Are You Being Served (by online shopping)?

Online retail is ubiquitous. But is it any good?

Sometimes. Other times, not so much.

What about the environmental impact?

The good:

  • Consistently comprehensive information. Full product descriptions. Reviews by:
    • other consumers, consumer associations,
    • industry associations,
    • random bloggers. many of whom are professionals in the field.
  • Stock. It comes in that colour, your size, a format compliant with the electrical supply in Iceland and can be purchase without leaving the comfort of your lawn chair.
  • Products are easy to find. At the physical store, staff that don’t seem to be able to find one of the 200,000 products in the [warehouse] store. Because really, who could? Online, the droids in the warehouse find it for you.

Online allows the entire company’s warehouse to be within reach of every customer service representative and has other wonderful features, like convenience, variety, ease of finding the lowest price. These features suggest an overall positive environmental footprint. Fewer car trips by buyers, more efficient delivery through route optimization with one vehicle serving hundreds of customers. Lower shipping impact compared to a company stock dozens of outlets across the country. Less impulse buying and therefore throwing of unwanted items into the landfill.

The dark side:

  • Occasionally not so convenient. If you order something requiring a signature, such as wine or expensive electronics, and aren’t there when it is delivered (because you are at work during the day, when it’s always delivered), then you have to trek, drive etc., to an outlet that is only open during the day. Online shopping is meant to avoid this.
  • Prone to theft. Because of the point above, many packages are left on the doorstep. And some disappear while waiting for the buyer to come home from work. Various creative approaches are being suggested to overcome this. Meeting people at in the parking lot of their work. Designated, convenient pickup points. Secure approaches to allowing the delivery person to place the package inside the home. It is an opportunity for entrepreneurs to address.
  • All that packaging. Tape. Boxes. Bubble wrap for fragile things. A mountain of stuff that is left over after the UPS truck departs. Might packaging of home-delivered merchandise negate 50 years of carrying your own shopping bags?

While the first two points could lead to extra emissions due to unnecessary trips, the third is more worrying, because it seems to have garnered little attention. The stats are staggering1. For the 2017 holiday season, UPS was predicted to ship 750 million packages, over 30 million a day.2 According to one source3, 41% of Americans get 2-5 parcels a month. Between 2012 and 2017, average annual deliveries increased in number between 5 and 6% for UPS, FedEx and the United postal service. How much cardboard, tape, sticky labels, and other assorted wrapping was involved? Tonnes4. Literally. And I haven’t heard a peep about it as an issue. Cardboard boxes are recycled, but how efficiently? The tape and labels aren’t generally. Overall, environmentally concerning.

While we’ve learned to minimize the packaging for items we carry out of the brick and mortar stores, can the same be done for home delivery? Here’s a great entrepreneurial opportunity – a ready made, growth market. Socially conscious. Easy to identify buyers and an easy to make value proposition if the new solution is less expensive than the current mound of packing.

Somebody go for it, please!

——-

1 Unless you are in the delivery business and then they are great – indicative of a good growth industry.

2https://www.cnbc.com/2017/10/26/ups-expects-to-ship-750-million-packages-this-holiday-season.html

3https://www.shorr.com/packaging-news/2017-05/2017-package-theft-report-porch-pirates-purchase-habits-and-privacy

4 Incidentally, who is making cardboard boxes? -This also must be a great growth industry, especially with good recycling programs.

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Barriers to Innovation

My last post was an optimistic ode to the endless innovation currently possible, due to the state of technology, entrepreneurship and related support systems. But that doesn’t mean it’s easy. Today, I want to discuss some sobering limitations that thwart the introduction and uptake of new things.

Several broad categories of barriers to innovation spring to mind:

  • regulation
  • fitting into existing infrastructure
  • consumer habits
  • figuring out who is going to pay
  • short term vs long term thinking
  • benefit twice removed

To illustrate these, I’ll discuss barriers in a couple of hypothetical situations where delivering a solution seems easy.

Consider the challenges to providing real-time transit information. This was inspired by a comment I overheard: “in X,Y and Z city, you know exactly when the next bus will arrive; why can’t we have that here?”

Why indeed?

The technology exists to track a vehicle, create algorithms to integrate the traffic flow, rate of bus progress, passenger demand and weather conditions to estimate and adjust time of arrival for buses and trains. Multiple options exists for providing this information to transit customers, such as pixel boards at stops, a downloadable app or text message service. The information is useful to customers to plan their commutes and use their time wisely. Providing real time updates enhances the customer experience, because it’s more satisfying knowing that your bus will arrive in 14 minutes than not knowing and having it appear after you have fretted and peered into the traffic for 6 (much longer) minutes. Happier customers are repeat customers. So, there’s value to be shared between provider and customer.

Why can’t they have it everywhere?

I can think of a bunch of (hypothetical) reasons.

1. Perhaps the current fleet of vehicles aren’t GPS enabled. Perhaps there is no way of announcing the information at the stops, since all that currently exists are metal signs. (infrastructure issues)

2. The bus drivers union may object to such a system because it tracks driver performance in an unfair way. Or the legal team could be concerned about liability of promising something not under the control of the transit authority. (regulations)

3. How will the new infrastructure be paid for? Through fare increases, increased bank loans, or decreased dividends to shareholders? Although the value can be seen, is it enough to make people reach into their pockets? (who will pay?)

4. The cost to implement this new system will have to be paid long before rider retention can be proven. (short term vs. long term thinking).

To illustrate the other two barriers, I’ll use plastic utensils, especially straws. Much has been made of the earth- and ocean-clogging features of these implements of consumption lately. We need an alternative. Why do we use straws to consume beverages? (This is customer habit.) Innovations that replace the straw must overcome habit. And why do we have plastic utensils, food containers and other disposable, polluting conveniences? Because they are convenient. Eating your meal and cleaning up afterwards are things you will enjoy right now. Pollution of the oceans may only come to your attention years later. And you’re not sure how plastic in the waters effects the environment. It’s difficult to understand the vastness of the consequences of disposables in the sea when you put a single straw in your bubble tea. (benefit twice removed)

Yes, there can be significant barriers to implementing a genius idea that is good for people, business and society as a whole.

And yet, the answer is innovation. Business innovation. Get around the regulations or change them. Show stakeholders short and long term benefits. If there is value in an innovation, someone will be willing to pay. People only cling to their habits if they don’t see the benefit of changing.

Innovation is possible, if you understand the barriers and come up with ways to get over, under or around them.

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Is Bitcoin like a Tulip?*

If it sounds to good to be true,

or like it should be illegal,

it probably is,

or will be soon.

I call this Ann’s Axiom, although I’m not sure I can claim exclusivity to the sentiment. I did add the last line to cover the current business environment, where it often takes a while for laws to catch up with technology.

So, bitcoin. Many of us are face-palming with regret that we didn’t buy some of this nouveau currency years ago. A small gamble, out of intellectual interest, might be worth the downpayment on a lux condo in Toronto now.

Why did it start? Because it could. The concept of blockchain – a way of distributing information so it is always verifiable – spawned a bunch of new concepts, including a currency or two founded on the principle. Bitcoin, like all currencies, are surrogates for value1. People who think bitcoin has value (buyers) will trade their dollars, gold, stocks or whatever for it, while those that find more value in the dollars/gold etc will sell their bitcoin, honouring the fundamentals of supply and demand.

Bitcoin futures recently started trading on the NY stock exchange, meaning that people can speculate on whether they think bitcoin’s value is going to go up or down2. There are futures markets in all kinds of things, from pork bellies to natural gas to Japanese yen. So why not bitcoin? Originally, futures were established to make doing business easier, such as allowing a farmer to find a buyer for their grain harvest while it was still in the ground and make plans based on knowing the value of the crop. Future’s buyers are willing, because early purchase might lead to a deal on the grain. Then humans got clever and decided that futures trading was a way to make money by riding the waves of supply and demand. I question what fundamental need is served by bitcoin futures?

Yeah, but, that’s not how modern financial markets work, you say. I’m worried, and here’s as flaky an explanation as I got: Bitcoin futures, along with the wild gyrations in bitcoin value and incredible increase in value over the past few years leaves an unsettled feeling in my gut.

There’s more enthusiasm than logic with bitcoin. Do I smell tulips3? It also reminds me of 2008, and the almost collapse of world financial markets.

Much as been written about the causes and impacts of the mortgage crisis of the last decade, what stands out for me are a few principles:

  1. It may not have been clear to everyone what they were investing in. Securities (surrogates of value) were bundled together in such a way that made them sound safer than they were.
  2. Past performance is no indication of future performance. Mortgages – what’s a safer investment? They’re secured on real estate, which time has shown to be a stable, safe investment. Stable meaning that it retains value without fluctuation and is backed by a tangible asset. But that supply and demand thing happened. A whole bunch of people defaulted on their mortgages in a short period of time and when the mortgage-holders tried to recoup their investment by selling the underlying asset, the asset spiralled down in value because there were many houses on the market. And so, the mortgage backed securities plunged in value too.
  3. But that’s not all. A chain reaction started when the mortgage-backed securities unexpectedly lost their value. Price instability rattled through the financial markets because investors needed cash to cover their losses and tried to sell other securities like commodities and bonds and financial whatnots. The whatnots were especially complicated when they were futures because of the unpredictableness of the situation. Commentary I’ve heard was that it wasn’t generally understood how the various markets, stocks, mortgages, commodities, bonds, were tied together. Perhaps because they weren’t tied together by any simple logic, only that people and institutions with a lot of investments have a lot of investments. (Right, eh?)

Do we understand now how bitcoin could impact the world’s financial markets? The thing that we can’t know, and shouldn’t really, is how the value of bitcoin will effect individual holdings, and therefore the desire of individuals to sell other financial instruments. If the value of bitcoin crashes, what would bitcoin holders sell to compensate? If it’s the same whatnots, will there be echo crashes?

Presumably we have tighter controls in financial markets across the world now. But my gut is uneasy. Tulips might be a good hedge. I’ve heard the sale of flowers remains strong despite economic conditions because people need a little bit of hope.


*  This (and all posts on this site) are commentary and solely my opinion. They are meant to be thought provoking, not business or financial advice.

1Currency makes trade easy and social. If I want to buy cauliflower but make my living as a dental hygienist, the dollar makes this exchange easy. I get paid in dollars and hand the farmer dollars. So much easier than cleaning one of their teeth every time I want some vegetables.

2Futures basics: Futures are a contract to buy or sell something for a fixed price at a specified date in the future. If the current price of gas is $1/litre, and you think the cost of gas is going to go down, but your friend thinks it’s going to go up, they might agree to buy a thousand litres of gas from you at $1.10 two months from now, thinking the market value will be $1.20 and therefore saving ($1.20 x 1000) – ($1.10 x 1000) = $100. You on the other hand think it will be $0.90 two months from now and so are happy to make a deal with your friend, sure that you can sell them $900 of gas for $1100, and profiting $200. Multiply all that by more zeros, big business and lots of suits, and you have a futures market.

3Many business and psychology profs will tell the story about mania in tulip bulbs in the 1600’s. Tulips, yes the spring flowers, increased in price in the Netherlands to truly silly values, with people reportedly selling their homes to buy just a few bulbs, only to have the bulbs crash in value a little while later, leaving investors with nothing but a pretty flower as their net worth. For more details see here or here

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Stop Helping, It’s not Helpful.

There is a fine art to understanding how, if, and when a customer wants to be helped. We’ve all experienced it: the difference between the poorly timed, inane, nagging questions and a salesperson who comes to your side just as a question about a product forms in your mind, adds insight to your shopping quest, and has you smiling at the check-out desk. Or the professional who distinguishes between when you’re in a hurry to find one, specific thing, vs. a leisurely browse that might see you buy an entire cartload of items.

The internet has taken the challenge of good customer service to a whole new level. It’s making me crazy. Why? Because pop-ups. There are many fine examples of using the internet to deliver better information about products, and ways to make products more accessible, both financially and physically. However, more thought could go into the implementation of some web browser popups.

Here’s a list of various pop-ups that miss the mark, at least for me:

  • Offering your newsletter before the site has even fully loaded. I don’t know who you are, what you do, or if I’ve clicked on a link by accident. So no, I don’t want your newsletter. Ditto alerts, updates and notifications. If you waited a bit, I’d be more likely to say yes. So wait a bit. In person, this would equate to a person with a clip board, standing at the store entrance, demanding ‘Do you like our store?’
  • Trigger happy sidebar ads, especially ones that scroll down the page with you. If I I’m interested in what you are selling, I’ll click on it. If I click by accident because of poor page design, I will hate your company for the rest of my life. It’s like a sales person holding up jackets when you’re browsing shoes and repeating: “How about this?” “How ’bout this?” “How bout this?” “How ’bout tis?”
  • Chat with an associate before I’ve even read a sentence. Put the dialog box away until an appropriate time to suggest it. Yes, it’s great you have people or bots to answer questions, but why do you have a website in the first place? So people can read about your company/product. This is especially true for logging into email and being offered chat with my friends. If I wanted to chat, I’d open a chat app. I’ve opened an email app, so guess what I want to do?
  • Why are the only two choices for getting rid of an ad that I don’t want to see: it covers the page1, or, it’s offensive? I have reasons for not wanting to see the ad. Maybe it reminds me of my ex-husband or dearly departed pet. Do you really want to push that negative association on me, so I can forever be repulsed by whatever is being promoted?
  • I don’t want extra windows to pop open with suggestions for helpful things like saving my passwords, adding people to my contacts, creating events in my calendar, or downloading an app to make what I’m doing easier2. It would be easier if I wasn’t constantly interrupted with popups trying to do things other than the one I’m trying to do. This is like trying to buy milk and bread while an over-zealous salesperson offers to determine my shoe size, the colour of my aura, or what my family history reveals about the perfect pet for me.
  • Requiring sign-in three screens into a site. There should be a flag (maybe like the toxic waste symbol) for sites that require creating an account to access the info they’re offering. Spending time on a landing page to get excited enough about the content to ‘click here to download’, only to find out that you need to surrender enough personal information for military clearance, is poor communication. Facebook and LinkedIn landing pages make it very clear that you are going nowhere without an account. It’s like getting to the check out at a store with some fabulous finds and discovering that the marked prices are only available to members. Who have signed up. With their personal information.
  • There should be a special place in hell for ads with a hard to find, or absent, close window ‘X’. This is the equivalent of a salesperson who doesn’t understand ‘I’m just looking’ as the signal to GO AWAY but instead follows you around the store, quipping useless information with each item you look at, oblivious to each new sneer.

Maybe everyone except me else loves pop-ups because they provide useful information. Most of us have things to do and don’t want extraneous pop-ups filling out lives with the need to swath though screens, like an explorer with a scythe in the jungle, to see what we came to see.

I might like pop-ups better if they added value. I am curious to know what conclusions fancy algorithms draw from my various searches and posts, akin to the fascination my rational self has with having my fortune read. A clever observer of people can conjure an accurate reading by observing and responding to their subject’s cues.

Know your client. In the modern era, that has to be done without invading privacy, which is how any good human salesperson has always done it – respecting the client’s preferences. The challenge is doing the same online. I’m sure someone or something will figure it out. Soon. Please.

——

1I’m probably being too honest because I won’t click on ‘it covers the page’ unless it covers the page. It only covers a third or a quarter of the page, so I don’t click.

2I realize this may not be the fault of the designer of the website I’m perusing. It’s the helpful operating system on my device. Still, back off.

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Privacy. Nothing to Fear but Fear Itself. And Third Party Use of Data.

‘What do we fear could happen if we put our personal information online?’ A question I came across while researching internet privacy. Simple but brilliant, because the answer didn’t come easily to me. Like washing my hands before meals, I do it, but why?

Should I be concerned that I’ve made numerous posts on Facebook about my love of beer, my Twitter account reflects an interest in rock music, and how these leisure activities align with the professional profile I try to maintain on LinkedIn?

If I ran for Prime Minister, which I wouldn’t, what might someone turn up to incriminate me? Not that I’ve done anything terrible. That’s the thing. Fear may be rooted in how some mundane piece of information could be spun. With a little information, say that I’m an avid poker player, what horrible portrait could be drawn of me – the gambling addiction? Or my fascination with guns. (I played paint-ball war games once in 1986.)

We all have our hobbies. Many people fear that their, ahem, socially-shared, social interactions (i.e.. partying) will be frowned upon by future employers. Stories of job interviews ending in a request for Facebook passwords still float around, despite the clear invasion of privacy. Snapchat, with posts that disappear without a trace unless someone downloads them, may resolve the drunken photo-share problem. Social media is worrisome because of the foreverness of it. Can something we did years ago, that everyone’s forgotten about because it isn’t a habitual activity, come back to haunt us?

Not only can we fear the past being exhumed, there’s little to protect us from the practice of tracing our day to day web browsing activity. On average, I go to 20 different sites in a day. What does my cumulative surfing activity tell a keen marketing algorithm? The practice of tracking user activities (searches and website visits) may provide smarter observations about our tendencies than we can come up with ourselves. Is this a valuable service or an annoyance of spam and suggestive selling?

Some fears are rooted in reality. Identity theft. Credit card fraud. Or being sold something you don’t need because you’re vulnerable, like forest fire damage insurance. Don’t you feel bad for people who make a silly mistake and get caught on social media, like calling in sick to work when they aren’t, or ruining a surprise proposal or party. We all have lapses in judgement occasionally.

Privacy is a fundamental right. If I don’t want you to know ‘that’, then it’s my right to keep ‘that’ private. But often, it isn’t on web forms. How many have you filled out where a phone number is a required field even though you can’t see the need for one, but can’t place your order without it? More annoying is the site that insists you create an account, or ‘sign up’, with the requisite disclosure of personal information. I say NO to those sites because I’m convinced they get more out of me becoming a member than I do.

Most of us know it’s possible to track websites visited and location through the GPS on mobile phone. However, in one study, while 90% of a group of experienced internet users say they know what a cookie is, only 15% can actually answer questions correctly that demonstrate they really know what cookies are1. We may be vaguely aware that online actions are traceable, don’t know what does it really means, or what could someone do with the information. Facebook reportedly2 looks into browser history to target ads to users. If an organization is profiting by selling information about me, without my knowledge, that does not sound right.

Back to the original question – how much harm can be done if a company knows I’ve researched hemorrhoids, looked up recipes for grasshoppers, visited six shoe shopping sites, and watched way too many cat videos? It might be embarrassing, but it won’t ruin my love life, empty my bank accounts, or set fire to my car. Still, I’m uneasy about what’s being done with my personal information, because I don’t know what’s being done with it. I’m not alone. This study3 suggests only 28% of people in a group of about 1500 agreed with the following statement: ‘what companies know about me from my behavior online cannot hurt’.

I don’t have the answer to ‘what do I fear will happen if my personal information is online’. I don’t need to. I wash my hands, without knowing if a bacteria, virus or fungus is lurking, waiting to infect me, or how serious an infection it might cause. Similarly, I’m concerned that something sick and disabling might be done with my online personal information, so I’m cautious of what I share.

1 from Luzak, J. (2014) Privacy Notice for Dummies? Towards European Guidelines on How to Give “Clear and Comprehensive Information” on the Cookies Use in Order to Protect the Internet Users’ Right to Online Privacy J Consum Policy 37:547-559

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On Drugs: Emerging Business Models (an update)

Remember the pharmaceutical company(s) that started an avalanche of public outcry for snowballing costs (hundreds of fold increase in months) of certain generic drugs? Well, Imprisis Pharmaceuticals has come up with a solution to get reasonably priced versions of said drugs to patients.

Brilliant,” I thought, on reading how they are going to do it.

Then I chewed my lower lip for a while trying to poke a hole in the concept.

But couldn’t.

Finally, in awe of the simplistic genius, I did a classic face-palm and wondered, Why Didn’t anyone Think of this Before?

Before I get into the logistics of it all, let me say that I’m glad the people who need the drugs, such as the generic pyrimethamine of the branded Daraprim, have better access to them. This report indicates the price will be about $1 per pill, compared to $750 that Turing was reported to be considering at one time (but pulled back from).

The trick, not to imply that Imprisis is doing anything that involves slight of hand or fooling anyone, the clever bit, is that Imprisis will provide generic versions of pyrimethamine by using a method that is, and has been for centuries, a generally accepted practice in pharmacies – called compounding.

Compounding is ancient. Used to be, medicines were all individually made by someone with a mortar and pestle and an apothecary of ingredients. As the pharmaceutical industry became more sophisticated, the creation of medicines was standardized (generally a good thing for safety and cost-effectiveness) and pills were produced under strict manufacturing conditions for the masses. Mass-produced pills contain not only the active ingredient but other things to increase its shelf-life, make it easier to swallow, delay release so once a day dosing is possible, decrease stomach upset and some other side effects, and have become the norm.

Occasionally, a physician will prescribe a specialized formulation, which eliminates an allergen, or allows the drug to be administered in different form, such as flavoured liquid or rub-on gel. Compounding is a wonderful throw-back to physician discretion, allowing the doctor to make a professional decision about what’s best for his or her patient, rather than selecting from a menu of pharmaceutical company offerings. Compounding is also popular with veterinarians, who will suggest using a drug that’s been proven effective in humans but needs to be modified for use in animals.

I’ve used compounded drugs. For my cat – a specially formulated gel that I rubbed on his ear to ease long-term administration. For me – combination drugs for topical administration, antibiotics and anti-inflammatories all in one. What the Doctor ordered for the specific situation.

The differences between branded, mass-produced drugs and compounded ones often includes more extensive testing for the preformed pills because the pharmaceutical giant behind them has funded the studies. Also, the pharmaceutical company has the liability if their medicines do damage. With compounding, the prescribing physician takes on this risk, generally with significant knowledge of the properties of the ingredients in the compounded formulation. Somewhat like buying off the shelf versus DIY. Compounding isn’t practical for all the pills prescribed today – we’d need half the population working as pharmacists to provide the millions of drug doses Canadians take every year.

However, clever Imprisis Pharmaceuticals has come up with a practical approach to providing off-patent, rarely used but badly needed drugs, such as the active ingredient in Daraprim. This is the drug Turing jacked the price on and elicited an impassioned response from the public, often focused on the evils of capitalism, pharmaceutical companies and perhaps hedge funds for good measure.

I’d never heard of Imprisis before this and promptly looked them up. They are a very young company,

whose core business is in compounding of existing drugs for better patient outcomes. Although this year looks like their break-even year for sales, prior to 2015, they’ve lost substantial sums. A not unusual scenario for a biomedical startup.

Am I implying the Imprisis has deduced a brilliant solution, hidden in plain sight before everyones eyes and the company deserves the support to do more good, or am I suggesting that being a pharmaceutical Robin Hood is a brilliant marketing tactic by a small company wavering between financial hard times and glory?

I’m not. I’m just sayin’ there’s many perspectives to every good story.

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Brief Encounters with Artificial Intelligence

I’m preoccupied with how artificial intelligence will impact society even though artificial intelligence isn’t very smart or common yet. A couple of recent observations (the type that come with the metaphorical light bulb over the head1, not made with binoculars from a shelter hidden in the shrubbery) brought me to a greater understanding of how artificial intelligence may fit into everyday life.

First encounter: I picked up my phone and thumbed to my favourite cab company. I hadn’t called them in a year and a half, and was surprised to hear an automated attendant answer instead of the woman with the gravelly voice who called me ‘dear’. It said if I wanted to be picked up immediately at the address I was calling from, I could push ‘1’ and it would happen. I did and did and was (want to be picked up at the address, pushed 1, and the cab arrived shortly thereafter). As we cruised towards my destination, I chatted to the driver, telling him that while the call seemed very efficient, I felt odd about it.

What was lacking? Why was having a machine arrange to pick me up, when that was the very reason I’d called the cab company, disconcerting? If the dispatcher had asked if I wanted to be picked up at home, or the usual place, I’d be glad of the personal service.

For me, the missing link was someone who actually cared if the cab came to get me. Someone who wanted to do their job well and understood that if I was going to the train station it was to catch a train, and being late could have a ripple effect: missing the train, then maybe being late for a job interview and therefore mortgage payments. The gravelly-voiced lady may never have given a rat’s ass if I got where I needed to go on time, but generally, people can empathize with the consequences of being late. Yes, a machine can list the potential consequences, but it can’t remember the time it got a flat tire on the way to a wedding rehearsal where it was the best man for a nervous groom who needed his best buddy’s support.

My second encounter is more subtle. I’m knee-deep in business theory, pondering what gives companies like Harley Davidson and Tim Horton’s their competitive advantage. Causal ambiguity is a thing, which I’ve always liked the sound, and the meaning, of. It’s rather similar to the idea that the sum of the parts is less than the whole. Sure you can make motorcycles growl and sputter in an outlaw kind of way but what makes a Harley the motorcycle of choice for everyone from rock stars to the pastor of an upwardly mobile flock? Why is Tim’s a thing half the Canadian population will wait in line for when the competition across the street has the same product (coffee)? Casual ambiguity. Don’t know how – but it works.

The best explanation we have right now is that casual ambiguity is the sum of a vast number of elements, each subtly different than the norm. Will artificial intelligences be able to dissect casual ambiguity into its multitude of components? It’ll be interesting to see what the AIs come up with to explain the appeal of Hello Kitty or the allure of certain notorious socialites.

On the same topic (competitive advantage), but a more mundane level, human nature dictates we develop processes, or rituals. These get passed down through generations, whether it’s a ham recipe or a manufacturing process for golf balls. Scholars of Operations Management know that the best processes morph overtime because every little detail can’t be recorded, so instructions are interpreted and revised. Will AIs eliminate this natural drift, detailing processes with an infinite number of stepwise instructions? Me, I take detailed instructions, read them until I understand the concept and then construct the functional details.

Humans make mistakes. Sometimes the mistakes are good and we discover something new. Sometimes they’re neutral for many cycles and get propagated through the system then someday turn out to be of benefit.

AIs won’t make mistakes, so there will be no drift in the processes they oversee or serendipitous finding of new things. AIs follow instructions with a precision that leaves nothing to the imagination.

So, we humans, with all our squishy emotions and random actions, are useful after all. We care – who can deliver good customer service without caring? And we err. To err is human, not to err – divinely artificial.

1Does that metaphor still work with a compact fluorescent bulb?

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Big Data – So Glad I’m not Alone

How many businesses are based on the collection of user data? Could be all of them, soon.

Having done just enough reading about the Internet of Things to be dangerous, I’ve surmised the time is coming when we’ll have the capacity to collect and store a ridiculous amount of information, perhaps down to a level of minutiae (does that word rhyme with nausea?) whereby we could track each step the family pet takes, every day, as it wanders around the house. I have to admit, I’m curious what my cats do while I’m not home, but suspect that information would interest me for 0.8 minutes. And I’d pay less than what a cup of coffee costs to know.

If I won’t pay, maybe a maker of veterinary products will. And discover a cause to displaced aggression, an increasingly common syndrome whereby cats get all snarly because they can see another cat outside their home, making them uber-aggressive to anything inside their home. Perhaps a new line of pet-food would counteract the cause. Depending on what the cause is, maybe the manufacture of air-fresheners, refiners of natural gas or growers of gourds should get involved.

It may seem I’m being silly but that is the potential of big data. Everything may be connected to everything else in previously unsuspected ways. A world where every object (including people) sends frequent signals about its position, temperature, or movement isn’t so far away. And while that may seems like an innocuous set of variables, much can be determined. Knowing where a person is at all times says a lot about their habits and interests. Go to the corner store each night? – there’s some kind of habit brewing – smokes, junk food, lottery or maybe just an attraction to the clerk. Already sounds like too much person information.

Add a little more, like your purchasing habits, co-location with other objects (people) provides much information about your relationships. A speedometer, GPS and accelerometer is enough to reveal your driving habits – do you break quickly or a lot? Knowing your speed and where you are tells if you are a habitual speeder. Aggressive driving can be spotted by proximity to other vehicles.

So there’s another rub. Things we are buying now come with embedded information gathers. Never mind the electronic device (mobile phone/tablet) we use to communicate that snarfs down a mountain of information about us – there are others, such as cars. Appliances will soon want to be in constant contact with retailers (or maybe the other way around) so the fridge will refill itself with all your favourite foods (at your expense). The washer and dryer will order refills of detergent and fabric softener if you don’t stop them.

The electric utility monitors my consumption of power by the minute but also may soon link that information to all the appliances in my house to suggest which are being left on too long or could otherwise be used more wisely. That’s information I can use to decrease my power bill, or may be the information will be used in another way.

Oops.The pessimist woke up.

What about personal privacy and associated rights that various businesses may want to stick their nose into? Like say, Insurance. There’s a data loving industry. Wouldn’t my home insurance provider like to know if I was in the habit of leaving electrical appliances unattended, risking a fire. Or maybe they’d be more interested to know there was no power drawn from a home security system even though I ensured them I installed one.

And this is just one example that sprung to mind. There’s cars and driving habits. Food and eating habits. How hot I heat my home compared to everyone else in the neighbourhood. How many fruits and vegetables my family buys each week and how many end up in the compose bin. The household consumption of entertainment – bringing a blush to everyone’s cheeks. You get the idea. Personal privacy is at stake.

Many businesses assure us that our information will not be used except to ‘provide us with service’ – that sounds like a can of worms.

When I saw the title ‘The Need to Embed Big Privacy in a World of Big Data – by Design’ a talk by Ann Cavoukian, I was thrilled because it seemed to echo my sentiments exactly. Dr. Cavoukian is the former privacy commissioner for Ontario who has created a system called Privacy by Design to protect privacy (all kinds, individual, corporate, organizational).

I went to the talk. I liked what I heard. The key principles. Privacy should be:

  • Proactive
  • By default
  • Embedded into design
  • Positive sum – not a trade off with security, we get privacy and security
  • Full life cycle protection
  • Visible and transparent
  • Respect for user choice – no service denial because you decline to provide information

The last one won me over completely. Too many online sites are binary (yes, the irony is intentional). If you don’t agree to provide information required, you can’t get in. After all, it’s a web interface and not capable of understanding explanations.

Hence my love of the privacy by default idea. If I don’t want to provide my birthdate, I can still get an account. This is where privacy by design is important. Yes, it you need to ensure users are above a certain age. Currently, you build the user account system to verify this by asking for their date of birth, then of course they are rejected if you refuse to provide that information. But if you did it differently from the beginning, asking people to warrant they were of age and sending an email to confirm, you might design a system that protected the provider and the consumer equally. Squeee.

One of the suggestions was that we should be routinely reminded that data was being collected. I’d love it if Facebook popped a window to tell me I’d watched 65 cat videos in a month and they were escalating my profile to ‘cat lady’. Or Twitter said I was following enough grunge-rock bands to qualify as a metal-head groupie. It might be fun.

I applaud the Privacy by Design initiative, to boldly embrace privacy and see how easy it is to incorporate it if it’s done from the beginning. I can see it as a competitive advantage, providing customers the option of how much of their data is used and what kind of information they get back from sharing. Sigh. Oh for the day when we’re secure in what we communicate freely, without fear of our messages being used against us.

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Innovation without Technology

Can a new product, a new service or application, be commercialized without new technology, without inventing a widget or writing new code? It can, when it’s based on knowledge, know-how, or understanding an old thing in a new way.

Remember the phrase – all the buzz ten years ago: ‘the knowledge economy’? While it certainly seems like machines are getting smarter ( but that’s another story), new knowledge has been translated into ICT, social media and the emerging IoT (internet of things). Billions of burgeoning new businesses (ok I’m exaggerating) became because people invented new hardware or software. Which is good. And of course, based on knowledge.

And while some of us were busy creating the new knowledge all those electronic, interconnected, disruptive technologies are based on, many others were discovering other new knowledge. In the past week, I’ve come across five new useful products, businesses or services or practices, that are based on knowledge. Not new technology. Just people being able to help more people because we’ve learned some stuff. And this too is what comes of research and translating research into a form that can be used to benefit society.

In no particular order, this is what I’ve learned about:

1. Understanding Childhood Behaviour. A medical condition can effect children – ODD1 – oppositional defiant disorder. Sometimes, putting a name on worrying behaviour makes it easier to deal with. This disorder is associated with excessive anger and vindictiveness in children towards authority figures, including their parents. Recognition helps people get coaching to facilitate positive ways for children and parents to interact. New ideas. New perspectives.

2. How the Body Changes in Pregnancy. The hormone relaxin2 is secreted, making all joints more flexible. There is a growing hypothesis that some women will secrete more than others and that the excess flexibility throughout the body can cause long term complications like arthritis. Awareness of the possibility can help woman take care, through exercise programs, to strengthen their msucles in such a way to protect their joints.

The other things I’ve learned about recently were at a wonderful event put on by Durham Sustain Ability on indoor air quality.

3. Knowing What’s Harmful in Indoor Air. Caroline Barakat-Haddad, a professor from UOIT, reviewed the scientific literature on indoor air quality, pointing out what had been found to be the most harmful types of indoor air pollution. Our bodies have adapted to deal with some particles in our environment but not others. It’s important to know what to guard against and to pinpoint causes and effects. And use this knowledge to create better indoor spaces.

4. Practical Approaches to Improving Indoor Air. Gail Lawlor presented us ideas for addressing common indoor air problems based on standards for air circulation in buildings. Such a nebulous concept – when is the air in a building good? Such a practical definition. If 80% of the people are comfortable, it a good start. Mould Get rid of the moisture. Old homes have a variety of benefits because they are built of materials that don’t interest mould But they aren’t air tight, which is both good and bad. While it avoids ‘sick building syndrome’ because there is natural air circulation, they lack optimum circulation to clear away the inevitable byproducts of our material things.

5. Living Walls – more than just a beautiful facade. Anyone who has seen one of these knows they are awesome. Alan Darlington, from Nedlaw Living Walls gave us an overview of how these storeys high, vertical displays of lush greenery are constructed and function. Something about an expanse of plants rising into the sky, dominating a foyer or other indoor open space evokes the feeling of calm, like you’re in the sunshine, in a forest or jungle, yet going about your daily business. Really, these wall are feats of engineering, horticulture, microbiology, and artistry. A serious combination to make a light-hearted atmosphere. And while there may be proprietary technology in the construction, what I heard was primarily a new way of putting together existing technology. The genius is in the creation of the whole.

There’s nothing I like better than learning new things. My recent experiences are a reminder that new knowledge, useful knowledge that can be delivered by business to make all of our lives better, comes in many forms, not just new gizmos or apps (although those are good too).

1http://www.mayoclinic.org/diseases-conditions/oppositional-defiant-disorder/basics/definition/con-20024559

2http://www.yourhormones.info/hormones/relaxin.aspx

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Where Are We Going in Self-Driving Cars?

If ever there was a disruptive technology, it’s self-driving cars. Imagine a world full of autonomous vehicles, and the ripples through all aspects of our lives.

Visionaries see a time when our roads will be filled with computer-driven cars, cars that completely control navigation – selecting the route, setting the speed, obeying traffic signals. Artificial intelligence systems in the vehicle will sense road conditions and surrounding objects, people and animals and integrate this information with data from other systems such as weather reports and traffic conditions, to get from point A to point B safely and efficiently.

To make this a reality, two major areas of technology have been advancing for the past two decades and will continue for decades to come:

1. Car technology. In broad categories, this consists of automated sensing, integrating and controlling. Automotive components and systems have been developed to sense the environment (a current example is the camera that shows what’s behind the car when backing up, and the detector that beeps more frantically as the car approaches an object). The next step is a system to integrate various information and control a subsystem of the car, such as breaks that automatically engage when the car is about to run into something. Subsystem control is available now and truly self-driving cars are being tested on the streets of California. Various sources¹ suggest we are ten to twenty years from truly self-driving cars dominating the roads.

2. The Internet of Things. The capacity to coordinate cars and traffic relies on a level of connectivity of many things, including each car, the traffic lights, community events (for examples a few thousand vehicle trying to exit the stadium parking lot after the game or a road closure for a charity event). This capacity is growing, perhaps exponentially, but I believe is still in its infancy.

Self-driving cars are anticipated to bring all manner of benefits, such as:

  • safer roads. No more human driver error.
  • more accessibility. Anyone can sit in the ‘drivers seat’ of an autonomous vehicle, regardless of their age, mobility, visual acuity or what they’ve been doing previously, like sitting in a beer tent.
  • more leisure time. The time we all spend driving becomes time to read, chat, or catch up on our communications (safely).
  • less traffic congestion. If the cars control the traffic, they can optimize the volume, distributing the traffic so there are no jams, rerouting around accidents long before everything comes to a halt, except…
  • fewer accidents, because the cars should be better at avoiding them. So, that’s even less congestion and more efficiency.

Depending on how the system evolves, we may stop owning cars and call them on demand. This could eliminate the need for parking, further easing congestion and freeing up a lot of real estate. When ready to go for groceries, send a text and the car appears. The cost will depend on the distance travelled, number of passengers, other items carried, whether we are willing to make a slight detour to share the fee. The fee would encompass maintenance, fuel, license fees and insurance.

What will become of taxi drivers? Other industries are likely to be effected. If there are fewer traffic violations and accidents, we’ll need fewer police, ambulance workers and tow-truck drivers. Auto insurance could be a thing of the past. If the cars are centrally dispatched and maintained, then there’ll be less need for fuelling stations and auto-mechanics. There may be less wear and tear on the roads and less construction.

All this efficiency and safety sounds very appealing, even if it has the potential to impact many industries and professions. Cars are a big part of our lives. People like to to drive. Think of the family tradition of loading everyone into the car, with no specific destination, and going for a drive. There are parents, at wits end to comfort a crying child, who bundle the infant in their car seat knowing that just ‘driving around’ is a sure fire way to send the little one into silent slumber. I get in my car to see new places, turn down roads I’ve never been down to find out what’s there, and take the long way because there’s a breath-taking view or tricky curves where I can put my steering skills to the test.

I’m sure we all hope autonomous vehicles will make road rage go away, but I’m skeptical. Impatience and feeling a lack of control seem to fuel road rage. The driver of the car that fills my rearview mirror who can’t get home fast enough to the icy cold beer he/she needs after a day of being scrutinized by the boss may not appreciate a self-driving car. An autonomous vehicle is unlikely to break speed limits, totally unsympathetic to the rider’s need to get where they want to go faster (although I can imagine that if we develop a safer automobile transit system, speed limits could increase).

When I was a kid, getting your driver’s license at 16 was a significant rite of passage. With self-driving cars, there may be no more licenses. With luck on my side, fully functional driverless cars should fill our streets about the time I’m too old to get my license renewed.

As a new technology, self-driving cars have the potential to deliver enhanced safety and efficiency in our transportation systems in an environmentally positive way, but they also have the capacity for profound social and lifestyle effects.

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¹ As examples:

https://www.navigantresearch.com/newsroom/three-quarters-of-vehicles-sold-in-2035-are-expected-to-have-autonomous-capability

http://www.driverless-future.com/?page_id=384

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