Entries by Alan Patrick

Interesting 2 paragraphs from Fred Wilson's blog, talking about "what's next":

But the roadmap has been clear for the past seven years (maybe longer). The next thing was mobile. Mobile is now the last thing. And all of these big tech companies are looking for the next thing to make sure they don’t miss it.. And they will pay real money (to you and me) for a call option on the next thing.

It isn’t clear if the next thing is virtual reality, the internet of things, drones, machine learning, or something else. Larry doesn’t know. Zuck doesn’t know. I don’t know. But the race is on to figure it out. Trillions of dollars of collective market capitalizations are on the line. So a couple billion here or there is chump change. Except for the people who collect that chump change for selling them an option on the next thing. It’s real money to us.

I'm intrigued by the idea of a call option, I think it could be executed better than via VC funding though, Fred - now that would be disruptive

But I think Fred's largely right that Mobile was the last Next Thing - though strictly speaking its not "Mobile" now per se, but PC level processing power meeting Moore's Law and shrinking in size and price so it can be easily portable, with a damn good UI (think iPaq then iPhone). These "Smart" phones and "tablets" killed good old Planet Mobile dead in about 3 years (Motorola, Nokia, Blackberry - where are they now? They were earth shaking giants a few short years ago!)

Anyway, where is the Next Big Thing to be found is the question Fred asks. The future is of course here, just unevenly spread, so the trick is to see what bits of the future are here, now - and actually are going somewhere. Ten things that have changed exponentially in the "networked technology" areas we follow, in the time we've been writing Broadstuff (est 2006) are:

- Robotics (including the flying type)
- Data generation, usage and cost of processing it (aka "Big Data" - but I think the mpact will be felt indirectly - see this video by Phili Evans of BCG
- Penetration and usage of very cheap personal comms....
- .....especially those that are "Things"...
- ....and used to scrape data about "marketing value units" (aka people)
- WiFi Connectivity is increasingly ubiquitous, and whenever a powerful new comms system does that, big changes follow
- Smaller and smaller machine tools (including the over-hyped "3D Printer" but also a whole host of CNC tools)
- Games have moved from PCs to every device, and some games aren't really games any more as the principles move into other areas
- All manners of virtual/augmented reality devices (if Google Glasses don't make them irredeemably uncool)
- "Open" (ie other people's involuntarily exposed) Data - but sadly this will, in my opinion, probably be massively abused and then clamped down again, but its a short term shooting star.

As you can see, these are hardly New New Things, just things that were already here in 2006 and even then clearly had high potential. What's interesting is that they were all already on very predictable development vectors in 2006, but no one looked at them as killer technologies in those days. That was because at that time, their rate of development was still mainly all theoretical, and not provably valuable. To compare, here are 10 other things that were also floating around in 2006/7 that I thought also could happen sooner and haven't yet, but still may as they are all Big Next Next Things potentially.

- Widespread revolt against privacy-invasive free business models (it's starting now though)
- Modular hardware (Fred may recall Bug Labs from 2007)
- Open & portable social networks.
- "New" Search technologies (of which many have been tried over the last few years, a New New search hope appears every 2 years or so)
- Low cost and easy organisation of unstructured data
- Self learning software sorting out my media consumption, inbox and schedule (preferably materialising as a cross-media avatar with Marlene Dietrich's voice)
- VRM (Consumer to Business commercial tools)
- Effective voice recognition (the acid test - can it understand the Scottish accent...)
- And on that note, a near-real time "Babelfish" online service (to translate Scottish to English....)
- Various self-learning Algorithms that could predict things like the stock market, drive cars, etc etc

These are all here today, unevenly distributed, and still chugging along - but at slower rates than the various laws of networking, learning, Moores et al would predict. Typically there is a something in them that is missing, obstinately sticking at current capability or economically unavailable, awaiting the "key" to their leap over the Chasm. But all it takes is a small shift (think iPaq vs iPhone again) and over they go.

All you have to do to build your own mind-boggling portfolio of New Next Things To Watch is read the various Gartner Hype Curves for the last 10 years, and you will see a slew of things on the hot S curve one year and disappearing 2-3 years later. They don't go away though, and are still evolving in the Darwinian mud of technology species, it's just that something hasn't yet quite worked out for them yet. And somewhere in that stew already, are the next 10 New New Things.

It was no great surprise to us that the makers of Candy Crush, King Digital Entertainment Plc , had a less than illustrious IPO. As we wrote in February, it was high time to run for the IPO gate before it closed on them, and they have. Good luck to them, they now have $500m in the bank now, a useful cushion against the slings and arrows of outrageous future misfortune. The c £8.5bn valuation (now c $7bn) will not be quite so easy to live with, I suspect.

But nothing changes our analysis since February, this stock is a still very high risk punt, and sold at Bubbletime prices to Bubble-minded investors to boot.

Who needs Google Glass with these goggles...

Facebook has bought a tiny Virtual Reality company with a near-virtual product for $2bn (mainly stock) - Grauniad.

Facebook has bought the virtual reality technology firm Oculus VR for $2bn [£1.2bn], it announced on Tuesday. In a surprise revelation, the social networking company said it had paid $400m in cash and the rest in more than 23m shares, currently worth $1.6bn [£970m], plus an additional $300m pegged to future performance.

A detailed company statement said that Facebook recognised how Oculus had built a solid following among game developers with 75,000 pre-orders for its virtual reality headset, but that virtual reality technology would expand to other industries from communications and entertainment to education and media.

Kudos to Oculus, it started as a kickstarter project 2 years ago and has taken some serious funding. And actually, its likely that goggles or glasses of some sort will be the view-screen of choice at some point. This is clearly where Facebook see it going, as Mark Zuckerberg notes:

After games, we're going to make Oculus a platform for many other experiences. Imagine enjoying a court side seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face -- just by putting on goggles in your home.

This does point to a rather interesting tussle between Google Glasses and Facebook Goggles for nerdiest eyewear, and it also points to a new tussle for video screenware device-as-portal. But this is very early days for a virtual product for virtual reality, to go for for $2bn. Still, its all virtual money and it all works out in the Bubbletime.

Can't wait for the iGlass now.....you just know its coming.

Today is the 25th "birthday of the Web", although strictly speaking that was the first proposal submitted, a memetic sperm if you like. The actual thing only came out in any recognisable form about 4 years later in 1991. For me it arrived 5 years after it's birth.

It was summer 1994, the day I downloaded the newly released NCSA Mosaic software on Windows (It was already out on UNIX, but I didn't have a UNIX tin anymore). Suddenly, all that stuff I'd been doing before was easy (FTP, Gopher et al). The thing about Mosaic was it was easy to use, put graphics where you actually wanted them and - most importantly - didn't crash! ("Browsing" had been around in buggy pieces of software - Cello anyone - before that, but Mosaic lit the spark - and sealed CompuServe and AOL's doom).

The rest, as they say, is history.

Anyway, with a sad (but quick) wave goodbye to Archie and Veronica, and grabbing my trusty basic guide to HTML, I started writing my first website.

Today of course you can knock out a whole web experience in the time it took to write one page then, but what the hell, that was web hacking early 90's style.

(Archie and Veronica were pre-Web search engines for FTP and Gopher respectively)

Kudos Gangstersout blog

Two pieces of news in quick succession - Friday, drones are cleared for use commecially in the US* - Pando Daily:

Drones might soon be coming to a neighborhood near you. A federal judge has ruled that the Federal Aviation Administration has not explicitly outlawed the unmanned aerial vehicles. This will allow all number of businesses, from beer distributors to photography companies, to operate their drones without running afoul of the law.

The ruling was made in favor of Raphael Pirker, a drone pilot fined by the FAA for “operating a drone recklessly while filming at the University of Virginia,” according to Politico. Though the FAA could issue an emergency rule to ban commercial drones or appeal the ruling, the case will allow drone operators to fly their vehicles below 400 feet, at least for now.

And then today: news in that two major US legal practices, LeClairRyan and McKenna Long, have set up Drone case chasing groups. - Washington Post:

LeClairRyan’s drone group, based in Annapolis, is led by Tim Adelman and Doug McQueen, a flight instructor and United Airlines pilot, respectively, in addition to being aviation attorneys. McKenna Long’s practice is headed by Mark Dombroff, a partner in the firm’s McLean office and a former in-house lawyer at the Federal Aviation Administration.

“We want to help [companies] shape rulemaking and get a seat at the table, then actually operate in a world they had a hand in creating,” Dombroff said.

There are thousands of companies building drones and trying to market and sell them, but they are running into hurdles because the federal government has yet to create regulations to govern them, Adelman said.

What a marvellous world......still, as the picture above shows, the hunting season could be prolonged all year

*Update: The FAA have appealed, which means the drones don't fly until its settled, and there will be lots of lawyers droning on about drones

Some weeks ago I gave a talk about the "Dark Side of Open Data" at the Open Data Institute, where I predicted that the major beneficiaries of government data were not going to be private citizens, taxpayers, or enthusiastic small startups, but large enterprises with deep pockets and less than altruistic service models. The slide I used noted that history tells us any potential goldmine will be mined, and the obvious business model would be:

- Triangulation of Open Data sources and other freely available data (Anonymisation is bunk)

- Buy other private (maybe "lost") data for triangulation (Anonymisation is bunk part II)

- Use Open Data, together with Big Computing to drive products for commercial purposes

As to who would do this, the question I posed was "Which side are all the sharpest knives on?". No surprises then, that today I read in a McKinsey article on trends in Big Data that:

...there was a growing awareness, among participants, of the potential of tapping swelling reservoirs of external data—sometimes known as open data—and combining them with existing proprietary data to improve models and business outcomes. (See “What executives should know about open data.”) Hedge funds have been among the first to exploit a flood of newly accessible government data, correlating that information with stock-price movements to spot short-term investment opportunities.

Which immediately begs the question as, given the government is giving away the data, and the taxpayer funding it, should they be getting a better deal and not letting it go for $0.00?. I contend, in a world where companies such as Facebook valued at c $ 175 bn will pay $19bn for companies like Whatsapp primarily for their user data assets, that the answer is "no".

Another slide I put up was a rather perceptive comment by Jo Bates, of Manchester Metropolitan University, from 2012:

The current ‘transparency agenda’ [of the UK government, supported by prominent Open Data advocates] should be recognised as an initiative that also aims to enable the marketisation of public services, and this is something that is not readily apparent to the general observer.

Further, whilst democratic ends are claimed in the desire to enable ‘the public’ to hold ‘the state’ to account via these measures, there is an issue in utilising a dichotomy between the state and a notion of ‘the public’ which does not differentiate between citizens and commercial interests…”

The issue is that there is major asymmetry between those that stand to gain (a few corporation s and companies) and those that stand to lose (citizens who have their data appropriated and misused with no recompense). That point is made loud and clear by the McKinsey news...and this is just the beginning, I'd predict. My last slide but one was about what I predict we will see for the next few years:

- The combination of enthusiasts who see no problems, and commercial interests who intend to make money from the exact problems it will cause, will ensure data will get out without adequate protections or safeguards, at low cost (to the buyers)

- The people who experience “the problems” (eg data hacked, sold, etc) will have little redress initially, but resistance will increase via social media channels

- There will be scandals, “lessons will be learned”, but little will be done…

- …until there is one scandal too many, too many "little people" will have been damaged, and the pressure to Do Something will be unavoidable.

- Finally there will be (over) regulation, an OfData will be formed, and it will all settle down to business as usual

So it is no great surprise that hedge funds are early entrants, nor that this week news emerged that 13 years of UK health data had already been sold under the radar to insurance companies for a pittance (to be fair, it was sold for modelling purposes, but the fact remains no one had agreed their data should be sold).

However, there are signs of hope. Days after I gave my talk, the Health Secretary had to abandon plans to sell off health data after a vigorous public protest campaign (waged heavily by social media....) and days later decided they would not sell patient data to such customers. In fact, what looks like an early day charter emerged, as the Government promised to:

....provide "rock-solid" assurance to patients that confidential information will not be sold for commercial insurance purposes, the Department of Health said.

He is to put a raft of measures in place including a statutory requirement that any patient's opt-out will be respected and legislation that will prevent the Health and Social Care Information Centre (HSCIC) – the body which will control the data – from sharing personal information where there is "not a clear health or care benefit for people".

A Department of Health spokeswoman said this "puts beyond any doubt that the HSCIC cannot release identifiable, or potentially identifiable, patient data for commercial insurance or other purely commercial purposes."

The HSCIC will also be bound by laws to protect patient confidentiality when anonymised data is released. And any researchers who wish to access identifiable data must demonstrate "an ethical reason to do so".

Reading the comments to that report though, it is clear that all the shenanigans and the backlash that finally brought the Government to this point has significantly reduced any trust that this new recommendation will actually be followed - especially as they are going to try yet again to change the law, to be able to make data accessible in a few months time.

The other interesting event today was an abortion charity being heavily fined for being somewhat cavalier with peoples' data and giving it to a hacker. While its a pity its a charity, unless penalties for slack data care are pretty heavy there will be little incentive to look after peoples' data and it will be open season for hackers.

Yes, another one has found it has some Bitcoins missing:

A bitcoin bank has been forced to close after hackers stole 896 bitcoin, worth £365,000, in an attack on Sunday....

"On March 2nd 2014 Flexcoin was attacked and robbed of all coins in the hot wallet,” the statement read. “As Flexcoin does not have the resources, assets, or otherwise to come back from this loss, we are closing our doors immediately.”

Not all of the company’s assets were stolen. In line with best practices for running a bitcoin financial service, Flexcoin held some bitcoins in “cold storage”, keeping them on devices not connected to the internet. Those bitcoins are safe, but only users who explicitly requested their bitcoins be held in cold storage (and paid a 0.5% fee) benefit.

We told ya so....

In the 90's and 'Noughties I made many trips to San Francisco/ the Valley, and as the 90's dotcom bubble built up on I noticed two "non-stock" signals of its frothiness - house prices and occupation of the SoMa (South of Market) area by trendy bars and techie startups:

- House prices rose to the point that educated non techies couldn't afford them, so people like teachers were priced out. This is starting to happen again. (By the way, my "top of market" indicator was when teachers in SF/SV decided to sell and go and teach elsewhere/semi retire based on the huge house price gains)

- SOMA became littered with start up bumf, not old newspapers, and you were tripping over blue-bazered dotcommers instead of winos (SoMa to me has been the flood plain of economic exuberance in the SF/SV area, its use is a good marker of prevailing conditions) - and its filling up with DotCom 2-ers again.

So, another sign of the BubbleTime.

Of course, this time it Will Be Different....

Of course it will....

Incidentally, I recall going back in c 2003 after a 2 year absence and there was a house price tumble almost back to Palo Alto, plus SoMa was full of winos and old newspapers again....

The Tube, if it told the Truth - Kudos Buzzfeed

Every time you think that Twitter has become more silly than it was, something existential like the above emerges in your feed and you stay hooked. That is all you need to know about Twitter's ongoing value proposition.

(Actually.....I have a meeting in town today, I can either get there from Tourist Tat or Eric Pickles.....oh the choices)

I haven't heard much about Prediction Markets for a while, but here is a new one - predicting Innovation - Innovation Excellence:

Prediction markets were popularized in James Surowiecki’s 2004 book, The Wisdom of Crowds. They are systems which forecast the outcome of projects or events based on how willing individuals are to buy “stock” in them. People buy shares in the topics they think will succeed. Each topic or event then gets a value similar to a stock market price. These prices can be interpreted as predictions of the likelihood of the event.

Companies such as Motorola have used prediction markets to engage employees in selecting and predicting which new product ideas will turn into winners. According to Consensus Point who supply the Huunu Prediction Market package, Motorola have doubled the number of ideas pursued and significantly improved time to market. Other users of the Consensus Point platform include Best Buy and Healthstream.

What makes prediction markets better at engaging employees than conventional suggestion schemes is the element of gamification. Exago is an innovation consultancy which supplies a prediction market service with a strong games emphasis. Participants get points to spend on ideas and they get additional points for suggesting ideas. The values of their holdings increase if they back ideas which are turned into implemented innovations. The points can be redeemed for personal prizes or corporate rewards such as attendance at prestigious external conferences or training sessions.

Exago claims that employee participation in their schemes ranges from 20% to 70% which is well above average for large scale suggestion schemes.

Much was predicted for Prediction Markets a few years back, but they faded from view as results were not as stellar as, er, predicted (especially in the US elections), but hope always burns. The reason is typically that the preconditions for them to work are ignored, i.e. that all choices must be made by a heterogenous and fairly large number of people who are in no way influenced by one another or any common intrinsic factors.

If this can be pulled off in companies (or by companies crowdsourcing innovation) it will be a very interesting.

One to watch.