Give support and encouragement to competent people who have ideas they want to try out

Wednesday, October 18th, 2017

Techniques of Systems Analysis reminds the Systems Analyst to take technical estimates for complicated systems with some skepticism if not cynicism:

The best that can be done is to push the state of the art in a whole series of component fields, give support and encouragement to competent people who have ideas they want to try out, be on the alert to extract by-product and bonus values and, most important of all, examine the programs as a whole to see if they are complete. The Systems Analyst should especially concentrate on the last two things. After all, almost everyone else is tied up with either specific projects, administration, budget crises, or congressional investigations. In some cases, he is just about the only Indian who can spend full time looking at the broader aspects of a program. What is also important, he often has a full-time and technically competent group of associates to help him look.

Nobody should object to buying insurance even if he doesn’t have a fire

Monday, October 16th, 2017

Development projects provide options, Techniques of Systems Analysis emphasizes:

We often hear statements that the major reason for doing a Systems Analysis is that development programs are so expensive and it is crucial that none of them be wasted; therefore, all development programs should be tied into a system, designed as a whole. Nothing could be more wrong. Development people have a saying, “It may or may not be a mistake to develop something which is not procured, but it is always a mistake to procure something which is not developed.”

The most important thing the Department of Defense can do is see to it that we maintain a great deal of flexibility in our capability and have available a great variety of on-the-shelf items to meet a variety of contingencies. This ordinarily means that many of our development projects will never reach the stage of large-scale procurement. This may create very difficult relations with both Congress and the public. The problem has to be faced directly and preferably adroitly, but it is a mistake to cut back on potentially valuable development programs just to prevent possible criticism in the event they do nut turn out to be needed. Nobody should object to buying insurance even if he doesn’t have a fire.

What would this look like if it were easy?

Thursday, October 12th, 2017

What would this look like if it were easy?, Tim Ferriss likes to ask:

It’s easy to convince yourself that things need to be hard, that if you’re not redlining, you’re not trying hard enough. This leads us to look for paths of most resistance, creating unnecessary hardship in the process.

But what happens if we frame things in terms of elegance instead of strain? In doing so, we sometimes find incredible results with ease instead of stress. Sometimes, we “solve” the problem by simply rewording it.

So, Tim “easily” wrote his next book, Tribe of Mentors, by sending his usual questions (and a few new ones) to a list of dream interviewees:

After hitting “send” dozens of times, I clasped my hands to my chest with excitement and bated breath, to which the universe replied with… silence. Crickets.

For 12 to 24 hours, nothing. Not a creature was stirring, not even a mouse. And then, there was a faint trickle through the ether. A whisper of curiosity and a handful of clarifying questions. Some polite declines followed, and then came the torrent.

Nearly all of the people I reached out to are busy beyond belief, and I expected short, rushed responses from a few of them, if I got any at all. Instead, what I got back were some of the most thoughtful answers I’d ever received, whether on paper, in person, or otherwise. In the end, there were more than 100 respondents.

Granted, the “easy” path took thousands of back-and-forth emails and Twitter direct messages, hundreds of phone calls, many marathons at a treadmill desk, and more than a few late-night bottles of wine, but . . . it worked. Did it always work? No. I didn’t get the Dalai Lama (this time), and at least half of the people on my list didn’t respond or declined the invitation. But it worked enough to matter, and that’s what matters.

In cases where the outreach worked, the questions did the heavy lifting.

[...]

The older I get, the more time I spend — as a percentage of each day — on crafting better questions. In my experience, going from 1x to 10x, from 10x to 100x, and from 100x to (when Lady Luck really smiles) 1000x returns in various areas has been a product of better questions. John Dewey’s dictum that “a problem well put is half-solved” applies.

Life punishes the vague wish and rewards the specific ask. Conscious thinking is largely asking and answering questions in your own head, after all. If you want confusion and heartache, ask vague questions. If you want uncommon clarity and results, ask uncommonly clear questions.

Fortunately, this is a skill you can develop. No book can give you all of the answers, but this book can train you to ask better questions. Milan Kundera, author of The Unbearable Lightness of Being, has said that “The stupidity of people comes from having an answer for everything. The wisdom of the novel comes from having a question for everything.” Substitute “master learner” for “novel,” and you have my philosophy of life. Often, all that stands between you and what you want is a better set of questions.

A close examination makes the precise imprecise

Tuesday, October 10th, 2017

Techniques of Systems Analysis notes that there are almost always large uncertainties when it comes to costs:

At first sight, costs look like a pretty concrete thing. You just grab an accountant and put him to work. However, as always, a close examination makes the precise imprecise. As we will explain later, when we talk about time-phasing, there is a real ambiguity in deciding the dollar cost of a system. Roughly speaking, this occurs because a military system is not bought at one instant of time by going into a department store and ordering it. It has to be built up over the past years and it is expect to have a continuous existence in the future. Under such circumstances one must always ask himself what it costs to use facilities which are already owned, and what will be the salvage value of any expenditures made this year in future years. Also, if one is procuring or developing a new system, he may have had no experience on which to base cost estimate.s It is surprising, in practice, how inaccurate even careful estimates of the costs of new systems have proved to be. Careless estimates tend to be out of this world.

There is another ambiguity in costs which the Analyst generally ignores but with which the policy make is sometimes concerned. Some dollars are harder to come by than others. Research and Development funds, for example, are ordinarily tighter than procurement funds. In the U.S., expensive gadgets are often easier to buy than high grade, but relatively low cost, people. Public works funds, for obvious reasons, are often easy to get and, of course, traditional expenditures are almost always easier to justify than new ones.

Finally, there are many costs which are not usually measured in dollars, such as crew lives, dislocations, political effects, etc.

Psychology beats business training

Thursday, September 28th, 2017

Francisco Campos and his fellow researchers chose to monitor 1,500 people running small businesses in Togo in West Africa and gave them two different sorts of training:

The typical firm had three employees and profits of 94,512 CFA francs ($173) a month. Only about a third kept books, and less than one in 20 had a written budget.

[...]

As they report in Science, the researchers split the businesses into three groups of 500. One group served as the control. Another received a conventional business training in subjects such as accounting and financial management, marketing and human resources. They were also given tips on how to formalise a business. The syllabus came from a course called Business Edge, developed by the International Finance Corporation.

The final group was given a course inspired by psychological research, designed to teach personal initiative — things like setting goals, dealing with feedback and persistence in the face of setbacks, all of which are thought to be useful traits in a business owner. The researchers then followed their subjects’ fortunes for the next two-and-a-half years (the experiment began in 2014).

An earlier, smaller trial in Uganda had suggested that the psychological training was likely to work well. It did: monthly sales rose by 17% compared with the control group, while profits were up by 30%. It also boosted innovation: recipients came up with more new products than the control group. That suggests that entrepreneurship, or at least some mental habits useful for it, can indeed be taught. More surprising was how poorly the conventional training performed: as far as the researchers could tell, it had no effect at all.

Surveillance capitalism fuels the Internet

Sunday, September 17th, 2017

In case you didn’t notice, Bruce Schneier reminds us, you’re not Equifax’s customer:

You’re its product.

This happened because your personal information is valuable, and Equifax is in the business of selling it. The company is much more than a credit reporting agency. It’s a data broker. It collects information about all of us, analyzes it all, and then sells those insights.

Its customers are people and organizations who want to buy information: banks looking to lend you money, landlords deciding whether to rent you an apartment, employers deciding whether to hire you, companies trying to figure out whether you’d be a profitable customer — everyone who wants to sell you something, even governments.

It’s not just Equifax. It might be one of the biggest, but there are 2,500 to 4,000 other data brokers that are collecting, storing, and selling information about you — almost all of them companies you’ve never heard of and have no business relationship with.

Surveillance capitalism fuels the Internet, and sometimes it seems that everyone is spying on you. You’re secretly tracked on pretty much every commercial website you visit. Facebook is the largest surveillance organization mankind has created; collecting data on you is its business model. I don’t have a Facebook account, but Facebook still keeps a surprisingly complete dossier on me and my associations — just in case I ever decide to join.

I also don’t have a Gmail account, because I don’t want Google storing my e-mail. But my guess is that it has about half of my e-mail anyway, because so many people I correspond with have accounts. I can’t even avoid it by choosing not to write to gmail.com addresses, because I have no way of knowing if newperson@company.com is hosted at Gmail.

And again, many companies that track us do so in secret, without our knowledge and consent. And most of the time we can’t opt out. Sometimes it’s a company like Equifax that doesn’t answer to us in any way. Sometimes it’s a company like Facebook, which is effectively a monopoly because of its sheer size. And sometimes it’s our cell phone provider. All of them have decided to track us and not compete by offering consumers privacy. Sure, you can tell people not to have an e-mail account or cell phone, but that’s not a realistic option for most people living in 21st-century America.

The companies that collect and sell our data don’t need to keep it secure in order to maintain their market share. They don’t have to answer to us, their products. They know it’s more profitable to save money on security and weather the occasional bout of bad press after a data loss. Yes, we are the ones who suffer when criminals get our data, or when our private information is exposed to the public, but ultimately why should Equifax care?

Yes, it’s a huge black eye for the company — this week. Soon, another company will have suffered a massive data breach and few will remember Equifax’s problem. Does anyone remember last year when Yahoo admitted that it exposed personal information of a billion users in 2013 and another half billion in 2014?

The Occupy Wall Street protesters and the bankers share a common delusion

Friday, August 18th, 2017

Eric Weinstein explains the crisis of late capitalism:

I believe that market capitalism, as we’ve come to understand it, was actually tied to a particular period of time where certain coincidences were present. There’s a coincidence between the marginal product of one’s labor and one’s marginal needs to consume at a socially appropriate level. There’s also the match between an economy mostly consisting of private goods and services that can be taxed to pay for the minority of public goods and services, where the market price of those public goods would be far below the collective value of those goods.

Beyond that, there’s also a coincidence between the ability to train briefly in one’s youth so as to acquire a reliable skill that can be repeated consistently with small variance throughout a lifetime, leading to what we’ve typically called a career or profession, and I believe that many of those coincidences are now breaking, because they were actually never tied together by any fundamental law.

Weinstein shares this anecdote about class warfare:

I reached a bizarre stage of my life in which I am equally likely to fly either economy or private. As such, I have a unique lens on this question. A friend of mine said to me, “The modern airport is the perfect metaphor for the class warfare to come.” And I asked, “How do you see it that way?” He said, “The rich in first and business class are seated first so that the poor may be paraded past them into economy to note their privilege.” I said, “I think the metaphor is better than you give it credit for, because those people in first and business are actually the fake rich. The real rich are in another terminal or in another airport altogether.”

The Occupy Wall Street protesters and the bankers share a common delusion, he says:

Both of them believe the bankers are more powerful in the story than they actually are. The real problem, which our society has yet to face up to, is that sometime around 1970, we ended several periods of legitimate exponential growth in science, technology, and economics. Since that time, we have struggled with the fact that almost all of our institutions that thrived during the post-World War II period of growth have embedded growth hypotheses into their very foundation.

That means that all of those institutions, whether they’re law firms or universities or the military, have to reckon with steady state [meaning an economy with mild fluctuations in growth and productivity] by admitting that growth cannot be sustained, by running a Ponzi scheme, or by attempting to cannibalize others to achieve a kind of fake growth to keep those particular institutions running. This is the big story that nobody reports. We have a system-wide problem with embedded growth hypotheses that is turning us all into scoundrels and liars.

Let’s say, for example, that I have a growing law firm in which there are five associates at any given time supporting every partner, and those associates hope to become partners so that they can hire five associates in turn. That formula of hierarchical labor works well while the law firm is growing, but as soon as the law firm hits steady state, each partner can really only have one associate, who must wait many years before becoming partner for that partner to retire. That economic model doesn’t work, because the long hours and decreased pay that one is willing to accept at an entry-level position is predicated on taking over a higher-lever position in short order. That’s repeated with professors and their graduate students. It’s often repeated in military hierarchies.

It takes place just about everywhere, and when exponential growth ran out, each of these institutions had to find some way of either owning up to a new business model or continuing the old one with smoke mirrors and the cannibalization of someone else’s source of income.

Then there’s the Wile E. Coyote effect — as long as Wile E. Coyote doesn’t look down, he’s suspended in air, even if he has just run off a cliff:

But the great danger is understanding that everything is flipped. During the 2008 crisis, many commentators said the markets have suddenly gone crazy, and it was exactly the reverse. The so-called great moderation that was pushed by Alan Greenspan, Timothy Geithner, and others was in fact a kind of madness, and the 2008 crisis represented a rare break in the insanity, where the market suddenly woke up to see what was actually going on. So the acute danger is not madness but sanity.

The problem is that prolonged madness simply compounds the disaster to come when sanity finally sets in.

SciFutures offers “corporate visioning”

Wednesday, August 16th, 2017

Hoping to distract himself from the boredom of his day job as the president of a market-research company, Ari Popper enrolled in a course on science-fiction writing at UCLA:

“It was, like, the best ten weeks of my life,” Popper told me recently. “But I knew I wasn’t going to pay the bills as a science-fiction writer.” Still, the course gave him an idea: since businesses often spend money trying to predict how the world will change, and since speculative fiction already traffics in such predictions, perhaps one could be put in service of the other — corporate consulting through sci-fi narratives. Soon, Popper quit his job, moved to a smaller house, and launched his own firm, SciFutures. Today, his network of a hundred or so authors writes customized stories for the likes of Visa, Ford, Pepsi, Samsung, and nato. Popper calls their work “corporate visioning.”

A company that monetizes literary imagination might itself seem like a dystopian scenario worthy of Philip K. Dick. “There can be a little tension,” Trina Phillips, a full-time writer and editor at SciFutures, acknowledged. The authors’ stories, she added, which range in length from a few hundred to several thousand words, are “not just marketing pieces, but sometimes we have to pull back or adjust to accommodate a brand.” She and Popper have found that clients generally prefer happy endings, though unhappy ones are permissible if the author also proposes a clear business strategy for avoiding them. Rarely is there room for off-topic subplots or tangential characters.

[...]

One of SciFutures’s more prominent contributors is Ken Liu, a Hugo Award-winning author and the translator of the popular Chinese science-fiction novel “The Three-Body Problem.” Liu told me that he relishes the level of influence that the firm offers. “As a freelancing gig, it’s not much money,” he said; typically, stories pay a few hundred dollars. “But you have the chance to shape and impact the development of a technology that matters to you. At a minimum, you know that your story will be read by an executive, somebody who’s actually able to decide whether to invest money and develop a product.” Liu dismissed the notion that writing science fiction for corporate clients compromised something essential about the genre. “I’m not a big fan of this vision of the artist as some independent, amazing force for good,” he said. “Everybody writes in a context for an audience.”

The audience that gives SciFutures writers the most freedom to imagine negative outcomes is, not surprisingly, the military. “Those stories can be grittier,” Phillips said. “They already do a lot of worst-case-scenario planning.” Last year, she and her colleagues produced thirteen stories that were read and discussed in a workshop for forty senior officials from a range of nato member countries. One involves a “smart gun” that gets hacked, nearly causing a massacre of civilians. Another, told from the perspective of a twelve-year-old girl in Uruguay, describes a group of child soldiers around the world who shoot targets through an online gaming site without realizing that the game is real: they are operating drones and other remote weapons that kill enemies of the Russian government. (Readers familiar with Orson Scott Card’s novel “Ender’s Game,” from 1985, may notice some similarities.) A third story follows a member of a Chinese “Fear Battalion,” a group of soldiers who have been genetically modified to emit a pheromone that induces terror in anyone who smells it.

As a woman in tech, Megan McArdle realized: these are not my people

Tuesday, August 15th, 2017

Until the age of 26, Megan McArdle was employed as a technology consultant by a small firm that served the financial industry, where she realized something:

I built servers and workstations, mostly for banks, and in a happy foreshadowing of my future writing for Bloomberg View, I installed some of the first PC-based Bloomberg terminals for a Japanese firm’s office in New York.

Finance back then was heavily male, as it is now. And technology, the same. At the intersection of the two … well, I can count on one hand all the women I worked with directly during almost four years of consulting.

It was very male-centric. I heard about client outings, involving strippers, to which I was obviously not invited. And the sexual harassment (entirely from clients, not colleagues), could be spectacular.

Which has nothing to do with why I left. This will make me sound a bit dim, but at the time, it never occurred to me that being a female in this bro ecosystem might impinge my ultimate career prospects. Nor did I miss having women in the room. I liked working with the bros just fine. And the sexual harassment, while annoying, was just that: annoying. I cannot recall that it ever affected my work, nor that I lost any sleep over it.

No, the reason I left is that I came into work one Monday morning and joined the guys at our work table, and one of them said “What did you do this weekend?”

I was in the throes of a brief, doomed romance. I had attended a concert that Saturday night. I answered the question with an account of both. The guys stared blankly. Then silence. Then one of them said: “I built a fiber-channel network in my basement,” and our co-workers fell all over themselves asking him to describe every step in loving detail.

At that moment I realized that fundamentally, these are not my people. I liked the work. But I was never going to like it enough to blow a weekend doing more of it for free. Which meant that I was never going to be as good at that job as the guys around me.

If parents really want to give their kids a movie night, they’ll pay

Sunday, August 13th, 2017

Virginia Postrel recently went to see Atomic BLonde, and someone brought two kids to the very R-rated movie:

Its fight scenes are lethal and bloody. “Character is choked with a garrote, very visible and intense, lasts for a :30-:60 seconds,” is one note from IMDB’s parents guide. The only respite from the mayhem is a lesbian love scene.

[...]

Like most U.S. theaters, AMC bars kids under 6 from R-rated movies after 6:00 p.m. “Since implementing this policy, guest complaints concerning noise in the theatres have decreased significantly,” a spokeswoman told me by email. Our 7:15 showing was covered by the rule — and demonstrated its flaws.

The first is that children under 6 don’t have driver’s licenses. If the parents say the kids qualify for admission, the theater has to take their word for it. Unless a child is so disruptive that the rest of the audience complains, it’s easy enough to break the rule. Maybe the kids near us were 6, maybe not.

The second is that the mere presence of children too young to understand a movie disturbs other audience members.

[...]

Instead of charging children $3.00 less than adults at R-rated movies, charge them $5.00 more. If parents really want to give their kids a movie night, they’ll pay. But if they just don’t want to pay a babysitter, they’ll stay home and let everyone else enjoy the show.

I still remember someone bringing little kids to the matinée of Gladiator years ago. Not cool.

He picked it up

Friday, August 11th, 2017

Handle has returned to discuss Average Is Over. Tyler Cowen’s book reminds him of a friend’s situation:

I know a Tesla mechanic and he really likes his job. He used to work for BMW, and said it had a truly toxic culture (not one that sounded very traditionally German) and the rats (i.e. other mechanics) were fleeing from a sinking ship. A former BMW maintenance manager was poached by Tesla, and he knew who the good guys were at BMW, and so was given the task of poaching them too.

Which really make you think.

One thing Tesla has is that anyone who can create a new car company from scratch will maintain a permanent advantage over all established car companies, in that it won’t be saddled with all those tremendous pension liabilities to former workers, and established super-powerful unions. Musk certainly has an incentive to get as far ahead on the automation curve as possible to avoid ever having to deal with those problems at anything like the magnitude of burden all the other companies must carry.

That makes it very hard for any established company to eat his lunch by copying simple and widely available tech, while also making it hard for any other new company to overcome the barrier to entry, especially if future subsidies are likely to be less generous than what Musk got to help him get started. That means there is a special, one-time opportunity to pick up this particular $100 bill off the sidewalk. He picked it up.

I admit I didn’t give this particular advantage enough consideration before, and now it seems to help account for Tesla’s unique ability to capitalize on electric cars with big batteries, which, after all, anyone can make. But his timing means that he’s the only one that can make them both with the most generous subsidies and before amassing manufacturing-era labor liabilities and before sclerosis infects his company.

It’s not necessarily regulatory arbitrage as it is also a kind of legacy sclerosis arbitrage. Indeed, this was and remains a considerably portion of the competitive advantage of East Asian automakers in the US market. All else being equal, the Big Three had to make an extra few thousand dollars per vehicle to pay for their liabilities. Tesla gets to start from scratch with a clean slate. That just having a clean slate is such a huge advantage these days is revealing in itself. Combined with ludicrously generous crony subsidies, it makes a strong case for his special, inimitable position.

Furthermore, in addition to not being saddled with the unions and all those pension liabilities to former workers, he’s got another advantage which accrues to any new company in an established sector, indeed one the big Silicon Valley companies have conspired among themselves to avoid by means of forming a labor-market demand-side cartel.

I’m guessing a lot of your work environments are a lot like mine, where compensation is fairly flat and compressed and bears little relation to ones marginal productivity in the short term, despite everyone knowing informally who is really pulling the weight. In the long term high performers are rewarded with promotions, but this suffers from Peter Principle problems, and anyway only works in tall hierarchies. There is a new employee where I work who is getting paid nearly as much as I am, but who is doing 20% of the work, because he is a moron, but he beats everybody in seniority, which is, alas, how the system works. He won’t get promoted, but in a way that’s almost worse, since the good performers will leave the job and people like him will stick around, lowering average productivity.

Everybody I know has lots stories like these.

So that creates another kind of obvious arbitrage opportunity. Maybe “Productivity Correlation Arbitrage.” If one could only pick one good manager in a unit or office, tell him he must fire 60% of people, and that he has unlimited authority to fire anyone he wants, and those he retains will get paid double so long as all the work gets done, then I have no doubt that the company and everyone left will be much better off.

Some seasonal companies actually do something like via over-hiring, automatic attrition, and selective rehiring. I had an uncle-in law who worked a job like this on the Alaskan oil fields and called it something like an “underbrush fire” that left all the big timbers standing.

But most mature organizations, especially those saddled with strong unions, can’t legally or practically manage anything remotely approaching this kind of ruthless culling.

But if a new company can poach a few good managers with the special inside knowledge needed to be future poachers of more good people, then your new company can start off with much better people producing much more value and for only a little more money. Is Tesla doing this too? That’s pretty smart, and it seems to borrow from some insights that may have been gained from Silicon Valley experiences.

Hmm… something to think about.

Jordan Peterson interviews James Damore

Wednesday, August 9th, 2017

Jordan Peterson interviews James Damore on his memo regarding Google’s diversity programs and their overweening ideological basis:

Peterson provides some links to the pertinent hate facts:

Sex differences in personality:

http://bit.ly/2gJVmEp

http://bit.ly/2vEKTUx

Larger/large and stable sex differences in more gender-neutral countries: (Note: these findings runs precisely and exactly contrary to social constructionist theory: thus, it’s been tested, and it’s wrong).

https://www.ncbi.nlm.nih.gov/pubmed/1…

https://www.ncbi.nlm.nih.gov/pubmed/1…

http://bit.ly/2uoY9c4

(Women’s) interest in things vs (men’s) interest in things:

http://bit.ly/2wtlbzU

http://bit.ly/2fsq7Ru

The importance of exposure to sex-linked steroids on fetal and then lifetime development:

http://bit.ly/2vP0ZLS

Exposure to prenatal testosterone and interest in things (even when the exposure is among females):

http://bit.ly/2wI28RE

Primarily biological basis of personality sex differences:

http://bit.ly/2vmtSMs

http://bit.ly/2uoPzy0

Status and sex: males and females

http://bit.ly/2uoWkMh

http://bit.ly/2uoIOw8

http://bit.ly/2vNzcL6

To quote de Bruyn et al (first reference on status and sex, above): high status predicts more mating opportunities and, thus, increased reproductive success. “This is true for human adults in many cultures, both ‘modern’ as well as ‘primitive’ (Betzig, 1986). In fact, this theory seems to be confirmed for non-human primates (Cheney, 1983; Cowlishaw and Dunbar, 1991; Dewsbury, 1982; Gray, 1985; Maslow, 1936) and other animals from widely differing ecologies (Ellis, 1995) such as squirrels (Farentinos, 1972), cockerels (Kratzer and Craig, 1980), and cockroaches (Breed, Smith, and Gall, 1980).” Status also increases female reproductive success, via a different pathway: “For females, it is generally argued that dominance is not necessarily a path to more copulations, as it is for males. It appears that important benefits bestowed upon dominant women are access to resources and less harassment from rivals (Campbell, 2002). Thus, dominant females tend to have higher offspring survival rates, at least among simians (Pusey, Williams, and Goodall, 1997); thus, dominance among females also appears to be linked to reproductive success.”
Personality and political belief

http://bit.ly/2hJ1Kjb

http://bit.ly/2fsxIzB

http://bit.ly/2fsILJd

http://bit.ly/2uoPS87

http://bit.ly/2ftDhOq

Conscientiousness associated with conservatism; neuroticism and agreeableness with liberalism: http://bit.ly/2wHNA4r
Occupations by gender:

https://www.dol.gov/wb/stats/occ_gender_share_em_1020_txt.htm

Electron rockets and Rutherford engines

Sunday, July 30th, 2017

At 18, Peter Beck strapped a rocket engine to his bike. Now he’s taking on SpaceX, with smaller, even less expensive rockets:

In 2007, New Zealand’s government let Beck take over a floor, rent-free, at the lab where he’d been working. He now had access to high-end equipment, but he needed money to buy other gear. So he called Mr. Rocket — real surname, first name Mark — a wealthy internet entrepreneur and fellow Kiwi whom Beck had heard on the radio talking about his interest in space. Beck arrived at their meeting with a proposal to launch a cheap rocket every week. Rocket was intrigued enough to start making calls. “When I was pitching the idea to my lawyer and accountants, there were some raised eyebrows,” he says. “It seemed like an easy way to get rid of a bunch of money. But Peter had engines he could show me, and we shared the same vision.”

Beck raised $300,000 from Rocket and some family and friends, then spent two years building a prototype. In November 2009 he and two new hires unveiled the Atea-1 — a nod to the Maori word for space. He arranged to launch the 20-foot-long rocket, which weighed only 130 pounds, from a pad on Great Mercury Island, co-owned by a businessman named Michael Fay.

[...]

Since that first triumphant test, Rocket Lab has become a lean, accomplished builder. The company’s manufacturing facilities, a few low-slung warehouses in an industrial part of Auckland, have a giant assembly area for its Electron rockets and rooms where software engineers fine-tune its Rutherford engines, which are named after the New Zealand-born physicist Ernest Rutherford. Rocket Lab conducts engine tests a few miles away, in a patch of pasture near the Auckland airport. Things have gone awry on occasion — like the time a wayward igniter caused a bush fire that shut down the airport — but on the whole, the company has progressed much faster than typical aerospace startups. It has raised $148 million to build out its operations and is valued at more than $1 billion.

There’s a degree to which all viable rockets are the same: thin, metal tubes packed with as much explosive material as physics will allow. Rocket Lab’s primary innovation was to opt for carbon fiber over aluminum, which makes the Electron much lighter than competing models. It’s also much smaller — a sleek, black 56-by-4-foot shell with nine Rutherford engines at the base. SpaceX’s workhorse, the Falcon 9, is 230 feet tall and 12 feet across, and can take a 50,000-pound payload into low Earth orbit, compared with the Electron’s 500-pound limit. Rocket Lab charges just $5 million per flight, though, while SpaceX charges $60 million.

Beck’s goal of launching at least once a week is also more ambitious than SpaceX’s once a month. His target is made more plausible by an additional innovation: Rutherford engines are among the first to be almost entirely 3D-printed, which means more of their parts are fused together and don’t need to be assembled by hand. This lets Rocket Lab build engines practically at the press of a button.

The company will also be able to launch more frequently because it has a private facility — a rarity in the aerospace industry — on the eastern coast of New Zealand’s North Island. Launch Complex 1 sits at the pointy edge of the Mahia Peninsula. The setting is stunning: a 26-by-26-foot launch pad, surrounded by the grasslands of the 10,000-acre sheep and cattle farm from which Rocket Lab leases its land. All of this is positioned atop a plateau that gives way to sheer, rocky cliffs that drop to a beach and open up to the turquoise ocean. Decades ago, Europeans and Americans had whaling stations here; during World War II, American troops practiced beach landings nearby.

[...]

That Peter Beck and New Zealand have been at the forefront of it all has been unlikely, to say the least. But Beck’s lack of formal training and his home country’s remoteness gave him a unique vantage from which to reimagine the rocket business.

Amazon is just beginning to use robots in its warehouses

Saturday, July 8th, 2017

Amazon is just beginning to use robots in its warehouses and they’re already making a huge difference:

Amazon acquired Kiva for $775 million in 2012 but only started using the orange robots in its warehouses in late 2014. The deal was expected to make inventory management more efficient. It’s now beginning to become clear by how much.

The “click to ship” cycle used to be around 60-75 minutes when employees had manually to sift through the stacks, pick the product, pack it, and ship it. Now, robots handle the same job in 15 minutes, according to a Deutsche Bank note published Tuesday (June 14) based on Amazon’s metrics.

These robots are not only more efficient but they also take up less space than their human counterparts. That means warehouse design can eventually be modified to have more shelf space and less wide aisles. At the end of the third quarter of 2015, Amazon was using 30,000 Kiva robots across 13 warehouses. Each Kiva-equipped warehouse can hold 50% more inventory per square foot than centers without robots. In turn, the company’s operating costs have been sliced by 20% — or almost $22 million — per warehouse.

If Kiva robots are dispatched to the rest of the 110 Amazon warehouses, the tech giant could save almost $2.5 billion, according to Deutsche Bank. However, since it takes $15-$20 million to install robots in each warehouse, the one-time savings is expected to be closer to $800 million.

Disney’s biggest business is cable TV, for now

Friday, July 7th, 2017

Disney’s biggest business is cable TV, and kids are tuning out:

The troubles are twofold: a lack of hits and the broader move by audiences away from traditional television to digital alternatives. The shift to streaming services such Netflix Inc. and web-based platforms like Google’s YouTube is particularly pronounced among younger viewers targeted by these Disney networks.

[...]

Disney Channel programming is focused on children, while Freeform, which changed its name from ABC Family in January of 2016, is aimed at teenagers and young adults.

Cable TV has long been Disney’s biggest business, accounting for 30% of its revenue and 43% of profits last fiscal year. About 26% of cable revenue and profits come from entertainment networks like Disney Channel and Freeform, Morgan Stanley estimates, while the rest is generated by ESPN. (Disney doesn’t disclose the breakdown).

[...]

Also at stake for Disney is the exposure its TV channels offer for toys, clothes and other products that the company relies on for hundreds of millions of dollars annually in revenue.

As consumers “cut the cord,” Disney’s once fast-growing cable business has slowed down. Cable revenue is flat and operating income down 6% in the first half of the current fiscal year, which has alarmed Wall Street.

Disney Chief Executive Robert Iger has said that strengthening online accessibility for television programs is a priority and that the company is preparing to offer its channels, in part or whole, directly to consumers online rather than just through costly cable packages.

[...]

For the first six months of this year, the commercial-free Disney Channel’s ratings among in its core 2-11 and 6-14 demographics fell 23% in prime time and 13% and 18%, respectively, during the full day, compared with the same period a year ago, according to Nielsen. Ratings are also down at the smaller Disney Jr. and Disney XD networks, which fall under Mr. Marsh’s Disney Channel umbrella.

Have parents caught on to how Disney’s “family friendly” programming consists largely of bullying followed by laughter?