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How the Social Tech Bubble Is Different
theodp writes "Tech bubbles happen, writes BW's Ashlee Vance, but we usually gain from the innovation left behind. But this one — driven by social networking — could leave us empty-handed. Math whiz Jeff Hammerbacher provides a good case study. One year out of Harvard, 23-year-old Hammerbacher arrived at Facebook, was given the lofty title of research scientist and put to work analyzing how people used the social networking service. Over the next two years, Hammerbacher assembled a team that built a new class of analytical technology, one which translated insights into people's relationships, tendencies, and desires into precision advertising and higher sales. But something gnawed at him. Hammerbacher looked around Silicon Valley at companies like his own, Google, and Twitter, and saw his peers wasting their talents. 'The best minds of my generation are thinking about how to make people click ads,' he says. 'That sucks.' Silicon Valley historian Christophe Lecuyer agrees: 'It's clear that the new industry that is building around Internet advertising and these other services doesn't create that many jobs. The loss of manufacturing and design know-how is truly worrisome.'"
A deliberate move.
Concentrate power and wealth for very few, at the cost of all the others... Then? Castigate the losers in this scheme as stupid or non- adaptable.
This is the new America. It's the perfect cesspit for breeding Zuckerbergs.
"Flyin' in just a sweet place,
Never been known to fail..."
I use two facebook accounts; one polished and clean for my parents and family, and one for my friends that has very little personal information(for instance i only use initials and dont link to my employer or even my city. I never spent a dime on any apps or services on facebook and I never will. The sad thing isn't the folks at facebook, google or twitter trying to get us to click on ads or buy fake gold for some facebook game, it's the ones of us that do click or buy fake gold. Website advertisement would not exist if it didn't work. This article warms me up and gives me hope that once all the baby boomers will be retired ... the IT workers and advertisement gurus of our generation might finally embrace better values than the ones brought on by capitalism.
Ever.
Groupon, which e-mails coupons to people, may be the fastest-growing company of all time. Its revenue could hit $4 billion this year, up from $750 million last year, and the startup has reached a valuation of $25 billion. Its technological legacy is cute e-mail.
Groupon is going to crash and burn like you've never seen.
1. Barriers to entry are pretty much zero and as such, competitors are cropping faster than ever.
2. The merchants are disillusioned with them: all they get are the people looking for deals and no repeat business and in the meantime, the business they get form Groupon hardly makes any money and most of the time, it's at a loss.
HPs, Oracles, SUN, the Slashdot hated Microsoft all created products - not easily duplicated services that are basically advertising which is what this whole new bubble is. That's all. No new technology. No new "paradigm" like the Internet was - just using bits and bytes instead of paper.
I will enjoy this show immensely!
"Manufacturing is dirty and nasty and you don't ever want to do it. It's for the dummies. It's buggywhips.
That's what's pounded into the heads of everyone going through school that scores above 100 on IQ. "
Not exactly.
It's more like, You Will Never Get a Job in Manufacturing Unless You Are Chinese So Just Freaking Get Over It.
And the executives running the enterprises---and their financiers---demand that they make it so.
Real world example. An MIT professor invented a pretty cool new technology for better lithium-ion batteries. He wanted to set up a company and manufacture them in the USA and started doing so. When he needed more money he went to the VC's---they demanded that he close down the US factory and re-open it in China before he gets any money. He did.
BTW, the professor was ethnically Chinese from Taiwan.
"The best minds of my generation are thinking about how to make people click ads" - Has there ever been a brief description that describes so well the technological time we live in? Hammerbacher should write a book or two.
His statement might be flawed: Maybe so that many bright minds of our generation work for these companies, but these companies don't just "make people click ads". It might be at their business's core, however, they provide services which many of us embrace while they last and it helps us be more productive (exceptions exist), which in turn contributes to the overall achievements we will see in the following years.
That is only that. Many of these companies also have people in employment who work, full time, on open-source software, do research and publish academic papers, etc. If ads fund these, by all means, go ahead.
His argument can be somewhat justified if the business's ONLY operations surround "making people click ads".
I personally took it to mean that someone else noticed one fact about Facebook: they aren't doing anything now that wasn't technologically possible ten years ago. The Flash games might be a bit more complex than ten years ago but that's about all. No real innovation has taken place. They haven't invented anything of significance. They aren't facing problems of scale that weren't already tackled by the likes of Microsoft and Yahoo and Google.
Facebook is a database backend (and those have been around a long time now), some JavaScript (available since 1995), some HTML (circa 1991), and Flash (1996). What have they invented? They're just another advertiser with nothing technically interesting to offer.
It is a miracle that curiosity survives formal education. - Einstein
The best minds of Ginsberg's generation were working to break the sound barrier and put a man on the moon.
American academia chose the beat poets' masturbatory pyrotechnics over technology - onanism over aerodynamics.
50 years later America is a nation of under-employed attorneys, marketing guys and lumpen-consumers.
Advertising has alway existed, but it's never existed on this scale. We're seeing a type of advertising now that dwarfs even the insane propoganda put out during rival governments during war time. You can't go anywhere, do anything without ads everywhere. In movies, buses, signs, TV, radio.
While it may be true in the US of A, there are still places where you don't get exposed to that many ads. For example, on this side of the Atlantic I don't see a single ad panel on the way to work (or back), BBC is still advertisement free (and for everything else there is MythTV commercial skipping), AdBlock+ and noScript filter out most of the crap on the web, there are so many freely available interesting podcasts or university lectures that I only tune in the radio for the news. I can't comment much on movies as I haven't set foot in a theater for the last 2 years.
To say it's always existed is like saying viruses always existed while everyone around you is dying of AIDS. At no other time in history have we been so over come with bullshit. That is the point.
Then do something simple about it... turn off the dumb box, stop consuming the mind-crushing drivel that passes as entertainment nowadays. Pick a hobby, any hobby that doesn't require you to sit for hours in front of a screen after spending your entire work day sitting in front of one.
If you really "need" to watch TV, consider watching it time-shifted using a PVR that is able to strip commercials.
We _do_ live in abundance, compared to 100 or even 50 years ago. Our standard of living has increased immensely thanks to increased productivity (from automation, computerization, etc.). As an economy we've converted this extra productivity into more/better goods and services, instead of extra time.
Oh, and before you suggest that median 1950 US citizen had a higher SoL than median 2010 citizen... taken quantifiably, SoL includes things like the size of your TV, car, access to medical care (1950 US medical care is worse than 2010 rural Indian medical care), cost of services like travel (inflation-adjusted plane tickets are like 10% the price of what they once were even 35 years ago), etc.
Technology will not take our jobs, technology will increase our standard of living in the future just as it has done throughout all recorded history. The thing is, absolute gains in personal wealth/GDP/SoL don't actually make us happier. It's an unfortunate quirk of human psychology - our absolute wealth doesn't make us happy, our relative wealth is what makes us happy. Because people tend to live around people who are about their wealth level, this means no one is very happy. (Another unfortunate quirk of human psychology - we tend to compare ourselves with people just above us wealth-wise, and assume there are more of them than we think.)
So, now that we are self-aware about our psychological quirks, here is my 3-step plan to lasting happiness
a) Recognize that on an absolute level, we are wealthier in every measurable way than before. Your TV is bigger and sharper than your grandparent's TV. You have access to lifesaving technologies, with new being developed every day. You have the freaking INTERNET for chrissakes. Now of course, _everybody_ around you also has these things... but now you are lapsing into thinking about *relative* wealth, not absolute wealth.
b) When it comes to relative wealth, start hanging out with people poorer than you. It'll make you feel rich.
c) Support some redistributive economic interventions, because more even distributions of wealth lead to more happiness that highly stratified wealth distributions. These policies will reduce our future growth of wealth as an economy, but as long as we are careful not to take it too far, it doesn't matter. Remember - relative wealth makes us happier than absolute wealth, so even if pure pro-growth policies do make us all much wealthier than the alternative, it will actually make us more unhappy if it serves to stratify the economy,
Okay so you have the endgame of the post-scarcity society where machines make everything limited only by materials and energy input(and with orbital factories those are effectively infinite). Eventually everything goes beyond very cheap and becomes free. It doesn't matter who owns anything anymore because there is more than enough for everyone. (Except for fashion and IP, but I digress).
Somewhere between where we are and there: goods become cheaper and there are a few super rich who control the means of production. Those with anything are taxed to pay for those who don't and you get social welfare programs, medicare etc to mean that the poor aren't dying on the street of hunger and lack of medical care.
As time goes on you end up with the rich who do little because they own everything, a social underclass who live off benefits and a middle class who are aspirational to become richer and therefore more powerful.
It then becomes if you're born with riches, your machines build it all for you. If you are born without then social welfare keeps you alive. If you want to progress (get the latest good, toys fashions, bigger house etc) you have to work for it. Quite frankly this is almost my idea description of a society that those who can't work or chose not to are still supported and those who want to progress can, and in fact we seem very close to having this now.I just hope we carry on progressing this way until we reach the point where machines can build everything and people don't need to work at all, I don't see why we can't progress to this situation.
So to go back to your original point: Those bastards who made this possible who designed invested in and implemented those machines should be rewarded for that. After all they could have spent their money on paintings, or big parties or mansions but they didn't they build machines that made products cheaper with less human labor. This is a good thing, or would you rather we went back to 90% of the population toiling on the fields in order to scratch a survival?
"The weirdest thing about a mind, is that every answer that you find, is the basis of a brand new cliche" -