Standardized Power Chargers

This is a great idea, I would love to see a standard sized device charger (doesn’t have to be limited to mobile phones) adopted by hardware manufacturers much in the same way that USB was embraced. Not only would this be convenient for consumers, but the charger could be unbundled from the device, as in you buy one charger to support the full range of devices that you have which results in lower BOM costs for the manufacturer and less waste from a consumer standpoint.

The agreement by Nokia, Sony Ericsson and other industry majors will mean phones compatible with standard charging devices are available in Europe from next year, said the EU executive, which has pushed for such a deal.

[From Telecom firms back standard phone charger in Europe | Technology | Reuters]

This is a totally doable concept because all mobile devices rely on chargers that are within specific output voltages and amperages, which can be auto-sensed by the wall unit, meaning that standardization really takes the form of standard cabling to connect the device to the charger unit… and as Apple and Blackberry, among others, demonstrate, USB is an ideal cabling for moving not just data to the device but also power.

Not surprisingly, Apple has taken a lead in smart designs in this area and the latest generation iPhone wall power unit is about as small as possible and the utilization of the USB cable means that there is less “stuff” that the iPhone requires. Unfortunately, Apple’s departure from USB standards, relying on the proprietary iPhone connector on one end, means that the iPhone itself will also require a proprietary component (even if someone else makes it there is still a licensing component which is, as far as I know, a flat fee of $4 per unit), but ignoring that for the moment, the Apple scheme that relies on a small wall plug in and a USB cable to connect the device is ideal.

A standard device charger is a big step in the right direction but it’s still only a half measure to something that would truly revolutionize how power is delivered to mobile devices and that is wirelessly. Nikola Tesla demonstrated the wireless delivery of electricity over 115 years ago (Tesla coils were not invented solely for use as movie props), which leaves me wondering why this technology has not been commercialized for consumer devices.

The (il)Logic of Krugman

Paul Krugman echoes President Obama’s rhetorical attack on critics of government run healthcare (and that’s pretty much what happens when the Federal government determines what care you are eligible for) as an example of the brilliant side of the President.

Both Baracks were on display in the president’s press conference earlier this week. First, Mr. Obama offered a crystal-clear explanation of the case for health care reform, and especially of the case for a public option competing with private insurers. “If private insurers say that the marketplace provides the best quality health care, if they tell us that they’re offering a good deal,” he asked, “then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.”

[From Op-Ed Columnist – Not Enough Audacity –]

Unfortunately for Krugman, and he should know better, is that the government trumps private insurance in this instance not because they are more efficient but because they can print money and run a system that is insolvent in perpetuity. This is precisely what the private insurance industry is rightly concerned about because if any of them ran a system in such a manner they would be hauled into court by the Department of Justice for anti-competitive activities (dumping).

Media Strategy 3.0

Really interesting summation of how media has evolved rapidly into the digital distribution age and what the current generation capabilities and shortcomings portend for the next generation.

This third stage is about the balance between targeting, which reduces waste and increases campaign efficiency, and creativity, which takes into account the message and the placement relevance. Just as in traditional marketing, our goal is to reduce the waste against an untargeted audience and focus dollars on the audience that is most likely to resonate with the message. The difference is that digital media has the capability to get to a 100% targeted effort, whereas traditional media does not.

This stage of media strategy requires data, and data is something that we have in abundance. The issue is not whether we have the data, but how we use it to be effective. There are numerous ways to slice the data, but the most important metrics are the ones that correlate to actual increases in consideration, intent and sales.

[From MediaPost Publications Media Strategy 3.0 06/17/2009]

Media and advertising has always believed itself to be an industry built on data but the fact remains that the data has been used as a blunt instrument, not a scalpel. Media buyers obsess about two dimensions, demographic data and impressions while publishers respond with, not surprisingly, a focus on demographics and impressions. I think this formulaic approach to media strategy drives the creative side of the industry bonkers, which is one reason why an increasing number of brands are looking beyond their advertising agencies as a primary means of engaging consumers.

Treffiletti is correct in asserting that we have the data, for the most part, what is lacking is the fine grained analytics that go beyond clicks to intentions. As media becomes further disaggregated this challenge will only grow larger, a consequence of universal reluctance by people to provide detailed information about themselves and of the increasingly disaggregated nature of media where visitors are not shuttled through a defined site map (e.g. inbound links to pages, search, etc.).

Lonnie Johnson, Inventor

I love interviews with inventors, it’s a rare window into the mind of someone who just things differently than the rest of us. I thoroughly enjoyed this interview with the inventor of the Super Soaker, but there was one response that really captured the essence of why this guy is so brilliant.

There are maybe three inventions I have that I rank as my top inventions that I’m most proud of. The robot I built in high school, the memory-protected circuitry for the Galileo and the Super Soaker.
[From Lonnie Johnson Quotes – Interview with Super Soaker Inventor on Gun’s 20th Birthday – Popular Mechanics]

You simply have to admire the sincerity of someone who puts a robot they built in 1968 while in high school, a memory circuit for a probe deliberately crashed into Jupiter, and a water gun all on the same plane.

More on this topic (What's this?)
Happy Accidents are Rare in Trading
Zayo Weathering the Storm
One Fund in 1700 Made Money in ’08
One Fund in 1700 Made Money in ‘08
Read more on RARE Hospitality International at Wikinvest

Blogging Has Been Light

For no particular reason, I just haven’t felt compelled to write in spite of finding a bunch of really interesting nuggets in the daily news. I think my writers block is passing… today’s post is a compilation of the small items that have caught my attention this last week.

California Eggs, Consumer Protections and Special Interest Groups

An egg fight has broken out in California over what else, the egg business. Last year the Humane Society sponsored a ballot initiative effectively requiring all egg producers to go cage free… it wasn’t written that way but that is by their own admission what they are targeting.

The ballot initiative was poorly written from a compliance standpoint, deliberately it would appear, and now the egg producers (a $300 million a year business in CA) are crying fowl (pun intended and yes I did misspell “foul”) because they are not getting any guidance about what they need to do in order to comply.

My first reaction is that it’s pretty shitty that the Humane Society, a group with a noble purpose and point in fact is a special interest group, could push through a feel good measure that saddles a food industry with yet more costs that get passed on to consumers. I wondered what would happen if CA egg producers said “fuck it, we’re leaving” knowing full well that the out-of-state producer mandates are difficult to enforce, or how would voters feel if eggs were suddenly 50 or 100% more as a consequence of increased costs being passed on across all producers. What would the state do if egg producers boycotted the state?

However, as the above is unlikely to happen, what does present itself is an interesting opportunity for CA egg producers to focus on the high end of the market, in effect dominating national (international?) supply for cage free eggs and leaving the low end of the market for out of state producers that fall below the threshold required to trigger the cage free mandate. Bet that isn’t what the Humane Society had in mind but an example of the law of unintended consequences that stems from interest group sponsored legislation.

RIAA Scores a Big Victory in a Civil Verdict

Ars Technica did a bang up job covering the retrial of Jammie Thomas-Rasset for illegal downloading of songs. I won’t get into my particular opinion on the bigger issue of the RIAA pursuit of downloaders, but this trial was interesting on several levels.

First a little background, Jammie Thomas-Rasset was convicted in an earlier trial for illegally downloading 24 songs and assessed a penalty of $220k. Her legal team persuaded the federal judge that the penalty was excessive, among other factors, and a retrial was ordered. The retrial concluded this week and a new penalty of $1.9 million was levied… to the shock and dismay of her legal team.

It appears rather conclusive that the defendant did violate the law and despised as they are for going after downloaders, the RIAA does have a right to pursue legal remedies against downloaders. Whether or not they SHOULD is a different discussion and not particularly relevant to why I am writing about this case.

Thomas-Rasset proved herself to be a nightmare for her defense team, not only from an attitude standpoint but also having implicated herself on the stand in several outright lies. This serves to reinforce what any first year law student knows, a defendant has to be sympathetic for the jury to find favorably for them, in this case it appears rather clear that the jury found Thomas-Rasset rather dislikable and skewed their damage award accordingly. I’m not saying this is right or wrong, it just is what it is.

CA’s Treasurer Pissed at Ratings Agencies

California Treasurer Bill Lockyer is pretty upset with bond ratings agencies, in response to a threatened multi-notch downgrade of California, Lockyer’s spokesperson said the ratings “don’t mean squat”. He may be right.

I have always found it curious that municipal agencies are required to buy insurance on their bond offerings, the cost of which is passed on to taxpayers, when municipal defaults are so rare. There was a time when the complexity of information about state finances, as well as the opacity of it, meant that ratings agencies actually performed a service… but can anyone really say that the ratings analysts know something about California’s finances that well informed investors don’t already know?

As much as it would be a mistake for states to be allowed to effectively self-rate, I’m wondering to what purpose to ratings agencies serve in this day and age, and to a lesser degree what the bond insurers role is. Indeed it would be catastrophic for the bond insurers to have to cover as much as $100 billion in defaults by California alone, they could cover the default but the industry would never be the same again and because every state would see bond insurance skyrocket as a result of a CA default, the Federal government would surely step in with yet another bailout.

So while Lockyer is probably right to say the ratings “don’t mean squat” that doesn’t change the fact that CA is insolvent and the bond markets know it. He has proposed new approaches to ratings in the past but when his only allies are states in equally dire financial condition, well he is likely to suffer the fate of a petulant child being punished for misbehaving, which is to be ignored.

Welcome To California, Highest Taxes in the Nation

While I am on the subject of CA, it’s again worth pointing out that we feature a tax system that has few limits on the small percentage of taxpayers to fund personal income tax payments to the state, yet still have a $24 billion hole in our budget. Anyone who suggests that higher taxes are the solution for CA really should not be taken seriously.

We can argue all day about this loophole or that (unless you are talking about lower economic tiers where “loopholes” are more commonly referred to as “tax incentives” and wealth redistribution schemes are called “subsidies”) but the fact that a small percentage of taxpayers supports the state income tax receipts disproportionately is just that, FACT. 15% of taxpayers pay 83% of the personal tax receipts that the state collects… more taxes are not the answer, a fair tax system is.


It’s hard to not get caught up in the drama unfolding in Iran, especially given the prominent role that technology is playing in these events… technology from right here in Palo Alto. Unfortunately, a smattering of revolt around the mantra of reform does not equal freedom and Iran will not be free until the people cast off the yoke that the theocracy ruling class has burdened them with.

Mousavi, the candidate that the world is rallying around, campaigned on reform but he is hardly a liberal reformer himself. When Mousavi, and the other candidates, talk about reform they are primarily referencing the economy, which like Venezuela under Chavez has been decimated under Ahmadjinedad’s reign. Iran under Mousavi would still feature a theocracy calling the shots and imposing their will on the population, a Stalinist state all in the name of God.

Nonetheless, it is reassuring that masses can unite when the offense is so great and speech can trump repression. At every turn the Iranian authorities have been frustrated in their attempts to control the flow of information, a fact that will continue in the days ahead. Imagine where China would be today if Tiananmen Square protesters had cell phone video and Twitter on their side…

U.S. Innovation Threatened

Interesting survey came out about economic competitiveness. Actually, maybe interesting is an overstatement, reinforcing is probably a better word.

Asked about the economic future of the U.S. over the next decade, only 13 percent of the 3,000 survey respondents agreed with the statement that the U.S. “will remain the most innovative country and therefore the global economic leader.”

[From Survey: US residents unsure of future of innovation | The Industry Standard]

Fundamentally nothing has changed in the U.S. that negatively impacts competitiveness, except for the economic recession, but a number of issues have been left unaddressed over the years and the result has been an erosion of competitiveness.

Immigration is a big nasty issue and what the tech industry cares about, H-1B numbers, is actually a really small part of the overarching issue. In a perfect world it should be a relatively straightforward solution to increase/decrease the number of new visas issued year over year, but of course we know it is not a simple solution. There is simply no way that the H-1B (actually there are several visa types that should be dealt with) issue gets addressed independent of the broader illegal immigration issue so I think we will end up living with the status quo.

The larger and more complex issue impeding competitiveness is the patent and copyright systems, both of which are dreadfully out of step with technology innovation and seemingly ill-equipped to deal any expansion of technology innovation. More significantly, the drag that the legal processes impose on new business creation are onerous to say the least, diverting capital away from invention and creation. There is momentum building to reform patent, trademark, and copyright law but given the scope and powerful interest groups surrounding all sides, it’s hard to speculate on what might actually be done to reform this system.

I am not a big believer in government sponsored investment in innovation because the money used for these programs must be borrowed or taxed out of the economy, which puts drag on the overall economy, but more importantly there is a well documented track record of inefficiency and political patronage in government programs that perverts the originating purpose for the spending in the first place.

Pundits like to point to the internet as an example of a success story for government sponsored innovation but it’s important to realize that the internet was originally built by the military, which operates much differently from the rest of government and secondly that the impact of the internet on modern life is a consequence of a massive amount of infrastructure spending done by the private sector with investor capital, not the government. Commercialization of the internet is responsible for its success, which is anathema to those who promote a larger government role in private sector investment.

Tax policy, federal and state, remains the single largest issue affecting investment and innovation. The federal R&D tax credit has a worthy goal but in practice is such a complex process that only the largest companies can take advantage of it. Capital gains taxes remain too high and fail to recognize the myriad ways that capital can be deployed. For example, there is no differentiation between long term cap gains as a consequence of real estate investment versus venture capital, the former arbitrages an existing asset while the latter actually benefits innovation. Germany’s capital gains tax system is a much more reasonable approach to taxing investment gains.

The U.S. is unlike practically every other country in that it taxes citizens on income irrespective of where that income is generated. There are arguments on either side of this issue that are valid; my preferred approach would be to couple offshore income generation with low capital gains taxes to encourage wealth created offshore to be reinvested within the U.S., and right now we have a system that has the exact opposite effect.

Lastly, K-12 education is often pointed to as a key competitiveness enabler, and it would be hard to dispute the role that education plays in modern society and wealth creation, yet this understates the role that parents and external forces have in education. It is impossible to force students into a math and science education tract, at least not without adopting a planned approach to economic development, something that simply will not happen in free societies. Despite the inadequacies of our K-12 education system, the U.S. consistently turns out generations of young people that engage in business creation, research, and innovation.

The forces involved in K-12 education will frustrate every attempt to reform the system, it will only happen when a majority of voters engage the issue and force reform but that require a massive leap of faith that voters will actually take the time to consider more than 30 seconds of sound bite. If it were me I would like to see the school year extended, restructure the system to graduate students after 10th grade and move them to a pre-collegiate track or vocational school for 2 years, and lastly, revamp the curriculum to reflect critical thinking as well as core subjects, but I admit that I am also vastly simplifying a complex problem.

In summary, while U.S. competitiveness has declined relative to other countries, little will be done to improve the core issues so it will be left to the private sector and families to carry the burden. It may also be misleading to suggest that factors in the U.S. alone are responsible for this shift, given that other countries have developed over the last 30 years and closed the gap with the U.S., making the issue less about the U.S. losing leadership and more about a global economy improving the conditions by which all of the mankind develops. At any rate, surveys like this tend to not be very informative, instead they serve primarily to reinforce whatever bias a particular interest group holds.

Contrarians Unite!

I think Paul really nails it. The VC industry needs to get smaller, re-evaluate what needs they are serving, and reconsider their place in the food chain. Entrepreneurship does not exist as a consequence of the venture capital business, it exists in spite of it.

Kedrosky presents himself as a contrarian, perhaps even a heretic, among VCs. “Many venture industry participants are comfortable with their industry’s size, structure and compensation model,” he writes. “At the same time, the industry has become conflated with entrepreneurship in the popular imagination as well as in policy circles, with the result being a widespread and incorrect belief that venture capital is a necessary and sufficient condition in driving growth entrepreneurship.”

[From Harris: One critic says smaller is better for venture capital industry – San Jose Mercury News]

Every bubble is predicated on a shift in the way that capital is allocated, going from a demand driven environment to one that is supply driven. The availability of excessive capital distorts valuation and the rush to fund all but guarantees that unsustainable businesses will be funded, which is great from an experimentation standpoint but also guarantees that the boom-and-bust cycle in tech continues unabated.

There is a lot of debate about how big the VC industry should be, but that’s a red herring because it’s not up to commentators or venture investors to determine that number but rather the LPs that provide the capital. It would be my hope that what comes out of this process is that a healthy venture capital sector emerges that creates more Apple, Cisco, Oracle, and Google companies that are able to stand the test of time and employ tens of thousands of people not just tens of tens while fundamentally bettering the foundation of our economy for everyone to benefit from.

Comcast Upgrade Breaks What Worked Fine

I noticed something interesting a few weeks ago, 2 of the televisions we have that don’t have cablecards or set top boxes stopped receiving some channels. After many calls to Comcast I learned what many people already know, it doesn’t matter if you have a digital TV because Comcast took advantage of the DTV conversion to change their channel package. Channels that were previously on “expanded basic” and required no set top box now require a converter box and more importantly, Comcast’s remote control.

The way cable works, and why it was better for us than satellite, is that you don’t need any converter box to decode the signal for the channels we often watch while in our kitchen, as one example, like cable news. This makes for a very clean installation with no extra hardware or additional control units while giving us exactly the channels we want.

Comcast took something that worked really well, broke it and called it an upgrade… they are really earning a Comcraptic reputation.

What I find particularly aggravating is that Comcast is taking advantage of the federally mandated digital TV (DTV) conversion to push through something they call “digital transition”. Comcast customer support kept repeating the phrase to me “the government is making us do this” and this is patently false and misleading. Comcast’s “digital transition” is a plan to open up bandwidth on their network, it doesn’t have anything to do with the federal mandate.

It’s very clear that the DTV mandate doesn’t force the cable companies to do anything… what Comcast did was a choice they made and part of a larger strategy to get a piece of their hardware on every television their customers have. The timing was deliberate and intended to obscure their actions under the umbrella of what the federal government was doing to over the air full power broadcast station on public airwaves.

Newspaper Harakiri

In response to a report that the NYTimes has hired Goldman to solicit bids for the Boston Globe, here’s what one analyst had to say… which I submit as a viable contender for understatement of the year.

“We’re skeptical about the number of bidders who would try to purchase an entity that doesn’t make any money and doesn’t have a labor base that appears willing to try to get it toward being profitable,” Simonton said.

[From Report: Times Co. will take bids to sell Globe]

More on this topic (What's this?)
The First is $100,000 is The Hardest
How to value dividend stocks
My Dividend Goals for 2015 and after
Read more on Triarc Companies at Wikinvest