Friday 6 January 2017

Stock Market Index: The Barometer of Business Elitism

As more and more people have investments linked to stocks and shares, so more people become obsessed with those ticker-tape numbers that roll by on the business news: FTSE this, DOW Jones that, yada yada. Only recently did it dawn on me how toxic these numbers could be. Just like GDP, which I've written about before, there is an almost unanimous view that bigger is better - up is good and down is bad. This is such a woeful simplification as to be dangerous. Touted as a proxy for the health of the business economy, these number (stock indices and GDP) have the potential to drive policy, with unintended consequences. Give the goal of raising GDP to an AI and it might suggest measures to increase crime, car crashes and climate destruction - all great for the economy by that simplistic measure.

In the case of stock market prices, it's not just the bundling of the bad with the good that is the problem, but also the promotion of elitism and inequality. Why? Because the most commonly quoted indicies focus on such a staggeringly narrow slice of the business pie. In the case of the UK it's the FTSE 100 - yes, just 100 companies! Laughable? Well, save your breath. The US Dow Jones Industrial Average includes only 30 companies! Yup, the state of the entire US business economy is based on the value of just the 30 largest companies. And indeed, a change in value of these few companies has a knock on effect to sentiment around the world. So, anything that can be done to bolster the value of the likes of ExxonMobil, McDonalds, Coca-Cola, Wal-Mart is ... good. But ... umm ... what?

Let's look at what this means with some examples, using the generally held belief that Up is Good:
  • If Sainsbury's (or Starbucks) opens up a new store (increasing its value) and a bunch of smaller businesses in the area struggle or fold because of it, this is: GOOD.
  • If a large listed company, say, Sports Direct (or Home Depot), swallows up all of its smaller rivals, that is: GOOD.
  • If British American Tobacco run a successful ad campaign to children in developing countries, this is: GOOD. (I know, this is the counting-the-bad problem, rather than the elitist problem, but I couldn't resist).
  • If a bunch of agile, innovative tech start-ups win some business off one of the Big Boys, this is: BAD.
So basically, the FTSE or Dow Jones going up really only tells us that the Top Dogs are doing well. I'm sure that will make us feel better. And widening the net, to the FTSE 250 or All Share index in the UK, doesn't really help, because the majority of businesses are not listed on any market.

The conclusion is the same as for GDP. We need to stop fixating on numbers that don't represent what we think they do and start putting more effort into measuring (and paying greater heed to) what's really important: happiness and well-being.

Saturday 29 December 2012

Pay As You Go: The eBook Pricing Revolution

Preparing to go on holiday recently I downloaded three books onto my Kindle.  One fiction, two non.  For the latter two I downloaded the preview before committing to a purchase.  This is a useful feature, but the problem with previews is that they generally start at Page 1 (no really) and consist largely of preamble - preface, acknowledgements, introduction, yada yada - with very little content by which to judge the remainder of the book. In a real shop of course I would have flicked through the book haphazardly to determine whether it was what I was after.  As it turned out neither of these were.  I didn't read much of them, and I doubt I ever will.

It was at this point that something occurred to me that, in retrospect, is so blindingly obvious that I will reject any claims of my genius for conceiving the idea.  It regards the purchase of electronic books and is almost too simple to make anything of it:

  • Only pay ... (wait for it) ... for what you read.
That's it.

It would work like this.  Say there is a 399-page book which costs £3.99.  Of course, I don't know whether I'm going to like it or not: books are very subjective, especially fiction.  No matter, though, because it costs nothing to download.  (I could download a couple of dozen before a holiday, say).  Only when I read Page 1 does it cost me anything, and only a penny at that; then I read Page 2 and it costs me another penny; and so on.  If the book is good enough to keep me to the last then I will pay the full price (and be glad to); but if however I give up before the end of the first chapter then it'll only have cost me, say, 30p.  Perfect.  The holy grail of pricing policies.

But more than just benefitting the consumer in the obvious way it is the ultimate mechanism for driving quality into the output of the industry.  If people people only have to commit to paying for what they read then they are more likely to try books by new or unknown writers.  And, on the flip-side, if the latest 'best-seller' from an old favourite doesn't cut the mustard, and doesn't actually get read, then the author (and publisher) will only get paid accordingly.  Big name authors (and non-authors!) could not afford to get lazy with their content and publishers could not afford to churn out rubbish riding on the author's celebrity.

The technology exists to implement this and, as with the ebook revolution itself, it would be another great step forward in levelling the playing field for all writers.  Of course, the stuffy old publishing industry will resist the shift, because they are backward and greedy, and fearful that they might actually have to publish decent readable books, not just ones where the author's name on the cover is larger than the title.

But the likes of Kindle are powerful.  Amazon could drive this revolution on its own, because no publisher could survive without them.  Or maybe it will be one of the other ebook platforms that strike first.  Because this could just be the edge they need to regain some ground.

Either way you read it hear first ... that'll be 1p please.

Tuesday 11 September 2012

Texas Death Penalty Paradox

If you didn't think Texas was crazy already; and if you didn't think the death penalty was crazy already; just consider this mind-blowing concept:

In Texas, they determine whether a murderer should face the death penalty based on whether s/he is intellectually impaired, which is defined as an IQ of lower than 70. Texas Puts Man With 61 IQ To Death

Okay, seems sensible enough, until you consider the implications:

So they give an IQ test to a defendant and say, "If you do well on this test, we'll kill you." It's fair to say there is a heck of an incentive to do badly, and luckily enough doing badly on an IQ test is really easy. In fact, if someone facing death by virtue of a high IQ score, is so dumb as to actually score highly, then they must be just intellectually impaired as those with a low score.

Friday 8 June 2012


It's interesting how technology, as well as having the potential to propel us into the future, has the equal ability to bind us to the past. The need for 'backward compatibility' - either in technology itself or the people using it - often prevents us making those let's-just-scrap-it-and-start-again leaps forward (any Windows users over the last two decades will be painfully aware of this). It's not always a problem, of course, as with the most immediately obvious example: the layout of the buttons I'm striking right now. Mind-blowingly the QWERTY layout was first devised in 1870 (to prevent type-writers from jamming); and it'll be with us as long as we're still using our fingers for the job, because, well, it actually works pretty good.  But sometimes the throwbacks aren’t so agreeable...

The origins of my current bugbear are back in 1985, which seems quite recent to some of us, but then let me remind those same people that Shakin' Stevens had the UK Christmas Number One that year; and even if he was aware of mobile phones at the time he certainly wasn't informed by text message, because they hadn't been invented yet. But this was the year that some bright spark first decided to add a short text messaging feature to the mobile telephony standard.  And, to cut a long story short, eventually the boffins figured out how they could squeeze a whopping 160 characters (7-bit for the geeks) down the control channel usually used for setting up voice calls. SMS was born.

Now, I would never have expected that over a quarter of a century (and no more Shakin' Stevens No. 1s) later my creativity would still being constrained by that 1985 limitation. Not when I am texting - oh no, seamless linking of multiple SMS messages did away with that years ago.  No, it's Twitter, I'm talking about.  And because space has to be reserved for the username when sending out tweets as texts, the limit is even lower: 140 characters!  That's 12.5% fewer than the bolted-on-at-the-last-minute 80's mobile texting technology.

Yeah, yeah, I get it.  Micro-blogging.  And yeah, yeah, I get it, many people around the world still use SMS to access Twitter.  But, to be honest, tough.  It's too late - the bird has flown.  Few people accommodate those users now anyway - they are oblivious to them.  A huge proportion of tweeters now circumvent the 140 character limit by just posting links to blogs (of the non-micro variety), which kinda defeats the point, and which people with non-smartphones can't access anyway.

So it's time to admit it. 140 characters just isn't enough. Don't get me wrong, I'm not suggesting to remove the limit altogether, because I do buy into the concept. I just think the number was never right in the first place. So, let's bite the bullet and double it.  Simple.  Retweet #twitter280 if you agree and let's get it trending ... because length does matter!

[PS: apologies to all those third-party developers of Twitter-related apps who've used statically allocated arrays - but, well, that's just bad practice.]

Friday 18 May 2012

Hardcover Story

Don’t get me wrong I’ve got nothing against ‘milking’. It brings back fond memories of A-Level economics.  I think we called it ‘price differentiation over time’ back then, and it’s ubiquitous in the marketplace, from train tickets to PlayStations. But the publishing industry is the only example I can think of that feels it has to dress it up as a different product. In this resource-conscious time, the right thing to do is bring the paperback out immediately and steadily bring it down in price. It’s not the price I object to, it’s the form factor. Of course, I know, this is not something an individual author or even publisher has much control over – the industry ‘just doesn’t work that way’. But my concern is that this is another sign the industry is unwilling to move with the times, to defend itself. Those pesky indie- and self-publishers (ahem) have mobilised – and, believe me, they’re not packing hardbacks.

(This was written to elaborate on my recent tweets regarding what will likely be my last ever purchase of a novel as a physical book, Killer Move by Michael Marshall (Smith))

Tuesday 3 April 2012

Smartphone App 'Immaculart' Kick-Starts Global Recovery

[Still trying my hand at those tabloid headlines - expecting a call from Murdoch any day]

So I posed a question in my last blog post:

What class of product generates value from thin air?

Well, with no further ado, the answer I had in mind was...


Not everyone likes art, I know.  But a lot - I'd say most - do. And the beauty of art (beyond the aesthetic kind) is that it can be owned at effectively zero cost.  It can be enjoyed without being consumed, appreciated without depreciating. It is an asset.  I'm not saying that if you are silly enough to buy a painting of a dot for ten grand that you'll ever recoup your outlay.  But if you discover a piece you really like and you're willing to pay a couple of hundred quid for it, then you can pretty much guarantee that there are a thousand other people out there that would do likewise.

And it is this ability to be both consumer product and asset at the same time that makes it a very useful tool for redistributing wealth in a socially ethical way (unlike, for instance, the insane notion of a lottery!! - sorry pet hate).

Of course many artists face difficultly in getting their art seen by those thousands who might appreciate it. So a few months back, when I had my epiphany, I began work on a little project. And at long last it takes its first tentative steps into the real world.

The project is called: immaculart.

It's an art gallery. For your phone.

It's an app where you can browse and buy real art by real artists.  And, also, for a more passive experience, you can allow the app to change your wallpaper periodically to a great piece of art from our collection.

Right now, it's just in a pilot phase, but it's live and you can try it out - only on Android at the moment I'm afraid.  But if it goes well, it will be made available on other platforms and more features are in the pipeline.

So, if you like art, do download the app, give it a try and let me know your thoughts (or any problems).  Or if know an artist, tell them to get in touch.  This is a way of them getting their work out to the world.

Contact me on or any of my other email addresses :)

Monday 2 April 2012

Elixir of Value

So we all know that encouraging people to spend money is one way of stimulating the economy. But that's about as limited a notion as trying to measure the extent of that stimulation via GDP. After all, having a car crash stimulates the economy, and adds to GDP (by virtue of all the medical treatment and car fixing involved), but no one's suggesting we encourage those. The problem here is in measuring output and not outcome (a really nice way of putting it borrowed from Umair Haque).

But this is all covering ground I've discussed before. The point that's important here is that what we spend our money on is crucial. We have lots of choices on that front, and their outcomes are all different, so you'll be glad to learn I am not going to begin analysing them all here. But in putting thought to this a little while ago I stumbled across a particular type of product with a very special property: it generates value from thin air.

Let's just consider the individual cost of buying a normal product. If you spend, say, £500 on a TV, how much has it cost you? £500? Well no, because you now have a TV, which has a value. But it's now secondhand, so scarily enough it's probably already depreciated 50%. So the actual monetary cost to you is about £250. Over time it will depreciate to nothing and will cost you the full £500, but over that time you will value the utility from owning it at far greater than that. So all is good. But not great. We generated some value and then saw it witter away into nothingness.

Now, diamonds are cool (of course) - as are many minerals. They don't depreciate. If you spend £500 on diamonds, then they are still worth £500. And over time they are likely to actually appreciate in value.  Awesome. But, these already exist. All of them. There are only a finite number of diamonds in the world - that's why they hold their value. So there is no generation of value here - just the moving of it about a little.  (Without going into detail, houses can be considered similarly. Because, it's mostly the land that gives a house its value, and that is finite also.)

What if there were a product that could be made from basic materials, such that it has added value over and above those materials (just like a TV), but that then appreciates in value over time? That would be ... really interesting. Why? Because, if person A (Alice) could make these things, and person B (Bob) wanted one, then a rather intriguing scenario ensues. If Alice has £20 and Bob has £500, and Alice can make a product from £20-worth of raw materials that Bob is happy to pay £500 for, then Alice now has £500 and Bob has something which is worth £500 (and will be worth even more in the future). We've generated permanent value from nowhere!

Is this possible?


So what is this magical product? Well, let me know your thoughts...