The value of an idea

I was sitting down with my fellow co-founder the other day and we got to talking about the philosophy of ideas. Specifically how you value them.

It was an interesting conversation. My takeaway was that your perceived value of an idea is in direct proportion to the difficulty you would have had coming up with it yourself. Thus, creative ideas from your accountant about how to avoid unnecessary tax are more valuable than fashion advice - it's not hard to figure out what looks good, but it's tough to avoid the IRS.

If you're pitching an idea, you need to reverse-engineer this argument. You need to present a simple idea with a complicated or difficult creation path. This gives the idea scarcity - originality borne of difficulty, not newness.

Scarce ideas and new ideas can both have value, it's just easier to see the value in something that LOOKED like it took effort to achieve.

One of these subtle, but important points.

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You can't be serious?

I just had to mention this news story that popped up this morning. It looks like Kolcraft (makers of various baby gear) is pulling some of its playpens from the market. A 10 month old apparently choked himself to death while playing in one.

Now normally the odds of this sort of thing happening are low - these guys make baby products and are obviously interested in keeping them safe. In this case though, it's amazing this is the first incident. If you look at a picture of one of these playpens, it essentially has a noose hanging in its center!

In the picture below, imagine the strap on the top flipped over to hang into the pen when the top basket is removed (there was actually a picture of it hanging down on TV but I couldn't find one online).


It boggles the mind that the guy who designed this didn't think about the possible ramifications of a loose noose-like strap hanging in the middle of a baby's play area! They should have just labeled it the 'playpen of death' and had a pit of crocodiles to remove the lifeless body come as an accessory.

This is one of those cases where you can obviously see the problem with hindsight, but still fail to imagine, without hindsight, how the issue was missed.

It's the sort of thing I dread happening with our software product - some serious design flaw that is a major game-breaker. Of course, we won't be killing babies so the stakes are a bit lower.

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Rugby World Cup points spread

This is a graph of the current points spread in the Rugby World Cup - being held in France. This is actually points differential - points scored minus those conceded.

It's sort of ridiculous that the top 20 teams in the world can be separated be such large differentials, and that that there are countries in the World competition that don't really have serious domestic leagues (or any leagues at all).

And for those of you who don't know much about rugby, getting outscored by 100 points is a very big deal! You kinda suck if that happens.

I wonder how many years this will go on before the World Rugby Commission realizes that they might have to design a new format? I'd rather see the top 10 teams in the world play a set of series against each other that decide the semi finalists than see the top teams walk all over weaker countries in a one-sided affair.

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Losing My Virginity

I just finished the Richard Branson autobiography, Losing My Virginity. I can't remember who exactly recommended the book to me. I think I might have read a blog post about it somewhere - so apologies to the forgotten source!

Bottom line, an interesting read. Are you going to learn Richard Branson's secrets from this book? Does he reveal the reason behind the seeming madness of his professional life? Are you going to come away with the knowledge to build a global brand in disparate industries? No, no, no and no.

But you will find out a lot about how the Virgin empire was built and even more about the remarkable life Mr Branson has lead. I think he should be the ultimate inspiration to all entrepreneurs. His belief in his own instincts is only surpassed by the belief he has in others - and the love, yes love, he has for everyone who works for him. His impeccable business ethics. His love for his family and children. His dedication to social causes and his adoration for small furry creatures everywhere.

Ok, that was one was laying it on a bit thick. My point is that yes, he seems like a pretty nice guy from this book, but maybe a bit too nice. No one can be that perfect. Although maybe he comes close? I really don't know, having never met him I don't want to pass judgment. But he is now in the top ten people I want to meet before I die.

He fascinates me now largely because I know there is some serious complexity there - you can read it between the lines of every paragraph. But none of it emerges in the book. His hopes, fears, desires, etc, are all there, just never explicitly addressed. It's like reading about a biblical character in the actual bible - you get their story, but only as part of a larger narrative, never as a personal journey. And no, I am not comparing Richard Branson to Jesus Christ, although they have both laid claims to the Virgin Births name at various times in the past.

Bottom line, an interesting read. Definitely recommend.

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Using online applications

As part of our business, my business partner and I have been using many of Google's online applications - a word processor, spreadsheet program and now a presentation program. These applications can be located in the app area of your Google account (you have to have a Google account to access them).

By and large, they are good. The functions they have are useful, although they do lack some of the more sophisticated formatting and mathematical functions present in their off-line counterparts. Despite this though, a major consulting firm recently signed a deal with Google to get these online applications used by more businesses.

This move is good for us. Google's applications are an example of something called Software as a Service (SaaS) - where you use online software services rather than download and install software. The software tool we're developing works in this way (kind of).

However, having used Google's applications quite a bit over the last couple of months, the experience isn't without problems. The biggest one is feedback - it's just too slow. Things that you do with a swift two key-stroke combination or a couple of menu choices in Excel or Word that are executed instantly, have a constant delay in Google apps - which gets worse the more information you have on a screen.

It feels like a big step backwards in terms of design, which is sad.

It vindicates a decision we made when we began development of our software tool - we decided to build a SaaS tool that worked on the desktop, not in the browser. With the UI on the desktop, there is no user lag and you can create a much richer experience. Significantly richer. Check out this example.

Even with all the advances in web technology over the last few years - mostly targeted at improving the user experience - the browser is still a straitjacket for really good design.

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Iraq and prediction markets

So having read through the Greenstone article, he does put some caveats around the use of Iraq government bonds as a predictor of the success or failure of the surge. Most notably, he admits that the market reacts to the same information we all have - making it, in my opinion, vulnerable to the same errors and biases. Of course, he argues it's the size of the market and the more rational opinions that make it better at predicting the outcome. More 'rational' as traders are only interested in the future income stream from the bonds, they have no other vested interest one way or another in the outcome.

All things being equal, I would rather place my bets on the collective wisdom of bond traders than any of the opinions on Iraq coming out of the US government - I think that is a given. I would also trust the traders more than, say, a poll of American citizens - most don't understand the war and just parrot back the media spin.

But I still wouldn't put a lot of money down. Why? Because the situation in Iraq is too dependent on Black Swans - the name Taleb gives to highly unpredictable but game changing events. A single incident (the bombing of a holy shrine, the murder of a political figure, a massacre, etc) can turn the course of the war. These incidents are hard to predict. No amount of public information helps. No amount of rational, unbiased assessment helps.

Because of this, the nature of the problem in Iraq is, in my opinion, ill suited to a prediction market. The prediction might be less biased, but it's not necessarily any more accurate.

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Microsoft can be cool...

http://www.microsoft.com/design/Default.aspx

In their own sort of 'Microsoftie' way.

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Economist discuss Iraq data

The Freakonomics guys link to the following report by economist Michael Greenstone. He takes a pretty detailed look at the recent data out of Iraq to try and come to a definitive answer regarding the 'surge' (the increase in US troops since January).

Firstly, it's good to see someone with a lot of experience in information assessment try to tackle this question. Secondly, it's good to see someone who (I assume) has no political axe to grind entering the debate.

I haven't read the whole article yet, so might get to a longer post about it later.

The first thing that struck me as a bit strange though was Greenstone's faith in the predicitive power of Iraqi government bonds. He states:

I examine the price of Iraqi state bonds, which the Iraqi government is currently servicing, on world financial markets. After the Surge, there is a sharp decline in the price of those bonds, relative to alternative bonds. The decline signaled a 40% increase in the market's expectation that Iraq will default. This finding suggests that to date the Surge is failing to pave the way toward a stable Iraq and may in fact be undermining it.

The logic makes sense - bonds represent future income so their price can be indicative of the likelihood of that income eventuating. However, why do the people trading these bonds have any better sense of if or when Iraq will fall/fail? The don't. They watch the same news broadcasts and read the same information you and I do. Their opinions suffer from the same biases their sources do. So do ours.

I guess there might be some merit in the averaging effects of a large market, but that just means you come to an average estimate, not a better one.

You just have to look at oil futures pre Iraq war to see that no one in that market was predicting what would come.

I'll read the paper and see what else he says. I think he makes some other very useful points. I guess I'm just not a fan of prediction markets. They are basically gambles. You may as well say the odds of a horse winning are best represented by the win and place money. You could bet that way, but you're never going to make much. I have 15 years of watching my father bet on horse races to back me up!

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Vista Bashing

I just read this post about Microsoft's Vista operating system. It adds to the increasing negative 'hype' about this OS. Which is fascinating, as I have been using Vista for weeks now and it's fine.

How did Microsoft let this type of negative PR about Vista run amok on the Internet? It's obviously difficult to control this type of thing, but this product is actually good! It has many useful advantages over XP - more stable (yes, not one crash and I can leave the OS on for days with no memory leaks), a better UI, looks nicer, easy to find programs, etc, etc.

I was talking to an IT manager friend of mine the other day about this, and it turns out he is a classic example of how the hype hurts. He was initially very skeptical of Vista because of the negative press. Refused to use it after the 'verdict' on it seemed to be bad. He recently installed it on a few computers and to his surprise found it to be a great system! He runs a lot of computers and his failure to buy Vista was because of bad PR, not because he tried the system and hated it.

If Vista ends up selling badly, as it seems to be, it's not because the product sucks. It's because the Marketing does. Microsoft's Marketing leaves a lot to be desired.

What should have they done? Might be a good topic for the next post.

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Lies, dammed lies, and Iraq statistics

Over the past couple of days, General David Petraeus has been presenting his version of the 'situation' in Iraq to various congressional committees. I sat and watched some of this testimony and was impressed to see the General use a wide array of charts and graphs to back up his claims of positive, but limited progress.

I have no particular political axe to grind, I'm all in favor of a solution over there, whatever that turns out to be. But one chart in particular did interest me. It was this one (sorry about the quality):

If you can't read it, this the number of attacks in Iraq (from top to bottom) against infrastructure, from IEDs (found and exploded), sniper and small arms attacks, and mortar/rocket attacks.

The General used this chart to support the notion that the surge (the increase in US forces since Jan, which peaked in Jul) is working to reduce attacks. I think it is, but how is it working? Have the increased offensive actions of US units destroyed the ability of insurgent groups to mount these attacks? Or has the increased number of US troops just made it more difficult to carry them out?

Either way it's a good outcome right? Well yes, but also no. If it's the former, you are destroying the capability for future attacks. If it's the latter, you are curbing attacks in the immediate future, but not really in the medium to long term - you're just putting your finger in the dike so to speak.

In the testimony I saw, the General didn't really elaborate on which mechanism was at work. There was no accompanying graph of captured or killed militants. And no indication of militant numbers who just went back home to sit out the surge because their chances of capture were higher.

So what can the graph itself tell us about which mechanism might be at work? One interesting observation is of the steepness of the decline post July. If militants were still going flat out to bomb and kill US troops and civilians in that post July period, even with the surge and very successful offensives by US troops, you wouldn't expect the decline to be so steep. Why? Because it's been shown in the past that these attacks can be carried out with relative ease and despite heavy US troop presence. If the surge was slowly eroding away the ability of militant groups to launch attacks, you would expect the decline to be less steep - more of a gradual fall.

More likely, the militants have just stopped attacking. They are having a bit of a rest. Re-grouping and waiting for the right opportunity to begin in earnest again. This is far more likely to be represented by a steep, rather than gradual decline in these numbers. Given the sheer amount of activity from Jan to May 07, you would think a rest would be in order!

If this is the case, the force reduction plan might just be 'taking the finger out of the dike' enough to cause a new flood of violence. Let's hope not

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Rugby World Cup started this weekend

The Rugby World Cup started this weekend in France. For those of you that don't follow International Rugby, this competition is played every four years and involves 20 different teams (selected from past World Cup performance and various qualifying matches).

New Zealand won the inaugural Cup in 1986, and we've come close, but never quite triumphed since. Suffice to say, most New Zealanders feel they are well overdue.

Rugby is almost non-existent in the US. You get the occasional mention on TV, but it's largely ignored. If you didn't follow it over the web, you would never know the World Cup was on. Which is a shame, as there is actually a US team in the competition (although they are pretty bad).

As a sport, it's almost impossible to break through the Baseball, American Football, Basketball trio here - those sports are such an important part of the fabric of US society. There isn't really room for anything else. But the same goes for Rugby in New Zealand and Soccer in the UK.

Sports are the ultimate brands in a way - people devote huge amounts of time, effort and emotion following their teams and will willingly dish out significant sums of money for the privilege - sort of like Apple enthusiasts (poor sods).

So spare a thought for me as I sit in my $150 All Black replica top (that cost me $30 to ship from NZ), sipping $40/case NZ beer watching the World Cup on $25/game pay-per-view. If we win it was obviously money well spent! If we lose, I will be looking for a refund.

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If you're going to have a consumer forum, moderate it

I've been looking at a lot of small business websites over the past week as we're looking for alpha clients for our software. Having an unmoderated forum is the most common 'web' mistake I've seen. Check out this unmoderated forum from the NY Flower Market Association (warning, link contains offensive material).

Bottom line, don't use unmoderated forums. Spam is like sand - it always seems to find its way into the smallest of places.

At the very least, require people to have a verified account before they can leave a message!

I am sure this is not the kind of image the Flower Market Association of NY wants to project.

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Riding the NYC subway for the first time

I just cracked up when I saw this post over at Scott Adams blog (the guy that does the Dilbert cartoons).

Just an excerpt:

To ride the subway, you must purchase a card with a magnetic strip. You learn this by observing other people “in the know” swiping their cards as they enter the turnstile. There are many options for what type of card you might want for particular purposes, and no apparent posted instructions. Luckily, you can ask for guidance from a helpful person who is behind thick glass. This transaction involves mumbling, rushing, condescension, the supposition that you are a moron, much evidence to support that assumption, and eventually the exchange of money for a little card that may or may not have some application for riding the subway.

It's possibly the worst designed system in the world. I experienced pretty much all of what Scott is talking about when I first moved to NY.

I even get lost after 4 years of using it! And I have been with 'natives' who have managed to get lost.

If you're new to the city, NY has this way of making you feel you're the butt of some cruel joke. I think Scott is just finding this out.

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Swivel in the spotlight

Nathan, over at Flowingdata made a post recently about some of the shortcomings he sees in the Swivel concept - Swivel is site that allows users to upload, share and comment on data. I've mentioned Swivel before, along with some of the other sites trying to make a name for themselves in this area (ManyEyes, Data360, BO Insight, Freebase).

I think Nathan hit on a few good points - poor visualizations, statistical validity and data quality.

I agree that the visualizations could be improved, but you don't need an expert in this area - there is a lot of literature and commonly held 'norms' that good sites and products adhere to. Follow these and you should be fine.

The whole issue of statistical validity and data quality is tied up in the larger question of what does Swivel want to be? Adhering closely to the world of statistics and enforcing strict quality requirements will make the site less accessible to the very people it wants to attract - non-statisticians. But not doing so makes it more susceptible to comments like Nathan's, and potentially undermines confidence in the site.

Is there a happy middle ground between validity and accessibility? Probably. But is it a compelling proposition? Not really.

It's not compelling because, fundamentally, DATA is not compelling. Accurate or not, DATA is boring. I know, I've been presenting data to people for years. They could really care less about it. What they do care about is what it allows them to DO. Data is just an input into a decision, a thought, a process. It's meaningless without a context or as an end in of itself. The guys at Swivel know this. They write about their featured graphs in a way to promote context. But unfortunately, the discussions don't seem to take hold. Why? Because if I want to debate interest rates, hurricane Katrina or suicide in the US, I am bound to find specialist sites with more interested parties elsewhere.

As a result, I see Swivel stuck between being a specialist site about data (which is not compelling to anyone but statisticians), and being a generalist issues site driven by data (which is mildly compelling to everyone else, but not particularly compelling to statisticians (although we don't really care about what they think :)).

So what to do? My two cents follow:

• I'd move to shore up the validity and quality of the data on Swivel, and put more emphasis on people embedding and blogging about it in their own forums, rather than trying to have the discussion on the Swivel site. I know this is a pretty big departure from what Swivel is trying to do. But at this stage, I think it's a far more compelling 'tool' than 'destination'.
  
• In keeping with this theme, I would really put emphasis on improving the visualization tools. It would be great to have Swivel as the default source for all data visualization in blogs.
  
• Definitely concentrate on the Official Data source program. I love the idea that there is a site I can go to get data that I know comes from a reputable source.

But above all, keep trying Swivel guys. There is definitely something worthwhile in what you are doing. And I hope you can make a successful business out of it.

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Service on your terms

Scott over at the very insightful Artificial Simplicity blog has a great post on service expectations in the Internet world. He sums up 'service' as:

• Free
• Fast
• Accessible 24/7
• Hyper-relevant in terms of specific times, place, situation, product
• Connected to as many venues as possible
• Configurable/Customization: reorganize info the way you want it
• And ideally Smart: Learns your preferences and improves through usage

I think it's a pretty good list.

What intrigued me the most (and why I left a comment on his blog) was that we now expect these elements to be present in many of our real-life interactions - I'm less willing to pay for service (I can do myself), don't want to wait, want things to be connected to other tasks/information I need, and don't want to go through the same steps each time to reach my goal (configurable service).

Case in point. Each time my cable modem goes down (and this has happened a few times for varying reasons), I have to go through the same steps over the phone with the tech rep. Even when it might be my third call that week! Same steps... same boring routine.... despite me telling them it didn't work last time. The human on the other end of the phone might be good at keeping me engaged and talking and trying to deliver that good'ole service with a smile attitude, but they are not great at learning from my past experiences and configuring the service to my needs.

It's strange, but there are so many examples where I feel a computer is better at the job than a human. I never always felt that way. It's the Internet that has done it to me. For better or worse? Interesting question.

I'm consumed by these things at the moment as we're still in development stage for our software service. Interaction, design, work-flows etc. - they all need to be thought through. Scott's post about Internet Service gives clarity to many of these things. I'll post about some of them as they get more fully developed.

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