What’s Up with the World Outside of Covid-19?

Yash Agarwal, ex-student and good friend recently shared this link on Twitter.

The last line of the article shared by Yash goes like this:

What is starting today is a new age of technological wonder, the Great Acceleration.

https://spectator.us/topic/great-acceleration-looking-forward-post-covid-age/

The background to this is that Tyler Cowen had written a book some years ago called The Great Stagnation. The basic thesis in that book is that innovation was slowing down, since the low hanging fruit in terms of technical innovation had already been picked. But the book also spoke about how this was not to say that innovation was forever going to be slow – it’s just that it had slowed down around then.

He wasn’t the only one, by the way. There were quite a few folks who were less than impressed with technological progress aobut a decade ago. Everybody has heard of the comparison between Twitter and flying cars, but there’s much more where that came from:

In the 2010s, we largely decided that we were in the middle of a technological stagnation. Tyler Cowen’s The Great Stagnation came out in 2011, Robert Gordon’s The Rise and Fall of American Growth came out in 2016. Peter Thiel declared that “we wanted flying cars, instead we got 140 characters”. David Graeber agreed. Paul Krugman lamented the lack of new kitchen appliances. Some economists asked whether ideas were simply getting harder to find. When the startup Juicero came out with a fancy new kitchen appliance, it was widely mocked as a symbol of what was wrong with the tech industry. “Tech” became largely synonymous with software companies, particularly social media, gig economy companies, and venture capital firms. Many questioned whether those sorts of innovations were making society better at all.
So it’s fair to say that the 2010s were a decade of deep techno-pessimism.

https://noahpinion.substack.com/p/techno-optimism-for-the-2020s

By the way, on a related note (although this deserves its own post, which will be out tomorrow) you may want to read this post by Morgan Housel in this regard.

In any case, Covid-19 has in some ways accelerated innovation, and that’s the point that Bruno Macaes1 is making in the article above.

Take transportation and energy: the demand for driverless cars and delivery vans boomed last year because people were fearful of getting infected. In response companies quickly scaled up their plans. Last October, for example, Waymo announced the launch of a taxi service that is fully driverless. Walmart announced in December its plans to use fully autonomous box trucks to make deliveries in Arkansas later this year. As retail goes online as a result of the pandemic, massive delivery volumes are now placing greater pressure on others to follow suit.

https://spectator.us/topic/great-acceleration-looking-forward-post-covid-age/

Note that without Covid-19, we would be having debate about automation, jobs and how technology is promoting inequality. That may well be true. But this is precisely why we study opportunity costs in college!


Perhaps the most interesting (to me) advance this past year has been in terms of we humans understanding how protein folding happens. Understanding is perhaps the wrong word to use (and note that I know as much biology as forecasters know about the future), but we have trained machines to understand it.

At CASP14 DeepMind produced an advance so thorough it compelled CASP organizers to declare the protein structure prediction problem for single protein chains to be solved. In my read of most CASP14 attendees (virtual as it was), I sense that this was the conclusion of the majority. It certainly is my conclusion as well.

https://moalquraishi.wordpress.com/2020/12/08/alphafold2-casp14-it-feels-like-ones-child-has-left-home/

As I understand it (and please note once again that I am no expert) this has the potential to change by orders of magnitude how we approach the treatment of a variety of diseases in this century.


But if you are anything like me, you are also curious to know about what else has been going on this past year. Again, before we proceed: this post is about the “what” in terms of scientific advancement. Tomorrow is a rumination about the “why”.

First, I’d referred to this interview in an earlier post, an interview of Patrick Collison by Noah Smith. It refers to some of what we have been speaking about, but much more as well:

I think the 2020s are when we’ll finally start to understand what’s going on with RNA and neurons. Basically, the prevailing idea has been that connections between neurons are how cognition works. (And that’s what neural networks and deep learning are modeled after.) But it looks increasingly likely that stuff that happens inside the neurons — and inside the connections — is an important part of the story. One suggestion is that RNA is actually part of how neurons think and not just an incidental intermediate thing between the genome and proteins. Elsewhere, we’re starting to spend more time investigating how the microbiome and the immune system interact with things like cancer and neurodegenerative conditions, and I’m optimistic about how that might yield significantly improved treatments. With Alzheimer’s, say, we were stuck for a long time on variants of plaque hypotheses (“this bad stuff accumulates and we have to stop it accumulating”)… it’s now getting hard to ignore the fact that the immune system clearly plays a major — and maybe dominant — role. Elsewhere, we’re plausibly on the cusp of effective dengue, AIDS, and malaria vaccines. That’s pretty huge.

https://noahpinion.substack.com/p/interview-patrick-collison-co-founder

Second, Caleb Whitney has a lovely blogpost on this topic, and shares with us this chart – and if this chart isn’t beautiful, I do not know what is.

The tiny red vertical line tells you when the cause of the disease was identified, and the tiny green vertical line tells you when the cure was licensed in the United States of America. And now think of what happened with Covid-19!2

There’s much more in that post, and there’s more on Patrick Collison’s website, Matt Clancy’s reading list, Matt Clancy’s Substack, and this blogpost by Eli Dourado. I am sure there is more I have missed – much more! – but isn’t that only reinforcing my point?


It is easy to get caught up in the short term pessimistic narrative, and be overwhelmed by it. It happened to me last year, as I am sure it did to many, many other people on this planet. I gave up on what until then had been my proudest achievement in terms of my work: posting here every single day.

But on a personal level, the past year has also taught me this, and I have Morgan Housel to thank for the central insight: the seeds of calm are planted by crazy.3

So when things are really bad and grim (and again, this is not over yet), look to the bright side. And not just because it’s a good thing to do! But also because the bright side is likely to be brighter precisely because of everything else being so goddamn dark.

Tomorrow, I’ll attempt to answer a question I have, and I am sure you do as well: why?

  1. I don’t know how to type out a c with a cedilla in WordPress, my apologies[]
  2. Please note, covid-19 ain’t over yet, especially here in India. That’s not the point though. The point is to ask if the kind of progress we have made this past year would even have been possible in the past.[]
  3. The reverse is also probably true, more’s the pity[]

Notes on “Does Palantir See Too Much?”

Just this past weekend, I finally got around to finally finishing The Lord of The Rings.

I know, I know. Spare me.

Worse, I finished the movies, not the book, and I do not have the faintest idea about when I’ll get around to reading it, but that is a story for another day. (Heh.)

Today’s notes, coincidentally, are about Palantir, but the new age one, not the panopticon from Tolkein’s universe. The new Palantir is a firm started by Peter Thiel, and is the subject of a rather long (and very nice) profile of the firm and it’s Chief Executive Officer, Alex Karp.

First, what is Palantir Technologies? Here’s Wikipedia – note that I have combined sentences across different paragraphs in this excerpt:

Palantir Technologies is a public American software company that specializes in big data analytics. Headquartered in Denver, Colorado, it was founded by Peter Thiel, Nathan Gettings, Joe Lonsdale, Stephen Cohen, and Alex Karp.

The company is known for three projects in particular: Palantir Gotham, Palantir Metropolis and Palantir Foundry. Palantir Gotham is used by counter-terrorism analysts at offices in the United States Intelligence Community (USIC) and United States Department of Defense…

…Palantir Metropolis is used by hedge funds, banks, and financial services firms…

…Palantir Foundry is used by corporate clients such as Morgan Stanley, Merck KGaA, Airbus, and Fiat Chrysler Automobiles NV

https://en.wikipedia.org/wiki/Palantir_Technologies

… and here’s the NYT amgazine story:

Its two primary software programs, Gotham and Foundry, gather and process vast quantities of data in order to identify connections, patterns and trends that might elude human analysts. The stated goal of all this “data integration” is to help organizations make better decisions, and many of Palantir’s customers consider its technology to be transformative.

https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html

But the story gets more interesting in the very next line in the article…

Karp claims a loftier ambition, however. “We built our company to support the West,” he says. To that end, Palantir says it does not do business in countries that it considers adversarial to the U.S. and its allies, namely China and Russia. In the company’s early days, Palantir employees, invoking Tolkien, described their mission as “saving the shire.”

https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html

There’s two questions at play here, really. First, what does Palantir Technologies do (that’s the first excerpt from the NYT story)? And second, why does it do what it does (and that’s the excerpt right above)?

Now, the reason I find this so interesting is that the instinctive argument that you might want to make against Palantir Technologies is “but privacy!”. And the second excerpt above is, in a sense, Palantir’s response.

Although Palantir claims it does not store or sell client data and has incorporated into its software what it insists are robust privacy controls, those who worry about the sanctity of personal information see Palantir as a particularly malignant avatar of the Big Data revolution. Karp himself doesn’t deny the risk. “Every technology is dangerous,” he says, “including ours.”

https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html

Technology is technology – what you do with it is what matters is a rather old argument, but that’s the argument that is being used here. There’s more though – if we don’t, somebody else will. Better the known devil, etc.

Once the data has been integrated, it can be presented in the form of tables, graphs, timelines, heat maps, artificial-intelligence models, histograms, spider diagrams and geospatial analysis. It is a digital panopticon, and having sat through several Palantir demos, I can report that the interface is impressive — the search results are strikingly elegant and easy to understand.

https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html

Elsewhere in the article, the author speaks about how the work isn’t glamorous, and is really just glorified plumbing. Well, maybe – but as anybody who has lived in a house will tell you, it is plenty important. Good plumbing is plumbing you don’t notice, but reap the benefits of – and that seems to be Palantir’s USP.

While Thiel provided most of the early money, the start-up secured an estimated $2 million from In-Q-Tel, a venture-capital firm that finances the development of technologies that can help the C.I.A.
Karp says the real value of the In-Q-Tel investment was that it gave Palantir access to the C.I.A. analysts who were its intended clients.

https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html

Did In-Q-Tel pay to help start Palantir, or did it hire consultants for 2 million dollars? Did Palantir agree to work for only 2 million dollars to get access to the CIA?

Bottom-line: the world is a non-zero sum game.

According to Thiel, their conversations generally took place late at night in the law-school dorm. “It sounds too self-aggrandizing, but I think we were both genuinely interested in ideas,” he says. “He was more the socialist, I was more the capitalist. He was always talking about Marxist theories of alienated labor and how this was true of all the people around us.”

https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html

This excerpt is from a section which is about Karp figuring out his education and career, and we learn about his Jewish, rebellious background as well. I found this clip interesting because from Peter Thiel’s viewpoint, succeeding in selling the idea behind Palantir to Karp is one of the biggest validations there could possibly be. If he bought into the story, well, there must be something to it. Second, what better way to maintain checks and balances than to have somebody like Karp running the show?

In fact, Thiel hiring Karp for this job becomes more and more interesting the more you learn about Karp. Thiel has a quote in the article about needing someone who was smart and scrappy, but left unsaid, perhaps, is someone who was very unlike Thiel. And not just unlike Thiel, also unlike the typical CEO. A person who worries about the alienation of labor, likes solitary pursuits, and dreams of being an intellectual in Europe isn’t the person you would have in mind as the typical CEO of a firm like Palantir. But that, it would seem, was the whole point. Well, that, and being a bachelor by choice wouldn’t hurt, given the traveling nature of the job.

(Although there is a section in the article in which Karp insists that he being who he is hasn’t helped him or Palantir.)

Karp and Thiel say they had two overarching ambitions for Palantir early on. The first was to make software that could help keep the country safe from terrorism. The second was to prove that there was a technological solution to the challenge of balancing public safety and civil liberties — a “Hegelian” aspiration, as Karp puts it.

https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html

Karp and Thiel make for a Hegelian pair themselves!

When I asked Thiel about the risk of abuse with Palantir, he answered by referring to the company’s literary roots. “The Palantir device in the Tolkien books was a very ambiguous device in some ways,” he said. “There were a lot of people who looked into it and saw more than they should see, and things went badly wrong when they did.” But that didn’t mean the Palantir itself was flawed



He continued: “The plot action was driven by the Palantir being used for good, not for evil. This reflected Tolkien’s cosmology that something that was made by the good elves would ultimately be used for good.”



A moment later, he added: “That’s roughly how I see it, that it is ultimately good and still very dangerous. In some ways, I think that was reflected in the choice of the name.”

https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html

I found this fascinating, and I also found it useful to think about this from the Wikipedia article about the original Palantir:

A major theme of palantír usage is that while the stones show real objects or events, they are an unreliable guide to action, and it is often unclear whether events are past or future: what is not shown may be more important than what is selectively presented. Further, users with sufficient power can choose what to show and what to conceal

https://en.wikipedia.org/wiki/Palant%C3%ADr

The technology is what it is – and as Karp himself points out, it is susceptible to misuse. More importantly, the technology in combination with the person(s) who are using it is, at least potentially, an even more dangerous tool.

Karp made clear that he was opposed to Trump’s immigration policies: “There are lots of reasons I don’t support the president; this is actually also one of them.” He told me that he was “personally very OK with changing the demographics of our country” but that a secure border was something that progressives should embrace. “I’ve been a progressive my whole life,” he said. “My family’s progressive, and we were never in favor of open borders.” He said borders “ensure that wages increase. It’s a progressive position.” When the left refuses to seriously address border security and immigration, he said, the right inevitably wins. To the extent that Palantir was helping to preserve public order, it was “empirically keeping the West more center-left.”

https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html

To understand a big data firm started by one the world’s most successful VC’s, one should end up reading about a German philosopher from the 18th century – for what could possibly more Hegelian than that excerpt?

And finally, the last sentence in the article:

“Palantir,” he said, “is the convergence of software and difficult positions.”

https://www.nytimes.com/interactive/2020/10/21/magazine/palantir-alex-karp.html

That, it would seem, is a reasonably good way to understand Pater Thiel’s investment philosophy!

Read the whole NYT article yourself (at least twice, if you ask me).

Apple through five articles

I’ve said it before and I’ll say it again. If you are really and truly into the Apple ecosystem, you could do  a lot worse than just follow the blog Daring Fireball. I mean that in multiple ways. His blog is one of the most popular (if not the most popular) blog on all things Apple. Popularity isn’t a great metric for deciding if reading something is worth your time, but in this case, the popularity is spot on.

But it’s more than that: another reason for following John Gruber’s blog is you learn about a trait that is common to this blog and to Apple: painstaking attention to detail. Read this article, but read especially footnote 2, to get a sense of what I mean. There are many, many examples of Apple’s painstaking attention to detail, of course, but this story is one of my favorites.

There is no end to these kind of stories, by the way. Here’s another:

Prior to the patent filing, Apple carried out research into breathing rates during sleep and found that the average respiratory rate for adults is 12–20 breaths per minute. They used a rate of 12 cycles per minute (the low end of the scale) to derive a model for how the light should behave to create a feeling of calm and make the product seem more human.

But finding the right rate wasn’t enough, they needed the light to not just blink, but “breathe.” Most previous sleep LEDs were just driven directly from the system chipset and could only switch on or off and not have the gradual glow that Apple integrated into their devices. This meant going to the expense of creating a new controller chip which could drive the LED light and change its brightness when the main CPU was shut down, all without harming battery life.

Anybody who is an Android/PC user instead (such as I), can’t help but be envious of this trait in Apple products.

There are many, many books/videos/podcasts you can refer to to understand Apple’s growth in the early years, and any one reference doesn’t necessarily mean the others are worse, but let’s begin with this simple one. Here’s Wikipedia on the same topic, much more detail, of course.

Before it became one of the wealthiest companies in the world, Apple Inc. was a tiny start-up in Los Altos, California. Co-founders Steve Jobs and Steve Wozniak, both college dropouts, wanted to develop the world’s first user-friendly personal computer. Their work ended up revolutionizing the computer industry and changing the face of consumer technology. Along with tech giants like Microsoft and IBM, Apple helped make computers part of everyday life, ushering in the Digital Revolution and the Information Age.

The production function and complementary goods are two topics that every student of economics is taught again and again. Here’s how Steve Jobs explains it:

 

You can’t really learn the history of Apple without learning about John Sculley firing Steve Jobs.

According to Sculley’s wishes, Steve Jobs was to represent the company externally as a new Apple chairman without influencing the core business. As Jobs got wind of these plans to deprive him of his power, he tried to arrange a coup against Sculley on the Apple board. Sculley told the board: “I’m asking Steve to step down and you can back me on it and then I take responsibility for running the company, or we can do nothing and you’re going to find yourselves a new CEO.” The majority of the board backed the ex-Pepsi man and turned away from Steve Jobs.

And the one guy who helped Steve Jobs achieve his vision for Apple once Jobs came back was, of course, Jony Ive. This is a very, very long article but a fun read, not just about the relationship between Ive and Jobs, but also about Ive and Apple. Jony Ive no longer works at Apple of course (well, kinda sorta), but you can’t understand Apple without knowing more about Ive.

Jobs’s taste for merciless criticism was notorious; Ive recalled that, years ago, after seeing colleagues crushed, he protested. Jobs replied, “Why would you be vague?,” arguing that ambiguity was a form of selfishness: “You don’t care about how they feel! You’re being vain, you want them to like you.” Ive was furious, but came to agree. “It’s really demeaning to think that, in this deep desire to be liked, you’ve compromised giving clear, unambiguous feedback,” he said. He lamented that there were “so many anecdotes” about Jobs’s acerbity: “His intention, and motivation, wasn’t to be hurtful.”

Apple has bee, for most of its history, defined by its hardware. That still remains true, for the most part. But where does Apple News, Apple Music, Apple TV fit in?

Apple, in the near future will be as much about services as it is about hardware, and maybe more so. That’s, according to Ben Thompson, the most likely (and correct, in his view) trajectory for Apple.

CEO Tim Cook and CFO Luca Maestri have been pushing the narrative that Apple is a services company for two years now, starting with the 1Q 2016 earnings call in January, 2016. At that time iPhone growth had barely budged year-over-year (it would fall the following three quarters), and it came across a bit as a diversion; after all, it’s not like the company was changing its business model

Video for 12th January, 2019

Tech: Links for 7th January, 2020

In similar vein to yesterday’s post, these five articles are about what to expect in tech in the year 2020. This Sunday’s video will be along similar lines, by the way.

  1. Venturebeat chooses 10 technologies that the magazine is excited about for 2020. If you ask me, autonomous driving is (mostly) already here. Commercialization of quantum computing is something I am very, very excited by – although I can’t, even now, understand it as much as I’d like to.
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  2. “And 5G will be going to work behind the scenes, in ways that will emerge over time. One important benefit of the technology is its ability to greatly reduce latency, or the time it takes for devices to communicate with one another. That will be important for the compatibility of next-generation devices like robots, self-driving cars and drones.For example, if your car has 5G and another car has 5G, the two cars can talk to each other, signaling to each other when they are braking and changing lanes. The elimination of the communications delay is crucial for cars to become autonomous.”
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    Brian X. Chen with a rather more prosaic list for 2020.
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  3. “In life sciences, we’ll have greater understanding of the dynamics of how our microbiome – the tiny organisms, including bacteria, that live in the human body – influences multiple systems in our body, including our immune systems, metabolic processes and other areas. This will result in seminal discoveries related to a variety of conditions, including autoimmune diseases, pre-term birth and how our metabolism is regulated. Regenerative medicine approaches to creating new tissues and organs from progenitor cells will expand significantly. ”
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    The World Economic Forum weighs in on the issue.
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  4. “Even if the gene drive works as planned in one population of an organism, the same inherited trait could be harmful if it’s somehow introduced into another population of the same species, according to a paper published in Nature Reviews by University of California Riverside researchers Jackson Champer, Anna Buchman, and Omar Akbari. According to Akbari, the danger is scientists creating gene drives behind closed doors and without peer review. If someone intentionally or unintentionally introduced a harmful gene drive into humans, perhaps one that destroyed our resistance to the flu, it could mean the end of the species.”
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    Fast Company ponders a world in which Black Mirror is non-fiction.
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  5. “Ten years from now is “the end of the
    classroom as we know it,” George Kembel of the Stanford d.school
    writes. Professors will be a “team of coaches,” and class projects
    will be like Choose Your Own Adventure — open-ended and actually pretty fun.”
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    Fast Company again, this time in 2010, trying to figure out what the world looks like by the time it is 2020. I can assure you that they got education completely wrong.

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.
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  2. On the whole, a depressing read about higher education in India.
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  3. “Anyway, please join me on an annotated trip through my favorite parts of the mandatory filing.”
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    A delightful (truly!) romp through WeWork’s IPO filings.
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  4. Robotic shorts that make walking and running easier.
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  5. xkcd is a treasure. This one on conferences.

Tech: Links for 9th July, 2019

  1. “In it, astronaut Sally Jansen has been working to come to grips with a Mars mission that went disastrously wrong, and NASA ended its crewed missions into space. But while she’s trying to move on, scientists detect an object designated 2I/2044 D1 entering our solar system, and when it begins to slow down, they realize that it’s an alien artifact. Jansen is called in to try and intercept the object and figure out what is behind it before it reaches Earth.”
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    Science Fiction is a great way to learn a lot and have a lot of fun while doing so, and for that reason, I thoroughly enjoyed learning about the premise of this book. In similar vein, I recently (and finally) finished The Three Body Problem, and can heartily recommend it.
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  2. “The camera was loaded with machine vision algorithms trained by Hamm himself. They identified whether Metric was coming or going and whether he had prey in his mouth. If the answer was “yes,” the cat flap would lock for 15 minutes and Hamm would get a text. (In a nice flourish, the system also sends a donation, or “blood money” as Hamm calls it, to the National Audubon Society, which protects the birds cats love to kill.)”
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    There are many people who bandy about the word AI these days, but this very short read (and within it, a very entertaining video) helps you understand how it could by applied in myriad ways.
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  3. “LightSail 2 is more ambitious and will actually try to maneuver through space, and even boost itself into different orbits using sunlight. The new mission’s mission control website will let people around the world follow along, including the 23,331 people who contributed to the project’s Kickstarter campaign, which raised $1,241,615 for the spacecraft.”
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    A third link from the same website (either The Verge is on fire, or I am being lazy today), but the best of the lot, in my opinion. It is now possible to crowdfund a satellite launch that contains a sail – and you can now watch your investment in space as it flies above your head. What a time to be alive.
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  4. “But while Tufte’s concerns are not limited to charts, he has spent a lifetime thinking through what he called the “perennial” problem of how to represent a multidimensional world in the two dimensions of the page or screen. At the end of the day, he pulled out a first edition of Galileo Galilei to show how the great minds of the past had grappled with the same issues. He rhapsodized over Galileo’s tiny, in-line sketches of Saturn, which clearly inspired his own advocacy of “sparklines” (tiny charts embedded in text at the same size as the text), as well as some beautifully precise illustrations of sunspots.”
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    Data visualization, medical visits, Galileo and sparklines. As they say, self-recommending.
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  5. “And with 92 percent of future jobs globally requiring digital skills, there’s a focus on helping students develop skills for careers that don’t yet exist. Last year, Sweden declared coding a core subject to be taught from the first year of primary school. And there is an appetite for these skills among students, too, with 85 percent of Brazilians from 16-23 indicating that they want to work in the technology sector. ”
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    Well, there’s a thought – I refer to Sweden’s decision. One, complements, not substitutes. Two, the links are worth following in this link – this is a subject very close to my heart.

Tech: Links for 25th June, 2019

I have linked to some of these piece in the past, but this set of posts is still useful in terms of creating a common set of links in one place for you to understand how to think about Aggregation Theory. If you can afford it, I heavily recommend Stratechery!

  1. “What is the critical differentiator for incumbents, and can some aspect of that differentiator be digitized?
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    If that differentiator is digitized, competition shifts to the user experience, which gives a significant advantage to new entrants built around the proper incentives
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    Companies that win the user experience can generate a virtuous cycle where their ownership of consumers/users attracts suppliers which improves the user experience”
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    Begin here: this piece explains what aggregation theory is all about, and why it matters.
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  2. “Super-Aggregators operate multi-sided markets with at least three sides — users, suppliers, and advertisers — and have zero marginal costs on all of them. The only two examples are Facebook and Google, which in addition to attracting users and suppliers for free, also have self-serve advertising models that generate revenue without corresponding variable costs (other social networks like Twitter and Snapchat rely to a much greater degree on sales-force driven ad sales).”
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    Aggregators on steroids: what exactly makes Google and Facebook what they are? This article helps you understand this clearly. Also read the article on super aggregators itself.
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  3. “There is a clear pattern for all four companies: each controls, to varying degrees, the entry point for customers to the category in which they compete. This control of the customer entry point, by extension, gives each company power over the companies actually supplying what each company “sells”, whether that be content, goods, video, or life insurance.”
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    This article explains the FANG playbook, and how they became what they are today: Facebook, Amazon, Netflix, Google.
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  4. “To explain why, it is worth examining all four companies with regards to:Whether or not they have a durable monopoly
    What anticompetitive behavior they are engaging in
    What remedies are available
    What will happen in the future with and without regulator intervention”
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    Ben Thompson states just above this paragraph that he is neither a lawyer nor an economist. But the last two questions in the list above show that he’d make a pretty good economist. He is, in essence, asking what is the opportunity cost of breaking up these firms. As the song goes: with the bad comes the good, and the good comes the bad.
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  5. “All those apps are doing is providing an algorithm that lowers search costs and makes booking easy. Expedia didn’t design, build and maintain the airplane that flew him to Sydney; build or operate the airport; train pilots; or find, produce, refine and transport the necessary jet fuel to power the plane over its continental voyage. Uber didn’t design and manufacture the car used to transport him to his hotel; find, produce, and process the raw materials that go into it (such as steel and aluminium); or actually drive him from the airport to his hotel. AirBnB didn’t design, build, maintain, or clean the house he stayed in, nor supply it with electricity. UberEats and OpenTable didn’t grow and process any raw foodstuffs, or use them to cook a meal, and TripAdvisor didn’t design, manufacture or operate any of the tourist attractions he visited.In fact, all these companies did was write some pretty simple code that made matching buyers with sellers easier and more efficient, and the real question that should be being asked is whether these platform companies are extracting too much value from the supply chain relative to their value-add, and whether that is likely to be a sustainable situation in the long term, or will invite potential disruption and/or an eventual supply-side/regulatory response.”
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    BUT, on the other hand, perhaps this is just old wine in a new bottle?

Links for 4th June, 2019

  1. ““Alexa, are you recording everything you hear?” It is a question more people are asking, though Amazon’s voice assistant denies the charges. “I only record and send audio back to the Amazon cloud when you say the wake word,” she insists, before referring questioners to Amazon’s privacy policy. Apple’s voice assistant, Siri, gives a similar answer. But as smart speakers from Amazon, Apple, Google and other technology giants proliferate (global sales more than doubled last year, to 86.2m) concerns that they might be digitally snooping have become more widespread. And now that these devices are acquiring other senses beyond hearing—the latest models have cameras, and future ones may use “lidar” sensors to see shapes and detect human gestures (see article)—the scope for infringing privacy is increasing. So how worried should you be that your speaker is spying on you?”
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    The article doesn’t answer the question it frames in as direct a fashion as readers might wish, but read this to understand that there is (as with everything else in life) a benefit to this technology, as also a cost.
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  2. “Many voters may have felt that others, more wealthier than them, were also being hurt by demonetization, and hence supported the adventurist move.The results of the second round of the YouGov-Mint Millennial Survey conducted in early 2019 suggest that even today and, despite all the evidence to the contrary, many urban youths who support the ruling party consider demonetization to be a great success of the government.”
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    Can you drive in reverse in a tunnel, Professor Hirschman? Livemint does a three year review of demonetization, and it is worth reading for a variety of reasons.
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  3. “Not all New York City views are created equal.Direct Central Park views may be the most valuable amenity in Manhattan real estate, but in a market filled with soaring new developments — some of which wind up blocking the views of other buildings — even a partial glimpse of a river, park or the city skyline can also command a hefty premium.”
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    This article is proof that microeconomics can be fun. But beyond that, it is also worth going through the article to take in the photographs. New York looks gorgeous!
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  4. “What Microsoft figured out is that it made far more sense for both Microsoft and their customers to pay on a subscription basis: companies would pay a set price on a monthly or annual basis, and receive access to the latest-and-greatest software. This wasn’t a complete panacea — updating software was still a significant undertaking — but at least the incentive to avoid upgrades was removed.There were also subtle advantages from a balance sheet perspective: now companies were paying for software in a rough approximation to their usage over time — an operational expense — as opposed to a fixed-cost basis. This improved their return-on-invested-capital (ROIC) measurements, if nothing else. And, for Microsoft, revenue became much more predictable.”
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    Ben Thompson helps one understand Microsoft, SaaS, Slack, Zoom and a simple way to understand what makes new businesses potentially attractive – be sure to read through the entire article to reach the four quadrant diagram at the end. Entirely worth your time.
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  5. “When it was finally time to deploy, with no hint from the U.S. or China or Brazil or India that anyone would send out a countering air force to simply knock the planes out of the sky, the three billionaires went back to the island and sent the aerosols tumbling through the stratosphere. There was no ceremony, no champagne, no photographs. This was nothing to be celebrated.”
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    My phrase-I-learned-today: Solar Radiation Management.

Links for 1st May, 2019

  1. “As McKinsey points out, governments, businesses and individuals will all have to embrace change and figure out the best ways to move towards digitisation — including on such basics as land records and business transparency (which could improve access to bank credit). There are also many aspects of this wave of digitisation that are not to the good—including the impact of toxic social media, the loss of privacy, and so on. The rules for this new world will have to be framed carefully to prevent business capture as well as political misuse, and to protect citizens from predatory action. What is required is to minimise the costs as much as to maximise the benefits. Still, the over-riding message is clear: The prospects of digitisation are so overwhelmingly advantageous, if not also inevitable, that those who become laggards in adapting to the new reality are the ones that will be left behind.”
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    T N Ninan (author of the excellent The Turn of the Tortoise) writes about the potential of “digital” India while reviewing a McKinsey report about the same topic. The scope, details and aspects of such a topic simply cannot be dealt with in a single post – but with that in mind, this is worth reading.
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  2. “The Right to Education Act in 2009 guaranteed access to free primary education for all children in India ages 6-14. This paper investigates whether national trends in educational data changed around the time of this law using household surveys and administrative data. We document four trends: (1) School-going increases after the passage of RTE, (2) Test scores decline dramatically after 2010, (3) School infrastructure appears to be improving both before and after RTE, and (4) The number of students who have to repeat a grade falls precipitously after RTE is enacted, in line with the official provisions of the law.”
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    That is the abstract of this paper. Also, have you read this book? Also, have you listened to this podcast? Also, keep an eye out for this Sunday’s video.
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  3. “China’s TFP surged in the 1980s following the agricultural and ownership reforms, in the 1990s following the state enterprise reforms and the creation of a modern housing market, and in the 2000s as China prepared for and was then able to exploit WTO membership.The key takeaway is that China’s one-party system deservedly has won plaudits when it has been most ambitious with regard to economic reforms and experimentation with market mechanisms. But this is not the case, for example, before the 1980s and again since 2012, when reforms were suppressed or stifled and inputs were boosted, but without any improvements.”
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    An interview that remains interesting throughout if you are a student of economics, or China and especially the intersection set. Troubling times ahead for the Chinese economy, it would seem – and on account of a variety of short term reasons, and one very important long term one – TFP.
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  4. “That was when he saw the light. Two small, black, rectangular boxes were stacked next to an outlet on the far side of the guest room, both facing the bed. From afar, they looked like phone chargers. But when Vest got closer, he realized they were cameras, and they were recording.”
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    Airbnb, technology, privacy and customer relations. A great way to learn that There Is No Such Thing As A Free Lunch.
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  5. “In 1960, 13.4% of the population age 20-74 was obese (as measured by having a Body Mass Index above 30). In 2016, 40% of the population was obese.
    In 1970, 37.1% of those age 18 and older were cigarette smokers. By 2017, this has fallen to 14.1%.”
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    Just two out of many, many interesting tidbits about America today, and America back then.