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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.'"
"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.
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. As Mike Rowe said at TED, there's a war on work that's been going on for 40 years.
--
BMO
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.
Unless you can manufacture the candy and soda efficiently, no amount of marketing is going to save your ass.
“Common sense is not so common.” — Voltaire
Yes, this guy is in advertising. He is the b-ark but for some reason, he figured it out. Well? Advertising has been around for a long time and has always about getting people to buy more widgets they don't need. There really is no difference between the guy who came up with Soaps to sell soap and the guy who invented the monkey gif ad.
If this guy hates his job, there are plenty others. It is hardly as if the whole world is just working for facebook.
If ANYTHING, this guys attitude "my job is just selling ads, therefor the entire world is about selling ads" is the problem. No, the whole world is NOT you. Don't throw a hissy fit because you found out you work in advertising. Oh and the guy in the example? Now runs a data analysis company. Gosh, he was so upset about this job selling advertising he went into data mining. Two guesses what he mines for.
But there are still countless companies doing real work, just as they have been doing while advertising agencies have been around.
Just accept, most of us lead utterly meaningless lives. The b-ark better be really big.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Fox & Friends: "Mr Cosm, how would you describe the modern American economy?"
Cosm: "Well, we have primarily shifted to a PTE based model."
Fox's Token Blond: "What's that? Is that like China?"
Cosm: "Polished Turd Economics, you should be quite familiar with it by now."
Snide Male Co-Host: "You mean like the democrats?"
Cosm: "...well..kind of...that would make the Republicans unpolished..."
Blond: "[winces] Hey now....We'll be back folks after this commercial break."
commercial fade-in: "The new iPad 4G from....fades off..."
'We are trying to prove ourselves wrong as quickly as possible, because only in that way can we find progress.' RPF
Yes, but to be clear, they are saying that this one is not only going to bust, it is going to be worse because there is less fundamental real value.
"Who is the Journal of Quantum Physics going to believe?" --Stephen Hawking
I think the real question from TFA is if we all do pointless crap like market analysis, marketing, branding, and search engine optimization like the guy in the article, are we going to someday have a future where these skills can no longer be converted into food and shelter through the magic of the market.
For a while now, I've been wondering what the purpose of the USA economy is.
There are the basics, of course. I work so that I can have food, water, clothing, shelter, free time, fun. But it is through the magic of the world economy that I get those things by writing software specifications and unit tests. The economy somehow figures out how many lines of code I need to write to buy a loaf of bread or a gallon of milk.
I suppose I don't worry too much about the fact that most of the work we do is of dubious importantance, so long as it is still convertible into food and shelter. But there is a tipping point somewhere. If everyone in the USA worked making click-through ads, we'd reach a point where no amount of work could be converted to food and shelter.
AI and natural language processing certainly benefit from this, and the technology invented goes beyond just ad placements (even if it's the primary motive).
Not only that, but innovation has taken place just to handle the sheer volume of data created by the "social web".
the technology and resources to predict trends is something that has come out of this whole social thing, and since this kind of information can be compiled and analyzed by just about anyone, just about anyone can capitalize on that information in many ways that don't involve specifically targeted web ads.
I'm god, but it's a bit of a drag really...
My fear is that Silicon Valley has become more like Hollywood," says Glenn Kelman, chief executive officer of online real estate brokerage Redfin, who has been a software executive for 20 years. "An entertainment-oriented, hit-driven business that doesn't fundamentally increase American competitiveness
Movies. Microcode. Pizza Delivery.
Faster! Faster! Faster would be better!
It's tragic how our era's finest mathematical and technical minds are working on social networking. It's not right that they're wasting themselves trying to figure out how to monetize people sending pet photos to each other!
Why just a few short years ago people in that field were really doing great things for the world--like repurposing the Black-Scholes theorem to create increasingly complicated derivative financial instruments. Those instruments powered a revolution that brought prosperity to everyone.
If we can't get our best and brightest to go back to investment banks and get to work on developing new financial instruments, I don't know what will happen to our fine nation.
At least the internet ad-clicking business should be able to implode relatively neatly into a pile of its own worthlessness, rather than blowing up outward and taking a nontrivial chunk of the real economy with it, like our last adventure in letting smart people produce nonsense for money. Plus, Facebook doesn't quite enjoy Goldman-Sachs levels of regulatory capture, so we might even avoid paying the people who fucked it up. Progress!
Less fundamental value than pets.com and drkoop.com? That's quite a bar to meet.
The best minds of my generation are creating bio-tech startups in Bangalore
The best minds of my generation design oil rigs for the Santos basin offshore Brazil
The best minds of my generation can't afford education in Nairobi
The best minds of my generation divert rivers in China to power cities not yet built
The best minds of my generation uncover the workings of the brain in a town near the pole
The best minds of my generation overthrew a dictator in Kairo
The best minds of my generation enrolled in a militia in Afghanistan
The best minds of my generation does not read businessweek.com
The best minds in the 1860s wasted their lives coming up with new colours of synthetic dyes to allow fabric manufacturers to sell more fabric. The best minds of the 1920s wasted their lives in the new(ish) field of advertising. The best minds of.. The vast majority of the 'best minds' of any generation have ended up taking the stable and well paid jobs associated with working for commercial interests, usually on stuff that won't exactly change the world or make it a better place or anything of the sort. The only thing more depressing is when there's a large war and the best minds of the generation spend years of their lives trying to come up with more efficient ways to kill other human beings. However, in any generation some bright people through accident or design work on things that decades later, in hindsight, are seen to have changed the world in some positive way.
And sometimes people who do useful things with their lives started off doing something like helping facebook sell ads, and had a sudden realization one day that this was a waste of their life. I hope this guy now goes and has a go at something he thinks will make the world a better place instead of just whining about how facebook is ruining the world.
Ya know, I really think we outta give credit where credit is due, and I don't see how these young 'uns will ever be able to top the level of worthless in Cuecat. I mean get VCs to pay for scanners to be passed out so folks can go to the trouble of hooking it up, installing a buggy driver that spied on you AND all for the "privilege" of scanning AN AD so you could be hit with ads on your PC? that is sheer genius levels of worthless right there pal, I don't see FB or any of these kids being able to top THAT nuclear powered failure!
I think the bigger question than "what happens when this bubble bursts" is the much more fundamental question of "What do you do when you don't have a use for people anymore?" Because as it is we are ALL playing IQ musical chairs with less seats for a bigger population every. single. day. and the next to go WILL be the entire service industry. what then?
You think MickeyD's bitches about having to pay minimum wage now, which frankly in America one can't live on and actually keep from going under, what do you think they will do when they can replace the ENTIRE workforce with machines? hell there really isn't anything that can't be done in your average fast food joint that assembly line automation couldn't do better, more accurately, and 24/7 without breaks, the only thing keeping them with humans is cost, but what happens when the robot is cheaper? you can't expect to hire everyone part time at $6 an hour when gas is $6 a gallon and a bag of groceries costs them $60, so what then?
I'd say you have a good 60% of the population that are working C and D level jobs that WILL be either shipped overseas where there is no working regs and you can run sweatshops and pollute the entire area, what are we gonna do with them? Execute them? lock them up? make up bullshit jobs (BTW currently government employs MORE than manufacturing, farming, fishing, forestry, mining and utilities combined source here) so now what?
So I'd say that is the bigger question we are facing. If the top 25% have everything while the bottom 75% starve society will collapse, crime will be rampant as they try to survive, yet at the same time we simply don't need the labor of more and more people on this planet. What do we do with these jobless masses? Blowing more bubbles doesn't change it, neither does pushing the "education!" meme that politicians keep harping about while ignoring that more and more that graduate from all these colleges and trade schools have nothing to show but debt they can't pay, because in the end machines will do it better.
And before anyone pops in with the capitalist meme of "wages will go down and they'll balance!" I'd like to point to what the race to the bottom gets us, aka the the Halliburton clause where more and more of our precious water is being contaminated and being rendered unfit for use by those that want to make money NOW and screw later. Meanwhile the super rich just got a giant tax break thanks to outright bribery, so trying to beat the third world at who can be the most polluted and corrupt probably ain't the right way to go, that is unless you like the idea of paying $10 for a bottle of drinkable water and having your kids wear masks just to go outside.
ACs don't waste your time replying, your posts are never seen by me.
Yes, but to be clear, they are saying that this one is not only going to bust, it is going to be worse because there is less fundamental real value.
From what are you deriving your analysis that the tech industry of today has less fundamental real value than in the first dot com era? Given that it's /., I'm guessing your statement is rectally-originated, but I'll give you the benefit of the doubt.
The real difference of today is that a lot of these companies actually DO have real value. 9- or 10-figure IPOs in 1999 were not unheard of, and they were happening for businesses that not only had no revenue streams, but had no plans for making revenue. The scale on which these companies operated could not be justified with the size of the potential customer base -- the number of millions of people online at the time could be counted on two hands, which makes selling a billion dollars of pet supplies in a year a rather daunting feat. The industry has changed, drastically, since then. Most of the money is around online marketing, which has a good reach, now that potential audiences are measured in billions, not millions. Microtransactions are now capable of supporting a multi-billion dollar operation. This was unheard of over 10 years ago.
This is not to say there won't be another tech bubble. It is legitimately scary when you consider the exuberance around a handful of companies whose path to money is sketchy at best. However, we'll see how severe the bubble is -- there is less investment money to go around, IPOs aren't popping out of thin air, and a very healthy portion of the companies in the general sector are at a minimum cash-positive.
In a sensible economic system, if all the work could be done by machines, we'd live in abundance. Alan Watts had an interesting idea about how each citizen ought to get a share in the wealth created the machines.
Re-read science fiction stories from the 50s: they already thought about plenty of variations of that. What they didn't think about would be that the investors of those machines would get 90% of the profits and leave the others to rot. Why wouldn't they, they have the money, the political influence and the power, so why would they share any of it, short of plenty of heads on spikes like in 1789.
Non-Linux Penguins ?
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" -
Bubbles are, unfortunately, never entirely collateral-damage free. However, compared to the impact of a bubble involving an unholy alliance of the financial services sector and the residential credit/residential construction sector(the first of which has its tentacles in just about everything, the world over, and crazy levels of regulatory capture and the second is strongly coupled to where real people really live, and also has the magic 'homeownership' ticket to favorable legislative treatment) a bubble involving the socialclickfraud.com sector should be comparatively self-contained.
Not zero, basically nothing in an interlinked economy can be, but there is a relatively clean collapse vector, where a few VCs lose their shirts, a bunch of companies learn that 80% of their "value" was in pretend internet money, the ones that offer a service people actually want start charging modest monthly fees, the others go out of business and their coders are reduced to designing IE6 compatible 'enterprise portals'(may god have mercy upon their souls).
Bubbles are always bad; but, as bubbles go, I'd take 'social' over a lot of other things.