Palantir Technologies: Maybe Stealth Is Better for Specialized Services Companies?
August 24, 2020
I, like many other Palantir watchers, read “Leaked S-1 Screenshots Show Palantir Losing $579M in 2019.” My hunch is that this going public thing is not going to be the cake walk some envision. Palantir Technologies is a specialized services company. In my lingo, that means the firm’s principal technology was developed for and influenced directly by the needs of intelligence, law enforcement, and similar enforcement agencies. I am not going to dwell on some facts which informed Palantir observers should know; for example:
- The company was founded in 2003. That is just about 17 years ago. In that time, the technology for intel and LE professionals has advanced. Anyone who has been in the “enterprise software game” knows one thing: Keeping the 2003 Buick running is not getting easier, nor is it getting cheaper to keep that four-door sedan humming. What’s this mean? First, the built in costs for a 17 year old engineering structure are not likely to decrease. Second, massive investment is needed to keep pace with upstarts like Datawalk. Third, some of the new specialized services solutions are quite easy to use and very, very slick.
- Palantir has ingested about $2.6 billion from about three dozen, Type A, usually impatient, and generally attitude choked, entitled people. That’s a big price tag on a company losing about $600 million per year. Real estate should be less expensive in Denver, but the traffic? Yeah, about the same as Sillycon Valley.
- The number of customers for high end specialized software is small compared to the number of people who happily consume TikTok videos. That’s a big, big problem. The number of vendors selling more modern systems outnumbers the number of intel and LE entities able to purchase, training professionals, babysit, and then — in a crisis situation — actually use the Fancy Dan software.
But these are facts which I have written and lectured about, and I have not done much with Palantir’s approach to sales, its exciting interactions related to the i2 Analyst’s Notebook AND file format, and the changing economics for LE and intel agencies. Let me just say that this “downsizing” movement is not new and it is not going to make selling big ticket software easier. One former Swedish intel professional asked me for a recommendation for investigative software or what I call intelware. I told him, but the fellow said, “Nope, we’re going with a low cost Israeli solution. It’s good enough.” That’s a potential problem for specialized services firm with gigantic cash burning systems. Better is not going to be “good enough” to make the sale.
Let me hit my main point: Stealth. I have long been an advocate that specialized software companies avoid the public spotlight. There are many reasons. Going public is a very public action, and it exposes the financial weaknesses in a way which is ultimately either a home run or a strike out.
Consider Voyager Labs. What is this company? What does it do? Getting info is difficult. The firm is a vendor of specialized software, but it keeps a low profile or distracts with some wacky marketing play for (heaven forbid!) advertising companies. What about Nice? What’s it do? Customer experience. Yeah, CX. And there are hundreds of other companies in the specialized services business. Only a few have gone public, and these outfits are very skilled at making sure their businesses are positioned in a way that seems logical to those unfamiliar with some of the more interesting facets of their business. One example is Verint. Another is BAE Systems. Will Palantir emerge as a BAE Systems-type outfit with shares chugging along in a range that does not excite Robinhood investors? With the losses reported from a somewhat mysterious source, it’s hard to say. But on the surface, assuming the “leaked” financial data are accurate, it seem like a long shot.
The IPO, the investors and stakeholders hope, will get them some cash. Will the payoff be one of those pre-Rona 17X jobs? You will have to noodle that question as you ponder 17 years and losing half a billion a year. Just getting one’s money back might be a realistic scenario to ponder. On the other hand, there is the possibility of losing money. Not a happy thought. Stealth may be a better option for some specialized services firms.
Stephen E Arnold, August 24, 2020
Google: A Money Diet Beats Keto
August 24, 2020
Google promised not to do any evil when it formed its company culture, but some consider a monopoly to be a capitalist evil because it limited the economy and hampers economic growth. Bloomberg explains that, “Google Search Upgrades Make It Harder for Websites Win Traffic.” Google’s search results have been plagued with ads since they added a fourth spot for ads at the top the results page. Employees opposed it, but Google had to please the investors.
Google has altered its search results page in efforts to organize the world’s information or so it claims, but the search giant’s monopoly is part of a bigger and growing gear of a complete monopoly:
“Debate over Google’s influence is gathering intensity as U.S. regulators prepare an antitrust case against the company in what will be one of the biggest legal clashes between the government and a corporation since the U.S. sued Microsoft Corp. in 1998. Google controls about 85% of the U.S. search market, and the changes it’s made have piled pressure on businesses to pay more to appear at the top of search results. That’s already a focus of regulators. Last year, David Cicilline, head of the House Subcommittee on Antitrust, asked Google if a 2004 statement from co-founder Larry Page that the company wants to get users “out of Google and to the right place as fast as possible,” still described its approach. In a written response, Google simply skipped the question.”
Google’s search results used to be unpolluted and it drove people to Web sites. These Web sites were and are owned by small businesses. Google, however, is trying to keep more people on its own Web site. Google is posting information gleaned and copied from the trillions of data sources its algorithms crawl in search results. Users read this information, then are exposed to ads. Google is becoming more like Facebook and Amazon; it does not want people to leave.
Most of this information comes from Wikipedia. Wikipedia spokespeople say they have worked with Google for years so that Wikipedia’s information is correctly cited. If Google copies information from sources without proper credit it devalues the information quality, not to mention false information could be taken as fact. Google does pay for some of the information it copies, but not the majority of it.
Google is into money. Facilitating research, helping small businesses harmed by Rona, organizing the world’s information, and offering accurate search results are not priorities.
Whitney Grace, August 24, 2020
What the Woz Wants He May Not Get
August 24, 2020
There is a popular argument that cars do not kill, rather it is the people driving the cars that kill. The car is only a tool, while people cause the actual harm. The same argument could be used for YouTube in regard to videos that spread conspiracy theories, hatred, and scams. The AP News reports that, “Apple Co-Founder Steve Wozniak Slams YouTube For Scam Videos.”
Steve Wozniak’s image and name were used in a bitcoin scam via YouTube and he is taking Google, YouTube’s parent company, to court. Wozniak claims that millions of dollars were stolen from around the globe. His suit is not only for himself, but also for seventeen other people, ten of which are located outside the US. The exact scam is described as:
“The 47-page complaint revolves around a ruse that has used images of Wozniak and high-tech celebrities such as Microsoft co-founder Bill Gates and Tesla CEO Elon Musk to trick people out of the digital currency Bitcoin. Videos spread on YouTube as part of the scheme entice viewers to send their bitcoins to an anonymous digital address, promising to return double that amount. The return payment never arrives.”
Wozniak has tried since May to get Google and YouTube to prevent the scam from using his picture and name. He compares trying to stop these scams to Whack-A-Mole: when one scam is taken down, another appears. Wozniak has been unable to receive human assistance from Google or YouTube and he does not want to pull strings to receive special treatment.
Lawyer Joseph Cotchett, along with his client Wozniak, want YouTube and parent company Google to do more to stop fraudulent activity. YouTube states it removed 2.2 million scam videos and deleted 1.7 million associated accounts in January-March 2020, but the platform has yet to comment about Wozniak’s charges.
Google earned $15 billion in scam related ad revenue last year, so there is motive for YouTube to turn a blind eye.
Google and its related companies might not do evil, but they do allow bad actors to use its tools and services for evil acts.
Whitney Grace, August 24, 2020
A Librarian Looks at Google Dorking
August 24, 2020
In order to find solutions for their jobs, many people simply conduct a Google search. Google searching for solutions is practiced by teachers to executives to even software developers. Software developers spend an inordinate amount of their time searching for code libraries and language tutorials. One developer named Alec had the brilliant idea to create “dorking.” What is dorking?
“Use advanced Google Search to find any webpage, emails, info, or secrets
cost: $0
time: 2 minutes
Software engineers have long joked about how much of their job is simply Googling things
Now you can do the same, but for free”
Dorking is free! That is great! How does it work? Dorking is a tip guide using Boolean operators and other Google advanced search options to locate information. Dorking, however, does need a bit of coding knowledge to understand how it works.
Most some of these tips can be plugged into a Google search box, such as finding similar sites and find specific pages that must include a phrase in the Title text. Others need that coding knowledge to make them work. For example finding every email on a Web page requires this:
Yep, dorking for everyone.
After a few practice trials, these dorking tips are sure to work for even the most novice of Googlers. It will also make anyone, not just software developers, appear like experts. As a librarian, why not assign field types and codes, return Boolean logic, and respect existing Google operators. Putting a word in quotes and then getting a result without the word is — how should I frame it. I know — dorky.
Whitney Grace, MLS, August 24, 2020
CB Insights Is Moving Fast with VentureSource Acquisition
August 23, 2020
CB Insights is a market intelligence and business analytics platform that provides insights for venture capitalists, startups, angel investing, and more. Companies use CB Insights’s data to make business decisions, develop products, and project long term goals.
CB Insights wants to remain one of the top market intelligence and business analytics platforms. The firm has upped its game by investing in machine learning and AI algorithms to its platforms. CB Insights’s biggest selling points are the quality/quantity of data.
CB Insights recently acquired the Dow Jones VentureSource dataset, announced in the blog post: “Our First Acquisition: CB Insights Acquires VentureSource Data From Dow Jones.” The VentureSource acquisition adds more information to CB Insights’s platform:
“The VentureSource data assets will significantly expand our private markets coverage and strengthen our position as a leader in emerging technology information and private market data.”
It means instead of searching through various market intelligence platforms, the Dow Jones data sets are now available through CB Insights. CB Insights promotes itself as moving fast so its clients can too. They are quickly integrating the VentureSource data set into the CB Insights.
CB Insights is probably using its own data and AI to power their own business decisions. At least they get it for free.
Whitney Grace, August 23, 2020
Microsoft Wants More Humans to Build Bots
August 22, 2020
Journalists have feared for their jobs since digital media consumed the field in the late 1990s. While this is not the robot apocalypse, Microsoft decided to downsize its human news staff in favor of AI bots says ABC News in: “Microsoft Cuts MSN News Staffers In Move Towards AI Editors.”
In July, Microsoft laid off an undisclosed amount of MSN news editors. This layoff comes during the COVID-19, when unemployment is at an all time high, Microsoft’s layoffs are not surprising. The company has shrunk its news editors since 2014. To flesh out its news, MSN has partnered with other news sites to redistribute content. These other news sites are, of course, paid.
There are multiple problems with AI software, the biggest being its racial and gender biases. There are many documented cases of dark skinned people being misidentified, such as the most recent case:
“The Guardian reported that the company’s AI software in early June confused two mixed-race singers from the British band Little Mix. MSN mistakenly used a photograph of Leigh-Anne Pinnock for a story about fellow band-member Jade Thirlwall and her personal reflections on racism.
Thirlwall quickly voiced her displeasure on Instagram. ‘@MSN If you’re going to copy and paste articles from other accurate media outlets, you might want to make sure you’re using an image of the correct mixed race member of the group,’ she wrote, adding: “It offends me that you couldn’t differentiate the two women of color out of four members of a group … DO BETTER!’”
It is a really embarrassing mistake for a company like Microsoft to make. How hard is it to collect diverse data sets, not to mention keep some editors on staff to fact check the AI bots? Humans are not perfect and so are their AI bots!
Whitney Grace, August 22, 2020
Apple Learns: There Can Be Knock Ons from Zoomified Congressional Hearings
August 21, 2020
What happens when high school science club “on the fly”, “we can do what we want” decision making is revealed in Zoomified Congressional hearings? “News Publishers Join Epic Games in Asking Apple for Lower App Store Fees” is an example of the strong reaction to special deals. Now Apple’s partners want the same “deal” extended to the Bezos bulldozer. Here’s the key statement from an online news service:
publishers including the New York Times, the Washington Post and CNET parent company ViacomCBS, want that 30% fee dropped to 15%.
Thus, it seems Apple and Amazon worked out a deal different from the one imposed on lesser Apple partners.
Digital Content Next offers this observation in a letter to Apple’s management:
Sometime in 2017, Apple and Amazon, two giant platform companies, struck a deal where Amazon Prime Video would be available on Apple TV and Apple products would be available on Amazon. As part of the terms of that deal, Apple would reduce its fee for consumers who subscribed to Prime Video from 30% to 15%. For existing Prime Video subscribers, Apple agreed to completely waive its normal 15% fee. The cherry on top for Amazon was that they could use other payment systems outside of Apple.
Apple now has to fancy dance its way around what looks like a problem.
Apple wants to do what it wants. Don’t like the changes in our operating systems? Well, that’s Apple doing its thing. Don’t like the fees? Well, that’s the way we operate. Take it or leave it. Don’t like the deal we worked out with Amazon? Well, too bad.
Despite the love many have for the Apple ecosystem, the time has arrived for those with different views to grouse out loud.
So what? This looks like another example of situational decision making. A deal with the Bezos bulldozer may grind slowly around and start rolling back to the digital orchard.
To sum up: High school science club are now playing Fortnite in real life or IRL. Battle royale? Yep. Those Zoomified hearings make it clear that the democratic processes generate useful information and cause an action-reaction demonstration. The game, however, is not a digital fantasy.
Stephen E Arnold, August 21, 2020
The Flywheel Thing
August 21, 2020
About a year ago, a marketing person asked me, “Why don’t you talk about the Amazon flywheel?” I replied, “Flywheel. What flywheel?” Sure, I knew about the Bezos buzzword, but that does not mean I have to use it when I write about the world’s largest online bookstore. I prefer jazzier words and phrases; for example, cat’s pajamas, wizards, and high school science club manager, etc.
“Question Everything or the Strange Loop Principle” seems to come down on my side of word choice. The essay asserts:
First, let’s see how Collins himself describes what he calls the Flywheel Concept. For that, I’m going to borrow from Collins’ own Turning the Flywheel: a Monograph to Accompany Good to Great. But first, we have to discuss Collins’ word choice and the mechanics of an actual flywheel. He picks “Flywheel” for a reason: he believes flywheels accurately describe the sort of dynamics he identifies in some very successful companies that go from being average – “good” – to being leaders – “great” –.
Now the flywheel in business:
So whatever Collins wants us to understand about great businesses, he thinks a flywheel is a good shortcut to get there.
The there is growth, maybe exponential growth. One problem:
Therefore, flywheels are great at describing something that holds a lot of momentum, but not something that behaves exponentially, or that self-reinforces itself.
Now Amazon:
I think Amazon is a great example of something I can’t quite point at but that seems to reinforce itself (I have no evidence that it’s exponential in any way. Just that it seems to go on and on forever without the need for more energy). As it sells more, it’s able to sell cheaper, which leads it to sell more, which leads it to be able to sell cheaper, and on and on. Businesses that find such self-reinforcing “mechanics” have something strong going for them.
The bottom line:
Here’s this guy who’s arguably the new Peter Drucker, revered by entrepreneurs, world leaders and executives alike, not only basing a huge part of his knowledge production on a shaky concept that’s named and explained with a shaky mix of words and examples applying it all in a very shaky way to his own life.
Yep, imagine that. Management thinking which is shaky. Nope, no flywheels for me.
Stephen E Arnold, August 20, 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
Cloud Data: Clear with Rain Predicted for On Premises Hardware
August 21, 2020
I like surveys which provides some information about sample size. “Survey: How the Pandemic Is Shaking Up the Network Market” says that 2,400 information technology decision makers participated. How were these individuals selected? How was the survey conducted? When was the survey conducted? are questions not answered. Nevertheless, some of the findings seemed interesting.
One of the surprising factoids was the shift from a license for a period of time to a “subscription.” How many outfits are subscribing to cloud services? The write up reports:
The average proportion of IT services consumed via subscription will accelerate by 38% in the next two years, from 34% of the total today to 46% in 2022, and the share of organizations that consume a majority (over 50%) of their IT solutions ‘as a service’ will increase by approximately 72% in that time.
Automatic monthly payments and probably tricky cancellation policies will be part of the subscription business, but that’s just a hunch, not a survey finding.
Other items of interest included these factoids:
77% [of those responding to the survey] said that investments in networking projects had been postponed or delayed since the onset of COVID-19, and 28% indicated that projects had been cancelled altogether.
35% of ITDMs globally are planning to increase their investment in AI-based networking technologies, with the APAC region leading the charge at 44% (including 60% of ITDMs [the acronym which few probably know means “IT decision-makers”] in India and 54% in Hong Kong).
just 8% [of the sample] globally plan to continue with only CapEx investments.
Net net: Pricing and curtailing capital expenditures may be trends. If these data are accurate, the data suggest that companies targeting on premises sales of hardware may face some headwinds. Of course, I believe everything I read on the Internet, particularly objective surveys.
Stephen E Arnold, August 21, 2020
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