Ged Carroll

Search results for: “cisco”

  • Valley of Genius by Adam Fisher

    Valley of Genius by Adam Fisher promises to be ‘the uncensored history of Silicon Valley’ based on stories that founders and programmers told to each other. All of which begs the question how much is myth making and how much is true?

    Valley of Genius
    Valley of Genius front cover

    Getting to the truth

    Having worked for Silicon Valley clients and in-house at Yahoo!; I recognise that the truth doesn’t get out there and the myth making is largely self-serving. There is also a big question about how far the collective memory actually goes back.

    Yahoo! star

    Secondly, the story of Silicon Valley has already been told a number of times, how will Valley of Genius compare to Dealers of Lightning, The Valley of Heart’s Delight, Where Wizards Stay Up Late or Accidental Empires in terms of telling the story of Silicon Valley?

    Finally, there is the challenge of how big tech companies have got so good at controlling their story in the wider world. Whether it was keeping close tabs on journalists like Fred Vogelstein found out while working at Wired magazine, through Frank X Shaw’s reputation for robust rebuttal, funded their own media outlets like Pando Daily and eventually disintermediated the media altogether.

    Adam Fisher

    Adam Fisher grew up in the Bay Area and became a journalist and later editor at Wired. He left there and freelanced for a number of publications, branching out from technology writing to other areas like travel and tourism.

    Style

    The most noticeable thing about Valley of Genius when you get into it is that there is no prose. It is all dialogue. Fisher has cut together segments of interviews to tell a story. Sometimes it feels like people around a table, other times it feels more disjointed.

    The book is described as an oral history and Fisher in his interviews describes the process as being like putting together documentary interviews.

    Fisher went out and interviewed many of the great and the good of Silicon Valley to get this material, however given some of the soundbites were things I had heard before such as Steve Jobs talking about a computer as a ‘bicycle of the mind’; I was not sure if these people like to self reference or if Fisher has interspersed his interviews with archival material. Right at the end of the book, Fisher comes a list of people by chapter and where he had to source secondhand quotes from.

    I’ve read a number of books on Silicon Valley over the years, so had a frame of reference and I had context, so I found Valley of Genius enjoyable to read. But for someone who is coming to the subject with just a cursory knowledge of Silicon Valley, there is benefits to having a guide. Reading the quotes without understanding the context, or having been to Silicon Valley still leaves you outside.

    I honestly don’t know if Fisher would have been a good guide, so him removing his voice from the book maybe less of a loss than we might think. But a new reader to the subject matter would benefit from a guide like Michael S. Malone or the insider snark of Robert X. Cringely (aka Mark Stephens). Fisher’s book Valley of Genius is a book for insiders and future academics who might be looking at the history of Silicon Valley in the future. According to Fisher, he managed to secure the last interview that Bob Taylor ever gave. Bob Taylor played key roles in moving Silicon Valley forward while in managerial positions at NASA, ARPA and XEROX PARC. In those interview quotes are more granular aspects of things, like Nolan Bushnell having a champagne party on the grass outside the offices of a recently bankrupt competitor, or that the video card to power the monitor used in Doug Engelbart measured about 3 foot by 4 foot in size.

    It’s also a very one dimensional view of Silicon Valley. It largely misses out hardware and hard innovation; which is problematic for a technology hub that is competing against China and India for that matter. There is no 3Com, Cisco or Juniper Networks. The hardware story is very much lacking, there is no Intel, AMD or Nvidia, Sun Microsystems or SGI. It is largely a consumer technology vision that writes out businesses like Oracle and Salesforce together with the characters that lead them.

    Plot line

    Valley of Genius ignores a good deal of early Silicon Valley, such as the the pre-war nature of Stanford, Varian, Bill Hewlett and David Packard’s garage start-up, Shockley Labs, the treacherous eight, defence contracting and the missile age.

    Mother of all demos

    Instead Valley of Genius history starts at 1968, when Dough Engelbart of Stanford Research Institute provides the Mother of all Demos to a mix of academics, government people from the likes of the department of defense and technologists.

    Engelbart talks about his developments in 1986

    He the talked about his career on the Google campus in 2007.

    Atari

    The story moves on to Atari and Nolan Bushnell. Bushnell was responsible for popularising computer games and arcade consoles. Bushnell was a bridge between the counter culture and Silicon Valley hustle. A few chapters later Valley of Genius also covers the acquisition and eventual (first) failure of Atari.

    Here’s Bushnell being interviewed for the 50th anniversary of Atari by IGN.

    Bushnell did a Google Talk a number of years ago as well.

    Xerox PARC

    PARC (Palo Alto Research Center) was a west coast R&D facility put together by Xerox to understand what the future of work would look like. They had already realised that it would be computerised. From PARC came modern computers, local area networks, file servers, laser printers and productivity software.

    Apple

    In separate chapters Valley of Genius covers Steve Jobs and Steve Wozniak’s commercialisation of phone hacking tools, and the evolution of the Apple computer line up from the Apple II to the Macintosh.

    Retailer High Technology did the first adverts featuring the Apple II computer

    Which was a far more budget affair than Apple’s own launch of the Machintosh.

    The book goes on to cover the return of CEO Steve Jobs and the rejuvenation of Apple as a business including the iPod, iPhone and iPad through to the death of Jobs.

    The hacker ethic, or hacker culture

    The hacker ethic or culture, a digital equivalent of the person who tinkers away with things in a shed or garage has their own section. The section is atemporal in nature, which I can understand to a certain extent. Steve Wozniak came out of hacker culture, as have many software developers over time.

    Fisher focuses on what hacker culture is, rather than what it means (both good and bad). I would recommend Steven Levy’s Hackers: Heroes of the computer revolution as a companion to this chapter in Valley of Genius. The copy I read years ago was published by Penguin, but O’Reilly have re-published it as the book this is part of myth-making and cultural norming in software development teams.

    The WeLL

    The WeLL was the proto-online community that is still going and features first generation digerati such as journalist Wendy Grossman, the founders of Wired magazine and cyberpunk author Bruce Sterling.

    Stewart Brand talked about the founding of The WeLL during a Google hosted talk

    The WeLL never scaled in the same way that we think about social networks now but it has quality discussions and is much kinder than Twitter or Reddit.

    VPL

    VPL was a failed start-up in the mid-1990s that set much of the expectations and tempo on VR to this day. You will most likely know it from the VR suit featured in The Lawnmower Man movie. I covered it in more depth in my metaverse discussion paper.

    General Magic

    Take a series of burnt out Apple employees and have them invent a predecessor of the net appliance or smartphone. That was General Magic and it was a glorious failure. Sarah Kerruish’s documentary on General Magic tells the story much better.

    Wired magazine

    Wired magazine gets its own chapter. it represented a way of melding culture and technology. I had read Wired before I had used the web, but it gave me a good idea of what to expect. But I don’t know if it is more important than ZDnet or other technology publishing houses. Valley of Genius goes on to celebrate Wired’s online endeavours including HotWired, Suck – a sarcastic version of Wired and Webmonkey – which taught a lot of people web development skills and probably doesn’t get the love it deserves in Valley of Genius. Mondo 2000, a rival to Wired in terms of setting the cultural zeitgeist for technologists also gets a chapter.

    Pixar

    Pixar as a Silicon Valley story is an accident due to two things

    • George Lucas’ Industrial Light & Magic being based in North California rather than in Los Angeles
    • Steve Jobs looking for a project post-Apple

    But it didn’t necessarily move Silicon Valley forward.

    Netscape

    The jump to Netscape as the first commercial browser makes sense. AOL, AT&T True Experience, CompuServe and Prodigy services were all driven by businesses outside the traditional Silicon Valley space.

    Bob Cringely, from what I guess was PBS’ Triumph of The Nerds

    At the time Netscape seemed as much about the crazy public valuation of the business which was emblematic of the dot com boom, as it was about the software that would kick off the open web. These kind of valuations re-emerged with businesses like Uber and WeWork.

    eBay

    eBay was the standout e-commerce play for Silicon Valley. Amazon was a Seattle company and so was an outsider in a similar way that Microsoft always had been. eBay was also founded by an ex-General Magic employee and so was part of Silicon Valley’s version of ‘Rock family trees‘. We see this even now with the ‘PayPal mafia’.

    Google

    Google changed the web experience that Silicon Valley had pioneered via Yahoo! and Excite. Brin and Page became a key point of focus in Valley of Genius. However, this ignores the complexity both around search and the development of foundational web technologies that other companies produced. If you are interested about the nature and history of Google, Steven Levy’s In The Plex is probably a better option to read.

    Google’s move to pay per click advertising gets its own chapter that greatly reduces the complexity of the real story.

    Napster

    Napster was the poster child of market value destruction and disruption that predated Uber and its ilk.

    Dot bomb

    The dot com boom can be charted from the last quarter of 1995 and reached its nadir in the last quarter of 2002.

    Eric Steiner tells his tale as the CEO of Inktomi through the dot com boom and bust

    Valley of Genius covers it in terms of its sociological impact on the Bay Area, as much as its economic impact. The reality is more complex, even the dot.com label attached to it is a misnomer. It encompassed telecoms, networking hardware, datacenters and more in terms of its impact rather than just e-businesses.

    Facebook

    While Facebook was an east coast invention, the movement of the company and its CEO Mark Zuckerberg west saw a cultural change in Silicon Valley that took it down a much darker patch. By comparison Twitter in its start-up phase looked more like Atari in terms of its counterculture influence.

    Future gazing

    At the end of the book there is a section on future gazing, which became what made Silicon Valley great. The business model was prioritised over innovation. Veteran journalist John Markoff even talked about how Salesforce had moved to a ‘vertical campus’ model with Salesforce tower. Which is how every other business in places like Singapore, Hong Kong and even Wall Street work anyway.

    There was a singular lack of reflection on challenges ahead or areas of introspection by the people telling these stories. If anything, that was what concerned me the most about the book. Innovation is at a technological, scientific and socio-cultural cross-roads and the inhabitants of the Valley of Genius apparently doesn’t have a clue. More on the book here. You can find more of my book reviews here.

    Extra content – Valley of Genius promotional tour interviews

    Panel hosted by Adam Fisher to promote the Valley of Genius book

    Leo LePort interviews Fisher on Valley of Genius at the time of its launch.

  • Uninsurable hacks + more things

    Uninsurable hacks

    As cybercrime has become more common there has been a move towards the incidents becoming uninsurable hacks in nature. 2022 looks like a watershed moment in the move to uninsurable hacks.

    Lloyd’s of London defends cyber insurance exclusion for state-backed attacks | Financial Times – Lloyds of London were looking at state backed exclusions. The parallel between a state backed cyber attack and and an act of war have clear parallels from an insurance point of view. An act of war would be exempt from most insurance policy cover. A state backed cyber attack then becomes an uninsurable attack. However, while a business could expect government retribution and likely support in an act of war, the uninsurable hack exists in a grey zone just below the threshold of government response.

    The closest thing that has happened was criminal charges filed against Park Jin Hyok for the Wannacry ransomware that affected the NHS, Bangladesh Central Bank theft and the Sony Pictures hack. Russia has attempted attacks against at an oil refinery in at least one NATO country likely due to the material support that Ukraine has been receiving. NATO isn’t in a state of war with Russia and there are likely to be few repercussions and deterrents. Chinese backed hackers dismantled Nortel and helped drive the business into bankruptcy. These would all be uninsurable hacks as the risk is unmanageable in nature.

    North Korea presents a particular type of risk for uninsurable hacks, using cyber crime to finance its sanction hit economy.

    Companies like NSO and service companies based in India have democratised sophisticated intrusions for legal firms and business purposes. Widening the risk even further and creating a shadow economy of such scale that it creates uninsurable hacks by his own nature. Some of these law firms may even work with insurance companies in other areas; indicating the kind of perverse business incentives that drive these uninsurable hacks.

    The final aspect ushering in uninsurable hacks is one of scale. Due to the economics of digital business – criminal or otherwise; they scale in a non-linear fashion. Insurance insiders see these as uninsurable attacks as they are ‘civilisation level’ attacks. Uninsurable hacks also come from an inability of the insurance industry to absorb pay-outs on a massive scale. But what can be done about uninsurable hacks since Pandora’s box has been opened?

    Business

    This story how Balkan organised crime groups completely compromised MSC is stunning for its audacity and impact.

    China

    Chinese business confidence falls to lowest in a decade | RTÉ 

    China to step up support for local chipmakers – supported businesses include NAND flash memory maker Yangtze Memory Technology (YMTC) and AI chip developer Cambricon Technologies

    Notebook component makers see large absences at China plants due to COVID – some notebook supply chain companies in China have seen infections in their plants affect up to 50% of their workers, resulting in the temporary shutdown of production lines

    China’s Bureaucratic Slack: Material Inducements and Decision-Making Risks among Chinese Local Cadres | The China Journal – We find bureaucratic slack among lower-ranked cadres to be caused mainly by the lack of material inducements, while higher-ranked officials are more discouraged by increased risks

    Mao and markets – great talk on the permeable membrane between communist thought and capitalism.

    China Makes Moves in Middle East After Biden’s Frosty Reception – An eagerness to offer “Chinese wisdom” to the Middle East’s problems is symbolic of Xi’s decade in power, during which time he has thrown off the humble shackles of his predecessors to raise his country’s stature on the international stage. Welcome or not, his offer signals to China’s domestic audience Beijing’s growing influence abroad and its capacity to advise others on successful governance. However, China’s exact role in realizing its peacekeeping recipe remains unclear. A frequent critic of U.S. military intervention in the Middle East and elsewhere, Beijing knows all too well the political, economic and military costs of becoming involved. Its willingness to do so is also a matter of constant debate. “China is cautiously increasing its presence in the Middle East, driven more by Middle Eastern states than its own ambitions,” said Jon Alterman, director of the Middle East Program at the Center for Strategic and International Studies. “China sees the Middle East as volatile and an area still dominated by the United States. They are cautious about getting sucked into the region’s conflicts.”

    Consumer behaviour

    Why the U.S. middle class is feeling squeezed | Noahpinion 

    Fascinating talk by Scott Galloway

    Culture

    Mr Tape used custom modified reel-to-reel tape recorders. The reason why he can handle the reels is that its actually the tape capstans rather than the reels that are powered on a tape machine. So very different to how a cassette tape recorder works.

    Henry Cavill on his love for Warhammer 40K. He is seriously invested in the universe.

    Design

    Shedding some light on “dark patterns” and advertising regulation – ASA | CAP 

    Economics

    Making Products in America Means Stuff Will Be More Expensive | Business Insider – cost is less clear when one takes into account carbon tax. It is also worthwhile thinking about how this could drive an improvement in product quality as well as production moves away from China. Improved quality could help reduce consumption and improve environmental impact

    Ethics

    The Camp Fix: Infrastructural Power and the “Re-education Labour Regime” in Turkic Muslim Industrial Parks in North-west China | The China Quarterly | Cambridge Core – Drawing on worker interviews, government documents, industry materials and images this article shows that for-profit public-private industrial parks have been built as part of a “camp fix” mechanism centred on detaining and “re-educating” Uyghurs and Kazakhs at the periphery of the nation. It argues that these industrial parks concentrate forms of repressive assistance and “dormitory labour regimes” that operate at other frontiers of Chinese state power and point these strategies of disempowerment towards a seemingly permanent, ethno-racialized underclass, producing a “re-education labour regime.” It further argues that the material infrastructures of these surveiled and policed spaces themselves are productive in enforcing the goals of the “camp fix”: the creation of high-quality, underpaid, docile and non-religious Muslim workers who are controlled through the built environment – this is the environment that large corporates have used in their supply chain. Companies such as VW Group and Anta (aka Salomon, Arc’teryx etc)

    Finance

    Scott Galloway breaks down a number of financial stories from 2022.

    FMCG

    Starbucks Sales Forecast to Decline Due to Customer Cuts in Add-Ons 

    Hong Kong

    Visual Framing: The Use of COVID-19 in the Mobilization of Hong Kong Protest | The China Quarterly | Cambridge Core – messages and images posted on Lennon Walls between January and April 2020 have used COVID-19 to extend public expression of sentiment on the debates around the Hong Kong government and to further mobilize a sense of Hong Kong identity against China. The findings contribute to the understandings of how the cultural politics surrounding the pandemic became a collective action frame in the mobilization of a localized Hong Kong political identity against the Hong Kong and Chinese governments – this linking of COVID-19 to political discourse makes public health communications much more complex

    Hong Kong property: developers mourn demise of ‘coffin homes’ boom | Financial Times – Analysts, including Goldman Sachs, expect Hong Kong home prices to drop by 30 per cent by the end of next year. Shares of CK Asset and Henderson Land have fallen about a tenth in the past six months. The latter trades at 10 times forward earnings, which is more than 40 per cent lower than even 2014 levels — during the last property market decline — reflecting the dire outlook. – add into this also the amount of Hong Kongers leaving the city as well

    Indonesia

    Indonesia’s foreign retirees fear being driven out as new visa scheme targets ‘filthy rich’ | South China Morning Post 

    In Indonesia, ‘all-gendered’ priests are fighting to keep their traditions alive | South China Morning Post – With fewer than 40 Bissu remaining in areas across South Sulawesi, a community which once held divine status is now fighting against extinction. Many Bissu were accused of violating Islamic principles and faced persecution, but some are trying to preserve their heritage by performing cultural, shaman-like roles – the implicit influence of gulf Arab style muslim beliefs is not only about extremism but presenting a dead orthodoxy that will make Indonesia as unattractive as Malaysia has become

    Innovation

    Chipmaker TSMC in talks with suppliers over first European plant | Financial Times – it will take a while for TSMC to get a European project under way

    Ireland

    This is fascinating, it shows how Irish consumers have become much more sophisticated in the 50 years that Ireland has been in the European Union.

    Japan

    Sapporo, Japan Olympic Committee hit pause on Winter Games bid -Kyodo | Reuters – the scandal that encompassed Japan could be a good thing on balance as it allows Japan to press pause on a Winter Olympics bid. The IOC is more hassle than its worth for Japan. Japan already has a great reputation

    Korea

    Jinni’s shock departure from new K-pop group NMixx, just three days after its Loewe fashion campaign launched and within a year of debuting – | South China Morning Post – girl group seems to have been formed to become brand ambassadors for a luxury brand. Much of the money is in sponsorship but usually its mainstream brands like LG, Samsung, G-Shock etc

    Luxury

    From meme fashion to gamified drops: The top consumer trends of 2022 | Vogue Business 

    Rolex Sales: Pricey Luxury Swiss Watch Exports Jump to Record High on US Demand – Bloomberg – Americans snap up pricey timepieces, lifting exports by 33%. Retailers in Qatar stocked up ahead of the football World Cup

    From meme fashion to gamified drops: The top consumer trends of 2022 | Vogue Business 

    Media

    Google agrees NFL streaming deal as Big Tech chases sports rights | Financial Times 

    Online

    Legal basis for removing inaccurate Hong Kong anthem results from Google, John Lee says citing tech giant’s policy – Hong Kong Free Press HKFP 

    Read Zuckerberg’s 2019 Deposition on Facebook User Data | Business Insider – A 2017 report in The New York Times had said Cambridge Analytica previously claimed it could use data to glean voters’ inclinations. Zuckerberg appeared to address those types of news reports in his testimony to SEC regulators, saying it piqued his interest about how the company might have been using Facebook at the time.  “I kind of remember having this reaction to this, which is, if they are using our systems for advertising, then I’m curious to understand if they’re actually doing anything novel that matches the rhetoric that they have, or if they’re just kind of puffing up rhetoric around what would be a relatively standard use of our ad systems,” he told the SEC in 2019, according to the newly released testimony. – to be fair Zuckerberg’s reaction reminds me of a lot of discussions that I was having with peers about Cambridge Analytica at the time

    Netflix password sharing may be illegal – British government warns – Nadine Dorries has already confessed at sharing a password. I think we need a strong a approach to law enforcement and use her as a demonstration case. I think 10 years inside should do it ;-)

    Retailing

    Amazon hit by ECJ ruling on online sale of counterfeit goods | Financial Times 

    Security

    Why everyone needs a dedicated GPS device. TL;DR don’t rely on wireless networks

    How This Bombardier Challenger 650 Jet Became a High-Tech Spy Plane – Robb Report – interesting that this appearing in luxury publication Robb Report

    How SpaceX’s Starlink terminals first arrived in Ukraine | Quartz – Weeks before Russia invaded Ukraine, the US began scrambling to find satellite communications equipment that could keep the Ukrainian government connected to the rest of the world, new documents reveal. Those efforts resulted in thousands of satellite-antenna terminals that connect to SpaceX’s Starlink broadband internet network being sent to Ukraine. They have proven vital to Ukraine’s war effort, but became a source of controversy for both SpaceX and the US over the service’s cost, and who is paying for it. Government contractor DAI began searching for the right equipment as early as Feb. 11, according to documents Quartz obtained through a Freedom of Information Act request. Russia invaded Ukraine on Feb. 24, shocking many, but not the US government, which sounded the alarm ahead of the invasion

    TikTok admits tracking FT journalist in leaks investigation | Financial Times – ByteDance, the Chinese owner of viral social media platform TikTok, has admitted it inappropriately obtained the data of users, including a Financial Times journalist, in order to analyse their location as part of an internal leaks investigation. Over the summer, four employees on the ByteDance internal audit team looked into the sharing of internal information to journalists. Two members of staff in the US and two in China gained access to the IP addresses and other personal data of FT journalist Cristina Criddle, to work out if she was in the proximity of any ByteDance employees

    Software

    How Amazon Uses AI To Automate Work In Its Corporate Headquarters – I was struck by how deeply artificial intelligence was already ingrained in their cultures. With in-house AI research labs that rank among the globe’s best, the tech giants were automating wide swaths of their operations and changing the nature of work within their companies. This commitment to AI in the workplace is newly relevant as powerful tools like Dall-E, ChatGPT, and their ilk make their way into the public’s hands. As access to this powerful technology spreads, nearly all companies will soon have tools like those I saw inside Amazon, Apple, Facebook, Google, and Microsoft. So work inside our companies will change as well

    Taiwan

    Foxconn to sell stake in Tsinghua Unigroup, faces fine | EE Times 

    Technology

    Asianometry does a run down of Sun Microsystems history. A few things. When I started working agency side, this was what our client websites were hosted on. Sun had a partnership with Netscape to have a great software stack. Oracle’s hardware business is the old Sun Microsystems business. Cisco routers and other manufacturers as well were basically a Sun motherboard and a raft of ethernet ports together with a look-up database that handled the routing.

    Revenge of reality: how technology was discounted in 2022 | Financial Times 

    Vietnam

    Vietnam loses 25 ancient books related to culture and sovereign territory — Radio Free Asia – one of which is “relevant to Vietnam’s sovereign territory,” according to the deputy head of the literature department, Nguyen Xuan Dien. Posting on his Facebook page on Tuesday, a day after the institute’s annual meeting, Dien said the books were “extremely important for national culture.”The institute said Wednesday the books were among 35,000 volumes it had cataloged and preserved at the request of the Vietnam Academy of Social Sciences When it inspected the inventory in April 2020, for the first time in over 10 years, it discovered that 29 books were missing. Four of the books were later found on the wrong shelves. Among the books still unaccounted for are four written by scientist Le Quy Don and two books which record the precise geography, boundaries and borders related to Vietnam’s sovereign territory, according to Dien. Those two volumes could help substantiate Vietnam’s territorial claims in the South China Sea – I would guess that these books have been incinerated in China, as it helps China’s territorial claims in the South China Sea and debilitates Vietnam’s rival claims

    Web of no web

    How successful are Roblox branded experiences? – Peter Gasston – low continued engagement

  • State capitalism & more things

    State capitalism

    State capitalism has been created in various forms in China since opening up. Some of the new forms have aspects that impacts the relative attractiveness of doing business in or with Chinese companies.

    Opening up

    Historically since opening up China has been a mixed market model. There were small private businesses including many farmers. There was the state owned enterprises, a direct descendent of Mao’s work units and businesses that the government wanted to keep a strategic hold on.

    Shenzhen biennial
    Taken at an exhibition that was part of the Shenzhen Biennial, when I was there back in 2010

    Grey zone and hybrid companies

    Grey zone companies

    A classic example of a grey zone company would be Huawei. In their 2019 paper Who Owns Huawei, Balding & Clarke make a convincing argument that Huawei is a state controlled company, if not state owned in the conventional sense. This view is supported by:

    • The state hacking of Nortel which Huawei disproportionately benefited from in their subsequent telecoms carrier contracts and 5G technology
    • State bank vendor financing on behalf of Huawei at negative interest rates that telecoms providers like BT and Vodafone were given
    • The ‘princess’ Meng Wanzhou case in Canada

    Zichen Wang translated a Chinese academic paper that pointed out an alternative view. Yes the ownership structure was a shit show, was pretty much the one point of agreement between the two papers.

    But that much of this was down to domestic practice influenced by classic state capitalism and modern business law that China brought in and still doesn’t square up with what was happening on the ground in terms of business laws.

    You can make up your own mind if this is an element of state capitalism.

    Hybrid companies

    An example of this would be the Stellantis | Guangzhou Auto Company joint venture that made Jeep branded SUVs for China. These joint ventures were basically the way the Chinese government coerced technology transfer from western firms to local firms. The Stellantis JV has gone into bankruptcy and GAC seems to have its own range of capable SUVs based on Stellantis expertise gained over the years.

    Huawei’s joint venture with 3Com allowed the telecoms giant to build a large enterprise networking business to compete with the likes of Cisco Systems. At the time that China first rolled out its Golden Shield internet censorship platform, it relied on Cisco technology, and China would want to remedy this under its state capitalism system. Huawei now supports internet censorship around the world. This form of state capitalism has been common in a number of developing countries over the years, but China was particularly successful in using it in a coercive manner to enhance state capitalism rather than just driving economic growth.

    Rise of the hybrid firm – Gavekal Research – Today, 48% of onshore listed companies, representing 67% of market capitalization, have a mixed bag of major shareholders from the private and state sectors. While many of those companies are still clearly controlled by either state or private shareholders, a large and significant group of firms occupies an intermediate position that is harder to characterize. – on China’s state capitalism system

    How China’s communist officials became venture capitalists – Times of India – The US and other Western governments have long been wary of the economic power of China’s “state capitalism,” fueled by giant state-owned companies and an industrial policy driven by subsidies and government mandates. But policymakers need to pay more attention to what’s really propelling China’s growth: private firms with minority government-­linked investments. “The distinction between state-owned and private has been important for policymakers outside China and for analyzing the Chinese economy,” says Meg Rithmire, a professor at Harvard Business School who specializes in comparative political development in Asia and China. “That boundary is eroding.” – see also Chinese banks vendor financing deals which is the real reason behind Huawei’s growth (alongside stealing IP and other proprietary elements: Nortel cough, cough)

    Influenced firms

    Influenced firms are a particularly pernicious part of the Chinese state capitalism system. The Chinese economy has always relied on relationships and even patronage of government power brokers similar to Malaysia, Thailand and Korea. But the state has looked to move personal bonds to state bonds. Much of this comes from National Intelligence Law 2017; that puts demands on Chinese citizens, Chinese companies and anyone connected to China.

    Like the more widely reported Cybersecurity Law (which went into effect on June 1) and a raft of other recent statutes, the Intelligence Law places ill-defined and open-ended new security obligations and risks not only on U.S. and other foreign citizens doing business or studying in China, but in particular on their Chinese partners and co-workers.

    Of special concern are signs that the Intelligence Law’s drafters are trying to shift the balance of these legal obligations from intelligence “defense” to “offense”—that is, by creating affirmative legal responsibilities for Chinese and, in some cases, foreign citizens, companies, or organizations operating in China to provide access, cooperation, or support for Beijing’s intelligence-gathering activities.

    The new law is the latest in an interrelated package of national security, cyberspace, and law enforcement legislation drafted under Xi Jinping. These laws and regulations are aimed at strengthening the legal basis for China’s security activities and requiring Chinese and foreign citizens, enterprises, and organizations to cooperate with them. They include the laws on Counterespionage (2014), National Security (2015), Counterterrorism (2015), Cybersecurity (2016), and Foreign NGO Management (2016), as well as the Ninth Amendment to the PRC Criminal Law (2015), the Management Methods for Lawyers and Law Firms (both 2016), and the pending draft Encryption Law and draft Standardization Law.

    Tanner, M.S. Beijing’s New National Intelligence Law: From Defense to Offense (July 20, 2017). United States: Lawfare.

    China’s companies rewrite rules to declare Communist Party ties – Nikkei Asia – the latest party congress has heralded a new chapter in state capitalism with all of China’s companies rewriting rules to declare Communist Party ties, rather than shareholder responsibility.

    Business

    The cost of doing business amidst the culture wars is an entirely new question of risk | CityAM 

    China

    For Young Chinese, Even State Sector Jobs Are No Longer a Safe Bet – the public sector hasn’t lived up to its reputation of being a safe haven. Nearly three years into the pandemic, many of China’s local governments are facing eye-watering fiscal deficits and implementing austerity measures. And those cuts are hitting civil servants hard. Wang had originally expected to earn at least 250,000 yuan ($34,600) per year at his new job. In reality, he estimates he’s being paid just 160,000 yuan. His basic salary has been cut by 30%; his social insurance payments haven’t risen as promised; part of his annual bonus has never been paid. Instead, Wang finds himself forced to work regular unpaid overtime shifts, helping to implement the town’s virus-control policies, and trying to cut back spending at home. His plans to trade in his boring SUV have been put on hold indefinitely.

    Chinese ‘police stations’ in Canada under investigation | Hong Kong Free Press – there is a definite turning point around the illegal Chinese police operations against its diaspora. I expect United Front activities to be the next point of focus and you could see triad organisations treated less like organised crime and more like the paramiilitary or terrorist arm of the United Front

    China wants homegrown logistics firms to take on FedEx, UPS | Quartz 

    The World According to Xi Jinping: What China’s Ideologue in Chief Really Believes | Foreign Affairs best read in comparison with this: There is no hope the Communist Party can reform — Q&A with Frank Dikötter – The China Project. The FT’s take: Maximum Xi | Financial Times  

    Design

    Chip Shortage Forces Toyota to Issue Metal Keys for Japan Cars | Jalopnik and New York state passes ‘Right to repair’ bill for electronic devices – Telecompaper – both could see a move for more repairable less software cloud dependent products

    Why isn’t the internet more fun and weird? – I was rereading this and it seems more powerful today than it was when I read it back in 2019

    Economics

    How the U.K. Became One of the Poorest Countries in Western Europe – The Atlantic – “Between 2003 and 2018, the number of automatic-roller car washes (that is, robots washing your car) declined by 50 percent, while the number of hand car washes (that is, men with buckets) increased by 50 percent,” the economist commentator Duncan Weldon told me in an interview for my podcast, Plain English. “It’s more like the people are taking the robots’ jobs.” That might sound like a quirky example, because the British economy is obviously more complex than blokes rubbing cars with soap. But it’s an illustrative case. According to the International Federation of Robotics, the U.K. manufacturing industry has less technological automation than just about any other similarly rich country. With barely 100 installed robots per 10,000 manufacturing workers in 2020, its average robot density was below that of Slovenia and Slovakia. One analysis of the U.K.’s infamous “productivity puzzle” concluded that outside of London and finance, almost every British sector has lower productivity than its Western European peers. Read alongside – What British politics looks like to the rest of the world – The Face TL;DR a joke that makes their country look good by comparison.

    Economy improves in Q3 but faces mounting risks | Merics on China but the numbers in Europe, in particular Spain and Germany are bad: Eurozone manufacturing output falls at sharpest pace since initial COVID- 19 wave as demand for goods plummets | S&P Global 

    Semiconductor market continues to fall … | EETimes – guess that the economy isn’t going to pick up for a while. You can measure industrial activity and likely predicted consumer demand by following the trends in the semiconductor market. More structural pain due as well – We must prepare for the reality of the Chip Wars | Financial Times 

    Energy

    Japan cannot survive without Russian oil, warns trading house chief | Financial Times – Some analysts have expressed concern about Itochu’s heavy exposure to China through its 10 per cent stake in Citic, but Okafuji stressed that its risks were lower since its investment was in a government-owned company. “Currently, what they are doing in China is to move private assets from private companies to government-owned companies to reduce the gap between the rich and poor,” he said. “Our objective is to contribute to providing a prosperous lifestyle to the Chinese people, so I think the Chinese government welcomes that.” – I expect that the Chinese government and CITIC will tear the face off Itochu

    Finance

    Paul Graham’s Legacy | I, Cringely – god save us from blockchain garbage

    Germany

    Concerns mount over German Chancellor Scholz’s upcoming trip to China | Axios – it looks like there is a battle royale brewing between the German public and their large corporates. Add to this: Ports in a storm: Chinese investments in Europe spark fear of malign influence | South China Morning Post  and Watching China in Europe with Noah Barkin – 55 percent of Germans believe he (Scholz) is out of his depth), deepens divisions in his government, and undermines its quest for a common European policy toward Beijing, a goal that was spelled out in black and white in the three-party coalition agreement. More worryingly, it shows that Scholz and his advisers still have a steep learning curve on China. Germany’s sway with Beijing depends on a united front in Berlin, in Europe, and across the G7. Scholz has managed to torpedo them all in the span of a few weeks. To be clear, the problem is not that Scholz is meeting with Xi. The party congress showed that Xi may be the only member of China’s leadership who is worth talking to these days. And it is normal for Scholz, who has been chancellor for nearly a year but unable to meet with Xi in person because of China’s restrictive COVID-19 rules, to want to sit down for a face-to-face with the country’s newly anointed leader for life. But the when, where, and how of this first meeting are important. And Scholz has whiffed on all three. The situation is reminiscent of his predecessor Angela Merkel’s decision, two years ago, to hurry through the EU-China Comprehensive Agreement on Investment (CAI) weeks before Joe Biden entered the White House. Like Merkel, Scholz is gifting Xi a geopolitical victory without much in return. And he is voluntarily sacrificing whatever leverage his government might have had with China. He may not realize that but members of his own government—some of whom have been working diligently for months on a new, tougher China strategy—are furious. “As long as the German chancellor doesn’t buy into his own government’s China strategy, then it is worthless,” one German official fumed. “The Chinese can see the divide in Berlin and Europe, and believe me, they will find a way to exploit it. It is absolutely fatal. And what is so stunning is that Scholz has done all of this of his own free will.”

    Hong Kong

    America’s Biggest Financial Firms Are Still Collaborating with the Sanctioned Hong Kong Government – After an increasing number of critics began to pile on, including the co-chairs of the Congressional Executive Commission on China Representative Jim McGovern and Senator Jeff Merkeley, a coalition of 20 U.S.-based Hong Kong activist groups, and the Wall Street Journal editorial board, Citibank’s Jane Fraser claimed that she had tested positive for Covid-19 and will pull out of the summit. The rest of these executives have only a couple of days to come down with similar illnesses or unexpected family commitments, but I’m not holding my breath and Hong Kong Summit Surrounded by Drama Before It Even Begins – Bloomberg – Top executives pull out after getting Covid; storm approaches. Event aimed at showing city is back in business after pandemic

    National security: Ex-leader of Hong Kong Tiananmen vigil group demands prosecution disclose more info – Hong Kong Free Press HKFP and High-profile national security trial of Hong Kong democrats to begin after Lunar New Year, court reveals – Hong Kong Free Press HKFP 

    BN(O) Hongkongers and Britain’s Chinese proficiency deficit — AgoraHK 

    Ideas

    Are Technologies Inevitable? – by Matt Clancy also worthwhile reading Kevin Kelly’s What Technology Wants

    Japan

    Kiko Mizuhara finds Heaven in Tokyo – The Face 

    Marketing

    9 in 10 marketers spend time in making global marketing locally relevant: report | Advertising | Campaign Asia – Marketers say local requirements are kept in mind by headquarters when making decisions, however, the majority (82%) feel they spend too much time educating HQ on Singaporean nuances and needs. 47% of marketing decision-makers in Singapore say that senior leadership in regional or global offices are misaligned with local marketing teams, there is a lack of local understanding of effective channels, and in some cases, there’s an assumption that a global approach will work across countries. Over a third (36%) of marketers believe in localising content for maximum ROI, however, the local tone, diversity and humour in campaigns is often not well understood by global offices teams. 

    Media

    Hong Kong editors used Stand News to praise criminals and promote illegal ideologies, says prosecutor at sedition trial | South China Morning Post – which gives you an idea of how far Hong Kong has changed after the National Security Law

    Online

    Inside the world of Wikipedia’s deaditors – The Face 

    Naspers Denies Report It’s Selling Its Tencent Stake to Citic – Caixin Global 

    Retailing

    11.11 shopping festival turns to long-term, sustainable growth | Marketing | Campaign Asia – Amid competition and economic uncertainty, more brand participants in China’s preeminent e-commerce festival in China may be seeking deeper customer engagement beyond driving up GMV with discounts. – Some thoughts: Chinese consumers are changing

    • Growth is changing towards disproportionately benefiting domestic brands and is very much in line with Xi Jinping’s vision
    • Economic growth is happening at the slowest pace in decades affecting consumer confidence and future consumer spend

    The macro-environment is changing too:

    • Economic growth is no longer a Chinese government priority
    • Chinese personal data laws are not marketer friendly

    Security

    US to deploy B-52 bombers to Australia as tensions with China mount | Financial Times 

    ‘We do rely on China — but so does every university’ | Scotland | The Times – admission by Edinburgh university principal

    Cybersecurity

    China to kick off ‘World Internet Conference’ next week with Beijing set to promote its vision of internet governance | South China Morning Post – The annual internet event will see participation from Huawei, Alibaba, Kaspersky and Infosys. Participation by western firms has diminished in recent years amid strict Covid-19 measures and Beijing’s crackdown on Big Tech

    Technology

    Apple’s Online Store and Information Systems Chiefs Are Leaving (AAPL) – Bloomberg
    https://www.bloomberg.com/news/articles/2022-10-31/apple-s-online-store-and-information-sy…

    – The departures mean Apple is losing at least three vice presidents — the highest manager level below Chief Executive Officer Tim Cook’s executive team — in recent weeks. Evans Hankey, Apple’s vice president in charge of industrial design, is also leaving the company, Bloomberg News reported earlier this month. Chief Privacy Officer Jane Horvath has departed Apple in recent weeks as well, taking a position at a law firm

    Vietnam

    Xi Jinping Rolls Out the Red Carpet for Vietnam’s Communist Party Chief – The Diplomat – The elaborate ceremonials of Nguyen Phu Trong’s state visit are a reminder of the alternating attraction and resistance that underpin Sino-Vietnamese relations

    Web of no web

    Metaverse could open new kinds of cybercrime, Interpol warns, with scams operating differently in virtual reality | South China Morning Post 

    Wireless

    Trio conduct 6G reconfigurable intelligent surfaces trials … – Reconfigurable intelligent surfaces can be programmed to modulate the phase of electromagnetic waves and reflect signals into blind spots, enhancing coverage and improving user experience. The low cost, low energy consumption and easy deployment, of RIS have attracted broad interest in 6G research and made it a popular candidate technology. The technical trial mainly evaluated the deployment effects and performance of sub6 GHz RIS and mmWave RIS in different indoor and outdoor scenarios. The tests modelled deployment conditions with and without RIS, different incidence and reflection angles, different deployment distances, etc. Recorded performance index parameters included RSRP, throughput and others. The trial participants worked together to carry out several RIS test projects yielding hard data that makes a strong argument in favor of continued RIS technology development.

  • The Power Law by Sebastian Mallaby

    The Power Law lays out VC history

    The Power Law: Venture Capital and the Art of Disruption does for the technology venture capital industry what Accidental Empires and Where Wizards Stay Up Late did for the technologists that they financed.

    The Power Law

    About the author Sebastian Mallaby

    Prior to reading The Power Law Mallaby wasn’t a familiar name to me. Looking into his background I could see why, Mallaby is a Washington Post columnist and specialises in international economics for the Council of Foreign Relations. A perfect CV for a policy wonk. His previous works have included a biography of Alan Greenspan, the World Bank and a book on hedge funds.

    What the book doesn’t cover

    The origins of modern venture capital in the pre-second world war era was through the family offices of people like the Wallenbergs and the Rockefellers. The Power Law only picks up the story post-war and has a distinct US bias in its storytelling.

    Synopsis of The Power Law

    George Doriot

    Mallaby starts the story with Georges Frédéric Doriot and the American Research and Development Corporation (ARDC). What’s interesting Doriot is how he was different from today’s VCs with a focus on patriotism. Doriot is most famous for his funding of Digital Equipment Corporation (DEC), an enterprise computer company whose mini-computers facilitated the early internet and many business computer systems. At the time of DEC, the Boston area seriously rivalled the Bay Area as the technology centre.

    Treacherous eight

    As the book goes into the story of Arthur Rock and his relationship with the treacherous eight who left Bill Shockley’s lab, this is where many Silicon Valley histories start to coalesce with The Power Law. Mallaby adds a little more, such as the 600x return that both the eight and Rock enjoyed from their investment. At 96, Rock is still alive at the time of writing. He is more recently remembered for his involvement of firing of Steve Jobs from Apple in 1985, a good deal of this came down to his distaste for Jobs informal appearance.

    Sandhill Road

    Arthur Rock and former Doriot student Bill Draper benefited from being in the right place and at the right time. The US government looked to spur innovation as part of the cold war and the Bay Area was were much of this innovation would happen. Sequoia and Kleiner Perkins followed soon after, these names are now central to the Sandhill Road venture capital ecosystem, but in 1972 they were just starting off with businesses like Atari. Atari wasn’t started by experienced business professionals, but by a twenty something who thought meetings in the hot tub were a good idea. Atari marked a point in time when VCs had to become the adults in room, or as Mallaby put it ‘active investors’.

    What I didn’t realise at the time was how early in Kleiner Perkin’s history was their engagement with biotech pioneer Genentech. I didn’t realise that Genentech was funded before Apple and was more a peer of Tandem Computers. Much of the early networking was based on a two-way door between established venture funded firms that were descendants of the treacherous eight and early venture capital firms that employed experienced executives as partners.

    Apple was notable for two reasons. Firstly, venture capital firms operated for the first time rather like an insurance syndicate with several funding the business rather than one large investor. Secondly, the returns on Apple seems to have solidified the model and bought niche financing to a wider awareness beyond the geographic pockets of the technology industry. Where many books like Accidental Empires would use this as a jumping off point to tell the story of the PC industry. The Power Law instead talks about computer networking, this makes sense if one thinks of Metcalfe’s Law as the power law that matters the most in the internet age. The early east coast venture capital community were more cautious than their west coast counterparts, partly because the east coast technology corridor had less of a loose network of connections compared to the west coast. I think that the different business culture of the east coast also had an effect.

    Connectors

    Doerr connected Cypress Semiconductor and Sun Microsystems, two companies that Kleiner Perkins funded so that they would make the SPARC RISC microprocessor. You could put this as the starting point for the golden age of UNIX servers and workstations – which we can trace forward to today’s Mac range and modern Google servers.

    Doerr had attempted other alliances before and in this way we see a different way how Metcalfe’s Law was the power law of the title. VCs has access to several nodes that they could connect together to try and build a technical vision. This is different to the idea we’re usually sold of the tech visionary / company founder a la the Google founders, Mark Zuckerberg or Steve Jobs.

    Meanwhile Don Valentine of Sequoia Capital usurped the founders of Cisco Systems and brought in a new team to run the business bilking the founders out of much of their money. Part of this was down to one of the original Cisco founders being a woman.

    Government money

    The VC industry of the early 1990s capitalised on government money. Netscape was a remake of Mosiac which was the first graphic internet browser software developed in the NCSA software design group. This was part of the government-funded National Center for Supercomputing Applications (NCSA) at the University of Illinois. UUNET was a commercial ISP based on the back of the ARPANET email delivery system. As the dotcom boom took off it was the largest ISP and the fastest growing. UUNET eventually became part of MCI WorldCom and then Verizon, where UUNET remains a key part of the Verizon business offering. Both Netscape and UUNET were viewed at VC successes but as The Power Law shows, the reality was more complicated.

    Irrational behaviour

    I thought that the original dot.com boom was irrational behaviour, but I learned from the account of GO Computers a decade or so earlier that irrational behaviour is very much in the blood of venture capital, which explains how we had WeWork and Uber in the 2010s which is where The Power Law finishes its tale. The funny thing about the irrational behaviour is that both the dot com era and the 2010s Softbank appear to have been an accelerant with their late stage momentum approach to venture capital deals which blew valuations on businesses up far beyond what would be reasonably expected otherwise. Softbank gave birth to ‘growth equity’ as a business model that took in many existing and new VC businesses including Russian Israeli Yuri Milner and his DST Ventures business which invested in Facebook, Stripe and GroupOn.

    Paul Graham and Peter Thiel

    Paul Graham was a founder of an ad tech business who then moved over to investing and had a reputation for warning startup founders about the nature of VC funding. It fitted neatly into the ‘John Gaunt’ type narrative that played well with some of his peers like Peter Thiel. The impact of these people setting an ideological agenda of sorts for Silicon Valley founders, together with a plethora of other founders providing seed capital to businesses from Google onwards greatly impacted the freedom of VCs to operate using their previous models and left the industry open for the Softbanks of the world to inflate everything.

    China off-note

    The Power Law offers a largely truimphantist view of the role of VCs such as Sequoia Capital in China. However, this seems to ignore the impact of Chinese VC and angel investors. It also chooses to ignore the negative impact of Xi Jingping.

    Conclusion

    Mallaby illuminates part of Silicon Valley history that I wasn’t familiar with, in particular VCs strategic role in steering technological change during the 1990s. Time has somewhat outpaced the book. The rise of Xi Jingping and the change in attitude towards safety and innovation amongst young Chinese is likely to make the China section look overly optimistic. The end of easy money, at least for the time being will impact the VC industry globally and growth equity looks like a folly during the present time. But if you want to understand how things were The Power Law is the ideal book for you.

  • Delivery services

    Why talk about delivery services? On the days that I go into office I am reminded of the late 1990s and 2000 with online services marketing, in particular delivery services. The Super Bowl advertising had a plethora of online businesses, Coinbase’s QRcode ad will likely be the Pets.com sock puppet of 2022. (The reason why online businesses are on TV is that it represents the lowest cost per reach for effective brand awareness of any medium, including digital channels).

    https://youtu.be/0XXPKvbNr8o

    Growth hacking

    We also saw a resurgence in growth hacking, trying to get consumers to go from ‘I’ve never heard of you’ to app download as fast as possible. Which usually means thrusting a leaflet with a QRcode into my hand as I leave the tube station on my way home most week day evenings. A lot of these apps are delivery services.

    Here’s a list of the on-demand delivery services that have been promoted to me so far:

    • Getir – I had a leaflet from Getir one time at the the tube station. It’s purple and yellow brand colours caught my attention because it immediately reminded me of vintage Yahoo! I threw the leaflet in the recycling and paid no more attention until ‘Taxi-gate‘. The company alleged that their agency partner didn’t buy enough taxi advertising for their brand and instead bought advertising for other delivery services. I didn’t realise until I started researching this post that Getir was founded in 2015 by a team in Turkey.
    • Uber Eats – Uber Eats had already established itself as a restaurant delivery service to rival Deliveroo and Just Eats. It has also pivoted into grocery deliveries over the past couple of years in my neighbourhood. I would get emails and mailouts from my credit card company with a discount code for use the first time I grocery shopped on Uber Eats.
    • Deliveroo – Like Uber Eats Deliveroo had already established itself as a restaurant delivery service and expanded into grocery delivery services as well. I had them actively promoted to me via email, as I had used Deliveroo in the past
    • Ocado – This spring Ocado started promoting Ocado Zoom to me promising deliveries of a limited amount of products within two hours of order
    • Gorillas – Gorillas is a Getir analogue that was founded in Germany and launched in 2020. I got a number of leaflets from them, they were the most frequent leaflet that I received on my way out of the tube station. The logo was distinctive, but that’s all I could remember about it.

    Kozmo.com

    Kozmo.com could be considered to be the American dot com ancestor of online delivery services. Kozmo.com was the brainchild of two investment bankers in the US. It was launched in 1998 serving areas of New York. In July 2000, at the height of its business, the company operated in selected areas of Atlanta, Chicago, Houston, San Francisco, Seattle, Portland, Boston, New York, Washington, D.C., San Diego and Los Angeles. It was popular with young professionals and college students, in the areas that it served. But despite the delivery service’s careful choice of markets served, it didn’t survive the dot.com bust going under in April 2001. While the business had filed for an IPO, it never actually went public.

    Economic circumstances

    The UK is likely to be heading into a recession that will be harder and longer than our near peers. There is an inflation and commodity pricing storm that has caused a cost of living crisis currently dominating the political agenda and rising interest rates.

    We know from businesses like Uber and Kozmo.com that delivery services are a low margin business at the best of times. We could be staring into another online business bust. This time it will be driven by a wider economic crisis rather than the precipitating incident, but the effect will be the same. Retail investors including pension fund savers will suffer.

    It feels that we forget history and are doomed to repeat it. Yes smartphones made ordering more convenient than dial-up, but it still didn’t change the essential business model for these delivery services. These businesses relied on cheap money to burn through in the hope of eventually getting profitable. In this respect it reminds me of the dot.com startups that I used to meet at the start of my agency life who talked about not worrying too much about profitability, but about trying to move at ‘internet speed‘. We’ve already seen this kind of thinking at WeWork and other Softbank businesses.

    History is destiny; if we fail to learn the appropriate lessons from it.

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