, for example, often cannot afford to chase up their patent rights. Only in the US is there a well-developed contingency legal service for patent enforcement and even these guys will only really take on the open-and-shut cases. The whole patent system is weighted towards the interests of large companies.
The true reason that the Chinese can copy technology products is that they have the energy and capital to do so. Many of the companies that they are copying are selling over-priced products which support whole organisations of entitlements. High margin Western tech companies that have a dominant position in a market niche tend towards what I would call an ‘aristocratic’ lifestyle choice that isn’t necessarily in the best interests of their customers.
I have had founded and run many tech companies in my time and it is always frustrating when a larger competitor sees the value of the products and copies them, thus putting downward pressure on margins and market share. And I should add that it’s not just the Chinese that do this. Everyone does. Over time I have decided that angst on the matter is futile and now I work with an awareness that copying will occur so this helps me frame what technologies that I take on. Some technologies are simply harder to copy, mostly because a lot of the ‘secret sauce’ is hidden deeply in the software.
And in making this comment you can see rampant copying without any checks and balances might in fact retard investment into technology development. Even in the single data point that I have to work with, me, it has caused me to pass on opportunities. But then I would counter that there are many more technology opportunities than there are people able and willing to make them a reality.
If I was forced to put the crystal ball to use and predict what the Chinese landscape will look like in 10 or 20 years time then I would suggest that they will doing much of the world’s inventing by then. And under these circumstances they will be very happy to have a strong patent enforcement system with all the reciprocal right in other countries to prevent their technologies being knocked off.
At this stage, at least here in Australia where the rate of technology invention is quite low, we would be well placed to find a source of low cost working capital for tech companies, water down our patent enforcement system even further (if that is possible), and then get busy knocking off the Chinese tech companies.
When something BAD happens to you, don’t get SAD, don’t get MAD, get even!
Google is slowly adding so much function to it’s chrome browser that eventually we will wake up and realise we really don’t need Windows or OSX on our keyboard devices. That’s their plan anyway.
The number of third party cloud based services that are coming on line to replace downloaded software will help accelerate this transition.
Microsoft is sort of fighting back by creating an Office cloud wormhole in Android. In principle, if all those apps go into the cloud then we won’t need Android either.
Microsoft would be well placed to buy Linkedin to help compel people into the Office wormhole. It would be good for us too since LinkedIn don’t seem to be able to run their own business.
Eventually you can imagine buying a device, any device, and the set up would simply ask you which of the preloaded wormholes you want to use – Google, Microsoft or Apple.
And within these would be cloud based services owned by one of these companies but available in all three.
Essentially there will be three large pools of data suckers and maybe one Chinese one as well, with lots of data overlap between them.
When we get to this point we will still be on the internet but arguably we will have moved away from the WWW and into the World Wide Data Wormhole Oligarchy.
“Dear Parents and Carers
Please find attached a gifted and talented checklist for parents.
If you have information for your child that you feel will assist the school in updating their gifted and talented register,could you please fill in the Gifted and Talented checklist and return to the office by Tuesday 12th May. Any additional documents you feel would assist us can be attached to the checklist.
Kind Regards
Gifted & Talented Committee.”
“Hello
Can you explain the purpose of this checklist?
many thanks
Ian”
Mike wonders why Australia has so few high tech billionaires compared to the US, even when adjusting for the different sizes of our economies. In truth we have hardly any and the ones that do sneak through generally piss off as soon as they can.
Australia has a population which is equivalent to the US population in 1850. Even in 1850 the Americans had already developed an appetite for risky technology ventures that we do not really have in Australia today. The problem is not the size of the economy per se.
A lot of this has to do with cultural differences relating to how the two countries were occupied from Europe. With much faster growth early on in their history, much more competition for resources and opportunities, a larger capital market, a different mix of immigrants and freedom from colonialism, the Americans developed a culture of risk taking very early on. And they had a much bigger market in which to make it work.
Fast forward to today, even if we in Australia wanted to compete against the US for ‘market share’ in the deployment of capital into high-risk tech business all we would be doing is over-supplying the global market with capital. That is, the US has captured this market and, being much better at it through practice, I doubt they will need to let go of their market share any day soon.
From a symptomatic point of view the main difference between Australia and the US with respect to investment in high-risk technology opportunities is the American habit of creating opportunities and solving problems with excessive capital investment. All other factors such as tax and labour laws, immigration policies, university structures and relationships with industry, the military machine, etc are, I believe, quite secondary and have been developed to help support the habit of excessive investment.
Often in the US, billions of dollars will flow to a company without any real demonstration of capability. Think of Tesla – a few years after the initial investment the capital has been used, probably quite inefficiently, to create electric cars and now solar energy storage products and, maybe in the future, the world’s leading rechargeable battery production capability.
This approach to investment works because, say, a billion invested might produce a startup with only limited revenues, many many customers, and an IPO value through the roof. Or not, as in the case of Solyndra and others.
On average though, enough make enough money for the capital to keep flowing and the hope of landing a ‘big one’ alive.
We in Australia pride ourselves on capital efficiency and in doing so, making small successes out of great technologies. And we hardly ever invest even millions of dollars into visionary leaders who simply offers the opportunity for investors to believe in the dream, and nothing else.
By way of example we can compare two taxi app companies, Uber in the US and Ingogo in Australia. Ingogo has raised $15m in 4 rounds of funding and is doing well in the local market. Uber has raised $5.9b in its 10 rounds and will likely be the market leader on a global scale for years to come. Need I say more?
The American model only works because the companies that they are over-investing in serve global markets and not just their local market. Fortunately for the Americans no other country has figured out how to re-create their wacky investment capability and this has ensured that their IRR remains healthy enough, on average, for the model to continue.
Only the Chinese have come even close to realising a competitive model to the Americans. What they have done is partially put up trade barriers to US tech companies and then they have used their government land reclamation scam to offer what is effectively free capital to tech companies. This model will only prevail while the real estate bubble purrs along, after which the capital may run out.
Israel does well, but in truth, in the context of high tech companies it’s just a franchise of the USA.
A friend once asked me if I liked his new jacket. I replied quite unkindly (this was a long time ago mind) that I would if it were ‘another colour, cut and material’. Similarly, I would argue that Australia has every chance of joining the USA in the business of over-investing in technology opportunities just so long as we can change our history and culture.
It can’t be too hard can it?
If someone forced me to develop policy on the subject I would probably go down the route of using all that cheap Chinese capital to do it. I suspect we would be much more willing to spend other people’s money on high risk technology company opportunities.
Getting money off the Chinese would be an interesting challenge but there are ways and means that our government could consider. And I am not talking chicken feed sums here, like the current Significant Investor Visa program. We would need billions to flow in return for, say, future assurances on the flow of resources to China, or selling off an Israel-sized chunk of Western Australia.
Even if we secured these billions the same old cultural reserve might come into play and the pressure to put the money into something like a Future Fund, with all it’s risk adverse investment policies, might just prevail. Collectively we simply would choose, through the electoral process, to put the money into implied sinecures rather than risky investments.
It’s how we are wired and we may as well accept this and move on.
Since I rarely listen to the radio or watch TV, the few occasions that when I do are very fascinating to me.
This morning, on one the ABC radio stations, I listened to some economist bemoan the Reserve Bank’s lack of resolve.
He argued that traditional macro-economic theory states that the role of the monetary policy of a Reserve Bank is to either raise interest rates to constrain inflation when an economy over-heats, or at other times to drop interest rates to maximise employment within the constraints of inflation.
That sounds all very rational and his argument was that our Australian Reserve Bank is a servant to too many masters and they therefore waffle in between these two courses of action with less than optimum effect.
He also pointed out that the Reserve Bank has accepted that in Australia there will for the foreseeable future be an increasing rate of unemployment that they can do nothing about. He thinks this is outrageous especially considering that there has been no debate on the subject.
Then a few people rang in to comment and its no wonder there’s no effort to have a debate on the subject. Morons to the core, focused only on their own wealth and security.
In any case there’s very little that the Reserve Bank can do about the long term increase in unemployment because it’s mostly driven by technological unemployment in the services sector as a result of new IT products and services. That is, it’s got nothing to do with monetary policy and is in fact the subject of an unrelated arm of economic theory.
Orthodoxy would suggest that any response to the problem of technological unemployment would need to be driven by major government policy. And in order for this to happen one of our governments would suddenly have to grow substantial balls, discover a new stream of creative economic genius, and care not a fig for re-election.
If you consider any supply chain, food products or manufactured goods or whatever, there is an accelerated movement to remove people from the supply chain, even in places like China where labour is much cheaper than in Australia. Apart from removing variable costs, removing labour improves utilization, enhances flexibility leading to more efficient use of capital equipment, and improves ‘yield’ by taking out the unexpected stoppages and mistakes attributable to the wandering or pissed-off mind of a human.
Until now we have responded to this movement by creating ‘fake’ jobs in the services sector driven by government regulations. However IT is even catching up with us here. I can, for example, imagine a robotic haircut within my lifetime replacing my hairdresser with his three year degree in haircuttery.
From here on, unless we come up with another plan, fewer and fewer people will be in employment. The natural result will be a increase in wealth disparity and social unrest. Under current policy the only action that any of our governments would consider would be to increase taxation on the wealthy and create even more of a social welfare state. This seems unlikely unless a good fraction of the population is hurting because the agents of the wealthy tend to have control of the media which substantially influences government policy on these matters.
Another course of action would be to enhance the country’s high value exports by creating and exporting the new IT technologies before they are imported here from elsewhere. This would at least insulate us against the pain that the rest of the world will feel. But we aren’t that good at high tech are we? And in any case we don’t seem to have the quality of politician that could even understand the need for such a policy, little own actually successfully implement one.
Option C would be to go all isolationist and cut-off most imports and ban new technology, thereby returning to past era where labour was more valued. This I would call the Luddite option. Generally speaking Luddites get hanged. When a whole country gets into the act, dire poverty often results as the whole shebang drifts backwards.
The core of the problem is what to do with people when we don’t actually need them to be productive? Just giving them a cheque for being alive doesn’t cut it because without a lack of purpose people tend to be dysfunctional. A whole society of dysfunctional people wouldn’t be a nice place to be.
I suppose we could all become academics. Each of us could spend our lives focused on intellectual development within a chosen niche, excluding those fields of endeavour susceptible to the benefits of artificial intelligence (eg. science, engineering and the North Shore trades such as dentistry, medicine and law).
That is we could have a whole nation of academics in those disciplines where the truth hardly matters, such as historians, philosophers, economists, art critics and the like, funded by taxes on those companies that provide fully automated products and services. This could work.
Listening to the radio this morning I heard the Prime Minister’s office use this excuse to attempt to cover up a storm in a teacup:
“A junior staffer was overzealous in the interpretation of the rules.”
The issue was the advanced notification to the awaiting Australian ambassador to France that his gay partner not be on the the runway when Tony emerged from the plane from Gallipoli.
Now don’t you just wish that I could have said that to the copper yesterday that penalised me for driving a car one day out of registration?
“Listen mate, you’re being overzealous in the interpretation of the rules.”
The result would have very likely been that he would have zealously interpreted a few more rules against my favour.
I just don’t think that this very rational approach cuts it any more in the land of the regressive taxation.
Courtesy of Mike, comes this pearler from the United States of depleted irony …
A silicon valley company called Knightscope has engineered up an autonomous robot that just hoovers around looking for crime to record or prevent (through an ear-piercing alarm and/or by alerting security agents).
Check it out below. All it needs is a gun turret and a tannoy.
Having just got back from China I forgot to notice that the car registration was due yesterday.
So on my way to a lunch, and driving because I am sick with a cold, a cop car that had been tailing me for about 5 minutes ‘woop woops’ me. I wasn’t surprised – you can sort of tell when that is going to happen.
After pulling over, the first thing I did was get out of the car to talk to the police. But apparently we have gone all American and I was quickly waved back into the vehicle. I am surprised I didn’t end up spread-eagled on the ‘hood’.
The first course of action was a breathalyzer test. I commented that I didn’t realise my driving was that bad. Not funny.
And then I handed over my license. Luckily I had it – a couple of weeks back I had misplaced it for a week or so.
Then came the true cause of my delay – driving an unregistered vehicle. A complete surprise to me.
After explaining the circumstances by responding factually and without embellishment to the questions, I was fined $623 for driving an unregistered vehicle.
(* – a little Googling later I find out that if I had said I was driving to the car rego office they have the power to let me continue on that drive without fining me, just FYI).
Apparently it could have been a lot worse, they told me.
I could have copped another $623 for driving an uninsured vehicle. There is some other offense as well for a similar amount. Plus they could have taken some demerit points off my drivers license. And they could have made me leave the car by the side of the road until the registration was dealt with.
So the picture I was painted was that they were in fact doing me a favour by charging me only $623, which is about double the registration cost, and just less than the combined compulsory third party insurance and registration cost.
Then one more weird thing happened. I had left the old (and now defunct) rego sticker on because I thought I could always refer to it if I was in doubt when the car needed to be registered – it’s pretty easy to lose track of all the mail that comes in. Unfortunately I had forgotten to look at the sticker altogether. In any case the copper came around to the passenger’s side, opened the door and removed the old rego sticker using my license as a scooper. What’s that all about if it’s not to do with making sure there’s a greater chance that we will miss the registration renewal?
What I am left with is an impression of how impersonal the police are these days. The whole process is videoed and recorded and they clearly have to play the whole thing with a very straight bat.
In fact it’s a binary process with very little leeway. You commit a crime or misdemeanour and you are charged or fined. My confusion remains as to why they suggested that they have the authority to charge me with one, or many offenses. If true, I can’t see the state government allowing this lost revenue opportunity to continue much longer.
There is now no connection between the words ‘policy’ and ‘police’. They are not policing policies at all – that would require police discretion. They used to have it but no more. What the police are actually doing is collecting revenues for state owned monopolies. You have to think that it will only be a matter of time before discretion is taken off judges and magistrates too.
Putting on my futurology hat, my guess is that the police will be the first government service to be completely replaced by IT technology and robots. They are well on the way already – they like daleks with all that IT they carry, half man and half machine.
In the bigger scheme of things it has to be cheaper to penalise people out of their cars and off the roads, as compared to investing in more roads. I think they could be onto something really good here.
I am just having a business lunch in Pyrmont with a bunch of Chinese.
A big round table in a private room. This could take hours. And hours.
This Chinese seafood restaurant is very fancy and little expense has been spared to create the impression that no expense was spared.
Except in the toilets, where little effort is being spared to create the impression that no effort is being made.
Lacking our Western goody-two-shoes sole-trader God and also a period of an Enlightenment, and retarded by the Cultural Revolution, our Chinese colleagues aren’t really up to the Indivuation stage of self-reflection.
This is to say, in the main, they look to the perceptions of people around them and society in general to validate their self worth. Just like the ancient Romans.
This is why it appears so easy for western brand companies to market to the Chinese. All they have to do is focus on the opinions of others, as impacted by the ownership of, for example, a particular handbag or car.
As in ‘if you drive around in this Jaguar everyone will think you are very wealthy and very successful’, quite independently of what fraction of your wealth went on the purchase, or whether there are other things worth valuing in life other than money.
Confucianism emphasized many humanistic elements such as the importance of the family, the cultivation of virtue, self-improvement and the maintenance of ethics. The Cultural Revolution pretty much killed off the latter three of these and left the family unit, along with money, as the key focus of the Chinese mind.
So where to from here?
Considering that there are up to 6 adults for each child and that the little buggers are spoiled rotten up until an age where they realise with horror that they are on the hook for supporting all of their elders, my guess is the Chinese youth will fast-track past the Western Gen-Y’s into Post-Indivuation.
This will be needed as a survival tactic. Especially when the Chinese economic bubble bursts, which it will. And it will be a big bubble burst because collectively they will really believe that all is lost, because they all believe it.
The symptoms that will help identify the Gen-C’s (which is what I have decided to call the Chinese youngsters that push through to post-Individuation) will be as follows …
1. They will care not for the opinion of others (primarily because they won’t be listening)
2. They will not judge themselves in any way at all (helped along by all that spoiling in their early lives)
3. They will retreat further into a virtual world with the smartphone being their major gateway to heaven
4. They will either be very skinny from not eating, or very fat from subsistence on Western junk food
5. In their virtual worlds there will only be ‘likes’ and ‘comments’ and no detrimental references will be allowed, further assuring them that all is OK
6. They will be confused by their angry parents and grand-parents always shouting at them. But they will be practiced in the art of recalcitrance
Apparently ancient Romans did not analyse their thoughts and feelings at all. They looked not inwards but to others to understand themselves. It was the opinion of others which dictated the opinion that a Roman ultimately held of him- or herself.
This Externalisation of personal awareness in the social construct was the first pit-stop on the road to ‘civilisation’ or socialisation of the animals that we were beforehand.
Fast-forward to the post-enlightenment era in the West, with the added benefit of 2000 years of our ‘personal’ Christian god that is shared by all. The ‘social’ in the inward-looking machine.
This second stage of personal awareness is known as Indivuation. Although this term has many meanings, I refer here to an individual in a social setting looking inwards for self-awareness and less so to the opinions of others.
Jesus met Jung and we are all now acutely aware of our weaknesses, here on earth as it were.
Oddly enough, Indivuation of self-perception is actually harder to adopt compared to just relying on the opinions of those around you since it takes a trained mental capacity to filter and de-construct these external opinions as simply those of other individuals.
These other individuals are not a monolithic social mass and as such there will be many different opinions; they are typically working with much less data on the subject at hand (you); and care less for the conclusions arrived at compared to the individual under consideration.
In other words, the ‘others’ with opinions are not only less qualified than the ‘self’ but less motivated to find the meaningful insights.
Indivuation actually helps to protect society and the individuals in it because it enables individuals to be less swayed by spurious and uncivilised movements, and also to correct behaviours that may be unsocial but also flying under the radar of social condemnation.
I suspect there will be a third age of post-Individuation where people will train themselves to care not even for their own assessment of themselves.
This Buddha-like state will be very difficult to achieve in a ‘social’ construct (but it is much easier in the ‘monkish’ isolationist state) since the useful tools of civility will have to be hard-wired into the brain for society to be facilely maintained.
The benefits of this post-Individuation state will be an ability to deal with social and technological complexity whilst by-passing performance-limiting anxiety.
I am starting to wonder if the apparent contentedness and vaguely self-unawareness of the Gen Y’s is not the first sign of this third Post-Individuation state?
If so, my assessment of them will have to shift a little. They may just be the necessary future.
I have an idea for a new business that designs and manufactures household electrical items.
They key for this business would be products that are
1. Super expensive
2. Designed to last forever
3. Completely serviceable with all wear parts easily interchangeable
4. Fantastically designed but with form following function
5. The market leading specs for performance, e.g. a toaster that does the job in 30 secs to a predefined brownness level that is actually measured in real time
Just imagine the wedding present market alone!
It would appear to me that the Americans have somewhat squandered their opportunity to use their affluence to hard wire civility into their society.
If answering a multiple choice questionnaire where you have no idea what the right answers are, which letter should you answer as the correct one for all questions to get the maximum score? *
A. D
B. C
C. B
D. A
E. None of the above
My, we are addicted to the new aren’t we? Where are you?
Vaguely related; I have missed all the news in the last month. Travel and all that.
So I went searching for news on Baltimore and the riots, after I finally heard about them.
A web search brought up the latest news (the aftermath) but a video search brought up the best and most popular summary from days ago which was much more interesting.
There a case for a search option that is time independent.
offshore westerly 