Posts from — March 2009

I recently wrote about alternate currencies as a solution to the financial crisis, specifically to the ineffectiveness of monetary policy at the zero interest rate bound. Well it looks like Greg Mankiw (independently) agrees with me which is quite exciting. When currencies loose value over time the Fed could lower its rate to less than zero (e.g. you give me $100 today, I’ll give you $98 in a year) and still find people who would be willing to lend at those terms:

Reduce the return to holding money below zero. Imagine that the Fed were to announce that, one year from today, it would pick a digit from 0 to 9 out of a hat. All currency with a serial number ending in that digit would no longer be legal tender. Suddenly, the expected return to holding currency would become negative 10 percent.

It definitely is an unorthodox solution that would be difficult to implement in practice but it’s also novel and interesting and it helps us understand why certain solutions work and others don’t:

I understand that this plan is not entirely practical. But you have to give the student credit for thinking out of the box. And his plan does address a fundamental problem facing the economy right now: Given the fall in wealth, increases in risk premiums, and problems in the banking system, the interest rate consistent with full employment might well be negative.

One key challenge to coming up with good solutions to problems is understanding why things are the way they currently are and what an ideal solution would have to accomplish. Coming up with good ideas that don’t quite cut it is an excellent learning process for getting closer to the optimal solution.

Update: The Economist talks about Switzerland charging foreigners a fee to keep their money there in the 1970s – effectively imposing a negative interest rate (this would have to be a percentage of the assets kept there instead of a lump sum).

Over the last two years, but especially in the last few months, Twitter has become an extremely efficient way of sharing information. You can follow people whose interests you share, learn from what they link to, and if you really like what they are saying you can share or retweet it. Only having 140 characters to communicate with forces people to become more and more succinct and it leads to very interesting behavior. This limit has made it OK to simply post a link combined with a short comment, something people are far more likely to do than write long blog posts. If people like it they will retweet it and people who see these retweets will do the same resulting in an extremely quick transmission of information. More importantly a search over that conversation will quickly let you see what people are saying and thinking about something – down to the last second.

A lot of people have been talking about the immense potential this offers to understand how people feel about any topic or product and learn from this data. Skittles was widely applauded for its innovative marketing campaign that turned skittles.com into a live display of what people were saying about skittles (including the campaign itself). At Apture we want to take the best ideas that people have on the web and make them available to everyone – to democratize them. With our new Apture Twitter Viewer anyone with a website can now integrate a live search stream about any topic right into their pages it takes less than ten seconds. We did this on apture.com/twitter/ and being able to see what people are saying about the things you write about is truly exhilarating - I’ve found myself visiting the page over and over to see what people are saying. It makes your webpage more powerful, more up-to-date, and gives your readers a reason to keep coming back. Apture user Steven Johnson realized this immediately and wrote an excellent post about the power of bringing internet conversations to your website with embedded Apture Twitter Viewer showing what people are saying about his new camera flash, the Lumopro 120.

We also pride ourselves on doing more than the obvious – apart from immediacy the most powerful features of Twitter are its interconnectedness and the ability to share. How often have you seen someone reply to someone else on Twitter and wished to quickly see the other side of that conversation? We make it easy, clicking on a person’s Twitter name inside of any Tweet will bring up their profile and Twitter stream. We do the same for hashtags, click on one to see what other people are saying about the topic. The other aspect is media. With the Apture Twitter Viewer will open any supported media you link to in a new Apture window so you can see it right there. We support Video, Images, Audio, Maps, and much more from more than 30 sources, all available right there.

Now combine immediacy, interconnectedness, and multi media sharing: See what people are saying about the things you care about, see who they are, where they are from, what else they are saying, and see all the media they like – isn’t that powerful. It really lets you dive into a conversation, all in just a few seconds.

Sign up for Apture, follow us on Twitter, and if you like my writing, follow me as well.

It’s official now, Apture has raised $4.1 Million in Series A funding, led by Clearstone Ventures. We are all extremely excited and could not wish for a better partner in this – Clearstone immediately understood the big vision behind what we are doing and the new opportunities that it will open up. We got great press today including an excellent article on Techcrunch as well as lots and lots of congratulatory Tweets – you can read more about the actual announcement on the Apture blog. I’ve always said that laser focused companies with great ideas can still make it in the current environments and we are very happy to be another proof point for this. We have a lot that we want to accomplish and we now have the resources to really focus on executing our vision. Stay tuned.

Richard Florida has a phenomenal article on how the current crisis will shape the geography of American cities. Recent growth has focused around growth in increasingly suburban cities clusters and the feedback loop that this created and about how the kind of sustainable economic growth that we want for the future will be about communicating and spreading ideas. But first things first, let us look at a typical housing boom city:

As prices rose, more people moved in, seeking inexpensive lifestyles and the opportunity to get in on the real-estate market where it was rising, but still affordable. [...] Cities grew, tax coffers filled, spending continued, more people arrived. Yet the boom itself neither followed nor resulted in the development of sustainable, scalable, highly productive industries or services. It was fueled and funded by housing, and housing was its primary product. Whole cities and metro regions became giant Ponzi schemes.

The big increase in suburbanization was a product of the World War II era, young men returning from the war, starting families, buying houses in cheaper areas, stores opening to sell to this new market, factories also moving to make use of the cheaper space and plentiful labor, creating jobs, attracting more workers, … This is where it gets interesting:

This weekend I spent some time reading a great book on the History of the of the Middle East – ‘A Brief History of the Last 2000 Years’ which I highly recommend, but for those of you who want to cover twice the number of years in less than two minutes and still actually learn something this interactive history map is incredible.

Much as I love reading I have always felt like getting the big picture of history is extremely difficult through books and even most history classes and I think that interactive media is extremely well suited to this. But who are all these people, you ask, the Hittites, the Seljuks? When it comes to digging deeper the map isn’t enough, wouldn’t it be great to have Apture in an interactive map like this? What do you think?

The US economy is reeling and we are all worried, many of us have lost their jobs or know several people who have. There are good economic arguments for trying to keep as much as possible of the economic stimulus inside the country (to maximize the impact of each dollar spent) while avoiding new protectionism that might spark a trade war. With all of us so focused on the domestic economy it is easy to forget that things are also happening in the rest of the world and that they aren’t that different from what we are going through here (and many of the problems like speculative investment in Eastern Europe are not at all the US fault).

However, if the current crisis has taught us anything, it is that nations are interlinked. The economic decoupling was a myth and the economic crisis is hurting everyone and endangering many US foreign policy priorities, including the recovery of Iraq. Because of this I was extremely shocked to see the following shortsightedness from Richard Posner:

I think the big foundations, such as the Gates foundation (the biggest), should be strongly urged to redirect their extensive foreign charity to the United States at this time of depression. I am not suggesting that his projects should “Buy American,” in the sense of buying U.S. products to give to foreign recipients of his charities. The point is rather that charity should begin at home when home is suffering.

I agree that in these tough times all of us who have steady incomes should help less fortunate ones by donating more to local charities. But taking away funding from the developing world would both be immoral and counter productive. These countries are already suffering immensely from a crisis that they did not create, the World Bank’s Chief Economist for Africa expects up to 700,000 additional infant deaths in Africa because of the crisis and an increase in conflict and decrease in governance quality. Ted Miguel and Ray Fisman have shown how economic shocks greatly increase the likelihood of civil wars and the same is true for a rapid fall in natural resource prices. Offering aid and then withdrawing it can be much worse than not giving anything in the first place. This decade has taught us that failing states, from Afghanistan, to Pakistan, to Somalia are real security problems, not just for their neighbors but also for the West.

If the Gates Foundation and others like it suddenly stopped funding projects in developing countries countless projects that have come to depend on their funds (many of which were started because of it) would have to shut down and it would take a long time for them to recover once the money becomes available again. The cutting of funds would worsen the impact of the crisis in affected countries, increase the time it will take for the global economy to recover, endanger long term research into tropical diseases, and produce a (potentially protectionist) backlash against the United States that we really don’t need right now.

This crisis and the way we get out of it is a chance for the US to show its leadership and creativity in the face of tough problems and together we can achieve that. If you as an individual want to help those less fortunate than you consider making a loan on Kiva or donating to a US charity.

Update: As Lauren pointed out in the comments you can also contribute by spending your time solving important problems and make a career out of making the world a better place.

Update 2: Richard Posner wrote another post supporting the elimination of tax deductions for charitable donations to foreign countries while Gary Becker (on the same blog) had a more nuanced opinion. Posner also maintains that we should regulate such giving which as an entrepreneur leaves me just flabbergasted. Many innovative non-profits started by young upstarts with great ideas such as Kiva, Forge, Face Aids, and Unite for Sight would never have been started under this plan and the world would be worse off for it. Let’s foster entrepreneurship in all sectors of the economy, not limit it without good reason.

I read a very interesting post on the information firehose today and about how all of us are being bombarded with more and more information and have a hard time processing and making sense of it all.

The video points out that more information will be generated in 2009, than was created in the past 5,000 years. That a weeks worth of the New York Times holds more information than most Americans living during the 18th century were likely to encounter in a lifetime. [...]Today, smart people who want to be “in the know” need to figure out how to filter the information fire hose. The challenge is not finding information, but finding trusted “filters” and then absorbing information through them while ignoring the rest.

I totally agree with the author but think there’s more to absorbing the right information than just filtering it down to the best parts. When we started working on Apture we wanted to give people a tool that helped them put new information into context by letting you view the most relevant rich media and guides without needing to leave the page to search for the material. We wanted to make the ideas expressed by the author, come to life. We believe that people will care more about events and ideas if they can relate to them, and that they will understand them better and relate them more deeply if they can put them in context. Good writing and story telling is a big part of that but we want to help everyone use the power of the web to communicate even more effectively.

Yes, more media can be even more overwhelming but by presenting it in the right way and allowing your users to discover more bit by bit, in chunks , instead of forcing them to drink from the fire hose we believe we can help make the things they do choose to read about more memorable and significant.

So if you want to show your readers what education in Eritrea looks like, how much you enjoyed the recent Coldplay concert, and how Large Hadron Collider works, Apture is here to help you do that more compellingly.