Last year, I thought David Brooks might have lost it. Fortunately, I think the change in the Presidency has breathed new life into his columns. Today, his analysis of the politics and policy of the stimulus package in the NYT is spot on.
Let’s hope the center holds, and we can jettison stale liberal spending plans and focus the stimulus package on getting the economy working again and bring some creative Republicans and conservatives back into the conversation.
Nathaniel and I just had breakfast with John McCrea of Plaxo. His thesis: Facebook is the AOL of the social internet. The key similarities: both Facebook and AOL were walled gardens in their early days. Since the open Internet eventually beat the walled garden Internet, he concludes that Facebook must continue to open up, radically, or face a similar fate as AOL.
I think that the analogy has some validity. Yet, there are important differences. As I pointed out in our conversation, social relationships can generate interactions and collaborative artifacts among people. Who controls those things? There is no analogy for these social interactions and artifacts on the traditional client/server Internet.
So, cruise on over to his blog to follow an advocate of the open social Internet. And time will tell if his bold prediction comes to pass!
Hollywood may at last be having its Napster moment — struggling against the video version of the digital looting that capsized the music business. Media companies say that piracy — some prefer to call it “digital theft” to emphasize the criminal nature of the act — is an increasingly mainstream pursuit.
Looting? Capsizing? Theft? Piracy? Really?!? To remind everyone, here’s a picture of real pirates in Somalia today:
Notice the use of violent weapons: guns and rocket launchers. Recall that they are attempting deprive someone of physical property. Physical property, unlike so-called intellectual property, can only be owned by one person at a time. Also, they take the crew hostage and hold them for ransom.
In contrast, sharing of digital goods increases the public good at no harm, on the margins, to the original owner. Remember kindergarten? Sharing is good!
The only plausible argument against sharing is that freely sharing may reduce the incentive to create content in the first place. But that argument only holds if (1) less entertainment content were created because of sharing and (2) the amount of lost value exceed the massive benefit to consumer of cheaply and easily accessing the content. As far as I can see, there has been no discernible decrease in the creation of good or crappy content in the five years or so.
Labels and studios may hurt from online sharing because it disrupts their control over distribution. But the artists? New artists that are creating the new content actually benefit from this alternative distribution mechanism that avoids the usual payola necessary through labels and studios. In fact, I think that digital distribution is creating a greater incentive to create content than previously. If we waste all our resources in a futile effort to protect vested interests, we are certainly going to get passed by other countries that side with the future and not the past.
McKinsey has published this terrific interview of Hal Varian, the Chief Economist of Google. (Why does Google need a Chief Economist and what does he do?!) The whole thing is worth reading, but I’ll highlight two quotes that I esepcially enjoyed.
First, he has a nice way of highlighting how digital distribution has reshaped the economics of intellectual property:
Back in the early days of the Web, every document had at the bottom, “Copyright 1997. Do not redistribute.” Now every document has at the bottom, “Copyright 2008. Click here to send to your friends.”
No longer is the Internet about ‘browsing alone’–the value comes the social activity of sharing.
Second, he validates my decision to go back and get a PhD (or at least the portion of the time that I spent studying statistics):
I keep saying the sexy job in the next ten years will be statisticians. People think I’m joking, but who would’ve guessed that computer engineers would’ve been the sexy job of the 1990s? The ability to take data—to be able to understand it, to process it, to extract value from it, to visualize it, to communicate it—that’s going to be a hugely important skill in the next decades, not only at the professional level but even at the educational level for elementary school kids, for high school kids, for college kids. Because now we really do have essentially free and ubiquitous data. So the complimentary scarce factor is the ability to understand that data and extract value from it.
Unlike computer programmers (who are valuable for creating programs), statisticians are valuable not for creating new statistics algorithms but in the ability to apply statistical analyses to business problems.
Touché, David Brooks! Best editorial. Ever. A small taste:
There are times when Masters of the Universe must be Masters of the Grovel. If you are a hedge fund manager and you find yourself in conversation with a person from Ward Three, apologize for ruining the Hamptons, and subsequently, the entire global economy.
According to the NYT, angel funding for start ups is drying up. Although this story is anecdotal, its mere appearance in the illustrious NYT can be a self-fulfilling prophesy. They do mention a couple of brighter spots:
Some angels are considering only low-cost companies that could become profitable without venture financing. Others are acting less like angels and more like venture capitalists, spending much more time than is typical advising companies, including taking seats on boards.
This approach–getting to profitability quicker–is definitely on our minds as we get our start up SocialFeet.com off the ground. We’d also love to have a qualified lead angel who wanted to be more involved. We had already thought about getting smaller dollars amounts from a larger group of angels, as suggested elsewhere in the article.
Finally, I found some unintended irony in the article. They mention that angels are backing off from investing because they are wary that venture capitalists have already turned off the spigot. Yet, they end the article with Mark Heesen, president of the National Venture Capital Association, saying “If we don’t have angels, that hurts us. Where are we going to be getting our next Series A deals if those entrepreneurs aren’t out there with the ability to move their idea forward?” So who’s to blame here anyway, the VCs or the angels?
