From Istanbul To Sand Hill Road

The Design Era Of Technology

A few months ago, during TED, Yves Behar, the designer of the OLPC and the Jawbone headset, was talking about "design driven engineering".  The talk made me think how much more important the role of design has become relative to engineering in consumer electronics.  He gave an example from the design of the jawbone, where designers controlled the size of the product and as they changed the size, engineering had to go back and re-layout the PCB (Printed Circuit Board, a.k.a the green thing on which chips are).  Designers were telling engineers where to put their circuits.  That is very very different from how things used to be done.

In my old days at U.S. Robotics, products sold in the same stores that sell the Jawbone were designed very differently.  No designer had the power to touch the printed circuit board layout.  Engineers defined the product (we had bad marketing guys, but the modems were flying off the shelves anyway so who cared) and they decided on what features a modem should have.  Once features are determined hardware engineers figured out what chips and components to use, drew a schematic and gave it to the PCB guy, which was almost always a fat white guy who worked alone.   A few weeks later, out came the PCB layout, which was the biggest determinant as to what the product looked like.  The size of the board, thickness were all features that determined the cost, so people who were accountable for the cost of the product made decision on the board. 

What was forgotten is that the size of the PCB determines the size and shape of the end product that some industrial designer would have to design around.  That person had no say whatsoever as to what size the product should be.  Even marketing people were scared, because the answer could be "can't be changed, too expensive, too hard or even impossible".  So design was done AFTER engineers were done with the product.

Yves Behar (whose father is Turkish), says they do the design BEFORE engineers get to put their circuits in.  That is a big change.  Finally the designers can ask critical questions like "who will use this?" and "what is their context?" at a point in time in product development that can actually have an impact on the end result.  That is design driven engineering.

So far this may not be all that new, but I wonder, why now?  Could it be that all of a sudden society has got more "taste" and care for design.  Surely not.  What has happened that caused this shift and what more could be coming our way. I see three key factors that gave power to design and took it from engineering.

1) Moore's Law:  There is enough processing power in small enough components that "getting it to work" is no longer the biggest problem.  Chips have gotten smaller and better, and people have learned over the last 10-15 years how to do it.  Just look at how small and powerful handsets have become.  If the iPhone can run the same big OS that runs in desktops, we are "there" in terms of technology being able to deliver the features we want.  Therefore, differentiation is less on making it work, and more on making it useful.  Enter design.

2) Wireless connectivity:  This is mainly WiFi and Bluetooth and Edge/3G.  A lot of devices we want, now come in portable forms.  Moore's Law has helped in that immensely, but so has connectivity.  Take the Jawbone.  If it had to have a cable instead of using Bluetooth, the options you have in the design of it is limited.  Wires are clumsy, so are power supplies, they shadow what design can do.  With connectivity, you don't need those things, and it opens up chance for good design to kick in.

3) Successful examples of winning designs.  This is the most important reason why the "Design Era of Technology" is starting and the "Functionality Era of Technology" is over.  The two examples I've written about over and over and over again in this blog is the Nintendo Wii and the Apple iPhone.  They are proof that good design sells in a big way and is "impactful".  Sony paid $1B to IBM to design the new processor for the Playstation 3.  The rules of the game until the Wii was that better graphics, faster games was the path to success.  Then comes Nintendo with a simpler machine, simpler technology but smarter and well designed technology and now you have a device that four generations of people can play and use.  The iPhone is no different.  Think of the billions invested by handset companies to build better more functional phones, think of the billions invested by VC's to reformat the Internet content to the phone.  Apple comes and better designs the device and UI an boom the rules are changed.  There are other good examples from the Internet as well, where a good designed UI has made the difference between one site winning over another (that's a whole other blog post).

In the end, I think we are squarely in the "Design Era of Technology"  D-schools will become more prominent over the years, and the designer will be one of the first hires in any company (true in the Internet). The next question becomes, "where else can design take over?" and that's left to the reader to ponder.  For a hint, look at Yves Behar's "seven axioms".

Thank you, Steve Venuto, for giving me the idea to write about this.

Android...Applications and Handsets are Coming

One of my 2008 predictions was that the Google backed Android open handset platform would be well received in the industry.  I gave a lot of reasons why.  A lot of industry experts have taken the other side of the bet.  But that is the less insightful and easier side of the bet, since many standards fail and the few who make it take years to get there, just look at how long Bluetooth took to get there.  But there are signs that Android is alive and kicking.  Here are two data points:

According to Google, 1788 apps from 70 countries have been submitted to the Google Android Challenge.  This is a healthy number given it's been less than a year since the challenge began.  It will certainly grow as phones really make it to the market.  Which brings us to the next point.

According to this VentureWire article, pieces quoted below, T-Mobile already has a prototype and plan to ship Android phones in 2008. 

"At the Wireless Innovations 2008 conference in Redwood City, Calif., sponsored by Dow Jones & Co., publisher of VentureWire, Joe Sims, vice president and general manager of T-Mobile's broadband and new business division, said he had already seen prototypes of the company's Android-based phone, which are scheduled to ship in this year's final quarter.

"I'm impressed," he said. "We will have more than one product...[The move to an open platform] will be innovation across the board, not just one device."

T-Mobile, like other carriers, was leery of Google at first, because the open platform that the search giant was pushing seemed radical and untested, Sims said. T-Mobile is now a part of Google's Open Handset Alliance, as is chipmaker Qualcomm Inc."

If indeed a consumer buys an Android phone in the next two years, let alone one, Android would be a success. 

All this is the side effect of the nuclear bomb that fell on the Wireless industry last year, called the iPhone.  It opened everybody's eyes as to what is possible.

A Social Network the Size of the U.S.

I qutoe Tim Leberecher from his blog post about QQ.com

"Let's take QQ.com as an example, the leading Chinese online social network. The site is reported to have more than 300 million active accounts. That is eight times the member base of Facebook--and it's the same size as the U.S. population.

What's also remarkable (and different from the Western social networks) is QQ's monetization. Facebook posted revenue of $150 million for 2007 (and according to Plus8star a loss of $50 million); MySpace.com (purchased by News Corp. for $560 million) is projected to generate $750 million in revenue this year; and Bebo (purchased by AOL for $850 million) had revenue of just $20 million in 2007. While QQ reported revenue of $523 million and an astonishing operating profit of $224 million in 2007. The revenue distribution is unusual, too: 60 percent of the revenue came from services like games, an additional 21 percent from mobile services like ringtones, and only 13 percent from online advertising."

Most of us who focus on the US can easily miss this scale and more importantly, miss that advertising is not necessarily the only way to monetize.  There are a number of other international social networking sites that do very well monetizing with value added services. 

Life In Cold Blood...Finally

Today, I received the DVD of David Attenborough's Life In Cold Blood, a phenomenal birthday gift no dobut.  Thank you!  It is one of those DVD's that you know will be a masterpiece before you even watch it.  I've been waiting for it for more than two years.

I did watch the first part of episode one, and it only takes 5-10 minutes into it you realize that, even if you never watched Sir David, you are listening to a master storyteller, and he hits you with one hell of a scene.  Now, some readers may remember that this blog has a fascination with evolutionarily more primitive animals eating more sophisticated ones.  I've featured an octopus eating a shark, a centipede eating a bat for example (one is a video).  Life in Cold Blood gives us another one and I have a feeling it's not going to be the only one.

David Attenborough shows in the first episode of Life in Cold Blood, a python eating a deer, a baby one but a deer nonetheless.  The python swallows it whole head first.  It is such a big digestive process that the snakes liver doubles in size in two days and its heart grows 40%.  It's entire body shows a vast increase in biochemical activity until the deer is fully digested.  Amazing.  After that, the snake doesn't have to eat for months, maybe a year.  That's the benefit of being cold blooded.  Warm blooded animals spend 80% of their energy on generating heat.

So there you go, have a deer for lunch, and don't eat anything for a year.  That's the diet I should be on.

Get this DVD here, and thank me for it later.

2nd Annual Labor vs. Capital Kickball

We just played the 2nd annual Labor vs. Capital games, where VC's go against entrepreneurs.

Last year the VC's lost to the entrepreneurs in dodgeball.

This year the tables had turned.

With convincing wins on the kickball field, (and one inning that had 11 runs) Capital has now evened the score against Labor.

Thanks everybody for coming and David, Hunter and Noah for organizing.

See you next year!

Philippines 2008 - Top Ten Photos

As promised, here are the ten of the best photos we took in the Philippines.  They were taken on various parts of the islands of Palawan, Mindanao and Luzon.  Look at the low resolution picture on the blog, but be sure to click on the image for the high-resolution picture.  All these photos took a lot of blood, sweat and tears to take, and all photo credits go to Cagan Sekercioglu, who proved over and over again that he is as good a photographer as he is a biologist.

1. Philippine Frogmouth:  We saw this bird off the trail path, in the middle of the jungle at night.  This is an endemic to the Philippines.  It's not an owl, it is in a family of its own.  Open the high-res version and zoom into the eyes.

2. Palawan Peacock Pheasant:  Saw this beautiful bird on the island of Palawan.  It's a pheasant with the tail of a peacock, another endemic to the Philippines.

3. Indigo Banded Kingfisher:  Seen on a creek during our last days in Luzon.

4. Yellow Breasted Fruit Dove:  Seen on the eastern part of Mindanao.

5. Philippine Serpent Eagle:  Seen circling over our heads in Mindanao, near a logging consession.

6. Scale Crested Malkoha:  Another endemic to the Philippines, seen on Mt. Makiling in Luzon.

7. Pink Bellied Imperial Pigeon:  Ever seen a pigeon like that?  Seen in Mindanao.

8. Apo Myna:  Another endemic, found on the hills of Mt. Kitanglad in Mindanao.

9. Oriental Dwarf Kingfisher:  Seen in our first day on Palawan.

10. Grass Owl:  Majestic bird, seen on Mindanao at the wetlands around an abandoned airport.

All picture credits Cagan Sekercioglu

The Tale Of Two Endemic Cultures

One thing I didn't mention in my previous post is that endemic species in the rainforest are especially resistant to introduced species, which are species brought to an island by people.  Often times, introduced species, like the brown tree snake in Guam and cats on Mauritius, wreak havoc on endemic species and drive them to extinction.  This is harder to do in a tropical rainforest.  Like I said earlier the rainforest ecosystem is especailly severe, yet the environment (climate...) is relatively stable so animals living in the rainforest have evolved to be exceptionally suited to it, making it harder for introduced species to survive. That is why the Philippines is still one of the most biodiverse areas of the world despite a lot of forest destruction.  The endemic birds have a strong culture of their own.

However, the success of the endemic bird species have not been replicated by the people of the Philippines.  While the endemic birds have kept whats unique to them alive, the people of the Philippines, sadly, have not in general.  The endemic island cultures have been mostly wiped out by introduced cultural elements, in the form or McDonald's, KFC, Pepsi, you name it.  These introduced cultural "species" or memes have driven indigenous Philippine culture nearly to extinction.  The island's history gives us a hint on that.

SInce Magellan, who was killed here in the 16th century, the island was first in Spanish control, then American, then Japanese, and then largely American again.  Add to that, crooks like the Marcos family that have nothing but taken from the island, and a population that the island can't sustain (in every house in every village we saw 5-6 kids), and what you have left isn't much.  It has become a land where you just can't find the endemic, unique culture anymore.  It is easier to find the Celestial Monarch bird, than it is to find something truly unique to the Philippines.

It seems like American marketing campaigns that are past their time in the US, go to the Philippines to find new life (who sees Ronald McDonald and the Hamburglar in the US anymore?  They are in the Philippines).  Their famous Jeepneys are a proof of the same phenomenon.  This was the sad part of the trip, and it doesn't end there.

The end is the destruction of the rainforest.  The introduced human culture now, in turn, is wiping out the forest and eliminating the endemic animal culture that's done a much better job remaining true to itself than the people.  Unfortunately, if you cut all the trees a bird eats on that bird goes extinct.  Some birds are so rare now, that it takes an expert like Tim Fisher to find them.  So at the end of the day, the one thing that's stayed unique to the Philippines is being wiped out by the on thing that's not stayed unique to the Philippines. 

The next post will have our top 10 photos of birds.

The Philippine Birding Trip 2008

When my ornithologist friend Cagan Sekercioglu asked me to join him and our expert local guide Tim Fisher, on a birding trip to the Philippines, he told me that the Philippine rainforests were among the most biodiverse and unfortunately among the most destroyed.  The trip would take us through a number of islands with the hope of seeing and photographing a lot of the birds of the Philippines. The thought of seeing a new country, and doing it in a non-traditional way appealed to me and I took the trip. It turned out to be one of the most interesting trips I ever took. What made it interesting was how we did it, where we did it and the emergent mindset the two created.

First, the 'how we did it'.  It was my first time birdwatching, and I was lucky to be with two experts.  I always thought of birdwatching as a leisurely sport for which the minimum age to start was over 50.  I was wrong, very very wrong.  It is an intense sport, and gets more so if you are with experts.  If you are competitive about it (my friend is in the world top 100) it requires a lot of strategy.  There are two big variables and one consttraint.  The variables are the total number of birds you want to see, and the number of rare birds you want to see.  The constraint is the time you have in each region.  If you focus on the rare birds, you have to spend a lot of time in specific places.  You may or may not see them but then you miss many common ones, but if you focus only on common ones you may miss that one elusive bird that may just go extinct before you get around to do the trip again.  They all count toward your overall global bird score.  In either case you have to study the birds, read previous trip reports and create the optimum path that takes you through the right elevation and right kinds of habitats.

Our strategy was to spend a lot of time in the rainforest to get all the birds, especially endemics and/or species threatened with extinction.  After all, the number of birds you see and photograph is directly proportional to the time you spend on the field.  That is why almost every day we woke up sharp at 3:00 am, had breakfast at 3:30, went on the field at 4:00 so that after a 2 hour hike (often up a mountain) in the dark, we would be ready to see the crepuscular birds just as the sun is rising.  If you are even 30 minutes late you could miss whole categories of animals.  We had lunch on the field and returned every day around 5-6 pm giving us some time after dinner to do night birding for owls.  Almost every day we went to bed before 9pm. 

Getting the rare birds is tricky.  There are 600+ birds in the Philippines, of which nearly 200 are endemic, which means that they are ONLY found in the Philippines.  You want to focus entirely on those, others can be seen elsewhere.  The problem with endemics is that they are endemic, you can't see them elsewhere.  If you miss that one rare endemic bird that lives on the top of Mt. Kitanglad, guess where you have to go again to see it?  And there is no guarantee you'll see it each time so focus is razor sharp when searching for these birds, and everybody is silent.  Some of these waits took us more than 5 hours.  You have a lot of time to think when you are waiting to hear the call of a bird for five hours on a mountain.

It was during one of these long waits that I realized that birdwatching is much like venture capital .  You look at a vast landscape, whether it is a dense jungle with figs and mahogany, or a wetland with Mangroves, and most of the time the landscape is barren.  It seems like there is nothing to see, or everything you see is something you've seen before.  But then, in the distance among a flock of common birds, you see something unique like a Scale-crested Malkoha camouflaged among a bunch of similar trees.  That's the company you want to invest in.  You focus right away to make sure the bird you are seeing is the real one, you look for identifying characteristics; that's what diligence is.  Once you are sure you get close with your camera and binoculars and take the picture.  There is your investment.  Often times the bird flies away or hides before you get a shot, so you have to sometimes be patient to find the investment or run fast to chase it down, this means getting off the trail path and into the wilderness where you can easily get lost.  Yes, you have to get out of your comfort zone sometimes to find the best investments.  Most importantly, good birds don't show up in a linear way, just like good investments, and you always always have to keep your eyes open.  Luckily for entrepreneurs, VC's often do more than just take a picture but I digress.

A little bit about the rainforest, which is the "where we did it" part.  We all know documentaries about rainforests where we are shown vividly colorful animals displaying all sorts of dazzling behaviors.  Well those documentaries take years to make, and most of the time when you look at a rainforest, especially a lowland tropical one like the one in the island of Palawan, you see nothing but dense, dense flora.  What amazed me beyond anything else is the speed at which plants rot and decay in the forest.  Life is so active that nothing stays on the ground for long.  With the help of constant rain and fungus like I've never seen anywhere, dead plants decay fast.  It's not when they are dead that they start decaying either.  As soon as a new leaf forms, there are 3-4 different fungi on them eating it alive and 2-3 different animals doing the same.  To survive in the forest, natural selection forces you to reproduce fast, develop fast, and spread fast.  Otherwise you are eaten.  Ants and termites are everywhere (including in your socks) and when they bite, they draw blood.  Interestingly this dense activity of life is what gives endemic species an advantage, it's hard for introduced species to make their way in.    You don't have a lot of time to wonder around and take breaks when you are walking in a lowland tropical rainforest, which brings me to my final point about the emergent effect of both birdwatching in a dense rainforest.

Simplify your life!  That's what it boils down to.  Places we stayed often did not have electricity (that simplifies things a lot, though we had to carry ice on horses to enjoy a cold beer), they have little or no cell phone coverage.  The forest is so dense that focusing on the path and the birds is all what you have energy for.  The result for me was a vast simplification of my life for two weeks.  Eat, walk, find birds, sleep.  That's it.  With such simplification comes focus.  Pictures of the birds you are looking for are clear in your head, what you are doing, and why you are doing it is crystal clear.  We slept in very modest housing, on a sponge bed 10cm thick, but nobody cared.  The result of all this clarity is that it is addictive.  You start thinking that the mountain life is your normal life and that all this civilization is temporary.  Maybe it appeals to a primal need, which is hunting of course.  Whatever it is, I highly recommend that you do such a trip, even do it looking for birds, but do it in a harsh environment that forces you to focus and simplify.  You will love the feeling.

As for our trip result, we observed 255 species of bird of which 122 were endemic, a Philippine record for the 13 days we had, according to our guide who'se been the premier birder in the philippines for the last 30 years.

Off To The Philippines

Starting tomorrow I am going on a trip to the Philippine rainforest, in search of rare birds and animals.  I will be joining a few biologist and we will travel to a bunch of remote islands, taking long hikes up and down mountains.  One trip to a part of the rain forest requires us to meet with the village elders and attend a ceremony to ask permission to go on their lands. Very intriguing indeed.

It's the kind of trip I've wanted to do all my life, and the stars aligned for this Month.  I've watched David Attenborough all my life and now is my tiny chance to make my own documentary :-)  Readers of this blog know what a role model he's been to me, see here and here.

The rain forests of the Philippines a have some of the largest biodiversity on our planet, but they are unfortunately among the most damaged.  I will give you guys a first hand account of it.

Stay tuned on this blog and on facebook to see pictures and stories of our trip. 

The Wii Fit...end of Yoga, Pilates

At the Game Developer's Conference 2008, by far the most inspiring product I saw was the Wii Fit; both the software and the fantastic sensory hardware that comes with it.

It's a pad with a bunch of weight and possibly motion sensors that can pinpoint where and how you stand.  It is accompanied by 40 games that are aimed to make you exercise your core body.  There is a unique game for almost every muscle group, and it even makes you do the yoga moves and figures out how accurately you do it based on what it senses on the pad.  It's nothing short of brilliant.

Games get harder as you go.  The pad also measures your progress, your weight and how well you've trained your core.  There is a skiing game that makes you move your knees left and right, there is a balance game that exercises your glutes, a ski jumping game that makes you do squats and it even makes you do pushups.  This may be the solution to the obesity problem in the US.

The game went out on sale in Japan in December 2007 and since it has sold 1.1 million copies in Japan.  It hits the US stores May 19th.  It is an absolute must have.

When good hardware is combined with good software something great happens.  Both the Wii and the iPhone are the two best examples of it.  They remind me of the following Alan Kay quote:

"People who are really serious about software should make their own hardware."

P.S. Google gets this quote too by the way...their data centers are their hardware, and it's a lot more impressive than both the Wii and the iPhone.

Locke, Hume and Berkeley at The Game Developer's Conference

I walked the exhibit floor at the GDC looking for the answer to one question and one question only; "Is there a user interface better than that of the Wii?"  I was looking for new kinds of sensors, new kinds of sensory input devices that can enable gameplay never imagined before.  I was the colonial empiricist at the exhibit floor looking to understand the world through the senses.  I saw a bunch of disappointments, but one spectacular and inspiring innovation.

The Playstation 3 booth was not the place to see that innovation, though the booth itself was hard not to see. I asked somebody from Sony whether they were coming out with a Wii like controller and nobody knew of any such effort.  That was disappointing, but maybe it is an admission of defeat for them if they do.  Then I saw a young guy demonstrating a game on the playstation.  I approached and asked him without looking at his badge: "Do  you know if Sony is going to come up with a Wii-like controller?"  The answer I got was decisive: "I have no fu..ing clue, but if they did it would be awesome duuude!"  Then when I asked him if he knew anybody who knew the answer he said "I have no idea dude, I am just here to demo this game."  Maybe Sony should listen to its developers, but I left that booth with no luck.

Then I ran into a booth that was selling the Novint Falcon (shown here).It's supposed to be a new kind of joystick with force feedback that is supposed to make your gameplay a better experience.  I tried it and the impact is marginal.  It's also a big device and where will you really fit it.  Also, you have to hold a tiny little ball (in front of the much bigger machine in the picture) to move your character and fire your gun.  It's a tiny little ball because if it was bigger, it would be harder to give it the force feedback.  Smart thinking?  Not!  When you play a first person shoot-em-up you want to feel you are carrying a big friggin gun, not a wimpy little ball in your hand. It was a niche product at best, and not what I was looking for.

Then I visited Neurosky's booth.  They make a headgear that analyzes your brain waves to turn it into sensory input to a game (see below).  The headset is below.  I knew of their competitor Emotiv, which has a different device.  It was surprising enough to see that not only had somebody come up with a "thought controlled joystick" but there were actually two companies doing it.  You got to love innovation.

There was something really cool about their demo.  You put on the headgear walk around in a virtual world and if you focus and concentrate long enough you can move objects. Much like using The Force.  Very cleverly, they put an X-Wing fighter in the water that is very heavy and you really need to focus to move the X-Wing out of the swamp.  I said: "That's pretty cool, I'll give it a shot and try."  Then suddenly the lady with the headset looked at me with her eyes opening wider and slowly said: "Try not.  Do or do not.  There is no try." 

Jokes aside, it will be a long, long time before these devices replace joysticks.  Can new games be developed for it?  Possibly, but that value proposition won't come clear unless the makes of the devices write a few decent games.  Still not the innovation I was looking for.

Then there was Zcam, whose tagline is "You are the Interface".  They use a 3D camera that captures not only the colors but depth (it sends out a signal and measures how fast it comes back).  So it can detect your head, fingers, arms, but more importantly whether it is moving towards the screen and back.  Therefore you can just use your hand and body motions as an input, no need to hold any device.  I can see that working well in many cases, but is it such a bad problem to hold something. Don't I want to hold something like a racket when I play tennis?  Must I use my hand?  Holding something is easy, pressing buttons is harder, and what about that case when you really want to press a button.  That's a pretty simple thing we can assume that people know how to do, again that's not a problem worth eliminating.  While the technology was impressive this device also didn't do it for me.

It wasn't the Playstation 3 (not the Xbox either by the way), it wasn't the force feedback device, it wasn't the thought controlling headset, and it wasn't the Zcam.  So what was it?  What was this remarkable new user interface that stole the show?  You have to read the next post to find out.

Subprime Mess for Dummies

A must read powerpoint that sums up what's going on with the subprime mortgage loans.

Download sub_pime_presentation1.ppt

Enjoy!

A Evening with Muhammad Yunus

Last month, I was at a Silicon Valley Bank sponsored event where we got to listen to Nobel Peace Prize winner Muhammad Yunus speak.  As most of you know he is the visionary behind microlending.  I had heard and read a lot about him before I met him, so the question I had in mind was, "Can microlending work in America?"  And I did get a good answer for that, and that's what this post is about but before we go there, let me talk very briefly about what he did in Bangladesh and why it worked. This is the very short version.

Muhammad Yunus started microlending in 1976 after seeing 42 people being hassled by loan sharks.  They were suffering, and according to Yunus, they were almost being tortured.  The total amount owed by these 42 people were $27 (that's twenty seven dollars).  He became the guaranteur of this amount.  Starting there, he created a bank, lent money to men and women, found out that money lent to men didn't come back, money lent to women was paid back.  So he started to lend to women.  He now has 7.5M borrowers, 96% are women.  99% percent of his loans are repayed.  They've even started lending to beggars.  You read it right, people begging for money in streets.  He gave loans to 100,000 beggars and 10% have stopped begging and have a business.  The remaining 90,000 are "part time beggars" they also used the money to become door to door salesmen.  Now that his bank has grown, it gives university scholarships, trains doctors, offers health insurance to the poor.  He trained doctors, but there weren't enough of them so the bank funded a medical school.  All this was done by lending money to the poor and sticking to his mantra which has been : "Poverty is not in the person, but in the sytems that created them."  In my personal opinion he's done more for his country than most presidents I've seen.

Now let's come to the situation we have here in the US.  47M people don't have health insurance, and there are probably another 47M who think they have health insurance, but find out they really don't when they need it (watch Sicko if you don't believe me).  The situation is worse with check cashing and payday loans.  According to Business Week the payday loans business is booming here as well, I quote:

"Plenty are profiting from the financial wreckage. Banks are increasingly pushing secured credit cards, which require borrowers to put down a deposit and charge stiff 19%-plus rates. CompuCredit, which specializes in cards for consumers with poor credit, added 500,000 accounts in the third quarter. Collection agencies, too, have moved into the credit-card game: PRM Financial Services offers debtors a card at a fixed rate of 18.9%. "We're talking to doctors, attorneys, and businesspeople," says Carol Freeland, a partner at PRM Financial. "Just because you make a lot of money doesn't mean you don't end up in trouble."

That may be why payday lenders, which advance customers money on their paychecks at rates of up to 500%, are migrating to more affluent neighborhoods. According to a recent Brookings Institution study, there were only a few hundred payday lenders in the U.S. in the 1990s; now there are more than 23,000, with 37% located in Zip Codes where the median income is at least $48,000. "People who never dreamed they'd go to a payday lender are going," says Gail Cunningham of the nonprofit National Foundation for Credit Counseling. " Business Week Feb 07 issue

I asked Muhammed Yunus personally after his talk; "What's the problem in America?" And his answer was very plain and clear. "The problem is the banking system.  It does not help the poor.  A lot of people can't open bank account, and if they do they pay heavy service fees".  He is right.  The banking systems wants to have nothing to do with the poor.  So the poor go to payday loan shops or check cashing outfits described above.  Muhammed Yunus also said something very saddening.  He apparently told this to a Congressman, and what he heard from the Congressman was that payday loans, and check cashing businesses were flourishing most in locations nearby military bases.  This normally would be hard to believe but coming from a Congressman, it's sad to hear that those who defend the country and risk the most are shunned by the banking system.  Now that should make us all think.

Superbowl Breaks Viewing Records...

Superbowl XLII was one hell of a good game.  I had a great time watching the whole thing.  Here is what I read about it recently on a blog

"SUPER BOWL XLII was the most-watched sporting event on record and the second most-watched TV program in history. Nielsen says an average of 97.5 million viewers watched the Giants-Pats contest. The most-watched program is still the M*A*S*H finale, which drew 106 million viewers in 1983."

97.5 million viewers ain't bad.  But it sure feels like a niche event, compared to the FIFA Wold Cup final which is watched by 2 billion people.

Why The British Health Care System is Better

I've been sick for the last two days and had to work from home.

I wonder if I had called 911, would I have gotten the same good treatment the British give their men who get sick?

See the proof for yourself.

asmallworld.net: Elite Social Network, or Facebook Roadkill?

I started getting emails from asmallworld.net, one of the social networks I belong to prompt activity.  Status updates, activity updates etc.  They didn't used to send those.  I don't like it, it feels like spam.  So why did they start?  Weren't they growing just fine without it?  Could be, but pretty much everybody I know there, is now on Facebook and that's where I connect with them.  They don't show up on Comscore but here is their last years Alexa graph.

You have to take Alexa with a grain of salt, but it says their pageview are half of what they used to be before Facebook opened its platform. I wonder what other social networks are feeling the same pinch?

Bounding The Biodiversity Problem

One of the books I read over the holidays was E.O. Wilson's Creation, a bestseller by the two time Pulitzer Prize winner that appeals to two opposing ways of thinking; religion and science to get together to save the biodiversity of the environment.  In this very well articulated book, he reminds us that in history (as captured by the fossil record) there has been 6 time periods where biodiversity has been vastly reduced, i.e. a lot of species have gone extinct.  The fifth was the end of the dinosaurs 65 million years ago, and in each case it took the world about 10 million years to rebuild, re-evolve that biodiversity.

Sadly, the sixth is happening now.  We humans are taking over the planet and creating mainly habitat loss for the other species.  Whatever we end up doing in twenty thousand years, it may take nature another 10 million years to recover.  It is sad, it is depressing, but it is what it is.  The book mentions all the hot spots in the word where species are especially endangered.  The rainforests of the Philippines, Madagascar and thr Amazon are among the worst ones.  But throughout the book I was waiting for the pragmatic bounding of the problem.  How much would it cost to fix it all?  If by a magic stroke every country chipped in, what would it take to preserve the forests, or help endangered species recover?

E.O. Wilson answers that question, and frankly the answer is just as depressing as the question.  He estimates that $30B annually is needed to preserve all the biodiversity on land.  That's it $30 billion dollars.  In the grand scheme of things that's tiny.

Compare that to the data on the link here on global defense spending.  I don't know if it is true but, is says that the world annually spends $1100B on defense.  That's $1.1 trillion dollars.  More than half of it is spent by the U.S., less than half is spent by the rest of the world.  And all it would take would be 3% of that spending to maintain biodiversity that nature needs 10 million years to recover.

I see now why some of my ecologist, biologist, ornithologist friends of mine are depressed about it.

Nonetheless, E.O. Wilson's Creation is a fantastic read, it's short, thoughtful and most importantly well-written.  You can get it it here.

Scared Kids?

Before we return to our regularly scheduled posts about the Internet and technology, I have to tell this interesting story, again about teaching science to children.  It's short and sweet.

Yesterday we were at The Exploratorium, which is a fun museum that teaches children about science.  It's one of my favorite places in San Francisco.  While there, I bought a few posters for the kids, one about volcanoes, one about The Elements, and one about the human body.  The human body one is the standard one you see at a doctors' office which shows the skeleton, the muscles around it and the organs etc.

When I pinned the human body poster to their wall on the hallway near their room, they all said that they are "scared of it" and want it put down immediately.  They were right, I can see why two 7 year olds might not want a skeleton, and a man with muscles exposed looking at them. (Flashback...when I was 8 I was given a "cute" poster of two little kittens.  The fact that I remember how they looked vividly should be enough to tell you it was scary). 

I told them again that we all have these muscles and organs but my explanations were no good.  They wanted nothing of this scary poster on their path between their room and the bathroom.  They said they would not sleep unless I took it down.  Instead, I told them, "take a post-it and cover every part that you think is scary, then as you grow up and get used to it, and are no longer scared, take them off."

To my surprise, they agreed, and covered almost the entire poster with post-its.  The skeleton was still there, but I guess the body with the exposed muscles and organs was the scary one.  They said "OK, now all the scary parts are covered" and they went to bed.

This morning I got up and saw them taking off the post-its.  That was a surprise.  I said "what's going on? I thought you were scared".  Their answer was: "we were but we got used to it and we are not scared any more"

That was that. 

Lesson of the story:  If explain something to kids they may or may not take it in, if you involve them, they learn.

UPDATE:  Chris Anderson posted this story and the pictures I took on Geekdad.  You can see the pictures there.

A Story About Bugs

This post is an exception.  It's not about business, not about technology, not about Web 2.0, venture capital or predictions for 2008.  It's about bugs, little black bugs with six legs and two antennae.  Moreover it's about bugs in food.  Even more, it's about bugs in food that was cooked in my house.  Talking about bugs is possibly curious, perhaps gross.  Bugs in food is for sure gross, but perhaps funny.  Bugs in food in your own home ain't funny, it's flat out embarrassing. 

And that was exactly situation I found myself in yesterday, when our nanny came up to me ands showed a spoonful of the dish she was cooking and asked me "are these bugs in our dinner?"  And I took a look and indeed the two tiny black little things looked very much like bugs.

I walked downstairs, and all my children were sitting at the dinner table, spoons in hand ready to eat.  The cauldron in which the dinner was cooking (we have a big family and we have to cook using cauldrons) was still boiling and I looked inside and saw a lot more of those little black things.  It was probably the lentils we bought from Whole Foods that had it.  That's not surprising because Whole Foods sells food that is pesticide free, and when you buy food that's pesticide free chances of finding pests in it are higher. C'est la vie.

The food was ready to go down the drain for sure, but with the disappointment in everybody's eyes, I knew I had to do something to turn this awkward situation into a productive one.  So I said looking at our nanny and the kids "I am not sure that these are bugs.  I need a scientists help to find out.  Go get your microscopes!"  I told our nanny not to throw away the food until the little scientists had proven that the black things were bugs.  If they didn't we'd eat the dinner (that's what I told them, no way we were eating that stuff).

The girls were learning about hypotheses and experiments in science class this week, so I played into that.  They rushed to the kitchen with their microscopes.  I asked "what's the hypothesis?" and they said, "There are bugs in the soup."  I said "good, so prove it, find me a bug under the microscope."

With their little tweezers that comes in the microscope kit, they picked out little black things from their food, put them on the slide, then under the microscope and they showed me black things, but they didn't exactly look like bugs, black blobs more likely.  I asked them to look for things that clearly bugs had, and they went on looking for antennae and legs etc.  They kept saying "I found it" and I refuted saying "well that could be part of a seed, or a burnt piece of corn, I think you need to get more data, that's what happens when you are doing an experiment."  They went through bug after bug and finally, my daughter, aptly named Sofia, yelled "I got it!  This is definitely a leg"  I looked through and clearly you could see a leg.  I said "that's it, that's proof.  We can now throw away the food."  Then I told the girls it was important that they document this and draw a picture of what they saw, and they did.

They were so happy to apply what they had learned in school and got a first hand idea of what it's like to form a hypothesis, do experiments and come to a conclusion about it.  I think they will never forget about this, and a day that could have gone down in history of a bad day with bad food became a day to remember about learning.

All was well except one thing.  I was so happy and proud that the kids did something good, I told them "now tell your teachers what you did and show your pictures".  That was a mistake, I think.  A mistake more embarrassing than talking about bugs in food.  Why? Because, there was 100% chance that my daughter would go to school the next day and excitedly tell her teacher: "Ms. Giamona, we saw these black things in our dinner and we put them under the microscope and they were black bugs, I saw their leg, and look I made a picture of the bug in our dinner."

I think it will be very hard for the teacher to see the educational angle here.

2008 Technology Predictions

It's becoming customary among VC bloggers to make predictions for 2008.  At the risk of educating my competition, here are my technology predictions for 2008.

1) The Success of Google's Android and the Open Handset Alliance:  This means that handsets will become more like PC's and wireless carriers will become more like landline DSL providers.  This is a bold statement because both handset makers (like Nokia) and carriers (like Vodafone) don't want this to happen.  So why do I predict a change in an industry where dinosaurs were surviving for such a long time? 

Because a meteor the size of Texas hit the wireless industry in 2007 and it was called the iPhone.  For the first time in the wireless industry, the handset chose the carrier as opposed to the carrier choosing the handset.  The product was so impactful and well designed that some carriers agreed to share 30-40% of their data revenues with Apple in order to have the device on their network.  That could be a very meaningful $200 dollars to Apple.  Why did carriers agree to that?  Because the carriers did the math and the revenue share probably made up the customer acquisition cost that they no longer had to pay which, in the US, is about $200.  In return for that bargain they gave up ALL revenue from applications, ringtones etc.  The consumers wanted it, they gave it, and doing so opened up the market an catalyzed the next innovation which came from Google.

Android and the Open Handset Alliance, enables other people to quickly create new iPhones.  It creates an environment that let's developers focus on what they do best, which is writing innovative applications.  So that somebody can come up with a device so compelling that it too will chose their carrier (if carriers need a nudge Google can share search revenues, if they need a punch they'll fund an open carrier).  Once that happens, the carriers become a dumb pipe, but a dumb pipe with similar economics and no worries for churn. 

The second reason carriers may embrace Android, is so they don't have to be hostage to Nokia which is exerting a bigger and bigger pressure on carriers.  They are even building an ad network and making carriers pay them a piece of their ad revenues.  Especially European carriers, are so dependent on Nokia that they may just welcome a cheap, Android phone that has a few killer apps built by young application developers.

Which brings me to my third and final reason why Android will succeed; the developers.  They are frustrated.  It is frustrating to write mobile apps if you have to test them with 100s of handset each running a slightly different OS, in slightly different carrier networks.  Getting apps and phones certified is a big daunting, time consuming and frustrating task.  Palm will attest to that as they lost 25% of their market cap because they missed certification.  Android, sets these developers free.

So between, independently innovative products, a tough supplier to the market, frustrated developers and a tough carrier business model, this industry is ripe for big changes, and I predict it will start happening in 2008.

2) Gaming Takes Off:  I think people will realize that they were all gamers all along.  Three things will make the non-gamer realize his or her true self only forgotten.

2a) Casual games become social:  When you play chess or any casual game on Yahoo, you are playing a stranger, all you know is his overall score.  You don't know your record against him, you don't know if he lives nearby, and more importantly you don't know if you know him.  In contrast, you play Attack! on Facebook, you know a lot more about that person, you can play against your friends, and you know your overall score and your score among your friends.  Playing against a stranger is one thing, playing against an old high school buddy is another.  This is a big deal which makes games a lot more addictive, and it is happening full speed in 2008. 

2b) MMO's become casual:  MMO's will extend their experience beyond the main game.  You will be able to play a small version of WoW on your cell to win a small number of experience points.  The game will be different but it will be the extension of the overall experience.  So when you have 3 hours free you'll play the real thing, when you have 30 minutes free  you'll play a small casual game on your PC that counts towards your experience in the big game and when you have 5 minutes free you'll play the mobile handset version.  A lot has been written about this and the best can be found here.

2c) Hardcore games become immersive:  Playstation 3 has incredible graphics, at times I can't tell what's real video and what's computer generated, but you still have to use a very complicated controller.  The Wii on the other hand has unrealistic graphics but every body who gets within 5 meters of the box wants to play (I am serious).   Put the two and two together.  Superbly realistic graphics combined with immersive controls will make hardcore games a generalized form of entertainment.  What do I mean by that?  I mean, why would you watch an action movie, when you can be in it with your friends?  Hard core games with easy immersive controls can let anybody play and why would you give up interactive entertainment for passive entertainment.  Watching a game will be almost as satisfying as watching a movie and you'll have to option to interact with it if you want to.  Why would you ever not?

3) Success of the TJ Watson Portfolio:  Five computing clouds are poised to deliver us most of what we need.  I wrote about this for GigaOm last month.  Google and Amazon give us consumer apps and infrastructure, Salesforce.com and VMWare give us enterprise apps and infrastructure and Akamai brings them all together.  I predict a basket of these stocks will weather any downturn much better than others simply because of their unique position in the industry.  I've put my money where my mouth is, you can follow the returns of this portfolio here.

4) At least one creative solution to the music industry woes will emerge in 2008:  There is where I risk educating my competition, but I will say this.  2008 won't be as bad for the music labels as people think.  And it won't just be because of embracing mp3, though that will help.  There are enough creative people in the industry, and hopefully by now, enough people who understand digital, that somebody will think outside the box.  That's all I'll say for this one.

5) Turks take over Facebook:  Last time I checked, Turkey was the largest non-English speaking country on Facebook with 2.1M users just behind US, UK and Canada and slightly ahead of Australia (which technically speaks English).  Surprised?  Don't be.  There are 75M people living in Turkey, mostly young.  My estimate is that Turkey will surpass one of UK or Canada in 2008.  Why is this relevant?  Size matters.  At least it should for app developers looking for users, and perhaps for tourists visiting Turkey, but I digress.  Seriously though, until recently, traditional media was not democratized as it is on social networks.  The few people who controlled the media controlled what we believe the truth to be.  This could change on social networks where numbers matter.  This may have a big impact on certain countries who have not leveraged their size to sway public opinion.  Now they can.  A lot more on that later.

Parts of this post was cross-prublished at Venturebeat.