bnjammin's Blog

Too Many Cooks

2009-11-23T07:00:00.000-08:00

Every company that is successful eventually runs into a problem which my favorite business-comic strip Dilbert pokes fun at in the two latest strips:

(from Nov 20)

(from Nov 21)

Think about it. How many large companies do you know of where there isn’t a massive layer of mysterious “vice presidents” (or some other equally meaningless-sounding title of doubtful seniority)?

This isn’t to say that all these positions are filled with useless people, or that distinctions like “senior vice president” and “executive vice president” and “associate director” aren’t important, but this proliferation of senior-sounding titles is indicative of companies facing a “mid-life crisis”, where the promise of massive growth and exciting future job prospects are no longer certain enough in order for a company to retain all of its talent.

As a result, companies are forced to create these new levels of management to keep their good people, either because there are not enough positions of seniority for these people to be promoted into or because they are being drawn by other companies/competitors who have already made the jump into “vice president land”.
This practice, in and of itself, is not in and of itself a bad thing. After all, why shouldn’t a successful company make a minor concession like this to retain talent? But, the problems emerge when:

These new positions add new layers of bureaucracy that muddy up what used to be a very clear decision-making process and make the company less agile
These new positions create “organizational bloat” -- where costly and inefficient “manager” positions are created which don’t actually manage anyone or which manage departments/groups of little value
These new positions allow senior managers to play politics with promotions and/or lower promotion hurdles, lowering the talent/efficiency of the company overall

While there is no easy way to tackle all of these issues (and, in my mind, the fact that companies feel they have to create these new “vice president” positions feels like a cheap cop-out to me), it is something for all general managers/consultants to be aware of as many companies suffer from the dilemma of keeping a company lean and efficient and yet retaining the talent/size that they need to grow.

(Image credits – Dilbert)

Look ma, no battery!

2009-11-19T07:00:00.000-08:00

While Moore’s Law may make it harder to be a tech company, it’s steady march makes it great to be an energy-conscious consumer, as one of its effects is to drive down power consumption in generation after generation of product. Take the example of smartphones like Apple’s iPhone or Motorola’s new Droid: Moore’s Law has made it possible to take computing power that used to need a large battery or power source (like in a laptop or a desktop) and put it in a mobile device that has a tiny rechargeable battery!

Some folks at NEC and Soundpower took advantage of this in a very cool way (HT: TechOn via Anthony). By combining NEC’s specialty in extremely low-power chips with Soundpower’s expertise at creating vibration-based power generators, the two companies were able to produce a battery-less remote control powered only by users pressing the buttons!

It makes me wonder where else this type of extremely low-power circuitry and simple energy generation setup could be useful: sensor networks? watches? LEDs? personal-area-networks?

And at the end of the day, that’s one of the things that makes the technology industry so interesting (and challenging to understand). Every new device could enable/develop a whole new set of applications and uses.

(Image credit)

Happy birthday Firefox!

2009-11-09T18:46:00.000-08:00

While most people will (and should) think of today as the anniversary of the Fall of the Berlin Wall (who can forget Reagan's "Mr. Gorbachev, tear down this wall"?), if you go back a mere five years (rather than 20), today was another fateful day for the Internet: the formal birthday of my favorite browser: Firefox.

Before that day, it was a time of great woe in the "interwebz", as it was a world where Microsoft's standards uncompliant browser had completely trounced Netscape's attempts to penetrate the market, leaving web developers everywhere the horrible task of designing their websites for Microsoft's backwards browser. But out of the disaster that was Netscape's original business model of attempting to make money off of packaged browser software sales emerged a new take on how the browser could be done. Instead of trying to sell copies of the browser (and lose in the war for user share because Microsoft's was free), the Netscape browser was turned over to an open source effort run by Mozilla. The Mozilla suite itself never quite took off, as it was perceived to be "bloatware" that tried to satisfy everyone but succeeded at satisfying no one (this user included), but it spawned an effort to create a browser code-named Phoenix (symbolizing the rise of the Netscape codebase from death, I suppose?).

Flash forward a little bit and Phoenix is renamed Firebird (which was around the time I started using the product -- ironically because I was wondering if Mozilla had gone the way of the dodo) and then re-christened Firefox before finally making its public (non-preview release) debut as Firefox 1.0 on November 9, 2004.

So, 5 years later, looking back - what do we see?

The most obvious change in the internet space was Firefox's key role in re-igniting the browser wars. Microsoft's browser development, which had almost all but ignored W3C-standards compliance and aggressive feature development, has been greatly accelerated (Internet Explorer 7 is a quantum leap above the disaster that is Internet Explorer 6, and Internet Explorer 8 is even a tall leap above Internet Explorer 7), and even Microsoft's tone with the standards bodies and web developer community has taken on a new level of humility. The availability of a popular, alternative browser with a different user interface, new features, and real extensibility shattered the ability of Microsoft to ignore its browser development and dictate its own standards on the web space, and was probably a major galvanizing force in the adoption of newer web technologies (i.e. CSS, AJAX, etc) as the market share of open source/standards-compliant browsers increased.

While much harder to gauge, its also hard to deny the role of Firefox in raising awareness about open source as an alternative software paradigm and increasing desire of software users for software extensibility (i.e. extensions/plugins), or even in the development of new projects like Google's Chrome browser (which is being built by many of the same engineers who had once worked on Firefox).

Happy birthday, Firefox!

For more information: Lifehacker has a great overview of Firefox's history. And, of course, Mozilla released a celebratory video:

(Image credit - I Has a Hot Dog)

Goodbye Mr. Dorf

2009-11-04T18:49:00.000-08:00

I was saddened to discover, upon checking my favorite RSS reader that Sheldon Dorf, founder of the San Diego Comic Con which I have grown fond of passed away today (Yahoo News link).

SAN DIEGO – Sheldon Dorf, who founded the world famous Comic-Con International comic book convention, has died. He was 76.

A longtime friend, Greg Koudoulian, says the Ocean Beach resident died at a San Diego hospital on Tuesday from kidney failure. He had diabetes and had been hospitalized for about a year.
Dorf, a freelance artist and comic strip letterer, founded Comic-Con in San Diego in 1970 after moving from Detroit.

Today, the convention draws 125,000 fans a year and is a major gathering for comic book fans, artists, writers and movie stars.

Koudoulian says Dorf was friends with comic greats such as Marvel artist Jack Kirby and "Peanuts" creator Charles Schulz. He says Dorf was also instrumental in helping budding artists find audiences.

Farewell, Mr. Dorf. Hopefully you enjoy yourself in the great comic book convention in the sky...

Abacus 2.0

2009-11-02T07:00:00.000-08:00

I’ve blogged before about the power of Wolfram Alpha, Mathematica creator Wolfram Research’s powerful online “knowledge engine” which is capable of, among other things, balancing chemical equations, looking up star charts, doing math, and even looking up medical information.

But it’s good to know that, despite the sophisticated computational engine which underlies it, Wolfram Alpha hasn’t forgotten its “ancestor” the abacus, a tool used by many cultures before the dawn of the electronics age.

Like a respectful child, Wolfram Alpha pays respects to its ancestors with a feature which allows you to see how any number would be represented in abacus form. Case in point, I entered the search string “abacus 24” into the Wolfram Alpha engine (because I turned 24 last week) and got:

Abacus 2.0?

(Image credit – abacus)(results from Wolfram Alpha engine)

Untouched

2009-10-28T07:00:00.000-07:00

Despite not really knowing the lyrics, I’ve had a song playing on and off in the back my head since I got back from training. It was played in the background of the closing slideshow, and upon getting back, I must’ve spent at least one (frustrating) hour searching on Google combinations of words “I just can’t reach you” and “I need you” to no avail.

Thankfully, I had the email contact of one of the training coordinators and she pointed me to this little gem. I was pretty surprised to find out it was from the Veronicas, as I haven’t really liked any of their other songs. Probably the strings and the ridiculously fast beats (176 beats per minute!)?

“Alalalala alalalala”

Schering-Plough says goodbye via analyst call

2009-10-27T07:00:00.000-07:00

If you follow the biopharma sector at all, then you’ll know one of the most noteworthy deals to be announced in recent months is the $41 billion deal where Merck will buy former rival Schering-Plough.

With the deal closing soon, Schering-Plough’s execs had to deliver one last earnings call with the analyst community which cover Schering-Plough stock.

Generally, these are very dry affairs full of corporate speak with many empty promises, excuses, and boasting (although, occasionally, if you have an interesting enough CEO like NVIDIA’s Jen-Hsun Huang, you get some very interesting commentary). But, this most recent analyst call had a bit of poignancy you don't usually get in an analyst call, as covered by the Wall Street Journal Healthcare blog:

The earnings call’s invariable bleating about operational sales growth and foreign exchange impact came with notes of nostalgia… Analysts offered kind good byes and good lucks. Executives waxed about the company, and its pipeline of new drugs, that they had built. It will all go to Merck now, Chief Executive Fred Hassan said in closing.

Awwww. Adios, Schering-Plough.

(Image credit – Merck/Schering Plough)

Innovator’s Business Model

2009-10-22T07:30:00.000-07:00

A few weeks back, I wrote a quick overview of Clayton Christensen’s explanation for how new technologies/products can “disrupt” existing products and technologies. In a nutshell, Christensen explains that new “disruptive innovations” succeed not because they win in a head-to-head comparison with existing products (i.e. laptops versus desktops), but because they have three things:

Good enough performance in one area for a certain segment of users (i.e. laptops were generally good enough to run simple productivity applications)
Very strong performance on an unrelated feature which eventually will become very important for more than one small niche (i.e. laptops were portable, desktops were not, and that became very important as consumers everywhere started demanding laptops)
Have the potential to improve by leveraging their industry learning curve to the point where they can compete head-to-head with an existing product (i.e. laptops now can be as fast if not faster than most desktops)

But, while most people think of Christensen’s findings as applied to product and technology shifts, this model of how innovations overtake one another can be just as easily applied to business models.

A great example of this lies in the semiconductor industry. For years, the dominant business model for semiconductor companies was the Integrated Device Manufacturer (IDM) model – a business model whereby semiconductor companies both designed and manufactured their own product. The primary benefit of this was tighter integration of design and manufacturing. Semiconductor manufacturing is highly sophisticated, requiring all sorts of specialized processes and chemicals and equipment, and there are a great deal of intricacies between one’s designs and one’s manufacturing process. Having both design and manufacturing under one roof allowed IDMs to create better products more quickly as they were able to exploit the interplays between design and manufacturing and more readily correct problems as they arose. IDMs were also able to tweak their manufacturing processes to push specific features, letting IDMs differentiate their products from their peers.

But, a new semiconductor model emerged in the early 1990s – the fabless model. Unlike the IDM model, fabless companies don’t own their own semiconductor factories (called fabs – hence the name "fabless") and outsource their manufacturing to either IDMs with spare manufacturing capacity or dedicated contract manufacturers called foundries (the two largest of which are based in Taiwan).

At first, the industry scoffed at the fabless model. After all, these companies could not tightly link their designs to manufacturing, had to rely on the spare capacity of IDMs (who would readily take it away if they needed it) or on foundries in Taiwan, China, and Singapore which lagged the leading IDMs in manufacturing capability by several years.

But, the key to Christensen’s disruptive innovation model is not that the "new" is necessarily better than the "old," but that it is good enough on one dimension and great on other, more important dimensions. So, while fabless companies were at first unable to keep up in terms of bleeding edge manufacturing technology with the dominant IDMs, the fabless model had a significant cost advantage (due to fabless companies not needing to build and operate expensive fabs) and strategic advantage, as their management could focus their resources and attention on building the best designs rather than also worrying about running a smooth manufacturing setup.

The result? Fabless companies like Xilinx, NVIDIA, Qualcomm, and Broadcom took the semiconductor industry by storm, growing rapidly and bringing their allies, the foundries, along with them to achieve technological parity with the leading IDMs. This model has been so successful that, today, much of the semiconductor space is either fabless or pursuing a fab-lite model (where they outsource significant volumes to foundries, while holding on to a few fabs only for certain products), and TSMC, the world’s largest foundry, is considered to be on par in manufacturing technology with the last few leading IDMs (i.e. Intel and Samsung). This gap has been closed so impressively, in fact, that former IDM-technology leaders like Texas Instruments and Fujitsu have now decided to rely on TSMC for their most advanced manufacturing technology.

To use Christensen’s logic: the fabless model was “good enough” on manufacturing technology for a niche of semiconductor companies, but great in terms of cost. This cost advantage helped the fabless companies and their allies, the foundries, to quickly move up the learning curve and advance in technological capability to the point where they disrupted the old IDM business model.

This type of disruptive business model innovation is not limited to the semiconductor industry. A couple of weeks ago The Economist ran a great series of articles on the mobile phone “ecosystem” in emerging markets. The entire time while I was reading it, I was struck by the numerous ways in which the rise of the mobile phone in emerging markets was creating disruptive business models. One in particular caught my eye as something which was very similar to the fabless semiconductor model story: the so-called “Indian model” of managing a mobile phone network.

Traditional Western/Japanese mobile phone carriers like AT&T and Verizon set up very expensive networks using equipment that they purchase from telecommunications equipment providers like Nokia-Siemens, Alcatel-Lucent, and Ericsson. (In theory,) the carriers are able to invest heavily in their own networks to roll out new services and new coverage because they own their own networks and because they are able to charge customers, on average, ~$50/month. These investments (in theory) produce better networks and services which reinforce their ability to charge premium dollar on a per customer basis.

In emerging markets, this is much harder to pull off since customers don’t have enough money to pay $50/month. The “Indian model”, which began in emerging countries like India, is a way for carriers in low-cost countries to adapt to the cost constraints imposed by the inability of customers to pay high $50/month bills, and is generally thought to consist of two pieces. The first involves having multiple carriers share large swaths of network infrastructure, something which many Western carriers shied away from due to intellectual property fears and questions of who would pay for maintenance/traffic/etc. Another plank of the "Indian model" is to outsource network management to equipment providers (Ericsson helped to pioneer this model, in much the same way that the foundries helped the first fabless companies take off) -- again, something traditional carrier shied away from given the lack of control a firm would have over its own infrastructure and services.

Just as in the fabless semiconductor company case, this low-cost network management business model has many risks, but it has enabled carriers in India, Africa, and Latin America to focus on getting and retaining customers, rather than building expensive networks. The result? We’re starting to see some Western carriers adopt “Indian model” style innovations. One of the most prominent examples of this is Sprint’s deal to outsource its day-to-day network operations to Ericsson! Is this a sign that the “Indian model” might disrupt the traditional carrier model? Only time will tell, but I wouldn’t be surprised.

(Image credit) (Image credit – Foundry market share) (Image credit – mobile users via Economist)

USB H4x0rz

2009-10-20T07:00:00.000-07:00

Back when I was still posting on Xhibiting, I was especially fond of interesting USB gadgets. Well, my good friend Anthony pointed me to this interesting gadget that he found out about through Engadget which takes my USB fascination to a whole new level:

The product is from Thumbs Up! and apparently, after plugging it into someone’s computer, will erratically turn on and off the caps lock, type out random text, and make random mouse movement. Better, still:

“Handily, the Prankster features a time delay setting, so that after installing it, you can make your getaway safely before it starts misbehaving.”

Glad to see they were thinking ahead. Thankfully, this is meant more to be a nuisance than a security risk, as its designed not to hit “Enter” or open/close files:

“The Prankster is highly annoying, but it’ll never activate the ‘enter’ key or close or save documents, so it’s mostly mischievous, not super-dangerous.”

Even so, to cover themselves morally (and possibly legally?), they note:

“However, it probably shouldn’t be used on computers that control nuclear reactors, security systems for genetically recreated dinosaur parks and/or zombie experimentation units, captured alien spacecraft or freezers packed with delicious ice cream.”

And all only for 20 British pounds!

(Image source – Thumbs Up)

Fro-yo

2009-10-15T07:00:00.000-07:00

My current manager loves Fro-yo (frozen yogurt) to an almost absurd degree. Having had some type of frozen yogurt for four years in college, my enthusiasm, while still there (as it still tastes good), is not quite as strong as his.

The result? I get a lot of amusement out of some of our case team’s ridiculous fro-yo antics. Here are three:

Example 1: Philosophy
One day, the team was trying to get back to the airport to make a flight after having spent a long day at the client site. Around the time that certain members of the team were uneasy about how soon the flight would board compared with how far away we were from the airport, my manager suddenly drives off the highway that is taking us to the airport.

Someone: “What’s going on? What are we doing?”
Manager: “We’re going to get Fro-yo.”
Someone: “Are you serious? We’re going to be late!”
Manager (dead serious): “I never joke around when it comes to Fro-yo”

Example 2: Never Lost
For some reason, the car that our team rented lacked a GPS device. The result? Some of us had no idea how to get back to the hotel. Of course, my manager picks this time to have a fro-yo craving. And immediately starts driving very quickly down the road.

Ben: “Do you know where are we going?”
Manager: “Please, Ben, I have a Fro-yo radar. I can sense we’re heading to a Fro-yo place right now.”

(Sure enough, he found his way to his favorite Fro-yo shop, and we wound up back in the hotel safe and sound afterwards)

Example 3: Priorities
We’re sitting at dinner just passing the time as we eat our meals. I joke that instead of grabbing dessert in the restaurant, we should grab Fro-Yo. Of course, my manager jumps on that and adds…

Manager: “It’s double-stamp day!” (a day when we get two stamps per serving on a rewards card, rather than the usual one per serving)
Teammate (laughing): “What do you memorize their schedule?”
Manager: “When it comes to unimportant stuff, (turns to me) like Ben’s analysis, I don’t bother remembering. But when it’s the important stuff, like double stamp day, I remember.”

Sure enough – it was double stamp day.
(Image credit)

Resume/cover letter pet peeves

2009-10-12T07:00:00.000-07:00

This may come a little late for those of you who are already in the middle of recruiting season, but having gone over in excess of 100 applications, I felt it’s my duty to at least try to make a few things clear about what I absolutely hate when I’m doing resume reads (apologies if the tone is a bit aggressive, but I’m really tired of running into applications with these problems):

Not following the directions – This is top of the list for me, and it almost warrants a complete disqualification of an applicant from my perspective. This is your one chance to prove to the company you’re applying to that you’re a great choice – and you can’t even follow the clearly stated directions? If the instructions say, “submit two applications through two different websites” – I don’t care if one website is poorly designed, if you want the job you’re going to submit it twice. If the instructions say “include your SAT score”, and you don’t because of some sort of moral objection – I don’t care, because apparently you don’t want this job enough to overcome that objection. Please, people. Most companies aren’t trying to make this difficult.
Cover letters that make you sound like someone I’d rather throw darts at than work with – Don’t get me wrong. To get hired you’ll probably have to do some gloating. And, there’s nothing wrong with using your cover letter to try to explain away a deficiency or two in your application. But, when your cover letter does nothing but convey either how you are someone who thinks you’re better than all the people around you, I find myself asking, “do I really want to work with someone like you?” and answering “No, I’m going to pass on this one.” It may be a little petty, but remember, its more important for a business to not hire bad people than it is for them to make sure every good candidate gets his/her fair chance.
Purpose statements – Your purpose is self-obvious. Its to get a job at the firm you’re applying to. If your resume doesn’t establish that you have the qualifications and passion to do the job, either change your resume so that the “purpose statement” becomes a waste of time/space or don’t apply for the job.
Skill: I’m great at Microsoft Office – Really? Unless you are super-super-kickass at using Word and PowerPoint and Excel (and I mean, you could teach the hardcore investment bankers and consultants a thing or two), don’t mention this. Nobody really cares (when’s the last time you heard a company hire a banker/consultant/analyst because of their Office skills?), and everybody knows you’re just pretending to have more computer skills than you actually have.

We now return you to your regularly scheduled blogging.

Off to training

2009-10-06T08:28:00.000-07:00

I'm sitting in an airport waiting for my flight to a training program that my firm holds for third year associates. That's good -- because two years of not knowing what I'm doing really needs to end :-).

Looking forward to returning to the blogosphere when I return (next week)! Albeit, I'll be out of the country (so no Blackberry :-X), and have limited access to the internet and Google Reader (my Google friends will experience a sudden decline in shared items to read and the Google Wave collaboration I just started with Eric, Anthony, and Kevin will have to take a back seat for a few days), and I will just happen to miss out on helping my lovely girlfriend move in to her new place (I swear, it was a coincidence!).

Until next time... (and if you miss me, there's a list of my favorite/popular posts on the right!)

An electric eel’s version of Energy Star

2009-10-05T07:00:00.000-07:00

It never ceases to amaze me the extent to which nature beats man to the punch when it comes to coming up with innovative solutions. There’s a reason, after all, that so much of engineering is biomimicry.

One cool example of nature coming up with a solution to a problem humans rea dealing with is something I recently encountered is from a journal article from the open access journal PLoS Biology (meaning that you don’t need to pay to read the article) on electric fish. While most people think of electric eels which are known to stun prey with electrical discharges when they think of electric fish, but there are many species of electric fish which use weaker types of electrical discharges for navigating (“electroclocation” – like echolocation, but with electricity) or communication.

Just like humans eventually did, electric fish have discovered that … electricity is costly to produce. These electric fish might not pay dollars and cents for said electricity, but they pay for it in terms of calories (they need to consume extra food to sustain their electrical abilities) and, for some species, in terms of being easily detected by electroreceptive predators (predators who can detect electrical fields).

A team of researchers at UT Austin and Florida International University studied a particular species of electric fish – the longtail knifefish (Sternopygus macrurus) and found that they was able to lower the strength of their emitted electrical fields by ~40%! This lowering of “power consumption” (to misuse the term) was triggered to changes in the day (these electric fish are more active at night, so they turn it up when the sun goes down and turn it down when the sun comes up) and when they were being social.

This, in turn, was all found to be controlled by a hormonal system that is analogous to the biological clock that controls when you or I feel like we need to sleep or wake up. These hormones triggered a change in the sodium channel proteins (like the ones that transmit our brain signals through our nerves) which moved them from their active position to an inactive position, increasing or lowering the knifefish’s electrical output.

I’ll leave those more interested in the biological details to check out the paper (which is very readable, even for novices), but I only hope that it takes humans less than the millions of years evolution that the longtail knifefish needed to solve its energy problems. After all, all we need is some sort of hormonal system (Higher prices at different times of the day? Smart grid signals?) that pushes our power consumption (Electronics which have different levels of power consumption, kind of like what some of today's chips have? Maybe adaptive lighting/cooling/heating? Smart grid technology?) to different levels…

Paper: Markham MR, McAnelly ML, Stoddard PK, Zakon HH (2009) Circadian and Social Cues Regulate Ion Channel Trafficking. PLoS Biol 7(9): e1000203. doi:10.1371/journal.pbio.1000203

(Image credit – Wikipedia)

Layers upon layers

2009-10-01T07:00:00.000-07:00

… upon layers… upon layers… of bureaucracy (HT: Dilbert)

It’d be even funnier if it weren’t such an accurate depiction of many companies today.

(Dilbert cartoon strip)

Graying

2009-09-29T07:00:00.000-07:00

Businesses need to see the trends that will affect their performance, whether they be technical trends, business model trends, or economic trends. One trend which I haven’t seen as many companies factor in (although you see many governments talking about it) is age demographics.

Completely ignoring my last post on the dangers of being obsessed with graphs, here is a very cool graph on how US population demographics will evolve over time as taken from the Calculated Risk blog (HT: Jeff L). In particular, I find the “Baby Boom” bulge (the wave of youngsters that came of age beginning from 1950-1970) moving towards the right to be very illuminating:

It highlights a trend which Japan is only beginning to grapple with – the “graying” of the American population that comes with the Baby Boomers becoming older. If Japan is any indication, that means the US will see a few things:

Rise in pension/Social Security costs and payments for care for the elderly
Decline in average wages as fewer lower-paid and younger workers replace more retiring higher-paid workers
Socio-economic changes that come from a smaller working-class population which needs to support a larger elderly population
Change in the political system as a balance will be sought between a growing importance in the elderly vote and the need for governments/companies to change the pension/healthcare payment balance and the ability of medical science to extend the workable years for elderly individuals
Change in business world as the elderly become more tech-savvy and become a more significant piece of the consumer population

If I were a business-owner looking at the long-term, I’d be looking long and hard at this list, and making investments into understanding how to convert these broad social/economic/political trends into insights which I can use to create a competitive advantage. For instance, if I were working in corporate strategy at Facebook, I’d be thinking of:

ways to make the site more attractive for the new generation of tech-savvy elderly
how to make my social network asset more valuable for elderly users (e.g. ways to make it easier to connect with old friends or family, ways to create mentoring relationships between older, more experience users and younger, less experienced ones, etc)
how to get useful ads that the elderly are more likely to pay attention to

Any other ideas on how things will change because of the demographic shift, and how businesses might adapt to them?

(Image credit)

Consultant syndrome

2009-09-24T07:00:00.000-07:00

It could happen to you too (HT: Megan McArdle).

Symptoms include excessive desire to represent every decision and factoid in life in simple chart form, especially in PowerPoint slide form. Treatment: long vacation with deep exposure to how people actually talk and relate to other humans.

Innovator’s Delight

2009-09-22T07:00:00.000-07:00

Knowing my interest in tech strategy, a coworker recommended I pick up HBS professor Clayton Christensen’s “classic” book on disruptive innovation: The Innovator's Dilemma. And, I have to say I was very impressed.

The book tries to answer a very interesting question: why do otherwise successful companies sometimes fail to keep up on innovation? Christensen’s answer is counter-intuitive but deep: the very factors that make a company successful, like listening to customer needs, make it difficult for successful companies to adopt disruptive innovations which create new markets and new capabilities.

This sounds completely irrational, and I was skeptical when I first heard it, but Christensen makes a very compelling case for it. He begins the book by considering the hard disk drive (HDD) industry. The reason for this is, as Christensen puts it (and this is merely page one of chapter one!):

“Those who study genetics avoid studying humans, because new generations come along only every thirty years or so, and so it takes a long time to understand the cause and effect of any changes. Instead, they study fruit flies, because fruit flies are conceived, born, mature, and die all within a single day. If you want to understand why something happens in business, study the disk drive industry. Those companies are the closest things to fruit flies that the business world will ever see.”

From that oddly compelling start, Christensen applies multiple techniques to establish the grounds for his theory. He begins by admitting that his initial hypothesis for why some HDD companies successfully innovated had nothing to do with his current explanation and was something he called “the technology mudslide”: that because technology is constantly evolving and shifting (like a mudslide), companies which could not keep moving to stay afloat (i.e. by innovating) would slip and fall.

But, when he investigated the different types of technological innovations which hit the HDD industry, he found that the large companies were actually constantly innovating, developing new techniques and technologies to improve their products. Contrary to the opinion of many in the startup community, big companies did not lack innovative agility – in fact, they were the leaders in developing and acquiring the successful technologies which allowed them to make better and better products.
But, every now and then, when the basis of competition changed, like the shift to a smaller hard disk size to accommodate a new product category like minicomputers versus mainframes or laptops versus desktops, the big companies faltered.

From that profound yet seemingly innocuous observation grew a series of studies across a number of industries (the book covers industries ranging from hardcore technology like hard disk drives and computers to industries that you normally wouldn’t associate with rapid technological innovation like mechanical excavators, off-road motorbikes, and even discount retailing) which helped Christensen come to a basic logical story involving six distinct steps:

Three things dictate a company’s strategy: resources, processes, and values. Any strategy that a company wishes to embark on will fail if the company doesn’t have the necessary resources (e.g. factories, talent, etc.), processes (e.g. organizational structure, manufacturing process, etc.), and values (e.g. how a company decides between different choices). It doesn’t matter if you have two of the three.
Large, successful companies value listening to their customers. Successful companies became successful because they were able to create and market products that customers were willing to pay for. Companies that didn’t do this wouldn’t survive, and resources and processes which didn’t “get with the program” were either downsized or re-oriented.
Successful companies help create ecosystems which are responsive to customer needs. Successful companies need to have ways of supporting their customers. This means they need to have or build channels (e.g. through a store, or online), services (e.g. repair, installation), standards (e.g. how products are qualified and work with one another), and partners (e.g. suppliers, ecosystem partners) which are all dedicated towards the same goal. If this weren’t true, the companies would all either fail or be replaced by companies which could “get with the program.”
Large, successful companies value big opportunities. If you’re a $10 million company, you only need to generate an extra $1 million in sales to grow 10%. If you’re a $10 billion company, you need to find an extra $1 billion in sales to grow an equivalent amount. Is it any wonder, then, that large companies will look to large opportunities? After all, if companies started throwing significant resources or management effort on small opportunities, the company would quickly be passed up by its competitors.
Successful companies don’t have the values or processes to push innovations aimed at unproven markets, which serve new customers and needs. Because successful companies value big opportunities which meet the needs of their customers and are embedded in ecosystems which help them do that, they will mobilize their resources and processes in the best way possible to fulfill and market those needs. And, in fact, that is what Christensen saw – in almost every market he studied, when the customers of successful companies needed a new feature or level of quality, successful companies were almost always successful at either leading or acquiring the innovation necessary to do that. But, when it came to experimental products offering slimmer profit margins and targeting new customers with new needs and new ecosystems in unproven markets, successful companies often failed, even if management made those new markets a priority, because those companies lacked the values and/or processes needed. After all, if you were working in IBM’s Mainframe division, why would you chase the lower-performance, lower-profit minicomputer industry and its unfamiliar set of customers and needs and distribution channels?
Disruptive innovations tend to start as inferior products, but, over time improve and eventually displace older technologies. Using the previous example, while IBM’s mainframe division found it undesirable to enter the minicomputer market, the minicomputer players were very eager to “go North” and capture the higher performance and profitability that the mainframe players enjoyed. The result? Because of the values of the mainframe players as compared with the values of the minicomputer players, minicomputer companies focused on improving their technology to both service their customer’s needs and capture the mainframe business, resulting in one disruptive innovation replacing an older one.

The most interesting thing that Christensen pointed out was that, in many cases, established companies actually beat new players to a disruptive innovation (as happened several times in the HDD and mechanical excavator industries)! But, because these companies lacked the necessary values, processes, and ecosystem, they were unable to successfully market them. Their success actually doomed them to failure!

But Christensen doesn’t stop with this multi-faceted and thorough look at why successful companies fail at disruptive innovation. He spends a sizable portion of the book explaining how companies can fight the “trappings” of success (i.e. by creating semi-independent organizations that can chase new markets and be excited about smaller opportunities), and even closes the book with an interesting “ahead-of-his-time” look (remember, this book was written over a decade ago!) at how to bring about electric cars.

I highly recommend this book to anyone interested in the technology industry or even, more broadly speaking, on understanding how to think about corporate strategy. While most business books on this subject use high-flying generalizations and poorly evaluated case studies, Christensen approaches each problem with a level of rigor and thoroughness that you rarely see in corporate boardrooms. His structured approach to explaining how disruptive innovations work, who tends to succeed at them, why, and how to conquer/adapt to them makes for a fascinating read, and, in my humble opinion, is a great example of how corporate strategy should be done – by combining well-researched data and structured thinking. To top it all, I can think of no higher praise than to say that this book, despite being written over a decade ago, has many parallels to strategic issues that companies face today (i.e. what will determine if cloud computing on netbooks can replace the traditional PC model? Will cleantech successfully replace coal and oil?), and has a number of deep insights into how venture capital firms and startups can succeed, as well as some insights into how to create organizations which can be innovative on more than just one level.

Book: The Innovator’s Dilemma by Clayton Christensen

(Image credit: hard disk drive) (Image credit: David and Goliath)

Why Comics? Why SciFi?

2009-09-17T07:00:00.000-07:00

There’s no denying it. Comic books and science fiction have more than their fair share of “only for geeks.” While I would be hard pressed to deny who I am, I will say that my love for science fiction goes far beyond just pure escapism.

Now, I could talk about how I think comic books represent a reassuring world where the good guys triumph and where the human spirit and concepts of justice and loyalty are all that is necessary to be a hero, and how I believe that science fiction represents an optimism about the future and the importance of human emotions and morals. But instead of “taking my word for it”, why not hear Reading Rainbow host and the actor behind Star Trek’s Geordi LaForge LeVar Burton take on the subject (yes, the quotes were an intentional Reading Rainbow reference):

I’m one of those people that believes that there was some kid back in the 1960s watching Star Trek, and he kept seeing Captain Kirk pull out this communicator and flip it open – and that kid grew up and became an engineer, a designer of products, and we now have a device that is more common than the toaster. How many flip phones do you see on a daily basis? That which we imagine is what we tend to manifest in third dimension – that’s what human beings do, we are manifesting machines. The metaphor of a man who has an external electronic device, something man-made that serves him and somehow serves humanity, and that he becomes so aligned with that device, with the power of that device, that at one point he can discard it – I think that’s a real metaphor for the human journey. One day we won’t need a transporter device to get from one place to another. And it begins with the wheel and then migrates through airplanes to some future technology that we can’t produce yet but we can imagine. Imagination is really the key part of the human journey, it’s the key to the process of manifesting what our heart’s desire is.

When I was a kid, it was comic books that pointed me in that direction and from comic books I went to science fiction literature, which is still one of my most favorite genres of literature to read. Don’t underestimate the power of comics and what they represent for us and how they inform us on the journey of being human – because it’s powerful. It’s very powerful. They give us permission to contemplate what’s possible. And in this world, in this universe, there’s nothing that is not possible. If you can dream it, you can do it.

To many African-Americans, like Burton and fellow Star Trek actor/fan Whoopi Golderg, Star Trek holds a very special role in their minds:

When I was a kid, I read a lot of science fiction books and it was rare for me to see heroes of color in the pages of those novels. Gene Roddenberry had a vision of the future, and Star Trek was one that said to me, as a kid growing up in Sacramento, California, “When the future comes, there’s a place for you.” I’ve said this many times, and Whoopi (Goldberg) feels the same way – seeing Nichelle Nichols on the bridge of the Enterprise meant that we are a part of the future. So I was a huge fan of the original series and to have grown up and become of that mythos, a part of that family, and to represent people dealing with physical challenges, much like what Nichelle Nichols represented for people like Whoopi and myself, I can’t even begin to share with you what that means to me.

While I was fortunate enough to be born in an era where nobody questions the role of Asian-Americans in industry and science, I can also see why many Asian-Americans would have been similarly inspired by George Takei’s role as Sulu in the original Star Trek series.

(Interview on LeVar Burton’s upcoming role in DC’s Superman/Batman: Public Enemies DVD) (Image Credit – LeVar Burton) (Image Credit – Nichelle Nichols)

More thoughts on the healthcare debate

2009-09-15T07:00:00.000-07:00

If you follow this blog at all, you’ll know that healthcare policy is a big interest of mine. Given that this was the focus of President Obama’s most recent address (and that this blog is my personal soapbox) I thought I’d chip in three thoughts to the blogosphere “marketplace of ideas” on the topic.

The first is that I’ve been very impressed with President Obama’s efforts. This may come as a shock to my more liberal friends who have been reading my Google Reader shares on the subject, many of which have been critical of Obama’s plans. But, as someone who was not terribly impressed with Hillary Clinton’s efforts in healthcare in the 1990s, I have been pleasantly surprised by the different strategy that Obama has taken. At least from this blogger’s perspective, Obama’s process has been much more open, allowing the plan to receive input and win support from the numerous groups which need to be won over (i.e. pharmaceutical companies, doctors and nurses, insurance companies, hospitals, etc), and much more driven by Congress rather than force-fed from the Executive Branch.

The result? In my opinion, a much more nuanced policy than what I’m used to hearing from pie-in-the-sky single-payer advocates and market fundamentalists with a promising focus on addressing access and cost concerns with a combination of regulatory/government directives and market-based methods.

The second is around the balance between using government initiatives and using private markets to solve the US’s healthcare problems. I tend to be biased towards the latter, given my lack of faith in the ability of central organizations to solve the coordination, innovation, pricing, and customization challenges which markets are more adept at solving. With that said, anyone who is not a free-market fundamentalist is probably also aware of the coordination challenges that markets face (i.e. one of the reasons why we don’t trust the market to be entirely responsible for national defense or international treaties) and the blindness to equality/access concerns that markets can have.

From that perspective, I think the Obama plan does a relatively good job of balancing the two. After all, I can list at least two “market failures” that are abound in the American healthcare system:

One can probably assign blame for many of our current complaints about American healthcare to the fact that there is a very poor market for health insurance (David Leonhardt at the NYTimes does). After all, why would insurance providers increase quality while lowering cost when most US healthcare coverage decisions are made by employers who don’t have the incentive or the information to shop around between plans and the fact that, in many markets, there are very few insurance companies who a consumer can choose between.
Holding concerns of access aside, not enough people get health insurance. This is true for three reasons. First, people oftentimes underestimate the “safety net” that they may actually need to deal with sudden illnesses and accidents. Without the bargaining power of a large health insurance company on your side, the costs of seeing a doctor and obtaining treatment are astronomical – something which many uninsured find out when they suddenly need treatment. Second, the fact that the uninsured are able to still get government-funded care or emergency room care, while morally praiseworthy, means that extra costs are added to our healthcare system (and hence our insurance premiums and copays) which could be avoided had those individuals originally been covered. Finally, there are a number of conditions (e.g. breast cancer) which are more easily and cheaply dealt with if detected and treated earlier. Individuals without health insurance oftentimes are less likely to find and treat these conditions early on, resulting in greater costs and more difficult problems for doctors to treat.

That Obama is pushing for a regulated “insurance exchange” and a requirement that all individuals have health coverage is, to me, a step in the right direction to addressing these two issues. The devil is of course in the details, but the fact that Obama is leaning towards these provisions is very encouraging.

I am much less enthusiastic about the “public option” that has been thrown around because I don’t believe it manages the public/private divide very well. The theory is that the government will step in and provide coverage to individuals who are not happy with any of the options on the table with the hope that this “public option” will help “keep the insurance companies honest.” While the theory is appealing on the level that everyone would like to have an extra safety net which helps to prevent market failures, I think the “public option” idea is based on a flawed premise.

There are three possibilities that I can envision for the public option. The first is a world where the initiatives that Obama is proposing create a strong market for insurance. In that case, in the same way that the low prices in the used car market cause a self-fulfilling doom loop where they attract only bad cars (the “lemon problem”), the public option will doom itself to be a high cost, inefficient solution that attracts all the patients which insurance companies don’t want to cover (e.g. those with difficult pre-existing medical conditions).

The second and third possibility that I can see have the same outcome. Either Obama’s market initiatives fail to create a strong market for insurance or the a strong market is created, but to bolster the public option, the government heavily subsidizes the public option and protects it from competition from the private sector. In both cases, the result is that insurance companies are unable to compete with the government plan, resulting in the market for insurance becoming even less robust than it is today, effectively converting the health insurance market into a single-payer model whereby the government takes on all health care. I’ve discussed many reasons why this would be undesirable, but the two biggest ones that come to mind are governments being generally bad at innovation (due to central planning being notoriously bad at allocating resources between different uncertain technologies) and the politicization of the rationing of healthcare rather than relying on medical and personal factors.

In all three cases, the public option not only leads to undesirable costs, but distracts the government from the solution which should be implemented: creating a strong insurance market with good options for consumers and using subsidies/regulations to expand coverage. That’s the only solution that provides the coverage, the level of cost, and quality of care that we want.

The final thought that I had revolved around additional steps which I hope the Obama plan will eventually take. I outlined them in a previous post I made on healthcare policy, but they include two things:

Universal coverage for children – Morally and practically (as there’s no better way to improve the long-term health of the country by making sure that children at an early age are vaccinated, have routine checkups, and are taught good health habits), I see no reason why every child should get quality healthcare coverage.
Making health insurance actually act like insurance - “Health insurance” is only insurance in name, not practice. You don’t expect your car insurance to pay for every tune-up and every time you fill up at the gas station. Why should you expect your health insurance to pay for every drug and every visit to the doctor’s office? The fact that so much of this payment is handled by someone else means that individuals don’t need to control their own healthcare costs, which makes insurance premiums higher for everyone. This fact also means that insurance ceases to be the “safety net” that protects you from catastrophic losses that its supposed to be, but instead becomes a significant drag on your earnings potential.

It is certainly an exciting time for anyone interested in healthcare policy, and hopefully, we leave this process with a set of initiatives and proposals which make us all better off.
(Image credit – Dr. Obama) (Image credit – Flag + stethoscope) (Image credit – Public Option pin)

Wolfram|Alpha reaches out to students

2009-09-08T21:41:00.001-07:00

In educational circles, there’s always a philosophical debate between those educators who favor allowing their students to use tools like TI-89’s or computer algebra-capable software like Mathematica and those who don’t, with those favoring their use citing the ability of the tools to expand the scope of the curriculum, and with those opposed worried about the tools supplanting the instincts that long practice engenders.

I personally am in favor of using such tools, as they allow a classroom to extend beyond simply learning how to do basic procedures to looking at real-world problems which are far harder and far more interesting than the simple “toy problems” which classrooms requiring all work to be done “old school” are limited to. But, even I have to say that the latest blog post by Wolfram|Alpha makes this supporter of new technical tools in classrooms a little wary.

Over on the Bench Press blog, we’ve posted a couple of times on the power of the new “computational knowledge engine” Wolfram|Alpha (brought to you by the makers of Mathematica) and its ability to help provide contextual medical and astronomical information, in addition to answers to sophisticated Mathematica queries.

Now, this should raise the eyebrows of any teacher who finds him/herself wondering if his/her students are “cheating” with computer algebra systems. And, what will raise their eyebrows even further is Wolfram’s latest post entitled, “College is Hard. Wolfram|Alpha makes it easier.”

I kid you not. Have problems balancing equations in chemistry? Just have Wolfram|Alpha do it:

Need to calculate a Taylor Series? Have Wolfram|Alpha do it:

I find myself asking – why didn’t I have this when I was in college?

(Image credits - Wolfram|Alpha blog)

Ed Glaeser Advice on Storytime for Kids

2009-09-03T09:43:00.000-07:00

Ed Glaeser was an economics professor of mine in college. He proudly called his class "boot camp" for economists and noted that while his class reviews always said that his class was "too difficult and too fast", he never planned to change it.

When I found out that he wrote a piece for the New York Time's Economix blog on how to stir in economics lessons to childhood fairy tales, I was intrigued:

"If you are an economics-minded parent of young children, like me, then you may also have spent long hours wondering how to teach economics to your toddlers. Luckily, much-loved children stories can be made far more delightful with a healthy dose of supply-and-demand charts. Many such tales already include their own hidden economic messages that only need to be exposed to bring edification and enjoyment to the under-5 set."

Really?

“The Three Little Pigs,” for example, is more than just a story about the value of better building materials. Like a whole host of fairy tales (“The Ant and the Grasshopper,” or “The Goose with the Golden Egg”), it teaches that sensible investment can yield high returns."

He gives few other examples which led me to wonder, why is Glaeser so interested in fairy tales? Apparently, its because his first paper was on Cinderella:

"The first thing I ever published in an academic journal was “The Cinderella Paradox Resolved,” which purported to make sense of the odd fact that Cinderella’s parents invested in only two of their three siblings, despite the fact that standard economics pushes toward more equitable arrangements.

The story itself explains this fact with “The Wicked Stepmother Hypothesis,” a reasonable but excessively straightforward explanation of the decision to ignore Cinderella. I offered a distinctly less plausible explanation. The marriage market in Cinderella’s country was a tournament, where marrying the prince carried high rewards and everyone else was a mouse, pumpkin, etc.

In a first-past-the-post race, it often makes sense to lavish investment on only one or two competitors, which makes the stepmother’s behavior entirely rational. Of course, the stepmother did choose to back the wrong horse, but that just makes her unwise, not wicked.

As I explain this logic to my children, they respond with the glazed and distinctly annoyed looks that conveys to me their inner joy. I am sure that you will get the same reaction."

So, do I take advice from Glaeser on how to raise my kids? On the one hand, he is an intelligent, wealthy, well-dressed man (always wore 3-piece suits if my memory serves me), who smokes a cigar. On the other hand, he was giving our class a lecture on the Slutsky Equation while his wife was in labor (probably with one of the kids who had to listen to this "re-telling" of Cinderella)...

HotChips 101

2009-08-31T07:00:00.000-07:00

This post is almost a week overdue thanks to a hectic work week. In any event, I spent last Monday and Tuesday immersed in the high performance chip world at the 2009 HotChips conference.

Now, full disclosure: I am not electrical engineer, nor was I even formally trained in computer science. At best, I can “understand” a technical presentation in a manner akin to how my high school biology teacher explained his “understanding” of the Chinese language: “I know enough to get in trouble.”
But despite all of that, I was given a rare look at a world that few non-engineers ever get to see, and yet it is one which has a dramatic impact on the technology sector given the importance of these cutting-edge chip technologies in computers, mobile phones, and consumer electronics.

And, here’s my business strategy/non-expert enthusiast view of six of the big highlights I took away from the conference and which best inform technology strategy:

We are 5-10 years behind on the software development technology needed to truly get performance power out of our new chips. Over the last decade, computer chip companies discovered that simply ramping up clock speeds (the Megahertz/Gigahertz number that everyone talks about when describing how fast a chip is) was not going to cut it as a way of improving computer performance (because of power consumption and heat issues). As a result, instead of making the cores (the processing engines) on a chip faster, chip companies like Intel resorted to adding more cores to each chip. The problem with this approach is that performance becomes highly dependent on software developers being able to create software which can figure out how to separate tasks across multiple cores and share resources effectively between them – something which is “one of the hardest if not the hardest systems challenge that we as an industry have ever face” (courtesy of UC Berkeley professor Dave Patterson). The result? Chip designers like Intel may innovate to the moon, but unless software techniques catch up, we won’t get to see any of that. Is it no wonder, then, that Intel bought multi-core software technology company RapidMind or that other chip designers like IBM and Sun are so heavily committed to creating software products to help developers make use of their chips? (Note: the image to the right is an Apple ad of an Intel bunny suit smoked by the PowerPC chip technology that they used to use)
Computer performance may become more dependent on chip accelerator technologies. The traditional performance “engine” of a computer was the CPU, a product which has made the likes of Intel and IBM fabulously wealthy. But, the CPU is a general-purpose “engine” – a jack of all trades, but a master of none. In response to this, companies like NVIDIA, led by HotChips keynote speaker Jen-Hsun Huang, have begun pushing graphics chips (GPUs), traditionally used for gaming or editing movies, as specialized engines for computing power. I’ve discussed this a number of times over at the Bench Press blog, but the basic idea is that instead of using the jack-of-all-trades-and-master-of-none CPU, a system should use specialized chips to address specialized needs. Because a lot of computing power is burnt doing work that is heavy on the mathematical tasks that a GPU is suited to do, or the signal processing work that a digital signal processor might be better at, or the cryptography work that a cryptography accelerator is better suited for, this opens the doorway to the use of other chip technologies in our computers. NVIDIA’s GPU solution is one of the most mature, as they’ve spent a number of years developing a solution they call CUDA, but there was definitely a clear message: as the performance that we care about becomes more and more specialized (like graphics or number crunching or security), special chip accelerators will become more and more important.

Designing high-speed chips is now less and less about “chip speed” and more and more about memory and input/output. An interesting blog post by Gustavo Duarte highlighted something very fascinating to me: your CPU spends most of its time waiting for things to do. So much time, in fact, that the best way to speed up your chip is not to speed up your processing engine, but to speed up getting tasks into your chip’s processing cores. The biological analogy to this is something called a perfect enzyme – an enzyme that works so fast that its speed is limited by how quickly it can get ahold of things to work on. As a result, every chip presentation spent ~2/3 of the time talking about managing memory (where the chip stores the instructions it will work on) and managing how quickly instructions from the outside (like from your keyboard) get to the chip’s processing cores. In fact, one of the IBM POWER7 presentations spent almost the entire time discussing the POWER7’s use and management of embedded DRAM technology to speed up how quickly tasks can get to the processing cores.
Moore’s Law may no longer be as generous as it used to be. I mentioned before that one of the big “facts of life” in the technology space is the ability of the next product to be cheaper, faster, and better than the last – something I attributed to Moore’s Law (an observation that chip technology doubles in capability every ~2 years). At HotChips, there was a fascinating panel discussing the future of Moore’s Law, mainly asking the question of (a) will Moore’s Law continue to deliver benefits and (b) what happens if it stops? The answers were not very uplifting. While there was a wide range of opinions on how much we’d be able to squeeze out of Moore’s Law going forward, there was broad consensus that the days of just letting Moore’s Law lower your costs, reduce your energy bill, and increase your performance simultaneously were over. The amount of money it costs to design next-generation chips has grown exponentially (one panelist cited a cost of $60 million just to start a new custom project), and the amount of money it costs to operate a semiconductor factory have skyrocketed into the billions. And, as one panelist put it, constantly riding the Moore’s Law technology wave has forced the industry to rely on “tricks” which reduced the delivery of all the benefits that Moore’s Law was typically able to bring about. The panelists warned that future chip innovations were going to be driven more and more by design and software rather than blindly following Moore’s Law and that unless new ways to develop chips emerged, the chip industry itself could find itself slowing its progress.
Power management is top of mind. The second keynote speaker, EA Chief Creative Officer Richard Hilleman noted something which gave me significant pause. He said that in 2009, China will probably produce more electric cars in one year than have ever been produced in all of history. The impact to the electronics industry? It will soon be very hard to find and very expensive to buy batteries. This, coupled with the desires of consumers everywhere to have longer battery lives for their computers, phones, and devices means that managing power consumption is critical for chip designers. In each presentation I watched, I saw the designers roll out a number of power management techniques – the most amusing of which was employed by IBM’s new POWER7 uber-chip. The POWER7 could implement four different low-power modes (so that the system could tune its power consumption), which were humorously named: doze, nap, sleep, and “Rip van Winkle”.
Chip designers can no longer just build “the latest and greatest”. There used to be one playbook in the Silicon Valley – build what you did a year ago, but make it faster. That playbook is fast becoming irrelevant. No longer can Silicon Valley just count on people to buy bigger and faster computers to run the latest and greatest applications. Instead, people are choosing to buy cheaper computers to run Facebook and Gmail, which, while interesting and useful, no longer need the CPU or monitor with the greatest “digital horsepower.” EA’s Richard Hilleman noted that this trend was especially important in the gaming industry. Where before, the gaming industry focused on hardcore gamers who spent hours and hours building their systems and playing immersive games, today, the industry is keen on building games with clever mechanics (e.g. a Guitar Hero or a game for the Nintendo Wii) for people with short attention spans who aren’t willing to spend hours holed up in front of their televisions. Instead of focusing on pure graphical horsepower, gaming companies today want to build games which can be social experiences (like World of Warcraft) or which can be played across many devices (like smartphones or over social networks). With stores like Gamestop on the rise, gaming companies can no longer count on just selling games, they need to think up how to sell “virtual goods” (like upgrades to your character/weapons) or in-game advertising (a Coke billboard in your game?) or encourage users to subscribe. What this all means is that, to stay relevant, technology companies can no longer just gamble on their ability to make yesterday’s product faster, they have to make them better too.

There was a lot more that happened at HotChips than I can describe here (and I skipped over a lot of the details which non-technical people wouldn’t really be able to grasp), but those were six of the most interesting messages that I left the conference with, and I am wondering if I can get my firm to pay for another trip next year!

Oh, and just to brag, while at HotChips, I got to check out a demo of the potential blockbuster game Batman: Arkham Asylum while checking out NVIDIA’s 3D Vision product! And I have to say, I’m very impressed by both products – and am now very tempted by NVIDIA’s Buy a GeForce card, get Batman: Arkham Asylum free offer.

(Image credit: Intel bunny smoked ad) (Image credit: GPU computing power) (Image Credit: brick wall) (Image – Rip Van Winkle) (Image – World of Warcraft box art)

Capillary Calendar

2009-08-28T07:00:00.000-07:00

This little gem of an idea was shared to me via Google Reader by my friend Cat of Pizza Diavola. Spanish designer Oscar Diaz took the usually boring concept of a calendar and came up with a way to really make it pop.
Through the power of capillary action (for you laypeople, what allows paper towels to soak up water), Diaz has created a calendar which slowly sucks up paint as the days in a month go by. The result? One hell of a calendar:

The full calendar has colors which “relate to a “color temperature scale”, each month having a color related to our perception of the weather on that month. The colors range from dark blue in December to three shades of green in spring or orange and red in the summer.”
It is apparently on display until October 11th at the Circulo de Bellas Artas in Madrid.
(Image credit)

Recruiting lessons

2009-08-24T07:00:00.000-07:00

If the sudden increase in emails from my company’s recruiting staff are any indication, the recruiting season is back in full gear! For many, this will bring enormous amounts of stress, but it doesn’t have to be that way. For starters, I’ve posted a number of tips in the past about:

But, while I’ve focused a great deal in the past on advice for how to land a job you want, I’ve spent relatively little time talking about how to select a job. On that front, I have four tips:

Reputation matters. A lot.
Find out what people actually do. Including the bad parts.
Determine what sort of training and mentorship is available.
Understand the working environment.

The practical minded out there (this blogger has been guilty of this many times) will say, “I’ll worry about that after I get a few offers.” And, on some level, especially in college/business school, that is true. But, the fact of the matter is that recruiting is a very time consuming and tiring process. The cycle of going to company presentations, chatting up people who are constantly sizing you up, preparing resumes and cover-letters, and interviewing took up valuable time which I would have preferred to spend with my friends or on things of greater interest to me. Worse than the opportunity cost of spending all your time applying for jobs you’re not interested in, it can leave you in a position where you, at best, are apathetic towards an offer and, at worse, leave you in a place which can actually be detrimental to your professional development. Instead, I would advise that you focus very early on in narrowing your search so that you can tailor your resume’s, cover letter’s, and conversations to fit the firms you’d actually like working for.

1. Reputation matters. A lot: If there is one thing that I learned during my two years in consulting, it is that the reputation of a company is everything. While this may seem a bit obvious, I think what most people don’t understand is the magnitude of the impact that reputation can have. It dictates things ranging from the money that a firm can make for a particular engagement or project to what sorts of engagements a firm will get to handle. Some informal conversations that I’ve had revealed that firms with stronger reputations will not only land more interesting, longer-term engagements (e.g. multi-month strategy projects vs. 2-week fact-finding projects), but that for the same project, a firm with a strong reputation can charge significantly more (I’ve heard gues-timates of pricing varying by over 50% between top-tier/specialist firms and second-tier shops). When you also consider the weight that the reputation of your previous employers has when you’re looking for new jobs (there are quite a few private equity/venture capital firms that require applicants to be from top-tier banks/consulting firms), it should become pretty clear that the reputation should be a very important consideration.

To be 100% clear, this doesn’t mean that you should only focus your time on “big name” companies. After all, while McKinsey is a great consulting firm, they may not get you where you want to go if you’re interested in PR or marketing or even in a specific type of consulting, like IT, or a specific industry expertise. What it does mean is that you should figure out what you want to build credibility around and find companies which can help you do that. This will help you develop your own skills and capabilities and position you well for the next job.

2. Find out what people actually do. Especially the bad parts. The recruiting process is as much a process for companies to find out more about their applicants, as it is a process for prospective applicants to find out more about the firm. This means that you shouldn’t be the only one answering tricky questions.

While you can ask direct questions like “what do you do?”, “how much travel do you do?”, and “what sort of hours do you work?”, you should be aware that any firm with a half-decent recruiting process will have already prepped its people with answers to those questions. While those answers won’t be outright lies, they are oftentimes couched in “spin” to mask un-pleasantries about the job and are generally too unspecific to help you understand what you really need to know about a job to determine if you like it (or, perhaps more correctly, if the rewards outweigh the bad aspects of the job).

Instead, ask strategic (“tricky”) questions, like:

What were you doing last week/month/yesterday at work? (More difficult to “apply spin” when you’re trying to recall something specific)
What do you do for fun outside of work? (Indirect way to get a sense of what sort of control people have over their work-life balance)
If you could change one or two things about your job, what would they be?
What was your best day at work? (Get a sense of what sort of on-the-job rewards, responsibilities, and recognition are possible)
What was your worst day at work? (High probability of “spin” in the answer, but still valuable to understand)
How many people stay at the firm for longer than 3 years? Why? Where do they go? (Good measure of whether or not people like the job and why)
Where do most of your non-college recruits come from? (A good way to assess what sort of person fits in and what sort of skills the firm can help you develop)

3. Determine what sort of training and mentorship is available. Success in your career is highly dependent on what sort of skills you can pick up over time and what sort of opportunities you choose to pursue. To that end, understanding what sort of formal training programs are available and how the firm’s more senior members think about mentoring is something that should be on top of every recruit’s mind.

I personally did not even think about mentorship when I did recruiting in college, so I am very lucky that I wound up at a firm with a wide range of training programs and where partners and managers place emphasis on providing advice and coaching to more junior folk. This sort of luck is not something you (or I) should ever count on, and I would highly advise you to find out:

Does the firm have ongoing training programs throughout an employee’s career? What sort of training? (Or are there just introductory programs at the start of employment and routine training on rules?)
Who conducts the training? (This can help establish whether or not the firm values training and mentorship enough to take senior staff away from their day jobs to do it, or whether or not training is an after-thought)
Who do individuals at the firm turn to for advice about their careers? (Is management willing and able to help their workers?)
Does the company let employees switch between different roles/divisions? (This is usually a good sign that the firm cares about developing its people by exposing them to more things)

4. Understand the working environment. There are a lot of little things which really can impact how you feel about a job. The challenge is identifying these things. Below, I’ve attached a list of things which I didn’t realize would matter to me so much:

Dress – Being required to wear a suit and a tie every day would be a nightmare for me, and so I am fairly grateful that my firm only requires me to dress semi-formally.
Location – I love the Bay Area. If you want me to work for you, you better be in the Bay Area.
Food – I strongly believe that offices should have breakfast cereal available. Some of my coworkers could pass on breakfast cereal, and complain that we don’t have enough in-office lunches. To each their own.
Face-time – Some people (like this blogger) would rather leave the office early to work from home, while some people want work to be only conducted in the office. And some people would rather not show up at all. Understanding where you lie on that spectrum and where the company you’re interested in working at lies on that spectrum is important.
Non-business Internet use – Consulting hours are very variable. Some days you’ll be in a rush all day. Some days you’ll have nice valleys of work intensity. As a result, at least at the firm I work at, nobody really minds if you’re on YouTube or Facebook or an RSS reader, as long as you get your work done on time. Some companies do mind. I don’t think I could work for one of those.
Socializing at work – Different firms have different approaches to socializing at work. And sometimes, within the same firm, different divisions and groups have different unofficial policies on socializing. If you are the type of person who can’t socialize at work (or stomach other people socializing while you’re working), then you definitely need to know these things.
Parties – Are company parties loud and crazy? Or soft and subdued? Are employees friends outside of work?
Start/End of day – Some companies have no set start time. Other companies expect you in by 8 AM. Other companies don’t mind as long as you’re in by 10 AM. Depending on how far you plan to live from the office and how late you wake up, this may be an important criteria.

These are just a few examples of things to ask about. What’s important is that you consider what sort of working environment you need to be productive, and find out whether or not the firm you’re talking to can deliver that environment. If they can’t, then it doesn’t really matter how much you like the company: if you’re unproductive, your career will suffer.

Hopefully these four tips help are helpful for people pursuing recruiting. Anyone else have any other tips on how to identify companies that fit you?

(Image credit – Freaking News) (Image credit – gossip) (Image Credit – Mentor)

Worried about Google owning all of your data?

2009-08-12T16:39:00.000-07:00

Although I've spoken at lengths about my love for Google, I am sensitive to privacy concerns that more and more people are having that Google just knows too much about me.

Thankfully, the brilliant thinkers over at Google have created a new option to help those who are nervous about Big Brother Google:

(Yes, it's from the Onion, so it is a parody)