Saturday, February 27, 2010

Complaining on the Internet

I posted recently about online businesses that have two phases: growing very popular but not profitable, and then converting the popularity into profit. It's arguably not the best business model: a sustainable income stream is generally preferable to a one time windfall, but it may allow online for-profit work that couldn't otherwise support itself.

In the comments, Meredith pointed us to Heather Armstrong's problems with Maytag. To recap, an influential 'Mommy Blogger' purchased a new washing machine that promptly broke, and was given the run around by repairmen and customer service reps. By taking her complaints into the public sphere her washing machine was promptly fixed, and another machine was donated to a shelter.

Heather Armstrong has a lot of sway in an important market segment, but the threat of bad online publicity isn't just being wielded by the twitterati. Comcast has a full time employee tasked with resolving any issues people bring up with its service on twitter. Various airlines do the same, with people reporting significantly better customer service by tweeting rather than talking directly to a representative. A complaint going viral (as happened in 2006 when a blogger recorded an AOL rep trying to prevent him from canceling his account) can cause serious damage to a company's reputation, so many are going to great lengths to avoid this.

This is a significant shift in power that should hopefully curb the worst abuses of corporations. Indeed, the power of the internet to communicate complaints to all corners of the globe is being used not just against corporations but against governments, educators and individuals who abuse their roles. The potential exists here to greatly enhance the transparency of the world, and to use the power of the masses to counterbalance localized power abuses.

But one needs only look at customer opinion aggregation services to realize that like everything else on the internet, there's a dark side. I googled "fake amazon reviews" to find something to link to, but the 1,000,000 hits speaks for itself (an aside: I find it interesting that Google-owned Blogger doesn't recognize 'googled' as a valid word). Companies post rave reviews of their products (sometimes a great many), and more sinisterly make up complaints and accusations against competitors. More than one business has been accused of extortion, Yelp being the most recent to face a class action lawsuit. Purportedly the company offered to take down negative reviews if a company would advertise with them, or conversely threaten to take down positive reviews. Any credible claim can influence corporate actions and consumer choices, not just true statements.

And while companies feel like fair targets, online complaints are also entwined with internet vigilantism. A Korean girl became the subject of abuse, eventually dropping out school, after she was filmed failing to clean up her dog's poop. Between misinformation and abusive use of correct information, it's not clear whether the soapbox of the internet is revealing truths about companies we otherwise would have missed, or if its muddying the water and making it increasingly difficult to understand the truth about a situation.

Perhaps worst of all is that the technology for automating the vocalization of opinions is continually being refined. As it currently stands, writing up fake reviews takes time. Many sites fight abuses by discounting users who post only a single opinion, or post rave reviews for every one of a company's product. Creating enough accounts, seeding with enough real reviews (over a reasonable span of time), and changing each review enough to hide that you wrote them all is work. But software could do it for you someday. Already a great many blogs exist that just use software to rewrite other people's posts.

I suspect we'll manage, though. Paid reviews and payola have a long history, and society has managed. Using reviews as extortion is starting to generate lawsuits, and I suspect over time the worst abuses will subside. More than anything, the internet is just a reflection of society, and the same critical evaluation required for interacting with the world is necessary online. It's not so much that the internet is unleashing new evils on the world, as its proving incapable of defeating the same old evils we're used to.

Thursday, February 25, 2010

When the wells run dry

I saw a commercial for the natural gas industry that discussed all the great things natural gas does. As an industry, it employs x million people. It's used to power our homes, run our factories, and produce our drugs and plastics. After discussing all the cool things gas can be used for, a pretty woman tells the audience to remember all the great benefits next time a natural gas pocket is found and drilled. I think the idea was that rather than worry about the environment, consider the positives of exploiting this resource.

But for whatever reason I found myself visualizing an alternative version of the commercial, where instead of saying "hey, isn't it great we can make drugs and fertilizer out of hydrocarbons?" the woman was instead reminding me of the products our grandchildren are going to have trouble creating. "Remember when we didn't have to turn food stuffs into hydrocarbons and then into drugs, but could instead eat our food and drill for our drugs? Look at how warm that house is! It's burning material built up over millions of years and consumed in a couple centuries! Next time a natural gas pocket is found and drilled, think of all the future generations who won't get a chance to use this easy source of energy."

I've always felt like economic theory fails to address the future. There's plenty of arguments for how to fairly allocate resources, but they always seem to deal with the current generation. "If we can pump 80 million barrels of oil a day, how should we distribute that energy between each nation?" But what about conserving it for another generation? Even if we reject the socialist idea that everybody deserves equal resources, how can using up a resource before someone's born be meritocratic? The market can't account for people and usages that don't exist at the moment.

One argument is that in the long run any non-renewable resource is unsustainable, so there's no morale imperative to share the windfall: if we're careful we could make easily accessible oil last 500 years, if we go crazy 15, but either way sooner or later we run out, and so on average people will have to live without it. But within a fixed time line isn't it morally superior to share the resource rather than use it up in our own lifetime?

Another argument is that resource usage leads to more sustainable living. The industrialized world has fewer children, and technology increases efficiency, so if consuming nonrenewable resources moves us quicker to a modernized, efficient world we've acted correctly. But it's hard to believe that cars, nitrogen-heavy industrial farming or youtube are having a huge impact on technological efficiency. Indeed, as peak oil threatens to appear that line of thinking suggests we should rapidly push consumption onto the third world to get over this theoretical hump, but that certainly isn't happening.

I think partially, at least in the western world, there's a great deal of technological optimism. We believe that in 300 years people will have solved the problems we're facing today. Our great grandchildren will be flying the void between the stars, living for millenia and enjoying the service of robots. If you believe this, it's less imperative we consider the impact of our actions on future generations, as the assumption is they'll be better off anyways, or that they wouldn't even deign to use as dirty a fuel as oil if it still existed.

I'm not sure. I am optimistic about the future, and the cynic in me believes that we won't move towards a sustainable civilization until easy energy is consumed, so speeding up consumption just brings us closer to whatever future is in store for humanity. But it also seems like technology can be maddeningly elusive. Will we really construct thousands of acres of solar panels in time? What if that turns out to have some hidden flaw, some even more dangerous effect on the environment. America is consuming 20 million barrels of oil a day. If we don't find alternatives, what will it mean when that goes away? I can't even conceptualize what 20 million barrels of oil a day buys you, how we'd handle having to give up all the niceties of civilization.

Ultimately, I find it more plausible to hope for the rapid development of futuristic technology then to believe the planet will voluntarily cut its consumption to a tiny fraction of our current usage. As long as easy energy exists, the desire to consume it and the fear somebody else will if you don't will drive us to use it. I wish I knew how to amend economic theory to properly operate in a world of limited resources, but I've yet to figure it out. On the plus side, we've still got plenty of radioactive elements in the ground to push this question on to future generations.

Saturday, February 20, 2010

The Gray Lady Finds A Sickle

There are legitimate complaints that can be raised against Wal-Mart, but one thing it has consistently succeeded at is offering low prices. What if that changed? What if instead of trying to keep prices low, Wal-Mart decided to aim at keeping profit margins high? Presumably, it would have a few highly profitable years, and then its market share would start to dwindle. Other stores would undercut Wal-Mart and people would start shopping there. But the key is that this isn't instantaneous. It would take accumulating evidence for people to believe Wal-Mart had changed. And it would take a long time for a competing superstore to enter many regions.

This process is sometimes called "harvesting": using the success of a business to create short term gains at long term expense. I first heard the term in this article (strongly recommended), which argues that the high cost of baseball tickets brought lots of money to the teams, but destroyed interest in younger generations. Harvesting is generally viewed as a negative process, a mistake businesses make. But harvesting is starting to look like an important business model online.

Consider Facebook (cash flow positive for the first time just a few months back), Twitter (again, cash flow positive but not profitable yet), Flickr or any other free internet service. They take on debt and investment on the hope of someday finding a way to be profitable. The idea is that charging for Facebook would prevent it from ever catching on, but that once it has caught on you can find ways to monetize it. In Facebook's case, this looks to be true. For Youtube, it's less clear that will happen. Sooner or later the investors into an online business will demand revenue pick up, and at that point the choice becomes harvest or close down. It might kill the business in the long run, but it may be the only way to generate money in certain niches.

The best example I can think of for internet harvesting is "Mommy Bloggers", quite likely the most financially successful portion of the blogosphere. Young, new moms started blogging about their experiences raising a child. Communities of mothers started following them. Recently, sponsors and advertisers got involved, paying these bloggers and sending free products in return for plugs. Some are using this as a profitable addition to their site, but some will push too hard and alienate their readers. As the readers are slowly pushed away, the blogger will be raking in cash. Eventually too many readers leave, and the blog is effectively dead.

Newspapers look to be in harvesting mode now as well. The New York Times is going to start charging for its content online. It's a respected paper, so people will pay. But I suspect it'll do poorly with the younger generations, who don't have the same veneration for the Gray Lady. Behind a paywall it'll bring in money, but not new readers, and when the old readers move on, there will be new news sources that are more generally respected. Perhaps that future news source will also take advantage of its reputation to begin charging. And then over time a new free news leader will emerge.

The key is that online popularity begets popularity. If you hit it big you'll grow and grow, if you don't you'll languish in obscurity. Some fields can grow and profit (Google), but a lot will only profit by shrinking their audience, moving out of the growth region and into decline. It's a weird business model, but it might be the future. In fact, there's a lot to be said for it: the Internet's propensity for change is actually quite endearing. If every decade sees new companies atop each niche, I think we'll see an overall healthier marketplace.

Saturday, February 13, 2010

Dress Up, Tea Parties and Semiconductor Device Fabrication

It's feels like just yesterday our little Teen-Talk Barbie was lamenting "Math class is tough."

But now she's found a job as a Computer Engineer! Good for you, Barbara Millicent Roberts. with a median salary around 100k, the serial job switcher should have plenty of pocket change for trendy new outfits, and whatever surgery gives her her inhuman body proportions. As a computer engineer she'll be working in the boundary between hardware and software, designing computer chips and integrating them with cell phones, industrial machinery, airplanes...really, space is the limit. Some day you may find yourself huddled in your basement, cursing Barbie not for the deleterious affect she had on generations of impressionable young girls but for releasing the Robot Apocalypse on us all. Also announced was News Anchor Barbie, who'll keep you updated on the devastation those cuddly pink robots are loosing on our toppled civilization.

Assuming she focuses on hardware, Barbie will be part of just 11% of females in her field. On the software side, she'd be only slightly better represented, in the 25-30% range. Will she be a role model, stemming the continual decline of those numbers? Or will she get bored, flitting between jobs at an ever increasing rate? She's been a business executive 4 times since the 60's, and women still make up just 15% of Fortune 500 Board Members.

I can believe the big business boardroom is a remaining bastion of sexism, but why the lack of female scientists? Could advanced mathematical thinking really be one of the ways our brains differ? Does society socialize children into adult roles more than we're willing to believe?

I read about a study recently that found elementary school teachers can pass math anxiety on to students of their gender. In an interesting twist, that would suggest that promoting Math and Sciences could actually exacerbate the problem: those with mathematical aptitude would be pushed towards science (more jobs, better pay, social rewards for holding the 'right' job), while people with math anxiety would be more likely to end up as teachers, and pass those fears on to a new generation. It's tough to comment briefly on sociological issues like this, because it's a complex interplay of so many factors that focusing on any small subset is likely to miss the big picture (thanks a lot chaos theory!), but I can believe that promoting teaching and learning as high value pursuits would do more good then promoting science explicitly.

Anyways, congrats to Barbie. If you've ever got any programming questions, feel free to send me an email. And remember: any self-replicating machinery absolutely needs a resilient kill switch.

Wednesday, February 10, 2010

Let Them Blog Cake!

I read an article on Fortune today about how tablets will save the publishing industry. I disagree with a lot of what the author wrote, which I think is great. A well thought out piece taking the other side helps me organize my own thoughts on a topic. Maybe I'm just contrary, but seeing the premises and assumptions of the other side lets me better understand the basic premises I'm coming from. A couple lines in particular helped me set down some thoughts that have been bubbling around in my head for a while now.

"The competitor, in this case, is a blogger who will simply read your stuff and repost it in truncated form à la the Huffington Post and so many others. It's a persuasive argument. People definitely want to browse. And using your headline, along with a few key bits of content, is fair use and legal. But many also crave deep reading experiences. Man does not live by blog alone! It would be like surviving entirely on cupcakes."

Blogs are like cupcakes? My experience with the world is apparently a 180 degree flip from his. I view blogs as a chance to get a depth of discussion I've never seen in newspapers or (to a lesser extent) magazines. ScienceBlogs gives me the thoughts of scientists in all sorts of fields. My Heart's In Accra not only teaches me about world events I don't see covered in traditional media, but also gives me the context and history of the news in a way newspapers have consistently failed to. You must hear polling statistics 800 times during an election, but FiveThirtyEight is the only source I've ever found that explains which poll is saying what, why they're saying what they're saying, and where exactly the uncertainties in polling are coming from. Ascii Dreams discusses game design: have you ever run across a game design article anywhere but a blog?

One news source I can't imagine losing is Slashdot. The posts themselves are just pointers to fuller articles, but thousands of comments are posted every day. A community moderation system culls out the noise from the commentary so I can just read the most important messages. No matter what the topic is, somebody out there knows more about it then the author of the original article. Technical infeasibility, similar breakthroughs, all the arguments for or against an idea are brought up. When I run into a news article that doesn't allow comments I feel like I'm missing something now. So many articles are just press releases, or are missing major points, that when I don't get the full range of opinions from other readers I'm unsure of what to believe.

Much of the discussion around newspapers and magazines has been on how they can make money. It's the wrong question. Declining sales are symptomatic: they need to learn why what they were selling isn't interesting to us anymore. It's not just a question of free. If Slashdot went behind a pay wall and lost the thousands of comments, it'd be of no value to me anymore. The question is what can a journalist offer me that an expert in the field can't? Plenty of scientists are perfectly capable of explaining their field in an approachable manner. What insight into Computer Science can a professional journalist offer me that a professor can't? Or that the original scientific articles can't?

Investigative journalism is still a crucial tool in fighting corruption. We need to save that. But the idea that a journalist can best present any information in the world is outdated. The idea that journalists need to play gatekeeper to information is dangerous. More and more of my understanding about the world is coming from bloggers who work in the fields they're speaking about. The biggest threat I see to traditional media isn't copycats undercutting their margins, but millions of experts on small topics sharing what they know and love. Any solution to old media's woes that doesn't address that is a temporary solution at best.

Monday, February 8, 2010

It's A Small World (network) After All

Certain ideas have a way of showing up wherever you look. The Golden Ratio appears again and again in art and nature. Chaos Theory becomes integral in just about any interesting real world process. It seems like every time I hear about small-world networks, it's in a new context. You've probably heard of it as well, at least in terms of Kevin Bacon.

Small-world ends up being an apt description of this phenomena in two ways. First, any two members of the network are "close", in that just a few connections link them. Hence the game Six Degrees of Kevin Bacon, where in fact 4 degrees are unusually distant (an interesting tidbit from the Wikipedia page: Kevin Bacon doesn't make the top 100 list of most central actors. The top billing shifts as new movies are made, but at the time of this posts is held by Dennis Hopper).

Small-world networks also have "clusters", where individual nodes tend to form groups that are more likely to connect internally than externally. Certain directors regularly use the same actors. An even more clear example is your own social network: you're probably a member of a couple friend groups, where everybody knows everybody else. Hence the entire world is small (compact), but it's also made up of lots of small worlds (clusters).

Why do small world networks matter? We're not exactly sure. There are theories that it's because they're more robust to damage (dropped nodes or edges). Alternatively, it could be that the rules that lead to them (e.g., preferential connection to already large nodes) are common, unrelated to any desirable network property. But although the reason is up for debate, they show up so often something must be up. The interactions between your genes, some ecological systems, brain structure, rock fractures, and social networks are all small world networks. As graph theory spreads through more fields of science I suspect many more examples will be found.

I'm sure I'll post about small networks again, as their tendency to pop up everywhere makes them a good tool for understanding the connections between disparate fields, but I'd like to use them in this post to talk about jobs. I don't have any empirical evidence this is so, but I suspect people's ability to take a job forms a small world network. There are definitely hubs: lots of people are qualified to work at Wal-Mart. There are certainly clusters: Aerospace Engineers could replace each other, but not many other people could. Is the network compact? That's precisely my concern, it appears to be spreading out. If nature finds small world networks to be so important, is that safe?

Let's assume some salesmen know a field really well, and some can just pitch anything. Let's assume the ones who know that field really well could move into some other aspect of it, like management. Let's consider a world where the car industry is declining, and robotics is really catching on. The competition for the sales jobs in the car industry is going to increase, and commissions will be shrinking. Meanwhile, the growing robotics field is likely in need of more workers, so salaries will be comparatively high. Those deeply enmeshed in the automotive world are stuck, but the universal salesmen will move on to greener pastures. As salesmen flow into robotics, the situations are likely to stabilize, and now that the demand is met, salaries will start declining again. Since managing a robotics plant might not be as transferable a skill as sales, that aspect of the field will still be in demand: the sales guys who know robotics well will have the opportunity to move into management. Thus there's a net flow from car sales into robot plant management, even though none of the car salesmen were qualified for that position. A small world network means that indirect actions can still be very powerful. If 10 people needed to each switch jobs to transfer personnel from one field to another, the mechanism would be far too slow and weak to be meaningful.

When everyone was farmers, the only limits for job replacement were geographic in nature. As occupations require greater and greater skill and training, we appear to be breaking into clusters. The highly educated can move within a couple fields, although not universally. Additionally, these fields may be clustered, so aerospace and pharmacology might be high skill but weakly linked. Meanwhile, large portions of the population lack the education for any of these technically challenging fields, and so are stuck in there own cluster. As certain fields declining (see, e.g. Detroit), there isn't the same opportunity to move that labor indirectly to cutting edge fields like nanotechnology: the path from assembly line worker to materials scientist is too long and one directional. You'd expect, then, the very universal hubs of entry level positions would get inundated, as that's the common direction from all the declining industry. The competition between the young and old for jobs suggests that's exactly what's happening right now.

Could the recession be partially our economy diverging from small world principals? It's something I lack evidence for, but that's worth considering. The economy may be becoming resistant to change at the same time the uncertainty about the future is growing. It's an interesting thought as well, because it suggests that this is something we could measure and take specific actions to address. Some fields are inherently high-skill, but some can be achieved by either. Farming is increasingly done by small groups of scientists. They're more likely to be able to switch to other important fields, and farming can clearly be done as a human labor intensive activity, so a transformation towards smaller farms might help keep the system more compact (and farming has arguably held this role since civilization form). It also suggests that opportunities for workers to get new training, and broad, cross-discipline degrees would help. The auto industry probably become a bigger hub as other manufacturing industries closed their doors: if we'd seen that more and more people were concentrating in a single industry we could tried to promote new links between it and other fields, or otherwise prepared for the coming problems. I'm interested to see how network gets applied to this and other problems, as it has the potential to help us understand underlying problems before they surface or at least to connect symptoms to a cause.

Saturday, February 6, 2010

The Limits of Knowledge, Part III

(Continued from parts I and II)

Kurt Gödel (1906-1978)

I left off last time with Bertrand Russell and Alfred Whitehead trying to derive all of mathematics from a small set of logical axioms, preserving consistency and completeness in the process. A consistent mathematical system will always give the same answer to the same question. 1+1 = 3 doesn't occasionally turn out to be true. It's always false. Completeness says that if you can form a valid mathematical statement, you can derive whether it's true or false in your system.

It's easy to see why math being inconsistent would be problematic: You can never be confident about anything again. 1+1 might equal 3. The oven might start shooting out cold air. The Earth could disintegrate at any moment. Who knows? Any argument against even the craziest idea is ultimately based on logic, and that could always change.

An Incomplete Mathematics is less worrisome, but it would upend the scientific and mathematical philosophy of much of history, dating back at least to Greece. We were often seen either as being guided explicitly by divine forces, or as the only logical outcome to a specific setup of the universe. Truth was viewed as a platonic beauty: every statement is true or false. You may not be able to figure it out, but in theory it could be figured out. At the very least God must know the answer. But if all mathematics and logic are incomplete, then there are meaningful, interesting questions without answers. For the divine to be all knowing he'd have to be inconsistent. Which is arguably his prerogative, but it's a very different world. It's not that any path towards truth would be doomed to failure because of your human limitations, any path towards truth would be inherently doomed to failure. No such path could possibly exist. It's a much more pessimistic understanding of the world.

And fittingly, a very pessimistic individual proved that no formal system can be both consistent and complete. It seems common for ideas that upend fields to come from the periphery, from the marginalized groups of scientists. Einstein was unable to find work within the physics community before he revolutionized our understanding of the universe. While Kurt Gödel did his work from within the field of logic, he was inherently an outsider. One of my favorite anecdotes about Gödel revolves around his dislike of human interactions. When someone would try to schedule a meeting with him he would oblige, making explicit plans to meet at a particular location at a particular time and date. Gödel would never show up. When asked why he made all those appointments he had no intention of keeping, Gödel answered that it was the only system he'd found that stopped people from persisting in trying to meet him.

Russel had found a paradox in Frege's attempt to formalize mathematics, so he constructed elaborate rules to keep those paradoxes out. If in doing so he introduced new paradoxes, he'd invent new axioms to hide those. G
ödel proved that any attempt to remove paradoxes just added new ones. It's a tricky bit of math, but it comes down to the idea that any interesting formal system can construct a statement along the lines of "this statement is false". Any system that can't make that statement in some form is too restricted to do anything more interesting than addition in. Gödel didn't just prove paradoxes existed in some system, he proved they'll exist in any system. Mathematics is filled with infinities of paradoxes, and there's nothing you can do about it.

ödel grew less stable as he aged, eventually become extremely paranoid of both germs and poison. He refused to eat anything unless his wife tasted it first. When she was hospitalized for six months and suddenly unable to serve this role, Gödel starved to death. It was an odd end for such a monumental mathematician. Gödel's Incompleteness Theorem is one of those truths so fundamental to the universe, it's unlikely his name will ever be forgotten as long as man exists. It's not the most exciting theorem, but it conclusively set down limits to knowledge, a concept that would be extended with the advent of computers.