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Startups and Libertarian Populism

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As more and more people look to the startup community to save our nation and our economy, it is only reasonable for things to get way more political. As more former bankers and teachers and rodeo clowns start companies, we’re witnessing the emergence of entrepreneurs as a political bloc.

But we are influenced by a different set of issues than the average partisan — H1B visa reform, patent reform, regulatory streamlining, et cetera — some of which haven’t yet been divided along partisan lines. In fact, it’s extremely difficult to assign the “entrepreneur’s agenda” to a traditional right-left spectrum. But this makes it even more interesting to attempt to arrive at some conclusions about the unique political beliefs of entrepreneurs.

However, some challenges. First, it’s notoriously hard to generalize anything about an entire industry. You can say that auto dealers and doctors tend to be conservative while teachers and scientists tend to be liberal, but technology-focused entrepreneurs are an even more diverse bunch. I’ve met founders who are die-hard socialists and others whose neo-conservative beliefs would make Glenn Beck blush. Second, politics is something that many founders simply don’t discuss in public. It’s tends to have a pretty poor risk-reward ratio.

However, I’ve seen a couple broad, fairly common threads among the political beliefs of startup founders, investors and early employees. I summarize them as “Libertarian Populism”, combining two political philosophies rarely seen together in the wild:

Libertarianism: A strong belief in individual freedom of thought and action. See the broad-based support for patent reform, creative commons licenses, regulatory reform (often de-regulation) and immigration reform.

Populism: The belief in the struggle of the people versus the “elites”, commonly represented by large corporations, specifically Wall Street. This tends to be particularly strong in developer-centric communities like Hacker News — most of the articles I’ve written that have hung on the front page for a while have had a strong populist streak.

But it’s more than just the independent adoption of these beliefs. Rather, libertarianism and populism are combined into a desire for freedom from all institutions, with little distinction between government and large corporations. After all, government and larger companies are both things that can (and do) harm small businesses. In many cases, government and big companies seemingly collaborate to attack startups: modern US patent policy, for instance, gives a massive advantage to enterprises with hoards of cash and lawyers.

Many entrepreneurs — especially the more common, cash-flow-focused entrepreneurs creating lifestyle businesses — consider their actions to be a declaration of independence of sorts from institutionalized corporate America and 9 to 5 drudgery. Yet the government’s rules tend to be written with the assumption that all companies are big companies, and the resulting administrative headache creates an antagonistic relationship between entrepreneurs and governments. Add to that the fact that big corporations — say, a health care provider — have similarly unfriendly rules, and the entirety of mainstream American institutions are thrown into the same bucket. Thus, libertarian populism.

This all has interesting implications. For instance, I’ve lately seen entrepreneurial populism leveraged to attack VCs. Take Chris Dixon, for instance, who has done a remarkable job leveraging his audience’s populist streak to paint VCs as the “other”. In reality, Chris is probably wealthier than most VCs — but he doesn’t have to answer to LPs, who are easy to lump into the government/corporate mob (and often justifiably so).

As our nation’s expectations of the startup community grows, expect the politicization of entrepreneurs to only deepen.

Like this? Vote for it on my favorite news site, Hacker News.

Written by Brad Hargreaves

September 3rd, 2010 at 7:44 am

Sex, Smartphones and Statistics

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Haven’t gotten your pop psychology fix today? Well, OkCupid is pleased to let you know that iPhone users have more sex than users of other smartphones. Their evidence — a handy chart — is below:

iPhone users have more sexual partners than users of other phones

OkCupid didn’t provide sample sizes, but let’s assume we’re dealing with their entire userbase — a statistically significant sample.

This is a pretty shocking graph. At age 27, iPhone users report having more than twice as many sexual partners as Android users. Quite an impact for a mobile operating system. So let’s look a bit deeper.

First, the heading — “iPhone users have more sex”. There’s nothing in that chart about the amount of sex people have. It’s a chart of the number of sexual partners. Anecdotally, if one removes the celibate — that is, people who have had zero sex and zero sexual partners — I haven’t seen a strong correlation between having a lot of sex and having a lot of sexual partners. In fact, there may be a negative correlation given the likelihood for people who don’t have long-term relationships to go through significant dry spells. That said, I haven’t seen any scientific data on this.

Second, it is important to realize that this is self-reported data on an online dating site. Data on sexual experience is notoriously bad even when subjects don’t clearly stand to gain by inflating the numbers, as they would on OkCupid. But that doesn’t explain why iPhone users claim more sexual partners than Android or Blackberry users, right?

Let’s take a step back. There are some oddities in this data. While I’m aware that the graph doesn’t provide a longitudinal sample, let’s consider it as such for the moment. The average iPhone user:

1) Has had four sexual partners by the time they graduate from high school.

2) Has less than one sexual partner during college

3) Has 2 sexual partners per year from 24 to 27

Those numbers are…odd. Especially given that the Kinsey Institute finds that about 35% of people haven’t had sex at all by age 18. I’m sure there is a long tail of kids who are having a *lot* of partners, but many of those teens would come from poorer and more urban families, not exactly a hot demographic for iPhones. And less than one (new) sexual partner during college? Who are these people?

So they’re probably lying, at least to some extent. But that still doesn’t explain the delta between iPhone users and Android or Blackberry users, which could be attributed to either or a combination of (a) an actual difference in sexual partners or (b) a difference in exaggeration.

OkCupid is particularly popular in San Francisco and New York — markets where the iPhone is more or less useless as a phone. It takes a certain type of person to own a really expensive, well-designed smartphone that doesn’t really work as a phone. Specifically, a person who perhaps:

1) Is wealthy enough that money is no (or very little) object.

2) Is extremely concerned about appearances and social status.

3) Is in the technology industry and needs it to keep up with innovation.

Let’s put (3) aside for a moment — while tech innovators are a big chunk of my own community, it’s probably a small percentage of the sample here.

(1) is probably correlated with having more sexual partners, although I can’t find any data on this. Once again, however, it is probably a small percentage of OkCupid’s users and could hardly explain a >2x difference in reported sexual partners by age 27.

(2) is more interesting. While someone who is more fashionable probably has more sexual partners than someone who isn’t, I’m more interested in the meta level — the need to appear fashionable and trendy. Awareness and desire to maintain appearances should be strongly correlated with inflating hard-to-verify information on an online dating profile. Like number of sexual partners, for instance.

In reality, the delta is probably driven by a number of factors. But a big piece of it is just about keeping up appearances — in profiles and phones.

Written by Brad Hargreaves

August 14th, 2010 at 9:12 am

Your Decisions are Wrong. Is Your Methodology?

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I made a lot of mistakes while running GoCrossCampus. Lots of people ask me questions that more or less amount to “If you could have done X differently, what would you have done?”

I always answer these questions sincerely. “Oh, I would’ve done A rather than B and C rather than D” or something like that. But in the back of my mind I know that counterfactuals make for odd teachers. That is, the information I have about the specific problem has obviously changed — and the more interesting lessons come from shifts in my decision-making methodology.

These “If you could have done X differently” questions are essentially asking “If you knew back then what you know now, how would the decision you made have changed?” Interesting, yes. But the information that led to the decision — for instance, my beliefs on the marketability of a product or the right way to scale an app — isn’t that useful. Rather, the juicy bits are the framework through which I took the information and produced an actionable plan. Consider the following question:

If you could do it again, how would you structure your financing round?

And answers:

I would’ve clearly taken a priced round rather than a convertible note given the difficulty we had in closing the round.


Given the information I had at the time, I would not have done anything differently. That is, even though my information was wrong, my decision-making methodology was sound.

In other cases, my methodology may have been wrong yet my decisions right — something we in the business call “getting lucky”. But those two replies are answering the question on different levels. One is concerning facts — the who, what, when, where and how of the situation at hand. The other is concerning methodology — given the facts at hand, how did I come to a decision?

When evaluating past decisions, too many entrepreneurs focus on the facts rather than the methodology. Methodology is replicable. The mental algorithms I use to convert data into a decision are used over and over again. Data is all too often ephemeral and unrepeatable, and condemning a decision-making methodology that was plagued by bad data is often a quick way to take a step backward (or vice versa, endorsing a poor system that got lucky due to circumstance or poor data.)

Focusing on the methodologies rather than the facts will allow you to see patterns and make better decisions in related but non-identical situations. If I get hit by a car, it would be odd to simply say “Wow, next time I’ll see the car.” Rather, I’m going to make fundamental changes to the way I think about crossing the street — specifically, how I gather information and translate that information into actions. Why should a startup be any different?

Written by Brad Hargreaves

August 1st, 2010 at 1:32 pm

The Next Generation of Game Mechanics

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I’ve already had a few things to say on the coming explosion of game mechanisms in non-game apps, but listening to Gabe Zichermann talk at last week’s New York Gaming Meetup raised some new questions.

I agree with Gabe on a lot of things. We’re absolutely seeing a proliferation of game mechanics throughout the internet, and the resulting points or badges are totally divorced from real-world value. But everything I’ve heard on this topic has presumed that most of the innovation in game mechanics has already happened; that the real advances will be in applying points, leaderboards and badges to anything and everything on the internet. In other words, we’ll see a world of thousands of companies replicating a limited pool of “proven” game mechanics to guide user behavior. There have even been entire companies formed to help companies stick points and leaderboards on their apps.

It’s a crock of shit, really. There is a whole world of compelling game mechanics out there, only a small part of which is the Activity > Points > Badges flow that Foursquare nailed. Game mechanics are going to expand throughout the web, but they’re going to diversify and incorporate a wealth of varied engagement strategies as they do. Different tactics work for different people and different sites, and consumers will demand diversity and deeper engagement as they become more hardened to “vanilla” game mechanics.

So what are these next-gen game mechanics, you ask? Here are a few I think we’ll see much more often:

Building and Growing: Most people like to build and grow things. You can chalk the psychology up to our agrarian past, but Ford knew this when they put a virtual tree into the Fusion. Leaderboards feel like a zero-sum game, and many people will respond better to a mechanism that feels more collaborative. Like growing a tree, for instance.

There’s a corollary mechanism to this — building or growing something that can help you play the game better in the future — that could be particularly powerful. This mechanism is analogous to building a strong base in a RTS game. People are doubly motivated to do it since it puts their involvement in the game on an exponential growth trajectory.

PvP Competition: This is a no-brainer. People can be motivated by leaderboards and badges, but it’s nothing compared to the passion you see in player versus player competition. That said, this is somewhat psychographically specific — lots of people have no interest in direct competition with other players, and I imagine that designers will initially approach PvP competition in non-game apps with a lot of caution. But I can’t see it staying on the sidelines forever given its power.

Real World Rivalries: I experimented with this in GoCrossCampus a few years back, and I still think there’s really something here. As I mentioned above, many people love to play games against other live players (whether asynchronously or in real-time), and real-world rivalries only accentuate the power of this mechanic. Your leaderboard isn’t doing enough to engage users? Let players represent major sports teams or their colleges and see which team/college is the best! Use real-world rivalries and your app can piggyback off your users’ natural loyalties and affinities.

Leveling: I’ve seen some non-game apps using this already — such as online forums that reward activity by “leveling up” members based on post count — but it’s still woefully underused. Levels give people goals, the lack of which can be the death of a traditional points-based reward system. If members don’t think they’re working towards anything other than more points or a slightly better place on the leaderboard, they probably won’t hang around too long. Social game developers know this well; it’s worthwhile to study the leveling system that Farmville uses to keep players from leaving in the early stages of gameplay.

Chance: When “gameifying” apps hits the mainstream, incorporating elements of chance into these game structures will be a big deal. People in the tech and media world like the meritocratic, deterministic nature of Foursquare, where points can only be earned, not “won”. But normal folks like to win and will often value a chance to win something valuable over something small and guaranteed. Game designers aren’t blind to this, and the game-based apps of the future will absolutely allow users to wager their virtual currency and tokens.

There are more, but this is enough to argue my point. It’s hard to imagine any of these tools not being used on a large scale over the next five years. Marketers and developers must stop mimicking points and badges and start thinking about how game mechanics integrate with their apps on a fundamental level.

Written by Brad Hargreaves

July 6th, 2010 at 6:52 am

Welcome to New York, Paul Carr

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If you haven’t read Paul Carr’s piece on his experience at New York Internet Week, go read it now. If don’t have time, I’ll summarize. Paul’s interaction with New York went something like this:

1. Media tool gets invited to New York by other media tools
2. Media tool goes to an internet week party populated by “identically unique hipsters”
3. Media tool only sees other media tools
4. Media tool goes back to the ‘burbs and writes shit about New York

Well. He argues that good content is dead, so at least he’s eating his own dog food. But he does get some things right. Old media is dying, and lots of people don’t understand how it’s dying. Many of those people hold on to false hopes that the bright shiny piece of technology of the day (social media, the iPad, Web 3.0) will save their shitty business models. Many of those people are in New York. He’s totally right on there.

But he’s the equivalent of a European tourist who visits Disneyland and thinks it is an accurate representation of America. He goes to an Internet Week party and thinks he gets it. Well, people who are actually creating interesting tech companies in New York don’t go to those hipster-filled digital / new media parties because they are clogged with PR reps, “content creators”, glassy-eyed social media strategists and starfuckers. Or they aren’t even aware of these panels and parties — as I’ve written before, the New York tech scene is huge yet strangely siloed, with founders aligning with particular industries rather than the broader “tech community”.

But — in Paul’s defense — the media world has used its superior resources to more or less occupy “high profile” NYC tech. If you go to a “tech” or “internet” event in the Valley, you’ll meet tech people. If you go to a similarly branded event in NYC, you’ll meet media people. And you’ll think there’s nothing to New York tech beyond hipsters and old media dreamers*.

Want to meet New York tech? Head over to Hackers and Founders or the Y+30 or NextNY. You’ll meet awesome people there, but they won’t fly you out. If you insist on having your ticket paid for, you’ll end up in the same media bubble-world you unfortunately fell into this time around.

* Many in nyc new media are great people, and quite a few are my good friends. But they aren’t what Paul Carr is looking for at a tech event, and those are the buckets he’ll throw them in.

Written by Brad Hargreaves

June 14th, 2010 at 9:49 am

Analog’s Last Bastion

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Almost everything is digital. It started with simple stuff, like calculators, watches and measurements, and now the digital revolution totally owns cable television, video, music and photography. But there’s still one huge pile of valuable information that has yet to be captured and digitized: our conversations.

The conversations we have with other humans are one of — if not the — most valuable piles of information in the world. Far more valuable than video content (how much is taped versus just spoken?) or written content (how much information is actually written down versus simply spoken?) This information is not just valuable in the aggregate, but it is specifically valuable to the individual. If I were to have an easily searchable log of all my conversations, my productivity would increase by at least a third. Followups would be easier. Business opportunities wouldn’t drop by the wayside. I would pay good money for this.

The technology (lapel microphone, a mechanism to transmit streaming audio to a hard drive or the web, speech-to-text, search) is all out there in some form. Sure, some conversations — such as those in bars or on airplanes — would be lost. And I’d have to spend 5 to 10 minutes every evening tagging specific conversations with my contacts so I know who said what. (And perhaps with an evolution of technology, the app would learn to associate certain voices with certain contacts.) But the value proposition to the end user is huge. This is going to happen; it’s simply a matter of when and who does it.

There are a laundry list of potential uses. Some of them, privacy concerns notwithstanding:

– Early identification of “trending topics”, with particular relevance in finance
– Vastly improved real-time ad targeting. Possibly bigger than web search.
– A real-time gauge of public opinion and beliefs, with particular relevance to politics and brands
– A great data set to test theories of human interaction and sociology “in the wild”

That said, I’m not totally sure how this should be priced. On one hand, I am willing to pay upwards of $50 a month for a service like this — assuming I own the conversations and they won’t be used to serve me ads or packaged and re-sold to hedge funds. But I’m not sure this is the best revenue model; the business may be much more profitable by giving the voice-capturing service away for free and leveraging the aggregate data. What if Google had charged users a monthly fee in 1999?

Regardless of how it’s done, this is going to happen. It simply isn’t sustainable that the largest and most valuable medium of information in the world isn’t being captured.

Written by Brad Hargreaves

June 6th, 2010 at 11:43 am

Sources of Capital, by Google Hits

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Search: “Funded by {x}”

{x} = Venture Capital
45,600 hits

{x} = Private Equity
34,500 hits

{x} = Friends
24,400 hits

{x} = Family
19,900 hits

{x} = Angels OR Angel Investors
13,900 hits

{x} = the Devil
4,020,000 hits

Protip: Startup capital can be hard to come by. VCs, angels, friends and family and Lucifer the Archangel are all sources worth exploring.

Written by Brad Hargreaves

June 4th, 2010 at 11:19 am

Facebook and the Extra-National Currency

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The creation of an extra-national currency has long been a libertarian dream. Fiat currency, after all, ties our assets to the wills and whims of a central government. At times — and many people argue that now is such a time — poor government decisions can dramatically debase the value of our income and savings. Thus, the need for a widely-accepted currency uncoupled from the politicized decisions of a national government.Facebook Coin logo filed with the trademark office

While we haven’t lacked for attempts to create a new currency, pretty much all have fallen by the wayside. The biggest selling proposition of these currencies — freedom from backing by government fiat — is way too obscure for most people, and the logistics of backing issued currency with precious metals is daunting and expensive.

Could Facebook coins be the first successful extra-national currency? There are several factors going for it:

– Facebook’s huge audience and deep presence across the web
– The audience’s clear need for a standardized and trusted currency
– The ability for people to (often inadvertently) “socially endorse” the new currency to their friends
– A pool of merchants — e.g., Zynga — poised to accept Facebook currency
– Simple and seamless integration and exchange with mainstream currencies via the web and mobile makes switching between currencies less of a hassle

To be clear, there have been other virtual extra-national currencies. WoW gold and Linden Dollars are two examples. But these haven’t even touched the mainstream, even in online purchases — try paying for a book on Amazon in WoW gold. These currencies’ value is dependent on an ability to exchange them for dollars — not terribly different from the “regional currencies” that pervaded America in the early 19th century. If you were traveling in South Carolina with paper dollars backed by a bank in Massachusetts, you had to find someone who would exchange them (likely at a steep discount) for a local currency.

But Facebook coins seem fundamentally different. The audience is huge and hundreds of millions of Americans have experience using virtual currencies on Facebook. Right now we’re buying virtual cows and guns, but is it much of a leap to use virtual currency to buy online goods with real-world impact, such as subscriptions to digital content? And once we’re there, it’s a natural step to move that digital subscription into the real world — and even expand into necessities like gas and groceries. They already sell virtual currency cards in grocery stores. The relationships are there. Soon we’ll be using those cards to buy groceries.

So what could this all mean? First, it’s important to draw a distinction between the libertarian fantasy and the reality of Facebook’s extra-national currency. Most libertarians desire a value-backed currency — as in, gold- or silver-denominated – rather than fiat currency. Facebook coins are still a fiat currency. It’s just a corporate fiat rather than a federal one. Facebook coins are only valuable if it can convince buyers of the coins’ utility as a medium of exchange and (possibly) a store of value. But I don’t see any issues with Facebook making this happen: at least initially, there will be a large and defined pool of merchants ready to accept coins via Facebook apps, and exchange with mainstream currencies will be simple.

Of course, this is assuming that Facebook doesn’t throw up barriers to prevent this from happening — namely, if they forbid any part of the buying, selling and transferring ecosystem that makes a currency market successful. The market won’t work if they (for instance) prevent an app developer from exchanging Facebook coins directly with the user or p2p transactions using coins. This doesn’t mean that they have to float the Facebook coin against the dollar — although that would certainly be a fascinating turn of events for economists and currency traders alike.

If Facebook can create a true extra-national currency, it will make more money than any other company in modern American history. Entrepreneurs and VCs often talk about successful companies “printing money”. But Facebook has the opportunity to literally print money within the next five years.

Written by Brad Hargreaves

May 23rd, 2010 at 2:21 pm

How to Fail at Presenting to Hackers

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I don’t usually like pointing out others’ failures (I prefer to focus on my own), but one particular demo by a startup at this past Tuesday’s New York Tech Meetup is particularly instructive in How to Fail at Presenting to Hackers.

A brief guide to failure, courtesy this demo:

Expect your connections to high profile individuals will build credibility: Exceptions include Richard Stallman, Cory Doctorow and probably Steve Jobs. Don’t rattle off a list of Silicon Valley investors and expect us to be impressed. We’ll just wonder why you’re not showing us a product.

Put the conclusion before the story: It’s fine to say that you’re raking in cash or you have amazing clients, but do it after you show us the product you used to get there. Otherwise the story seems backwards and you seem full of yourself. Explain how something was built from the ground up, gained traction and eventually convinced people with money to buy your product and support you. That’s a story that resonates with hackers.

Ignore the allegiances and perspectives of the audience: This is more of a general presentation rule, but this company couldn’t have blown it worse with a hacker crowd. For instance: if your product has applicability to hiring for both Fortune 500 companies and early-stage startups, don’t show examples of how Fortune 500 companies can use it to gain leverage over potential employees. You seem to be enabling a corporate culture that your audience is rebelling against.

Send someone who isn’t a cultural fit with the audience: I’m sure your company has hackers. Even an executive CTO or VP of Engineering. Send them, not the business development executive you just recruited out of an investment bank.

Like any audience, presenting to hackers isn’t hard. But just as it wouldn’t be a good idea to wear jeans and Birkenstocks when making a presentation to the board of a Fortune 500 company, pitching a crowd of hackers requires a level of understanding and respect of the group’s culture. Anything less is simply going to waste everyone’s time.

Written by Brad Hargreaves

May 5th, 2010 at 6:59 pm

An Agile Approach to Science Education

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As an entrepreneur, a big part of my job is figuring out what people want and building products that meet those needs. Even if I think a product is really cool, I’m not going to invest time and money making it better if the market doesn’t seem to care. There’s a slim chance that I’ll fiddle around with the product long enough that I can get people to understand what they didn’t know they needed, but such is a fool’s errand unless there’s a clear path to success.

Unsurprisingly, people with backgrounds in iterative software development aren’t running education in America. It’s a shame, really, because I think consumer web startups could provide some good lessons to improving K-12 science education. Let me start with one premise: Our nation’s cultural values, especially in middle and high school environments, are strongly aligned against science and technology. And most distressingly — and has Dean Kamen has recognized — this is contagious. When a student’s most respected peer is the football captain, they are likely to realign their interests away from science and education and towards things that are less productive to society.

Yet like an entrepreneur without a good grasp of the audience, we continue to focus on shifting the product — fiddling around with different ways to present information — rather than the market. While there’s certainly value in iteration and superior presentation, I can’t really envision a secular change in performance and output taking place without a fundamental change in the market’s attitude toward science. We have to make science sexy to high-potential K-12 kids. All the product iteration in the world is for moot unless we can figure out a way to make smart students actually care about science, math and engineering.

Logically, there are two ways to make this happen:

Change the attitudes of society as a whole. This is Dean Kamen’s strategy with FIRST — turn science into a sport, engaging larger segments of the populace by framing science students in the same verbiage as football players.

Change the attitude of a subset of society, and immerse qualified science students in that subset. This is a controversial one, and — other than a few specialty schools such as TJHSST — isn’t commonly employed in a meaningful way.

While I love what FIRST is doing, I’m not convinced that the former is feasible. Getting hundreds of thousands of high school students engaged in competitive science — as FIRST has done — is awesome. But it’s not changing our culture’s attitude toward science as an unpopular, unsexy, geeky, male-dominated field. And there’s a decent argument to be made that such stereotypes are hard to dispel because they’re true. Fixing that problem — well, that’s another debate. Regardless, I don’t see brilliant science students gaining the fame, notoriety and sexiness of their peer athletes in my lifetime. And if you rely on the societal change model, this is a massive problem: science and engineering students have been promised a reward in exchange for their work that they’re not going to get. In other words, FIRST could be selling a lie.

Disturbingly, our best bet to stay competitive as a nation may be to ghettoize high-performing students, placing those with real potential to be our nation’s next generation of scientists and engineers in environments where their interests won’t be misaligned by the skewed perspectives of a nation fascinated by D1 college football and Justin Bieber. There are a lot of downsides to this proposition — namely, the fact that a majority of students are stuck in downward-spiraling groups of non-qualifying kids. But is this significantly different than our nation’s current private school structure, except with academic performance as opposed to financial means as the selector?

Regardless of the method used, I’d love to see our nation’s policymakers and educators focus a bit more on the market they’re trying to reach.

Written by Brad Hargreaves

April 25th, 2010 at 7:35 am

Silicon Valley Moves to New York

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If you’re living in San Francisco and working in a hot Valley startup or tech company, you probably have a bit of a commute. If you’re living in NYC and working in a hot startup in the area, not so much. Unlike those in the Valley, most tech companies in New York are in the city itself.

For the entertainment and edification of my northeastern readers, I’ve created a map that superimposes Valley companies on New York and Connecticut, assuming identical driving times (from midtown Manhattan and downtown San Francisco, respectively) and distance from commuter rail (Caltrain and Metro North’s New Haven line, respectively).

To make this more explicit, here are exactly where our Silicon Valley darlings would find themselves:

Adobe: Noroton Heights, Connecticut

Sun Microsystems: north side of Stamford, Connecticut

Apple: North Mianus, Connecticut

Google: North Greenwich, Connecticut

YCombinator: Greenwich, Connecticut

Facebook: Greenwich, Connecticut

Electronic Arts: between Mamaroneck and Eastchester, New York

Oracle: between Mamaroneck and Eastchester, New York

Wikia: Pelham Manor, New York

YouTube: Soundview, Bronx, New York

Zynga: Harlem, Manhattan, New York

Written by Brad Hargreaves

April 10th, 2010 at 1:22 pm

The Government Technology Gap

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My girlfriend had the unenviable task of going to the DMV this morning. I’ll spare the gory details, but I think we can all get behind the premise that the level of technology adoption (user-facing as well as internal) within governments lags well behind the level of adoption in the private sector. You see it everywhere, with a recent hot article about NYC spending $722 MM on a doomed payroll system making the rounds. But I would argue that not only is the gap bad, but it is getting worse and it threatens the very nature of our relationship with government.

It’s Getting Worse

An interesting case study is child welfare IT services, as (a) it is typically run at a state or local level, not federal and (b) its failure directly impacts the most vulnerable members of our society. In brief, child welfare caseworkers need to record what they are observing in the field — where are at-risk children, who is threatening them, and who is taking care of them. At a purely logical level, this requires a complex — but not overwhelmingly so — software application.

Before computers, all this information was recorded on paper. But in 1993, the Feds passed laws providing (monetary) incentives for states to adopt software for recording child welfare information. The software had to meet fairly specific specs in order for states to be eligible for the incentives, and states were forced to repay their incentives if they later abandoned those systems. It all seemed pretty logical to everyone at the time.

Fast forward seventeen years, and states are now running the entire child welfare systems on software that was built in the early ’90s. While rebuilding the system to reflect modern standards would in itself be a major cost, that cost is increased by orders of magnitude by the fact that the states would also have to repay the incentives they received in the early ’90s to re-architect these systems. Meanwhile, systems integrators (Accenture, Unisys and IBM, to name a few) continue to suckle from the teat of the taxpayer, knowing that a multimillion-dollar contract is to be had every time any modification needs to be made.

Meanwhile, technology in private hands is not only moving forward, but it’s moving forward at an ever increasing pace. Not only is the first derivative positive, but so is the second derivative — and likely the third as well (e.g., it is accelerating at an ever-increasing pace). Yet government seems to adopt technology as a step function, with steps significantly separated in time and limited in scope. Thus, the separation between public and private technology is quickly becoming a gulf. And the further government IT gets behind, the harder it will be to catch up, as adopting dramatically different modern technologies can require significant shifts in procedure, policy and overall thought. Five years ago, governments were operating native software and mainframes, while private entities were using SaaS platforms. Today, governments are still operating native software and mainframes while everything goes social and collaborative. How big of a leap can governments make in order to catch up, or are we now stuck?

It Threatens Our Relationship With Government

As more of our lives are dependent on interactions mediated by computers, citizens are becoming more alienated with a government that can’t adapt to our preferred media. I dread picking up my snail mail, as I know it is nothing but (a) spam and (b) stuff from financial institutions and governments. In other words, communications from people who either don’t care about how I prefer to be reached (email) or are too slow or bureaucratic to use that media. And if you fit into either of those categories, I probably don’t want to hear from you.

And as web technologies become more accessible to the masses and an entire generation of tech- and new media-savvy people enter the “real” world, the lack of modern technology and media usage by institutions designed to serve us is becoming far less acceptable. When the web was an esoteric world and it took millions of dollars to build an app, it made some sense that government didn’t have a major presence. But now it’s becoming common knowledge that a kid with a couple months on his/her hands can make a site that would take a government years and hundreds of millions of dollars to complete, if at all.

This kills the relationship between a government and its citizens. If I can’t trust my government to communicate and interact with me using technologies that even vaguely resemble the stuff I use on a day-to-day basis, how can I trust that government to provide services, spend tax money, or educate my children? Why would I support any expansion of government or its services, even if those services are (in theory) a good idea? If the DMV is using technology from the Reagan era to process my forms, why would I entrust my money, information or children to the care of the state?

I wish I could end this post on a positive note, but I’m struggling. I don’t see the American government dramatically changing their outlook on technology adoption, as this is ultimately not a technology problem — it’s a policy problem at best and a political problem at worst. And if the Obama administration — the regime of the “Geek President” — can’t effect this political change, who can?

Written by Brad Hargreaves

April 2nd, 2010 at 10:10 am

Posted in Uncategorized

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