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broadstuff"broadstuff" - 5 new articles

  1. Tesla, Solar Panel Roofs and Castles on the Rhine
  2. IoT - snooping on your Good Vibrations
  3. Gartner's Top 10 Technology Trends for 2016
  4. Uber...and Out
  5. Fun with Analytics - the Brexit System Dynamic Model, and can we Trump it?
  6. More Recent Articles
  7. Search broadstuff
  8. Prior Mailing Archive

Tesla, Solar Panel Roofs and Castles on the Rhine

Apparently Tesla is ging to do Solar Roofs as well as Cars:

"Tesla has finalized a $2.6bn deal to buy solar power company SolarCity to produce solar “shingles” – photovoltaic material that would be fashioned into the shape of a house roof."

Elon Musk was quoted as saying:

“I think this is really a fundamental part of achieving differentiated product strategy, where you have a beautiful roof,” Musk said. “It’s not a thing on the roof. It is the roof.”

When I started my consulting career there was a very smart Partner I worked with, and he told me when we first went into a company he looked for 3 signs of about-to-fail businesses, and these were:

- Head Office interiors that had started to look like palaces, he thought it was a sign they were no longer "lean and hungry" and were starting to ossify*
- CEO is only partly invlved in the business (and more -ve points if CEO is a Media "personality")
- "Extreme" jumps in product mix, far away from "the knitting", as losing focus usually does not end well but it was also a sign that any or all of the following applied (i) they are desperate (ii) the CEO has lost control (pacifying powerful barons) or (iii) the CEO is not under control and is building follies - and none of these are not good news

By these measures, Tesla is hitting 2 out of 3 already (I have no idea of their head office palacification) so I know he would be going "Hmmmm...." on this news.

But, while I've always kept his rules in mind, I have found there are some stunning exceptions to these rules that have succeeded - (Apple, Virgin, Nokia for example) - and studying them in depth as to how they do it is fascinating. There seems to be an underlying logic stream to what these companies do and how they do it. Apple enters high potential market segments still saddled with badly integrated and poor UX products and uses its brand to find new customers. Virgin transfers a "cool" brand promise to a previously dowdy and boring consumer segments and makes services more customer friendly. Both have/had extraordinary leaders. Nokia went from tyres to mobile masts to mobiles, so anything is possible, but they have failed at the at the "incredible leader" game for the "next hop" (ditto Apple..?).

So, one possibility is this is F*cked Company time as the Leader jumps from one gambit to another. But arguably, Tesla has an "incredible leader", so what may be a possible underlying logic train here?

As best we can see, it could run something like this - electric cars need a ubiquitous charging infrastructure covering their routes, and that needs to be as cheap to roll out as possible. For people to buy lots of Tesla electric cars a fair portion of this infrastructure needs to exist before they buy them. So how to do that? How about ubiquitous solar roofs that can easily be integrated into a roof-to-charger system (think Fon for car-charging). It's the closest to physical-world game to the internet "increasing returns" one. Even better if its unique to that car company so others can't even use the river without your say so, so how about it being owned by the Car company. And borrowing large wads of money for infrastructure plays has never been cheaper. In essence its a logistics toll play, aka "Castles on the Rhine" - you build your castles first, you get to extract tolls on everyone else or prevent their passage, you win.

Supporting this argument, Tesla is also big time into batteries and has built/bought a factory for them - electric cars need better ones to replace IC cars in all but relativley slow, short duration and low weight tasks right now - but car charging infrastructures using renewable energy also need lots of better batteries so at a stroke there is another huge new market for your batteriees, and they will buy your batteries because you own the roof-to-charger Castle.

The ony problem with building Castles an the Rhine, and building the boats to go on them is that its a very costly thing to do one of these, never mind both, and lots of others will try and do it too. And despite a CEO-as-business-savant, the "F*cked Co" probability ticklist is mounting, so it's going to be an "interesting" one to watch.

In fact, given how hard this two-industry strategy would be to execute, and how costly cars are to make (and that all the major car makers will be in on this game soon), and that Rhine castle owners never really needed to build ships, you do wonder if Tesla should drop cars and do charging there is an added benefit - charging stations don't crash and kill people, avoids all that awful bad publicity....

(*Incidentally, one of the things that has interested me over the last 2 decades or so is how much more palatial so many companies' Head Offices have become so if my old Partner was right, there are a lot of ossified businesses out there)

IoT - snooping on your Good Vibrations

Those who have been reading the articles here on the Internet of Things will know that, while we believe the potential is huge, the opportunity for snooping and surveillance is also huge, as is the risk of hacking owing to commercial pressures driving bypasses of good security implementation.

Now, we believe we have found the poster-boy (as it were) for this trend - a personal vibrator that phones home whenever it is used, and that has now been hacked - Grauniad:

Two years ago, someone had the good idea to put a bluetooth connection inside a vibrator, and the We-Vibe 4 Plus was born. The vibrator can connect with a smartphone app that its makers say “allows couples to keep their flame ignited – together or apart”: that is, it can be controlled remotely, while, say, making a video call.

But at the Def Con hacking conference in Las Vegas, two independent hackers from New Zealand, who go by the handles goldfisk and follower, revealed that the way the vibrator speaks with its controlling app isn’t really secure at all – making it possible to remotely seize control of the vibrator and activate it at will.

To no great was this not predictable? And surely it doesn't need to phone home either, but it does....

The app sends the temperature of the device back to Standard Innovation every minute, and every time the intensity of the vibration changes, that gets sent back too.

Between those two data points, it’s fairly easy to work out when and how often someone is using the vibrator. “What are the implications of who they’re going to give that data to,” asked goldfisk. “In their privacy policy, they say ‘we reserve the right to disclose your personally identifiable information if required to by law’, but what does that actually mean?”

Apparently this recording of your comings and goings* is only for "market research" purposes (One wonders if they researched the reaction of people to know that their most intimate experiences were being shared like this). Once upon a time, things like these were made by Spy skunk-works to spy on a few people, now they are made as part of a vast new commercial undertaking to spy on everybody that busy their kit.

Anyway, the hackers have decided to seize the initiative, and launched the “Private Play Accord”, an initiative to encourage sex toy manufacturers to sign up to basic standards of privacy and security. There is no reason why this should no be extended to every Consumer IoT device out there, of course.

We would however bet that the manufacturers will kick back, hard. Because the data they collect is vital for their overall business models, its not just for "market research". That's why just about no IoT consumer device gives you your data, and the option to not make it transferable any farther.

(*yes, it was hard to refrain from using all the puns and double entendre's one could have)


Gartner's Top 10 Technology Trends for 2016

Gartner's Technology Trends for 2016 probably contain the most obvious rebottling and labelling of old wine for many a year, probably signalling that the "wave of innovation" of the last few years is coming to an end and its now about making stuff work (and renaming it again).

Here they are, with the Broadstuff summaries characteristically tongue in cheek:

- The Device Mesh - connect lots of different devices using y'know, the Internet - and make it Mobile. Ta-Dah...The Mesh. So long Grid and Cloud.......

- Ambient User Experience - the user has the same UI in their mesh, and because everything is connected its like, all ambient (and did we mention Mobile). Astounding stuff, never before thought of - oh, wait, its 10 years old.

- 3D Printing Materials - we have more 3D printers - next up, more 3D printer consumables. The world will be changed, forever - next year. Maybe.

- Information of Everything - IoT connects to The Rest Of The Internet shock.

- Advanced Machine Learning - replaces Ordinary Machine Learning and AI, those are so 2015 and haven't performed well as buzzwords

- Autonomous Agents and Things - In 2015 was Smart Machies. Now its Autonomous Agemts. We used to call them Robots. Plus added Softbots and IoTbots and Thingbots and Thisbots and Thatbots

- Adaptive Security Architecture - "IT leaders must focus on detecting and responding to threats, as well as more traditional blocking and other measures to prevent attacks". That is totes amazeballs, IT leaders have probably never considered any of this stuff.

- Advanced System Architecture - Ordinary System Architecture with new, added Neuromorphs. The 80's called, they have a ew buzzword for us....

- Mesh App and Service Architecture - now that we have re-badged the Grid/Cloud/etc as the Mesh, the App and Service Arcitecture can no longer be for the Grid/Cloud.r experiences that span the digital mesh.

- Internet of Things Platforms - Last Year was the Internet of Things, it's so done - so this year we called it a Platform.

FYI, here is the 2015 Forecast, spot the New Lamps for Old:

- (Mobile) Computing Everywhere
- The Internet of Things
- 3D Printing
- Advanced, Pervasive and Invisible Analytics
- Context-Rich Systems (aka AI + Machine Learning with the analytics)
- Smart Machines (aka Robotics)
- Cloud/Client Computing
- Software-Defined Applications and Infrastructure (ie move from hardware to software, atoms to bits etc etc)
- Web-Scale IT (People build stuff in the Cloud)
- Risk-Based Security and Self-Protection

As you can see, by and large a smooth continuum except for the new words

Uber...and Out

Uber has exited China with a sale of all its Chinese operations to the Chinese market leader, for a 17.7% financial stake - Biz Insider:

Uber is selling its Uber China unit to Didi Chuxing.
Uber's app will continue to exist in China (for now), while the two teams are folded together.
The combined company will be worth $35 billion.
Per a press release, "Uber will receive 5.89% of the combined company with preferred equity interest which is equal to a 17.7% economic interest in Didi Chuxing."
Didi Chuxing will also invest $1 billion in Uber, at a $68 billion valuation.

Uber was burning c $1 billion a year in trying to enter China, a huge cash-hole even for a Megacorn so this helps shore up the cashflow. Downside is that it also closes off Uber's biggest future growth story (see above graph from Biz Insider). But given that market's interesting view of open-ness, its probably a not-bad outcome.

As Biz Insider points out, its a lesson that even infinite bucketloads of VC cash have a limit in what can be done. Still, it will be easier to IPO now, before the investment community works out that Taxis as a business have very low margins.

Also expect to see redoubled efforts in other large and fairly well wired countries where regulators are amenable to having their own domestic taxi industries done over.

Fun with Analytics - the Brexit System Dynamic Model, and can we Trump it?

System Dynamic model of Brexit (Simplified)

Now that the emotion around the UK Referendum has (hopefully) died down a bit, its time to look at why the (apparently) surprising Brexit result occurred. Based on experience during the referendum campaigns and reading quite a lot afterwards, there were 3 major causes that stood out.

A Mismatch of Belief Systems

In essence, the Remain camp believed an argument based on the EU as a desirable, stable platform going forward, plus the moral and economic benefits of it's precepts, was persuasive. Added to that they clearly felt that Establishment voices of authority would persuade the undecided, and if that didn't work "project Fear" - promising Doom if the UK left the EU, would persuade the floating voters - as they believed it did in the Scottish Independence referendum. (By the way, I think this was false - my recollection was that, at the end, the "Remain in UK" camp in the Scottish referendum made a lot of concessions to the Scots in the last days as Fear wasn't really working out).

Also, if you are going to paint the EU as a stable, desirable organisation to rest your campaign on, don't allow it to show itself as sclerotic, near-bankrupt and prone to random acts of mass terror during the election campaign.

The Leave camp, on the other hand, believed that a lot of people in the UK were suspicious of the EU, thought it was in a lot of trouble, or at least didn't see any tangible benefit from it, and were very also hostile to the "open borders" migration into the UK for a wide variety of reasons, true and false. Also, the Establishment, via a plethora of scandals, post 2007 austerity, and cultural remoteness was not nearly as trusted as Remain believed. It's also hard to believe that Remain thought that hectoring the British would ever work, its not for nothing the nation is depicted as having a "Bulldog spirit" - maybe it is more obvious to a non-Brit like me, but in general the British are as stubborn as it gets, so episodes like President Obama telling them they will be "back of the queue" for trade deal for example was bound to backfire.

Attitude - Hubris and Nemesis, and polls

Before the campaign, Remain was supposed to win, very comfortably, according to the polls. Bookies were offering 1/5 odds on a Leave win. In my view that influenced the campaigns, in that Remain was initially overconfident whereas Leave knew they were in for a real scrap, and as it became clearer that Remain was not going to be a slam dunk then panic set in, whereas Leave grew in confidence. This was exacerbated by the much larger risks to the senior people involved in the incumbent Remain camp.

By the way - a quick word on the polls - we tracked the UK 2010 and 2015 elections using our social media analytics systems, and found in both cases a stronger bias to the liberal, metropolitan viewpoint than the actual election results displayed. This we believe is due to 3 main reasons:

- Conservatives by nature are more likely to be online technology laggards and/or talk less about things, (but they do vote)
- The Liberal Metropolitans have better access to the Media, in general (many work in it, or are connected to it) so their voice is amplified
- A significant number of people do not have the courage of their convictions when they feel they have socially "frowned on" views (like anti immigration for example), and this is a poll-altering feature

This means there is a tangible "hidden residuum" voting for the socially uncool side, whatever that is, and its probably higher if the uncool side is seen as personally beneficial.

The System Dynamics of a disaster

However, the biggest failure of the Remain campaign was to not address the situation dynamically as it progressed. The (simplified) System Dynamic diagram above tries to capture this. In essence, Remain's arguments, exaggerated by Project Fear logic, tended to over-egg the risks (or at least be perceived to do so) and that led to an increasing resistance to the message and it gave a foothold to pro Leave media to start to land some telling blows. The Remain response was to double down on Project Fear, with increasingly exaggerated claims of Doom which allowed Leave to both lampoon Remain's claims and headroom to make even more exaggerated claims of its own. Cycle this through a few times, increase the hectoring volume, and more and more people just switched off to the messages of Doom and the insults (calling c 50% of the population "racist" is clearly absurd). As it became clear Leave was gaining, they started to gain in confidence, getting that all important momentum - undecided people like winners. Then Remain visibly panicked, and output became more and more unbelievable (we eventually got to Brexit starting World War 3). By the time the Conservative government, who had largely run the Remain show, started to criticize Labour for not doing enough, it was clear Remain were mortally wounded.

What should Remain have done instead?

This is a simplified model - there are some sub-loops and unique events not shown, but in essence they fit in this overall model. Our experience of System Dynamic models is it is these high level models that often give the major insights, the detail is often bedevilled with layers of assumptions, where anything can happen with small changes. At any rate, the simple model would suggest 5 main actions:

(i) Make sure the ingoing assumptions are all valid, and defendable. GIGO, as they say.
(ii) Beware Hubris - assume the gap is less than you think, especially if you believe you have the "moral" advantage as quite a sizeable % - 5 to 10% in our view - are just keeping quiet as they dont want to be seen as "the Other"
(iii) Project Fear won't win it for you, and ramping it up certainly won't.
(iv) Break the circles if they are going against you. It was quite clear some time before the end that there was a vicious circle emerging for Remain, and they should have broken the circle and tried to understand the actual root causes of why people were not responding, and change their approach. In this case it was incorrect ingoing assumptions about the attarctiveness of their message. Ditto their opponents started to see a Virtuous circle emerge
(v) A corollary to (iv) - have other loops going, so if the main one doesn't work one can switch over. One of the major issues, left until far too late, was for Remain to actually deal with the concerns of the Leavers on a practical, policy basis.

Can we Trump this model?

The main point of making such a model is to see if it is predictive. So we plan to turn it onto the US election, where our hypothesis is that fairly similar dynamics are taking place. So, what we have been doing is following the US election with our systems for a few months to try and calibrate the US systemically, and now the Presidential candidates are anointed we have a simple 2 horse system - and a 2 horse dynamic model to test out on it.

There are differences which we will have to set up for, (for EU read USA, for example) but it should be an interesting experiment (and a decent test of our social analytics systems)


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