blarg?

business

Let’s say you wanted to design a laptop, preinstalled with Linux and for a linux-user audience. This is mostly my own notes about what I’d like, but I wouldn’t mind some feedback.

  • Pixel Qi screen 14″ inches if possible, for power and daylight readability.
  • Arm SOC (Tegra?)
  • User-replaceable battery and RAM.
  • Ideally, off-the-shelf batteries. Are cellphone batteries now good enough that you could line up four of them to power a laptop? Could be, could be…
  • Casing that was meant to be disassembled, insofar as possible. Not junk, but not triwing-five-point-torx screws, either.
  • Built-in software-defined-radio-usable chips, two of them, and significant antenna.
  • Bluetooth 4, usb3. Wifi, obviously.
  • HDMI out. It’d be nice to know if a chip existed that could support HDMI-out and the Pixel Qi screens, that sounds like the best of both worlds.
  • Nonjunk touchpad.

What am I missing? Anything else?

A friend I was having a conversation with the other day noted, quite correctly I think, that while Joel Spolsky has said many very silly things in his time, he’s also said about five very true things better than anyone else, so well that much can be forgiven. One of them came up today when we were talking about the high perceived cost of decent ergonomics compared to the real, properly amortized costs of wrecking up your wrists, back and workplace morale.

One of the true things Joel has said, on the real costs of buying your employees great equipment or buying them junk, is this:

“[...] The bottom line is that an Aeron only really costs $500 more over ten years, or $50 a year. One dollar per week per programmer.”

“A nice roll of toilet paper runs about a buck. Your programmers are probably using about one roll a week, each.”

“So upgrading them to an Aeron chair literally costs the same amount as you’re spending on their toilet paper, and I assure you that if you tried to bring up toilet paper in the budget committee you would be sternly told not to mess around, there were important things to discuss.”

And bear in mind: those are just the costs you can measure right there on the balance sheet. If you think cheaping out on your people doesn’t have much higher hidden costs, you keep right on doing what you’re doing. I’m perfectly OK with it, it’ll make it easier for me when the time comes for me to start hiring.

I’ve said this before myself – over a computer’s life, the difference the very best box you can get and a piece of junk is pennies per hour. It gets more extreme when you start talking about chairs, desks and ergonomics: they’re expensive, but the amortized costs are negligible and the potential downsides are huge; one manager I know here says that if it says “ergo” on it, he doesn’t even bother looking at the price before he approves the expense.

The moment you can afford, both in money and time terms, to think like this you pretty much have to.

I’m trying to get a Thing off the ground here, wranging VCs and assembling a team, and I was asked what I thought about employee expenses, tools, resources and training. What I said was:

  1. If it’s for the job, we’ll pay for it.
  2. If it seems extravagant, I’m going to ask you to make your case. If you can do that I’ll pay for it. In particular, if we can trade money for time I’ll pay for it.
  3. If we get something wrong, we fix it promptly.
  4. If you fuck us you’re fired.
  5. If we need to make more rules because of something you did, we’ll make more rules and you’re fired.

A friend of mine points me to this incredible New York Times article in which publishers lay out the fact that they are fundamentally opposed to public libraries, detailing their struggles as they take up arms against these nefarious institutions promoting such injustices as culture, literacy and the greater public good.

Ms. Thomas of Hachette says: “We’ve talked with librarians about the various levers we could pull,” such as limiting the number of loans permitted or excluding recently published titles. She adds that “there’s no agreement, however, among librarians about what they would accept.”

It’s really a great article, full of these little turns of phrase that seem to come out of publisher’s mouths without them even realize how evil they sound. “There’s no agreement among librarians to bend themselves, the public and the greater good over this barrel we’ve offered to sell them at a very reasonable rate”, they don’t quite say.

HarperCollins was brave to tamper with the sacrosanct idea that a library can do whatever it wishes with a book it obtains.

This sacrosanct idea is better known as the First-Sale Doctrine; those crafty librarians, always falling back things like “established law” and “century-old Supreme Court decisions” to make their case. Crazytimes, right?

But that’s not the best bit:

David Young, Hachette’s chief executive, says: “Publishers can’t meet to discuss standards because of antitrust concerns. This has had a chilling effect on reaching consensus.”

Mr. Young lays it flat out: that laws prohibiting anticompetitive collusion and price-fixing are having a “chilling effect” on major publishers’ attempts to collude, fix prices and thwart competition.

I can’t imagine a functioning adult saying this with a straight face, but there it is. “Laws against doing evil things are having a chilling effect on the efforts of aspirant evildoers.” I’m sure it’s a problem for somebody, but as far as I’m concerned, mission accomplished, gold stars all ’round, well done laws and keep up the good work.

As has been noted many times, by many people, we’ve juiced up the entirely artificial copyright laws of the world to the point that if libraries weren’t already a centuries-old cultural institution, there’s no chance they’d ever be able to come into existence today. And here in this miraculous age of free-flowing information, that’s sad as hell.

Nowhere

“We are driving Windows down to the phone with Windows 8“, says Steve Ballmer, inadvertently strangling the entire WP7 ecosystem in its cradle as he telegraphs to Windows Phone 7 developers that anything they build will be dead-end technology by fall 2012. (update: see below…)

Were I in that situation (and I’m in one that’s surprisingly similar) the next obvious question will be, if the Windows 8 ecosystem is all HTML5, why don’t we just build a webapp?

Why not, why not indeed.

Microsoft needs some new leadership just so badly. They’re really not much good at anything they weren’t good at before he took over, and the world’s kind of changed since then.

I love the fact that Google search for ‘windows phone 7 silverlight’ gives you http://www.silverlight.net/obsolete as its first result. Yeah, it’s like that.

Ho ho! A very rapid update: Ballmer was misquoted, as evidenced by this sound bite. “We’ve got broad Windows initiatives, driving Windows down to the phone. With Windows 8, you’ll see incredible new form factors, powered by Windows, from tablets – small, large, pens – smaller, bigger, room-sized displays. We are in an era in which the range of smart devices is just continuing to expand.”

While I don’t think that my opinion has changed, unfortunately, I’m still going to leave this up, for ownership’s sake, and maybe to remind me on the perils of blogging too hastily.

@mhoye: Market indicators down on fears market indicators won’t rise… wait um what ca.reuters.com…

These graphics are poached from a friend’s private journal, but I suspect they won’t mind; it’s informative.

@adammcnamara: The stock market: Because you don’t really need your money. google.ca/finance #fack

You know how every single stock portfolio in the universe always has the disclaimer that “historical performance is no guarantee of future earnings”? Yeah, take a look at this. This is the Standard and Poor index over the course of the 80s:

Over the 90s:

And finally, from 2000 to 2010:

One of those things looks very much unlike the others, you’ll notice. In particular, if you started investing in the late nineties or early zeros, you’ve got a decade or more of evidence behind you right now implying that all those people who’ve told you to invest in stocks are thieves and hucksters, and odds are good that you’d have done better putting 90% of your money in a savings account and taking 10% of it to a casino.

From the Globe And Mail, in February:

While youth unemployment in Canada is running at almost 14 per cent, it’s far, far higher in other regions. In the European Union, for example, fresh readings today showed the jobless level among young people at 21 per cent. In South Africa, it’s a stunning 51 per cent. Here’s a telling, and worrying, statistic from Britain: Among fresh college grads, unemployment is 20 per cent.

Periodically I read articles about how young people aren’t “planning for the future”, with all the real-estate-buying, kid-having and so forth that implies, I am enraged by it. I want to show the author these numbers and then smack them across their sanctimonious faces until they stop talking forever. You want people to take the money they don’t make at the job they don’t have, buy bubble-priced real estate, take on a dependent and throw whatever’s left over on what amounts to a craps table? Awesome plan, old person. You get a gold star.

I’ve been able to do these things; I have a house, and a kid, and they’re awesome. But I’ve been incredibly mind-blowingly fortunate to do so, in the same way that previous generations of people, who are now writing these hand-wringing articles, were incredibly fortunate to live through twenty years of relentlessly upward prosperity. I had a computer as a kid, and turned that into a valuable career. I had ample nutrition as a toddler. For all the times I’ve hit my head, I’ve never hit it hard enough that I couldn’t feed myself or understand NTFS, LDAP and shell scripts afterwards. And being lucky isn’t a plan.

And, possibly worse, this is a profound structural and generational problem. My friend David Eaves will talk about this at furious length if you give him the opportunity;

Yes, young people reject the status quo, but it is deeper than that. They eschew the tools that Martin wants them to use – not just party politics but traditional media as well. They reject the whole system. But this isn’t out of juvenile laziness, but for the very opposite reason. In a world filled with choice, one that fragments our attention, they seek to focus their energy where they will be most effective and efficient – at the moment, that frequently means they are uninterested in the slow and byzantine machinations of politics (why engage when every party, even the NDP, are conservative?), the snobbishness of traditional media (when’s the last time a columnist on the Globe actually responded to a reader’s comment on the website?) or a hierarchical and risk-averse public service (held hostage by the country’s auditor general).

… and in a lot of ways I don’t think he goes far enough. It’s not just that young people “reject the whole system” for their complexity, lethargy or conservatism; it’s that there’s a large and growing pile amount of evidence available now that these systems a straight-up sham. Did every TSE-listed company lose 5% of its profits, 5% of its assets or announce a 5% cut in expected growth on Tuesday? Did any TSE-listed company lose 5% of anything except the aggregate price on the sticker? Some did – the people who make the Yellow Pages had a long-overdue bad day, apparently – but how much of that was just panic? Some, most? So maybe, just maybe, this is all just a collective fictions that let rich people get richer and pretend the poor are at fault for their poverty while the dwindling middle class pushes their chips around a roulette table. Is that a naive, oversimplified way to look at things? Maybe. I’ve also got a decade of evidence that when financial shenanigans get complicated then somebody, usually lots of somebodies, are about to get robbed.

And in that environment, the only way to win for sure is to be the house, or not play at all.

I’ve made a graph.

This is Bell and Rogers current broadband offerings, their advertised “up to X” speed, and how long it would take to hit their stated monthly cap running at their advertised maximum speed full-out.

As you can see, they’re selling you a month of quota that you can use in half a day. Rogers caps their overage fees at $50, Bell at $60. Both companies ship digital cable and pay per view to you over the same wires, both of which are also made of bits and both of which actually run about 25 GB/hr. This is, you will note, at least an order of magnitude faster than their most luxurious internet offerings and a connection speed they don’t and will make every effort never to sell you.

This effectively means that Bell and Rogers both have connections to your house with ten or more times the bandwidth than anything they’ve make available to you; we complain when we see other countries routinely offering 100Mbps fiber for $30/month or less but (putting aside the urban/rural split for the moment) people seem to think that’s impossible to achieve here. But the fact of the matter is that not only has it already been achieved, it is already fully deployed. Bell and Rogers have simply elected not to sell that to you.

I think it’s informative to look at the state of play in those terms, and compare the cost and speeds of connections available where you’re the one making the choices about what to watch, as compared to your telcos.

First off, my colleague Donna wrote up a bit about the work we’ve been doing for the last few months. It’s been a pleasure to work with her, and I don’t really think of her as a crony but nobody tell her I said so.

The second thing is a way to get all the linuxes. That’s right, all of them; specifically a way to get a variety of them running in a single headless virtual machine on your OS of choice. You start with an Ubuntu .ISO and VirtualBox.

Install Ubuntu on a suitably capacious VM, make sure sshd is running and starts by default, pause it, close and quit VirtualBox. Then do two things; first, set yourself up with this script:

#!/bin/sh
VBoxManage startvm Prime --type headless
VBoxManage setextradata Prime "VBoxInternal/Devices/e1000/0/LUN#0/Config/guestssh/Protocol" TCP
VBoxManage setextradata Prime "VBoxInternal/Devices/e1000/0/LUN#0/Config/guestssh/GuestPort" 22
VBoxManage setextradata Prime "VBoxInternal/Devices/e1000/0/LUN#0/Config/guestssh/HostPort" 2222
VBoxManage setextradata Prime "VBoxInternal/Devices/e1000/0/LUN#0/Config/guesthttp/Protocol" TCP
VBoxManage setextradata Prime "VBoxInternal/Devices/e1000/0/LUN#0/Config/guesthttp/HostPort" 8080
VBoxManage setextradata Prime "VBoxInternal/Devices/e1000/0/LUN#0/Config/guesthttp/GuestPort" 80

(My VM’s name is “Prime” in this example, to clarify. Yours may not be.)

Then read this article by Ted Dziuba about running several versions of Linux, simultaneously and non-virtualized, on the same machine. It’s pretty cool, and that should set you up with All The Linuxes, should you happen to want all the linuxes.

From that you can SSH to localhost:2222 for Ubuntu and schroot between the whatever other linuxes you desire. X-forwarding will help you here, and I wonder if you can add Android to that list? Hmm. Hmmmmm.

Next up, if you’re making changes to Firefox don’t/won’t/can’t get at their Tryserver test harness, I just found out (duh, of course) that all their tests are in their source tree anyway. Add these lines to the end of your Makefile, and you can run the whole test harness locally with one command.

test-me:
    echo 'Running automated tests in 10 seconds. This can take a long time - hit control-C to end.' && sleep 10
    make $(MAKE) -f $(topsrcdir)/obj-ff-dbg/Makefile crashtest
    make $(MAKE) -f $(topsrcdir)/obj-ff-dbg/Makefile jstestbrowser
    make $(MAKE) -f $(topsrcdir)/obj-ff-dbg/Makefile reftest
    make $(MAKE) -f $(topsrcdir)/obj-ff-dbg/Makefile mochitest-plain
    make $(MAKE) -f $(topsrcdir)/obj-ff-dbg/Makefile xpcshell-tests

Configure, make, make test-me, then wait. This is a run-overnight kind of thing – it will stomp on your machine pretty hard – but at least it will tell you if you broke anything. I was briefly tempted to call that “trouble”, or “come-at-me-bro” rather than “test-me”, but I think wisely elected not to.

Finally, I broke down and installed Fedora on my little netbook, and to my surprise it’s awfully pretty. I miss apt-get, but the new Gnome UI is actually great, wildly better and more discoverable than Win7. It’s actually a respectable little computer now, all things considered. Except, of course my wireless doesn’t work, and if I put an SD Card in it won’t suspend anymore.

“Sysadmin” is a portmanteau of “administration” and “Sisyphus“, apparently.

The Light At The End

I was wondering the other day why investment banking, which is in theory a competitive service industry, appears to be so insanely profitable. A notion occurred to me, but not being an expert in the field it’s hard for me to evaluate its veracity. It’s got a certain sinister elegance to it, though, and if you’ll bear with me for a minute I just want to put this idea in your head.

The 2001 Nobel Prize in Economics went to Akerlof, Spence, and Stiglitz for their “analyses of markets with asymmetric information“, that is to say, the economic effects of the other guy knowing something you don’t. Akerlof’s classic paper on the subject is The Market For Lemons, of which Wikipedia provides a good summary, per usual. The more cynical among you are rightly saying, well yes, the economic effect of making a deal with somebody who knows way more than you do is that you lose your shirt, but that’s microeconomics; we’re talking macro here. There are no easy buckets on this court.

In any case, one thing I haven’t found in my cursory n00b investigation is something on the economic effect of what I will politely call an asymmetric understanding of the basic principles of modern markets and the naive company’s place in them. Which is to say, let’s imagine… I start like that because from what I can tell, “let’s imagine” is the traditional way of starting any argument about economics. Which probably tells you something about economics, now that I think about it. Seriously, try googling the name of your favorite economist plus “let’s imagine”, and count the Google hits. It’s eerie.

Anyway, you all know what derivatives, specifically futures are, right? The idea is that you can set up a long-term contract to sell a thing at some fixed price, fixing the price and letting the buyer at the other end absorb the risk, reaping the potential benefits or losses of a fluctuating marketplace. This lets our entirely imaginary A-One Flour Co. say “for the next five years we’re selling you this much flour for this price every year”, and whatever happens to the market price of flour, either more profit or unexpected loss, get absorbed by whoever’s on the other side of that futures contract.

That, in short, is why futures are traded – there’s both risk and potential profit involved, ownership can change, etcetera. But our imagined A-One Flour, a company with one major input of “wheat” and a single output of “flour” may choose to engage in the same sort of transaction on the wheat-purchasing end, to give themselves some stability on the supply side as well, a sensible move now that there’s a lot less flexibility available to them in terms of revenue. So they agree to buy a fixed amount of wheat for a fixed price over the course of the next few years, from some commodities trader whose hope in this case is that the cost of wheat will drop, thus insuring him some profit on the deal.

Now let’s say I’ve been watching all this, or more realistically I’ve had my computers watching all this. I see what the A-One people are up to, and because they’re traded commodities and I can, I buy both of those futures contracts.

Now: what just happened to A-One flour? They no longer control, in very real sense, the amount of money coming in, the amount of money going out, or who they buy from or sell to. They get wheat from me, they sell flour to me, and they’ve effectively been reduced from controlling their destiny to little more than operating their machinery. They went looking for stability, effectively trading stability for control. I own the complete set, in the Boardwalk & Park Place sense, of contracts for their material, and thus financial, inputs and outputs and this effectively means that I’m the one who’s really in charge of the company. All that without a single share of A-One Flour changing hands.

Better still, if I can pull the same trick with B-One Bread Co., and pair up those futures contracts profitably? That’s a pipe that spews money. And maybe even better than that, this is de-facto inside information about how profitable (or not!) A-One is going to be in the next year or three. So I have this great arms-length way to engage in what would normally be insider trading, knowing what’s going to happen to A-One long before shareholders or the public does. And it’s an oversimplified example, sure, but I’d be surprised if it wasn’t already a well-understood process in some of the taller office buildings of the world.

I haven’t thought of a better way to make money recently, but I’ll let you know if I do.

I brought some mathy snark last time for which I make no apologies, but this is the longer post promised on the subject of the Usage Based Billing controversy that has rightly been getting a lot of airplay recently.

Set Stimulator To 138

Let me open this up by marveling at the magnificent job the terminology has done in framing this debate. “Usage Based Billing”, does that not sound entirely reasonable? Should we not pay for what we use? Of course we should, and you know who doesn’t? Freeloaders, that’s who; leeches and layabouts, the lot of them. Even my esteemed colleague David Eaves has fallen into that trap, which frankly surprised me. It was a compelling hook that he bit, I suspect, because that interpretation advances some causes he champions; transparency and net neutrality among others. Laudable goals all! But I think we’re talking about something very different here.

There’s two things, in fact.

The first one I haven’t seen mentioned much, aside from Konrad Von Finkelstein’s somewhat agonizing claim that IPTV is “not an internet service” are all of those places where huge amounts of bandwidth get consumed, for which Bell charges very nearly nothing at all. Bell’s “Fibe” service, for example, offers customers:

  • Record up to 4 shows at once and get 100 hours of HD recording capacity included
  • Over 100 HD channels
  • Flexible programming – choose more of the channels you really want.
  • Stop paying for the same channel twice – for every standard definition channel you get, receive the HD version at no extra charge
  • Advanced Search – stop scrolling, start watching – our keyword search feature makes it faster and easier to find more of what you want to watch

Bell says you get 25GB/month in “data”, and pay $2/GB when you go over that. But the 4 simultaneous HD recordings, the 100 hours of HD recording, the pay-per-view stuff being sent well below the ostensible per-gigabyte cost, all of that stuff is coming over the same wire and all of it is approximately free. That $2/gig charge that would add up to between $30 and $50 per hour if it ever showed up on the bill isn’t really about congestion, abusive downloaders or any of the various disingenuous reasons on offer; it’s about punishing users to the tune of an extra $30/show for using AppleTV or Netflix instead.

It is nothing more or less than a surcharge that Bell has the luxury of imposing on you for the privilege of going to Bell’s competitors, in short.

In the same vein, why should TekSavvy be required to charge their users in accordance with Bell’s pricing policies? Don’t they buy bandwidth in bulk, and then resell it? This is of no benefit to TekSavvy or their customers, but again, it’s fantastic for Bell, forcing TekSavvy and any other reseller to pass punitive bandwidth surcharges on to their customers.

Retrovillainy

I’m not going to argue that bandwidth isn’t a relatively scarce resource – there’s a finite amount of it in the world, sure – but the fact that Bell is offering the Fibe service at all is a clear indicator that it’s not all that scarce, certainly not the grade of scarce that demands a 10,000% markup.

That’s why this “Usage Based Billing” discussion really isn’t about usage-based billing at all. This is about an incumbent monopolist engaged in price fixing, distorting secondary markets in which they have a substantial stake, dramatically impeding the ability of Canadian consumers to make choices in a free marketplace, and thwarting competition thereby.

There’s more to say about this, of course; while I think the CRTC has erred, and that the cultural protectionism they mandate is also broadly bad for Canadians, I also think that a body with the legislated power to rein in what is obviously corporate malfeasance in the communications space is an extraordinarily valuable thing, and not to be discarded lightly. I also think that error has handed the Conservative government the rare chance to carve up a cultural institution and business regulator under the guise of populism, and they’re going to ride that opportunity as hard as they can. That would be a terrible mistake, I think, but that’s a post for another day.

Bits are bits, and the worst-case scenario for a telco is to be reduced to being a purveyor of bits. There’s no money in it – no long distance calls, no ridiculous $20/month landline rental, nothing. It means going from the 40%-50% year over year profits telcos usually make to the 8%-10% year over year numbers that most other companies do. Just pushing bits is really bad for telecommunications companies; they’ll do just about anything they can to prevent that from coming about, and billions of dollars in spare profits gives you a lot of options on that front.

Back in the 90’s there used to be lots of ISPs; competition on performance was fierce and prices were relatively low. But VOIP was threatening to be the next big thing, so Bell used the profits from their monopoly on telephony to buy almost all the small-shop ISPs; now there’s very little competition and relative to most of the world our network connections are underperforming and really, really expensive.

Bell’s worst-case scenario is being nothing more than a purveyor of bits. That would be really bad for them.

But anything else is really bad for the rest of us. Those huge profit margins don’t come from nowhere; they come out of Canadian pockets in ways that put a terrible barrier in front of Canadian content creators and Canadian entrepreneurship, and pretending that between the absence of serious competition and legislated price-fixing affecting those few independent ISPs left that the invisible hand of the free market will somehow just sort this mess out to the betterment of the average Canadian is a dogmatic mercantilist’s daydream.