Month: August 2006

Blogs I Read: Jason Steinhorn, The Steinhorn Stare

/ Adam Nash

One of the most fun blogs that I read is one that belongs to my friend and colleague, Jason Steinhorn.  It’s called, “The Steinhorn Stare”, I’m assuming after his now infamous poker face, captured on television as part of the World Series of Poker.

Here is a great example of why I love reading Jason’s blog:

2006 Legends of Poker

Now, I will be the first to admit, I am clearly a voyeur of the recent poker boom that has hit Las Vegas, the internet, and about half of the engineers and techies I know.  I really appreciate the way that Jason’s posts capture the subtlety and complexity of the game.  Poker is a fascinating blend of psychology and math, with a distinct advantage to those who know how to manipulate the perception of their play vs. just knowing the odds.

As a result, Poker lands squarely into my “sweet spot” of fascination – an arena where the ultimately rationale (statistics) intersects with the ultimately irrational (human emotion & perception).

So while I may never be a great poker player, I like living vicariously through Jason and other friends who participate in these events with $10K buy-ins, and who actually win.

True story: Last year, Jason & I were both managers in the same division of eBay Product Management.  At our regular Monday managers’ meeting, Jason was nowhere to be found.  He was still in Vegas, having won 2nd in the World Series of Poker, and close to a quarter of a million dollars.

That news would be cool enough, but what I liked is that Jason had faxed in the winning check – like a “doctor’s note” to be excused from class that day.

This is Jason’s last week at eBay, and he’ll be sorely missed.  But he’s off to a new adventure at another cool company, and I feel extremely fortunate to have been able to learn from him these past two years.

Now, if he would just post more regularly to his blog…

Google, Apple & EBM (Everyone But Microsoft)

/ Adam Nash / 1 Comment

A lot of press today about Eric Schmidt, CEO of Google and alumnus of Sun & Novell, joining the Board of Directors of Apple Computer.

http://www.appleinsider.com/article.php?id=2003

Everyone is a buzz with implications of what happens if these hot hot hot companies join forces against Microsoft. As you can tell from my sarcasm, as usual, I think the press is sensationalizing a fairly mundane corporate event here, just because putting Google & Apple in the title of articles gets readers these days.

Don Dodge potentially gives this idea more credit than it deserves, but provides a really thorough explanation on why we shouldn’t count our merger chickens before they have hatched.

Of course, if you look closely at any two big internet players these days, you can find synergies:

  • Apple.com has a lot of traffic
  • The Safari browser has 3% marketshare and growing
  • iTunes is the winner in the online distribution of music
  • Google is the winner in market share for natural search
  • Google paid search economics are currently the best available
  • Google Video is a player in the nascent digital video market

However, this announcement has a lot more to do with the fact that Steve & Eric run in the same circles, have a lot of common friends and beliefs, and of course, Google & Apple are both great consumer internet brands. It looks good for Eric & Google to be on the board of Apple, and it looks good for Apple to have Google & Eric on board. Simple.

What is interesting to me, however, is how much better Google is doing handling the mantle of “Leader of the EBM Club” (EBM = Everyone But Microsoft). This has been a dangerous baton to hold, and many formerly strong companies have been destroyed this way. But Google has learned a thing or two about how to proceed here, and it is interesting to watch the next round of the “let’s try to topple Microsoft” game.

It’s different this time, of course. Google & Yahoo both are giving Microsoft fits, so the three-way dynamic is immediately more interesting. Success by new entrants (MySpace, Facebook, YouTube) keep changing the game. The resurrection of Apple continues to astound veterans. And as eBay has shown recently, the other internet powers will weigh in and influence this game. This is a very exciting time to be in the Internet space.

I remember in the late 1990s when Netscape had this mantle, and completely failed to appreciate the responsibility. They largely shunned Apple. Their arrogance got in the way of a deal with AOL (ironic, given the later merger).

There was a time when Netscape had all the market share you could want, but Microsoft clawed their way into a significant minority (25-30%). Then with one deal (the infamous AOL deal to use Internet Explorer), they flipped to majority marketshare and never looked back.

I bring up this story because shunning Apple was not about marketshare, although at the time Macs were still disproportionately strong in Internet market share because they come with networking out of the box, and because Macs were strong in the university & high income demographics (early adopters of the web).

Apple is the Grandpa of Microsoft battles of yesteryear. It is still a thought leader on imagining a world where you DON’T need a DOS/Windows PC. Their audience, though small, are thought leaders – disproportionately represented by the creatives, the journalists, and the executive ranks. They are also cooler than most.

By linking their name with Apple, Google in some ways gains a small, but powerful ally. Like a chapter out of The Lord of the Rings, it makes people think maybe this new champion will succeed against Microsoft where others have failed. The prophecy fulfilled.

The baton is passed.

I’ll post another time about why I think the question of Google vs. Microsoft is likely the wrong one. The Google ethos isn’t about killing Microsoft. In the end, this is much more about future growth opportunities for Microsoft than any type of defeat. But in our market-based economy, growth is power, so it’s worth talking about… another day.

Dream Machine: Tivo Series 3 Available in September?

/ Adam Nash

The following post appeared on PVRBlog today:

Wild rumor: Series 3 TiVo out on September 13th?

This is a really big deal for Tivo fans out there, because for the last 12-18 months we’ve been in a sort of limbo. DirecTV has betrayed us by abandoning Tivo as their primary DVR platform. At the same time, the only viable High Definition Tivo has been through DirecTV.

Now, with the deals Tivo has signed with Comcast and Cox, it’s likely that in 2007 many cable customers will have access to the best of both worlds:

  • Cable’s great range of local & nationwide High Definition programming
  • Tivo’s best-in-class DVR software for their DVR boxes

The problem has been waiting and uncertainty. How quickly will DirecTV shoot themselves (and their customers) in the foot with their migration to an incompatible MPEG4-based high definition line up that is not compatible with their current Tivo boxes? How quickly will Comcast & Cox offer their solutions to offer Tivo software on non-Tivo boxes?

The Tivo Series 3 looks like a potential “third answer”. For a price, you’ll be able to buy a best-in-class High Definition box that will work, dual-tuner, with any cable system that supports the CableCARD standard (which should be all of them – note the word should).

This box was demoed at E3 earlier this year, and it has had Tivo fans salavating since then.

The price looks steep, so this looks like a niche product for the ardent fan who wants the absolute best high definition DVR out there.

In the meantime, it would be great for someone to write a Harvard Business School case study on the incredible blundering by DirecTV with its DVR strategy and its relationship with Tivo. DirecTV had a multi-year lead on having an integrated dual-tuner DVR, and completely botched any attempt at leadership in the digital living room by avoiding differentiating software features that Tivo had readily available. A phenomenal embarrassment, worthy of ridicule.

Personally, my loyalty to DirecTV was 100% tied to their Tivo-based solution. As soon as a viable High Definition product is available from cable, I’m switching, and I’m taking my $100/month with me.

The official Tivo page for the Series 3 is available here.

Blogs I Read: Don Dodge

/ Adam Nash / 1 Comment

In the spirit of hilighting some of the best blogs that I read and given Google’s product announcement today for “Applications for Your Domain“, I’d like to point you to this humorous press release on Don Dodge’s blog today:

Don Dodge on The Next Big Thing: Google Announces New 24X0 Support Service for Business Users

I find Don’s blog particularly interesting because he:

  • Posts regularly
  • Provides insight from his unique experiences at AltaVista, Napster, and now Microsoft
  • Provides a rare intersection of the “modern” Microsoft point-of-view on Web 2.0 and related technologies and products, with an outsider flavor
  • Seems to genuinely understand the professional Venture Capital viewpoint on key technology trends (based on my experience as an Associate Partner in a multi-billion dollar early stage firm)

A worthy addition to anyone’s RSS feed…

    Behavioral Finance, Anchoring & eBay Auction Starting Prices

    / Adam Nash / 7 Comments

    There is a great article today from Alex Goldfayn in McClatchy Tribune papers, like the Sun Herald in Mississippi:

    The Sun Herald | 08/27/2006 | Starting price is key in eBay auctions

    It quotes some recent research from the Kellog School of Management, including Associate Professor Adam Galinsky on the behavior of buyers in auctions.

    Now, as someone who has been selling on eBay for over 8 years, and working for the company since early 2003, the conclusions of this study are fairly obvious. It turns out – yes, it’s true – that auctions that start with lower starting prices result in higher final sale prices.

    Why is this interesting? Well, it turns out one of the staples of modern negotiation theory and behavior finance is the concept of anchoring. Anchoring, loosely defined, is the irrational human process where people will gravitate towards a number – any number – and use it as a sub-conscious basis for what they consider a fair price.

    Example: it has been shown time & time again that the higher the original price quoted by a salesperson, the higher the final price that the buyer will end up paying for the exact same item.

    Even more disturbing, experiments have shown that even quoting random numbers, like the last four digits of your social security number, can actually affect the answer the people give to seemingly unrelated questions, like estimating the number of doctors in New York.

    What’s interesting about this research in relation to eBay is that you would expect, based on anchoring, that the higher the auction start price, the higher the final price of bidders.

    However, what the Kellog research shows is that there are other, more important emotional factors in auctions. The low price lowers the “barrier to entry” for people, and then once they are involved, they continue to bid based on the “sunk cost” of their time spent already on the auction.

    I personally believe a third factor comes into play with auctions, which is competitiveness based on a false sense of ownership. People find an item they like, and that message, “You are now the high bidder” is powerful. Getting the message that you have been “Outbid” is inflamatory – it signals a primal part of your brain that triggers fear and anger that someone has “stolen” your item away from you.

    I think that there has been so little academic research on the largest and more varied global marketplace (eBay), so I love to see these papers that trickle out that begin to help scratch the surface of understanding how human beings interact with each other in marketplaces other than the stock and commodity markets.

    Please, if you see other research like this, send me links or documents. I find this type of analysis incredibly interesting.

    Blogs I Read: Eric Cheng & Wetpixel

    / Adam Nash

    Eric Cheng is a good friend of mine from college, and an extremely interesting person. Like me, he did the co-terminal program at Stanford Univerisity in Computer Science (which involves getting BS and MS degrees) with an emphasis in Human-Computer Interaction. Eric is also an accomplished cello player. After school, he worked for a few years at a software company called E.Piphany, which was pretty much your typical late 1990s success story.

    After leaving E.Piphany, Eric decided to pursue his interests in digital photography, becoming one of the first to really specialize professionally in digital underwater photography. He now has one of his pictures hanging in the Smithsonian, and travels the world constantly on diving expeditions.

    You can find a blog of his travels and insights at his blog:
    Eric Cheng’s Journal

    He also runs the site WetPixel, which is dedicated to digital underwater photography.

    I’m lucky to count Eric as one of my close friends. If you are interested in either diving or photography, it’s worth subscribing to his feeds.

    Pluto is a Planet

    / Adam Nash / 5 Comments

    Of course, like everyone, I caught the headline this morning:

    Astronomers say Pluto is not a planet – Yahoo! News

    I have mixed feelings about this. On the one hand, it’s nice to see people who probably cannot even name all nine planets interested in a story about cosmology and the way we define our neighborhood in the galaxy. On the other, this entire debate to me seems to be missing the point – “planet” is hardly a technical term, which is why they can’t really figure out how to define it. However, the term “planet” does inspire children to look up in the stars, realize that there are different things out there, and most importantly realize that our entire world is really just a small little ball, whirling around in space.

    How many children have been excited about the prospect of discovering the “10th planet”? I remember books from the 80s, talking about “mysterious tugs” on the orbit of Neptune, and even conjecture that “something else” might have pulled Pluto & Charon away from Neptune.

    Demoting Pluto doesn’t inspire anyone. When the press dies down, in roughly a week, it’ll become an obnoxious fact – a fact that only the most annoying people will bring up every time they go to a classroom, museum, or other location that still shows all nine planets.

    What they should have done, instead, is find a way to make Xena the 10th planet, leave Ceres in the asteroid belt, and highlight Charon & Pluto as a unique “double planet”. That would have been inspiring.

    BTW I haven’t found any technical journal reporting detailed enough to explain to me why, if the new requirement is that a planet has “cleared its orbit”, why Neptune is a planet and Pluto isn’t… seems to me that Neptune hasn’t cleared it’s orbit either, since Pluto crosses it. The whole idea that Pluto crosses Neptune’s orbit as a reason for demotion seems specious.

    Blogs I Read: Hitchhiker’s Guide to 650

    / Adam Nash / 1 Comment

    If you haven’t checked out this blog, it’s worth adding to your regular RSS reader:

    Hitchhiker’s Guide to 650

    It’s written by a friend and former colleague from eBay, Will Hsu. Very witty and insightful, I like the sharp way he looks at key issues surrounding e-commerce, startups, and venture capital. More importantly, I feel like Will captures some of the real psychology of Silicon Valley.

    Take his post yesterday on a great Web 2.0 CEO anecdote.

    Now, I’m trying not to hold it against Will that he actually does not live in the 650 area code anymore. Still, the blog is a must-read.

    I’ll be posting from time to time the blogs that I really recommend, and adding them to my blogroll on the right.

    Why Psychohistory?

    / Adam Nash / 8 Comments

    The first question that people ask me about my blog is:
    “Why is it called Psychohistory?”

    This is, of course, a great question, and I think it ties closely to the first question that I had to ask myself when I decided to start blogging again: “What am I going to blog about?”

    I’ve been fortunate enough in my academic and professional careers to have had exposure to a wide variety of subjects and businesses. However, I’ve realized in the past decade that my primary interest has always been the intersection of the rational (technology & economics) with the irrational (people).

    As a software engineer, my primary interest was in human-computer interaction and the recognition that technology is useless without significant thought given to how people perceive and interact with it. As my interests shifted to the study of economics, I developed a deep fascination with the study of behavioral finance and the recognition that classic economic models fail to predict activity in many cases because people are often not rational actors.

    These insights are fascinating to me because I firmly believe that in fact, there is a method to the madness. People are irrational in many situations, but in many cases predictably so. In my recent professional roles in early stage venture capital and product management, I have been repeatedly astounded with the level of value generated from insights into human behavior with technology and economics.

    When I was in junior high school, I voraciously read the works of Isaac Asimov, and to this date I remain a fan of his intellect and insight. In his “Foundation” series, he introduced a fictional science called Psychohistory, which was based on the idea that even though individual humans were not statistically predictable, large groups of humans were. This was a direct analogy to the growing awareness of the impacts and contradictions inherent in quantum mechanics: there is uncertainty when evaluating the velocity and position of a single particle, but yet we can still accurately predict where a large mass of them (a baseball) will go when dropped.

    When I think about the topics I will blog about here, I know since it’s a personal blog that there will be a fair share of “books I’ve read” and “baby/puppy/family” posts. But in the end, my guess is that the relatively unique theme to most of what I share here will lie somewhere in the intersection of my passions for technology and economics and my fascination with people and their motivations. This means common topics will likely include:

    • Personal finance
    • Economics
    • Venture Capital
    • Product Design & Product Management
    • Silicon Valley
    • Software
    • Science Fiction & Future Technology
    • Video Games

    As a result, I decided that Isaac Asimov’s simplistic vision was probably the best title to capture the essence of my personal blog.

    As I mentioned yesterday, I’ll be experimenting with a new post to this blog every day for the next 30 days. We’ll see how close my guesswork here comes to the actual topics I post to this blog.

    Thanks for reading.
    Adam

    BTW I do realize that there is now an actual field of study called psychohistory which is defined as the study of the psychological motivations of historical events. Obviously, I think that this is unfortunate nomenclature, and I’m siding with Asimov on this one.

    Welcome to Psychohistory

    / Adam Nash

    This is the inaugural post for the personal blog of Adam Nash, tentatively titled “Psychohistory”. 

    For those of you who know me, you may know that I’ve had three separate blogs in the past six years, but each time they faded due to lack of attention, change in responsibilities (personal and/or professional), and in some cases lack of purpose.

    My hope is that this time will be different, largely because I’ve learned a lot over the past few years about what makes a blog successful and rewarding, both for those who read it, and those who write them.  I’ve also realized that I have a possibly irrational passion for sharing interesting information and opinions with others, and receiving feedback, information, and opinions in return.

    So, for the next 30 days, consider this the trial run for Psychohistory.  I’ll be posting at least once a day for the next 30 days, with an evaluation at the end of that time. 

    Just to be extra clear, this blog is intended to be purely personal, and will not necessarily reflect in any way the opinions or policies of my employer. 

    My next post will be, of course, an explanation for why I picked the title Psychohistory for this blog.