Yikes! Fund People, Not Projects

January 18, 2021

Fund People, Not Projects III: The Newton Hypothesis; Is Science Done by a Small Elite?” addresses innovation, procurement assumptions, and MBA chestnuts. The write up is long, running about 6,300 words. Here’s my summary of the argument in the research paper:

You bet your bippy, pilgrim.

Here’s the academic version of my summary:

The Newton hypothesis seems true, as far as citations are concerned: science is advanced by a small elite. This is not just “Einstein-level” breakthroughs, the small elite may not be 0.01% but 1-5% of the total number of practicing scientists. Even 10% would still cohere with the idea of scientific elitism. Citations at least on a first pass do seem to correlate with “good science” both casually (Highly cited classic papers) and by assessment of peers (Nobel prize panels; Nobel-winning papers are highly cited, and cite highly cited research).

The write up also explains why some technology organizations decline; for example, the Google. The reason is that really good people leave for greener pastures either mentally or physically. The result? Gmail goes down, Intel can’t make chips, and IBM can’t get Watson to deliver that mythical billion dollar business. Common sense, yes. Will significant change take place in staff management, procurement, or MBA thinking about innovation?

Nope.

Stephen E Arnold, January 18, 2021

A Beefed Up Elasticsearch Presages an Interesting Future

December 31, 2020

The write up “Elasticsearch New Features: 2020 Year in Review” makes several “enterprise search” issues clear:

  • Key word retrieval is not enough
  • Additions to basic search signals that Elasticsearch is following the Entopia, FAST Search & Transfer, and other proprietary systems down the path of exponential complexity
  • Specialists in the time series and geospatial sector have cause to rejoice and be worried.

The article provides a summary of the feature landscape for Elasticsearch. It is worth pointing out that many commercial vendors rely on Elasticsearch or its cousin Lucene for information retrieval functions.

The article illustrates why. A single firm lacks the resources to build, enhance, and support what now is a retrieval and analysis platform. What’s interesting is how few vendors report their open source roots. Most prefer to concentrate on their proprietary add ons. These are the differentiators, but I must admit that most of these commercial vendors appear to me like an iguanas in a Caribbean iguana farm pen. I can no longer tell them apart. When I encounter a “new” enterprise or specialized search system positioned as a problem solver for the enterprise, I see iguanas. I suppose each iguana has a quite distinct personality, but I am not smart enough to perceive the difference.

Net net: Enterprise search is a utility. As an information service accretes features and functions, the basics become less important. At some point, the enterprise search systems, whether free or proprietary, bangs straight into the accounting department’s Zoom meeting.

The results are not pretty. Complexity, triage costs, customization costs, and special add ons set the stage for more Delphes, Fulcrums, SMARTs and STAIRS. Will vendors of enterprise search figure out how to get off this pathway to a Dante-like digital netherworld?

My prediction for 2021? Nah.

Stephen E Arnold, December 31, 2020

Innovation Shift: Not Just in China and Singapore

November 23, 2020

How much innovation will $700 million buy? I think I will find out in the next six to 12 months. “COVID Hit Startups Badly – but Something Surprising Is Happening” contains an interesting factoid, if the datum is accurate. Here’s the passage I noted:

Research from MAGNiTT, a startup data platform, revealed that $704m was invested across 564 different startups across the region in 2019. “To put it into perspective, 2009 saw $15m of funding in five venture deals,” the company noted.

The article emphasizes Covid. My thought is that other factors are contributing to this old-school Silicon Valley type surge. Regardless of the reason, some of these “deals” were ones which just a few years ago would have involved lots of Philz Coffee conversations. Not now it seems.

Stephen E Arnold, November 23, 2020

Google Reveals Its Aspiration: Everything

October 30, 2020

An online publication called Gadgets360 published “Google Renames the Chromebook Search Button to the Everything Button.” The lowly capitalization lock key has been identified as expendable. By repurposing a way to create CAPS, Google has performed two vital services:

  1. Easier access to search
  2. A way to reveal its aspiration: To be “everything” to a human user.

The article states:

Google is renaming a button on Chrome OS PC keyboards to ‘Everything Button. … Google said that the new name for the Launcher button was chosen to reflect user feedback; the search giant hoped that the inclusion of the new name for the button will help highlight that Chromebook laptops have a dedicated button on their keyboards. Clicking on the Everything Button will open up a search bar through which you can search for things on Google, as well as for apps and files on the Chrome OS machine.

Interesting. What about confusion with the freeware application called Everything. David Carpenter at Voidtools.com has offered his useful information retrieval software for several years. Google is indeed innovative and proving that it is “everything” a me-too outfit would want to be.

Stephen E Arnold, October 30, 2020

Be an Entrepreneur: The Venture Outfits Need You

October 2, 2020

Institutional Investor ran an interesting story. No, that is not an oxymoron. Really. “The Pervasive, Head-Scratching, Risk-Exploding Problem With Venture Capital.”

I noted this passage:

Two-thirds of venture deals fail, researchers have found. With such a high mortality rate, a VC fund’s actual ending portfolio size is merely one-third of its invested companies’. So to arrive at an exposure with 20 to 70 companies, a fund needs a starting portfolio of 60 to 210 startup investments. Very few funds meet this size.

Without wrestling with the assumptions or the math, I thought this statement was fascinating:

Significant portions of the average come from very few outlier deals.

Now the assertion:

The golden rule for investors into the venture asset class must therefore be: Build a portfolio of 500 startups, with 100 companies being the absolute minimum.

Okay, how many venture firms do you know that have a portfolio of 500 start ups?

Then the question, “Why not buy a fund of VC funds?” Answer:

Based on industry studies, funds of funds frequently lack diversification across gender and race.

Nervous? Not to worry. Here’s why:

Is venture capital a risky asset class? No. Most VC funds choose to act in a risky manner by not diversifying, but that does not make the asset class risky. To de-risk venture capital, CIOs simply need to acknowledge that VC math is different from public markets math. The importance of low-probability, excess-return-generating investments means that proper diversification requires a portfolio of at least 500 startups.

But most VC firms don’t have 500 or more start ups in their portfolio? That’s what the write up said.

Does this seem to be reassuring?

Stephen E Arnold, October 2, 2020

Google Decides It Is Time To Play Cards

September 8, 2020

Innovation is part of Google’s mantra. Alphabet Inc. never stops developing ideas, especially when it comes to improving its trademark product: search. Mobile search and having seamless access between mobile and desktop devices is a key selling feature. Google decided to improve its activity cards feature says Engadget in the article, “Google Promises Better Search Results For Recipes, Jobs, And Shopping.”

The activity cards feature allows users to continue searches they started on mobile devices. The feature works like this:

“Let’s say you’re looking for iPad accessories. The shopping card will display products that you’ve been researching, and even some that you haven’t explicitly searched for. If they were featured in a review or a guide, Google might surface them in the card. That could help you to compare all of your options and reach a decision.

The jobs card could make it easier for you to keep on top of new openings in your field. It’ll display relevant job listings that have popped up since you last searched, so you don’t necessarily have to trawl through the same ones over and over.”

The recipe cards work similar by keeping content on searched for recipes updated. The activity cards act like personalized RSS feeds centered on specific topics: jobs, search, shopping, and recipes. They offer a unique and customizable browsing and search option.

However, their subject reach is limited. Dozens of other apps provide the same service, but they are not limited to four topics. The only special thing about Google’s activity cards is the Google name.

How about customizing activity cards so Google users can get the most out of this feature.

Whitney Grace, September 8, 2020

Qualcomm: Tools? Nobody Had Tools.

September 7, 2020

I read “Qualcomm’s Founder On Why the US Doesn’t Have Its Own Huawei.” Interesting viewpoints appear in the article.

Here’s the passage that caught my attention:

Qualcomm, by selling companies a comprehensive chipset that could power a cellphone, actually made it easier for new Chinese competitors to hit the market, because they had the tools to create a product instantly. “Unfortunately,” he says, “nobody in the US has really run with it” and done the same thing.

And then:

Another complicating factor is that governments in China and Europe have had industrial aid policies that helped their telecom firms in a way that the US has not. “Our government has not provided R&D support or other support that Huawei and ZTE (another successful Chinese firm) managed to get from their own government,” Jacobs says.

Observation:

  1. US companies are as large or larger in terms of access to cash and humans. Those companies have the resources to solve certain technical problems, sustain the ecosystem to support certain technologies, and push technology which will be used by billions. What went wrong? Is it possible the US companies were supplying grain to the highest bidder. These bidders then developed industrialized farms. Looks like an error and finger pointing.
  2. Those who build tools often discover unexpected consequences. As a child I read science fiction books. I recall descriptions of humans building robots and then robots building robots. The story explained that humans were subjugated to their robot overlords who manufactured more and increasingly sophisticated robots. An unexpected consequence?
  3. “Nobody” and the “government” are convenient excuses.

Net net: Significant shift in the balance of technological power seems to be evident and industry spark plugs are not delivering the necessary oomph. Not a flattering look in what should be a public relations extravaganza, not evidence of systemic failure.

Stephen E Arnold, September 7, 2020

Interesting Insight Tucked in a Discussion of Corporate Labs

August 21, 2020

The Death Of Corporate Research Labs” is an interesting essay. I found the references to Bell Labs fascinating. My team and I performed some small work for Bell Labs which then morphed into Bell Communication Research. Earlier I had done small work for the old Ma Bell, and it was a person from that company who submitted my name for an ASIS Award.

The write up points out that corporate research and development laboratories became a thing as a result of anti-trust pressures decades ago. Today corporate R&D is mostly a memory. Shifty eyed bean counters and Teflon coated MBAs know when to dump a cost center which does not contribute to the bottom line every 12 weeks.

The essay contains a brilliant observation. I circled this in red:

A surprising implication of this analysis is that the mismanagement of leading firms and their labs can sometimes be a blessing in disguise. The comparison between Fairchild and Texas Instruments is instructive. Texas Instruments was much better managed than Fairchild but also spawned far fewer spin-offs. Silicon Valley prospered as a technology hub, while the cluster of Dallas-Fort Worth semiconductor companies near Texas Instruments, albeit important, is much less economically significant.

Innovation is a result of lousy management.

I have to think about that because many of the high tech companies are not in my opinion well managed. Profitable? Yes. Well managed. Nope.

That raises the question:

If we accept my hypothesis that Silicon Valley high tech anti trust targets are not well managed, why are many of these firms starved for innovation?

Perhaps there is minimal correlation between management (good or bad) and innovation. The status quo suggests that me too thinking is the surest path to “innovation.”

Stephen E Arnold, August 21, 2020

Apple: An Intellectual Property Misunderstanding Resolved

August 18, 2020

DarkCyber is aware of the legal dust up between an electronic game company and Apple computer. However, another facet of Apple’s corporate mindset surfaces in “Apple Ordered to Pay PanOptis $506.2 Million for Infringing LTE Patents.”

The write up reports:

In [the] decision, the jury decided that Apple failed to prove that any of PanOptis’ patent claims were invalid. According to Law360, it also said that Apple willfully infringed on the patents. Notably, the in-person patent jury trial was the country’s first since coronavirus lockdowns began. The $506 million is a royalty of past sales of infringing devices, with the jury finding five of the seven patents in suit were violated.

With interest in next generation wireless technology moving more quickly than the US legal system, will Apple obtain its technology via licenses, good old R&D, or some of the more interesting methods available to the company? There’s nothing like American know how, is there?

Stephen E Arnold, August 18, 2020

Is America Losing its Innovation Edge?

August 6, 2020

Google borrowing money, dwindling university funding, a trend toward working from home, and a less than welcoming immigration policy combine to spell trouble for the United States. The Atlantic tells us why in, “America’s Innovation Engine is Slowing.” Writer and R Street resident fellow Caleb Watney begins by describing a recent event that contributed to doubt in education: ICE’s announcement that, should universities switch to online-only classes this fall, their international students would be booted from the country. The agency has since backed down from that stance, but not before it unnerved many current and potential students that might have contributed much to our nation. Watney writes:

“The visa debacle was only the latest of many ominous signs for the United States, long the world’s primary incubator of new technologies, new drugs, new therapies, and new business models. The coronavirus pandemic and the administration’s botched response to it are damaging the engine of American innovation in three major ways: The flow of talented people from overseas is slowing; the university hubs that produce basic research and development are in financial turmoil; and the circulation of people and ideas in high-productivity industrial clusters, such as Silicon Valley, has been impeded.

We noted:

“All three trends started before the coronavirus arrived, but the pandemic has accelerated them in ways that, if left unaddressed, could cripple the U.S. economy for decades. During the difficult economic recovery from COVID-19, closed businesses will be able to reopen and rehire their furloughed workers, and delayed investments will resume. But if the nation’s capacity for economic and technological innovation is diminished, Americans will feel the loss for decades to come—not just in lower GDP but in slower progress toward a vaccine for COVID-19, solutions to climate change, a cure for cancer, and more.”

Bright students from other countries have sought education in the U.S. over the last century, and many have settled here. These folks have made considerable contributions to our country’s progress and economy. Universities, long the sources of academic research that has propelled us forward, will be forced to shutter their labs as funding continues to dwindle. Finally, the trend toward working from home is pulling people away from central meeting places where great ideas are shared and evolve, often during “off” hours. As we are finding out, virtual meetups just aren’t the same. The article covers each of these three factors in some depth, so navigate there for more details.

Watney paints a pretty bleak picture, but ends with a little hope—we have the power to invert these trends, if we choose. First, he advises, we should reverse the current administration’s immigration freeze to communicate to the rest of the world we welcome their inquiring minds. We should also inject a huge chunk of change into university research labs. Packed central meeting places cannot return until we’ve beaten the pandemic, of course. Once that is done, though, we could set the stage for collaboration by building affordable housing in dense cities, Watney suggests. Will we do what it takes to correct our course and avoid falling behind the rest of the world? We shall see.

Cynthia Murrell, August 6, 2020

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