Philosophical Musings

August 23, 2007

Lies, Damned Lies, and HitWise

Filed under: Uncategorized — Elad Kehat @ 11:10 am

Not to be outdone by his competitors at ComScore, Bill Tancer, General Manager of Global Research at Hitwise, engages in some shoddy reasoning practices on his blog:

“Our regional map gives some clues as to interest in the Dunkin Donuts brand, note there are currently no franchises in California yet it ranks 10th in states sending Internet traffic to the site.”

Also note that California has more than 10% of the total US population, and sends just 2.83% of the traffic to the Dunkin Donuts site. That’s 10 times more people then Connecticut, which sends almost 3 times more traffic (7.43%) to Dunkin Donuts. So a person in Connecticut is (which ranks 3rd to California’s 10th) is roughly 30 times more likely to visit the Dunkin Donuts website than someone in California. Now doesn’t this sound much less sensational?

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Some More Shoddy Statistics

Filed under: business,investing,statistics — Elad Kehat @ 10:47 am

Founders know best, says USA Today: “Firms tend to prosper with founders at the helm“.
As a startup founder myself, I was naturally intrigued – what data supports this conclusion?

“Going back 15 years, stocks in founder/CEO companies have surged an average 970%, vs. a 222% gain for the S&P 500, according to data from S&P’s Capital IQ.”

Oh. See the problem? If not, read on…
The article goes on to try and explain (unsurprisingly, with no further hard data) why it is that founders are so successful at managing their own companies. No further consideration is given to the idea that this may just be a false correlation.
So here’s the problem: Del Jones and Matt Krantz, the USA Today reporters, compare the 15 year performance of companies with founder at the helm vs. companies in general.
What about an alternative explanation: public companies that have the same CEO at the helm for 15 years must have a damn good CEO. Otherwise they wouldn’t be successful and the board would find someone else for the job.
It’s nice that they use a system called “Capital IQ”, but a little more of it (or a passing understanding of statistics, or a minimum level of critical thought) would have prompted them to dig further and compare those founder/CEO companies to other companies that had the same CEO for the past 15 year. Would that study yield the same result? Or would that just lead to no article and an angry editor?

Or maybe it isn’t reporters fault:
“Ohio State University finance professor Rudi Fahlenbrach”. This is from a top-60 university?

And the “experts” seem to fall for it with no trouble at all:
“I should’ve attached more attention to it over the years,” says Rob Sellar, a money manager of Aberdeen Asset Management.
Really, Mr. Sellar? How about “attaching” more attention to what’s missing from the data? After all, there no telling in this “research” whether all companies headed by their founders succeed, just that public companies that had a leader successful enough to stay at the helm for the past 15 years are successful…

Science as Attire is as good as it gets

Filed under: religion,science,society — Elad Kehat @ 9:09 am

Eliezer Yudkowsky is worried that “many people, especially in the media, understand science only as a literary genre.” A worthy read.
Hardly surprising though. There’s no reason really to expect people to behave in the scientific age any different than they did in any previous age, i.e. treat science the same way religion used to be treated.
Most people who believe in evolution, do that just as others believe in ID, and in just the same way that some are protestants, some catholics and some Jews. They choose to believe mainly due to social reasons.
Now don’t get me wrong, I’m not trying to say that science and religion should be treated as equals – science is better simply because in general it’s willing continually test its basic hypotheses and admit mistakes. However, that too is done on the general level, i.e. through culture and over generations, and seldom on the personal – show me more than a few scientists willing to shed off their misconceptions in face of new evidence. Einstein certainly couldn’t.
And regarding the X-Men decidedly unscientific use of mutations, science, and specifically the theory of evolution, is used here as a literary tool just as religion and superstition were used in fairy tales and fantasies of old. The human mind is always looking for an explanation. We aren’t willing to accept fantastic powers and events without one. However, the explanations that we’re willing to accept are surprisingly simple. Apparently most of us don’t require an explanation of the explanation, maybe because that would lead to a chain of “dangerous” questioning that evades any further explanation in the end (god, or the big bang) which could drive you to existentialist musings which inevitably make you feel bad.
Which leads me back to Yudkowsky, and his closing words:
“You had best ask yourself which future experiences your belief prohibits from happening to you.”
Exactly, and most people would rather feel safe than venture to unknown future experiences. We need to separate science as a form of constructive critical thought that can generate an understanding of our world that continuously shatters our previous world views, from science as a social phenomenon, that since the 19th century has ascended to become an attire to don, if you are to be accepted in intelligent society. Most people prefer the latter.

August 17, 2007

Do We Really Want Smarter Software?

Filed under: AI,software — Elad Kehat @ 1:32 pm

I recently read these excerpts from Microsoft’s Craig Mundie, quoted on Geeking with Greg:

 

Think if the computer was really much more personalized in terms of what it did for you.
It will become more humanistic – your ability to interact with the machine more the way you would interact with other people will accrue from this big increase in power.
It … [will] adapt more to the environment and your needs and the things that are going on around you … The way in which you will be able to interact with it will be significantly changed.
A computer and its software can move today from a tool to … a great assistant.
[Assistants] think. They learn about you. They understand what you value. They understand what’s important. They make decisions … They speculate about what might be interesting.

 

While in general I’m very enthusiastic about AI, reading this made me rethink – do I really want my computer to become an intelligent assistant?

I’m thinking about what Microsoft has achieved so far in this field (albeit it isn’t much), to try to picture where this is going: all those pesky MS Word features that supposedly study me, try to anticipate me, or speculate what I want. The annoying numbered lists that never work the way I want them to, the automatic indentations that never get it right, the pesky auto-text suggestions and the appallingly bad grammar checker. Thankfully, I can disable them. But would a Word with some better AI sprinkled on top be better at all these tasks? I think not.

The fact is, all those automatic suggestions are usually right on target! Nevertheless, those occasions when the software gets it wrong, be they few and far apart, annoy the hell out of me, to the point where I disregard the successes and focus on the failures.

But this bias still isn’t my main problem. The real problem is, I think, that I don’t want the computer to think, learn about me, or god forbid, make decisions. I want it to be a stupid machine that does what it’s told.

Human assistants, while they can study, anticipate and make decisions, frequently make mistakes in their anticipations and decision. However, we accept this as a fact of life, because they’re human. After all, to err is human. We also need to treat them as humans, anticipate them, care about their feelings and adjust our expectations. But who wants their software to be like that?

 

AI has great potential and endless applications. However, I am not in need of a more intelligent productivity software suite, to anticipate what I want. I am in need of better UI, that makes it easier for me to tell my software what I want.

August 10, 2007

Strike Back for Freedom

Filed under: business,capitalism,Copyrights,Democracy,Freedom — Elad Kehat @ 2:01 pm

Finally, someone is trying to use the media industry’s own weapons against them.

TechCrunch reports that Veoh, an online video website, is suing Universal Music, after being continually threatened by them.  While their chances in court are probably not very high, its heartening to see that some entrepreneurs aren’t easily intimidated.

Incidentally, I ran into this quote of a judge today:

“There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back, for their private benefit.”

Unfortunately, the speaker isn’t a real judge, he’s a fictional one, in Robert Heinlein’s classic short story Life-line, written in 1939! (I’ve been reading some classic scifi lately). Too bad that this paragraph, written 68 years ago by a true libertarian to criticize corrupt business, is still relevant today. Even worse, no real life court today would say the same.

August 8, 2007

My two cents on Age and Entrepreneurship

Filed under: entrepreneurship,youth — Elad Kehat @ 12:34 pm

Mark Andreessen chose to weigh in on the age and entrepreneurship debate, but instead of just “mouthing off” on the subject, he’s brought forth some research data, which makes his post a great read.
He ends with a question:
“…is entrepreneurship more like poetry, pure mathematics, and theoretical physics — which exhibit a peak age in one’s late 20s or early 30s — or novel writing, history, philosophy, medicine, and general scholarship — which exhibit a peak age in one’s late 40s or early 50s?”

So here’s my small contribution to the debate, in the form of an answer to this question:
I think that Mr. Anreessen is wrong in looking at entrepreneurship as a single discipline. An internet entrepreneur, enterprise software or telecom equipment entrepreneur, an “old” business entrepreneur and a life sciences entrepreneur, while they all engage in the act of starting a business, and no doubt face some challenges that are the same across all fields, mostly take on very different endeavors, especially when viewed from the question of age. That is because age, as analyzed in the research data pointed out by Mr. Andreessen, pertains mostly to the question of creativity, i.e. its effects on the impetus to dream up a new business and the courage (or foolishness) required to go ahead and start one, age has far bigger effects on entrepreneurial success when it comes to the entrepreneur’s knowledge of the market, and the various barriers to entry that stand in his or her way there.
Let me explain:
Take for example an entrepreneur in the field of Life Sciences. This field is characterized by a long and costly R&D period, before a product can be brought to market, much of it due to regulatory hurdles. The result is that this enrepreneur must raise a large sum of money in order to have a chance. This is a barrier to entry, in which age plays a role, because venture capitalists are unlikely to give a young person this funding – the risk is too high. Funding usually goes to biology professors and MDs who did some research in academia (that’s the seed capital) and wrote a patent. For someone to head a lab in a university, or be in a position in some other way to be able to direct such research, first requires a slow processions through the echelons of of academia. Young entrepreneurs simply can’t enter this field.
Next, lets look at business software. Here the R&D period is also usually pretty long and costly, though not as long as in life sciences (no regulation…). Nevertheless, the need to raise a lot of money _before_ one can start selling a product creates a difficulty for the young (and therefore relatively inexperienced) entrepreneur to get VC money. Another barrier is the customer – CIOs are aren’t too enthusiastic to take a risk and make a bet on some software touted by a 25 year old. There are exceptions of course (Confluence is an interesting case), but still, age, in and of itself and regardless of talent, poses a problem.
So where is young age less of a hurdle? Naturally, where the cost of bringing a product to market is lower, and where the customer judges the product itself, rather than the person behind the product.
If you add to that a market where a majority of the customers are young, making a young entrepreneur more likely to understand their needs (or even realize that such needs exist in the first place) and young age becomes an advantage.
Classic examples of such businesses are pubs, dance bars and other places of entertainment that cater to a younger audience. From my experience the owners of such places are almost always young entrepreneurs.
And the best example of course is consumer internet start-ups. Successes such as ICQ, HotOrNot, MySpace, Facebook, YouTube etc. all share characteristics that made it possible to their young founders to succeed: customers of roughly their age (or lower), relatively low cost of building their service and low cost word-of-mouth marketing. These combined to allow the entrepreneurs to quickly get to what Mr. Andreessen calls “product/market fit”, i.e. prove that there are millions of customers out there who want their product. After that, raising money from VCs to scale the business is much easier.
Obviously, the same cannot be done in life sciences start-ups, where you can’t give your product to consumers before the FDA approves it (which costs many many millions), and is very hard to do with enterprise software, where the customer isn’t normally in an experimentative mood – it isn’t easy to get them to even try your product out, even if it’s free, and in any case, you expect them to pay you a lot of money for it, not just use it so you can show them ads.

In short, my opinion is that while age may or may not affect an entrepreneur’s creativity, correlation between age and success is far more likely to be the result of the peculiarities of the specific market that the entrepreneur is pursuing.

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