Inflation Gets Right Down to the Real Nitty-Gritty

Saturday, August 23rd, 2008

Inflation gets right down to the real nitty-gritty — soil prices:

Dirt and its upmarket cousins offer a glimpse of how rising energy prices have caused inflation in the grittier corners of the consumer culture. Products that are cheap, heavy and bulky, such as bags of soil, are particularly vulnerable to rising freight costs.

Moreover, thanks to technology, globalization and changes in consumer preference, a bag of potting mix is now a highly manufactured, meticulously designed product, often containing ingredients from all over the continent and from across the planet.
[...]
What does it have? Depends on the recipe, but any kind of topsoil or potting mix is likely to be crammed with composted organic material. Topsoils can be made from composted shellfish shells, for example. Potting mixes often contain sphagnum peat moss from bogs in Canada or Ireland. Bark fines might come from a sawmill in the Deep South. Coconut “coir,” a peat moss substitute, gets shipped all the way from Asia.

A common ingredient in potting mixes is perlite, which makes the soils airier while also retaining moisture. In its final form, small white pellets, it appears to be something synthesized in a factory. In fact, it comes from a volcanic sand mined on the Greek island of Milos. Shipped to the United States, the ore is heated to 1,400 degrees Fahrenheit, at which point it pops into kernels.

Poor earning virtual gaming gold

Saturday, August 23rd, 2008

Research by Manchester University shows that gold-farming — gathering in-game cash or items to sell for real-world money — is growing rapidly:

Prof Heeks said very accurate figures for the size of the gold farming sector were hard to come by but his work suggested that in 2008 it employs 400,000 people who earn an average of $145 (£77) per month creating a global market worth about $500m.
[...]
Already, he said, gold farming was comparable in size to India’s outsourcing industry.

“The Indian software employment figure probably crossed the 400,000 mark in 2004 and is now closer to 900,000,” said Prof Heeks. “Nonetheless, the two are still comparable in employment size, yet not at all in terms of profile.”

With Energy in Focus, Ground-Source Heat Pumps Win Fans

Friday, August 22nd, 2008

Geothermal heat pumps make financial sense, even without government subsidies. Now, with energy in focus, ground-source heat pumps are winning fans:

The systems use a network of water-filled pipes laid either horizontally (6 feet under) or vertically (often 200 to 300 feet down), that attach to a heat exchanger.

The technology can be used almost anywhere, on any type of building. “We’ve got them all the way from Texas to the Arctic Circle,” said Mr. Bose, a professor of engineering technology at Oklahoma State University in Stillwater.

And even without financial incentives from the government or energy utilities, says John Shonder of the Energy Department’s Oak Ridge National Laboratory in Tennessee, “ground-source heat pumps have the lowest life-cycle costs in several cost studies that I’ve done” of heating and air-conditioning systems. (For details on incentives, see www.dsireusa.org.)

The systems pay for themselves in three to eight years, depending on “location and energy prices,” Mr. Shonder said.

In fact, heat pump systems may offer the greatest savings to the owners of commercial buildings, says John W. Lund, director of the Geo-Heat Center at the Oregon Institute of Technology. “For commercial buildings, where you have a fairly large heating and cooling load, the payback period could be two to three years.”

Though no comprehensive survey of the heat pump sector exists, Energy Department statistics on units shipped tell a striking story. In 2003, system manufacturers shipped 36,439 units. In 2006, the last year for which data is available, manufacturers shipped 63,683 units.

(Hat tip to FuturePundit.)

Driven: Shai Agassi’s Audacious Plan to Put Electric Cars on the Road

Friday, August 22nd, 2008

Daniel Roth describes Shai Agassi's Audacious Plan to Put Electric Cars on the Road — which I’ve discussed before — but the real meat is in one of the comments:

Time for a simple reality check here.

15,000 miles at 20mpg requires 750 gallons of gasoline. Gasoline has 125,000BTU of energy per gallon which means that in total we’re talking about 99GJ of energy here. Dust off your HP calculator for the conversion. Internal combustion engines are about 20% efficient which means that of the 99GJ of energy you filled up with in order to drive 15,000 miles, only about 20GJ is actually used to move the car.

Now, replace that car’s drive train with an electric one. Electric motors are about 90% efficient so that they only need 22GJ of energy to move the same car 15,000 miles but batteries and chargers are only about 50% efficient so really more like 44GJ is needed out of a socket somewhere. This is about 12MWh for you meter watchers which translates to $960 at residential rates of $80/MWh and $720 at industrial rates of $60/MWh. So this only leaves between $70 and $330 for all other costs including battery depreciation over that 15,000 miles in order to achieve Agassi’s claim of $1,050 per 15,000 mile cost. I’m assuming that’s what it would cost him and that he would actually charge the consumer something like $2,000 per 15,000 miles or $2.66/gal gasoline equivalent.

But realistically, this means that you’re only consuming about one laptop battery value’s worth in 15,000 miles. This sounds more miraculous than scientific. Battery depreciation will be the major cost in this enterprise and not the electricity. Agassi has it backwards or selling this scheme to consumers is not his objective.

Given that he’s not a stupid guy and that a whole bunch of other smart peeps have piled on to this enterprise, my evaluation of what’s going on here is that their business model actually consists of profiting from various government entities. The article supports this. Look at Agassi’s target audience. It’s not the marketplace but a bunch of politicians. People with a solid business venture start making money as soon as possible and don’t wait for a bunch of politicians to get off their asses, and then wait again for legislation to pass. It seems that Agassi has found the 21st century version of the railroad. It’s a great technology and everyone wants in on it but the real money is in getting the government to pay for everything up front.

Electric cars will come on their own as cheap oil dwindles, so I offer these final words of caution about people like Agassi, “Beware of the monorail!”

From Barn Raisings to Home Building

Wednesday, August 20th, 2008

The Amish have expanded from barn raisings to home building:

About 600 Amish contractors or subcontractors work in at least a dozen states, a rapid increase over the past decade, says Donald B. Kraybill, who has written more than a dozen books on the conservative Christian sect. Not only do some of them specialize in the timber-frame construction method that doesn’t use nails, they often can erect a house faster and for less money than traditional contractors, customers say.

Yet working with an Amish builder brings special challenges. Imagine trying to keep in touch with a contractor who doesn’t own a phone — most are forbidden to have one at home. They also aren’t allowed to drive, so they need a driver or other means to get to the job site. Few use computers, have insurance or will sign a detailed construction contract.

Amish contractors find ways around the sect’s restrictions:

Many can’t own power tools — but they can rent or borrow them. They aren’t allowed to drive — but they can use a car with a hired driver. Use of phones is banned at home — but many are permitted to use cellphones for business or if someone else owns the phone, like the non-Amish driver.

“There’s no question it is harder to get in touch with me,” says Mr. Schwartz, the Amish builder who erected Mr. Heitland’s lake house. Though Mr. Schwartz works out of El Dorado Springs, Mo., he has built houses as far away as Colorado and Montana. He says he has a driver but has also used taxis and gets rides from clients. Though computers are taboo, he hires non-Amish to do three-dimensional pictures of his hand drawings. In his shop, his tools are driven by horsepower using a contraption that resembles a merry-go-round, allowing up to four horses to turn steel shafts that are geared to saws and planers. But in the field he uses a non-Amish person’s power tools.

Some Amish use non-Amish as conduits for their construction businesses. Cindy Shepherd, a real-estate agent at Mike Thomas Associates/ F.C.Tucker in Fort Wayne, Ind., agreed to develop a Web site and handle open houses and referrals for an Amish-owned builder of both spec and custom homes.

Deanna Vickery turned to Amish Timber Framers in Doylestown, Ohio, when she bought her grandparents’ farm in nearby Dover, Ohio, and wanted to put an addition on the 100-year-old barn. Although the Amish generally aren’t allowed to watch TV, if they happen to be in a room where the TV is on, they don’t have to leave. As a result, she would be asked to show up at lunchtime to turn on football games for the workers. Mrs. Vickery says she quickly became friends with the crew, inviting them and their families to her annual pig roast.

Why are the Amish diversifying outside of farming? It’s pretty simple, really:

About 20 years ago, the Amish started to diversify out of farming when it became clear that subdividing a farm among sons wasn’t sustainable as their population grew and land costs made buying new property prohibitive. The Amish population has about doubled since then to an estimated 231,000 nationwide, says Mr. Kraybill, the author, who also is a senior fellow at Elizabethtown College in Elizabethtown, Pa. Many became entrepreneurs, carpenters, factory hands and artisans. Now, more than 70% of Amish household heads pursue nonfarm lines of work, Mr. Kraybill says. Typical Amish thinking views work as an overwhelmingly positive and even formative element of life, says Erik Wesner, a scholar who studies the Amish and runs a blog about them.

Awww-A-Day

Wednesday, August 20th, 2008

The awww-a-day calendar by Cute Overload sold out in a day on Amazon:

[T]he birth of Cute Overload was almost purely accidental. Meg Frost, a 36-year-old design manager at Apple, started cuteoverload.com three years ago to test Web software. Within months, it became an online institution, drawing about 88,000 unique visitors a day — about the same as the political gossip blog Wonkette. BoingBoing linked to Cute Overload, saying that viewing the site “is like taking a happy pill.”
[...]
Ms. Frost will not talk about how much money she has made from the site, although it is enough money that she recently hired two part-time assistants. Nor will she say how many calendars have been sold. But the calendar’s top ranking in its category — accessories — and its reaching as high as No. 21 last week on the overall category — books — are indications of its success.

The site’s ads are placed by Blogads, which handles advertising for about 1,500 blogs, including the gossip site PerezHilton.com and the political site Daily Kos. On Blogads.com, advertisers can view traffic numbers for each site and the cost of various types of ads. According to Blogads, a “premium” ad on Cute Overload costs about $2,000 a week, with an estimated 808,000 page views. Hartz Mountain currently has a premium spot for its UltraGuard line of flea and tick repellents, as does American Apparel for its Essential X 3 line of underwear three-packs.

The site also offers “standard” ads for $500 a week. Those are taken up mostly by small companies serving what might be called the “cute market.” Sublime Stitching, for example, sells “cute embroidery patterns,” like “Forest Friends,” while Shanalogic offers clothing and accessories emblazoned with cute imagery.

According to Blogads, there are nine “standard” ads currently running on Cute Overload.

That’s good money for a niche site.

Naturally, you’ll want one for yourself, right?

Richard White’s Entrepreneurial Axioms

Wednesday, August 13th, 2008

Ben Casnocha says that Richard White’s The Entrepreneur’s Manual: Business Start-Ups, Spin-Offs, and Innovative Management is the best book on entrepreneurship that’s he read — despite the fact that it’s 30 years old and out of print. He shares some of White’s axioms:

Axiom One: In a free enterprise economy, there are always more dollars searching for viable and developed ideas than there are ideas searching for dollars.

Axiom Two: Your company must be the image of what your industry needs…the industry will not conform and be the image of what your company needs.

Axiom Three: Your sales price is totally a function of your product’s value as seen by your customers. In no way is your sales price a function of your costs to produce your product.

Axiom Four: Your company’s objectives must be in harmony with your inner self.

Axiom Five: If the financial communities feel that an industry is a growth industry, they will invest in it heavily enough in years to come to make it a growth industry.

Axiom Six: If the financial communities feel that an industry will plateau and become stagnant, they will withhold essential funds and stunt that industry’s growth so that it will indeed plateau and become stagnant.

Axiom Eight: First rate men hire first rate men, second rate men hire third rate men, these third rate men will then employ the bulk of your company’s employees who tend to be fourth rate people.

Axiom Nine: You need to attract talents, disciplines, and personalities which complement…not duplicate…each other.

Axiom Ten: Regardless of how large, how old, or how established your company becomes, there is room for only one management team. There should never be factions.

Axiom Eleven: You will realize as much from your people as you allow them to produce.

Axiom Twelve: If everyone is responsible for a task, then in truth no one is responsible, and the task will not be completed properly.

Axiom Fifteen: Sales training is a forever thing, an ongoing requirement as long as your company exists.

Axiom Seventeen: Nothing ever happens unless somebody sells something.

Axiom Nineteen: You’re not after all the business. You are after all of the profitable business that you can handle.

"Chuck Norris"-ing code

Monday, August 11th, 2008

Perl-expert Brian Foy explains what “Chuck Norris”-ing code means:

Sometimes when merlyn or I consult on Perl projects, it turns out that the client expects a magic wand. Somehow, because we have our names on books or speak at conferences, when we load code into an editor, that alone should magically fix things while at the same time not changing any code or any part of the process. Randal has started calling this “chuck norris”-ing the code.

He suggests these additional Chuck Norris Facts:

  • The system works because Chuck Norris tells it to work
  • Chuck Norris doesn’t need a test suite. The test suite needs Chuck Norris.
  • CPUs run faster to get away from Chuck Norris
  • Chuck Norris normalizes all schema just by inserting random data
  • Chuck Norris can compile syntax errors
  • Packets travel faster than the speed of light for Chuck Norris, but he can still catch them
  • Chuck Norris has Internet 3
  • Check Norris can parse invalid XML
  • Chuck Norris can break Moore’s Law
  • Chuck Norris’s brain is his revision control, and it works better than git
  • Chuck Norris can fix everything without changing anything.

The lesson here goes well beyond software projects.

Birth, death and shopping

Monday, August 11th, 2008

The Economist looks at Birth, death and shopping, and the evolution of the modern shopping mall, which started with the Southdale shopping center in Minnesota:

Southdale’s creator arrived in America as a refugee from Nazi-occupied Vienna. Victor Gruen was a Jewish bohemian who began to design shops for fellow immigrants in New York after failing in cabaret theatre. His work was admired partly for its uncluttered, modernist look, which seemed revolutionary in 1930s America. But Gruen’s secret was the way he used arcades and eye-level display cases to lure customers into stores almost against their will. As a critic complained, his shops were like mousetraps. A few years later the same would be said of his shopping malls.

By the 1940s department stores were already moving to the suburbs. Some had begun to build adjacent strips of shops, which they filled with boutiques in an attempt to re-create urban shopping districts. In 1947 a shopping centre opened in Los Angeles featuring two department stores, a cluster of small shops and a large car park. It was, in effect, an outdoor shopping mall. Fine for balmy southern California, perhaps, but not for Minnesota’s harsh climate. Commissioned to build a shopping centre at Southdale in 1956, Gruen threw a roof over the structure and installed an air-conditioning system to keep the temperature at 75°F (24°C) — which a contemporary press release called “Eternal Spring”. The mall was born.

Gruen got an extraordinary number of things right first time. He built a sloping road around the perimeter of the mall, so that half of the shoppers entered on the ground floor and half on the first floor — something that became a standard feature of malls. Southdale’s balconies were low, so that shoppers could see the shops on the floor above or below them. The car park had animal signs to help shoppers remember the way back to their vehicles. It was as though Orville and Wilbur Wright had not just discovered powered flight but had built a plane with tray tables and a duty-free service.

Oddly, this most suburban American invention was supposed to evoke a European city centre. Hence Southdale’s density and its atrium, where shoppers were expected to sit and debate over cups of coffee, just as they do in the Piazza San Marco or the Place Dauphine. Gruen exiled cars, which he thought noisy and anti-social, to the outside of his mall. Most contemporary critics thought Gruen had succeeded in bringing urbanity to the suburbs. Southdale was “more like downtown than downtown itself”, claimed the Architectural Record. Another asserted, in a rare example of journalistic hyperbole that turned out to be absolutely right, that the indoor shopping mall was henceforth “part of the American way”.

In the US, two developments boosted their growth:

The first was a change in the tax code which allowed investors to write down a large proportion of a new building’s cost as a loss. That made malls much more profitable. The second was a widespread property-tax revolt that deprived local governments of their most reliable source of income. Desperate, they tried to lure businesses that they could milk for taxes. They were particularly keen on shopping malls.

Now, of course, we’ve moved on to outdoor malls — or lifestyle centers, in the jargon of real-estate developers.

Sarkozy Forces the French to Join the 1980s

Saturday, August 9th, 2008

In commenting on the French — Sarkozy Forces the French to Join the 1980s — Michael Lewis (Liar’s Poker and Moneyball) explains the British transformation of the 1980s:

A few years after Margaret Thatcher came to power and launched what at the time seemed a futile war to compel the English people to embrace business values, I found myself dazed and confused in a London corner shop.

Down one aisle and up the other, I paced but found no trace of what I’d come for: the world’s finest pseudo-cookies. The shelf that once held those delicious McVitie’s wafers coated with milk chocolate was now stocked with less desirable items.

At length, I went to the middle-aged shop owner and asked where she’d hidden my favorite treats — this gift from the gods to those of us who want to pretend our cookies are merely crackers.

“We used to stock those,” she said, sweetly, “but we kept running out, so we’ve stopped.”

Right then I thought: Thatcherism is doomed. The English will never embrace efficiency, or money-making, or the-customer-is-always-right mindset, or any of those uneasy values that underpin modern capitalism.

I was wrong, obviously. The English have not merely embraced commercial values but have become so thoroughly imbued with them that London has displaced New York as the world’s money hub. A nation of people once embarrassed to complain that their soup was cold is now among the first to demand to speak to the manager.
[...]
Of course, it’s possible to change a society and to drag it into the global economic monoculture. Mrs. Thatcher showed how: Break up collectives and make people feel a little bit more alone in the world. Cut a few holes in the social safety net. Raise the status of money-making, and lower the status of every other activity. Stop giving knighthoods to artists and start giving them to department-store moguls. Stop listening to intellectuals and start listening to entrepreneurs and financiers.

Hate Becomes Love.

Don’t mind that artists and intellectuals hate you — or even that, for a time, the entire society seems to hate you. Stick to the plan long enough and the people who are good at making money acquire huge sums and, along with them, power. In time, they become the culture’s dominant voice. And they love you for it.

Tito Ortiz signs with Affliction

Thursday, August 7th, 2008

I did not realize that there was a Celebrity Apprentice, let alone that Tito Ortiz was on it and became friends with Donald Trump — who own the UFC’s latest competitor, Affliction. Now it looks like Tito Ortiz has signed with Affliction, and the deal is a big one:

“I guarantee you that my contract will be like no other,” said Ortiz, stopping short of giving away the specifics of a deal that could include responsibilities outside of the ring. “It will be a ground-breaking record contract for sure, without a doubt. There’s so much money to be made right now in mixed martial arts and it’s all about the fighters trying to make that money. It’s going to be a long-term deal where I put my heart and soul into the company and help build them. That’s something I’m interested in doing. They’re going to bring me on, not just as a fighter but also doing some of the back work also.”

Ortiz, who became a free agent on Monday after an 11-year career with the Ultimate Fighting Championship, met with Donald Trump on Tuesday to finalize the deal and is expected to be at Wednesday’s press conference where his first opponent will be Renato “Babalu” Sobral.

Ortiz, by the way, retired from the UFC after losing to Lyoto Machida. (It was pretty one-sided until Tito almost pulled off an impressive triangle in the final round.)

Nearly Waterless Washing Machine to Debut in 2009

Tuesday, August 5th, 2008

Nearly Waterless Washing Machine to Debut in 2009:

A new washing machine that uses just a cup of water, a pinch of detergent, and about 1,000 small plastic chips to clean clothes may be available for consumers in the UK next year.
Researchers at Leeds University designed the machine, which will be marketed by a spin-off company called Xeros Ltd (which means “dry” in Greek). Company founder Stephen Burkinshaw, a professor of textile chemistry, explains that the machine will reduce both water and energy consumption.

Currently, washing machine use accounts for 13 percent of daily household water consumption in the UK, or about 21 liters (5.5 gallons) of water per day, according to the UK organization Waterwise. Besides saving water, the Xeros machine uses just 2% of the energy of a conventional washing machine. And since clothes come out nearly dry, they don´t require the use of a dryer.

“We have shown that it can remove all sorts of everyday stains, including coffee and lipstick, while using a tiny fraction of the water used by conventional washing machines,” Burkinshaw said.

When doing a load of wash, users throw their clothes in like a normal washing machine. Then a cartridge in the back of the machine adds plastic chips — about 45 pounds (20 kg) of them — to the load. Next, a cup of water containing the detergent is added. After the water dissolves the dirt, the chips absorb the water, without the need for a rinse or spin cycle. When finished, a grill at the bottom of the machine opens to collect the chips.

According to Xeros, the chips can last for about 100 loads of laundry, or about six months for an average family. The company has not yet provided details on what the chips are made of, or how easily and safely the chips can be disposed of or recycled.

Working with Leeds University´s commercialization partner IP Group, Xeros has secured an investment of almost 500,000 pounds ($984,400) for the project. The price of the Xeros washing machines for consumers is “not expected to be dramatically different from (conventional) washing machines,” according to the company.

Toyota Announces Segway Killer: The Winglet Personal Transporter

Monday, August 4th, 2008

Toyota has announced its new Segway killer, the Winglet “personal transporter” — which seems to assume that the Segway needs a competitor to kill it:

Only a year after taking control of Sony’s robotics business, Toyota has come up with a vertical, mechanized scooter (or personal transporter, in future-speak) intended to help people move about in public areas.

Called the Winglet because of its fleet nature, it is the first gadget to duplicate the celebrated, and often mocked, navigation system of Dean Kamen’s Segway Transporter: self-balancing through gyroscopic sensors detecting the gentle directional tilts of a rider.

However, this personal scooter is probably not up to par to the Segway in speed or ruggedness. The newest Segway model can go up to 12.5 miles per hour (versus the Winglet’s 3.7 MPH), and the slightness of the Winglet’s frame probably wouldn’t survive a Police chase.

We Know How Many Kindles Amazon Has Sold: 240,000

Monday, August 4th, 2008

Erick Schonfeld of TechCrunch says, We know how many Kindles Amazon has sold: 240,000:

Doing a little back of the envelope math, that brings total sales of the device so far to between $86 million and $96 million (the price of the device was reduced to $360 from $400 last May). Then add the amounts spent on digital books, newspapers, and blogs purchased to read on the device, and you get a business that has easily brought in above $100 million so far. (Each $25 worth of digital reading material purchased per Kindle, add $6 million in total revenues).
[...]
Scott Devitt, an analyst at Stifel, Nicolaus & Co., predicts that Amazon is on track to sell 500,000 to 750,000 more Kindles over the next four quarters (including this one). He estimates that Kindle owners will buy an additional $120 to $150 worth of books and other content for each device, bringing the total revenues over that time period to somewhere between $225 million and $355 million. Based on that, he values the Kindle as a $1 billion business for Amazon.

Everybody’s Second Choice

Sunday, August 3rd, 2008

Michael Schrage cites former Chrysler vice chairman Robert Lutz on prototyping to avoid being everybody’s second choice:

When we showed the early prototype for the new “big-rig-inspired” dodge Ram pickup to consumer focus groups in the early ’90s, the reaction was so polarized that the room practically vibrated with magnetism. A whopping 80 percent of the respondents disliked the bold new drop-fendered design. A lot even hated it! They wanted their pickups to keep on resembling the horizontal cornflake boxes they were used to, not to be striking or bold. According to traditional consumer research strategy, we should have thrown that design out on its ear, or at least toned it down to placate the hatemongers. But that would have been looking through the wrong end of the telescope, for the remaining 20 percent of the clinic participants were saying they were truly, madly, deeply in love with the design. And since the old Ram had only about 4 percent of the market at the time, we figured, What the hell! even if only half of those positive respondents actually buy, we’ll more than double our share! The result? Our share of the pickup market shot up to 20 percent on the radical new design.