Archive for September, 2008

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An Irresistable Photo Op

No photography


Due to the level of alert throughout
our nation regarding terrorist activity,
picture taking is prohibited in all areas
of this parking facility.
If at anytime you should see a person
or persons taking pictures
please report this immediately
to the security or management personnel
we thank you for your cooperation in this

The Management
Union Square Garage

A Separate Reality: on the Brink

A Separate Reality

Sometimes it takes a few days for the dust to settle, for all the threads to become untangled, and for the bright lines of an event to emerge. BearHug Camp defined the silhouettes of two alternate futures.

To paraphrase a politician’s recent comment, the fundamentals of microblogging are sound. The 140 character standard message length seems safe for the moment. But one senses there’s an uncomfortable feeling about the randomness of that specific constraint and its origin in SMS. Access to APIs and the ecosystem of multiple end clients providing and discovering unique new value propositions filtered from the fire hose of the full microblogging stream is pretty stable. But there’s a fear that access may be cut off, or that the economics of API access may change radically. System stability has improved measurably, but is still below acceptable major league standards. Real time messaging and track are still on the critical list, either absent or cobbled together as a pencil sketch (everything works for a small N).

Convergence on a unified microblogging standard is key to the foundation of a larger ecosystem, what Dave Winer calls a coral reef. Currently that convergence owes its existence to the mirroring of Twitter’s feature set. The distribution of power within the political economy of the system leaves this as the only avenue for progress. An open standard that departed from Twitter wouldn’t have a leg to stand on.

The first possible future belongs to Twitter. It’s a future where scaling a real time microblogging messaging system with track is key to success. The transition of the economic model of API access from free to one with some kind of usage tax will lay the foundation for a potentially dominant business model. As long as the tax is low enough and the volume high enough, Twitter will prosper and the friction they’ve introduced won’t slow down viral growth.

Oblique Strategy: Think Garden instead of Architecture

The second possible future belongs to a distributed network of players. The big scale required by Twitter’s architecture is redistributed to multiple players with different roles and responsibilities within a networked system. It’s not that competes with Twitter, but an ecosystem of sites that cooperate to provide the identical feature/function set along with a fertile ground for new innovation. But there’s a fly in the ointment, there is no ecosystem. Currently there are only unscalable instances of that don’t connect to each other very well. In order for there to be viral growth in the Open Microblogging ecosystem the individual nodes actually need to form a network of connections. Today they don’t. The nodes aren’t nodes so they can’t grow as a network. Many aren’t competing against One.

There are couple of things missing from this garden:

  • Name resolution across Open Microblogging nodes
  • Inter-node real time public and direct messaging
  • Full network real time track (Aggregate XMPP Firehose)
  • Multiple clients for multiple devices

To the extent that these items aren’t at the top of the Open Microblogging project priority list, and Open Microblogging stand on the brink of an abyss. The “growth” of disconnected nodes is the illusion of growth. In a few weeks Twitter will turn on all services, introduce a small tax and the game could well be over. The acolytes of Open Source believe they will win the war because they have a structural advantage that over time will prevail. The metaphor that was used was “flipping the iceberg.” Except for the fact that there is no structural advantage and they don’t have a critical mass of users, nor a method to virally attract them. They’re living in a separate reality, their watches have stopped and their eyes aren’t on the prize.

BearHug camp showed us all the shape of the playing field, that the game was underway, and the ball was pointedly handed to the key players. Can they keep their eyes on the prize? From the opening gun, this game is being played in sudden death. The next move is crucial.

Hambrecht Previews the Next 18 Months

Om Malik interviewed my old boss Bill Hambrecht about the state of the economy and the future of the IPO in Silicon Valley. Watch the whole thing. Hambrecht has worked on transparency in the pricing of securities for many years. His ideas about using a modified dutch auction to price initial public offerings are still revolutionary.

Hambrecht’s explanation of the subprime mortgage crisis is one of the clearest I’ve heard. Mortgage backed securities are traded in a dealer-to-dealer market without transparent and continuous pricing. Stocks are priced through a continuous auction on the stock exchanges. When a company has to voluntarily mark down the value of these mortgage-backed securities, they hesitate. When they’re finally forced to mark an asset down, there’s a big jump down in value. That change in value wrecks the balance sheet. Interestingly, it’s not a business or revenue issue– it’s a price/value of assets problem. Hambrecht’s solution has always been to allow the market to discover the appropriate price and make the process transparent.

Hambrecht thinks the consolidation of the bulge bracket investment banks means that big iBanks will only be doing big deals. Their cost structures will dictate a move toward the mega deal. The ground is being prepared for a new crop of boutique investment banks to bring the new crop of small companies public. My favorite quote in the interview? “It’s like 1968 all over again.”

Tree Planting and the Politics of the Soil

Japanese Maple

I recently planted a new Japanese maple tree in my back garden. The new one replaced an old one that had died a suspicious death. Over the last few seasons its growth had slowed to a crawl. It had always put on a fine display of maple leaves that turned bright orange-red in the Autumn. When they fell to the ground, the leaves scattered across the green grass making beautiful patterns.

This Spring the maple tree barely sprouted leaves; clearly something wasn’t right. We consulted with our gardener and we took some measures to try and bring the tree back to health. In the end, the battle was lost. A preliminary post-mortem concluded that a gopher had eaten the roots of the tree and therefore it was unable to take in water and nourishment from the soil.

A month or so passed and the Japanese maple turned into a stark and brittle wooden sculpture. Slowly, bit by bit, the life was drained from it. My wife and I drove down to Half Moon Bay to a large nursery to pick out a replacement tree to be planted to celebrate my birthday. After a few stops, and auditioning a number of trees, we found a perfectly formed Japanese Maple — an Emperor I variety.

When we planted the new tree, the mystery of the previous tree’s death was revealed. The gopher was exonerated by a more thorough investigation. The large Italian cyprus tree nearby, a tree planted in the 1920s, had strangled the maple. It was murder. The cyprus sends out shallow roots in a fine dense mesh. The roots of the large tree surrounded, enclosed, and cut off the water supply of the smaller maple. The Japanese maple has woody roots that are meant to grow deep. They never had a chance.

This war of the root systems had been going on underground all along, invisible to us. We suddenly discovered that our garden is also a kind of battlefield. We were about to plant a new tree and place it in harm’s way. We realized that we couldn’t do what we’d done before. If we simply went ahead and planted the tree, it would meet the same fate as its predecessor. It was the end of the era of naive tree planting.

Our gardner came up with a solution. The new Japanese maple came in a large 10 gallon plastic container. The plan was to cut the bottom from the container and plant the tree along with the container. The container’s plastic sides would serve as a barrier which would protect the new roots from the Cyprus root’s smothering embrace. This new arrangement gave the maple’s roots the chance to grow deep into the open soil below.

As we plant new trees, and start new ventures, sometimes we aren’t attuned to the political currents flowing just below the surface. Our naive first attempt at tree planting assumed we were entering a neutral and nurturing space. Who could take exception to the addition of a beautiful tree to our garden? We won’t know for some time whether the strong move by the federal government of our garden will have effectively given the new maple tree the chance to grow and prosper. But so far, so good.

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