Economics

Putting Your Media on a Diet

When you type an address into your web browser and are brought to a web server, a lot of decentralized magic happens within the span of a few seconds. Through the web, we have an infinite media available to us.

It as though you have a beautifully-maintained bookshelf and run your finger along the spines of the books, and then pluck out the one you want. But the sci-fi part, which is more science than fiction today, is that the bookshelf has millions of virtual entries and the information you want is delivered to you instantaneously. Once this virtual book is delivered (once a website is loaded), it can be frequently refreshed with real-time updates, and it exists in a form that can be navigated, searched, read, spoken, heard, shared, saved-for-later, or even automatically analyzed and summarized.

This is a lot of power for each individual to wield.

That is a lot of text to choose from, with which you can train your brain.

And that is even if you put aside the world of paid digital books via Amazon’s empire of Kindle. By the way, this Amazon empire need not cost money to you in the US, as you can often gain (adequate) free access to it via your local library on the Libby app.

So, one thing is for sure: there are a lot of words to choose from when deciding what to read. But this also means that an individual faces a paradox of choice when they click into that blank address bar in their browser.

Will they, like so many others, ignore the address bar and the browser altogether? That is, despite having the “infinite bookshelf” at their fingertips, will they, instead, hit an app shortcut to one of the major passive content delivery platforms, like Facebook, YouTube, Instagram, or TikTok?

Recent research from Pew suggests that major passive-consumption mobile apps are used by a majority of Americans, and, what’s more, that usage of the most video-forward of these (YouTube, Instagram, and TikTok) is nearly universal among people 18-29 years old. As for teens, 9 out of 10 of them are online (presumably via smartphones) every single day, and nearly 5 out of 10 are online “almost constantly.” This comes from a 2023 report.

Original artwork for “Amusing Ourselves to Death.”

If you read between the lines of these two reports, what comes into a focus is a culture of individuals addicted to video streaming devices in their pocket, filling inevitable moments of boredom with hastily- and cheaply-produced sights and sounds, rather than retreating to the world of written words. And, unsurprisingly, people are reading less.

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Over-Organization (1958)

This section of Brave New World Revisited, a long essay by Aldous Huxley reflecting on his own novel many years after its publication, can be found on Project Gutenberg Canada; if you enjoy it, I recommend you purchase Brave New World & Brave New World Revisited, which includes the original novel (1932) and Huxley’s essay (1958), along with a wonderful foreword by Christopher Hitchens (2003), published by Harper Collins here.

As a computer programmer and software entrepreneur, I like to make order from chaos. But, as Huxley argues quite well in this section entitled “Over-Organization” in his essay, a little too much order may be at odds with a very human freedom.

Though written over sixty years ago, and though reflecting on a future technocratic world state originally envisaged in the author’s mind nearly a century ago, this excerpt feels unbelievably modern when read from a 2020s vantage point. And yet, Huxley was writing during the heyday of mid-20th-century industrialization, but right before the beginning of the information age and the rise of pervasive computing. As a result, he couldn’t foresee the new forms of “over-organization” we’d face after the digitization of everything.

In Huxley’s fiction, he predicted that the systematization of daily life would eventually arise from a combination of state power and genetic technology. But in his non-fiction analysis of modern times, he recognized that it would most rapidly arise from corporate power and a general advancement of industrial technology. This we have witnessed in the decades since his passing.

We who work in software and who see a certain beauty in large systems and the organizational models they enable should, perhaps, take a moment to reflect on humanity’s deepest fact: that each human being is unique, and we are only truly happy when there is individual freedom of thought and action.

The rest of this post is Huxley in his own words. Please enjoy Huxley’s thoughts on “over-organization” below.

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A Different Way — Thoughtful Financing, Or Why We Said “No” to a Lot of Money

Note: This post was authored by Sachin Kamdar, my co-founder at Parse.ly, in 2017. It was written as CEO of the company we started together, but reflects our joint attitude, at least at that moment in time, toward fundraising. It is hosted on my blog as an archival project for the MuckHacker group blog we started a few years back.

I felt pretty good at the start of 2017. My company, Parse.ly, had just executed its best quarter without exploding expenses. We’d built the business to a point where we effectively had unlimited runway to stay the course and still grow. However, coming off of such a successful year made me realize how much more we could do.

2016 gave us a taste of how impactful launching new products and working with differentiated customers could be for our business. We’d only scratched the surface. I knew what we had in the bank wasn’t going to be enough to capture the full opportunity in the market. We needed to fundraise if we wanted to accelerate our momentum.

Sachin Kamdar, CEO at Parse.ly (left); Andrew Montalenti, CTO (right)

I know I’m preaching to the choir when I say fundraising is hard; the numbers are against us. Mattermark found that on average, just 17% of companies that raise a Series A go on to raise a B and that number dwindles to 0.3% for later rounds.

While raising capital is hard, there’s an emerging debate as to whether growing your business organically from customer revenue is even harder. The founder of Basecamp lambasted the VC market for misalignment with entrepreneurs, suggesting the market was architected with few windows for success, instead encouraging growth at all costs.
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The Great Reckoning in Digital Attention

Note: At the time of this post’s publication, I was the founder/CTO of Parse.ly, a company that worked closely with major media companies on a real-time analytics platform.

The attention economy is broken.

Brands are spending billions of dollars on a complex digital ad ecosystem to influence consumers, but with often terrible results. Publishers, meanwhile, have never had bigger digital audiences — but they only earn a fraction of the revenue, mainly due to the power of the Google/Facebook adtech dominance.

Spending on Google and Facebook ads exploded between 2010 and 2016, as shown by the orange areas above. Google and Facebook also have about half of all the advertising revenue in the Internet category. It’s very likely that by 2020, that will be closer to 60–70%, with every other Internet publisher on the planet fighting for a shrinking portion of ad dollars.

Consumers — you and me — are the ones footing the bill. We see increasingly slow page load times for publisher pages which are bloated with ad tech vendor code; increasingly invasive ads from brands who are desperate to catch a click; and, a media trend toward outrage, rather than thoughtful debate.

On this last point: it is outrage, not truth, that prevails in an Internet economy built around attention capture and auction, which is how our programmatic digital advertising ecosystem works.

This is because outrage — through a quirk of societal and brain evolution — is more effective at capturing our time. Indeed, as we’ve been learning, outrage decoupled from truth is one of the most engaging forms of content on the web.
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He Who Controls Traffic Reigns King

Note: This post was authored by Sachin Kamdar, my co-founder at Parse.ly, in 2016. It was written as CEO of the company and when he refers to “we” in the post, he is speaking about Parse.ly’s customers, most of which were independently-run top-ranked websites who were struggling to compete on the open web with the digital advertising and internet traffic duopoly held by Google and Facebook. It is hosted on my blog as an archival project for the MuckHacker group blog we started a few years back.

Last week we saw earnings reports from the two giants of the internet: Google & Facebook. Alphabet (formerly Google) beat expected earnings handily in Q3 2016 and announced a $7B buyback. Facebook did the same showing that a slowdown in user growth doesn’t equal a slowdown in revenue growth.
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The Twitter growth conundrum

Note from the future: this post written in November 2016. A lot has happened to Twitter (or, Twitter/X) since then. But, the fundamental analysis of Twitter’s growth dynamics outlined in this post continues to hold true even 8+ years later.

Twitter is the public Internet company everyone loves to hate these days. It’s not growing. No one wants to buy it. And people are genuinely confused: what, exactly, is Twitter? Is it a social network? A “micro-blogging” platform? A “live events destination”? A social data company?

Twitter 2011–2015 user growth.

I am one of Twitter’s active users, tweeting on topics such as analytics, Python programming, and the media industry, in which I work. In my day-to-day dealings with journalists, editors, social media managers, audience development folks, and others in the media industry, it’s clear Twitter has a special position among the professional class of media raconteurs.
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Improving a surface interpretation of “big data”

A silly little piece appeared in The New York Times discussing a hypothesis of a Harvard economics professor that Apple might slow down its operating system ahead of major product releases in an attempt to encourage consumers to upgrade.

One of his students used Google Trends data to investigate this hypothesis. In the article, two graphs are compared — one that shows Google Trends search volume for “iPhone Slow” and the other for “Samsung Galaxy slow”.

It is shown that the spikes in searches for slow operation of Apple’s products seem to correlate with new iPhone release dates, whereas there are no search spikes in the data for the Samsung Galaxy.

These graphs are horribly misleading on their own. Both products have grown in popularity over the years, so the increase in search volume over time reflects nothing more than their widespread mainstream popularity. This could have easily been removed from the graphs by adjusting these trendlines relative to the “base” searches, e.g. “iPhone” and “Samsung Galaxy”. In the graphs as shown, it’s hard to tell whether little spikes are actually hidden within the compressed and precise trendline for the Samsung Galaxy.

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The content trading desk

Note: At the time of this post’s publication, I was the co-founder & CTO of Parse.ly, the company behind a a real-time analytics platform used by top publishers such as The Wall Street Journal, Bloomberg, Slate, Fortune, TechCrunch, and over 2,500 others. This post was informed by that work experience.

My first job out of college was as a software engineer for Morgan Stanley. This 50,000 employee firm employed tens of thousands of software engineers. Though the most important employees were the traders, it was clear that software ran the place.

For anyone who has worked on Wall Street in the last couple of decades, this is no surprise. It may be surprising to people from outside the industry, who perhaps still associate Wall Street with traders wearing funny jackets calling out orders across a busy NYSE trading floor. That still goes on (though, probably not for long). Most of the trading activity on Wall Street is heavily computerized. Orders are placed and fulfilled mostly by machines.

Once the markets went digital, data analysis became a much more rigorous discipline on Wall Street. Whereas before, a trader’s primary edge was being personally connected to the most important players (think Gordon Gecko), today’s traders seek edge in systematic prediction models. In other words, other machines analyze the orders being placed and fulfilled on the market, and yet others try to detect patterns or make predictions based on all of this data.
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Capital, public good, and the real economy

Every once in awhile, I get this strange feeling that the entire economy is a sham, my optimism in capitalism and entrepreneurship a farce, my own path much more manufactured by a system than carved out on my own. Luckily, these moments are fleeting, so I am able to go on with my life, pursuing my goals confident that the end result will be substantial public good, and even a personal gain.

One of these moments happened recently when I watched the documentary An Inside Job. Though the facts presented by this excellently-shot film were not new to me — I had heard the same facts in the writing of Matt Taibbi, the Giant Pool of Money special on NPR, the terribly underrated film The New American Ruling Class, and on blogs such as Naked Capitalism and 13 Bankers — no other single source of information has so connected the dots between the political, academic, private and public problems which culminated in the financial crisis we witnessed in 2008.

Joseph Stiglitz recently wrote an article about the richest 1% of Americans, and their increasingly better relative wealth and income over the last 30 years. His points are well-argued (and again, nothing new for those well-versed in history of economics of neoliberalism). But, perhaps most interesting is Stiglitz’s recognition of the shrine of finance.

To give just one example, far too many of our most talented young people, seeing the astronomical rewards, have gone into finance rather than into fields that would lead to a more productive and healthy economy.

John Maynard Keynes also had something to say on the subject:

For my part I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight. But, capitalism in itself is in many ways extremely objectionable. [… As for] Economics, it is a very dangerous science.

When I swirl that together with my vantage point in 2011, looking back on the crisis of 2008, I find it very hard to not wish we were doing a rethink of the system altogether.

It is not enough that the conditions of labour are concentrated in a mass, in the shape of capital, at the one pole of society, while at the other are grouped masses of men, who have nothing to sell but their labour-power. Neither is it enough that they are compelled to sell it voluntarily. The advance of capitalist production develops a working class, which by education, tradition, habit, looks upon the conditions of that mode of production as self-evident laws of Nature.

The organisation of the capitalist process of production, once fully developed, breaks down all resistance. The constant generation of a relative surplus-population keeps the law of supply and demand of labour, and therefore keeps wages in a rut that corresponds with the wants of capital. The dull compulsion of economic relations completes the subjection of the labourer to the capitalist.

Direct force, outside economic conditions, is, of course, still used [at times], but only exceptionally. In the ordinary run of things, the labourer can be left to the “natural laws of production,” i.e., to his dependence on capital, a dependence springing from, and guaranteed in perpetuity by, the conditions of production themselves.

But, then I snap out of it. Of course, I don’t have to tell you who wrote that quote and what that thinking led toward in history.

“Facile anti-intellectualism is the order of the day”

A book review by Thomas Frank, on a biography of John Kenneth Galbraith.

What astonishes the contemporary reader is, first of all, that a genuine, independent intellectual like Galbraith was permitted to serve in government, let alone become the confidant of presidents. Facile anti-intellectualism is the order of the day now, as even Democrats race to embrace the free-market logic of the Chicagoans. The ”New Industrial State” that the great liberal economist described in 1967 is now Public Enemy No. 1 of financiers and rebel C.E.O.’s determined to, as Tom Peters put it in 1992, blast ”the violent winds of the marketplace into every nook and cranny in the firm.”

Yet reading Parker’s comprehensive account of the 20th century’s economic battles, I can’t help thinking that this ought to be Galbraith’s moment. An old-school scoffer like Galbraith would remind us that all our elected officials have done with their heady incantations of the virtues of privatizing Social Security and the glories of deregulation is resurrect the superstitions of our orthodox ancestors, and trade in our affluent society for a faith-based 19th-century model in which the affluence accrues only to the top.

Or, as I sometimes like to put it, “Economics is too important to be left to economists.” Galbraith would have agreed.

Seemed particularly relevant to me as I have just finished reading books by Galbraith and Frank in the last few months.