Category Archives: Observer

Real hero of the Facebook story isn’t Zuckerberg

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My take on the Facebook story — from yesterday’s Observer.

The number to watch is not the putative $100bn valuation but the 845 million users that Facebook now claims to have. The observation that if Facebook were a country then it would be the third most populous on the planet has become a cliche, but underpinning it is an intriguing question: how did an idea cooked up in a Harvard dorm become so powerful?

Thanks to a compelling movie, The Social Network, we think we know the story. A ferociously gifted Harvard sophomore named Zuckerberg has difficulties with women and vents his frustration by creating an offensive web application that invites users to compare pairs of female students and indicate which is “hottest”. He puts this up on the Harvard network where it gets him into trouble with the authorities. Then he lifts an idea from a pair of nice-but-dim Wasp contemporaries who need a programmer and, in a frenzied burst of inspired hacking, implements the idea in computer code, thereby creating an online version of the printed “facebooks” common to elite US universities. This he then launches on an unsuspecting world. The Wasps sue him but lose (though get a settlement). Zuckerberg goes on to become Master of the Universe. Cue music, fade to black.

It’s all true, sort of, but the dramatic imperatives of the narrative obscure the really significant bit of the story. So let’s rewind…

TCP/IP and the dim future of universities

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This week’s Observer column.

Once upon a time, a very long time ago, in 1995 to be precise, a scholar named Eli Noam published an article in the prestigious journal Science under the title “Electronics and the Dim Future of the University”. In it, Professor Noam argued that the basic model of a university – which had been stable for hundreds of years – would be threatened by networked communications technologies.

Under the classical model, universities were institutions that created, stored and disseminated knowledge. If students or scholars wished to access that knowledge, they had to come to the university. But, Noam argued, the internet would threaten that model by raising the question memorably posed by Howard Rheingold in the 1980s: “Where is the Library of Congress when it’s on my desktop?” If all the world’s stored knowledge can be accessed from any networked device, and if the teaching materials and lectures of the best scholars are likewise available online, why should students pay fees and incur debts to live in cramped accommodation for three years? What would be the USP of the traditional university when its monopolies on storage and dissemination eroded?

If that was a good question in 1995, it’s an even better one today…

Facebook and the sociopathic mindset

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This morning’s Observer column.

The truth is that companies such as Facebook are basically the corporate world’s equivalent of sociopaths, that is to say individuals who are completely lacking in conscience and respect for others. In her book The Sociopath Next Door, Martha Stout of Harvard medical school tries to convey what goes on in the mind of such an individual. “Imagine,” she writes, “not having a conscience, none at all, no feelings of guilt or remorse no matter what you do, no limiting sense of concern of the wellbeing of strangers, friends, or even family members. Imagine no struggles with shame, not a single one in your whole life, no matter what kind of selfish, lazy, harmful, or immoral action you had taken. And pretend that the concept of responsibility is unknown to you, except as a burden others seem to accept without question, like gullible fools.”

Welcome to the Facebook mindset.

The tyranny of hindsight

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This morning’s Observer column about Kodak’s demise.

A good way of inoculating yourself from the wisdom of hindsight is to read Clayton Christensen’s seminal book, The Innovator’s Dilemma, which is the best explanation we have of why and how successful firms can be undermined by disruptive innovations – even when they appear to be doing everything right: listening to their customers, watching the marketplace, and investing in research and development.The really sobering thought to emerge from Christensen’s book is that good decisions by great managers can still lead to corporate disaster. The reason is that while big companies are often good at fostering “sustaining” innovations – ones that enhance their positions in established markets – they are generally hopeless at dealing with innovations that completely disrupt those markets.So the question that Kodak’s demise raises in my mind is this: would any of us have done any better in 1976 after our R&D guys had come up with an idea that would cannibalise our core business and reduce our margins to near zero?

Is YouTube really a threat to conventional TV?

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From my piece in yesterday’s Observer.

The big question is whether YouTube poses a strategic threat to the traditional television industry. Up to now, most observers have been sceptical about that. They see conventional TV and YouTube as inhabitants of parallel universes. TV is all about marshalling scarce and expensive resources, exerting tight editorial control and charging for content. YouTube is all about the absence of editorial control, not charging for content, harnessing the abundance of free, user-generated (and sometimes copyrighted) material and extracting value from it by attaching personalised advertising to video clips.

The parallel-universes theory appears to be supported by comparisons of how people use YouTube and conventional TV. While a lot of people visit YouTube every day, they stay, on average, for only 15 minutes. Conventional television viewing, on the other hand, at between four and five hours a day in the US, seems to be holding up quite well. On the basis of these numbers, can TV executives continue to sleep easily?

Maybe. But Google, which owns YouTube, has plans to increase the “stickiness” of YouTube by getting into the content-creation business…

Has Microsoft Word affected the way we write

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This morning’s Observer column.

Here’s a trick question: who’s produced the most books in the past 30 years? Answer: a guy called Charles Simonyi. Eh? Well, I said it was a trick question. Mr Simonyi, you see, is the chap who created Microsoft Word, which is the word-processing program used by perhaps 95% of all writers currently extant, and although Simonyi didn’t actually write any books himself, the tool he made has definitely affected the ways texts are created. As Marshall McLuhan was fond of saying, we shape our tools and afterwards they shape us.

I write with feeling on the matter. When I started in journalism, I wrote on a manual typewriter. After I’d composed a paragraph, I would look at it, scribble between the lines, cross out words, type some more before eventually tearing the page out of the machine and retyping the para on a fresh sheet. This would go on until my desk was engulfed in a rising tide of scrunched-up balls of paper.

So you can imagine my joy when Mr Simonyi’s program appeared…

The piece has attracted some very thoughtful comments.

The SOPA opera

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Last Sunday’s Observer column.

The key to survival – in business as in the jungle – is to be able to learn from your mistakes. The strange thing is that some industries haven’t yet figured that out. Chief among them are the so-called “content” industries – the ones represented by huge multimedia corporations which own movie studios, record labels and publishing houses.

Every 20 years or so, technology throws up a challenge to these industries. When audio cassettes arrived, for example, the music industry fought tooth and nail to have the technology outlawed or crippled. Why? Because it would encourage “piracy”. What happened? The record labels wound up making lots of money from cassettes as well as records.

Then along came the video recorder, and the movie industry fought it tooth and nail because it was the handmaiden of the devil – on account of facilitating “piracy”. What happened? Same story: it turned out that the studios were able to make tons of money from videocassettes, because films continued to sell long after they had disappeared from cinemas.

Since then the story has been repeated at least twice more – with DVDs and portable MP3 players. So you’d think that the penny would have dropped in what might loosely be called the minds of those who run the content industries. The lesson is that new technologies that look like threats can become glorious opportunities. But there’s still no evidence that media moguls have grasped that simple idea.

The ideas man

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I’ve long been an addict of Edge.org, the website/salon founded by John Brockman. I finally got to interview him for the Observer.

To say that John Brockman is a literary agent is like saying that David Hockney is a photographer. For while it’s true that Hockney has indeed made astonishingly creative use of photography, and Brockman is indeed a successful literary agent who represents an enviable stable of high-profile scientists and communicators, in both cases the description rather understates the reality. More accurate ways of describing Brockman would be to say that he is a “cultural impresario” or, as his friend Stewart Brand puts it, an “intellectual enzyme”. Brand goes on helpfully to explain that an enzyme is “a biological catalyst – an adroit enabler of otherwise impossible things”.

The first thing you notice about Brockman, though, is the interesting way he bridges CP Snow’s “Two Cultures” – the parallel universes of the arts and the sciences. When profilers ask him for pictures, one he often sends shows him with Andy Warhol and Bob Dylan, no less. Or shots of the billboard photographs of his head that were used to publicise an eminently forgettable 1968 movie. But he’s also one of the few people around who can phone Nobel laureates in science with a good chance that they will take the call.

Amazon v the high street

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First Observer column of 2012.

Now’s the time of year when columnists are expected to peer into crystal balls. Not being able to find such a device in his local Apple shop, all this columnist can do is to speculate on the implications of some developments that are already highly visible.

Online shopping, for example. A glance down any high street confirms that Amazon & Co is beginning to make inroads into the urban landscape. The costs of running a bricks and mortar shop – in rent, rates, inventory, theft and wages – together with the wafer-thin margins of most retailers (excluding Apple and other purveyors of luxury goods) meant that it was a knife-edge business at the best of times. But the combination of recession and intensified competition from online is proving too much for some retailers, which is why high streets are beginning to have a gap-toothed look…