The David Brooks Seduction

David Brooks, more than almost any other conservative pundit, does the best job of putting a congenial face on Republican dogma, turning it into rational-sounding, no-brainer soundbites. Smart people of many stripes read him and think: “Yeah, of course that’s right, it all sounds so reasonable.”

But then you read a column like the one for tomorrow’s NY Times. And you’re reminded of the one-dimensionality — the stunning naivete — of his thinking. Take this paragraph from near the very end:

Both parties see the same problem. The current system is a mess, with opaque prices and perverse incentives that mostly favor the insurance companies. But, as Yuval Levin has pointed out in National Review, the Democrats believe the answer is to create a highly regulated insurance system with inefficiencies eliminated through rational rules. The Republicans believe that the answer is to create a genuine market with clear price signals, empowered consumers and an evolving process.

The emphasis added in mine. This last sentence is the perfect encapsulation of almost every argument we’ve heard from Republicans, on almost every possible issue. More freedom! Let the market forces work their magic!

Brooks rarely questions the argument — indeed, he offers no challenge to the Republican position in his piece for tomorrow’s Times — and often advances it with his warm of embrace for folks like Paul Ryan.  And you wonder if he learned anything over the past 30 years.

Thirty years of Republican economic rule (Reaganism, essentially) with unchecked de-regulation and the neutering of government oversight in so many arenas of economic life. You’d think we’d be in some kind of free market nirvana by now. But I think we’ve all learned the past couple of years just how far from nirvana we are.

Take the telecommunications business. I spent yesterday morning at Gigaom‘s offices in San Francisco with sixty other entrepreneurs and Internet infrastructure executives who spent 2 hours bemoaning the state of US broadband and wireless networks, and how quickly and far we’ve fallen behind other countries in Asia and Europe. Not one person blamed the government for this state of affairs — indeed, there has been massive deregulation in the telecoms space over the past 15 years.

Instead, nearly everyone focused on the large carriers — their bureaucracy, lack of vision, their focus on short term margins and pure defensive behavior. (This hilarious Fake Steve Jobs rant about Randall Stephenson might give you a taste of the venom in the room).

And this is the big lie of the libertarian, Ayn Rand-loving, government-suspecting free market acolytes like David Brooks and Paul Ryan. Deregulation and less government doesn’t lead to free markets — not in telecommunication, not in finance, not in health care, not in energy.  Because it turns out that corporations and corporatists abhor free markets more than Communists. And will do everything in their powers to stymie competition, and to maintain their advantages.

You never hear Republicans or conservatives or libertarians make this argument. And it makes you wonder: are these folks just naive dupes? Or are they so passionate in their anti-government ideology that they’re blinded by this larger truth.

Thirty years ago, Ronald Reagan loved getting a laugh with this quip: “The nine most terrifying words are ‘I’m from the government and I’m here to help.’” Too many people believed him, and AT&T, Goldman Sachs, Well Point, and Enron laughed all the way to the bank.

The Digital Revolution: Lessons from the 19th Century

Last summer I spent a fair bit of time reading up on the history of the newspaper business. Biographies of Hearst, Pulitzer and E. W. Scripps, along with a few more academic books on how these newspapers actually became big businesses.

The most suprising thing I learned?  That without the twin forces of urbanization and industrialization, there would have been no modern newspaper business, no modern advertising business, and no modern media business.

Those two tectonic shifts in the 19th century created new neeeds; those new needs created a huge array of new markets that flourished well into the 20th century. The newly created needs most relevant to the newspaper business produced by urbanization and industrialization were:

Need for ready-to-wear clothing
Up until the mid-19th century, most people in the West made their own clothes. Buying clothes was beyond the reach of all but the very rich. But with urbanization and industrialization, it suddenly became possible to buy clothes. And, in large urban areas, getting the right clothes (even though mass produced!) became a marker of your status and position in life. Department stores, an invention of the 19th century city, built huge new markets catering to this new need.

Need for Packaged Goods
Most people in the West also grew and produced their own food up until the middle of the 19th century. But as the West became increasingly urbanized and industrialized, that just wasn’t possible. People working at factories or other jobs in cities needed to be able to buy packaged foods and sundries, giving rise to businesses like P&G, Kellogg, and Colgate.

Need for Entertainment
Finally, those living in cities were no longer bound to a full day of work tending to the land or to their animals. The middle and upper classes, and even the poor, suddenly found they had time for leisure, made more abundant still by electricity which extended the day.

Newspapers flourished in late 19th century as they built huge audiences among urbanites catering primarily to this need for entertainment.  The great papers of the late 19th century offered a steady diet of crime trials, sex scandals (tame by our standards today), and increasingly sports news. Publishers like Hearst and Pulitzer added muckraking journalism that entertained and agitated for change.

With millions of readers every day, newspapers offered packaged goods companies (P&G) and sellers of clothing (department stores) the very best way to grow their businesses. Buying an ad in an urban newspaper with a big circulation was the most effective way to market to city dwellers who needed to buy clothes, or packaged goods.  And this gave rise to an entirely new market — for media, and for the creation and making and selling of advertising. That had never really existed, in any meaningful way or at scale, until the late 19th century. And it would not have occurred without the forces of urbanization and industrialization.

It’s obvious to most anyone now that the huge tectonic forces at work in this generation are the combination of computing and digitization (or, digitalization as the English would say).  These new forces have fostered new ways of making existing markets more efficient — you can now buy nearly anything online, for example.

But they’ve also given birth to new needs, desires fresh and new and that perhaps we didn’t know (or still don’t know) we had including these two:

The need for self expression and self-representation
For many on the Internet, it’s no longer sufficient just to go online; you need to be online.  As we spend increasing amounts of time on the Internet, or engaged in a digital life, many people want to have a presence there and assert there personhood there. This began with early online communities like The Well and other BBS, but has gotten a fuller expression with blogs, sites like Digg and Stumbleupon, and media publishing platforms like YouTube and flickr and even Vodpod. Myspace and Facebook (and to a much lesser extent, Twitter) were the first mainstream incarnations of this need.

The need for immediateness
We now live in a world where we expect — and crave — access to anything from almost anywhere at anytime. Google has been the most obvious outlet for this new need, and a whole new market — search-related advertising — was borne from it. But one could also list Amazon, Netflix, Craigslist, e-mail, IM, and real-time services like Facebook and Twitter as tapping into our new need for immediateness.

Other, more recent services and products can be explained as illustrations of these two new needs. I would argue that services driven by game mechanics — Foursquare and Farmville for example — are primarily driven off the need for representation of self. “Leveling up” and earning badges helps to define who we are online, helps to foster our sense of digital personhood.

The iPhone, Blackberry, and other smart phones show the need for immediateness made manifest in the mobile world.  The iPad, if it succeeds, will do so because it satisfies our need for immediateness in some more profound way than laptops and smart phones do (and this is why I’m skeptical about it); and not because it’s a “consumption” device.

Just as markets for clothing, packaged goods, and entertainment begat the entirely new market of media and advertising in the 19th century, it’s interesting to contemplate what new markets might get created from our newly created needs for self-expression and immediateness. Virtual currency, curiously, can perhaps be understood best through this prism; we want Farmville dollars to facilitate our self-expression; we buy virtual currency to satisfy our desire for immediateness.

But what else? What might come next? What other markets might be born as the result of all this?

Jesse Schell at DICE 2010: “Design Outside the Box”

Really great speech by Jesse Schell on game mechanics and implications for our future in a world where sensors are everywhere, on everything.

Entrepreneurial Profiling

Fred Wilson has a post up today on whether entrepreneurship is a learned, or inherent, trait. Fred argues it’s an inherent trait, then lists the characteristics he’s seen. There’s great commentary on the post, as always. Including this really good, smart comment from Bijan Sabet.

I’ve had the good fortune to have been around and worked with some good entrepreneurs these past 15+ years, and I’ve been on my own startup adventure these past 4 years. Overall, I’ve come to the conclusion there are very few iron-clad rules about startups, or the kinds of people best suited to create them.

But there is one overriding, critical quality, though, that I’ve observed: to be an entrepreneur, you have to have an incredibly strong will. Or as Fred says, you need “a stubborn belief in one’s self.”

Startups don’t just happen — they are willed into being.  Sometimes by just one person, more often than not by a couple of people.

You get told no a lot. An entrepreneur has to be strong-willed enough to plow through an unending series of rejections — from prospective funders, employees, even from people who use their products. Even if you achieve a certain level of success with your startup, you’ll encounter skepticism, doubt, a lack of confidence in you and your idea. Some people might think you’re crazy, or foolish, or misguided. These people might even include members of your own family (a great topic of conversation among any group of startup founders). And if the startup fails, and you’re the founder, there is no escaping the blame.

A lot of people just don’t have this in their DNA — and I’m not sure it can be taught by any professor at any university or business school. I suspect there many complex personal and psychological drivers at work here, some of them perhaps pathological.

I know a lot of extremely talented people who have gone on to become successful executives at big companies who would make horrible entrepreneurs because they lack this critical sense of will. (In fact, I’d say this is true of almost all the people I know who have become executives at established companies). They’re all confident, talented, smart, analytical — but they’re missing that key ingredient, that need to do your own thing.

I think the main reason so many executives can’t be entrepreneurs is that they don’t want to look like they’ve failed. You see it in their online resumes at LinkedIn — the glowing summary of job after job, success after success. You see it in how they spend their time — often at conferences, basking in the glow of and admiration from their peers. The always upward executive knows and hones this key skill –  always claim credit, never accept blame. Many have spent their life chasing good grades, getting into the right schools, working hard to earn the respect of their friends, family, and peers. Failure is not an option.

I met a really interesting professor at the Stanford D School this winter at a dinner, and he said that when they look for candidates they try to find people who tinker, invent, and design “because they can’t help themselves.”

I think that’s as good a description of “will” that I can come up with.  People become entrepreneurs because they can’t help themselves. They have to do their own thing; to prove themselves, to put their ass on the line, to create something for which they know they can claim credit.  Those people come in all shapes and sizes and genders and ethnicities, and come from a wide array of backgrounds. Some are confident and brash, others humble and shy. But if they’re missing that — that sense of will, that need to do something and the willingness to look like an idiot, even, if necessary in pursuit of a goal — it’s impossible they’ll be able to make it as an entrepreneur.

Stop the Hypocrisy!

This is a nice reminder of what empty suits those Republicans are.

more about "GOP: Recovery Act Hypocrites", posted with vodpod

Relevant to Our Present Condition

Philip Roth’s I Married a Communist, a terrific book. It’s about about McCarthyism and its grip on America in the 1950s, and this monologue on page 284 from Murray Ringold, an English teacher in Newark and the brother of the protagonist Ira Ringold feels like it could be spoken today:

Once the human tragedy has been completed, it gets turned over to the journalists to banalize into entertainment… In Gossip We Trust. Gossip as gospel, the national faith. McCarthyism as the beginning not just of serious politics but of serious everything as entertainment to amuse the mass audience. McCarthyism as the first postwar flowering of the American unthinking that is now everywhere.

McCarthy was never in the Communist business; if nobody else knew that, he did. The show-trial aspect of McCarthy’s patriotic crusade was merely it’s theatrical form. Having cameras view it just gave it the false authenticity of real life. McCarthy understood better than any American politician before him that people whose job was to legislate could do far better for themselves by performing; McCarthy understood the entertainment value of disgrace and how to feed the pleasures of paranoia. He took us back to our origins, back to the seventeenth century and the stocks. That’s how the country began: moral disgrace as public entertainment. McCarthy was an impressario, and the wilder the views, the more outrageous the charges, the greater the disorientation and the better all-around fun. (that emphasis is mine)

As we read the last line, names come to mind: Sarah Palin, Glenn Beck, Sean Hannity, Bill O’Reilly, Lou Dobbs, and their overlord and master impressario Roger Ailes of course.

But the overall sentiment — the turning of “everything” into entertainment — applies more broadly, to liberal as well conservative. To the Huffington Post.  Even to the uber-serious NY Times, with columnists like Maureen Dowd and Frank Rich who trivialize important issues and cover policy and politics as if it were Hollywood or Broadway (Frank Rich was, of course, a Broadway critic before he turned his foul pen to politics). To Matt Taibbi, even, in the Rolling Stone.

Barack Obama, in his inaugural address, said: “(T)he time has come to set aside childish things.” One year and more into his presidency, he’s lived up to that directive more than anyone else in public life. But most of the rest of us haven’t. We remain, as Roth describes us, immersed in the “flowering of American unthinking that is now everywhere.”

A Modest Proposal for TED 2011 (and Davos, Foo, etc)

The TED Conference was last week –if you’re in the tech business and on Twitter, you couldn’t have missed it.

There were complaints and controversy — that the conference is just too elitist, or that the audience was missing the funny gene. And this very funny and tart tweet got passed around:

Scobleizer, attending his first TED, came to its defense with this post.

In this age of Snooki, I celebrate any conference that seeks to inform and enlighten, be it TED, Davos, or FooCamp. The sessions and speakers at this year’s TED looked pretty interesting, who wouldn’t want to attend?

The problem with TED is the toxic admixture of self-promotional tools we’ve created (twitter, j’accuse!) and the self-promotional tendencies of so many of its attendees. If folks went off to TED, and just kept their mouths (and keyboards) shut for those 3-4 days, the rest of us would be just fine and we’d never notice.

But of course that’s now what happens. We get a steady stream of breathless Tweets — “TED is so amazing” and “The people here are so brilliant” all with the essentially the same subtext: “Look at me! Aren’t I amazing too! I’m at TED with the fabulous people!”

Elitist conferences and gatherings like TED have been around for years. But the elites who attended those kinds of conferences 50 or 100 years ago had the good social graces instilled in them not to boast about it. It’s hard to remember now, but there was a day when modesty was a prized character attribute.

But we seem to have lost that in the last 20 years or so (my first memory of modern conference-going boasting were those horrifying articles about the “Renaissance Weekends” the Clintons attended in the early ’90s). I blame the Boomers for starting this horrifying trend. And the barriers have been further reduced with all our newfangled social sharing tools which practically compel the hardwired self-promoters among us to be ever more self-promoting.

So here’s my modest proposal for anyone who goes off to TED, or Davos, or Foo Camp in the next year –  channel your favorite, self-deprecating and humble movie character from the middle of the last century. Remember that just because the conference you are at is amazing, it doesn’t necessarily mean that you are amazing. Feel humbled by the genius that surrounds you; feel joy in your good fortune (you are with the boldfaced names!). Just don’t feel so compelled to share.

A Little Idea for Square

A really neat new startup is Twitter creator @Jack Dorsey’s Square.

If you haven’t heard of it, Square’s an idea of simple — and complete — genius. A little square credit card reader, the size of two chiclets, that attaches to an iPhone, iPod Touch, or Android Phone threw the audio jack.  And that allows anyone with a smart phone to set themselves up as a merchant, and to receive payments via credit card. Here’s the demo:

more about “Welcome to Square“, posted with vodpod

Here’s my suggestion for Square: provide a Square for consumers and their phones, not just for merchants (or wannabe merchants). And let people pay — well, anyone — with it. Make the point of purchase the conumser’s phone, not the merchant’s phone.

I think this would help to make Square an incredibly broad and beloved and essential consumer service. Just give away the little Square phone attachment to anyone who sets up an account, and make up the cost through transactions.

In the video above, say I’m buying the couch –let me pay with my Square, and send the money via e-mail to the person I’m buying it from. They get a nice message saying “Mark just sent you $300 for: Couch” — with a link to claim your money. Not dissimilar from PayPal, except way more elegant.

I’d feel a lot more comfortable doing that than letting some stranger I just met on Craigslist swipe my credit card into their phone.  And given how utterly elegant Square seems to be, I could see wanting to use it in lots of cases — maybe making it the default way I pay for things. Way easier than having to enter your credit card and billing details over and over.

On Google Buzz

Buzz is going to be a much bigger deal than some folks think.

Already, I’ve noticed:

1. I am getting more followers per day than I’ve ever gotten on Twitter.

2. More responses and interaction with people who are reading articles I link to than in Twitter or Facebook.

All in just the first 48 hours of the service being open. These interactions are with “real” users, not the tech elites who gravitate to the latest shiny shiny.

There has been a lot of griping about Buzz by the tech cognoscenti.  A lot of the complaints are, frankly, purely ideological; from Apple supporters who now hate everything about Google, or folks just tired of Google and its dominance, or folks who are Twitter partisans. Others complain that Buzz is “me too” — too little, too late.

But I think they all miss the critical, and maybe essential, point that the kind of sharing enabled these past two years by Twitter and more lately Facebook/Friendfeed is a natural corollary to e-mail for many, many users. This was the excellent question asked by Mathew Ingraham the other day on Gigaom — is the binding to Gmail a strength or weakness?

From what I’ve seen so far, the tie-in with e-mail is clearly a strength. Maybe even a killer blow. For many people, e-mail is their true social graph (thus the ubiquitous e-mail import functions supported by Facebook, Twitter, etc). For many people, e-mail is still the primary way to share links and photos and videos with their friends (we see this in the data every day at Vodpod). For these people, a service like Buzz is a simple, understandable on-ramp to status updates and link-photo-video sharing with friends.

No messy address book import — your Buzz network is there from the start.

No separate client or window — it’s adjacent to your inbox.

No character limits, opaque communication methods (@ replies, short links, etc) — posting with Buzz is just like writing a message in Gmail.

There is the subtle, intuitive sense that what you’re doing with Buzz is writing a “public” e-mail. For those immersed in Twitter the past 3-4 years, no big deal. But for the many, many hundreds of millions who never got on Twitter, or never posted if they did, I suspect this will be a more familiar and comfortable construct.

My friend and colleague spencer noted the other day that as soon Google Talk was bolted into Gmail, ICQ/AIM was toast for him and his friends. A reminder that e-mail is still the great white whale of the Internet.

How this all plays out for Facebook and Twitter I don’t know. My gut tells me Twitter has a lot to be worried about — mainly because their service has never really been embraced by mainstream users, and certainly not to the extent the hype would suggest. I think folks who tried Twitter, but never really got it, will embrace Google Buzz. And if they do, expect an exodus of power users (who generate the bulk of Twitter’s activity) to move with them (perhaps reluctantly).

For now, Buzz probably is less of a threat to Facebook. The big thing Buzz provides that FB doesn’t is asymmetric following (which to me is a big deal, not sure if it will be to most people). I suspect Buzz is mostly a defensive move by Google vis-a-vis Facebook, with the expectation that Facebook will try to encroach on Gmail in the coming months.

Buzz is, to be sure, an immature product. It definitely has flaws, and we just don’t know if Google views this as a core effort internally, or an experiment.  But if they really focus, make improvements regularly and listen to complaints, and make this a central effort, it will have a big impact. Maybe bigger than we can imagine just yet.

You’d really be a fool to write this off.

The Online Video Landscape, 2010

Liz Gannes (@lizgannes on Twitter) had an interesting post yesterday, in the wake of the Veoh bankruptcy announcement, with a great chart outlining the huge volume of funding that has flowed to video sites over the years and how that has panned out.

As a document, the chart is an excellent indictment of the irrational exuberance — and folly — that attended the monies plowed into a handful of video sites.

But you’d be mistaken if you conflated this with an indictment of the health of online video more generally.

For that, a much more accurate picture was provided just the other day by Liz’s colleague Ryan Lawler at Gigaom sister site NewTeeVee (@ryanlawler) in a piece that reviewed recent Comscore data on video viewership online. First, the Comscore data shows consumption of online video doubled from December 2008 to December 2009. Second, that most viewing of online video (52%) takes place in the “long tail” — sites outside the top 25 video destinations.

This corresponds to what we’ve seen at Vodpod (given the nature of our service and our dataset, I think I can confidently say we have the most complete and intimate view of what’s happening with online video). Our members have now collected videos from over 13,000 different sites. What’s going on? As I’ve maintained for a long, long time, it’s not about “video sites” — it’s about web sites with video.

Video — and now video sharing — has become a standard feature of the web.  Why this has happened is the result of a bunch of factors, some obvious and some not:

1. Pervasive broadband.

2. The ability to make more money with in-video advertising, and an explosion of new ad networks that focus just on in-video advertising.

3. The fact that it’s trivial to create and transcode video now with tools like FFMpeg.

4. Flash — most web sharing platforms (blogs, Facebook, Myspace, etc) are willing to accept Flash player object embeds, and the Flash player has made video advertising easier, more effective. These are an important — critical — points lost by all those folks engaging in Flash-bashing right now. And there isn’t a clear, obvious path — yet — to replicate a lot of this with HTML5.

5.  Decreased (and decreasing) broadband and storage costs. It’s simply not that expensive to deliver video.

6. Growth of SaaS video hosters like Brightcove, Ooyala, and The Platform who have enabled video hosting for 1000s of sites.

7. The huge free distribution opportunity provided through video sharing, all enabled by the “embed code” construct unique to video which I’ve previously written about here.

While it’s sad to see a site like Veoh come to an end, I don’t think it’s particularly illustrative of any trend or a forecast of anything to come. The storm clouds I see, and worry about, include a more fractured video environment due to HTML5 and lack of uniform support by the browsers for a single, standardized video codec; Apple’s intransigence on Flash on the iPhone and iPad, with the result that most of the video available today on the web is and will continue to be broken on those devices; the lack of any clear path technically, right now, to replicate what is done with Flash video for both advertising and video sharing.

We’ll check back in a year with an updated assessment on all this.

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