Felix Salmon on the Economics of Online Content

Over the past year, Felix Salmon of Reuters wrote a masterful five-part series on the economics of content online. Worth reading for anyone interested in the topic. I link to each part below and excerpt my favorite paragraphs (all Salmon’s words, but emphases are my own).

Part 1: Advertising

Do advertising dollars ultimately end up where people spend their time, he asked, echoing Kleiner Perkins’ Mary Meeker says, or, pace Bernstein Research’s Todd Juenger, is that a “fallacy”?

I’m with Juenger on this one. As he says, “time spent is supply, advertising spend is demand… Just because there is a large and growing supply of Internet inventory doesn’t mean advertisers have a correspondingly large desire to deliver more Internet impressions.” Indeed, as the price of online inventory continues to fall, it seems just as likely that online ad spend will go down (because the ads being bought are getting cheaper) as that it will go up…

Moreover, if you’re running a news site, you’ll be even more sobered to learn that just 2.7% of the time that people spend on the internet is spent on news sites. You think you’re competing against a lot of other news sites to attract advertisers? You don’t know the half of it. In reality, you’re competing against the other 97.3% of websites, andthey are competing against TV. It’s a fight you can’t hope to win, especially since non-news websites are so much better at delivering people primed to buy stuff (search) or delivering large numbers of people in narrowly-targeted demographics (Facebook)…

According to Meeker, some 67% of all ad dollars are spent either on TV or in print. And according to Juenger, ad spend on TV actually went up, between 2009 and 2012, even as Americans’ attention moved away from TV and towards other screens. That makes sense to me, mainly because of the point I was making back in 2009, drawing the distinction between brand advertising, on the one hand, and direct marketing, on the other. TV is brand advertising; online ads, by contrast, are closer to direct marketing….

When people like Meeker look at ad spend, they’re looking mainly at brand advertising. Brands are valuable things, and billions of dollars are spent every year to keep them that way, mostly on TV and in print. And if you have a big national brand, there’s really only one way to reach a big national audience: you need to buy ads on TV. Doing so is expensive, but it’s necessary, and it works, which explains the huge sums of money which still flow into TV every year…

So if the internet is not going to displace TV as a medium for mass-market brand advertising, might it at least be good at direct marketing? Can publishers not deliver certain readers, in certain demographics, to marketers who want to reach them? To a certain extent, yes. But the fact is that Google and Facebook, between them, are extremely good at delivering as many of those readers as any advertiser could ever want: all that Facebook needs to do is turn a dial, and billions of new impressions get added to the stock of global inventory, targeted at any demographic that any advertiser could want. Google, similarly, owns search, especially mobile search. It’s conceivable that some marketers might prefer to reach an audience some other way — but this is a race to the bottom, with a finite amount of demand chasing an essentially infinite amount of supply. That’s a buyer’s world, where the sellers have no real leverage at all…

Some very large proportion of the websites on the internet have a pretty basic business model: “we will publish great content; millions of people will want to read or view that content; advertisers will want to reach those people; and so we’ll be able to sell our audience to advertisers and make lots of money”. There are people out there who have succeeded with that model, but the number of successes is dwarfed by the number of failures, and the amount of scale you need to even get your foot in any media buyer’s door has been rising dramatically for years. By the time you’ve paid for your content and for your ad-sales infrastructure, the chances that you’ll have any money at all left over for your shareholders are slim indeed, and getting slimmer year by year…

All of which means that smart online publishers are looking beyond advertising, to other forms of generating revenues.

[In a recent exchange with Marc Andreessen, during Marc's tweet storm about online journalism, Felix wrote: "Pot at end of rainbow = advertisers who aren't buying on a CPM basis."]

Part 2: Payments (Alternatives to Advertising)

Which brings up a fundamental rule of online subscriptions: there is zero correlation between value and price. There are lots of incredibly expensive stock-tipping newsletters which have a negative value: you’d be much better off if you didn’t subscribe to any of them at all. And of course there’s an almost infinite amount of wonderfully valuable content available online for free, starting with Wikipedia and moving on through the sites of organizations like Reuters, Bloomberg, the Guardian, and the BBC

But there’s another consideration, too: the more formidable the paywall, the more money you might generate in the short term, but the less likely it is that new readers are going to discover your content and want to subscribe to you in the future.

Part 3: Costs

If [Bezos] didn’t want an established property, he could have invested $250 million to create a brand-new journalistic outlet. To put that sum in context, the total amount of money raised by Business Insider, since inception, is $21.6 million; Vox Media has raised $23.5 million; BuzzFeed is on $46.3 million; andHuffington Post raised $37 million before it was acquired by AOL. Throw in Gawker Media, Mashable, Politico, Pando Daily, Breaking Media, Weblogs Inc, and just about any other new journalism company you can think of, up to and including Bustle; you’re still nowhere near $250 million…

The result is that the journalistic outlets seeing the biggest profits are the ones where costs are kept incredibly low. At one extreme lies the Bleacher Report, which was sold for a reported $180 million; it consists primarily of stories written by unpaid contributors, expertly optimized to maximize pageviews at the expense of accuracy or quality. Or look at Summly, which Yahoo bought for $30 million: it produces news summaries entirely by algorithm, with no editorial costs at all… 

Here’s a statistic worth dwelling on: “A senior editor at The Washington Post recently told me that he killed an average of three advanced investigations a year, usually over the protests of the reporters, who couldn’t see that they didn’t have the goods.” Outside ProPublica — and even inside it — how many online-only organizations can say the same?

Part 4: Scale

Henry Blodget: “I do think that over the next five years, what you’re going to see is a lot of consolidation. The fact is, there are way too many digital news and media organizations out there right now. There will be a lot of consolidation. As they come together, you will get huge economies of scale on the sales side, on the tech side, and on some of the other areas as well. And then you’re going to see these companies produce good profits…”…

It’s almost impossible to overstate the importance of the CMS when it comes to the question of who’s going to win the online-publishing wars. As Blodget said on Friday, if you’re going to make serious money in this business, you need serious scale. If you want serious scale, you have to be able to expand not only organically but also by acquisition. And if you want to be able to scale up through dealmaking, you need to have a technology and sales platform which can support large-scale acquisitions…

The difference between the Glam view of the world, which comprises thousands of publishing brands, and the Blodget view of the world, which involves only a relative handful, is that while it’s true that consumers like brands, it’s no longer true that one big brand is going to beat thousands of small brands. Smaller websites can feel much more targeted and personal, and can build up a much more loyal following, than sites which have millions of users. If advertisers can get their ads onto that kind of site, and reach just as many people as they would buying one huge site, they’re better off for it. …

The question, however, is whether Bankoff would want Business Insider to be part of Vox. News is always a tougher sell, but at the same time it confers priceless legitimacy: BuzzFeed, for instance, is investing an enormous amount of money in its journalism, not because that’s a particularly cost-effective way to generate traffic, but rather because it means that both readers and advertisers take the site much more seriously as a result…

Looking at Medium, along with Vox, and Glam, and even AOL, I think I can begin to discern the vague outlines of how digital publishing might eventually be able to deliver the kind of scale and impact that brand advertisers demand from TV and glossy magazines. I don’t know who the winner is going to be. But I do think that Blodget is right about one thing: whoever the winner is, they will have to have some very deep pockets. Winning this game won’t come cheap.

Part 5: News

The most enjoyable part of blogging, in the early days, was putting things up on the internet and seeing people respond to them — by clicking on your links, or linking to you, or engaging you in the comments section. But it wasn’t easy. Twitter and Facebook — and Pinterest, for that matter, and the rest of the social media universe — did two important things. Firstly they made publishing incredibly easy; and secondly they rewarded publishing by giving contributors immediate likes and replies and favs and other evidence that people really cared about what you were publishing. It was the endorphin rush familiar to old-school bloggers, democratized and accelerated…

Right now might also be a very brief window of opportunity for roll-up strategies. The idea behind such things is simple: if you have a powerful CMS, then it makes sense to take existing sites (like, say, the Curbed Network) and move them onto a more powerful system (like, say, Vox Media’s Chorus). Everybody wins. But as web technology becomes increasingly sophisticated, and sites start looking very different depending on the device used to view them, it becomes increasingly difficult to port an entire website over to a brand-new platform. You can’t just import the HTML and tweak the CSS any more. Up until very recently, there hasn’t been the money available to prosecute such a strategy; it won’t be all that long before such a strategy becomes technically much more difficult. (I can’t imagine, for instance, merging the Vox Media and BuzzFeed back ends without enormous headaches and difficulty.) So if you’re going to do it, then you should waste no time.

The Beautiful vs. Sublime, Instagram Edition

Fun musings on the trend of Instagram photos of sunsets:

The genre has turned into a commonplace—a grab at easy beauty. My friend, an amateur photographer, likened shooting sunset pictures to “eating Lucky Charms for breakfast.” “What do you mean,” I pressed, speaking as someone who faults Lucky Charms only insofar as they aren’t Fruit Loops. She elaborated: “They’re sweet and anodyne. The effect is like a sugar rush that disappears.” Buried in her objection is the hoary philosophical distinction between the beautiful and the sublime, between prettiness that doesn’t challenge us and sights that fill us with awe and terror.

Romantic writers expressed a preference for sublimity over attractiveness in the late 18th and 19th centuries. Edmund Burke wrote, “For sublime objects are vast in their dimensions, beautiful ones comparatively small: beauty should be smooth and polished; the great, rugged and negligent … beauty should not be obscure; the great ought to be dark and gloomy: beauty should be light and delicate; the great ought to be solid, and even massive.” The experience of watching a sunset usually counts as sublime. The scene unfolds on a grand scale, loud with color and radiance; you get a shivery feeling of time passing as you sip your G&T; death draws just a bit nearer. Sunset pictures, though, reduce and tame that sublimity. Instead of your mortality rising to meet you, you see pretty colors, locked in a small and tidy moment. It’s as if putting sunsets on film magically relegates them to the same cloying aesthetic category as wildflowers and blonde children—other people’s.

Subtle Inaccuracies and Reader Trust

The most recent Vanity Fair has a long piece on Facebook and their new algorithims and processes for serving better ads. In it, there’s this paragraph:

Moreover, the company has created a computer framework that allows it to constantly revise the Facebook site. At any time of day, hundreds of different versions of Facebook are running on the Internet—with a changed color here, a moved button there—and the user response to each variation is measured. And the same is done with advertising. Through what executives call A/B tests, a company can run different ads at the same time, have Facebook engineers measure the response, then ditch whichever ones had less of an impact.

Vanity Fair is a general interest publication, so it’s fine that they explain A/B tests to the uninitiated. But the piece loses credibility with a single phrase: “…what executives call A/B tests..” Wait, did Facebook execs invent A/B tests? No way. The sentence should have read: “Through what’s called A/B tests…” so as not to imply that A/B testing is in any way unique to Facebook.

It’s a tiny word thing. But it caused me pause, and made me not trust the rest of the article in terms of insight. To be sure, had the thrust of the piece been a profile of an exec or an examination of the company’s public policy efforts or any number of other things — it’d be a forgivable slip up. But it in fact centers on the company’s ability to serve targeted ads and monetize user behavior, and the A/B testing point is held up as evidence of innovation. And the author subtly overstates the newness and interestingness of that point, which conveniently supports his broader thesis. I ask myself, “What else could he be getting wrong?” and switch from reading to skimming.

Book Notes: What Technology Wants

Someone I respect once told me, “I have never heard an uninteresting thought come out of Kevin Kelly’s mouth.” Shortly thereafter, I dove into Kevin’s latest book What Technology Wants with heightened attention and expectation. I was not disappointed. There were interesting bits on nearly every page about the evolution of technology and the relationship between humans, technology, and society.

After learning a lot about our networked brains and the living organism that is technology, paragraphs like the following may induce goosebumps.

In addition to holding spiritual retreats in redwood groves, we may surrender ourselves in the labyrinths of a 200-year-old network. The intricate, unfathomable layers of logic built up over a century, borrowed from rainforest ecosystems, and woven together into beauty by millions of active synthetic minds will say what redwoods say, only louder, more convincingly: “Long before you were here, I am.”

Highly recommended for your “long, slow read” pile. Some of my highlights from the Kindle edition below.

Each new invention requires the viability of previous inventions to keep going. There is no communication between machines without extruded copper nerves of electricity. There is no electricity without mining veins of coal or uranium, or damming rivers, or even mining precious metals to make solar panels.

During the years I was puzzling over these questions, something strange happened to technology: The best of it was becoming incredibly disembodied. Fantastic stuff was getting smaller, using less material but doing more. Some of the best technology, such as software, didn’t have a material body at all. This development wasn’t new; any list of great inventions in history contains plenty that are rather wispy: the calendar, the alphabet, the compass, penicillin, double-entry accounting, the U.S. Constitution, the contraceptive pill, domestication of animals, zero, germ theory, lasers, electricity, the silicon chip, and so on. Most of these inventions wouldn’t hurt you if you dropped them on your toes. But now the process of disembodiment was speeding up. Scientists had come to a startling realization: However you define life, its essence does not reside in material forms like DNA, tissue, or flesh, but in the intangible organization of the energy and information contained in those material forms. And as technology was unveiled from its shroud of atoms, we could see that at its core, it, too, is about ideas and information. Both life and technology seem to be based on immaterial flows of information.

Even if we acknowledge that technology can exist in disembodied form, such as software, we tend not to include in this category paintings, literature, music, dance, poetry, and the arts in general. But we should. If a thousand lines of letters in UNIX qualifies as a technology (the computer code for a web page), then a thousand lines of letters in English (Hamlet) must qualify as well. They both can change our behavior, alter the course of events, or enable future inventions. A Shakespeare sonnet and a Bach fugue, then, are in the same category as Google’s search engine and the iPod: They are something useful produced by a mind.

what I consider to be the essential quality of the technium: this idea of a self-reinforcing system of creation. The qualities we hold dearest in the universe are all extremely slippery at the edges. Life, mind, consciousness, order, complexity, free will, and autonomy are all terms that have multiple, paradoxical, and inadequate definitions. No one can agree on exactly where life or mind or consciousness or autonomy begins and where it ends. The best we can agree on is that these states are not binary. They exist on a continuum.If humans are not fully autonomous, what is? An organism or system does not need to be wholly independent to exhibit some degree of autonomy. Like an infant of any species, it can acquire increasing degrees of independence, starting from a speck of autonomy. So how do you detect autonomy? Well, we might say that an entity is autonomous if it displays any of these traits: self-repair, self-defense, self-maintenance (securing energy, disposing of waste), self-control of goals, self-improvement. The common element in all these characteristics is of course the emergence, at some level, of a self. In the technium we don’t have any examples of a system that displays all these traits—but we have plenty of examples that display some of them. Autonomous airplane drones can self-steer and stay aloft for hours.

We created the technium, so we tend to assign ourselves exclusive influence over it. But we have been slow to learn that systems—all systems—generate their own momentum. Because the technium is an outgrowth of the human mind, it is also an outgrowth of life, and by extension it is also an outgrowth of the physical and chemical self-organization that first led to life.

All technology, the chimp’s termite-fishing spear and the human’s fishing spear, the beaver’s dam and the human’s dam, the warbler’s hanging basket and the human’s hanging basket, the leaf-cutter ant’s garden and the human’s garden, are all fundamentally natural. We tend to isolate manufactured technology from nature, even to the point of thinking of it as antinature, only because it has grown to rival the impact and power of its home. But in its origins and fundamentals, a tool is as natural as our life. Humans are animals—no argument. But humans are also not-animals—no argument. This contradictory nature is at the core of our identity. Likewise, technology is unnatural—by definition. And technology is natural—by a wider definition. This contradiction is also core to human identity.

Fewer than 1,500 generations after their “great leap forward” in Africa, Homo sapiens had become the most widely distributed species in Earth’s history, inhabiting every type of biome and every watershed on the planet. Sapiens were the most invasive alien species ever. Today the breadth of Sapiens occupation exceeds that of any other macrospecies we know of; no other visible species occupies more niches, geographical and biological, than Homo sapiens. Sapiens’ overtake was always rapid. Jared Diamond notes that “after the ancestors of the Maori reached New Zealand,” carrying only a few tools, “it apparently took them barely a century to discover all worthwhile stone sources; only a few more centuries to kill every last moa in some of the world’s most rugged terrain.” This sudden global expansion following millennia of steady sustainability was due to only one thing: technological innovation.

Daniel Dennett crows in elegant language: “There is no step more uplifting, more momentous in the history of mind design, than the invention of language. When Homo sapiens became the beneficiary of this invention, the species stepped into a slingshot that has launched it far beyond all other earthly species.” The creation of language was the first singularity for humans. It changed everything. Life after language was unimaginable to those on the far side before it.Also, many women are extremely lean and active and, like lean, active women athletes in the West, often have irregular or no menstruation.We are not the same folks who marched out of Africa. Our genes have coevolved with our inventions. In the past 10,000 years alone, in fact, our genes have evolved 100 times faster than the average rate for the previous 6 million years. This should not be a surprise. As we domesticated the dog (in all its breeds) from wolves and bred cows and corn and more from their unrecognizable ancestors, we, too, have been domesticated. We have domesticated ourselves. Our teeth continue to shrink (because of cooking, our external stomach), our muscles thin out, our hair disappears. Technology has domesticated us. As fast as we remake our tools, we remake ourselves. We are coevolving with our technology, and so we have become deeply dependent on it.

Historian Lynn White notes, “Few inventions have been so simple as the stirrup, but few have had so catalytic an influence on history.” In White’s view, the adoption of the lowly foot stirrup for horse saddles enabled riders to use weapons on horseback, which gave an advantage to the cavalry over infantry and to the lords who could afford horses, and so nurtured the rise of aristocratic feudalism in Europe.

Yet ideas never stand alone. They come woven in a web of auxiliary ideas, consequential notions, supporting concepts, foundational assumptions, side effects, and logical consequences and a cascade of subsequent possibilities. Ideas fly in flocks. To hold one idea in mind means to hold a cloud of them.

The effort to maintain difference against the pull of entropy creates the spectacle of nature. A predator such as an eagle sits atop a pyramid of entropic waste: In one year 1 eagle eats 100 trout, which eat 10,000 grasshoppers, which eat 1 million blades of grass. Thus it takes, indirectly, 1 million blades of grass to support 1 eagle. But this pile of 1 million blades far outweighs the eagle. This bloated inefficiency is due to entropy. Each movement in an animal’s life wastes a small bit of heat (entropy), which means every predator catches less energy than the total energy the prey consumed, and this shortfall is multiplied by each action for all time. The circle of life is kept going only by the constant replenishment of sunlight showering the grass with new energy.

The powers of our minds can be only slightly increased by mindful self-reflection; thinking about thoughts will only make us marginally smarter. The power of the technium, however, can be increased indefinitely by reflecting its transforming nature upon itself. New technologies constantly make it easier to invent better technologies; we can’t say the same about human brains. In this unbounded technological amplification, the immaterial organization of the technium has now become the most dominant force in this part of the universe.

I think the balance settles out at higher than 50 percent positive, even if it is only slightly higher. As Rabbi Zalman Schachter-Shalomi once said, “There is more good than evil in the world—but not by much.” Unexpectedly, “not much” is all that’s needed when you have the leverage of compound interest at work—which is what the technium is.

worldwide, affluence brings increased satisfaction. Higher income earners are happier. Citizens in higher-earning countries tend to be more satisfied on average. My interpretation of this newest research—which also matches our intuitive impressions—is that what money brings is increased choices, rather than merely increased stuff (although more stuff comes with the territory). We don’t find happiness in more gadgets and experiences. We do find happiness in having some control of our time and work, a chance for real leisure, in the escape from the uncertainties of war, poverty, and corruption, and in a chance to pursue individual freedoms—all of which come with increased affluence.

One UN report found that households in the older slums of Bangkok have on average 1.6 televisions, 1.5 cell phones, and a refrigerator; two-thirds have a washing machine and CD player; and half have a fixed-line phone, a video player, and a motor scooter.

As Suketu Mehta, author of Maximum City (about Mumbai), says, “Why would anyone leave a brick house in the village with its two mango trees and its view of small hills in the East to come here?” Then he answers: “So that someday the eldest son can buy two rooms in Mira Road, at the northern edges of the city. And the younger one can move beyond that, to New Jersey. Discomfort is an investment.”

Historian Niall Ferguson believes that on the global scale, the origins of progress lie only in expanding population. According to this theory, in order to elevate populations beyond Malthusian limits you need science, yet it is the increase in the number of humans that ultimately drives science, and then prosperity. In this virtuous circle more human minds invent more things and in turn buy more inventions, including tools, techniques, and methods that will support more humans. Therefore, more human minds equal more progress. The economist Julian Simon called human minds “the ultimate resource.” In his calculation, more minds were the prime source of deep progress.

If the origins of prosperity lie solely in growth of the human population, then progress will paradoxically temper itself in the coming century.

We don’t go on as we are. We address the problems of tomorrow not with today’s tools but with the tools of tomorrow. This is what we call progress.

I prefer how biologist Simon Conway Morris puts it: “Progress is not some noxious by-product of the terminally optimistic, but simply part of our reality.”

But a hundred, or a thousand, cases of isolated significant convergent evolution suggest something else at work. Some other force pushes the self-organization of evolution toward recurring solutions. A different dynamic besides the lottery of natural selection steers the course of evolution so that it can reach an unlikely remote destination more than once. It is not a supernatural force but a fundamental dynamic as simple at its core as evolution itself. And it is the same force that funnels convergence in technology and culture. Evolution is driven toward certain recurring and inevitable forms by two pressures: 1. The negative constraints cast by the laws of geometry and physics, which limit the scope of life’s possibilities. 2. The positive constraints produced by the self-organizing complexity of interlinked genes and metabolic pathways, which generate a few repeating new possibilities.

Humanity is a process. Always was, always will be. Every living organism is on its way to becoming. And the human organism even more so, because among all living beings (that we know about) we are the most open-ended.

But Isaacson, a celebrator of Einstein’s special genius for the improbable insights of relativity, admits that “someone else would have come up with it, but not for at least ten years or more.” So the greatest iconic genius of the human race is able to leap ahead of the inevitable by maybe 10 years. For the rest of humanity, the inevitable happens on schedule. The technium’s trajectory is more fixed in certain realms than in others. Based on the data, “mathematics has more apparent inevitability than the physical sciences,” wrote Simonton, “and technological endeavors appear the most determined of all.”

A recent example: The first digital cameras had very rough picture resolution. Then scientists began cramming more and more pixels onto one sensor to increase photo quality. Before they knew it, the number of pixels possible per array was on an exponential curve, heading into megapixel territory and beyond. The rising megapixel count became the chief selling point for new cameras. But after a decade of acceleration, consumers shrugged off the increasing number of pixels because the current resolution was sufficient. Their concern instead shifted to the speed of the pixel sensors or the response in low light—things no one had cared about before. So a new metric is born, and a new curve started, and the exponential curve of ever more pixels per array will gradually abate.

But on average, digital technologies will roughly double in performance every two years for the foreseeable future. That means our most culturally important devices and systems will get faster, cheaper, better by 50 percent every year. Imagine if you got half again smarter every year or could remember 50 percent more this year than last. Embedded deep in the technium (as we now know it) is the remarkable capacity of half-again annual improvement.

Who you are is determined in part by your genes. Every single day scientists identify new genes that code for a particular trait in humans, revealing the ways in which inherited “software” drives your body and brain. We now know that behaviors such as addiction, ambition, risk-taking, shyness, and many others have strong genetic components. At the same time, “who you are” is clearly determined by your environment and upbringing. Every day science uncovers more evidence of the ways in which our family, peers, and cultural background shape our being. The strength of what others believe about us is enormous. And more recently we have increasing proof that environmental factors can influence genes, so that these two factors are cofactors in the strongest sense of the word—they determine each other. Your environment (like what you eat) can affect your genetic code, and your code will steer you into certain environments—making untangling the two influences a conundrum. Last, who you are in the richest sense of the word—your character, your spirit, what you do with your life—is determined by what you choose. An awful lot of the shape of your life is given to you and is beyond your control, but your freedom to choose within those givens is huge and significant. The course of your life within the constraints of your genes and environment is up to you. You decide whether to speak the truth at any trial, even if you have a genetic or familial propensity to lie. You decide whether or not to risk befriending a stranger, no matter your genetic or cultural bias toward shyness. You decide beyond your inherent tendencies or conditioning. Your freedom is far from total. It is not your choice alone whether to be the fastest runner in the world (your genetics and upbringing play a large role), but you can choose to be faster than you have been. Your inheritance and education at home and school set the outer boundaries of how smart or generous or sneaky you can be, but you choose whether you will be smarter, more generous, or sneakier today than yesterday. You may inhabit a body and brain that wants to be lazy or sloppy or imaginative, but you choose to what degree those qualities progress (even if you aren’t inherently decisive). Curiously, this freely chosen aspect of ourselves is what other people remember about us. How we handle life’s cascade of real choices within the larger cages of our birth and background is what makes us who we are. It is what people talk about when we are gone. Not the given, but the choices we made.

Roads throughout the vast Roman Empire were built to this specification. When the legions of Rome marched into Britain, they constructed long-distance imperial roads 4’ 8.5” wide. When the English started building tramways, they used the same width so the same horse carriages could be used. And when they started building railways with horseless carriages, naturally the rails were 4’ 8.5” wide. Imported laborers from the British Isles built the first railways in the Americas using the same tools and jigs they were used to. Fast-forward to the U.S. space shuttle, which is built in parts around the country and assembled in Florida. Because the two large solid-fuel rocket engines on the side of the launch shuttle were sent by railroad from Utah, and that line traversed a tunnel not much wider than the standard track, the rockets themselves could not be much wider in diameter than 4’ 8.5”. As one wag concluded: “So, a major design feature of what is arguably the world’s most advanced transportation system was determined over two thousand years ago by the width of two horses’ arse.”

Like personality, technology is shaped by a triad of forces. The primary driver is preordained development—what technology wants. The second driver is the influence of technological history, the gravity of the past, as in the way the size of a horse’s yoke determines the size of a space rocket. The third force is society’s collective free will in shaping the technium, or our choices.

In Nonzero, author Robert Wright offers a wonderful analogy for understanding the role of the inevitable as applied to technology, which I paraphrase here. It’s appropriate, Wright says, to claim that the destiny of a tiny seed, say, a poppy seed, is to grow into a plant. Flower yields seed, seed sprouts plant, according to an eternal fixed routine burned in by a billion years of flowers. Sprouting is what seeds do. In that fundamental sense, it is inevitable that a poppy seed becomes a plant, even though a fair number of poppy seeds wind up on bagels. We don’t require that 100 percent of seeds arrive at their next stage to acknowledge the inexorable direction of the poppy’s growth because we know that inside the poppy seed is a DNA program. The seed “wants” to be a plant. More precisely, the poppy seed is designed to grow stems, leaves, and flowers of a precise type. We regard the destiny of the seed less as the statistical probability of how many complete the journey, and more as a matter of what it is designed for. To claim that the technium pushes itself through certain inevitable technological forms is not to say that every technology was a mathematical certainty. Rather, it indicates a direction more than a destiny. More precisely, the technium’s long-term trends reveal the design of the technium; this design indicates what the technium is built to do.

David Nye, a historian of technology, adds to the list of inventions envisioned as abolishing war once and for all and ushering in universal peace the torpedo, the hot-air balloon, poison gas, land mines, missiles, and laser guns. Nye says, “Each new form of communication, from the telegraph and telephone to radio, film, television and the internet, has been heralded as the guarantor of free speech and the unfettered movement of ideas.”

We do the same with unknown technologies, too, just not as well. And most of the time, after we’ve weighed downsides and upsides in the balance of our experience, we find that technology offers a greater benefit, but not by much. In other words, we freely choose to embrace it—and pay the price.

I believe these two different routes for technological lifestyle—either optimizing contentment or optimizing choices—come down to very different ideas of what humans are to be.

“Technology,” Kay says, “is anything that was invented after you were born.”

We make prediction more difficult because our immediate tendency is to imagine the new thing doing an old job better. That’s why the first cars were called “horseless carriages.” The first movies were simply straightforward documentary films of theatrical plays. It took a while to realize the full dimensions of cinema photography as its own new medium that could achieve new things, reveal new perspectives, do new jobs. We are stuck in the same blindness. We imagine e-books today as being regular books that appear on electronic paper instead of as radically powerful threads of text woven into the one shared universal library. We think genetic testing is like blood testing, something you do once in your life to get an unchanging score, when sequencing our genes may instead become something we do hourly as our genes mutate, shift, and interact with our environment.

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Best of My Tweets

I’ve tweeted more than 3,200 times over several years at @bencasnocha.

My new Best of Twitter page breaks down some of my better tweets, by category.

Go to: Observations - Practical Tips - Quotes - Travel - Facts and Figures

Or 25 random tweets as an example below:

Tweet Link
A Boeing jet generates 10 terabytes of information per engine every 30 minutes of flight. -Stephen Brobst, CTO of Teradata
95% of medical technology donated to developing countries breaks within the first five years of use. -Steven Johnson
50% of the fresh produce (food) consumed in the U.S. in a six month period is grown and picked in Mexico.
If you really understand something, you can: 1) explain it using a clear metaphor and 2) explain the strongest counter-argument to the idea.
Competent” is often a better adjective than “smart” or “intelligent” when talking about a person because it forces specificity and context.
High IQ combined with high insecurity: a uniquely toxic one-two punch. (inspired by B. Horowitz blog post)
Courage is not the absence of fear but the capacity for action despite our fears. -John McCain
Writing is like driving at night in the fog. You can only see as far as your headlights, but you can make the whole trip that way. -ELD
The art of writing is the art of applying the seat of the pants to the seat of the chair. -Robert Frost
Envy is when you compare your inside to someone else’s outside. -Stephanie Ericsson. Sounds cheesy but totally true (via @stevesilberman)
People are experience-rich and theory-poor. I help people organize / make sense of their experiences. -Malcolm Gladwell
Everybody has a plan until they get punched in the face. -Mike Tyson, on risk management
Reading is not just about the content of the text. It’s allocating quiet time / space to think and reflect on the issues raised by the text.
Overheard: “The problem in education is that we have educators running the school systems. Pilots are not CEOs of the airline companies.”
If frequency with which you cite an education credential does not decrease over the course of your life, you’re not accomplishing very much.
Looking back on experiences, we remember the highest or lowest moment, and how they ended.
Self-understanding, like happiness, is never fully achieved. It’s an on-going pursuit and sometimes excessive explicit focus hurts the cause
When ordering food at restaurants favor dishes that are hard to make at home. I rarely order pasta at a restaurant.
Why Japan is one-of-a-kind for Americans: it’s a completely different world (culturally) yet equal or better material standard of living.
JFK to SFO flight arrived 75 minutes early because “there were no ground delays at JFK.” Shows how much buffer they build into the schedule.
I love how civilized/orderly Switzerland is. At Zurich crosswalk today, no cars in sight yet every pedestrian waited patiently until green.
Three Chile observations: 1) All houses are behind gates/fences, 2) Canned soup does not exist, 3) Maids clean gym 24/7, crazy maid culture!
Valparaiso, Chile is probably my favorite city of this South America jaunt. Lovely lovely. Hills, colors, water, laid back vibe.
When choosing aisle or window seat on plane you need only ask yourself one question: Do I go to the bathroom more or less than avg person?
When ordering a $4 USD burger at McDonald’s in Santiago, Chile today, I could do a one-time payment, or multiple installments on credit card

Thanks to Brett Bolkowy for building.

Optimistic Technology Luminaries

Last night Reid was “in conversation” with Steve Ballmer. Here’s an article about their chat, which drew the largest audience at the Churchill Club in a decade.

A couple weeks ago, Reid hosted Marc Andreessen for a chat about the future of technology, Silicon Valley, and even a bit about career strategy. Here’s a write up of their talk.

After hearing these luminaries in conversation, you can’t help but be left with a feeling of optimism about the future of the technology industry and the opportunity for each of us to participate in the next round of game changing innovation.

Remembering Steve Jobs

There has been so much written about him already. I wanted to share a few random, personal reflections.

– Jobs was an icon to me, though he was not a role model, mentor, or muse. It's interesting how people differ in where they find inspiration; the most inspiring people in my life are people who seem within my reach. Jobs always seemed in a different orbit–so astronomically more creative and talented than I was/am/will be that I never followed his life in the obsessive maybe I could be him/her way that I follow some people. He was certainly aspirational, but not relatable. And that's why, while I feel a lasting sadness over his death, I do not feel like I've lost something as profound as a personal pole star. 

– I've written about the Think Different ad. I've spoken the text dozens of times to people over the years, and have begun nearly every public speech with the story of being forced to memorize it while in school. The text of the ad has been hanging in my childhood bedroom for years. The newly released video of Jobs narrating the ad, embedded below, is so moving. 

– When I was very young, I mailed a letter to Steve Jobs asking if he could donate a computer to help me start a company. My family had a couple computers (early Macintoshes), but I figured maybe I could get a new fancy one for free, if I asked nicely. A few weeks later, I received a letter back from an Apple spokesperson. It was two sentences long. The first sentence said Apple doesn't make donations. The second sentence requested that I remove Apple from my mailing list. Looking back, that's a pretty amusing reply.

– There's so much pessimism about politics and economics in the world right now. The celebration of innovation that accompanied Jobs's death reminded me why I love the technology industry.

– As with all breaking news events, the best action that day was on Twitter, for the raw emotion.

RIP, Steve.

Are Online Reviews Making Brands Irrelevant?

My friend Nathan Labenz writes about the success of TripAdvisor (the leading review site of hotels) and what it means to the future of brands:

Historically, brands were built on the assumption of limited information. As mass production made it possible to sell soap and soup nationwide, companies developed brands to represent quality and cultivate product loyalty. Brands were a natural fit for radio and TV advertising, and brands thrived with the proliferation of cable channels, which kept advertising costs down while offering unprecedented demographic targeting.

Facebook and Twitter get most of the attention for brand disruption, but the biggest problems for brands are in search and e-commerce.

Take this Google search for Super 8 Motels, for example. On the front page, you’ll see ratings that hotel guests have written about particular Super 8s on TripAdvisor, Yahoo Travel and Yelp. Importantly, the reviews vary widely. When I checked, a New Mexico location was rated 4.5 stars, while a Los Angeles location was at 3.5 stars and one in British Columbia had only 2 stars. Such location-specific information undermines brands’ ability to affect consumers’ purchasing decisions with 30-second TV spots and gives TripAdvisor a powerful position….

For the Super 8 brand, the end game could be scary: as TripAdvisor accumulates more and more trusted reviews, the best-performing Super 8s, all of which are independent franchises, may eventually realize that their business is suffering from their association with lesser motels. At that point, we might see a “brand run,” wherein the best locations leave the chain, lowering the brand’s value and ultimately leading to its collapse.

It's a solid point and underdiscussed in the hoopla about social media and how it's affecting big brands.

An even better example than Super 8 might be Mariott as I'm guessing a large percentage of Super 8 rooms are sold on no reservation and reviews don't play as much a role.

In the case of Mariott, I'm likely to have reserved a room in advance. In the old days, perhaps I assume that all Mariotts around the world are good. Now, in conjunction with booking the reservation online, I can read reviews of individual locations. There's more variance in the quality of Mariott properties than Mariott HQ would like to admit (I've stayed in dozens of Mariotts myself), and that variance is now for all to see on sites like TripAdvisor.

The end game that Nathan proposes–the outperforming properties dissociating from the national brand because they're being hurt by the low performers–seems quite possible in the long run. After all, wouldn't you rather stay at a hotel you've never heard of (i.e., no national brand) but one that has hundreds of credible five star reviews over a Mariott location that has hundreds of two star reviews?

Eventually, the good franchises will recognize this. And Mariott HQ–whose business is premised on the benefits of a national brand uniting thousands of independent franchises in an information-poor world–will be hurt.

Randomness and Serendipity on the Internet

This is a short biography of a link, as it relates to the randomness and serendipity that drives conversation on the web.

A couple weeks ago Tim Harford, the Financial Times columnist and author of the stimulating new book Adapt: Why Success Always Starts with Failure, was in town on book tour. I've read Tim's stuff for some time but hadn't met him, so I went to his talk at the World Affairs Council and we grabbed dinner afterwards. We had a delightful chat, and later that night Tim linked on Twitter to an old blog post of mine, 50 Ways to Expose Yourself to Randomness.

Seeing that Tim is — according to the hottest economist in America — the best economist on Twitter, he has a strong following and the link got picked up a bit.

This morning, Anne-Marie Slaughter, a noted foreign policy scholar and former Obama State Dept official, tweeted: "Someone that I follow sent out a great piece last week on ways of adding randomness to your life, but now I can't find it. Pse resend!"

An hour later, Michael Clemens, an economist from the Center for Global Development — who I randomly met at a conference in Miami on Latin America and who I've stayed in touch with online ever since — replied, "50 ways to expose yourself to randomness" from @BenCasnocha http://bit.ly/jJYBPB." Presumably, Michael remembered Tim tweeting about it and figured it was the link Anne-Marie remembered.

Shortly thereafter, Anne-Marie wrote a post for CNN's GPS blog about creativity, innovation, and entrepreneurship, and linked at one point in the piece to my post on randomness. It was cool for me to see this – I read Anne-Marie's book The Idea That Is America a couple years ago, and linked to her post on the development of China three years ago. Cooler yet, Fareed Zakaria just tweeted the CNN post on creativity and asked Amy "Tiger Mom" Chua for her reactions. And Amy Chua just replied.

I'm detailing the backstory here because it's fun to point out the random connections that gave rise to Anne-Marie's link on…cultivating randomness. Every day in the blogosphere and twittersphere these types of conversations happen; being able to trace the outlines of how ideas and memes come together is one of the unique joys of the online intellectual experience.

It's also worth pointing out that it was a year-old blog post that got picked up by Tim et al. Blog posts are easily searchable and archivable. It would have never happened with a tweet. It supports the point of my post (and Anil Dash's): Twitter, Transience, and Tempo.

Finally, I think it's relevant that in-person relationships played a role in how the link made its way into Anne-Marie's post. I met Tim for dinner, and afterwards he took a closer look at my blog and then felt compelled to tweet it out. I met Michael, the guy who responded to Anne-Marie's initial question, in-person in Miami and he started following me (and I him) after that. The internet does a marvelous job at connecting people from around the world. Even if I've never met a blogger or tweeter I follow, the connection I feel I have with them is anything but superficial. But it remains the case that an in-person interaction creates a unique bond. In my experience, even just one in-person meeting can enrich the online communications with the person for years to follow.

Twitter, Transience, and Tempo

Anil Dash notes the double edged sword of Twitter's transience:

Perhaps the most important psychological innovation of Twitter is that it assumes you won't see every message that comes along. There's no count of unread items, and very little social cost to telling a friend that you missed their tweet. That convenience and social accommodation is incredibly valuable and an important contribution to the web.

However, by creating a lossy environment where individual tweets are disposable, there's also an environment where few will build the infrastructure to support broader, more meaningful conversations that could be catalyzed by a tweet. In many ways, this means the best tweets for advancing an idea are those that contain links to more permanent media.

He's right that the guilt-free nature of Twitter is a delight. You can go a few days without checking it and it's "okay." But the downside of such a set-up is captured in Anil's post title: If You Didn't Blog It, It Didn't Happen. This is not just about the 140 character limit of Twitter (though obviously that's a major impediment to conversations). Tweets come and go, and if it's gone, it's (basically) gone. As evidence of this, I'd link you to a "debate" David Frum and Virginia Postrel had last week on Twitter about health care policy, of which I read bits and pieces, but alas, it's too hard to find and impossible to reference in full.

Blog posts are easily linked-to, archived, tagged. Lengthy conversations can ensue in the posts and comments section. And an RSS reader efficiently captures everything (though it could do a better job at tracking multi-blog conversations). I'd give up Twitter without much of a fuss, whereas you'd have to fight me to death to take away my RSS reader and blogs. I'd miss Twitter, to be sure — it's fun to see an on-going stream of gestures from people I care about. But it's not core to my intellectual experience on the web.

Stowe Boyd concludes on a philosophical note:

Lurking behind Anil’s practicality are the more philosophical issues of time and transience. Yes, we don’t need to retain every tweet ever read or written. We can accept the fast and furious impermanence of most tweets, and the up tempo pace of the Twitter bloodstream. But we want to also operate at a slower pace, dealing with deeper and abiding interests, ideas, and connections. We need to be able to shift tempo without missing a beat.

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Here's my post on the evolving uses of Twitter.