The US Economy at a Permanent Plateau?

If you want some insights into what's ahead for the economy, you should check out Tyler Cowan's new book, The Great Stagnation.  It's a $4 ebook (no doubt the price itself is an economic experiment).

His genius is that he describes the economy in terms we all can understand.  For those of us in our 40s or younger, what major technological innovations have occurred since our childhood?  That is, besides bigger refrigerators that produce different kinds of ice.  The answer is there have been practically none of significance, except the Internet, and the book describes why the Internet has had little impact on the economy.  Case in point, Twitter currently employs about 300 people and Facebook had to reach 500 million users before it had real revenues.

The book backs this up with many economic studies of real wages, GDP, and other factors.  I've long wondered why the growth of the financial industry in the last decade is attributed with helping the economy, and Tyler is the first economist I've seen who explains why it hasn't.  Similarly, healthcare and education have become larger chunks of the US economy while contributing relatively little to growth.

The message is that we should get ready for a flat economy.  And maybe that's not such a bad thing, so long as we can keep our society relatively equitable.

His blog is also a fascinating read.  I don't know how one person manages to post so much.

New Year's Resolution for 2011 – Write

I've been full of resolutions lately.  It all started with Leo Babauta's ZenHabits and his simple advice to set achievable goals that aren't too ambitious.  In the past, I set the bar too high and then gave up if I didn't immediately make progress.  Now I try to pick something each month that's so small I can't easily fail.

So in October, I started by organizing one piece of paperwork before my morning cup of coffee, and now I'm on top of my finances.  In November, I started doing 20 minutes of exercise every morning, and now I'm addicted to it.  In December, I decreased by email to-do list a bit each day, and now I'm responding faster to new email.

So I'm here celebrating the New Year in snowy Japan and it's time to choose a new habit.  I've thought a lot about it and decided to focus on writing.  I've always been a voracious content consumer — now it's time to spend time and energy on producing content.  It's also time for this introvert to be more public and open about things I do.

Here's what I plan to write:

I'll post on my brand spanking new site GoodScreens mobile development which covers tools and sdk's for building mobile apps and mobile websites.  My motive for Goodscreens is to help me stay current on mobile technologies, share information that might be useful to others, and simultaneously test techniques for content-generation and lead-generation for my legal startup (which is another story I will be telling soon).

I'll continue to post on this old blog on random esoteric and philosophic topics like paleontology, life origins, economics, cell biology, ancient and modern history, south pacific sailing, brain neuro-imaging, art, astrophysics, business theory, and perhaps a little self-help for good measure.  Not sure if anyone will read, but I'll enjoy writing it.

I'm finally getting my social networking profiles up to date.  I'll focus Facebook on messages/photos for family, friends, and the occasional random stranger who views my profile.  I've given up on Facebook privacy (why would anyone trust Zuckerberg?), so this will be a filtered personal stream.

Twitter will become my aggregated log of the content I produce across the web.

I also hope to write some guest posts on other blogs and plan to do much more commenting across the internets.

I'm giving up on Typepad and Posterous for this blog.  Typepad is dead and Posterous seems to offer no advantages for anyone who knows WordPress.   Haven't decided on the replacement yet.  Tumblr looks fun, but I feel too old.

Anyway, back to my sake and sushi and some quality time with wife and family.  I'm cheating a bit with this New Year's post, it's actually January 2nd across the date line.  Here's to making the most of the new year, and living fully in this brief life we get.

I'm now blogging on posterous, here is my feed..

Bill Warner On Startups

This week I got to meet Bill Warner and hear his philosophy about entrepreneurship at a sparkcloud open door event.  I came away pretty impressed, Bill flips the conventional startup model on its head.

Bill's ideas originate from his experience in founding two companies.  The first, Avid, returned 30x to the original investors.  The second, Wildfire, returned 4x to the original investors.  He draws some useful conclusions from what what went right and wrong at each company.

Doing it right:  Avid

Bill came up with the idea for Avid to help a specific group of people — video editors who were trying to tell a story.  As he built the company, they stayed true to this vision for 'his people' which led to adoption by Hollywood video editors.  The most famous user was James Cameron, who joined the editors guild to use the Avid system and went on to win an Oscar for editing "Titanic".

Doing it wrong:  Wildfire

Bill's original concept for Wildfire was to help people to connect by phone through a presence-based phone network.  When this original idea failed to get VC funding, he allowed the product to morph into something more appealing to investors — an 'electronic secretary' to screen and manage incoming calls.  The original dream of connecting people was betrayed, and the company joke became that Wildfire spouses wouldn't touch the product because it de-personalized phone communication.

My takeaways are:

Mothers teach their children to 'follow their hearts'.  That means using the right brain, not the rational left brain to which we usually attribute business and financial success.

Focus on 'your people'.  Determine the type of person you really want to help and never let go of who they are.

Use words to describe your business such as 'Believe' and 'Intend' to stay focused on the people you want to serve.  The technology 'Invention' is also important, but only if it fulfills the overall mission.

While there are many ways to start financially successful companies which don't involve the heart, Bill's philosophy can increase the odds of success while making the experience more exciting and rewarding.

Bill also gave a tour of the Anything Goes space within the CIC and held an impromptu brainstorming session about how it will be organized.  Sounds like an excellent idea to support the Boston startup community.

iPhone versus Android, April 2010 Snapshot

I've been looking through the AdMob report for April 2010, which includes some of their own stats and other metrics made publicly available.

According to Gartner, iPhone and Android platforms combined to sell 25% of smartphonesworldwide in Q1 2010.

According to Google, 100,000 Android devices were getting activated each day as of May 2010.

According to Apple,  85 million iPhones and iPod Touches have been sold over the past three years as of April 2010.

And here's a great Admob chart of mobile phone market in the US and global.

 Source:  Admob April 2010 Report

Voila Comcel wireless support for Haiti earthquake relief

Live Blogging the  CTIA keynote today.  Most inspiring thing I’ve seen is the relief effort by Voila Comcel for the Haiti earthquake by providing a working mobile phone network in the capital.  It’s a great example of social entrepreneurship where for-profit efforts can lead to a greater social good.  Their vision is to help rebuilt Haiti by connecting the country wirelessly.

Video will appear here as soon as it’s live

A Hackintosh book reader

A Hackintosh book reader, thanks to Amazon's new Kindle for Mac.

I hadn't read any Kindle books since losing my iPod Touch months ago. It even remembered the page I was reading in my last book. And of course this reading experience is much bigger and brighter.

Does GNP mean anything?

I just came across Caterina’s post on Robert Kennedy’s GNP speech.  It prompted me to read again A Steady-State Economy by Herman Daly.

Herman Daly says there is no reason that GNP should always increase.  For wealthy countries, a steady-state or zero-growth economy may be better.

One of the problems with GNP is that it counts only the benefits, not the costs, of new technology:

Tetraethyl lead provided the benefit of reducing engine knock, but at the cost spreading a toxic heavy metal into the biosphere; chlorofluorocarbons gave us the benefit of a nontoxic propellant and refrigerant, but at the cost of creating a hole in the ozone layer and a resulting increase in ultraviolet radiation. It is hard to know for sure that growth now increases costs faster than benefits since we do not bother to separate costs from benefits in our national accounts. Instead we lump them together as “activity” in the calculation of GDP.

Daly recommends wealth redistribution to an ideal multiple of 100x, e.g. the richest have 100x the wealth of the poorest.  For comparison’s sake:

  • Plato thought the richest people should have 4x the wealth of the poorest
  • In today’s academia and civil service, the multiple is 10x to 20x
  • In the US corporate sector, the ratio is 500x

This is not to say that pure economic growth isn’t valuable in the developing world:

For poor countries GDP growth still increases welfare, at least if reasonably distributed. The question is, What is the best thing for rich countries to do to help the poor countries? The World Bank’s answer is that the rich should continue to grow as rapidly as possible to provide markets for the poor and to accumulate capital to invest in poor countries. The steady state answer is that the rich should reduce their throughput growth to free up resources and ecological space for use by the poor, while focusing their domestic efforts on development, technical and social improvements, that can be freely shared with poor countries.

It’s a long essay and I’ll post more later.  One question for those of us in the capitalist world is how to measure our success beyond personal wealth creation.  In other words, would we still be contributing to the economy if the true costs/benefits of our work was measured more accurately.

Here’s the link to Robert Kennedy’s speech on GNP.