Showing posts with label long tail. Show all posts
Showing posts with label long tail. Show all posts
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Nanotechnology: Broadband, Renewable Energy, Long Tail

Tuesday, January 16, 2007

Professor Lessig wrote an interesting article in Wired commenting on municipal broadband initiative:

Yes. There isn't yet a Linus Torvalds of broadband, nor is a single competitive platform being built by volunteers to displace AT&T. But there are forces mucking up the game for those who would profit most from last-mile control.

The core of this resistance comes from municipalities. Local governments are building neutral infrastructures that allow anyone, from ISPs to community networks, to use and extend blisteringly fast broadband networks. At the end of its first year, a project in Sandoval County, New Mexico, for example, already provides many in the area with more than 10 times the capacity than anywhere else in the US.

And municipal networks are just a first step. Many Linux-style volunteers are building free wireless networks that enable participants to share access and offer capacity to others. These volunteers are also building free protocols that enable legal access without shifting control to a last-mile access provider.

What can Nanotechnology can contribute to broadbands? Cheaper cables, cheaper routers, cheaper, faster, better connections. Similar to broadband, nanotech may contribute significantly to the energy market: cheaper, high capacity high quality solar cells. What effects will this brings to the future regulations?

As for the energy market, the network still belong to the giants. But this will soon changes as nanotech makes it easy for anyone to provide energy:
MIT's Vladimir Bulovic said that nanotechnologies such as nanodots and nanorods are potentially "disruptive" technologies in the solar field. That means they could cause a major switch in a primary energy source, potentially proving more efficient than the silicon used in most solar energy devices today. Bulovic is fabricating quantum dot photovoltaics using a microcontact printing process.

"If 2 percent of the continental United States were covered with photovoltaic systems with a net efficiency of 10 percent, we would be able to supply all the U.S. energy needs," said Bulovic, the KDD Associate Professor of Communications and Technology in MIT's Department of Electrical Engineering and Computer Science.
Thus, nanotech will trigger a long tail effect in the energy market: everyone can supply energy,mostly through solar cells. This is not good for the giants of course, but this does not mean that they'll lose their business. Like Microsoft's response to Linux and open access, they only need to change their business model. One of the possible business model is to become an energy aggregator. As to my knowledge, a scheme similar to this one has been applied in Germany for wind-energy electricity providers. The government there supports independent green energy production and provide mechanism for energy providers to sell their surplus to the authorities. Nanotech will only make the pattern and the tail longer. Nanosolar, a solar cell company called this the third wave of solar energy as it will open mankind to the era of abundant energy.

What the legal people need to consider is how to adjust the regulation to this phenomenon; how to adjust the regulation to support the long tail. Unbundling of energy market will still be a hot debate for the next decade.

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How virtual office works

Thursday, January 4, 2007

How stuff works posted an interesting article on how to run a virtual office. For advanced techies most of the tips provided there are basics and refers more to Small-Office-Home-Office (SOHO) concept, nevertheless, there are some which is relatively new such as the use of Virtual Assistance. There is also a link to Virtual Office Group, a london based company offering telephone reception services and renting office spaces on hourly basis.

I can actually lists down free programs that could be used for Virtual Offices as I have been using it myself, but I think I'll just do it on a later post. See also my previous post on virtual lawfirm, long tail and law 2.0.

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Defend yourself using blog networks

Friday, December 22, 2006

Emerging technologies such as nanotech is a two-bladed sword for venture capitalists. It is a raising trend as more and more products are sold on the market, it is strongly associated with modernism, it is very promising as it will shape the future world. These factors will trigger people to invest. The media and blogosphere contributed a lot to these developments. On the other hand, a single defective nano product can ruin the whole thing. The media and the blogosphere also plays a major stake here: what brings you up can always take you down.

Forbes had a good article which illustrate this case:
Then the bloggers attacked. A supposed crusading journalist launched an online campaign long on invective and wobbly on facts, posting articles on his Web log (blog) calling Halpern "deceitful,""unethical,""incredibly stupid" and "a pathological liar" who had misled investors. The author claimed to be Nick Tracy, a London writer who started his one-man "watchdog" Web site,, to expose corporate fraud. He put out press releases saying he had filed complaints against Circle with the Securities & Exchange Commission.
Yahoo and Google is responsible for this (un?)holy alliance. Not only Google has its adsense advertisement network that feeds bloggers with money, not only that it hosted blogs and provide blogsearch, it also include blogger comments in its finance site. The commentaries will affect people's decision to invest.

Those are the drawbacks the longtail gives to the economy. Are there any remedies to this? Well, Forbes recommends to start building a blog network.

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Policy Proposal for filtering the Long Tail

Saturday, October 28, 2006

Now we have multiple choice in every areas of life, such as where, when and how we work. Even personal identity is a matter of choice–you can reinvent yourself in almost wide variety of ways. Paradoxically too much choice can be paralyzing, from buying jam and speed dating to mutual fund investing (too many fund choices, investment goes down). With all the choice peope may do better, but they will feel worse. It’s too easy to imaging the alternatives could have worked better–regret and anticipated regret kick in. As you enjoy what you choose, you imagine attractive features of what you passed up–the opportunity cost rising in consciousness can be completely debilitating.

Or, as the New Yorker puts it: Instead of calculating opportunity cost as the value of the single most attractive foregone alternative, we seem to assemble an idealistic composite of all the options foregone. A wider range of slightly inferior options, then, can make it harder to settle on one you’re happy with. Similarly, when people direct their wants toward “classes” of goals, they tend to figure they’ll get a better-than-average example of the class. When a person says, “I feel like a plate of spaghetti,” he envisions a particularly good plate of spaghetti. And, as the psychologists Daniel Gilbert, of Harvard, and Timothy Wilson, of the University of Virginia, have observed, “If it is difficult to know whether we will be happy fifteen minutes after eating a bite of spaghetti, it is all the more difficult to know whether we will be happy fifteen months after a divorce or fifteen years after a marriage.”

I am still talking about the Long Tail. Long Tail means more choice.

More choice = more freedom
More freedom = more welfare

# More choice = more welfare (False?)

Barry Schwartz, a psychologist at Swarthmore suggest that the syllogism above could be false. In his book, "The Paradox of Choice", he argued that more choices are essentially good as it reflects improvements, but, there are dark sides of having more choices:

1. Paralysis. We don't choose at all. Many people stays single, right? :)
2. Poor decisions and performance quality. We made bad choices.
3. Dissatisfaction, dissappointment. We are not happy despite our choices.
4. Opportunity costs. The cost in choosing stuff could even be greater than the stuff itself!
5. Time Pressure. Too many choice makes us feel like we are being rushed.
6. Escalation of expectation. When we spent lots of time in choosing, we expect that the stuff we finally choose is a good stuff. When we turned out wrong, we become dissapointed.
7. Self Blame. Good feelings gradually reduces. Bad feelings escalates and change forms.

More choices is better, only if it occurs in any of these two situations. First, Preference Articulation. If you really know hat you want, more choice is better. Most people never have this. Or, second, Alignable Option. If the options can be scaled down to the similar size. Most people never have this too.

For personal decisions, there is a good catch-a-phrase from Schwartz's presentation: "Seek for the Good Enough, don't seek for the best". For public policy, he then suggested "Libertarian paternalism", as prescribed by Cass Sunstein and Richard Thaler.

Sunstein-Thaler give an example. Consider two studies of savings behavior:
1. Hoping to increase savings by workers, several employers have adopted a simple strategy. Instead of asking workers to elect to participate in a 401(k) plan, workers will be assumed to want to participate in such a plan, and hence they will be automatically enrolled unless they specifically choose otherwise. This simple change in the default rule – from nonenrollment to enrollment -- has produced dramatic increases in enrollment.

2. Rather than changing the default rule, some employers have provided their employees with a novel option: Allocate a portion of their future wage increases to savings. Employees who choose this plan are free to opt out at any time. A large number of employees have agreed to try the plan, and only a few have opted out. The result has been to produce significant increases in savings rates.
Libertarian Paternalism is "an approach that preserves freedom of choice but that authorizes both private and public institutions to steer people in directions that will promote their welfare". So, they are paternalistic in the sense that people are being directed to choose a certain option, but libertarian in the sense that people can say no.

That means, if you are, you will not be confusing people with long lists of books, but refer them to your filtering, self-reviewed selections and in the same time still allowing people to look for more. If you are a supermarket, you will only put good, cheap and high quality stuffs in your shelves. If you are a restaurant, you will advise your customer not with abundant menu but with "today's special menu". But, how do we know that they are working their best in giving their reference? Well, we don't. This could arise the principal-agent problem. But, it may be better compared than not choosing.

Both Schwartz's and Sunstein-Thaler's theory indicates the importance of choice theory in the economics of abundance. Schwartz's theory will trigger behavioral approaches in economics. Meanwhile, Sunstein-Thaler's will produce a public policy formula for decision-makers, legislators and governments. Schwartz's video presentation in Google is available here. Sunstein's-Thaler paper is downloadable here.

Contentment is always better than riches.


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"Scarcity" and "Cost" in the economy of abundance

In corellation with our previous discussion on the economics of abundance, there is a review on the topic at Harvard Business School's blog. One of the commentator said:
This is easily observed from the prices of any number of e-books on the web. The most popular carry higher prices than the less popular, even though they all cost virtually nothing to reproduce. This emphasizes the point that prices are set by demand, not the constraints of supply. Of course, the price floor created by direct physical materials doesn't exist any more. But production costs never determined price: Demand always did.

The scarcity effect, therefore, has nothing to do with physical constraints. If there is a popular Stephen King novel that exists only in digital form, the price charged for it would be determined by how much the individual reader wants the book. It might cost one-hundredth of a cent to reproduce, but still cost $4.99 to download.

I think it can be true assuming the consumers does not share the book it has purchased through P2P softwares. Prices at the initial sales are determined by consumer demand. But once an information good is released to the market, it's becoming a public good. Any attempts to limit its movement would be artificial (through DRM and IPR), and not natural. So, will there be an adjusted "price"?

Scarcities and Costs

Another commentator said:
The cost of creation is increasing in every creative area such as games, Internet websites, and digital contents. It was possible to make a website with one or two developers five years ago, but it is impossible now if they want to make it attractive to consumers.
Besides creation, one element of cost that I can figure out is time-cost and opportunity cost. The time you spent searching for cheap products at e-bay could be more valuable if it is used in analyzing the ups and downs of the stock market. So, another form of business model could be in making search faster and more filtered. That's what user-review sites such as Digg is doing.

Of course we still need to diffrentiate between purchasing movies at netflix and buying a laptop from e-bay. Movies can be directly downloaded, there is a time cost there. But a laptop needs to be packaged and sent. Thus, there is a distribution costs plus time cost there. This triggers the improvement of two business models: (1) Delivery and (2) Direct Marketing. And where do the tax goes as the transaction is made on the internet? Good question. Then we might need to regulate the internet, but I rather hate the idea of regulating the net.

Walmart could be threatened and so as CBS. So, will market monopoly finally comes to an end? Not really. Where do you search the goods before ending up in netflix or you tube? Google. That's right. What kind of monopoly will the future have? Our next topic is "Competition in the economics of abundance".

Do leave me comments...

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Economy of Abundance

Friday, October 27, 2006

A wonderful power point presentation from Anderson's Long Tail, titled "Economy of Abundance" is now available on line. There is a good summary from David Hornik in his blog:
The same businesses that are the poster children for the Long Tail, are the poster children for the Economy of Abundance. And the same businesses that are the victims of the Long Tail are the poster children for the Economy of Scarcity. With bandwidth and storage approaching free, iTunes can offer three million songs (P2P offers nine million). In contrast, with limited shelf space, Tower Records can only offer fifty- or sixty-thousand tracks. The end result, consumer choose abundance over scarcity (something for everyone) -- Tower Records gets liquidated while iTunes grows dramatically. Television is undergoing a similar transformation, from scarcity to abundance. TV initially consisted of only the major networks. Consumers were limited to 3 choices in any given time slot. With cable the number of channels was dramatically increased and a broader range of content became available (Food Channel, Discovery Channel, ESPN, CNN, etc.). To many, 250 channels may constitute sufficient abundance as to approach infinite choice in their minds. But the true television of abundance is YouTube. With unlimited bandwidth and unlimited storage, television is subject to microprogramming -- millions of shows, viewable on demand at any time. Now not only should NBC be worried, so too should be Comcast.
Anderson did not take into account molecular manufacturing in his presentation. I have the feeling that full scale abundancy will-- for the time being-- be only availabe to non-physical goods. The cost for sharing files in P2P is of course, almost zero (there is of course the time costs and therefore opportunity costs being incurred). E-books, songs, videos, you can sell it this way. But that is not the case when you sell vegetables through the internet. There are still costs thay you will have to pay, you need to grow it first, then maybe sell it at e-bay. Consider other commodities such as water. Do you really think there is going to be a long tail for water companies? Nope, water market is always monopolistic.

Those aspects, Anderson did not consider. But, those scarcities may not last long. Thus, there could be a long tail too for water or plants, not the real water or plants, but programs containing molecular structure of water or plants. This is what we call, the nanotech's economy of abundance.

I am taking this opportunity to point out that futurist and nanotech expert had actually come up with the idea of abundance, but seen from the nano perspective and not from the economical and marketing perspective.

Abundant economy will revolutionarize the Law. Creative Commons and EFF movements is a reflection of this, but it is not likely that the developments are limited into those areas. The trend of the future law will follow the long tail trends: decentralized, personalized, fast, consumer-dictated, open, shared, highly networked. In Burgess words:
In a system based on scarcity, those holding the levers of production will not easily give them up. In domestic and international markets based on scarcity, the function and responsibility of directors and officers is to maximize shareholder value—at nearly any cost that does not fall afoul of laws, or at least not so far afoul that the penalties exceed the financial gain resulting from illegal actions.

So, what kind of culture do we want? In a system of plenty, will we continue to keep score by maintaining the preponderance of benefits inside corporate walls and coffers? Will we continue to stifle the spread of benefits through secrecy and protectionism? Unless something changes, history suggests that laws, regulations, and protections will continue to be designed for the exact purpose of directing all profits and virtually all of the benefits to shareholders.
Will corporation remained existed? I have a feeling that the trends toward "limited liability" will be reduced. Limited liability has been quite abusive in that it escapes real liability and hide it behind corporate walls. There is of course a doctrine of lifting the corporate veil, but it doesnt really work if you can hire good lawyers. So I think there is going to be a shift from limited liability to common but differentiated liability. Next question, will multi-national corporations (MNC) ceased to exist? Their number of employees will shrink of course, but it isn't likely that they ceased to exist. They will evolve, maybe as a completely new entity. I must remind you to Google. That, is the prototype of future MNC. And what does google have in mind? Stakeholder, not shareholder. Participation, not centralization. Opennes. Boldness in buying You Tube with the risk for violating multiple copyright laws. The world is changing and the future law must accomodate this.

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Long-tailing Nanotechnology?

Monday, October 16, 2006

CRB wrote a very inspiring review of the Long Tail in her blog:
Chris Anderson, in his interesting book, The Long Tail, says: “When the tools of production are available to everyone, everyone becomes a producer.” He’s talking in the context of the explosion in computer technology and internet access to software that allows ordinary people to create videos, music, books, and blogs on every conceivable topic, but the thought is an important one in other contexts as well.
If nanofactory is available for everyone, will everyone becomes a producer? Could be, but that may not necessarily means that there will be no majority producer who controlled the market. There will still be trends and hits, but would it mean that the tail becomes longer?

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Long-tailing the legal service: The Googlawfirm

Sunday, October 15, 2006

Hit-driven economics is a creation of an age without enough room to carry everything for everybody. Not enough shelf space for all the CDs, DVDs, and games produced. Not enough screens to show all the available movies. Not enough channels to broadcast all the TV programs, not enough radio waves to play all the music created, and not enough hours in the day to squeeze everything out through either of those sets of slots. This is the world of scarcity. Now, with online distribution and retail, we are entering a world of abundance. And the differences are profound.

Being an underdog? Worry not, the internet gives you hope. Welcome to the economy of abundance, where there is a demand for everything, everyone.

I am sure that most of you have heard about Anderson's Book, The Long Tail. But if you haven't heard it, here's a short description from wikipedia:
"....products that are in low demand or have low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers and blockbusters, if the store or distribution channel is large enough..... Where inventory storage and distribution costs are insignificant, it becomes economically viable to sell relatively unpopular products; however when storage and distribution costs are high, only the most popular products can be sold".

If you look at the wikipedia's graph above, the long tail is the yellow part. Let's assume that this is a music or film industry. The red part is the Hit, bestseller singers like, say Robbie Williams, or blockbuster movies like say, Saving Private Ryan. The yellow part is for the less known singers, street musicians, amateurs, Cafe Singers, or independent movies, etc. Now, the bottomline here is, there is always a market for everyone. The traditional 80-20 power law, where 80 per cent of the market is controlled by 20 percent producers could no longer be applicable.

What makes long tail possible? First, The Internet. Second, human's psychology. Hey, everyone's unique. I like documentaries, you like war movies and the other loves drama. There's no accounting for some people's taste.

Recently, there is an article in on how the future legal service will respond to this long-tail phenomena. The article asked several important questions. Here, I'll try to suggest some possible answers:

Q: Lawyers mostly create new legal work at high cost for one client at a time. Aren't lawyers at increasing risk of competition from Internet-based models of legal service and information?

A: Yes, as they are doing this virtual online legal service thing

Q: And are they even at risk of having to compete with their own past work, much of which is now available on the Web in official and unofficial repositories?

A: As far as I know, some companies' legal departments are now looking for answers to their problems in Blawgs. It is more efficent, and cheap.

Q: What indeed will the long tail of lawyering look like? Will the power law effect that the "rich get richer" on the Internet, exacerbate existing inequality in the legal profession?

A: Could be in terms of internet companies, No for lawfirms. Traditional lawfirms are, I think, is being jeoperdized by the Internet. They still survive as they relied on (1) Trust, (2) Jurisdictional Protection (through bar exams), (3) Local Networking. Lawyering is a service business and "Trust" is the best marketing tool. This is what differs lawyering from selling books at Amazon. But, it may not last long.

Q: Will local and traditional CLE organizations be supplanted by national Internet-based CLE organizations and CLE content aggregators? If so, will speaking and reputation-building activities be drastically reduced for lawyers whose volunteer efforts have made CLE work until now?

Lawyers will speak through blawgs, I think.Q: If Internet-based services can assist clients in locating just the right lawyer, and if lawyers across firms can work together collaboratively on project teams, exactly what is the role of the law firm going forward?

A: If the legal service can be completely unbundled, then there is no need for a lawfirm. But it may take time to get there. Only until lawyers can practice in different jurisdictions, maybe. Confidentiality could also be an issue if we can work cross-lawfirm, I guess.

Q: In an era of information abundance, much of it highly pertinent to law practice, does one risk liability by not taking full advantage of it? How do rules of ethics and liability need to change to acknowledge the fact that lawyers cannot know everything, even with a good portion of the world's information literally at one's fingertips? Will tenacious clients be able to find out more about their legal problems than their own lawyers have gotten round to discovering?

A: When I talk to computer programmers, they know more about creative commons licensing than any corporate lawyers I've ever met. Creative Commons is the "living law" of intellectual property licensing, but there are some lawyers who never even heard about it.

Consider the role of tax consultants and investment consultants, they are taking the role of lawyers. Also, internet users are becoming more advanced and they have a very good personal knowledge management skill. Lawyers know better on how to wrap their arguments, they know the theories better. But, practice may not always require theories. Take for example free boilerplates provision available on the internet. Programmers just put it in their programs and launch them. But of course, there are cases when they still need alegal advice from a lawyer.

I think giant internet companies will eventually replaces lawfirms. I think both Google and Yahoo has the power to do it. Take for example, Ask Yahoo and Google Scholars. They can make a good future consultation service. All they need to do is to agregate! Google can agregate legal knowledge from various continents in their website and provide a legal service across all jurisdictions. This will certainly kill all giant lawfirms but it will help lots of lawyers to spend more time with their family :)

Email me in if you are interested in the concept

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Barriers to "Star Trek" economy

Monday, March 27, 2006

An interesting post from the Adam Smith Blog:
In an article in the current Business newspaper I examine how people increasingly expect goods to be free. From matches given away in restaurants and bars, we have been through free downloads and even free DVD movies given away with daily and Sunday newspapers. Skype has given us free telephone calls around the world. Many people, especially young people, prefer to read newspapers and magazines free over the internet. It leads to a new type of economy. It does lead to a rethink. If people are receiving the goods free, the price element of competition diminishes, and those of quality and convenience probably increase. It isn't quite a Star Trek economy where food and appliances come free from the replicator, but it's on the way to somewhere we haven't been.
Over at wise-nano, you will find an essay written by Giulio Prisco, titled “Globalization and Open Source Nano Economy”, in which he argued:
"Basic goods should be free, or priced within the means of everyone. In other words, Coca Cola can be expensive, but water must be free. Armani suits can be expensive, but basic clothing must be free. Who will develop royalty-free MDL descriptions of basic goods that everyone on the planet can use? The answer, I think (or at least I hope), is that they will be developed with an Open Source development model by armies of MDL programmers."
Hear hear! And Nanotech can make that happen. But for the near-term, we must get rid of bad laws that prevent open-source. In India, copyright relinquishment must undergo tight process like giving written notice to copyright registraar. In many other states, you cannot just append "Attribution, Non Commercial, Share alike"* to your writing as an indication of license as in their laws, "copyright license" must be written and signed by both parties.
These laws won't work after MNT is discovered. Even today, ther already become serious impediment to the economy. They will have to be rewritten. Immidiately.
Mohamad Mova Al 'Afghani
* In Creative Commons, that means a work can be copied freely given that the copier sufficiently attribute the work to original author, in a manner prescribed by him. Noncommercial means that people may not use the work for commercial purposes. Share Alike means any alteration of the work can be distributed under an identical license.