One API to rule them all.

A few months ago I wrote about how API's could be used as a personal key that will give access to various platforms that people belong to and sell their products or services through. I still strongly believe that this is a good idea especially in lieu of so many people using different platforms to make money. (Think everything from Etsy to Uber or even how musicians and artists could benefit from having one with streaming platforms like Spotify). But another function of an API that I hadn't thought of is getting rid of layers of management. I ran across this post today which talks exactly about using API's in that way.

What is interesting to me is what the possible ramifications of this could be. People are already starting to get worried about automatons taking over the working world, but I don't think it's as cut and dry as that. Although I do think that more jobs will be automated in the future, I would argue that was going to happen no matter what. Technology is snowballing in that direction regardless. But somebody will need to work with this type of software and those people will have to be trained with new skills. Ultimately, most autonomous software isn't even completely autonomous. It needs the feedback of a human who is trained properly to work with it. This is where the ultimate synergies will reside; where human beings and machines will work together seamlessly and augment one another. This also gets me thinking about what types of new jobs there will be in the future that we can't even fathom right now.

So as API's and software start digging away at different layers of management, it will be those who know how to work with that software that will be the better off. I am also curious as to what kinds of scenarios will be possible if  or when this type of system is in place. Much to think about. 

An Approach to Thinking Deeply

I discovered this article over the weekend and have been pondering it quite a bit since then. The quote that really got me was this: 

"People vastly prefer passive activities like reading or listening to music over spending just a few minutes by themselves. Being alone with no distractions was so distasteful to two-thirds of men and a quarter of women that they elected to give themselves mild electric shocks rather than sit quietly in a room with nothing but the thoughts in their heads."

This was shocking (no pun intended) to me and at I had a hard time believing it at first. Then this morning on a packed bus, I sat down and quietly looked out the window for a few minutes. There was a new concept in probability that I had been reading and thinking about and I wanted to take some time to wrestle with the concepts in my head. When I looked up I noticed that all but two people were staring at their mobile phones. The first one was me and the other was a child who couldn't have been more than five years old. For many years now I have always tried to have quiet moments where I can reflect on what is happening in my life. Some people call this meditation, but it isn't quite like that for me. There are always thoughts reverberating through my mind and sometimes it feels best to just reflect and think on them. Focus is the key element here. But I haven't always been successful doing this and the rise of smart phones has made it a bit more difficult to actually accomplish such deep thought. 

Lately I've been thinking about very specific things (algorithms) and focused thought has become a key to understanding the way I think through a problem and solve it. Or at least understand it on a deeper level. My process has been very simple. Normally I will review, study, and apply new concepts when I am at home, but I can't always be at home to work. So I write down a problem or concept in a small notebook I keep in my pocket, glance over it throughout the day, and then when there is time, I exercise focused thinking about that one topic for the next 20 - 30 minutes. Sitting on the train or bus (but mostly the train) helps me relax and do this without too many distractions. My goal is to know the problem inside and out instead of a cursory understanding. In fact, having read this book a number of times and applying the methods to my own thoughts has helped me grow intellectually. What is it I hope to achieve over the long term? To become a more effective thinker and problem solver and to think critically instead of haphazardly. 

So it's disheartening to read that people would rather receive an electric shock than be bored. Our minds are made to think effectively and critically analyze problems to make our world a better place. And it's no secret that doing so takes a tremendous amount of work. But it takes work for a reason and the best reason, at least to me, is to understand ones self at greater level. It's strange to think that some people don't want to know themselves at all. Or as Bertrand Russell once said "many people would rather die than think. In fact, most do."


I had taken the time to write a very specific post over the past week on probability and forecasting but when it came down to it, I decided to nix using it at the last moment. I will eventually post it (probably this summer), but since I haven't written anything in a while I thought I would at least use a quote here. 

"Whether you think you can or you think you can't... You're right." - Henry Ford

I'm not sure of the circumstances that made Henry Ford say this but I fully agree with it. If you think you can do something then you will find whatever means necessary to accomplish it. Likewise, if you don't think you can do something, then you will find every possible way not to do it, whatever it is. It's a quote I think of whenever I feel stuck in a rut or not sure. I just ask myself if I think I can do whatever it is I've set out to do. If the answer to myself is yes, then I do what needs to be done. It's as simple as that. 

I haven't written much here in a while and would like to get back in the habit of sharing my thoughts and ideas here. Composing one or two essays a week for now should be good to move forward. It feels good to be writing again. 

Building an Audience Machine - "Conversation is King"

I've been reading a book by Cory Doctorow called "Information Doesn't Want to Be Free" which argues that copyright and creative success in the digital age are changing dramatically. I agree with this sentiment and it's not only because this book is wonderfully argued, but because I have been doing it with my own creative endeavors for the past year. Selling art isn't what it was 20 years ago and because most people expect music to be freely streamed or torrented, making a living as an artist has changed dramatically. 

Exactly one year ago I made the choice to start releasing my music. It needed to happen for several reasons. First, I was finding that I was creatively stymied in my work environment and needed a way to express myself. Second, I hadn't ever released my own original compositions to the world, only a few DJ mixes, with one being featured prominently on a British radio show back in 2006. (I don't have a link). Third and lastly, recording and releasing my own music was something I have wanted to do since I was 8 years old and now was a great time to do it. Why? Because there are so many great distribution channels and ways of reaching people all over the world and that is fantastic way to get your products (in my case music) to people.

But I had to put some limitations on my work first. Each piece of music had to be composed, recorded, and released all within a one week time period. Also within that time period I needed to create an album cover, copy describing the track, and put together any other marketing components. The example I took was a methodology based on scrum and kanban. My weeks generally ranged from Monday as my start date to Sunday as my release date. The limitations worked wonders for my creative output and I found a musical voice for my project quickly and was able to expand on it with each new subsequent release. Although this started as a project that was primarily dance music focused, it quickly turned into a more elaborate electronic music project that was starting to showcase my composition skills. Skills that have felt hampered by not creating or releasing anything for the past few years finally felt a bit of release. My happiness levels shot through the roof. What I found was that by adopting this system and adhering to the process helped me get things done. I was able to release music consistently and started to slowly build an online audience which I will get to next.

Another limitation that I placed on myself was not telling any of my close friends about it which meant I had to build an audience organically through social media and other methods. This has proved much more difficult than I would like, but in the past year alone, I have connected with a multiple amount of people all over the world who simply enjoyed the music I was making. It is a fantastic feeling to be able to do this and it's something that I want to continue to do. However, without a large marketing budget, it is much more difficult. That aside, I will continue pushing forward over the next year. 

What started as a project that was going to help me showcase my skills and release some creative tension quickly snowballed into more creative work and bigger ideas that needed to be acted upon. I had to make a choice as to whether or not I should release music as a single musical project, or as a boutique record label with the possibility of adding more artists further down the road. I chose the latter based on the idea that it could offer me more freedom and the opportunity of working with other great artists in the future. Once that choice was made, I operated the entire project from the perspective of a business day in and day out with the ultimate goal of releasing an albums worth of material by sometime in late summer '14 (which was accomplished). To help market my eventual album release, I contacted a few electronic music blogs until I found one (BeatsandBeyond) that would let me submit my new material and have it posted. Doing it this way really helped clarify my thinking as to how I would interact with customers (fans who liked my music) and release more music down the line. I also went into this knowing full well that there was a huge probability that no one would actually make a purchase of any music. The fact remains that people just aren't purchasing music like they used to and that is fine by me. It is a commodity that is for the most part free (torrents and streaming) and it is harder to swim against the stream then anything.

How has everything fared in the year since my first song release? Here are the numbers: I average about 100 - 150 plays a week on Soundcloud when I am not promoting anything. The majority of my fans and followers came from Soundcloud as well and I found that talking with and regularly updating them with new music and news was the best way to keep a relationship going. It should also be noted that when one of my tracks went up on their trending section, I found myself gaining on average about 1000 plays per week for that track over the next six weeks or so. It was a fantastic way to get my music heard. People still love music and that is exciting to know. Advertising on Reddit was a small success (seeing as how I didn't have much capital to pour into the two campaigns I did) and I was able to convert new fans based on them clicking the advert, sending them to Bandcamp and getting them to listen to the music. From there these fans could decide to support me by paying or download my releases by giving me their email address. There is a bit more power in Reddit then most people may realize and using it for future campaigns will be a must. My click through rate was a bit under 0.6% (this metric is an average for all Reddit music campaigns). I didn't sell a whole lot of albums but I did make a little money (not a lot but a fair amount to justify the work that was being done) and that was enough for me to continue on. Lastly, and most importantly, a year ago I had zero fans or support and now my Soundcloud followers (whom I consider fans) fluctuates around 600 (give or take a few). People seem to stop following ever once in a while. That is fine by me as I would rather the label builds up a solid fan base of people who really enjoy what is being released. 

Now that I have written through my thoughts and experiences of the past year, I should probably explain what I am expecting over the next. The plan is to continue creating and releasing music. And with that it should be added that each fan relationship should be carefully cultivated. I would rather have 100 people love the products (music) we are releasing (and pay for it) than 1000 people who don't care one way or another. Building and maintaining that audience is going to be priority number one. I'm sure by now you are asking "didn't you say that people don't want to pay for music?". In fact I did and I will follow that up by saying I am going to be experimenting with new methods of building an audience by stepping into new territory. Licensing music and creating music/sounds for specific media platforms are examples that are already currently being looked into and implementation will begin over the next few months. But I would also like to add a few more services slowly as well such as sonic branding, strategy and intelligence for companies looking to add music to their campaigns, and finally a tool I built to help discover information about artists. It is still in it's minimal viable product stage, but you can check it out for yourself here: MusicGenius. (I have a plan with what I want to do with it. I just wanted to make sure I could build it first). If that seems like a lot to handle then you are right. But just know that I will slowly be building out these new methods. And the hope is to build a company with the revenue to not only build a bigger customer and fan base, but hire employees who are just as passionate as I am and can fill in the roles that will be needed. If you think that sounds less like a record label and more like a marketing and tech company then you are correct. The future music incubators will have to be a cross between marketing and technology since those are the best ways to reach out and have conversations with people. And instead of relying on the old adage "Content is King", they will instead have to be focusing on the new one, "Conversation is King." Marketing and technology make it easy for people to communicate with one another and for brands to communicate with people. Building an audience will take more than content, it will take starting the conversation.

I've had some other projects that I have worked on throughout the past year. But my focus is now going to be on building this business into a viable record label and business. And that won't be easy at all. Like I said, my main focus with it is going to be building an audience for the music that will be released. I am super proud of everything that has been accomplished since the release of my first track a year ago, but now it's time to up my game. I've connected with some pretty cool people all over the world. And in the second year creating more great music, as well as fun and new ways for people to experience it, will be my main mission. Now it's time to take that mission to the next level.

Check out my latest release here:

And go here too:


Private and Public Thoughts

I don't post much of my writing in the public as I would like to. To me, there is nothing better than to open up a notebook, pull out a pen, and start writing to my hearts content. Most of the time these are just small, private ideas or thoughts that need to get out of my head. So I lay them down on paper and can comfortably walk away afterwards. I've always thought of this blog as being a place where I can write a more detailed analysis about whatever it is I am thinking about and apply my mind to understanding it in greater detail. 

Lately, that has been with three things: Bitcoin and it's applications with the world around us (not just the financial world), The Internet of Things (I just ordered some Arduino supplies like a touch screen. Learning how the IoT may work seems super exciting to me. I will need to purchase some sensors soon too.) And finally, functional programming. In fact, I have been throwing myself head first into an online course given at the University of Washington called "Programming Languages". I love this course and I love what I am learning in it. The best way to describe it is like this: In order to learn a language like English, we must first understand the analysis of how it works. What is a verb? A noun? An adjective? And how do these elements effect the language? We can move forward from there. This class works in much the same way. What is the languages syntax? In other words, how do the various parts of the language work? Does it type-check? Do we understand the semantics of the language? Finally, does it evaluate? What do the expressions in the language evaluate too? I have been learning so much that it is very overwhelming at times. But it in order to learn, we must keep moving forward one step at a time.

Now is the best time as any to start putting more of my thoughts out there in public. And writing about something can really help analyze and clarify any elements of our thought process that we are not sure about. So that is my resolve, to start clarifying my thoughts in more of a public space.  

Isaac Asimov and great ideas.

There is an article printed in M.I.T.'s Technology Review written by Isaac Asimov about how people get new ideas. I suggest you go read it

"Probably more inhibiting than anything else is a feeling of responsibility. The great ideas of the ages have come from people who weren’t paid to have great ideas, but were paid to be teachers or patent clerks or petty officials, or were not paid at all. The great ideas came as side issues."

Thoughts on Moats and Monopoly

The economics of the technology field is drastically changing from the past. Businesses that are known for selling physical goods still deal with diminishing returns. By virtue of this very fact they run into their own limitations. Yet the very idea of diminishing returns is taught in both business schools and to many economics majors. (I should know, since economics was a major focus of my undergraduate career and we learned quite a bit about this subject). In many aspects, this idea makes sense. Especially in the commodities business. In fact, most all commodities run into diminishing returns. You can only grow and mine so much of your resources. Remember, I am talking about physical commodities here. But the fact still remains that it has been assumed, especially in the past, that most companies will reach a state of diminishing returns selling their products in the markets.

However, this line of reasoning is dramatically changing as more and more companies are now in the business of collecting/selling data and information. So what is the result we are seeing with this change? Now we are starting to see companies that have increasing returns as the processing of resources turns into the processing of information. What makes the concept of increasing returns interesting is what it enables a company to do if it has them. For starters, those companies with finite resources will compete with one another until the price is pushed down to an equilibrium level. Those companies that go below this level will start losing money and may find it harder to stay in business. On the other hand, those companies with increasing returns will move further and further ahead and have a higher probability of locking in their particular market. Not only does this idea go against the grain of your typical competitive analysis, but it also gives these highly competitive businesses the ability to operate differently in their market.

There are only a few companies (but I am sure there will be plenty more in the future) that are able to operate this way and thus are able to push super far ahead in their markets. One such company that I will briefly analyze is BuzzFeed. This company may not be the first that comes to mind and may even seem a bit silly but hear me out. BuzzFeed, along with Vice, are leading a new wave of media companies into the 21st century. They are long term focused with BuzzFeed's main focus being on social advertising. And Vice is busy changing the rules of the media game with video. In fact they reach a young audience in a way that makes most advertisers drool. 

Back to BuzzFeed, You know you have seen their idea of social advertising. How many times have you been super annoyed by some of your Facebook friends taking all those ridiculous quizzes to see which movie character they are. Or what their real career should be? Those are all paid for social advertisements and they work because most everybody takes a break from their work day and takes one or more. After all, I want to know which super hero I really am. Although it is mostly by luck that there is even a social advertising market in the first place, they lead it with focus, efficiency, and fun. By having the right platform, with the right product, at the right time, they have enjoyed a large amount of increasing returns and become one of the highest valued new media companies right behind Vice. They are enjoying increasing returns not because their process can't be repeated, but because they are already so far ahead of their competition. 

Another such newer company that uses increasing returns in an extremely valuable way is Uber. In fact Uber is changing many rules of the game and if the company is analyzed closely, more people might see just how much change it can bring about. Uber has created a loop that will just continue pushing their returns to astronomical levels. Think about it like this, there is an initial demand for available cars, this creates an increasing demand for more drivers, which increases faster pickups, which leads to a greater demand of available cars. Also, an increasing demand for drivers leads to less downtime for drivers, which means lower prices for customers, which again, leads right back to a higher demand for available cars. Uber has this down to a science. Let's not forget that they are also partnering with smartphone vendors, car manufacturers, credit card companies and insurance companies. Slowly but surely, Uber is making itself the undisputed market leader and the competition will not be able to keep up. There are also other variables that I have not even analyzed here such as car ownership going down, the density of their coverage and how it is growing quickly, the dual rating system (the drivers get to rate the users), and trust. Let's also not forget the damage they are doing to the taxi industry

The last company I'm thinking of doesn't need much of an introduction at this point but Google's search functionality enjoys increasing returns by the shear fact of how powerful their market share has gotten. Peter Thiel argues they are a monopoly and how that is good for them. I would argue that they have built a powerful moat around their search and advertising business and it is become incredibly difficult to compete with them in these arenas.  Only time will tell if this thesis is correct or not.

I'm sure there are a few ideas right now that small startups are looking to create a business out of and I'm pretty sure that one or maybe two will enjoy increasing returns to the point of creating a protective moat around their business. In fact, I wouldn't be surprised if it was in the Bitcoin/Altcoin community right now. But as I said earlier, only time will tell.

__________________, Genius.

I just found this piece written by Biz Stone for Wired magazine last year and thought I would share it. Here is my favorite quote from this article from Wired. 

"By simply announcing himself as a genius on his business card, Wile E. Coyote epitomized the spirit of the Silicon Valley entrepreneur. When you’re starting a company, you sometimes have nothing more than an idea. You have to begin somewhere, so you declare yourself an entrepreneur just like Wile E. declared himself a genius. Then you make a business card and give yourself the title Founder and CEO.”

You can learn about "Faking It" Here.

Personal API Key

I read an interesting blog post yesterday by Albert Wagner of USV. In it he talks about the impact that many new companies are having with freelancers as traditional employment is falling. And while these marketplaces are growing, the biggest influence will be access to the information they employ (with the marketplaces winning since they will have access to all of their information). His suggestion is an individualized API key that would have the right to access full read/write capabilities in the marketplaces system that the user can then see via an application. Or as he put it, it will be the right of the individual to be represented as an algorithm. My thoughts immediately started thinking about how this could be done via blockchain technology but I will have to look more into that idea.

I am currently working on an essay about the "increasing returns" that information can bring to a company and should have it posted within the week. If you are interested, you can check out Albert's essay here.

Kitchen-Table Economics

There is a question that economists have dealt with for years which is "if we have markets, why do we need the corporation"? I'm pretty sure this isn't a thought that crosses most peoples minds on a day to day basis but it is something that I have thought about from time to time. So how do we find the answer? Let's first look at the question another way, "What is the best way to properly allocate capital and organize labor"? From that question, we can say say that the best method has been the corporation. So why is that? And is the corporation the best way to go about it?

Economist Ronald Coase was able to analyze and answer this question with his seminal essay The Nature of the Firm. Due to a set of issues related to discovery costs, transactional costs, and obscured reputation, it is simply too expensive to keep making and doing certain processes over and over again. So the solution has been to start a corporation and create and sell a product or service to the public that way. It works pretty simple. People are hired into a corporation to work on a specialty and they focus primarily on that output. Each employees input (whether that is an expertise in marketing, finance, sales, or product creation), contributes to a much larger output (a finished physical good or service) that the corporation then sells to its customers. For example, Ford's assembly lines in the early 20th century are an amazing example of inputs coming together for a bigger output. In fact, Ford's process was so great that it revolutionized the way that factories were run, and help put in place more specialty focus for each employee. This process caught on to many other companies in other industries and suddenly more products could be made much quicker and gotten out to more people in less time. For the majority of the 20th century, The U.S. was the biggest exporter of manufactured goods.

Skip ahead to the 21st century and things are not what they used to be. China is the number one exporter of manufactured goods and the U.S. has slowly turned itself into a service driven economy. Because of this, I think that we will start to really see some major changes with manufacturing. In the past, and thanks to the assemly line revolution, large quantities of the same product could be made quickly and shipped to its destination in a short frame of time. Furthermore, with Deming's statistical research and systems put into place (think lean manufacturing and six sigma), manufacturers could suddenly make their products faster with little defects. Japans rise to dominance in the 1980's is a prime example of what could happen when manufacturing is done correctly. (I will skip over their economic fall from grace in the early 1990's to the present). 

But times change and broadly speaking, more people want products or services that are individually made for them. This isn't something that is easy to do when your entire line of products has little variation and your company must sell a large quantity just to break even. The fashion industry is catching on pretty quickly thanks to the Spanish behemoth Zara. Although they don't manufacture clothing for each individual person who wants it, their supply chain is so streamlined that they can sell out of a popular product, have more quickly made, and shipped back to the store in a heartbeat. Their process is unreal and a testament to how effective a well run supply chain can be for a company. There are only three other companies that I can think of with such an effective supply chain and that is Apple, Amazon, and Wal-Mart.

So what about hardware products, or smaller products that don't need huge assembly lines to create? Will it be easy to manufacture these products that are tailor made for each person in the future? Part of that answer could be 3-D printing, which has the ability to really throw the manufacturing world on it's head. 3-D printing is still in the early adoption phase, but once more people start to see how it can be used, and the price of printers comes down to the point that most anybody can easily buy one for a cheap price, we will probably start to quickly see some changes with the manufacturing process. It has even been stated that 3-D printing could bring about the second manufacturing revolution here in the U.S. I don't know if it's true but I'm pretty sure we will find out quickly enough. With this type of technology, more and more people will be able to print and manufacture their own products right at their own kitchen-tables (or garages if they need more space). But this technology is still in the early adoption phase and unless there a few companies that are able to cross the chasm soon, then this will remain a niche technology for those who understand it.

The other part of the answer are the newer types of marketplaces that give smaller creators access to more people. Etsy is the most prominent example I can think of at the moment and it has done wonders to create a whole new market for people to sell their creative wares to other people. These micro niches give people access to (mostly) hand-made products that will work out perfectly. And I wouldn't be surprised if customers contact these smaller one-stop shops to request a product made specifically for them. 

So what does all this have to do with my original question, "if we have markets, why do we need the corporation"? Because we are starting to move into a place where more people will start making their own products and services to sell to other people on an individual basis. And by that I mean more products will be tailor made for people instead of the one size fits all approach. These people are creating new marketplaces at their kitchen table with technology leading the way. And some of these people will have products that sell more than others and it will require them to better organize their labor and allocate the capital working for them. And the best way to do that will be through a corporation. Love them or hate them, the basic idea of the corporation is the best we have come up with yet to do all of this.