Jargon watch as an idea was something that came from my time reading Wired magazine. I found that in my work terms would quickly spring up and just as quickly disappear. So it made sense to capture them in the moment.
The best way of illustrating jargon watch is by example. I came across the term black technology through mainland Chinese friends. One of the key things that Chinese consumers think about technology products is the idea of ‘black technology’. This makes no sense to your average western reader. It equates to cool and innovative.
The term itself comes from a superior technology featured in a Japanese manga series plot. As an aside the relationship between Chinese and popular Japanese culture is becoming increasingly attenuated due to Chinese nationalism.
What might be black technology this year might be humdrum in six months as the companies quickly catch up. Black technology is a constant moving target, but generally its sophisticated and likely has a cyberpunk feeling to it.
I keep an eye out for jargon like this all the time, hence jargon watch. I find this content in my professional reading and in the sources that I follow online. What makes something worthwhile to appear here is purely subjective based about how I feel about it and how much I think it resonates with my ideas or grabs my attention. A lot of British youth culture doesn’t make it because it doesn’t have that much of an impact any more beyond the UK.
It says something about the time that we live in that digital abortion clinics is a normal phrase and that publications like Wired have to have rank the clinics on patient data security. Disclaimer: I lean pro-choice in my beliefs as I don’t have to make the kind of choices that many women have to. Secondly, the second order consequences of high risk procedures done the black market create new moral and ethical dilemmas.
Dystopian vibes
Matt M – Ghost In The Shell Stand Alone Complex
Five years ago, if you had said digital abortion clinics to me it would have brought to mind the darker recesses of the cyberpunk realms created in novels by William Gibson or Neal Stephenson’s Snow Crash, or the Ghost In The Shell series of manga and anime created by Shirow Masamune.
The reality is more banal and horrifying all at the same time.
How we got here
Legal and regulatory environment
Family planning clinics that provide terminations have been under regulatory attack since the US Supreme Court ruling on Roe vs. Wade gave American women access to abortion in 1973. Roe vs Wade was challenged repeatedly in court and upheld in rulings given afterwards. Some of these rulings narrowed the definition of what procedures could be conducted and when they could be conducted. In June 2022, the US Supreme Court overturned Roe vs Wade with its finding on Dobbs vs Jackson Women’s Health Organisation. Abortion was no longer considered a constitutional right, which then meant pregnancy terminations became governed by a myriad of state laws both for, and against abortions.
Some states went as far as to provide a legal shelter for their medical staff against legal measures out of state.
Pharmaceuticals
Historically, medicinal herbs and drugs used to induce an abortion risked causing kidney and liver damage. But we now have drugs available that can provide a much safer alternative. It’s these drugs that the digital abortion clinics rely on. The two most common are:
Misoprostol was developed in 1973. It’s used to induce abortions, but also has other uses including the prevention and treatment of both stomach ulcers and some forms of postpartum bleeding. It can also be used to induce labour during pregnancy.
Mifepristone developed in 1980, is typically used to induce abortions in conjunction with Misoprostol. It is also used on its own to treat high blood sugar levels in patients who also have hypercortisolism.
Femtech
Femtech as a term has only been around since 2016, but investment in the area of women’s health related technology has been growing over a decade. A few things were driving this. The personal nature of smartphones as a device. The explosion in software tools that allowed you to write apps and the availability of wireless technology stacks that hardware easier to connect. Finally, countries like the US started working on data privacy standards in the health space which were very important.
2016 saw Nurx get funding for it to provide in-app ordering for birth control pills. So prescribing abortion inducing medications is a logical next step, in order to give women full control of their reproductive capabilities.
Telehealth
COVID-19 accelerated the normalisation of digitally mediated health services including telehealth consultations and digital abortion services are now exception. If a woman chooses to have an abortion, it’s a big decision and the popular apps covered by Wired seemed to have a wide variance of user experience / provision of care.
These clinics operate in different ways—some provide live video visits with doctors and nurse practitioners, while others offer asynchronous counseling—but many have experienced a record number of patient orders (and increased VC funding) over the past year.
Poli K. (August 21, 2023) The Most Popular Digital Abortion Clinics, Ranked by Data Privacy. United States: Wired magazine
Security issues
Those software tools that allowed apps to be written easily often included API calls that enable privacy infringing tracking. For instance, a byproduct of the software tools used to make LGBTQI dating app Grindr’s locative nature risked exposing precise location data of gay men. Which is of concern in more socially conservative environments. Women using some digital abortion clinics face similar challenges.
In US states, where the politicians thought that Margaret Atwood’s The Handmaid’s Tale was a how-to guide, rather than a societal warning; prosecutions in abortion related cases are using mobile data and search history.
Wired worked with the University of Texas privacy lab to grade the post popular digital abortion clinics on the degree of risk they posed to their patients.
The results were concerning and these problems can’t be mitigated through the use of a VPN or in-app settings.
Third-party data app sharing and data collection were used by the likes of Palantir to aid targeting people of interest in the global war on terror (G-WAT in security circles), and could be used in a similar way against women, if the state government were so inclined.
The Wired article that inspired this post here. More health-related content here.
I wish gatekeeping was a thing back in 2005 and 2006 when I was working on the international launch of Yahoo! Answers. The problem that we had was getting people to contribute answers to questions. Gatekeeping and the exhortation to not gate keep is about sharing knowledge and opinions freely – an in real life version of what we saw in early social publishing. Ironically gatekeeping stands in sharp contrast to oversharing as a social faux pas. The kind of knowledge that concerns about gatekeeping is particularly opposed to is opinion based knowledge or NORA.
Now ‘your jam’ is no longer your jam, but instead offered up to be other people’s jam instead. Your individuality ready to be cloned at a moments notice. Will everything descend to being ‘basic’ or mainstream? Does it disincentivise possessing good taste?
What the Internet’s Use of ‘Gatekeeping’ Says About Power – The rise of “Don’t gatekeep” has reframed keeping things to yourself as a selfish act. But not everything is for everyone! And sometimes the act of sharing does more harm than good. I’m thinking of how Anthony Bourdain felt conflicted about sending droves of tourists to mom-and-pop restaurants. I’m thinking of gentrification and what happens when certain neighborhoods are positioned as hidden gems.
Study Times op-ed shoots down new policy options | Pekingology – translation from an article from the Study Times. Comments on infrastructure are particularly instructive in terms of the view point that they reflect: To debunk views such as “infrastructure overcapacity is wasteful,” “promoting infrastructure equates to taking the old path that’s inconsistent with high-quality development,” and “limited space,” it’s crucial to fully understand the role of infrastructure investment from a holistic perspective of national economic development. Infrastructure investment doesn’t only interact with the expansion of aggregate demand to stabilize economic operations, but also enhances macroeconomic efficiency, improves people’s living standards, and robustly supports high-quality development. Overall, there’s no issue of excessive infrastructure. On the contrary, there are areas that hinder the efficiency of the national economy and the improvement of people’s living standards. China’s per capita infrastructure capital stock only accounts for 20% to 30% of the developed countries, and public facility investments per rural resident are only about a fifth of an urban dweller, indicating potential for investment
McDonald’s Hong Kong and Kevin Poon “Coach McNugget Art World” Exhibition | Hypebeast – via Ian at Deft. This was to celebrate 40 years of the McNugget. McDonald’s have always done some smart cultural marketing work in Hong Kong (such as an McDonalds Big Mac themed issue of Milk magazine). Hong Kong seems like a natural home for these things, I remember activating a Coke Zero x Neighborhood collab while there.) But it isn’t only a Hong Kong thing, McDonalds has done some strong cultural marketing internationally as well: from the Cactus Jack happy meal to a bounty programme for rappers that namedropped McDonalds on their mixtape over the years. As my friend Ian observed this is at odds with their current UK positioning ‘ McDonalds is the perfect place for estranged parents to meet their kids for awkward conversations’. The implication in that McDonalds restaurants are a lower rent third space (than Starbucks or Costa) positioning. I have welcomed their value-priced coffee and breakfasts at the end of an all-nighter on a pitch or a long drive. But the UK’s the third space aspect loses all the joy that McDonalds manages to imbue in their children experiences – the treat, the birthday party, the expectation of picking up a much wanted toy in a happy meal. The child to adult disconnect in the experience is something cultural marketing like this can help bridge if done in the UK.
Hong Kong’s corporate lawyers test boundaries as Beijing’s influence grows | Financial Times – legal practitioners, including corporate lawyers, are concerned the broadening scope of a sweeping national security law could jeopardise the independence of the city’s legal system, a legacy of British administration, as Beijing tightens its grip. “There is general concern . . . that people are not fully understanding where the boundaries lie,” said a senior corporate lawyer with a global firm who has worked in Hong Kong for more than two decades
Daring Fireball: ‘Changes to U.K. Surveillance Regime May Violate International Law’ – As I see it, the most likely outcome is that the U.K. passes the law, thinking that the grave concerns conveyed to them by the messaging services are overblown. That the platform providers are saying they can’t comply but they really just mean they don’t want to comply because it’s just difficult, not impossible. And when it becomes law, the platforms will hand it off to the nerds, the nerds will nerd harder, and boom, the platforms will fall into compliance with this law. That’s what they think will happen. What will actually happen, I believe, is that E2EE messaging platforms like WhatsApp (overwhelmingly popular in the U.K.), Signal, and iMessage will stop working and be pulled from app stores in the U.K., full stop. The U.K. seems to think it’s a bluff; I don’t
Singapore
Money Laundering Bust Puts Foreign Wealth in Singapore on Notice | Asia Sentinel – if that occurred at the behest of the China then we’re likely to see flight overseas from Singapore. It’s also interesting that these raids have come soon after China arrested a Shanghai immigration consultant to get hold of their database of UHNWI overseas (predominantly in the US). They second question I had would be why Singapore would cooperate with China on this?
Software
Now is the time for grimoires – by Ethan Mollick – With the rise of a new form of AI, the Large Language Model, organizations continue to think that whoever controls the data is going to win. But at least in the near future, I not only think they are wrong, but also that this approach blinds them to the most useful thing that they (and all of us), can be doing in this AI-haunted moment: creating grimoires, spellbooks full of prompts that encode expertise. The largest Large Language Models, like GPT-4, already have trained on tons of data. They “know” many things, which is why they beat Stanford Medical School students when evaluating new medical cases and Harvard students at essay writing, despite their tendency to hallucinate wrong answers. It may well be that more data is indeed widely useful — companies are training their own LLMs, and going through substantial effort to fine-tune existing models on their data based on this assumption — but we don’t actually know that, yet. In the meantime, there is something that is clearly important, and that is the prompts of experts.
Trybals is a YouTube channel that features people from the less developed parts of Pakistan and asks their reactions about different aspects of the modern world. It’s an interesting bit of anthropology. In this episode the panel gets to try a VR experience.
The YouTube algorithm can take you into odd places, so it was with me and the London Watch. The watch collecting community is a global connected bunch of super passionate and and seriously nerdy people. It’s not the kind of stuff I would generally have bothered with. Watch collectors, particularly at the premium to luxury end of the scale have have started to talk about London (and by the implication, the rest of the UK) as hive of crime.
Watch community YouTubers often do a wrist check to show what timepiece they have on. Usually you will see a luxury or cult timepiece. But I have started to notice a few videos talking about the presenters empty wrist as a London Watch. You can see it on this live stream by Paul Thorpe just after the 9-minute mark. He was doing the video from right by the Oxford Circus shopping area in Central London.
The implication being that only going watchless or wearing a plain looking Casio is the right ‘watch to wear’ in Central London.
Crime tsunami
A random walk through Google News yielded these examples:
In February 2022 Saul Murray was drugged and stabbed to death for his watch collection. East London trio convicted after man’s ‘horrific’ death | Hackney Gazette – describes how they befriended him to gain access to his home, drugged him so they could search the apartment and then stabbed him and left him to bleed out
It took seven years for YouTube celebrity Yianni to talk about having his watch taken in a violent robbery that occurred back in 2016
My list of robberies isn’t exhaustive, but the constant drip, drip, drip of this news helped drive the idea of the London Watch.
Staggering scale
In October 2022, a luxury auction house ran a public safety campaign advising watch collectors to leave their pieces at home after they were alarmed by the Metropolitan Police’s own crime numbers. This came after the police tried and failed to assure Londoners and tourists over the summer. In April and May 2022, there was a 60 percent increase in high value watch robberies just in Central London with a 100 having been reported and investigated by the Metropolitan Police.
Watch crime has been happening in European tourist spots as well such as Barcelona and Paris, but the UK seems to be particularly blighted. London based watch crime has even attracted the attention of US watch collector hobbyist site Hodinkee who featured it heavily in an article on the international view.
Between January and July 2021 there were 377 reported watch thefts, according to the Met Police compared to 621 in the same period during 2022.
Police have attempted to stop some incidentsin progress, but the scale of the problem seems to be beyond their current capability and capacity.
Possible contributing factors
Rich opportunity. London is an international city and hosts high net worth individuals from different countries all year round. Many choose to make it their home
Luxury watches get a good return for the thieves. Apparently a watch will net the thief half its face value when fenced. By comparison diamond or gold jewellery will fetch roughly 10 percent of its value. I was surprised by this as all high end watches have a traceable serial number, which would make it harder to pass on. Many are apparently stolen and shipped out of the country, though some end up for sale online
Thieves have very little chance of getting caught. The amount of incidents that are happening versus the amount of successful police investigations means that both watch and phone thefts are a low risk, lucrative option for thieves. Despite London have a large amount of CCTV systems, only a small percentage of the crimes are solved. Finally the police are under-resourced for the scale of the task they face
The high level of violence involved is troubling and reason for it isn’t immediately apparent.
Thieves seem to use social media research and spotters to find their mark. Many of these spotters work as staff in restaurants, hotels, bars and night clubs frequented by the rich.
Luxury sales will be impacted, this looks like the likely reason that auction houses are actively warning people in London about the risk and how to mitigate it through public information campaigns
Tourists are less likely to spend money in hospitality if they feel that some of the staff might be setting them up to be robbed
Tourists and business travellers are less likely to come to London, if they feel that the risk of violent crime is disproportionate
For the time being, be sensible and stay safe out there by wearing a London Watch.
Last week I heard the acronym NORA mentioned with regards the kind of problems that Microsoft’s algorithm could solve. NORA stands for no one real answer. Search is already pretty good at answering questions like ‘what time is it in Osaka’ or ‘what is the capital of Kazakhstan’.
In the mid-2000s NORA would have been called ‘knowledge search‘ by the people at Google, Yahoo! and Bing – who were the main search engine companies. So its not a new idea in search, despite what one might believe based on the hype around chatbot enabled search engines. ChatGPT and other related generative AI tools have been touted as possible routes to get to knowledge search.
Knowledge search
Back when I worked at Yahoo! the idea of knowledge search internally was about trying to carve out a space that useful and differentiated from Google’s approach as defined by their mission:
To organise the world’s information and make it universally accessible and useful
Google was rolling out services that not only searched the web. It also covered maps, the content of books including rare libraries and academic journals. It was organising the key news stories and curating which publications were seen in relation to that story. It could tell you the time elsewhere in the world and convert measures from imperial to metric.
Google’s Gmail set the standard in organising our personal information, making the email box more accessible and searchable than it had been previously. We take having a journaled hard drive for granted now, but at one time Google Desktop put a search of the files on your computer together with online services in one small search box.
Being as good as Google was just table stakes. So when I was at Yahoo! we had our own version of Google Desktop. We bought Konfabulator, that put real time data widgets on your desktop and were thinking about how to do them on the smartphone OS of the time Nokia’s Symbian S60. Konfabulator’s developer Arlo Rose went on to work on Yahoo!’s mobile experiences and Yahoo! Connected TV – a photo-smart TV system that was before the modern Apple TV apps. Tim Mayer led a project to build out an index of the web for Yahoo! as large, if not bigger than Google’s at the time. And all of these developments were just hygiene factors.
My colleagues at Yahoo! were interested in opinions or NORA; which is where the idea of knowledge search came in. Knowledge search had a number of different angles to it:
Tagged content such as my Flickr photo library or social bookmarking provided content from consumers about a given site that could then be triangulated into trusted context, or used to train a machine learning model of what a cat looked like
Question and answer services like Quora, Yahoo! Answers and Naver’s Jisik In Service improved search. Naver managed to parlay this into becoming the number one search engine for Korea and Koreans. Google tried to replicate this success with Knol and failed
Reviews. Google managed to parlay reviews into improving its mobile search offering. Google acquired Zagat in 2011. This enabled Google to build a reputation for good quality local restaurant reviews. It eventually sold the business on again to another restaurant review site The Infatuation
The ChatGPT type services in search are considered to provide an alternative to human-powered services. They create NORA through machine generated content based on large data sets trawled from the web.
Energy consumption
A conventional Google internet search was claimed to consume 0.3 watt/hours of power according to Google sources who responded to the New York Times back in 2011. This was back when Google claimed that it was processing about one billion (1,000,000,000) searches per day. It accounted for just over 12 million of the 260,000,000 watt hours Google’s global data centres use per day. The rest of it comes from app downloads, maps, YouTube videos.
But we also know that the number of Google searches ramped up considerably from those 2011 publicly disclosed numbers
The driver for this increase was mobile search including more energy intensive Google Lens and voice activated searches thanks to Android.
Large language models (LLMs) are computationally intensive and this will result in a corresponding rise in energy consumption. That also has implications in terms of business profit margins as well as ESG related considerations.
Legal liabilities
With NORA content being created by machine learning services, it might be different to the previous generation of knowledge search services. These services were platforms, but machine learning services become publishers.
This becomes important for a few reasons
Increased costs (while they aren’t using an army of writers, they are using a lot of computing power to generate the responses)
Legal protections (in the US)
Intellectual property and plagiarism issues, currently they can handle it just by taking down the content. Once they become a publisher rather than a platform things become more complicated
“no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider”
Communications Decency Act of 1996.Section 230
Section 230 has been repeatedly used to regulate Facebook, Google et al in a lax manner as they haven’t been ‘publishers’, with ChatGPT this may change. The question of whether an algorithm is a creator has some precedence. Financial reporting has used machine learning to create news reports on company financial results over a number of years. Combine that with the general political antipathy towards Meta and Alphabet from both of the main US political parties and things could get interesting very fast.
It is interesting that OpenAI is putting a lot of thought around ethics in LLM, which will impact future services and they probably hope stave off regulation.
Regulated industries and liability
Given an LLM’s ability to make things up it can:
Gives advice without pointing out health risks by creating a workout plan or a weight loss diets
Gives bad legal advice
Infringe regulations surrounding different industries like financial services
This is just the tip of the iceberg that NORA content powered by LLMs face.
Business model disruption
Search advertising as we know it has been the same for the past two decades. The disruption to the look and feel of search results through Bing’s chat response has a negative impact on Google’s advertising model with the search ads along the top and down the right hand side of the search engine results page. Instead you’ll end up with the ‘correct’ answer and no reason to click on the search adverts.
Currently if a non-relevant site shows up in Google. The lack of relevance is blamed on the site rather than the search engine. However an error in a machine learning created NORA response will see the search engine blamed.
Which is pretty much what happened when Google demonstrated their efforts in the area. Inaccuracies in a demonstration held in Paris cause the share price of Alphabet to decline by 7 percent in one day. Technology news site TechCrunch even went as far as to say that Google is losing control.
Microsoft probably doesn’t have a lot to lose in Bing. So integrating ChatGPT’s LLM might give them a few percentage points of search market share. Microsoft thinks that each percent gain would be worth 2 billion dollars in extra revenue.
The 2 billion number is an estimate and we don’t know how the use of NORA results generated by LLM will affect bidding on search keywords. That 2 billion might be a lot less.
Is NORA the user problem that Google and Bing’s use of LLMs are fixing?
Around about the time that Google enjoyed a massive uptake in search it also changed search to meet a mobile paradigm. Research type searches done by everyone from brand planners to recruiters and students have declined in quality to an extent that some have openly questioned is Google dead?
Boolean search no longer works, Danny Sullivan at Google admitted as much here. While Google hasn’t trumpeted the decline of Boolean search, ‘power’ users have noticed and they aren’t happy. That narrative together with the botched demo the other week reinforced each other.
Unfortunately, due to the large number of searches that don’t require Boolean strings, Google wasn’t going to go back. Instead, chat-based interfaces done right might offer an alternative for more tailored searches that would be accessible to power users and n00bs alike?
Technology paradigm shift?
At first the biggest shock that myself and others had seeing the initial reports was how Google and Microsoft could have been left in the dust of OpenAI. Building models requires a large amount of computing power to help train and run.
Microsoft had already been doing interesting things in machine learning with Cortana on Azure cloud services and Google had been doing things with TensorFlow. Amazon Web Services provides a set of machine learning tools and the infrastructure to run it on.
Alphabet subsidiary DeepMind had already explored LLM and highlighted 21 risks associated with the technology, which is probably why Google hadn’t been looking for a ChatGPT type front end to search. The risks highlighted included areas such as:
Discrimination, Hate speech and Exclusion although there is research to indicate that there might be solutions to this problem
Information Hazards – there has already been a case study on how an LLM can be influenced to display a socially conservative perspective.
Misinformation Harms – researchers claimed that LLMs were “prone to hallucinating” (liable to just make stuff up)
Malicious Uses
Human-Computer Interaction Harms
Environmental and Socioeconomic harms
Stories that have appeared about ChatGPT and Bing’s implementation of it seem to validate the DeepMind discussion paper on LLMs.
The Microsoft question of why they partnered with ChatGPT rather than rolling out their own product is more interesting. Stephen Wolframs in-depth explanation of how ChatGPT works is worth a read (and a couple of re-reads to actually understand it). Microsoft’s efforts in probabilistic machine learning looks very similar in nature to ChatGPT. As far back as 1996, then CEO Bill Gates was publicly talking about how Microsoft’s expertise in Bayesian networks as a competitive advantage against rivals. Microsoft relied on research and the Bayesian network model put forward by Judea Pearl which he describes in his book Heuristics.
Given the resources and head start that Microsoft had, why were they not further along and instead faced being disrupted by OpenAI? Having worked in the past with Microsoft as a client, I know they won’t buy into anything that they can build cheaper. That raises bigger questions about Microsoft’s operation over the past quarter of a century and its wider innovation story to date.
Flash in the pan
At times the technology sector looks more like a fashion industry driven by fads more than anything else. A case in point being last years focus on the metaverse. The resulting hike in interest rates has seen investment drop in the field. Businesses like Microsoft and Meta have shut down a lot of their efforts, or have scaled back. It is analogous to the numerous ‘AI winters‘ that have happened over the past 50 years as well.
Bing’s implementation of LLM is already garnering criticism from the likes of the New York Times. This new form of search may end up being a flash-in-the-pan like Clubhouse. The latent demand for NORA in search will still be there, but LLM might not be the panacea to solve it. Consumers may continue to rely on Reddit and question-and-answer platforms like Quora as an imperfect solution in the meantime.
In summary….
NORA content generated by LLMs represent a new way to solve a long known about challenge in online search
NORA as a concept was previously called knowledge search
NORA content competes with: social media including Reddit, specialist review sites including Yelp or OpenRice and question and answer services including Quora
ChatGPT and similar services affect human perceptions of search and the experience makes them more critical of the search engine response is not of an acceptable standard
LLMs represent a number of challenges that large technology companies have discussed publicly, but were still attractive for some reason
ChatGPT shows up the the decades of research that Google, Microsoft and Amazon have put into machine learning, this will negatively affect investors attitudes to these companies and merits a more critical nuanced examination of ‘innovation’. These large companies seem to be struggling to put applied innovation into practice. Microsoft buying into ChatGPT is essentially an admission of failure in its own efforts over at least 3 decades. Even ChatGPT’s deeply flawed product is considered to be better than nothing at all by these large technology companies
Use of ChatGPT like services expose Google and Bing to business risks that are legal and regulatory in nature. It could even result in loss of life
ChatGPT’s rise has surfaced deep seated concerns amongst technologists, early adopters, power users and investors about Google’s ability to execute on innovation successfully now (and in the future). Google’s search product has been weakened over time by its focus on mobile search dominance. Alphabet as a whole is no longer seen as a ‘leader’
LLMs, if successful would disrupt the online advertising business model around search engine marketing
ChatGPT and its underlying technology do not represent a paradigm shift
There is evidence to suggest that ChatGPT and other LLM powered chat search interfaces could turn out to be a fad rather than a future trend. The service as implemented has underwhelmed
The Patagonia vest recession was a phrase that I first heard touted by Scott Galloway to encapsulate the economy in 2022. In most recessions, the first sectors to go under are construction, retailing and manufacturing – blue and pink collar working class people suffer the blunt of lay-offs and site closures due to recession.
The kind of vest thought of when one talks about a Patagonia vest recession. It is called a Better Sweater vest and was popular with media firms, technology companies and investment banks as employee schwag.
recession, in economics, a downward trend in the business cycle characterized by a decline in production and employment, which in turn causes the incomes and spending of households to decline.
A recession generally isn’t felt uniformly across the economy. It doesn’t affect all households. In the past, the middle class might be affected but not as severely affected as working class people. My Dad had managed to move off the shop floor and into an office job in the shipyard as a planner. He was made redundant because he worked in heavy industry and he was in a minority compared to the thousands of other blue collar workers let go.
Not all businesses experience actual declines in income, for instance accountancy firms, business consultancies and change management firms may find a high demand for their services. However, there is a general expectation about the future being less certain during a recession. This causes businesses to delay making large purchases or investments and possibly look to reduce costs to conserve cash.
In recessions, the output decline can be traced to a reduction in purchases of durable household goods such as computers and washing machines by consumers. This drives a corresponding decline in corporate purchases of machinery and other equipment.
If the companies aren’t already running ‘just-in-time’ there reduction in additions of goods to stocks or inventories. Where ‘just-in-time’ is in place, the client reduces their forecast demand to their supply chain driving a similar effect. The greatest effect is likely on inventory; businesses stop adding to their existing inventories and become more willing to draw on them to fill production orders. Inventory declines thus have a double impact on production volume as it filters through the supply chain like a Mexican wave.
So what happened?
But the Patagonia vest recession was different. A number of things happened:
Technology stocks and start-ups had been swept up in a decade of irrational exuberance in terms of business values
Funding suddenly declined for startups. This was partly due to interest rates and a realisation that crypto-currencies weren’t worth what many investors had assumed. This led to a raft of redundancies
Crypto companies started falling one after the other. Prominent exchange FTX and related investment fund Alameda Research go under with allegations of fraud. Their rival Binance is ensnared in legal issues too
Cloud software firms suddenly find that their pay-as-you-go model can result in sharp cash flow declines which affect their profits
Big technology companies had staffed up to meet the COVID-19 related demand, found themselves with an employee overhang. This particularly affected e-tailing and cloud services business. They cut back on staff as they release poor financial results. BUT, the amount of people cut as a percentage was still below the proportion of head count Microsoft would have let go back when it practiced stack ranking. The mainstream media focus on the big numbers rather than the small overall proportion of lay-offs. Secondly those getting made redundant are finding it a reasonable market to get work outside the technology sector
Activist investors object to what they consider to be more indulgent projects like Meta’s deep investment in the future metaverse, which is a very long term bet
Meanwhile, services and manufacturing industry kept ramping up to meet supply-chain related challenges and meet latent demand. But had problems getting staff. You have restaurants that open up limited hours due to their problems hiring. Manufacturing businesses have been hoarding staff, because they know how hard it is for them to recruit
Inflation in the US is starting to come under control as supply chains started to balance out
Of course, all of this doesn’t mean that the Patagonia vest recession won’t bleed on to Main Street, but at the start it looked very different.
The Patagonia vest boom prior to the Patagonia vest recession
To the general public, awareness of the Patagonia vest as an emblematic garment of class came from the press photos taken at the Sun Valley conference hosted by private investment firm Allen & Co. which built up a bit of a reputation in terms of ‘speed dating’ for mergers and acquisitions deals. Media titans like the Murdoch family met Silicon Valley CEOs and Jeff Bezos of Amazon. Telecommunications was represented primarily through the cable TV company executives who attended.
Amazon founder Jeff Bezos decided to buy the Washington Post when he was at Sun Valley. It was also where the Time Warner | AOL merger was cooked up.
Cameras aren’t allowed inside the conference which operates in a Chatham House-style arrangement. So press photographers could only take pictures when people were arriving or leaving the conference centre. Sun Valley sat at the nexus of a media and technology sector boom over almost two decades. The bulk of the media photos showed people walking cropped at the knees or their grotch, which focused readers attention on the tops that they were wearing. And a uniform emerged to the general public. The uniform was the Patagonia vest to deal with the cool early morning and early evenings of Sun Valley. These vests were given out some years by Allen & Co.; but the Patagonia vest has extended itself far beyond Sun Valley.
It became such a cultural touchstone that the Sun Valley conference complete with vests was lampooned in a story arch of Succession.
From working with dot com clients to when I worked at Yahoo!, Silicon Valley fashion was bifurcated in nature. The reality of Silicon Valley couture is that many people wore a t-shirt jeans and layers like hoodies. Footwear would vary somewhere between sneakers and trekking sandals.
But the ‘MBA class’ of professional managers tended to wear collared shirts, ‘smart’ jeans or chinos. They may have worn a sleeveless pullover or fleece vest. Their venture capital counterparts who where probably their MBA class colleagues wore a similar uniform, with a bit more of lean towards Ralph Lauren country club friendly shirts or polo shirts.
Corporate branded wear started with bags. I had my share of corporate branded Timbuk 2 bags. Different engineering projects would have celebratory t-shirts for things like hack days. Eventually we started to see branded corporate wear, from the cringeworthy chambray or scratchy polo shirts issued to booth staff at an exhibition to hoodies and fleeces. I knew engineers who bragged about being dressed almost head to toe (sweatshirt material top, t-shirt, boxers and socks) in schwag that they had picked up for free as an anti-fashion statement.
You can see these dual styles in the TV show Silicon Valley. Coming from a creative agency background, I felt more at home in the hoodie wearing crowd.
Secondly, there was a cargo cult amongst try-hards in the early to mid-2000s there was a move towards turtle necks with Silicon Valley types looking suspiciously like architects as they tried to ape Steve Jobs. There has been a similar buzz has surrounded Allbirds sports shoes
The finance sector had its own transformation. Early dot com era west coast-based tech focused investment bank financiers such as Frank Quattrone mirrored the east coast convention of the tailored business suit, usually in grey with a conservative tie and pocket square. This would be paired with a set of brown shoes, usually loafers. You could buy the look at Armani, Barneys or Brooks Brothers depending on your budget.
The 2008 Great Recession hit the finance centre like a shockwave. There was a need to dress down. A few things drove this:
An Armani suit is an obvious target when you have Occupy Wall Street camped outside your place of work
Wall Street had to modernise and attract new types of talent and competed against tech firms
The need to mirror the look of the hedge funds and technology companies that investment bankers wanted to do business with. They already stood out with their east coast vibe, the outfits communicated that ‘actually we’re just like you’ with varying degrees of success
The look has morphed into a relaxed yet sophisticated uniform that drew on preppyness, or the Ivy League look and the country club vibe evoked by Silicon Valley VCs. This resulted in a grey or navy fleece vest paired with a button-down, chino pants, and maybe even leather sneakers. It fitted in with weekend wear in more high class neighbourhoods and didn’t scream privilege in the same way that traditional Wall Street did.
However this became a power validation all of its own, dubbed the “Midtown Uniform” by many for its popularity throughout Midtown Manhattan as the business casual look rolled across the cultural wallpaper of Wall Street.
Expired?
Patagonia haven’t enjoyed their vests being the punchline of a joke. They are a mission led company that looks to be sustainable and environmentally friendly. They’ve been described as the conscience of the outdoor industry. Patagonia doesn’t want its products sold on Amazon, not because it’s luxurious and exclusive. But because Patagonia believes that Amazon encourages thoughtless consumption and is bad for the environment. Being seen as the uniform of the privileged didn’t go down well. So in April 2019, Patagonia announced that it wouldn’t provided corporate branded clothing to financial institutions or fintech companies, preferring to focus on mission-led environmental businesses instead. Given its iconic status within these sectors, the news was given the kind of coverage that would usually be reserved for an uncharacteristically large drop in the S&P 500 index.
The case against fintech businesses is down to their rapidly expanding energy footprint, which I have covered in depth elsewhere.
While a clear successor to the Patagonia vest hasn’t become apparent yet, there are brands looking to take their crown such as
Cotopaxi – who are environmentally friendly, but also corporate friendly
North Face – have been doing some interesting work in more environmentally friendly materials and already well known in the corporate branding space
SCOTTeVest – famous for being traveller-friendly. It comes with routing for your headphone cables, a plethora of pockets and charging wires. Their CEO called the Patagonia stance PR BS
Grandfathered in
Secondly, Patagonia decided that it wouldn’t leave long term customers in the lurch, which probably means that your favourite investment bank or big tech firm is safe from the customer purge.
According to Corley Kenna, senior director of global communications at Patagonia, customers and the press had inquired as to “whether we’re leaving ‘bros out in the cold.’” Kenna confirmed again that long-term customers would be grandfathered in.
And those left in the economic cold can still enjoy a Patagonia vest recession. I am thankful that it wasn’t called the Carhartt or Chore coat recession signalling a creative class layoff-led recession.
