Archive for category Business

The New Yorker publishes an article proving the patent system is broken

The New Yorker has published an article on Nathan Myhrvold’s Intellectual Ventures, a think tank that brainstorms new ideas, patents them, and licenses their subsequent ownership of that new “intellectual property.”

The point of incredulity, for me, came when I read this quote from Bill Gates:

They also came up with this idea to stop hurricanes. Basically, the waves in the ocean have energy, and you use that to lower the temperature differential. I’m not saying it necessarily is going to work. But it’s just an example of something where you go, Wow.

The article talks about Alexander Graham Bell and his genius, and how Myhrvold is inspired by Bell. But Bell didn’t simply think up the telephone and patent it; Bell actually invented the telephone!

Intellectual Ventures files up to 500 patents a year. There are no inventions here, mind you, just ideas. You know the patent system is broken when a company can obtain a government-granted monopoly on an idea like preventing a hurricane and sue the bejeezus out of someone who might actually figure out how to control Mother Nature.

Ideas are cheap. Ideas are easy. It’s the implementation that is hard. The research and successful development of a seemingly impossible idea is worthy of a patent, not the brainstorming for the idea itself. How would you like to solve an impossible problem only to be rewarded with a lawsuit by a troll with a submarine patent who’s put zero work into solving the hard problem? Yeah, that’s what I thought.

The Great Indian Outsourcing is over

The Great Indian Outsourcing movement will be over within two years.

That’s what an architect turned blogger who writes anonymously from Bangalore is predicting. The author is writing from the movement’s Ground Zero, so he may have better insight than the rest of us. But I’ve got good anecdotal evidence from a local outsourcing company that lends weight to his prediction.

I live and work in Charleston, S.C., an area known more for its beautiful beaches and gorgeous live oak trees than high technology (though we do have Robert X. Cringley). But Charleston’s location can attract businesses that don’t necessarily need high technology, just smart people. Outsourcing is one of those types of businesses.

I know personally a project manager at a local outsourcing company. Our daughters go to school together. We were talking at a recent birthday party about outsourcing, cost, and the availability of talent. Business is booming, but it has little to do with cost, she tells me. She says its the lack of local talent that drives most of their business. They deal largely with the marketing end of technology, making websites and fancy Flash applications. Madison Avenue marketing firms would rather hire local Flash experts, she says, but they’ve hired them all. They’d prefer the rapid turnaround that local talent can give them. There just aren’t enough talented people in NYC to fill the huge demand, so they outsource to Charleston, S.C. In turn, this local company sends the work to a development center they own in Costa Rica. Costa Rica is, I’m surprised to learn, a hot up-and-coming technology spot. And you don’t have to wait 12 hours for Costa Rican project managers and developers to reply to email or voice mail.

The Tired Architect – our Bangalorian blogger – talks about the availability of talent in Eastern Europe and China, and there’s obviously talent in Central America. Brazil is another up-and-coming technology hot spot.

I agree with The Tired Architect that India’s monopoly on the outsourcing market is over.

Caveat emptor

I think the claims made by the people hawking this book are some of the most disingenuous things I’ve ever read:

http://sourcemaking.com/design-patterns-simply

They are selling a rehash of the classic Gang of Four (GoF) Design Patterns book as a PDF, making preposterous claims which I’ll cut & paste here. You can’t make this stuff up.

The Whys:

Why should I read it?
When you finish reading this book, you can go to your boss and ask him for a promotion.

Why? Because using design patterns will allow you to get your tasks done twice faster, write bugless code and create an efficient and reliable software architecture.

How to become programming guru?
The main difference between a programming guru and a novice is the knowledge of secret coding tricks, as well as awareness of most cornerstones and the ability to avoid them.

Design patterns were created as a Bible of avoiding problems related to software design. Isn’t it a true guru’s handbook?

“Bugless code” after learning design patterns! I must be a poor learner, because I still have bugs in my code and I’ve lived with the GoF book for many years now. Unless you are writing code for the space shuttle, you’ve probably written your share of bugs, too. And bosses don’t give promotions because you read a book about patterns. Mine gave me promotions because of hard work, passion, and creativity in problem solving.

“Testimonials”
If you follow through to the order page, you see the publisher is based in the Ukraine. That explains the broken English “testimonials”:

Daniel Sommers, UK

I have learned all design patterns about a 3 days with this book. Thank you very much!!!!

and

Jeremy Parkinson, USA
Four month ago I was just coder in Boeing corp. I had a lot things to learn to get a level up in my skills, and I started with this book. Now I am a software architect and I happy, because nobody in my department is so good with programming as me!

I’d be pissed off if I were Boeing. That “testimonial” makes me think the talent there must be terrible. Boeing does “aerospace engineering.” Rocket scientists. Literally. I suspect they are a smarter bunch than “Jeremy Parkinson.”

Free Book Offer:

Buy our book now and get a free gift! (limited offer)
It is classic “Design Patterns” book by “Gang of Four”.

Amazon is selling the classic GoF book for $38, but this publisher is going to sell you a PDF for $20 and give you a $38 book for free. If they gave a single GoF book away for free, would that be considered a “limited offer”?

The odd thing is that the quality of the rest of the site appears, at first blush, quite good. The writing on the pages describing each of the patterns is good and without any outlandish claims. It makes me wonder if they didn’t get that copy from somewhere else. Regardless, the content on the site is sufficiently good that one wouldn’t need to buy their PDF.

Save your money. Or better yet, buy the real GoF book. It’s a classic for a reason, and there are products that nicely complement the book, like a wall poster detailing the original patterns in a striking visual way.

The Accidental, The Essential, and Corporate Earnings

Fred Brooks famously wrote about accidental vs. essential complexity in his seminal essay No Silver Bullet. If you’ve not read it, I think you owe it to yourself to borrow someone’s copy of the Mythical Man Month and check it out. I believe No Silver Bullet provides a corollary to business and corporate quarterly earnings.

Briefly, Brooks asserts that accidental complexity is the “how” part of programming, such as how we manage memory, parse text, or use editors to write code. Garbage collected languages help manage memory, excellent libraries have emerged to help us parse text (like RegEx), and IDEs get better every single year with support for code completion, intellisense, refactoring tools, and even support for dynamic languages!

Each of these improvements, while welcome, only address the construction process of building software. None of the examples mentioned help attack the “essential” complexity of solving the problem at hand. No amount of tooling will help organizations better understand the problem, increase quality, improve poor designs, or otherwise reduce the complexity of the problem itself. Software construction — the act of actually writing software — is a small fraction of the cost and schedule, while requirements analysis, specification, design, and thorough testing for software fidelity represent the large majority of cost and time when building a product. No tools exist to slay this werewolf. Writing software is hard.

I’d like to posit that business governance is no different. Within a business, there are accidental and essential problems to solve. Both affect the bottom line, but the former will not provide an order of magnitude growth and the latter will always be a hard problem to solve. Wall Street likes to see companies constantly growing to justify any premium or P/E ratio given to the stock.

Accidental complexities in a business are the expenses incurred by normal operations. Payroll is the largest expense an employer has. Facilities and maintenance is another substantial portion of expenses, as is the cost of goods sold for those manufacturing products.

Organizations can increase quarterly earnings by tackling each of these accidental complexities. A business can find the optimal headcount to keep payroll costs as low as possible. Companies can tap into new green building techniques that put gardens on rooftops which help keep the building cooler, thus reducing the business’ energy costs (with a win/win scenario of helping the environment). A business can find a new paper supplier to reduce the cost of stationery or switch to new technologies to remove the paper trail entirely. Programs like Six Sigma help a business achieve higher quality on manufactured goods, reduce costs, and operate at higher levels of efficiency. Highly effective COOs are worth their weight in gold, but there is a fundamental limitation to each of these examples. All of them tackle accidental complexity, and none of them address the essential problem of growing the business itself.

There is no single expense reduction, no single improvement to operations that will grow a business by an order of magnitude, thus making it accidental complexity. Quarterly earnings improvements provide a temporary boost to the company’s stock price, but is quickly forgotten by Wall Street as they look to the next quarter.

Some companies achieve astronomical top line growth for periods of time. Their stocks may double, triple, or even quadruple in value in a year or two. These are exceptional growth rates for exceptional companies. They are not the norm, nor do they represent an order of magnitude in growth. Eventually, all growth companies slow down as the market changes from a growth industry to a mature one. Just take a look at Microsoft. They post excellent numbers every quarter with consistently growing earnings that are predicted, telegraphed, and boring to analysts. It’s a big, mature company in a huge, mature industry. Today, Microsoft struggles in every market they enter that’s not part of their desktop/office business.

The hard problem of growing a business remains. There is no silver bullet.

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