Links for Friday, 23rd Oct, 2020

Human evolution produced gossip. Cultural anthropology sees gossip as an informal way of enforcing group norms. It is effective in small groups. But gossip is not the search for truth. It is a search for approval by attacking the perceived flaws of others.

Arnold Kling writes an excellent essay about gossip and (as he puts it), the ISS. That, to be clear, stands for Internet, Smart Phones and Social Media. Excellent essay, well worth your time.

Low level of CRAR not only hampers bank health but also restricts smooth transmission of monetary policy. Injection of capital by the Government of India in public sector banks is likely to increase the credit flow to the real sector and help in smoother transmission of monetary policy.

How much of this paper is signaling/laying the groundwork, and how much of it is a genuine addition to what we already know about monetary policy? The link comes via Amol Agarwal

This is exactly why I am so pleased to see how narrowly focused the Justice Department’s lawsuit is: instead of trying to argue that Google should not make search results better, the Justice Department is arguing that Google, given its inherent advantages as a monopoly, should have to win on the merits of its product, not the inevitably larger size of its revenue share agreements. In other words, Google can enjoy the natural fruits of being an Aggregator, it just can’t use artificial means — in this case contracts — to extend that inherent advantage.

The concluding paragraph from this blog post by Ben Thompson is even better, and I was tempted to go with it, but this works too! Please read the whole thing – excellent writing, as always.

If you’re looking to get an iPad right now and can afford it, the new $599 iPad Air is the best tablet for most people. Apple has taken the design from the more expensive iPad Pro and brought it down to a more reasonable price point. It’s $100 more than it was last year, but in return this year’s iPad Air has a bigger, better screen and a faster (and very intriguing) processor.

Dieter Bohn’s review of the iPad Air (2020). If I could, I would!

Miniature paintings are among the most beautiful, most technically-advanced and most sophisticated art forms in Indian culture. Though compact (about the same size as a small book), they typically tackle profound themes such as love, power and faith. Using technologies like machine learning, augmented reality and high-definition robotic cameras, Google Arts & Culture has partnered with the National Museum in New Delhi to showcase these special works of art in a magical new way.

This is a must have app on your phone. I mean, it was always a must-have app on your phone, this latest collection only makes the argument stronger!

A wish list for Google Classroom

Today’s essay isn’t for everybody – but if you are interested in tech/education, you may want to give it a read.

As the title suggests, it’s about the functionalities I would like to see in Google Classroom.

It’s available on Google Docs, and the link is here. Especially for folks working in the intersection of tech and education, please do share, and please do give me feedback. Much appreciated!

Also, a quick update – work’s been slightly crazy, so I’ll shift to an M/W/F posting schedule for a while.

The Everything Play

It was a throwaway line in a post from last week:

Oil, its linkages, its by-products, and its enabling nature is what attracted Dhirubhai to oil as a business. It wasn’t just about oil itself – it was always about all of what oil allowed one to get into as a business. And it is the same now – it’s not about telecommunications and data. That just enables Reliance to get into – well, everything, really.

…but it deserves deeper analysis.

Software has eaten up the world

We’ll begin by taking a look at what is by now a very old essay, but it remains an eminently readable one: Why Software Is Eating the World,
by Marc Andreessen.

Here’s an excellent excerpt:

More and more major businesses and industries are being run on software and delivered as online services — from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.

Remember, this was written in the year 2011. We’re talking Indian winning the World Cup, Obama as the President of the United States of America, and the biggest threat to the global economy was the worry that 2008 would somehow erupt all over again. Or something like that.

And to help you understand quite what this means in practice, let’s talk, um, boogers. It’s bad enough that we’re talking about them, I agree. Imagine having to eat them, and imagine they were not even yours!

When two Domino’s Pizza employees filmed a prank in the restaurant’s kitchen, they decided to post it online. In a few days, thanks to the power of social media, they ended up with felony charges, more than a million disgusted viewers, and a major company facing a public relations crisis.
In videos posted on YouTube and elsewhere this week, a Domino’s employee in Conover, N.C., prepared sandwiches for delivery while putting cheese up his nose, nasal mucus on the sandwiches, and violating other health-code standards while a fellow employee provided narration.

As you might imagine, things weren’t looking good for Dominos. So what did they do?

BILL TAYLOR: So this is the part of the Domino’s story that struck me more than anything, when he simply declared for all to hear, we no longer think of ourselves as a pizza company. We think of ourselves as a technology company. I said, excuse me? Well, turns out, they’re headquartered in Ann Arbor, Michigan. They’ve got 800 people working in headquarters. Fully 400 of those, half of their headquarters employees, are engaged in software analytics and big data. They really– once they finally got the product right, they really are, from this point going forward, as much a technology company as they are a food company. And many of the initiatives have to do with making it as easy, as convenient, as kind of natural and impulsive almost to order Domino’s, much more so than any other pizza company.
So it began very early on with the Domino’s smartphone app. They then went to the capacity to order a Domino’s over text messaging. Now you can literally tweet an emoji of a pepperoni pizza, and a pepperoni pizza will appear at your doorstep within 30 minutes. You can order it through Facebook messaging. They’re simply saying to themselves, we understand that a big piece of our customer base are young people, millennials, or what have you. And he knows where those people are and where they’re spending their time, and that capacity while you’re on Facebook to simply go over to Messenger and pop in an order or while you’re sitting there, you know, tweeting out various things to also tweet out a Domino’s emoji, because you’ve pre-registered, it’s really a very powerful thing.

They decided to become a software company. Yes, that’s right, Dominos is not a pizza company that uses software, it is a software firm that happens to deliver pizzas.

Dominos is one of the best examples I can think of that helps you understand what Andressen was getting at when he said software is eating the world. It was literally eating up a pizza (company, that is)!

Amazon and Jeff Bezos

As you may have heard, Amazon and it’s owner are doing fairly well:

Jeff Bezos added $13 billion to his net worth on Monday, the largest single-day jump for an individual since the Bloomberg Billionaires Index was created in 2012. Inc. shares surged 7.9%, the most since December 2018 on rising optimism about web shopping trends, and are now up 73% this year.

Why are they doing so well? Because the global pandemic has accelerated what was already a very obvious trend: online shopping is here to stay.

Perhaps the single most dramatic example of this phenomenon of software eating a traditional business is the suicide of Borders and corresponding rise of Amazon. In 2001, Borders agreed to hand over its online business to Amazon under the theory that online book sales were non-strategic and unimportant.
Today, the world’s largest bookseller, Amazon, is a software company — its core capability is its amazing software engine for selling virtually everything online, no retail stores necessary. On top of that, while Borders was thrashing in the throes of impending bankruptcy, Amazon rearranged its web site to promote its Kindle digital books over physical books for the first time. Now even the books themselves are software.

Like Dominos, Amazon is a software company that happens to sell books, and just about everything else you can imagine. The stock market is simply acknowledging in 2020 what Andreessen had predicted in 2011.

What does software allow one to do that one could not earlier?

Andreessen answer the question in his essay by pointing out two factors, the first of which I read as unlocking demand:

Over two billion people now use the broadband Internet, up from perhaps 50 million a decade ago, when I was at Netscape, the company I co-founded. In the next 10 years, I expect at least five billion people worldwide to own smartphones, giving every individual with such a phone instant access to the full power of the Internet, every moment of every day.

And the second is the disintermediation of technology. That’s a big word, but it is simply explained: the elimination of the middle man.

Consider this post you’re reading right now. You’re reading it on your device (laptop/tablet/smartphone). Much more impressive is the fact that I was able to put up a website, set up an email subscription service, have a personalized email address – and all of this without paying anybody else a single penny to have all this done for me. Don’t get me wrong, I pay Google and WordPress money every month, but at my end, it was a one man show. No IT department, no IT consultant, nothing.

On the back end, software programming tools and Internet-based services make it easy to launch new global software-powered start-ups in many industries — without the need to invest in new infrastructure and train new employees. In 2000, when my partner Ben Horowitz was CEO of the first cloud computing company, Loudcloud, the cost of a customer running a basic Internet application was approximately $150,000 a month. Running that same application today in Amazon’s cloud costs about $1,500 a month.

So whether you want to write a blog (yours truly), order food (Zomato), buy groceries (Bigbasket), learn stuff online (Byju’s), get your leaky faucet fixed (Urban Company) – or anything else you can think of really – it is all enabled by the fact that everybody has a device that enables them to connect to the Internet, and the fact that building out a company is cheaper than ever before.

So Who Are The Winners?

Well, I find it pretty cool that I am able to write a blog that a lot of people choose to read daily, and the local pizza delivery place is quite happy that is is able to compete with somebody like Dominos. And hopefully you are happy that you get to read this post while chomping on a slice of pizza.

But the real winners? The intermediaries.

But wait, you might say. Didn’t the internet enable disintermediation? Well, no, not really. It replaced a lot of inefficient middlemen with a few super efficient ones.

If, in the pre-internet era, I wanted to write a series of essays that people could read, the barriers to entry were quite significant. They could be published as a book, or as a series in a newspaper, or in a magazine. But then would come the difficult job of publicizing the fact that I had written these essays. People would send in their comments (maybe via mail, maybe in conferences/book launches) and I would reply to them, but these would be available for everybody to see.

Today? Hit publish, and people who follow me on Twitter/LinkedIn/Facebook get to not only read the essay, but they also get to work as my marketing team, and they get to comment right away. Said comment can be replied to near instantaneously, and that conversation is also available for everybody to view and ponder on.

What allows this to happen? Well, I pay WordPress money to keep this blog up, and I pay Google so that I have a personalized email ID. Without these two companies (and their competition), this blog is well nigh impossible.

What the intermediaries have done is the following:

Earlier, a select group of people could get in touch with a select group of customers at very high costs. Today, anybody can get in touch with anybody at very low costs

A restaurant (let’s call it Vaishali) can get in touch with a potential customer (let’s call him Ashish) and online delivery of food can happen, even in times such as these. I get my upma and filter coffee, Vaishali gets its money, but in the long run, the real winner is Zomato.

A homeowner in Paris (let’s call her ABC) can get in touch with a potential traveler (let’s call him Ashish) and I and my family can stay in said homeowner’s apartment during our trip to France. The homeowner gets money for a home she isn’t currently occupying, I get a memorable holiday, but the real winner is Airbnb.

And so on.

Uber, Oyo, Swiggy, Urban Company – there’s no end to these examples, and these, as per Andreessen’s essay, are the real winners.

The coup de grace

What if these intermediaries were either owned by one entity? What if that entity, because it knew what you were doing in n separate transactions across n different platforms, could flawlessly predict what you needed next, on the n+1th platform? And could provide you that need at the lowest price possible?

Let’s go back to the beginning of this post:

Oil, its linkages, its by-products, and its enabling nature is what attracted Dhirubhai to oil as a business. It wasn’t just about oil itself – it was always about all of what oil allowed one to get into as a business. And it is the same now – it’s not about telecommunications and data. That just enables Reliance to get into – well, everything, really.

Airtel, Amazon, and Untangling Some Thoughts

Capital Mind, one of my favorite blogs to read, recently posted an excellent write-up on how Bharti Airtel is faring over the last three to four years. You might have to sign up in order to read it, but happily, Capital Mind allows you a free trial, so you should still be able to access it.

Why do I think you should read it, and why am I talking about this today? Because we need to think about telecommunications, technology, monopolies, scale, regulations, FDI in order to understand why Amazon may well be interested in buying Airtel, or at least in owning a stake.

Airtel has issued a boilerplate disclaimer since, but, well. Come on.

But hang on a second. We first need to get a basic framework in place, before we start thinking about everything else.

Our framework will consist of three things (or actions) that we tend to do on the internet, three international behemoths that are very, very interested in India, and three telecommunications firms that are very heavily invested in India.

First, the three things that all of us tend to do on the Internet. We create content, we consume content and we engage in commerce.

Let’s begin with the one in the middle. When you’re lying on your sofa at three in the morning, flicking through Netflix’s endless library of content, you are very much a consumer. When you roll your eyes at the latest dripping-with-insanity forward you receive on your family Whatsapp group, you are a consumer of content online. When you run a search for a PDF that will help you finish an assignment in college: consumer. For most of us, the internet enables us to consume stuff at levels that have never before been possible. Music, videos, podcasts, the written word: all consumption.

Now let’s move on to the one on the left: creation. You weren’t around when I wrote these words that you are reading, but I was creating stuff. Your latest Instagram story? Creation of content. The latest GIF that you created before sharing it? Creation of content. Do you upload videos on Insta/YouTube/Vimeo? Do you blog? Do you create podcasts? All content creation.

And finally, the reason Jeff and Mukesh are as rich as they are: commerce. Online shopping is literally blowing up in front of our eyes in terms of value. Amazon, Flipkart, Nykaa, all of Jio’s online shopping, MakeMyTrip, Oyo, Airbnb, Uber, Zomato… the list is endless, and exhausting. That’s the third thing you do online. Commerce.

Ah, you might say. What about a Whatsapp call with friends, or a Skype call with family, or a Zoom online seminar (god help us all)? That’s arguably consumption and creation at the same time, no?

Well yes. Or call it communication.

Creation and consumption of content are really two sides of the same coin, and when they happen simultaneously, they are all of what we spoke about in the last paragraph.

There is a world of thinking to be done about the blue rectangle on the left. About how Google cornered the consumption of stuff online using Gmail, Google Maps etc, by piggybacking on it’s search monopoly, and about how Facebook took away the search monopoly by creating its own walled garden and making Google search irrelevant within it, and how Google tried to respond with Google Buzz-no-Wave-no-Plus-no-WhateverNext and failed… and this can go on. But here’s the quick takeaway:

When it comes to content creation, or content consumption, or communication, Google and Facebook have the market pretty much tied up between them. The battle for who wins between them will continue for a while, and it will be a fascinating story, but for our purposes, it is enough to realize for today that Google and Facebook are mostly on the left. That’s not entirely true (Google Play Store, Froogle, Facebook Marketplace being just some examples), but it’s good enough for now.

Google and Facebook are mostly communication based firms who dabble in commerce.

And Amazon, of course, is the easiest example to think of when it comes to online commerce. The Amazon app, sure, but also its delivery and logistics arm, and, of course, AWS. If I want to buy stuff online, Amazon is literally the first – and more often than not, the only – thing that comes to mind. Zomato and Swiggy for food, Uber and Ola for travel, OYO and Airbnb for hotels/lodging, MakeMyTrip/Cleartrip/Yatra for travel are also very valid examples. But we’re, as consumers, not passively consuming content over here in this space: it is a very specific transactional approach.

But then things began to get complicated.

Consider Amazon. Commerce company, very much so. But what about Amazon Prime Video? What about Amazon Prime Music? What about Amazon Photos? What about Alexa and the Echo family?

Or consider Google. What about, as we have already mentioned, the Google Play Store? What about Froogle? What about Play Movies, Play Books?

Our neat little framework now has overlaps, and there are insurgencies along this virtual boundary. But we can add to our framework to help us keep it relatively simple:

Google, which is a firm that started life as a software firm, then started to make hardware as well (Nexus, Pixel, Chromebooks, Pixel tablets, Google Glass etc). Of course people could create and consume content on these devices. Of course these devices would help Google learn more about the people who owned these devices. But wouldn’t it be great (Google thought) if we could make moaarrrrr money by using this gleaned information ourselves? Hey, let’s get into commerce.

Facebook tried to say the same thing, but with rather more limited success.

And Amazon, a firm that started life as an online seller, started to make hardware as well, precisely so as to learn more about people’s consumption habits online and offline. That’s the Echo devices, the Kindle, the Firestick and so on.

And don’t forget Apple! They no longer can rely on selling hardware alone for growth, mostly because they have already sold all the devices they possibly can to as many people as they possibly can (at least in the USA, but they’re coming for you too). And so, services! Apple Music, Apple TV, iCloud – all of these are not hardware related, they’re all about consumption of content.

So even our latest attempt at simplifying the framework fails, because none of these blue rectangles are neat and delineated: firms from every blue rectangle want to be present in the creation, consumption and commerce space.

They want to do this for a variety of reasons, but the most important reason is simply the following: they’d much rather get a “360 degree” view of their consumer, without having to rely on some other firm to share information.

If, for example, Jio manufactures the device I use to go online (JioPhone), and I log on to that device to watch JioTV, and visit Ajio to buy clothes using that device, and post about the sneakers I just bought on a social media platform owned by Jio (or well, something like that), then I’ve obviated the need for Google! Neither the device, nor the steaming platform, nor the shopping platform, nor the social media has anything to do with Google. How then, does Google know me enough to advertise effectively to me?

But, if I use a Pixel phone to stream content on my Chromecast device, and buy a pair of sneakers on Flipkart (well, in a parallel universe…) and post about it on whatever is Google’s next attempt to build a social media platform, I’m living entirely in the Google Universe.

It’s no longer about companies living in one blue rectangle, you see. It is about one company dominating all blue rectangles, and so knowing everything there is to know about the consumer. That’s the end game here.

And speaking of all blue rectangles…

And that, my friends, is why Amazon wants to be friends with Airtel, Google wants to be friends with Vodafone.

Because Mukesh has his finger in each of these pies, and Mark has acknowledged as much.

Homework: as a consumer, and as an investor, which of the three are you betting on? Amazon, Google or Jio? Why?

Understanding Google

Out of all the tech companies that I have written about so far, Google is far and away my favorite, and one that I always have wanted to work at (at some margin, I still do).

It’s just – and this is a personal thing, may not work for everybody – cool.

The only reason I say this at the outset is to make sure that you’re aware of my biases!

Here we go:

I often ask this question in classes I teach in microeconomics, or introductory economics:

“What is Google’s business?”

The default answer is almost always “search”. At which point of time, I have a follow-up question: identify for me one person who has paid Google to run a search.

In fact, if anything, Google seems to go out of its way to keep Google search free. And if running a search is not to be paid for, it can’t be much of a business, right?

So what is Google’s business?

But suppose we say that Google is primarily an advertising company. That changes things. The U.S. search engine advertising market is $17 billion annually. Online advertising is $37 billion annually. The entire US advertising market is $150 billion. And global advertising is a $495 billion market. So even if Google completely monopolized US search engine advertising, it would just own 3.4% of the global advertising market. From this angle, Google looks like a small player in a competitive world.

What if we frame Google as a multifaceted technology company instead? This seems reasonable enough; in addition to its search engine, Google makes dozens of other software products, not to mention robotic cars, Android phones, and wearable computers. But 95% of Google’s revenue comes from search advertising; its other products generated just $2.35 billion in 2012, and its consumer tech products are a mere fraction of that.

That’s Peter Thiel, in From Zero to One. The context in which he wrote this apart, what matters is the fact that he’s absolutely right about the fact that Google earns a vast amount of its revenue from advertising, not running searches.

But what are advertisers paying money to Google for? To provide digital real estate, in which ads can be shown, and the impact of these ads can be measured better than ever before in history. And advertisers are willing to pay because Google understands its users better than anybody else. Why does Google understand its users better than anybody else?

Because we have some combination of the following as part and parcel of our daily lives

Google Maps | YouTube | GMail | Android | Chrome OS | Chrome Browser |

But here’s the thing: we don’t pay for any of these. By that logic, we aren’t Google’s customers. But advertisers are Google’s customers and that makes us Google’s… products.



So here is the kicker. Android, as well as Chrome and Chrome OS for that matter, are not “products” in the classic business sense. They have no plan to become their own “economic castles.” Rather they are very expensive and very aggressive “moats,” funded by the height and magnitude of Google’s castle. Google’s aim is defensive not offensive. They are not trying to make a profit on Android or Chrome. They want to take any layer that lives between themselves and the consumer and make it free (or even less than free). Because these layers are basically software products with no variable costs, this is a very viable defensive strategy. In essence, they are not just building a moat; Google is also scorching the earth for 250 miles around the outside of the castle to ensure no one can approach it. And best I can tell, they are doing a damn good job of it.

That was Bill Gurley, in 2011, on his own blog.

All those products that I listed above? They weren’t build to generate revenue for Google (although that may be changing now), they were built to make sure that Google continued to attract, and track, eyeballs.

That allowed Google to continue to sell advertisements, which is where it makes the bulk of its money from. And they’ve refined the signal-to-ads cycle, as Ben Thompson calls it, better than anybody else:

Google dominates every aspect of this cycle, and every announcement at IO accrued to it:

On the signal side:

  • Their mobile apps are both the best, and the most popular, and they work best with a Google+ account
  • Their browser is the best, and the most popular, and it works best with a Google+ account
  • Their maps are the best, and the most popular, and they work best with a Google+ account
  • Their video website (YouTube) is the best, and the most popular, and it works best with a Google+ account
  • Their mail service (GMail) is the best, and the most popular, and is a Google+ account

And they simply own online advertising, with the best, and most popular, search ads, 3rd-party ads, and display ads.

But for the longest time, Google was a hammer in search of a nail.



Google was by far and away the best search engine in the late 1990’s – it wasn’t even close. But – and it was a big, painful “but” – how to make money? Enter economics, Google style:

Googlenomics actually comes in two flavors: macro and micro. The macroeconomic side involves some of the company’s seemingly altruistic behavior, which often baffles observers. Why does Google give away products like its browser, its apps, and the Android operating system for mobile phones? Anything that increases Internet use ultimately enriches Google, Varian says. And since using the Web without using Google is like dining at In-N-Out without ordering a hamburger, more eyeballs on the Web lead inexorably to more ad sales for Google.

The microeconomics of Google is more complicated. Selling ads doesn’t generate only profits; it also generates torrents of data about users’ tastes and habits, data that Google then sifts and processes in order to predict future consumer behavior, find ways to improve its products, and sell more ads. This is the heart and soul of Googlenomics. It’s a system of constant self-analysis: a data-fueled feedback loop that defines not only Google’s future but the future of anyone who does business online.

And so Google has become a company that has changed how to think about business in tech: give away cool products for (nearly) free, in exchange for your information, that is then sold on to advertisers.

A useful way to think about Google is that you are Google’s product, not its customer. Think of it this way: if you aren’t paying for something, how can you possibly be a customer?

Facebook and Google both have the same model: ad-driven.

There are many, many things to unpack as a consequence of thinking about this business model, and we’ll get to all of these things in the weeks to come.

How do you interact with your computer?

“Alexa, play Hush, by Deep Purple.”

That’s my daughter, all of six years old. Leave aside for the moment the pride that I feel as a father and a fan of classic rock.

My daughter is coding.

My dad was in Telco for many years, which was what Tata Motors used to call itself  back in the day. I do not remember the exact year, but he often regales us with stories about how Tata Motors procured its first computer. Programming it was not child’s play – in fact, interacting with it required the use of punch cards.

I do not know if it was the same type of computer, but watching this video gives us a clue about how computers of this sort worked.

The guy in the video, the computer programmer in Telco and my daughter are all doing the same thing: programming.

What is programming?

Here’s Wikiversity:

Programming is the art and science of translating a set of ideas into a program – a list of instructions a computer can follow. The person writing a program is known as a programmer (also a coder).

Go back to the very first sentence in this essay, and think about what it means. My daughter is instructing a computer called Alexa to play a specific song, by a specific artist. To me, that is a list of instructions a computer can follow.

From using punch cards to using our voice and not even realizing that we’re programming: we’ve come a long, long way.

It’s one thing to be awed at how far we’ve come, it is quite another to think about the path we’ve taken to get there. When we learnt about mainframes, about Apple, about Microsoft and about laptops, we learnt about the evolution of computers, and some of the firms that helped us get there. I have not yet written about Google (we’ll get to it), but there’s another way to think about the evolution of computers: we think about how we interact with them.

Here’s an extensive excerpt from Wikipedia:

In the 1960s, Douglas Engelbart’s Augmentation of Human Intellect project at the Augmentation Research Center at SRI International in Menlo Park, California developed the oN-Line System (NLS). This computer incorporated a mouse-driven cursor and multiple windows used to work on hypertext. Engelbart had been inspired, in part, by the memex desk-based information machine suggested by Vannevar Bush in 1945.

Much of the early research was based on how young children learn. So, the design was based on the childlike primitives of eye-hand coordination, rather than use of command languages, user-defined macro procedures, or automated transformations of data as later used by adult professionals.

Engelbart’s work directly led to the advances at Xerox PARC. Several people went from SRI to Xerox PARC in the early 1970s. In 1973, Xerox PARC developed the Alto personal computer. It had a bitmapped screen, and was the first computer to demonstrate the desktop metaphor and graphical user interface (GUI). It was not a commercial product, but several thousand units were built and were heavily used at PARC, as well as other XEROX offices, and at several universities for many years. The Alto greatly influenced the design of personal computers during the late 1970s and early 1980s, notably the Three Rivers PERQ, the Apple Lisa and Macintosh, and the first Sun workstations.

The GUI was first developed at Xerox PARC by Alan Kay, Larry Tesler, Dan Ingalls, David Smith, Clarence Ellis and a number of other researchers. It used windows, icons, and menus (including the first fixed drop-down menu) to support commands such as opening files, deleting files, moving files, etc. In 1974, work began at PARC on Gypsy, the first bitmap What-You-See-Is-What-You-Get (WYSIWYG) cut & paste editor. In 1975, Xerox engineers demonstrated a Graphical User Interface “including icons and the first use of pop-up menus”.[3]

In 1981 Xerox introduced a pioneering product, Star, a workstation incorporating many of PARC’s innovations. Although not commercially successful, Star greatly influenced future developments, for example at Apple, Microsoft and Sun Microsystems.

If you feel like diving down this topic and learning more about it, Daring Fireball has a lot of material about Alan Kay, briefly mentioned above.

So, as the Wikipedia article mentions, we moved away from punch cards, to using hand-eye coordination to enter the WIMP era.

It took a genius to move humanity into the next phase of machine-human interaction.

The main tweet shown above is Steven Sinofsky rhapsodizing about how Steve Jobs and his firm was able to move away from the WIMP mode of thinking to using our fingers.

And from there, it didn’t take long to moving to using just our voice as a means of interacting with the computers we now have all around us.

Voice operated computing systems:

That leaves the business model, and this is perhaps Amazon’s biggest advantage of all: Google doesn’t really have one for voice, and Apple is for now paying an iPhone and Apple Watch strategy tax; should it build a Siri-device in the future it will likely include a healthy significant profit margin.

Amazon, meanwhile, doesn’t need to make a dime on Alexa, at least not directly: the vast majority of purchases are initiated at home; today that may mean creating a shopping list, but in the future it will mean ordering things for delivery, and for Prime customers the future is already here. Alexa just makes it that much easier, furthering Amazon’s goal of being the logistics provider — and tax collector — for basically everyone and everything.

Punch cards to WIMP, WIMP to fingers, and fingers to voice. As that last article makes clear, one needs to think not just of the evolution, but also about how business models have changed over time, and have caused input methods to change – but also how input methods have changed, and caused business models to change.

In other words, understanding technology is as much about understanding economics, and strategy, as it is about understanding technology itself.

In the next Tuesday essay, we’ll take a look Google in greater detail, and then about emergent business models in the tech space.


Tech: Links for 24th December, 2019

Beginning today through until the 31st of December, I’ll link to five pieces from each category that I enjoyed collating this year. There’s no science or overt logic to any of them: I’m just going to scroll through the posts, and replug those that I enjoyed re-reading. Hopefully, next year, I’ll get a little more scientific about it. Happy holidays!

  1. Let’s help ourselves understand Stratechery and it’s Aggregators concept.
  2. I wish the world would get more excited about Oumuamua!
  3. I hope to be working (from a writing papers viewpoint) on urbanization in the coming year.
  4. I am an unabashed fan of Google, and it’s products. With some caveats, about which I hope to write in the coming year. But kudos to them for doing what they do, especially in education!
  5. Five great reads from The Ken.

Tech: Links for 12th November, 2019

I have used some of these resources partially, and none of these completely. More as a bookmark to come back to for me (and maybe for you), these are five free resources to help you learn how to code.

  1. Grasshopper by Google.
  2. The Odin Project, fully open source.
  3. Lectures from Harvard University on Computer Science.
  4. edX courses on coding.
  5. … and finally, Khan Academy on coding.

Tech: Links for 5th November, 2019

  1. “Wearable technology, wearables, fashion technology, tech togs, or fashion electronics are smart electronic devices (electronic device with micro-controllers) that can be incorporated into clothing or worn on the body as implants or accessories.”
    Wikipedia on wearables.
  2. Wearbles are bigger than you thought.
    “Wearables are now bigger than iPad and will soon be bigger than the Mac. And the glasses are supposedly coming next year, and the $250 AirPods Pro just shipped.”
  3. You’ve heard of Google Glass, presumably. But uh, one ring to rule ’em all…?
    “Amazon is experimenting with putting Alexa everywhere, and its latest experiment might be the wildest yet: a new smart ring called the Echo Loop that puts Alexa on your finger.”
  4. “And it goes without saying that the technology still matters: chips need to get faster (a massive Apple advantage), batteries need to improve (also an Apple specialty), and everything needs to get smaller. This, though, is the exact path taken by every piece of hardware since the advent of the industry. They are hard problems, but they are known problems, which is why smart engineers solve them. ”
    The ever excellent Ben Thompson, writing about wearables in 2016. He was bullish then, and I suspect will be even more bullish now.
  5. All of which, I hope, will help contextualize Google’s latest acquisition.

Etc: Links for 23rd August, 2019

  1. Google Assistant can now have you assign reminders to other people. Solve, as they say, for the equilibrium.
  2. On the whole, a depressing read about higher education in India.
  3. “Anyway, please join me on an annotated trip through my favorite parts of the mandatory filing.”
    A delightful (truly!) romp through WeWork’s IPO filings.
  4. Robotic shorts that make walking and running easier.
  5. xkcd is a treasure. This one on conferences.