Archive for the ‘Business’ Category

Free

Saturday, August 15th, 2009

Free book coverChris Anderson’s latest book, Free, and Malcolm Gladwell’s recent bestseller, Outliers, offer contrasting visions of success. Mr. Gladwell writes that success comes from hard work – at least 10,000 hours of challenging practice – combined with being in the right place at the right time. Mr. Anderson embraces the contrary thesis that economist Milton Friedman’s favorite expression, “There ain’t no such thing as a free lunch” is “deeply, almost head-scratchingly” wrong.

Consider the Free economic paradigm:

[S]omebody’s paying, but it’s probably not you; indeed the costs may be so distributed that we individually don’t feel them at all.

I tend not to prize goods I don’t pay for. After spending $80 to rent a seat at the concert hall, I cherish every second of undivided attention to music. Had I invested over 10,000 hours of blood, sweat, and tears to master the cello – as Slava did – I’d appreciate Dvořák’s brilliant Cello Concerto even more. Downloading a free song, on the other hand, gets no skin in the game. If the first few seconds fail to entertain, the song drops with a thunk into the digital trash bin. Music appreciation degrades to sound bites instead of deep contemplation. No investment, no engagement, no feeling, no value.

Free hypes the glittering generality that a near-zero marginal cost of distributing information will lead to an era of abundance, using the sci-fi term “post-scarcity economics.” This ridiculous oxymoron ought to remain in the realm of fantasy because allocating scarce resources is precisely the point of economics. For pirated songs, photos of inebriated teens on Facebook, or silly tweets on Twitter, there is no scarcity, so economics does not rule. Readers might overlook one nugget of fool’s gold like “post-scarcity economics,” but Free is a mother lode of contradictions and tautologies.

Mr. Anderson does a yeoman’s job surveying the societal, technological, financial, and marketing basis of free goods. He recites many familiar anecdotes, quotes, and history lessons. Insights on trends in the computer, network, and media industries seem apt and even farsighted. I’d rate the book’s distillation of the Free business models a paragon of clarity.

Yet Free is no outlier. Unlike Mr. Gladwell, who starts with a premise that resonates, Mr. Anderson fights an uphill battle, ultimately failing to convince that a free lunch is on the path to success.

Dr. Obama Strikes a Nerve

Monday, July 27th, 2009

TonsilsPresident Obama’s comment about greedy doctors during last Wednesday’s press conference strikes a nerve because it relates not only to medicine, but to any profession, including my own.

You come in and … your child has a bad sore throat or has repeated sore throats. The doctor may look at the reimbursement system and say to himself, ‘You know what? I make a lot more money if I take this kid’s tonsils out.’

This line of thinking is ethically repugnant to me and every professional I know. Money isn’t a factor. The client’s interests always come first.

Turning Watchful Eyes into Money

Sunday, July 15th, 2007

Tracking a personal Gulfstream IV jetIf you’re like me, you strive for a low profile while traveling. You want to avoid the watchful eyes of every nosy Tom, Dick, and Harriet as you fly the Gulfstream to London to visit the tailor. Alas, there is precious little privacy left. Once your inquisitive comrades know the tail number of your personal aircraft, your life is an open book. They can track your jet’s every move on FlightAware. (Photo credit: albspotter.)

But money can still buy happiness. By filling out a simple form and paying a mere $720 annual fee to FlightAware, you can conceal your plane’s whereabouts from the prying eyes of the site’s users. How nice of FlightAware to provide this helpful service. They didn’t invent the hush money business model, but they’ve certainly done a great job translating it to Web 2.0.

I wonder how long it will take government to catch on to this. After all, you can look up on the local property tax site the value of my neighbor’s house and even the size of her swimming pool. The tax man could easily whip up a form that would shake me down for a pretty penny to remove data about my house from the tax site. Ain’t Web 2.0 grand?

Persistence

Friday, April 13th, 2007

Boeing 737-200In today’s Wall Street Journal, a front page piece tells amazing stories of Alaska Airlines pilots flying up north. In beat-up Boeing 737-200s affectionately called “mud hens,” they flew into the world’s toughest airports. What got my attention was this snippet:

Capt. Malcolm af Uhr, 45, co-piloted a flight headed for Juneau in a snow storm. He and his pilot aborted four attempts to land because they couldn’t see the runway at the critical moment. After refueling back in Sitka, 95 miles away, they returned to Juneau and tried to land five more times without success. As local fliers dozed or read the paper, a passenger from California stood and demanded, “What’s wrong with you people?” The plane finally landed on the 10th try.

I have to admire that kind of patience, persistence, and derring-do. Seldom have I experienced similar effort in the computer industry. Capt. af Uhr’s everyday heroism makes me feel jealous of his passion.

Welcome

Wednesday, January 31st, 2007

Welcome to our blog. Enjoy.