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Category: venture capital

Graeber and DiDonato: Imagine Technology for Nothing

David Graeber’s recent interview on puts a spotlight on an uncomfortable fact about the economics of our working world. The more you care about something, the less you will be paid for it. Art is for art’s sake, and therefore monetary compensation is subsidized by the worker’s own care. The more you care, the lower the monetary reward required to get you to take on certain kinds of work. If you are truly passionate about something, you should expect no financial reward at all. This is especially true if you care about directly helping and educating other people. We’ve set up the incentives so that it’s almost impossible to care for another person without extreme sacrifice.

In her recent commencement speech for the 2014 graduating class of Juilliard, the great American diva Joyce DiDonato delivered a similar message. “You aren’t going to make ‘it'” and that’s because there is no “it”. The lives of these students of art, drama, dance and music will be dedicated to service within their respective arts. There’s no point in thinking about the financial rewards beyond what it takes to keep body and soul together. It’s as though DiDonato is talking to a room filled with religious martyrs about begin their journeys. Given the state of our culture, DiDonato is dispensing very practical advice.

In the San Francisco Bay Area, the wealthy technology giants are learning the meaning of noblesse oblige. In an era of vast income inequality, these technologists have to learn how to care about the neediest among us. Of course, they learned long ago that there’s no percentage in “caring”. The people who “cared” ended up burned out and barely scraping by. It’s only by extreme focus on technologies that will “help all of humanity” (but no person in particular), that they’ve amassed these large fortunes. Only a loser would focus their energies directly on helping the people around them. To avoid the label of vampire squids of the West coast, the technology and venture capital giants must become less focused, must use their excess capacity on something completely outside of their corporate mission statement — helping the people sleeping on their doorstep.

In some alternate universe I imagine DiDonato giving this talk to a class of computer science students. Telling these young technologists to focus on, not monetary rewards or groundbreaking technological achievement, but on the ability to meaningfully touch the lives of people in need. No doubt they will face hardship and days when they’ll ask themselves if it’s really worthwhile. Only their passion for making a difference in people’s lives will carry them through.

For DiDonato it’s crucial to focus on the moments of joy along the way. That’s how a passion for the work can be sustained. For some reason that brought to mind a video of opera singers Rene Barbera and Wayne Tigges backstage in a dressing room singing “More than Words” by Extreme. In the mirror you can see Joyce DiDonato lip syncing and dancing to their impromptu performance. Sometimes those moments of joy aren’t under the lights of the main stage in front of a full house. Other times, they are.


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Apps and Sturgeon’s Law


Despite the fact that the Network has a kind of permanent memory, it’s not very good at remembering certain things. Or maybe it’s just that we aren’t. We see what we want to see.

During the last internet bubble we learned about startups, venture capital and burn rate. There’s a small window for new technology companies to find an exit before they burn up. The more companies in a space, the more difficult the exit.

The last bubble was burst when a list of tech companies was published that compared their cash on hand to their burn rate. Suddenly it was simple to see how much time each company had to make a profit or an exit. It wasn’t a pretty picture.

The unlimited optimism of the time quickly turned into a climate of fear. Investors suddenly wanted to see revenues and profits. It changed everything. Should someone publish such a list today, it would have a similar effect. We’ve simply forgotten that start ups burn cash, and while many things are cheaper, the fuse has just been lengthened a bit.

Another thing we seem to forget is that free communications systems fill up with spam. It’s estimated that 70% of all email is robot-generated spam. Whenever a new social communications hub is created we think that this time it’ll be different. As a social networking system matures it attracts trolls and starts to fill with spam. It’s always worked that way.

If your company is marketing to a free (non-subscription) social network, it’s likely the audience is filled with robots and spam accounts. Free access to a social network lowers barriers to growth, but it also creates a fertile ground for gaming the system.

Recently I read that 80% of mobile apps are used only once. That seems like a high number until you remember Sturgeon’s Law. This law states that 90% of everything is crap. In light of that, 80% is actually an excellent number. The other thing this should tell you is that as the ecosystem of apps matures it will revert to the norm. That means the number of apps used only once is more likely to be headed toward 90% than 70%.

If an app store has 1 million apps, 900,000 of them are crap. That leaves 100,000 that might be useful. That’s actually a pretty big number. Some say that software is going to eat everything. It’s certainly going to try and eat everything. But despite the brilliance of the young engineers writing this ravenous software, 90% of what they produce is going to be crap. It’s easy to forget when everyone’s smiling, optimistic and sure that their new technology is going to fundamentally change the way we do this or that.

It might be more helpful to look at tech start ups as though they were a slot machine programmed to take your money 90% of the time. Some can afford to play games with those odds, most can’t.

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A Ring Cycle For The Anthropocene

This past week I attended the San Francisco Opera’s production of Richard Wagner’s Ring of the Nibelung. For those unfamiliar with this ritual, the work is comprised of four operas: Das Rheingold, Die Walkure, Siegfried and Gotterdamerung. They tell the story of the twilight of the gods. When presented as The Ring, the four operas are presented within a single week and the total running time of the work is about 17 hours. It’s a massive work consisting of 2,092 pages of orchestra music, and this production requires the participation of 415 people and 12 animals. Mounting a production of the Ring Cycle is one of the most challenging things an opera company can attempt. Generally, three full cycles are performed. When a company with the stature of San Francisco Opera performs The Ring, it draws an audience from around the world. This was my third Ring Cycle. The Ring is too vast to address fully in a blog post, so instead I’ve decided to just string together some notes, some moments that stood out to me this time through. This was an American Ring, the tale begins with the California gold rush and ends in the near future.

* * *

The characters and narrative of The Ring are loosely derived from Norse mythology. But as new productions are mounted through the years, The Ring attracts the major threads of modern thought. The unconscious, capital, class, gender, power, sexuality, and race have all surfaced in one production or another. In director Francesca Zambello’s American Ring, ecology and the interconnectedness of things provides the environment in which the story unfolds. Here the canvas of the story isn’t a neutral backdrop, it’s affected by the actions and decisions of the characters. I’ve been reading and listening to a lot of Timothy Morton, so the idea that The Ring should address the ecological thought seems completely natural.

Alberich steals the gold from the Rhinemaidens and forsaking love, he fashions it into a ring of power. Wielding that power, he begins a massive gold mining operation, delving deep into the earth, he turns the magic power of the ring into the material power of gold. The stage pictures bring to mind Sebastiao Salgado’s photographs of gold mining in Brazil. Meanwhile in the world of the gods, Wotan has flipped the structure of the gold mine upwards toward the heavens and created a Valhalla of skyscrapers. But like so many in the recent mortgage crises, he’s purchased a Valhalla that he can’t afford. In order to avoid default on the fortress of the gods, Wotan resorts to crime. He must steal the gold from the thief Alberich—a little money laundering to cover up the stains on the foundation of the godhead.

In Zambello’s Ring, the concentration and exercise of power drains the earth of its life. Power is drawn from the environment, but the earth isn’t an infinite resource. As the operas unfold, the environment has been turned into a standing reserve– a battery, or a gas tank, to power the regime. At the beginning of the third act of Gotterdamerung, the Rhinemaidens are destitute, collecting trash in big garbage bags as their river has been choked with the flotsam and jetsam of the industrial wasteland surrounding them. The struggle for the Ring taking place in the foreground is interrupted by the background of the story. The river would like its gold back.

At the end of the Ring Cycle, Brunhilde has understood that the Ring must be returned to the river and that this will mean the end of the gods. The music registers the cataclysm of the fall of Valhalla and the cleansing power of the river to wash the sins from our hands. The end of the Cycle points to an ending as beginning. One door closes and another opens. Zambello is an optimist, the return of the Ring represents the possibility of renewal. Throughout the story we’ve seen the earth’s finitude, the director’s gesture in the very last stage picture indicates the damage is not beyond repair.

* * *

The Ring Cycle is so large that there’s no vantage point from which to take it all in. Well before the first notes, the experience begins to engulf you. There’s a review of the motifs with Deryck Cooke. Listening to favorite recordings, trying to get the sequence of events in the story lined up. Thinking about the singers cast in various roles and whether they’ll be up to the daunting task ahead.

Believe me, nobody has every composed in this manner. I think my music must be frightening. It is a morass of horrors and sublimities.

—Wagner to Liszt, January 1854

Once the performance begins you’re well into the middle of it. The opera is broadcasting on all frequencies and flooding the senses. In this experience of the Ring Cycle, I had the distinct impression that the music continued between performances of the individual operas. While there aren’t hummable tunes in the Ring, the motifs of the music seemed to detach themselves from the opera and emerge from the America that exists outside of the opera.

Even after the final end, the music continues to play, the cycle begins again. Once inside, there may be no outside.

* * *

Several years ago, the San Francisco Opera commissioned a work by John Adams called ‘Doctor Atomic.’ It’s the story of the creation of the atom bomb. The director of the premiere was Peter Sellars. In a talk he gave about the opera, he noted that the stage of the War Memorial Opera House directly faces City Hall, the seat of power for local government. The relationship between the buildings provided an avenue for art to speak to government.

Perhaps we no longer think that art has anything useful to say to government. But the two buildings sit across from each other, waiting for the moment when the conversation begins to flow in both directions. Like ‘Doctor Atomic,’ the Ring Cycle had something to say to government.

* * *

The curtain came down after the final act of Gotterdamerung and applause erupted. Then the curtain rose for Nina Stemme, the Brunehilde of this Cycle. A solo bow, in acknowledgement of her achievement. The crowd leapt to its feet applauding, shouting, whistling, in a unanimous ovation. It was a thrilling moment.

And an unusual moment between the second and third acts as Donald Runnicles, the conductor, took his place. A spontaneous standing ovation for the orchestra. As a friend said during that intermission, “man, they’re just wailing.”?

* * *

Leafing through The Ring’s program, I noticed the names of the individual and corporate sponsors. Opera is an expensive business, and David Gockley, the general director of SF Opera, has made it clear that the company is in financial straights. The big donors to the opera are small in number and advanced in age. He openly wonders where the next generation of patrons will come from.

This brought to mind Cynthia Salzman’s book ‘Old Masters, New World: America’s Raid on Europe’s Great Pictures.’ The new world started from cultural scratch.

“In the late nineteenth century, as industrialization transformed the United States into a world power, artists and writers decried the nation’s meager collections of art. “I cannot tell you what I suffer for want of seeing a good picture,” Mary Cassatt complained from the confines of Hollidaysburg, Pennsylvania, in June 1871. The twenty-seven year old artist had spent five years painting in Europe and longed to return. The novelist Henry James view the problem more broadly. Americans, he told his mother in 1869, seem to have “the elements of the modern man with with culture quite left out.” Ten years later, in writing about Hawthorne and famously listing the cultural assets missing from the United States in the early part of the century, James, who had himself decamped for England in the mid-1870s, conveyed his own sense of deprivation: “no cathedrals, nor abbeys, nor little Norman churches, no great Universities nor public schools—no Oxford, nor Eton, nor Harrow; no literature, no novels, no museums, no pictures.” Later, in 1906, when the British critic Roger Fry served as curator at the Metropolitan Museum of Art, he tallied the museum’s pictorial shortfall: “no Byzantine paintings, no Giotto, no Giottoesque, no Mantegna, no Botticelli, no Leonardo, no Rafael, no Michelangelo.”

The giants of industry, Henry Clay Frick, J. Pierpont Morgan, H.O. Havermeyer and Henry Gurdon Marquand, took an interest in redressing the imbalance of culture in the new world. The great fortunes amassed during this period were put into service for one of “history’s great migrations of art.”? It was an event that fundamentally changed the character of this country.

In this day and age, it’s something we take for granted. The museums are filled with pictures, the symphony hall with music, and the opera house with divas. Perhaps we think this high art is the province of the upper classes, the restricted playground for old money. It’s a living legacy and if the next generation doesn’t take it up, it could very easily disappear. The performing arts are in particular danger.

Donald Fisher, founder of The Gap, collected more than 1,000 contemporary paintings and eventually donated them to the San Francisco Museum of Modern Art. But could it be that his is the last generation to have a real connection to the arts? The new generation of technology billionaires seems more interested in popular culture, sports and science. As I leafed through the program of the Ring Cycle, I didn’t see the names Google, Apple, Intel, Oracle, Cisco, Facebook or Microsoft. Rich technologist seem to prefer to put their money back into technology through venture capital investing.

I’m not sure what it would take to connect the Silicon Valley’s Techno-Elite to Opera. But if it were to happen the possibilities would be immense. San Francisco has a long history with opera. The gold rush of 1849 brought masses of people to Northern California. San Francisco’s first opera production was in 1851, Bellini’s ‘La Sonnambula.’ Morosco’s Grand Opera House held an audience of 4,000, including standees. A signal event in the rebirth of the City after the 1906 earthquake was the concert by the soprano Luisa Tettrazini in front of Lotta’s Fountain. It’s said that as many as 250,000 people attended. More recently the annual Opera in the Park and Opera in the Ballpark events draw enthusiastic crowds from all walks of life.

In the era of the 140-character communique it may seem counter-intuitive to yearn for the total theater of the opera, but opera performance actually delivers on what 3D HD movies promise. And strangely, at this moment in history with music, singers, musicians, technology and composers we could be at the cusp a of great new era of opera. Here are two examples of new operas that take up the current of our times. This Fall, San Francisco Opera will debut ‘Heart of a Soldier’ by Christopher Theofanidis, with libretto by Donna Di Novelli. It tells the story of Rick Rescorla, a man trained to be a consummate solider who gave up his life saving thousands during the World Trade Center attacks of September 11, 2001.

And perhaps closer to the pulse of technology flowing through the Bay Area, the English National Opera recently debuted Nico Muhly’s ’Two Boys’ with libretto by Craig Lucas. Here’s a description from a Wall Street Journal review:

A prepubescent boy is stabbed, and a teenaged boy is caught leaving the scene on CCTV. But the middle-aged female detective in charge of the investigation, caught up in the intricacies of chat-rooms, user-names, apparent espionage and cybersex, comes to realize that she has to change her own mind-set if she is to understand the behavior of these children and the morality of the internet age.

We say that this technology we’re creating here in the Bay Area is changing everything. I wonder if we’ll every take it seriously enough to engage technology in a deep conversation with art and culture? The War Memorial Opera House in San Francisco could be the site of one of the great historical conversations about the times we live in. If only the right connections could be made…


Shadows in the Crevices of CRM and VRM

Two sides of an equation, or perhaps mirror images. Narcissus bent over the glimmering pool of water trying to catch a glimpse. CRM and VRM attempt hyperrealist representations of humanity. There’s a reduced set of data about a person that describes their propensity to transact in a certain way. The vendor keeps this record in their own private, secure space; constantly sifting through the corpus of data looking for patterns that might change the probabilities. The vendor expends a measured amount of energy nudging the humans represented by each data record toward a configuration of traits that tumble over into a transaction.

Reading Zadie Smith‘s ruminations on the filmThe Social Network” in the New York Review, I was particularly interested in the section where she begins to weave the thoughts of Jaron Lanier into the picture:

Lanier is interested in the ways in which people ‘reduce themselves’ in order to make a computer’s description of them appear more accurate. ‘Information systems,’ he writes, ‘need to have information in order to run, but information underrepresents reality (Zadie’s italics).’ In Lanier’s view, there is no perfect computer analogue for what we call a ‘person.’ In life, we all profess to know this, but when we get online it becomes easy to forget.

Doc Searls’s Vendor Relationship Management project is to some extent a reaction to the phenomena and dominance of Customer Relationship Management. We look at the picture of ourselves coming out of the CRM process and find it unrecognizable. That’s not me, I don’t look like that. The vendor has a secured, private data picture of you with probabilities assigned to the possibility that you’ll become or remain a customer. The vendor’s data picture also outputs a list of nudges that can be deployed against you to move you over into the normalized happy customer data picture.

VRM attempts to reclaim the data picture and house it in the customer’s own private, secure data space. When the desire for a transaction emerges in the customer, she can choose to share some minimal amount of personal data with the vendors who might bid on her services. The result is a rational and efficient collaboration on a transaction.

The rational argument says that the nudges used by vendors, in the form of advertising, are off target. They’re out of context, they miss the mark. They think they know something about me, but constantly make inappropriate offers. This new rational approach does away with the inefficiency of advertising and limits the communication surrounding the transaction to willing partners and consenting adults.

But negotiating the terms of the transaction has always been a rational process. The exchange of capital for goods has been finely honed through the years in the marketplaces of the world. Advertising has both a rational and an irrational component. An exceptional advertisement produces the desire to own a product because of the image, dream or story it draws you into. Irrational desires may outnumber rational desires as a motive for commercial transactions. In the VRM model, you’ve already sold yourself based on some rational criteria you’ve set forth. The vendor, through its advertising, wants in to the conversation taking place before the decision is made, perhaps even before you know whether a desire is present.

This irrational element that draws desire from the shadows of the unconscious is difficult to encode in a customer database profile. We attempt to capture this with demographics, psychographics and behavior tracking. Correlating other personal/public data streams, geographic data in particular,  with private vendor data pictures is the new method generating a groundswell of excitement. As Jeff Jonas puts it, the more pieces of the picture you have the less compute time it’ll take to create a legible image. Social CRM is another way of talking about this, Facebook becomes an extension of the vendor’s CRM record.

So, when we want to reclaim the data picture of ourselves from the CRM machines and move them from the vendor’s part of the cloud to our personal cloud data store, what is it that we have? Do the little shards of data (both present and represented through indirection) that we’ve collected, and release to the chosen few, really represent us any better? Don’t we simply become the CRM vendor who doesn’t understand how to properly represent ourselves. Are we mirror images, VRM and CRM, building representations out of the same materials? And what would it mean if we were actually able to ‘hit the mark?’

Once again here’s Zadie Smith, with an assist from Jaron Lanier:

For most users over 35, Facebook represents only their email accounts turned outward to face the world. A simple tool, not an avatar. We are not embedded in this software in the same way. 1.0 people still instinctively believe, as Lanier has it, that ‘what makes something fully real is that it is impossible to represent it to completion.’ But what if 2.0 people feel their socially networked selves genuinely represent them to completion?

I sense in VRM a desire to get right what is missing from CRM. There’s an idea that by combining the two systems in collaboration, the picture will be completed. We boldly use the Pareto Principle to bridge the gap to completion, 80% becomes 100%; and close to zero becomes zero. We spin up a world without shadows, complete and self contained.

From T.S. Eliot’s The Hollow Men

Between the idea
And the reality
Between the motion
and the act
Falls the Shadow

For Thine is the Kingdom

Between the conception
And the creation
Between the emotion
And the response
Falls the Shadow

Life is very long

Between the desire
And the spasm
Between the potency
And the existence
Between the essence
And the descent
Falls the Shadow

For Thine is the Kingdom

For Thine is
Life is
For Thine is the

This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.