Category Archives: Early Stage

The Changing Face of the Software Industry

When the world seems too wide for purely individual effort, craftsmen of all sorts spring up to specialize. Specialization and trade bring the world to a better level of productivity, and encourage innovation in endlessly narrowing fields. The same dynamic will take hold in the software industry, but this time the wires are the trade channels, and the coders are the craftsmen. Systems will become independent, allowing plug-in applications, interfaces, drivers, and other components; just as monitors are interchangeable now. Large teams of coders will be able to work together without understanding the details of the others’ work. This will be enabled by standardized information interfaces between modular functional components.

The number of programmers will increase in total, but a smaller number will produce broadly adopted code. These few will be developing applications that are web-served and integrated through standard information interfaces with a large system of other applications.

ASPs will emerge that offer as much computing as consumers in each market demand. The software will run centrally, and deliver the services that are traditionally performed by the operating system. Individuals and companies will be able to research, create, manage, and distribute information of all kinds in an efficient and commercial manner. Information access will be intuitive, and input devices will learn to recognize your intentions based on your patterns. A small number of ASPs will emerge after a great competitive consolidation war. The winner will be the architecture that is best able to serve and keep the public’s mindshare through adoption tools, distribution tools, and financial tools, and competitive tools.

  • Adoption tools include a visual interface, intuitive navigation and control, ease of use and editing, and other systems that encourage a habit of use. This opens the door of market entry for a scaleable service.
  • Distribution tools refer to the systems used to place adoptability in the perceptions of the optimal target marketing. The ASP nature of this software technology trend will merge the functions of marketing, sales, advertising, and PR.
  • The approach to the financial tools will determine the incentives for the use and support of the system. Contributors of new valuable information will be paid to encourage their contributions. Service providers of various kinds will be paid for their time, effort, expenses, and access to their information. All types of files and assets will be transactable for money, credit, or barter. Transactions will take place across borders — encouraging legal, pricing, and tax parity.
  • Competitive tools include personalization, aggregation, integration, and any other activity that increases the added value of the service or increases the burden of changing services. These tools will, in many cases, retain users in inferior systems until the value proposition becomes very strong. And by then it is too late for the inferior system to catch up.

Competition will continue to exist in the hosted computing industry for many years as an overwhelming breadth of media and services shocks the human race with an information overload. Cultures will specialize and form media, financial, and service niches. Interfaces will develop to increase speed and resolution until we can no longer tell the difference.

Irrational exuberance and other drivers of economic growth in the information age

Alan Greenspan, the Federal Reserve Chairman, once labeled the nation’s sentiment as one of “irrational exuberance”, and subsequently tightened monetary policy to prevent an overheating economy. It seems pretty clear, however, that this period of optimism and growth was one of the most important periods of technical and social development in human history. New business possibilities, medical breakthroughs, and communications tools mark this period, and drove the exuberance. I propose that the exuberance is not irrational at all. In fact, I believe that the market was correct to be excited about the potential of recent technological advancements.

Value and growth are not necessarily measured best when viewed in dollar terms, and the period of time when a company commercializes its non-financial value can often be many years. Take Geocities for example. This is a company with negligible financial assets, yet was purchased by Yahoo for more than $5 billion… yes. Was that irrational? Or does Yahoo know something that Greenspan does not? There is significant value in information and habit. Information is the better-than-money bits that translate to utility in the information age. Habit is what brings customers back, and signals the acquisition of and demand for future information.

Ok, then how should the Fed think about economic growth? How should they consider information assets in the optimization model for the welfare of Americans? I think that, for the most part, the financial markets do a decent job of evaluating information assets; we see the widening distribution of P/E ratios in public company market capitalizations as investors placing value on non-financial assets. It is not absurd to think that investors are placing large value on the information assets that do not play a role in the traditional valuation models used for equities. Additionally, economic growth can go up without creating inflation as long as productivity increases enough.

Now that the Fed has loosened rates by a full 1% in less than a month, I think that they are attempting to re-ignite the ‘growth’ that marked most of the 1990s. That is not to say that they are looking to raise the level of the stock markets, or increase economic growth beyond 3-4%, but that they will try to create an environment where technical and social development is optimal. Inflation tends to fall as productivity increases, all else equal. I hope that the Fed begins to use their power to encourage gains in productivity as a vehicle to offset inflation under historically high economic growth rates.

Musical Collaboration by Opt-in and Mass Beat Channels

There could be channels for each beat/tempo, and an unlimited number of contibutors could participate in the creation of music within each channel. Any listener could select the combination of contributors and listen to the mixed track. Popular and preset groups could simplify selection, and descriptive fields for contributors could help improve custom selections. Contributor-defined sub-channels could branch off from the public ones. This system would allow unlimited musical collaboration in a way that provides compatibility and flexibility on a global scale.

CD Repair Shop

The CDDB provides the identification of CD content based on track set characteristics. This is how your Winamp program can provide you with the CD track titles when you put a CD in your computer and are connected to the internet. CDs get scratched and damaged, and are cumbersom to travel with. With a large single centralized database of CDDB data and the associated MP3 files, a CD could act as a key to gain access to a set of MP3 files – available from anywhere. A user account could store a list of authorized CDs for any user. Each account would not require additional storage of MP3s – rather, simply a list of unique keys. Even damaged CDs could be converted to high quality (undamaged) MP3 files in less than a few seconds with this system. Barrier to entry is high, but marginal costs for volume users is low. User accounts would provide users with access to their CD libraries from any networked device.

Innovation in the 21st Century

The rate of innovation will continue to increase as communications and transportation help us to conquer time and space. The value of innovation will become quantifiable and attributable – leading to a renaissance in most fields, and a new breed of professional innovators currently being born as a new sector in the consulting industry.