December 2011 – rc3.org

Month: December 2011 (page 1 of 2)

Why maximizing shareholder value is no way to run a company

This article (link via Daring Fireball) makes a sound argument against the concept of “maximizing shareholder value,” a concept which has struck me as pretty stupid from the first moment that I heard it. It’s one of those things that makes sense as an abstraction, but no sense as a way to run a business on a day to day basis. Given that shareholders are the owners of a company, it theoretically makes sense to focus on making sure their investments pay off, but in practice, the approaches managers take to doing so are just disastrous.

As the article points out, what it comes down to is management focused on the expectations market rather than the real market. The article reviews Roger L. Martin’s book Fixing the Game, and quotes Martin thusly:

What would lead [a CEO] to do the hard, long-term work of substantially improving real-market performance when she can choose to work on simply raising expectations instead? Even if she has a performance bonus tied to real-market metrics, the size of that bonus now typically pales in comparison with the size of her stock-based incentives. Expectations are where the money is. And of course, improving real-market performance is the hardest and slowest way to increase expectations from the existing level.

I see the stock market as a game that exists almost entirely separately from the businesses upon which it is theoretically based. This article goes a long way toward validating those thoughts.

Rethinking log messages

December 27, 2011 / Rafe / 4 Comments

Paul Querna has written an interesting post arguing that developers should rethink how they handle logging — using a robust, machine-readable format (like JSON) rather than human-readable strings that are formatted so that each log entry is a single line long.

The big change is not in how you create log messages but rather in how you consume them. Right now, when a user notices an error, I tend to immediately log into the server and start looking for the log messages associated with the transaction in question using grep or my favorite pager.

Were I to log everything in a machine-readable format, it would make sense to have a more robust tool to parse the logs. Finding or building such a tool is doable, but it becomes yet another project. You need management to sign off on it, the systems administrators to agree to the infrastructure change, and someone to actually choose, test, and deploy the new tool for dealing with logs. Then you have to teach everyone who’s used to finding things in the old logs how to find things in the new logs.

That’s how things that seem like a great idea find a way to never become reality.

Garret Vreeland on 12 years of blogging

December 23, 2011 / Rafe / 0 Comments

One of the best of the old school bloggers, Garret Vreeland, has written a long series of posts talking about what he’s learned in twelve years of blogging. Unlike the long-winded majority, Garret is economical with his words, so this massive outpouring is particularly noteworthy. There’s tons of hard-won wisdom in there.

Tim Bray on eradicating the digital divide

December 21, 2011 / Rafe / 0 Comments

I like this quote from Tim Bray on the proper aspirations of people working the mobile industry:

Some worry (reasonably) about everyone being online all the time. I think that regularly disconnecting from the endless input overflow is a good thing. But, that choice must always be voluntary; its imposition, by a malevolent government, a failing market, or poverty, is a bug that we should fix.

The anachronism that is North Korea

December 20, 2011 / Rafe / 2 Comments

Am I wrong in thinking that the most interesting thing about North Korea is that it is a living anachronism that illustrates how most countries around the world were governed in the pre-enlightenment world? Ostensibly North Korea is a Communist country ruled by a dictator, but now leadership has passed to third generation, I think it’s pretty clear that North Korea is for all intents and purposes a monarchy. As economic systems go, North Korea is home to an expansive state that keeps most of its people in a equivalent to serfdom. Any wealth generated by the country is used to maintain an army, build monuments to the ruling class, or fund the lifestyle of the “royal” family. Prior to the enlightenment, that’s how pretty much every country operated. As frustrated as I am with our government, even our somewhat shabby democracy is better in just about every way to what preceded it, monuments like Versailles, the Taj Mahal, and the Egyptian pyramids notwithstanding.

Update: Brad Plumer looks at the results of decades of misrule. Per capita income in North Korea is 5% that of South Korea, meaning that even if the two countries wanted to reunite, they probably couldn’t afford it.

An opportunity to exercise empathy

December 19, 2011 / Rafe / 0 Comments

My previous post was about Ta-Nehisi Coates’ call for muscular empathy. This video of North Koreans crying over the death of Kim Jong-Il provides an opportunity to exercise that empathy:

The New York Times catalogs the evils of his regime.

Giving advice as a form of self-aggrandizement

December 14, 2011 / Rafe / 1 Comment

A couple of years ago I wrote a post advising people not to give advice. Let’s move on past the hypocrisy inherent in that sentence so that I reiterate my point. Giving advice is often a form of self-aggrandizement.

This week, Gene Marks, a technology writer, wrote a bit long chunk of advice entitled If I Were A Poor Black Kid. It turns out to be the sort of reductio ad absurdum argument against getting into the advice business. You can easily skip reading the article and just imagine what it says instead, and you’ll probably be right. What you should read is Ta-Nehisi Coates’ response to it.

He attacks the general idea people have that they would never allow themselves to be victims, be it of poverty, or slavery, or abuse, or any other situation that is obviously abhorrent. He writes:

What all these responses have in common is a kind benevolent, and admittedly unintentional, self-aggrandizement. These are not bad people (much as I am sure Mr. Marks isn’t a bad person), but they are people speaking from a gut feeling, a kind of revulsion at a situation which offends our modern morals. In the case of the observer of slavery, it is the chaining and marketing of human flesh. In the case of Mr. Marks, it’s the astonishingly high levels of black poverty.

It is comforting to believe that we, through our sheer will, could transcend these bindings — to believe that if we were slaves, our indomitable courage would have made us Frederick Douglass, if we were slave masters our keen morality would have made us Bobby Carter, that were we poor and black our sense of Protestant industry would be a mighty power sending gang leaders, gang members, hunger, depression and sickle cell into flight. We flatter ourselves, not out of malice, but out of instinct.

As he points out further down, this is really a failure of empathy, an empathy that’s necessary to really understand the world at all.

Apple the patent troll

December 12, 2011 / Rafe / 0 Comments

It appears as though Apple has become more deeply engaged in patent warfare — transferring patent rights to a patent troll so that they can pursue lawsuits against other mobile handset makers. For more on this tactic, the goto resource is episode 441 of This American Life, When Patents Attack! I’m sure Apple’s response to criticism would be, “Don’t hate the player, hate the game,” but I reserve the right to hate both the game and the players. Apple is one of the most profitable companies in the world, it can afford to stay out of the gutter.

In other patent news, Marginal Revolution blogger Alex Tabarrok argues in his new book that our dysfunctional patent system is holding back innovation in the United States.

Why Twitter ought to keep supporting third-party clients

December 9, 2011 / Rafe / 1 Comment

John Gruber has posted a lengthy review of the new Twitter client for iOS that was released yesterday. Just as the new Gmail disappointed a lot of longtime Gmail users, the new Twitter client has disappointed a lot of longtime Twitter users. How big are the changes? Here’s how Gruber describes them:

This is more than an update. It’s a serious rethinking of the entire concept of Twitter.

I’m sure the goal of the new redesign is to make Twitter more engaging to new users and to people who’ve signed up for Twitter in the past but have never really gotten into the flow of things. Rather than working to make things better for the people who are already addicted to Twitter, they’re experimenting with new ways to create more addicts. My gut feeling is that the experiment will be a failure this time around, mainly because the interface is rather muddled in the ways that John describes, but I would expect Twitter to continue to experiment in this direction over time.

The other reason for the redesign is that Twitter wants to make more money. That seems to be the reason the Discover tab has been added — not everything on it is stuff that someone is paying Twitter to show you, but that’s the part of it that matters to Twitter. I don’t begrudge them that, either. It’s clearly a case, though, where Twitter is trading off usability for cash. This goes to a point that Maciej Ceglowski made earlier this week, which is that free services have their own set of costs. The one he focuses on is that the risk of a free service being acquired and disappearing along with your data is high. The other, though, is that when a service is funded through advertising or sponsored content, making money and making the product better for end users are in a constant state of tension.

Twitter once had a thriving ecosystem of third party clients that made the constant tweaks Twitter makes to its Web site mostly irrelevant. You could use your favorite client and ignore Twitter’s user interface mishaps. Unfortunately, Twitter seems to be committed to killing off the third party application market. If Twitter were only worried about its first set of concerns — making Twitter more engaging for new users and old users who aren’t taking advantage of the service — then they’d have no reason to shut out third party clients. New users could try out Twitter as designed by Twitter, and the rest of us could use the clients that make sense to us. A diverse client base makes it more likely that power users will stick around — even if the default interface doesn’t work, they can probably find one that will.

The other side, though, is that third-party client developers don’t really care about shoving sponsored content at users. Indeed, the ability to hide or deemphasize sponsored content could be a killer feature for a third-party client. So inside Twitter, a user switching from an official appa third-party app represents lost revenue.

I’d argue that Twitter should support third-party clients anyway. Twitter, like all social sites, derives nearly all of its value from a network effect. Nobody would use Twitter if other people couldn’t read their tweets. For Twitter, it’s better for a user to abandon the official Twitter client for a third-party client than it is for a user to abandon Twitter for Facebook or Google+. A robust ecosystem of third-party clients is a strong competitive advantage for Twitter against other social sites.

Secondly, the intramural competition helps Twitter. When the official apps are losing market share to third-party alternatives, it’s a good indication that they need to put more work into improving their official apps. Third-party apps provide free R&D for Twitter. They can always incorporate the best ideas from third-party apps into the official apps. And finally, developers of third-party apps provide a solid base of talent from which Twitter can recruit.

Twitter’s two key advantages relative to other social sites have always been that it is simpler than the others, and that it is a platform rather than just a Web site. Unfortunately, Twitter seems committed to erasing both of those advantages. The service continues to gain complexity, and Twitter’s management seems bent on reducing the flexibility of Twitter as a platform. I think both are big mistakes, but it’s not too late to rectify either of them.

Why you might not want to do business with PayPal

December 7, 2011 / Rafe / 1 Comment

Teresa Nielsen Hayden runs down the debacle of PayPal shutting down Regretsy’s toys-for-kids drive on utterly ludicrous grounds. PayPal works fairly well for most people most of the time, but every once in awhile we get these kinds of reminders of how much power PayPal has over your money if you choose to use them to process payments. There is a very troubling lack of accountability here.

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