FEBRUARY / MARCH 2014 $12.95
ISSUE XVI
ART E N T E R TA I N M E N T DESIGN TECHNOLOGY
FACEBOOK BUYS WHATSAPP FOR $19B: Boneheaded or Brilliant?
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CONTENTS
Facebook Paper Inside the brief life and untimely death of Flappy Bird Facebook buys Whatsapp for $19B
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Whats the secret to making wearables that people actually want?
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What to expect from Facebook in 2014
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This guy’s building a tsunami-proof pod in his Silicon Valley backyard
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06 Why indie game thrive without 10 devs big publishers 22
8 ways Tech has completely rewired our brains Lifelogging: the most miserable, selfaware 30 days I’ve ever spent
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Goodbye, Popcorn Time! The Bitcoin bubble and the future of currency
28 #Howto: Coachella
The future of iOS design?
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I wanted to work at Apple really bad, and now not so much...
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38 39 49
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FACEBOOK PAPER
Can Facebook overcome the burden of being Facebook?
Paper, Facebook’s new iPhone app, is a confident product from a company that’s been slow to master the nuances of creating a fine mobile app. Out today, it’s probably the best Facebook has ever looked. But behind those looks lies a smart strategy to turn Facebook into a publisher of original content. Maybe, like Facebook Home, it will crash. But it’s still a fascinating window into how the company might eventually face off against media brands and content publishers. Created by a small group of star designers and engineers operating as a sort of startup within the company itself, Paper isn’t a replacement for the official Facebook app so much as an alternative to it. Nevertheless, it’s far more polished and satisfying than Facebook’s other offerings, letting status updates and pictures luxuriate in a fullscreen layout instead of relegating them to a cramped vertical feed.
Matas is a UI wunderkind who was hired by Apple at age 19. There he was responsible for shaping the look of a staggering number of applications, from the first Photo Booth app for OS X to the camera, photos, maps, and settings interfaces for the original iPhone. After that he helped create the UI for the Nest thermostat.With his start-up Push Pop Press, Matas tried to solve the vexing problem of incorporating multimedia and interactivity into digital books without losing the essential simplicity of the real thing. Facebook acquired it in 2011.
The most radical aspect of Paper, though, is that it isn’t predicated entirely on your friends. In addition to giving you a new way to leaf through their updates, the app also comes with a handful of sections for topics like tech, sports, and cooking. Here, algorithms and human editors will pull together a variety of content, collating stories from big-name publications and choice offerings from lesser-known blogs—and one other, very important source. Mixed in with all that will be the best publicly posted content from Facebook users, as handpicked by the curatorial team.
The central question with Paper, says Matas, was a similar balancing act. “How do we design something on a screen the size of a credit card that will bring in some of the influence of older print design? That led all of our decisions.” Their first step was to strip away the visual junk that usually accompanies smartphone apps.You’ll find no navigation bars and on-screen buttons.The app is built around a few simple gestures.
Paper is thus something of a Trojan horse, meant to transform the idea of what it means to use Facebook in the first place. By expanding the scope and quality of content you can expect to find there, Paper is trying to position itself as a place you’ll go for news and inspiration–and, just as importantly, as the kind of place you’ll want to contribute to yourself. A Beautiful Way to Read Facebook has been toying around with the idea of building a reader for years. Mark Zuckerberg has said that he wanted
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to make Facebook “the best personalized newspaper in the world.” As the designers of Paper explain it, though, what they had in mind was something closer to a glossy monthly periodical. “Picking up a feed on your phone is nowhere near the experience of picking up your favorite magazine and flipping through it,” says Mike Matas, the lead designer on the new app. The plan for Paper was to change that.
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The design focuses your attention on just one thing at a time: You flip through updates one at a time. Each photo album, web link, or single sentence status update gets a chance to fill the whole screen. There isn’t a trace of the dense vertical stream of content popularized by Facebook’s NewsFeed. “We’ve talked about it almost as going through a museum,” says Matas, “Where you tilt your head and try to understand what the person was trying to say.” One of Paper’s most impressive design accomplishments is a grid-based UI that can accommodate all these different types of content. “One of the interesting things with Paper is the texture you get,” says Matas. “It’s the texture you get when you’re looking at a magazine.”
The coolest part about it, of course, is that it didn’t end up looking anything like Facebook at all.
Paper will live or die by the quality of its content. In Facebook’s promo video, we’re whisked into a world where everyone posts well-composed photos of the California sunset and dashes off thoughtful status updates several times a day. One woman publishes a sonogram of her unborn child while taking a bath. It think it’s safe to say that’s not a common use case. A quick look at my own feed reveals what I imagine is a more realistic cross-section of content: Beyonce lyrics and links to BuzzFeed. How can any perfect pocket magazine improve the Facebook experience if the pages are filled with crud? Matas sees it as a chicken-andegg type problem. Today, he argues, people are well aware that their status updates get piped directly into the firehose, and there’s not much incentive to contribute good stuff. Build a better container, and the content quality will rise as well. Paper looks to solve that problem in two ways. One, it beautifies the way the content is displayed, bringing the final product to the level of Tumblr or Medium. Further, Paper comes with publishing tools to match. Like Medium, the app shows a preview of how your post will look. Thus, posting stuff to Paper will cease to feel like anything resembling “updating Facebook” at all, and more like putting out a news article. Paper was designed by a close-knit team under the banner of Facebook Creative Labs, who had autonomy to pursue their own vision. Image: Facebook Paper also aims to solve the quality problem with one very big carrot: The chance for contributors to reach a massive audience, on any of of a number of specialized sections. And unlike Twitter, each of those sections is staffed by editors
charged with elevating those people making good stuff. Out of the dozen-plus sections that will be found in Paper at launch, only a couple will focus on news.The rest will put an emphasis on creative content. “With these different sections, if you’re an artist, you can share it on your Facebook,” he says. “We’ll feature these people.” Cool by Dissociation Mark Zuckerberg has argued that Facebook doesn’t need to be cool to win. “Maybe electricity was cool when it first came out, but pretty quickly people stopped talking about it,” he said last fall. “Are fewer people turning on their lights because it’s less cool?” The trouble with that analogy is that our relationship with Facebook today isn’t one of dependence so much as habit. At this point, we have all sorts of avenues for sharing, promoting, and consuming. Every time someone posts something to a competitor, that’s one page that doesn’t end up in Facebook’s lovely magazine. But by launching a product that celebrates content, Paper could win back some of that valuable engagement. That’s a war Facebook plans to fight on several fronts, with a portfolio of focused apps, such as Messenger and Instagram, instead of a single do-all mobile tool. Not that Matas and his close-knit team of fellow designers were necessarily thinking about all that when they were making the app. The coolest part about it, of course, is that it didn’t end up looking anything like Facebook at all.
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INSIDE THE BRIEF LIFE AND UNTIMELY DEATH OF FLAPPY BIRD In May, Dong Nguyen uploaded a new game to the iOS App Store. It was just one of the hundreds of apps added to Apple’s iTunes marketplace each day. In that way, it was just another game. But it would prove to be anything but. Nguyen had created a simple game in which the player controls a funny-looking bird by tapping the screen, and it needed a simple name. He called it Flap Flap, until he realized another app had the same title. Luckily, developing and updating games on the App Store is such a fast, iterative process that he was able to quickly retitle it Flappy Bird. Perhaps you’ve heard of it. Nguyen’s game would become one of those viral success stories you hear about from time to time, the next Angry Birds, the next Temple Run. Months after he released it, Flappy Bird shot to the top of the charts, drawing even more players, which made it even more popular, which drew in even more players. Millions of people were downloading Flappy Bird at its peak, and Nguyen was raking in $50,000 a day from the pop-up ads that appeared during gameplay. But he also was under a constant barrage of messages, insults, requests for interviews, and even death threats. Nguyen decided last weekend that it wasn’t for him. He stopped talking to anyone and pulled Flappy Bird from the App Store. He’d soared briefly and came down hard, rather like the little bird he created.This is how it all went down. Get Ready! Flappy Bird was similar to other games Nguyen had released on mobile devices, games like Shuriken Block or Super Ball Juggling. The graphics played cute homage to retro sprite art, the gameplay was extremely simple and the difficulty was jacked up high, meaning games lasted just a few seconds. The concept sounded almost too simple: Tap the screen to fly up, release to dive down, and maneuver through gaps in a series
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of green pipes clearly styled after those in the Super Mario series.The gaps were invitingly wide, many times the height of the bird. But because the bird moved so fast and dove up and down so quickly, making it through the gap without wiping out proved extremely challenging. Because you get just one point for each pipe cleared, your high score is likely to be in single digits, if not zero. For months, Flappy Bird did about as well as Nguyen’s other games, which is to say few had ever heard of it. In late October, he released a small update that fixed some bugs. A few days later, something changed — someone besides Nguyen sent the first tweet about the game. “Fuck Flappy Bird,” it read in its entirety. The game was aggravating, but addictive. And because misery loves company, players who found it wanted to vent.Throughout November, Flappy Bird slowly added users. Reviews began trickling in: One per day, then three, then 20. Its growth seemed based entirely on word of mouth as players expressed their love-hate relationship with Flappy Bird. Nguyen took to Twitter to interact with his slowly growing fan base, even promising to port the game to Android. By the end of December, Flappy Bird had clawed its way to No. 80 on the U.S. App Store’s “Free Games” chart. Then it took off. Its popularity began growing exponentially as more and more users took to Twitter to complain about its brutal difficulty. Nguyen became increasingly excited as Flappy Bird broke the top 40 most downloaded free iPhone games. Then it was in the top 10. On January 17, it went to number one, the most popular free app in the world. Fans began writing hilarious five-star reviews, claiming the game was ruining their lives. “I’m sitting in the bathtub writing this review, warning you NOT to download it,” one wrote.“My family doesn’t dare enter. My brother hasn’t taken a shower in a month.”
“All it takes is seeing the words ‘Flappy Bird’ until you find yourself, 19 hours later, fingers bleeding, screen cracked, eyes duct taped open, insomnia and paranoia set in, so determined to pass the devil bird through the impassible gates that you would sacrifice every part of your body except your thumb if it helped beat your high score,” wrote another. It was about this time that I encountered Flappy Bird, with a reaction of utter bewilderment:What is this low-budget game that looks like it took all of its art from Super Mario, and why is it becoming popular? I downloaded it, and played a few rounds. I sucked.
CNET called it “the embodiment of our descent into madness.” I kept playing. I grew increasingly pissed off that I couldn’t score more than 10 points. I was hooked. I had to talk to this guy. On January 24, I emailed Nguyen, asking for an interview. The next day, I had a response. “Wow, it is a honor to have a chance for an interview from WIRED,” he wrote. “I love your magazine and I would love to do that.” We set a date to talk on Skype. When it came time for the call, Nguyen said he’d prefer to chat via text. We got through some basic questions — his name is Dong Nguyen, he’s been making games for four years, he lives in Hanoi — but the back-and-forth was taking so long that I asked if he would prefer to answer my
questions on his own time and email them to me. He readily agreed, since it was midnight in Hanoi and he was sleepy. We signed off for the night, and that was the last I ever heard from Dong Nguyen. It wasn’t just me that asking about Flappy Bird. This infuriating game was garnering more varied reactions and passionate discussions than any iOS game in recent memory. CNN struggled to explain what makes Flappy Bird so addictive. Game critics declared that the game proved that nobody truly knows what players want. CNET called it “the embodiment of our descent into madness.” Through it all, Nguyen found himself under an increasingly bright spotlight. At first, he seemed to be handling the attention with cheerful aplomb. He tweeted back-and-forth endlessly with fans on Twitter, and was unperturbed whenever people sent him less-than-friendly messages. “I got so many mean tweets, I’m getting used to it now,” he wrote in late January. Soaring Before long, though, the negative attention on Flappy Bird started to block out the positive comments. Flappy Bird‘s continued hold on the App Store’s number one spot brought increasingly vile online harassment, some of it racist in nature. There were also death threats. As hundreds of people continued to sending tweets to say they hated the game and hated Nguyen for making it, his self-assurance began turning into self-doubt:“And now, I am not sure it is good or not,” he wrote on Twitter. Slowly, even mundane comments began to wear him down. He apologized profusely to fans who complained about the slow pace of releasing a version of Flappy Bird for Windows phones. “I am really sorry I cannot keep my promise but I am
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I can call Flappy Bird [a] success of mine, but it also ruins my simple life. So now I hate it.
trying really hard,” he wrote.“There are a lot of things happening to me right now.” The storm of criticism and negativity raining down on Nguyen brought indie game designer Terry Cavanagh to Nguyen’s defense on February 5: “Flappy Bird is kinda cool, what are you all getting so worked up about,” he tweeted. Cavanagh, whose game Super Hexagon was another iTunes success story, was among the first people Nguyen followed on Twitter. Nguyen, it turns out, follows lots of indie game designers. It’s clear from his tweets and from interviews that he wants to pursue a career as a game designer. He’s even explained that he doesn’t want to put a PR representative between himself and his fans because the “PR will make me not an indie game maker anymore.”
copying and pasting Nintendo sprites into his game. Nguyen responded that he did not copy any art and drew everything himself. This spawned a new wave of abusive comments, and Kotaku eventually retracted the story and apologized. “Flappy Bird isn’t a good video game… arguably not even a fun one,” IGN wrote on February 8, calling it “completely artless.” “Press people are overrating the success of my games,” Nguyen tweeted at the beginning of February. “It is something I never want. Please give me peace.” While the gaming press piled on to find fault with Flappy Bird‘s mechanics, other app developers tried to advance the idea that Flappy Bird‘s success was ill-gotten. They believed Nguyen had used “bots” — virtual iOS devices used to juice an app’s download numbers and get it onto the charts artificially — to get his games played, in violation of Apple’s terms of service. “I hate to say it, but it looks really similar to bot activity,” app developer Carter Thomas wrote on January 31, before adding, “Of course, I can’t prove this.” In fact, the only “evidence” of wrongdoing Thomas had to offer was Flappy Bird‘s meteoric rise through the App Store’s top 100 charts. This didn’t stop many people from assuming the worst and accusing Nguyen of being a fraud. He denied the accusations.
Flappy Bird creator, Dong Nguyen
The media coverage, especially from gaming websites, was turning negative, too. After The Verge revealed how much money Nguyen was making from Flappy Bird‘s ads, Kotaku posted a story on February 6 headlined, “Flappy Bird Is Making $50,000 a Day Off Ripped Art.” It accused Nguyen of
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Ian Bogost, who wrote about Flappy Bird for The Atlantic, told WIRED that there is really no way to tell if Nguyen cheated to get his game to the top charts. “Who cares?” Bogost said. “What is interesting is how desperate the game devs are for it to be fraudulent. They just cannot take the idea that this is a real thing.”
Falling As the week went on, Nguyen had gone from confident to unsure to depressed.“I can call Flappy Bird [a] success of mine,” he wrote on Twitter. “But it also ruins my simple life. So now I hate it.” “Good,” someone replied. “Everyone else hates it too.” “Haha,” Nguyen tweeted back. By Saturday, Nguyen had stopped laughing. He decided to take Flappy Bird off the market. “I am sorry ‘Flappy Bird’ users, 22 hours from now, I will take ‘Flappy Bird’ down. I cannot take this anymore,” he wrote.That prompted a mad rush to download the game before it was gone forever. By Sunday evening, Nguyen had followed through with his threat. Flappy Bird was gone.This only increased the attention and harassment directed towards Nguyen. “If you delete flappy bird I’ll kill myself,” wrote one player, including a disturbing photo of a woman with a handgun in her mouth. Flappy Bird‘s detractors wasted no time spinning conspiracy theories. Some suggested Nintendo must have threatened to sue Nguyen over the similarities between Super Mario‘s green pipes and Flappy Bird‘s. A Nintendo rep, speaking to The Wall Street Journal denied these claims. People couldn’t understand why Nguyen would delete an app that was making him so much money. To be fair, Flappy Bird
probably still is making money, since Apple iAds still are being served to the more than 50 million devices on which the game was installed. Nguyen also has left his two other mobile games up on mobile marketplaces, and the global attention on Flappy Bird has sent them skyrocketing up downloads charts. So the answer to why Nguyen shut down and pulled his game might just be that he genuinely wants people to leave him alone and stop playing Flappy Bird. Me-too apps have rushed to fill the gap. The top four free apps on iOS as of Tuesday were Fly Birdie, Splashy Fish, Ironpants and Flappy Bee — Flappy Bird clones, one and all. Nguyen will have plenty of supporters in the gaming community if or when he returns to developing games. A group of indie developers is even holding a game jam in his honor, with the message “Have fun, be supportive, hate must not win.” Super Hexagon designer Cavanagh joined in. “I dunno if a game jam makes sense here, but I’m annoyed and I wanna do something,” he wrote. Like others who became famous overnight, Dong Nguyen learned that success is rather like a game of Flappy Bird:The forces pulling you down are just as strong as the ones pulling you up, and either one can cause you to crash sooner than you expect.
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COVER STORY
FACEBOOK BUYS WHATSAPP FOR $19B Brilliant or Boneheaded?
Conventional wisdom seems to be seeing that Facebook paid too much to acquire WhatsApp, a mobile texting startup that is enjoying meteoric success in developing countries. At $19 billion, the price may exceed the GNP of some of those countries, so I see the point if you think that is what should be measured.
I personally, think this is a brilliant–but risky–deal, one that give Facebook a clear shot of becoming the most successful of all Internet companies in the 21st century, but I am looking through an unconventional prism. As Katie Paine, a social measurement expert has taught me, companies become what they measure.
But I don’t think Mark Zuckerberg is much of a conventional thinker. If he was, then Facebook would not have transcended from a dating site for Ivy League fraternity boys into the world’s largest social network. I am not Zuckerberg’s greatest fan, but his ability to choose roads not taken and get to important goals before anyone else has been pretty impressive so far.
Brandon Wirtz, CTO at Stremor.com in Scottsdale and I are Facebook friends. We have talked there often, but have never met in real life. I like his ideas and perspective over all, but last week we banged heads over this acquisition. He hates the deal, but I love it. He is looking at the numbers which don’t add up; I am looking at the story, which is exciting whether Facebook soars or plummets because of this buy. Billionaires Brian Acton (left) and Jan Koum
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The WhatsApp acquisition shows Facebook’s determination to follow the road not yet paved. It is a bold move, filled with peril along the way.
While I see this deal as brilliant, Wirtz sees it as boneheaded. He sees evidence that this deal must be bad because Facebook stock immediately ratcheted down upon its announcement. I don’t find much credibility in the knee-jerking, wallet-slapping reactions on Wall Street. There was a time when the place was about what a company might achieve in a few hours. Now it seems to me to be more like offtrack betting that the stock price will open higher tomorrow morning than it closed last night. Mark Zuckerberg has already demonstrated his respect for Wall Street by showing up in a hoody when he first visited the folks in Gucci suits and Ferragamo shoes before Facebook’s IPO. The stock suffered from that play but not for very long. I think he deals with Wall Street the same way most of us deal with the IRS–as an unpleasant requirement. Wall Street sees Zuckerberg as quixotic. Zuckerberg, in forging the strategy for the world’s most successful social network complies with them, but doesn’t play to them. And he is anything but quixotic. His goals are clearly stated and have been often repeated: He wants Facebook to dominate the world. For several years he closed staff meetings with employees all shouting “Dominate!” Once the company went public he complied with legal advice that this was an unwise ritual. For the last few years, he has modified his stated goal: Facebook will connect all people in the world. I first noticed him saying that in his poorly received address to Wall Street, way back in 2013. He repeated it, when Facebook announced last October that it would spend $200 million to acquire Onavo, an Israeli company that trims mobile phone costs for people in developing and underdeveloped countries, a move that was scorned on Wall Street for a few days until investors forgot about it.
Zuckerberg’s moves, it seems to me, are much more carefully orchestrated than most people realize. Facebook has a firm position in the first world where it must compete–often fiercely– with several other capable and and agile Internet companies. The real question is where are all these companies going in the next five, ten and 20 years. And what is the shortest–least travelled–route to getting there? Hs competitors follow conventional wisdom and play to the investment community in the way that most public companies feel compelled to play. Corporate strategies very often end up about making quarterly results. Zuckerberg give every possible indication that he is looking elsewhere and that elsewhere is in developing nations often overlooked or disdained by the tech elite community. That hoody didn’t play well to the house on Wall Street but the perception might have been quite different on the streets of Senegal, Brazil or India where ancient feature phones are shared by entire families and iPhones and Androids still have a few years before they find their way into the lives and budgets everyday people in developing lands. My friend Brandon Wirtz is dismissive of a deal that has Facebook paying $80 per WhatsApp customer, when many of those customers don’t make $80 in a month.That’s good conventional analysis of good conventional numbers, but I doubt that is where Facebook is looking. In WhatsApp they see a bridge into the 21st century when the world inches toward the flatness that Thomas Friedman wrote about. Facebook is taking a long view, that Google, Apple, Amazon, Microsoft, Yahoo! and other may not yet be seeing. Most of those companies are doing quite well with available low-hanging fruits of the First World orchards. Facebook seems to be forging out into the jungles and deserts that are yet unexplored by rivals.
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The WhatsApp acquisition shows Facebook’s determination to follow the road not yet paved. It is a bold move, filled with peril along the way
Wirtz sees what these other companies sees and what Wall Street sees and there is nothing wrong with that perspective. There is a great deal of money to be made in marketing to the sort of people who read Forbes; who drive upscale cars and are willing to pay a few hundred dollars for a tablet computer, and only grumble slightly at the price of our data plans. But sooner or later, you reach a point of saturation where all pack members end up selling the same goods and services and the only way to compete is on price. This is the conventional thinker’s dilemma. If you keep doing what you have always done, you end up trying to pilfer your competitor’s customers because there doesn’t seem like anywhere else you can go. The WhatsApp acquisition shows Facebook’s determination to follow the road not yet paved. It is a bold move, filled with peril along the way. But that’s the right course if you measure the number of potential users in the workd rather than the cost of acquiring each user and the potential for selling ads to each user today. Using rough and unpolished numbers, there are about about 1.5 billion people using Internet technology today. Most are already Facebook users. Where is the growth? If you stay focused on just these, you can only hope more babies are born and grow up to use your technology before their grandparents wither off and sign out.Where does a company like Facebook, Google or Apple find its next billion customers? And what about the billion after that?
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The answer may be more likely found in Paraguay than in Palo Alto. Currently, they are carrying not-so-smart feature phones in their pockets, phones from companies like Nokia, Symbian, Motorola and Sony Ericsson—brands rarely mentioned in Silicon Valley. Very often the people using these phones are young and hungry for more than what they have now, more than what their parents had before them. In these devices that you might consider to be outmoded, they see hope. In these devices they are conducting their first online conversations, and in time they will start connecting with stangers in other places, stranger with whom they share common interests, strangers with whom they may eventually do business, strangers who become friends like Brandon Wirtz and I have done on Facebook. For nearly two years, the first place such online conversations have taken place has been on WhatsApp where more text conversations are being held than through any other means. In a short while 450 million people have signed on and that number is growing at one million per day. It is a good bet that post-acquisition, that rate of adoption will rise. Chances are likely that in the coming years, the first conversation hundreds of millions of people in developing nations will have online will be on a Facebook platform. When you look at it that way, then $19 billion is a bargain. You have probably been reading and hearing about a new
What will this move mean to Facebook over the next five, ten, twenty or fifty years? global phenomenon called that is being called the sharing or collective economy.You hear about alternatives to taxi cabs or hotels or way for affluent people to not have to sell off their yachts. All this interests me, but I see something far lager, more enduring and world-changing taking place. I believe that what is really happening is the the Internet and the contextual forces of mobile, social media, sensors, location technologies and data are removing the barriers to marketplaces. More people in more places are getting more opportunities to buy, sell, trade, barter and share. I think my friend Wirtz is missing how this new open economy is about to disrupt the formulas and ratios of traditional investors. We are entering a world where a revolution that started with the Internet, was accelerated by social media and the other contextual forces is reshaping the fundamentals global economics.Traditional best practices are starting to be shunted aside by better practices. Governments are no longer the only ones who can create currency; banks are being cut out of transactions. Artisans joining a global community working on dirt floors in jungle huts are getting access to Nordstrom shelves. through Etsy, a relatively new online community. As my friend Robert Scoble says. The haves and have nots are not being defined by wealth, so much as by who has Internet access. Geography as an economic barrier is waning as more and more marketplaces relocate to online spaces and the result very well could be a more balanced distribution of global wealth. This balancing trend has been going on but remains pretty much ignored. While the US seems to be widening its gap between affluent and poor, other countries are reversing direction, a trend apparently unnoticed by many conventioal strategists–but not all. At some point last week, Scott Monty, Ford’s top social media executive, joined Wirtz and me in our Facebook debate. He
pointed out that the world’s leading auto makers are investing hundreds of millions of dollars in Brazil where WhatsApp enjoys great popularity. Wirtz had some fun discounting Brazil in terms of economic opportunity for either Ford or Facebook. “[Buying WhatsApp] would be like Ford saying ‘Llamas are really popular in Brazil. Let’s buy all the llama dealers, at $25k a customer, so we can convince the users to buy a $15k Ford Fiesta, without bothering to check to see if the Fiesta will make it up to their mountain homes.’” Well, beside the fact that Brazil is more jungle than mountain, and that the llamas are mostly on the other side of those mountains in Peru,Argentina, Bolivia and Chile, much has happened in South America, apparently without Wirtz’s notice. Far more Brazilians live near te ocean than up mountains. Apparently also unnoticed was that Brazil’s GNP has been growing at a healthy pace during the very same years that the ours has been lulling around doing very little. Brazil’s unemployment is at an all-time low, according to the Mundi Index. Brazil and its llama-accommodating neighbors have an emerging middle class. They are gaining unprecedented family affluence as well as education and access to the rest of the world via technology. What will this move mean to Facebook over the next five, ten, 20 or 50 years? How will it position Facebook against Google, Apple, Amazon, Microsoft and the other titans of today? One can only guess. But Zuckerberg is willing to bet it is worth a lot more than $19 billion and I for one would not bet against him. The biggest obstacle will be to figure out how to converge texting and social networking platforms. Historically, that has been like trying to mate sheep and llamas. It remains to be seen how Facebook will handle that.
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WHAT’S THE SECRET TO MAKING WEARABLES THAT PEOPLE ACTUALLY WANT? Last September, right around spring/winter Fashion Week, an unexpected group of people gathered for a round table discussion at the main offices of the Council of Fashion Designers of America in New York City. Present was Steven Kolb, the CFDA’s CEO, a few higher-ups from Intel and a handful of CFDA members who also happen to be big names in fashion and accessory design. Intel had called the meeting to discuss the idea of starting a collaboration between the company and the fashion industry at large, with the ultimate goal of figuring out a way turn their decidedly unwearable technology into something people fashionable people might actually want to put on their bodies. Earlier in the summer, Intel, like most every other big technology company out there, had started a division to explore the future of wearable technology. Best known for supplying the processor chips you find in your computer’s guts, Intel has the technology to build what could eventually be a very smart device.They did not, however, have the design and fashion expertise to create stylish hardware. “Technology companies know what is useful, but do we know how to make something desirable?” says Ayse Ildeniz, Intel’s vice president of business development and strategy for new devices. “We have thousands of hardware and software engineers looking at sensors, voice activation and how to build smart devices, but we wanted to create a platform where they can meet with the aesthetic gurus.There needs to be an alignment and discussion, so breakthroughs can actually come about and flourish.” Enter the Hipsters During CES this year, Intel announced the formalization of its partnership with the CFDA, Barney’s and Opening Ceremony, an ultra-hip fashion company tasked with designing the first wearable product to be born from the collaboration. If that
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wasn’t proof enough that Intel was taking wearables seriously, the company also announced its Make It Wearable competition, which will award $1.3 million in prize money ($500,000 for the grand prize) for whoever who comes up with the most promising design in wearable tech this year. Those are some pretty good incentives. Netatmo’s June is a UV tracker that takes the form of a jewel designed by French jewelry designer Camille Toupet. It syncs up with your smartphone to help keep track of your skin health. Image: Netatmo
“Tech companies know what is useful, but do we know how to make something desirable?” We’ve only recently begun to see technology and fashion take each other seriously. A few months ago, Apple hired Angela Ahrendts, Burberry’s former CEO, and before that they poached Paul Deneve, Yves Saint Laurent’s CEO. Given the optimistic projections for wearable tech’s influence, the union between these two worlds seems inevitable. If wearable technology makers have learned one thing so far, it’s that just because you make something, it doesn’t mean people are actually going to wear it. Adoption of wearable tech depends on striking a delicate balance between style and functionality, and no one has leveled that see-saw quite yet. And the fashion crowd, as progressive as they are, have never been trained to think
Misfit Wearables launched the Shine, an activity tracker that can be worn almost anywhere on your body.
through the rigors of product design, ranging from use cases to demographics. “Products are often made with good intentions, but in a vacuum,” says Kolb.“You have programming people thinking about wearable technology but not necessarily, and I don’t mean this with disrespect, thinking about the aesthetic. Then you’ve got fashion people who are very much focused on the overall look but don’t have the technological language or vocabulary.”
Up to this point, technology companies have approached wearables with a one-size-fits-all mentality. Even Google Glass’ Titanium Collection, while certainly more stylish than the original, hasn’t gotten it quite right. A choice of frames that say, “I write code and like to shop” is a start, but in order for people to really want to wear Glass, we have to be able to seamlessly integrate them into our own very personal style. We have to feel like we’ve had more of a choice in the matter. The Missing Link: Modularity
Kolb explains that oftentimes, fashion people have a sci-fi understanding of what technology can do. On the flip side, technologists and even industrial designers have a difficult time grasping what it means to create something people feel good wearing. “Fashion designers are always thinking about things like, how does that clasp close, how does this leather feel?” he says. “That element might not necessarily be on the radar of a tech person, but it’s definitely on the radar of a fashion person.”
“I think fashion and accessory brands in the near future will make glasses that work with Glass in the same way we have accessories and covers for our mobile phones,” explains Syuzi Pakhchyan, accessories lead at Misfit Wearables. “The key here is to design technology that can be modular and allow others to develop an ecosystem of products that work with your technology.”
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“I think we’re going to see a lot more beautiful and interesting wearables coming out in the next few years” Misfit is the maker of the Shine, a pretty, smoothed-over disc that acts as an activity tracker. As far as wearable tech goes, the Shine is actually quite lovely. Misfit’s offering is part of an increasing number of wearables that make an honest effort to look good. There are others like Netatmo’s June, a UV tracker disguised as a sparkling rhinestone that can be worn as a broach or on a leather band around a wrist, and the collaboration between Cellini and CSR to create a Bluetooth-enabled pendant. Working Together Earlier The intentions are good, but they all fall a little short, as though the styling was a last minute gloss instead of baked into the actual product. In order for wearables to feel authentically cool, fashion and technology need to begin working together from the earliest moments of product development, discussing what current technology enables and having an an open-minded conversation about how it could be worn. As Pakhchyan points out, much like our clothes, not everyone wants or needs to wear the same piece of technology, and we don’t necessarily have to wear it all the time either.Tech companies have been chasing the elusive silver bullet smartwatch, but maybe it’s not such a bad thing to treat wearables like the
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This pendant prototype, a collaboration between CSR (developers of Bluetooth Smart and jewelry designers Cellini), communicates phone alerts via the glowing green light.
Adoption of wearable tech depends on striking a delicate balance between style and functionality...
other wearables in our life: As separate, individually-valuable pieces of clothing that can work together to ultimately create the perfect outfit. Staying focused, at least while we’re figuring out what form and functionality works and what doesn’t, might not be such a bad thing. Right now, the collaboration between Intel and the CFDA is just getting started. How it will shape up depends on what each organization is trying to achieve. But at least by beginning to build a real bridge between the fashion and technology worlds, we’re opening up discussion about how these industries can benefit each other, which hopefully will lead to some great innovations. For what it’s worth, Pakhchyan figures it’s only a matter of time before the parallel paths of technology and fashion intersect for good. And when they do? We’ll probably be seeing a lot more people actually wearing wearables.“I think we’re going to see a lot more beautiful and interesting wearables coming out in the next few years,” she says. “I have a feeling we’re going to look back at these plastic wrist-worn things and be like, ‘Oh, that was kind of an awkward stage.’”
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WHAT TO EXPECT FROM FACEBOOK IN 2014 New algorithms mean more ad spend Facebook has confirmed that even more changes are coming that will limit organic reach. Companies who think they have a fixed CPA (cost per acquisition) for each Facebook like, will need to go back to the drawing board as Facebook limits each post’s reach to the company’s own, already attained audience. The changes also affect potential reach per dollar spent on advertising. Ultimately, Facebook’s initiative to increase advertising revenue creates a big divide between large corporations with hundreds of thousands of dollars in advertising allocated for Facebook, and medium sized companies who had hoped to use Facebook for new business. No plans to address the adblockers A few months ago, Google addressed some concerns about adblockers by introducing an AdWords option to pay by viewable impressions versus impressions served. Before, a site would try to serve an ad, but be blocked by adblocking software, and then still come up as served to the marketer/advertiser. Now, Google claims to have introducing a way to charge for ads being actually seen on-screen by the end user. Facebook, who have been accused of fabrication “reach” numbers in the ad management platform, have made no such plans to address the fact that many people don’t see ads that advertisers are being charged for, or that they were promised in reach estimations prior to running the ad. The generational gap grows wider While teens and young people have been long assumed to make up the majority of Facebook’s users, recent trends show that this generation has moved on to other social net-
works. Companies are still finding success launching contests and advertisements on Facebook, but to a new audience. Facebook boasts over 800 million users registered with nearly equal demographic and age representation across the board, but the actual number of daily and active users tells a different story. Consistently, posts and contests targeted at an older age range (most often women, 25-44) are ranked most popular, and feature content about home supplies, pets and children. The bottom line If Facebook is a vital part of your business strategy for 2014, or already a much-used feature of your online toolkit, here are some suggestions for getting the most from the social media platform: - Set your expectations. If you have the budget to advertise, or if you don’t, make sure you have realistic expectations for what Facebook can and can’t do - If you do invest in ads, make sure to have a skilled and experienced ad manager monitoring and adjusting the ads all the time. I often compare ad management to day trading. On social networks, you have to make sure you’re pointing your investing in the direction that will get you the best return. - Track your reach and analytics. Even with the best ad manager, companies can only succeed as much as Facebook (or any other platform) will allow them to. If you see you’re just not getting what’s being promised, or if your reach is declining week after week even with content adjustments, you may want to salvage what you can and abandon ship. Knowing when to do that is key.
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THIS GUY’S BUILDING A TSUNAMI-PROOF POD IN HIS SILICON VALLEY BACKYARD
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“I’m not a survivalist. I don’t even have life jackets.” He does, however, have an emotional connection to Fukushima...
Chris Robinson has never built a boat or even sailed, and he admits that a tidal wave is unlikely to hit Silicon Valley. But in his Palo Alto backyard, Robinson has spent the past two years building a defense against one: a 22-foot-long, 10-footwide, 8.5-foot-high tsunami-proof capsule made of plywood and epoxy. After watching coverage of the Fukushima disaster and a flood-devastated Japan, Robinson started working on an escape route. “No one is going to wear a jet pack on their back as they work in their office,” Robinson says, so he imagined a more buoyant solution—drawing inspiration from oil-derrick escape pods and a Canadian artist who constructs wooden spheres that hang in trees and double as hotel rooms.
The former Facebook and PayPal art director used Adobe Illustrator to sketch his tsunamiball plan (he asked some engineers for help calculating whether it would float). “Very early in the project it became about building this interesting object,” Robinson says. “I’m not a survivalist. I don’t even have life jackets.” He does, however, have an emotional connection to Fukushima—he met his wife there in 1991, when he lived in Japan. “Half the places we went on dates are gone,” he says. Robinson plans to finish the outer shell by May, then oceantest the vessel if he can find a crane and truck big enough to haul it over to the Pacific. And if the sphere doesn’t sink, he’ll use Airbnb to rent the tsunamiball for tidal wave-safe overnights in Palo Alto.
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WHY INDIE GAME DEVS THRIVE WITHOUT BIG PUBLISHERS Now, they will rise or fall on their own merits.
We deserve better. It’s a common refrain among video game developers who work with major publishers. Churning out the latest iteration of Call of Duty or Assassin’s Creed takes its toll: inflated workweeks and 12-hour days, lists of notes and changes from the faceless entities of EA and Activision and the like, with simultaneous requests to pick up the pace — all the while making a tiny percentage of the game’s profits, not knowing if there will be another job when the project ends. “The publishing people all watch [a game] and then make passive, aesthetic appraisals of active, functional aspects of a game,” wrote an anonymous developer, delivering a blistering attack of major game publishers. “This is because the bulk of execs can’t and don’t want to play or understand how games work.” This is the conflict at the heart of the gaming industry. Developers feel creatively stifled by the demands of the latest blockbuster game; when a major triple-A release brings in poor sales numbers, the publisher may shore up profits by simply cutting developers loose. A troubled Disney Interactive, for instance, laid off 700 employees this month. In recent years, however, the runaway successes of independently developed games such as Minecraft, Super Meat Boy and the Kickstarter-funded Broken Age have made independent game developers hopeful that they can make a living without turning their intellectual property (IP) over to publishers. Not only have digital downloads and crowdfunding made self-publishing seem like a viable alternative to working for a major developer, big-ticket gaming consoles like the PS4, Xbox One and Wii have begun to embrace indies, allowing developers to self-publish to their platforms and even doling out funding for innovative games. Not all traditional publisher-developer relationships are quite so grim. Plenty, in fact, are perfectly civil, professional unions, if not perfect marriages. And for better or worse, major game publishers aren’t going anywhere. However, the traditional
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publisher-developer relationship is eroding in significant ways, pieces at a time. In the ‘90s and early 2000s, studios hoping to make “niche” games were widely suppressed by the limited number of titles retailers could support, and blockbuster franchises such as Call of Duty and Grand Theft Auto were given preferential treatment, says Charles Cecil, one of the founders of UK-based video game developer Revolution Software. Digital distribution, from Apple’s App Store to web-based downloads, has effectively exploded that model, allowing developers to publish without retailers and reap a greater share of their IP’s profit.
“With digital distribution, you’ve effectively got an infinite number of [retail] slots” “ With digital distribution, you’ve effectively got an infinite number of [retail] slots With digital distribution, you’ve effectively got an infinite number of [retail] slots,” Cecil says. “You also can disintermediate and ship directly to your audience.” Crowdfunding platforms have radically changed the way developers can obtain funding — independently, without the strings attached to partnering with a major publisher. Cecil brought Broken Sword: The Serpent’s Curse to Kickstarter, promising backers a digital download in exchange for a $15 donation.The game received nearly twice its $400,000 goal.
Double Fine’s Tim Schafer speaks with Jamin Warren of Kill Screen about Broken Age’s success on Kickstarter.
“Every bit as good [as the money] was that we built a direct relationship with 15,000 of our fans,” Cecil says.“Ten years ago, you would have paid a marketing company a huge amount of money to be given a way to communicate with 15,000 fans.”
“Doing independent development via Indie Fund or Kickstarter allows us to be free of the pressure to change our game and to avoid things that seem risky,” Schafer says.“Now, we will rise or fall on our own merits.”
Double Fine’s Tim Schafer shattered Kickstarter records when his campaign for Broken Age — previously known as Double Fine Adventure — raised $3.3 million. Like Broken Sword, Broken Age is a point-and-click adventure game, a niche genre not typically backed by major publishers. The game couldn’t have existed without Kickstarter. “There’s a small number of gatekeepers [at a publisher] that approve ideas or modify them, basically to mitigate the risk of any investment,” says Schafer. “That’s not the kind of process that leads to things that are innovative or risky or perceived as ‘niche’ investments.”
Broken Age rose: The first part of the game has been released to praise from its backers. A second act is in development.
Schafer, who founded Double Fine after spending more than a decade at LucasArts, had previously released titles in partnership with major publishers such as Electronic Arts and the now-defunct THQ. In recent years, he has also published titles with the backing of Indie Fund and Dracogen, programs that help indie developers fund projects.
Not all games will succeed on Kickstarter, however, and even the ones that do succeed face challenges. Mingled with the positive reviews on Broken Age’s Kickstarter page are reviews that express backers’ disappointment. “I would not have pledged as much as I did or given money 2 years in advance if I had known what the result would be,” one wrote. “ You will always be at the mercy of someone who’s given you money You will always be at the mercy of someone who’s given you money, whether it’s an executive at EA or a kid who gave you five bucks on Kickstarter,” says Jason Della Rocca, co-founder of mobile game accelerator Execution Labs and former executive director of the International Game Developers’ Association.
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You will always be at the mercy of someone who’s given you money
Plus, he adds, in a market saturated with self-published games and Kickstarter campaigns hoping to launch the next big thing, it’s not always easy to drive downloads, let alone funds. “The very fact that you and I can release a game on the App Store tomorrow means that every other developer can do the same thing,” he says. “That’s where it’s less about creating an awesome game and more about discoverability. Guess who is really good at discoverability? The publishers.” Certain consoles and publishing partnership ventures aim to tackle the discoverability issue, acting as cheerleaders for indie titles while allowing developers to retain their intellectual property (IP) rights. Sony in particular has built up an indie-friendly reputation in recent years, providing developers relatively hassle-free access to development kits, helping to market games released on the console and even, in certain cases, providing funding. Developers who self-fund a game, either through investors, crowdfunding or partnerships like Indie Fund, can publish their games on the PS4 without having to fork over their IP or sign an exclusivity agreement, says Adam Boyes, Sony’s VP of developer and publisher relations.There’s also the Pub Fund initiative, which provides funding for developers who need a financial boost.“We basically help them do PR and market the content, put up banners on the storefront and bring [the title] to different events,” Boyes says. “We don’t give any creative input if they don’t want any.We don’t own the IP.”
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Microsoft and Nintendo, as well as Steam, have likewise unveiled self-publishing programs for independent developers who want to break into console games. Cecil attributes these initiatives to an industry-wide realization that indie titles are prized by large communities of gamers.“If you want a really vibrant ecosystem for your platform, you want to attract independent developers as well as the triple-A titles,” he says. “These other platforms are allowing a place for games that can’t sell 10 or 20 million copies to have an opportunity to be seen and played,” adds Chris Roberts, who received $39.9 million in crowd-funding for the upcoming space simulator Star Citizen. “You don’t necessarily need to sell ridiculous numbers of units to stay in business, as long as you’re not a big publisher.” Despite certain predictions to the contrary, most industry experts doubt that major publishers will ever become obsolete. There are beneficial aspects of working with a major publisher, after all: marketing, distribution, a financial safety net, the ability to make a kickass first-person shooter. “I would not try to independently produce something like Titanfall,” Schafer says. “And those kinds of games are not going away. The indie games community is just offering something more. It’s like how Sundance didn’t get rid of blockbuster films — it just added more variety and made the whole ecosystem healthier.”
8 WAYS TECH HAS COMPLETELY REWIRED OUR BRAINS Technology has altered human physiology. It makes us think differently, feel differently, even dream differently. It affects our memory, attention spans and sleep cycles. This is attributed to a scientific phenomenon known as neuroplasticity; the brain’s ability to alter its behavior based on new experiences. In this case, that’s the wealth of information offered by the Internet and interactive technologies. Some cognition experts have praised the effects of tech on the brain, lauding its ability to organize our lives and free our minds for deeper thinking. Others fear tech has crippled our attention spans and made us uncreative when it comes to anything analogue.
up in a household with a black and white television set were more likely to dream in black and white.Younger participants, who grew up in the age of Technicolor, nearly always experienced their dreams in color. The American Psychological Assocation seconded these findings in 2011. Previous dream research, conducted in the early 1900s through the 1950s, has suggested a correlation between exposure to black and white television and dreaming in black and white. In the 1960s, dreams returned to Technicolor with the advent of color film and television. 2. We experience FOMO…
Tech has crippled our attention spans and made us uncreative and impatient when it comes to anything analogue. Every emerging study and opinion piece is hotly disputed, yet each brings us closer to understanding how tech can fundamentally alter our minds. Below, we list some of the major ways tech has rewired our brains, for better or worse.
The reports are anecdotal at best, but FOMO (fear of missing out), defined by The New York Times as “the blend of anxiety, inadequacy and irritation that can flare up while skimming social media,” seems fairly legit.
1. We dream in color
Before Instagram and Facebook, people who chose to spend a quiet Saturday night at home with a glass of wine and a copy of Anchorman might have felt a little guilty or sad they weren’t out whooping it up. But thanks to social media, that feeling is compounded by pictures and posts of scrumptious dinners and
Television impacts our psyche so thoroughly, it may even affect our dreams. In 2008, a study conducted at Scotland’s Dundee University found that adults over the age of 55 who had grown
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Individuals immersed in digital media find it difficult to read books for long periods of time... raging parties, plus endless videos of friends chugging beer. Even if none of these activities are your idea of fun, you’ll definitely recognize that pang: “Should I be doing something else right now?” That’s FOMO. There’s even evidence that looking at pictures of friends’ meals on Instagram and Pinterest makes your own meal taste bland by comparison.
Neuroscientists suspect the glowing lights emitted by laptop, tablet and smartphone screens mess with your body’s internal light cues and sleep-inducing hormones. Exposure to bright lights can fool the brain into thinking it’s still daytime, and can potentially have lasting effects on the body’s circadian rhythms (your internal sleep clock). Our eyes are especially sensitive to the blue light emitted by screens. This makes it harder to fall asleep, especially for those who already struggle with insomnia.
3. … And “phantom vibration syndrome.” We are now hard-wired to assume our phones are ringing, even when they’re not. In a 2012 study published in the journal Computers and Human Behavior, researchers found that 89% of the 290 undergraduates surveyed reported feeling “phantom vibrations,” the physical sensation that their phone was vibrating, even when it wasn’t, once every two weeks. A survey of hospital workers found similar results. A research psychologist speaking on NPR suggested that physical sensations, such as an itch, may now be misinterpreted by our brains as a vibrating phone. “Something in your brain is being triggered that’s different than what was triggered just a few short years ago,” he said. Since nobody is especially bothered by phantom vibrations, the sensation is more of a nuisance than a physiological problem. Still, it’s pretty freaky. 4. We can’t sleep. We technophiles are accustomed to falling asleep with laptops glowing softly by our beds, playing a soothing Futurama episode to lull us into sleep. Others might end the day by reading a chapter of The Hunger Games on their iPad. But those comforting nighttime routines may actually be screwing with our sleep patterns.
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5. Our memory isn’t great, and neither is our attention span. Back in the old, old, old days, learning by rote was a prized skill. So prized, in fact, that students were often expected to recite entire books from memory. In a Google-happy world, when virtually any scrap of information is instantly at our fingertips, we don’t bother retaining facts, let alone whole book passages. Who needs to memorize the capital of Mozambique when you can just ask Siri? In 2007, a neuroscientist polled 3,000 people and found that the younger respondents were less likely to remember standard personal information, such as a relative’s birthday or even their own phone number. Similarly, studies have shown that calculators may decrease simple mathematical
As social media promotes a culture of sharing, users feel more inclined to create and share something of their own
skills. Some people are unable to navigate their own cities without the help of GPS. Social media and the Internet have also been shown to shorten our attention spans. Individuals immersed in digital media find it difficult to read books for long periods of time, and often skim articles online rather than reading every word.This phenomenon can be particularly troubling for youth, whose brains are more malleable and, therefore, may fail to develop concentration skills. 6. We have better visual skills… A 2013 study found that first-person shooter video games, such as Halo and Call of Duty, boost decision-making and visual skills.These immersive games force players to make snap decisions based on visual cues, which enhances visuospatial attention skills, or the ability to parse details of your physical environment. Gamers are also better at detecting contrast between objects in dim environments. Meanwhile, complex, strategy-based games like Starcraft may improve the brain’s “cognitive flexibility,” or the ability to switch between tasks, thus enhancing the much-disputed ability to multitask. This was particularly true among older study participants.
7. ...But poorer impulse control. Unfortunately, that same 2013 study found video games like Halo can inhibit players’ ability to rein in impulsive or aggressive behavior. Researchers concluded that forcing players to make snap decisions in violent situations inhibited “proactive executive control” over knee-jerk reactions and impulses, meaning they were more likely to react with immediate, unchecked hostility or aggression in real life. Other studies have substantiated the idea of a link between violent video games (and other violent forms of media) and aggression and attention problems. 8. We create more. Ending on a high note, tech makes it easier for artists and non-artists alike to engage with creative media. Author Clay Shirkey argues that the Internet enhances what he calls “cognitive surplus,” the excess hours and brain power we can devote to pursuing activities and goals we enjoy. Social media, according to Shirkey, prompts users to engage with texts, images and videos in a way that simply watching television doesn’t. As social media promotes a culture of sharing, users feel more inclined to create and share something of their own, be it a Flickr album, a book review, a contribution to Wikipedia or a DIY project. “We do things because they’re interesting, because they’re engaging, because they’re the right things to do, because they contribute to the world,” said Daniel Pink, author of Drive: The Surprising Truth About What Motivates Us,. “Once we stop thinking of all that time as individual minutes to be whiled away and start thinking of it as a social asset than can be harnessed, it all looks very different,” said Shirkey. “The buildup of free time among the world’s educated population — maybe a trillion hours per year — is a new resource.”
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LIFELOGGING: THE MOST MISERABLE, SELF-AWARE 30 DAYS I’VE EVER SPENT
I’ve taken approximately 4,056 steps so far today. As a 6’2” bipedal mammal, that amounts to about 1.97 miles. Last night, I slept for 6.1 hours, with my deepest sleep period beginning at 2:10 a.m. and lasting for roughly two hours. If I had to rate my mood from 1 to 100, which I do, I’d place it somewhere around 73. There — I’m quantified. If you haven’t noticed, the art of lifelogging and personal data tracking once reserved for medics and athletes has permeated mainstream culture. Jawbones, FuelBands, Fitbits and countless other wearables adorn the wrists of an ever-growing percentage of the tech-savvy population. A quick mobile App Store search for “Sleep Tracker” yields 124 results. Multiple major publications have dubbed 2014 “The Year of the Wearable.”To put it succinctly:We’re in it deep.
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Having my doubts about the usefulness of the Quantified Self movement, I’ve spent the past 30 days recording my daily activities with a small army of lifelogging apps and my trusty, apparently rash-inducing Fitbit Force. In the early stages of my experiment, I reached out to graphic designer and data-cruncher Nicholas Felton for some insight into the tracking world. Since 2005, Felton has been releasing “annual reports,” a year’s worth of his own personal data presented in a book of stunning visualizations. This past February, he released Reporter, a customizable tracking app that helps lifeloggers visualize and gather their data. Felton is the uncontested Michael Jordan of personal data tracking. With his help, I’m hoping to become at least Charles Barkley.
“I think we’re in the super early days of this right now. I don’t predict that we’ll be in a world where everyone is buying $100 pedometers, but I do think we’ll be in a world where everyone will have access to that information,” he says. Don’t underestimate the current popularity of lifelogging, either. If the Facebook Lookback video proved anything, it’s that we love revisiting things we already know we did, particularly when they’re arranged in a pretty way and we’re the stars.The added bonus of not doing any work for the results can’t be truly appreciated until you’ve become a slave to your data. The Experiment
“This is the 10th year, it’s probably the last year that I’ll make a report,” Felton tells me. “And that’s partially because I think the world has really caught up to the stuff that I was doing in those reports.” Aside from Reporter and a selection of other logging apps, Felton uses various activity trackers to record his time spent in his car, at rest and on his computer. He also wears a Narrative Clip and regularly uses a breathalyzer. Even advanced trackers can’t hold a candle to him. “To get the most out of the stuff you’re recording, you need to get it somewhere where you can look across the different data sets,” he says.According to Felton, data without context is useless. When I reveal my doubts to Felton, he assures me that personal tracking is here to stay.
With a handful of apps, I begin tracking my daily activities. Using MyFitnessPal to track my diet, Sleepbot to track my sleeping habits, Fitbit to sync my movements from my wristband and Felton’s Reporter to measure almost everything else, I log everything from the existential “Are you looking forward to today?” to the trivial, “What do you smell?” It is not enjoyable. Manual data input, as it turns out, is a hindrance to the daily activity it’s supposed to be tracking. I frequently put my book down to tell my phone that I’m reading, take my phone out at dinner to let it know I smell hamburgers and zone out of conversations to tell it who I’m talking to. Have you seen Her? It’s a lot like Her. In order to get a realistic scope of my day, Felton recommended I record my activities every 90 minutes. That’s a pretty sizable chunk of time, so I decided it’s only accurate to also track the time I spend tracking. For a brief moment I tried to track the time I spent tracking my tracking, but I found it too disruptive to my tracking.
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Who I spent time with:
Average mood vs. person
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We love revisiting things we already know we did, particularly when they’re arranged in a pretty way...
I quickly find that most of the results I’m getting back are obvious. My stress typically increases at the middle of the work day and decreases at the end. Drinking coffee often correlates with smelling coffee. I spend more time with my roommate than I do with my dog who lives three hours away at my parents’ house. Nonetheless, I begin to yield some more revealing results as well. Contrary to my expectations, I actually have a pretty normal sleeping schedule. My vitamin C consumption is right up there with other human males of my size. I talk to my parents more often than they think I do. Visualized on my phone, my mediocrity is truly a sight to behold. This, it seems, is the real value of data tracking — revealing small, random yet somehow surprising bits of information that I, the tracker, really wasn’t aware of.This data, once given context can then uncover unique patterns, giving me a better idea of why I do what I do. “People are skeptical about [data],” Felton says. “I think what’s missing is a service that leverages the personal value of this
data so that people feel like there’s a reason for keeping track of themselves.” The Results At the end of 30 days, it’s difficult to say if I learned anything about myself that I wouldn’t have guessed already. My mood averaged out around a 70 out of 100, my “most smelled” smell was cleaning fluid (for some reason) and I read 1,657 pages. But according to Felton, thinking about data tracking in terms of what hidden secrets it will reveal is the wrong way to go about it. He uses tracking more as a storytelling method, to give an accurate depiction of his year. Felton is confident that the future will only bring growth for this kind of storytelling. “I think it’s just waiting for the right platforms for this stuff to be brought together. We certainly need a bit more data openness from several parties.” For now, though, we have to work with what we’ve got.
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THE FUTURE OF iOS DESIGN? Sweating the details of iOS 7
“Completely flat,” “Like Android,” “Microsoft-flat,” etc., etc.. The talk about how Apple is going to “flatten out” its UI style has set the rumour-mills ablaze with completely spurious conjecture. So I thought I’d add to it. However, let’s approach this not from “what one insider source told someone” but instead from evidence of progression within some of the top iOS apps. Let’s start with home-screen icons given it’s the most obvious port of call. Below (Figure 1.1) is a selection of some of the most popular, well-known or lauded apps for the iOS platform. And there’s not a gloss,“texture” or stripe in sight.Yes, we can see a hint of it (Spotify, Path, Evernote) but the majority have gone for a different approach. There’s still the evidence of gradient and a “top shine”
but it’s a more subtle, radial curve (Facebook, Google Drive, Dropbox, Flipboard) that alludes to a sense of perspective or 3D as opposed to the harshly cut gloss of old. To me, there is a distinct movement towards a particular style and I would be very surprised if Apple were ignorant of it. It’s not “flat design” per se and it’s certainly nowhere near the “Metro” levels that people are suggesting they may follow, but it’s a mellowing out of the visual indicators that people need to trigger the idea of a tappable element.Why? Because this is not 2007 anymore, and we are all now fully aware of the medium and the process; we don’t need to be led garishly by the hand. There is still a sense of depth and tactility but done in a refined and suggestive way, sensitive to the changed perceptions that people have of interacting with touchscreens. (Figure 1.1)
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Figure 1.2
One of the jobs of a designer is that you’re very sensitive to trying to understand what goes on between seeing something and filling out your perception of it. — Jony Ive Google and Facebook have led the charge recently for throwing design resources at their iOS apps and redesigning them in a beautiful, subtle and elegant manner.The idea that either of those wouldn’t have inside information about the direction of iOS 7’s UI and styling is beyond belief and we can only assume that the similar route they have taken (away from Google’s completely-flat Android style) indicates the direction in which Apple is pushing. One design pattern which is becoming more and more prevalent is the idea of “cards” on top of a simple (usually neutral/grey) background. This is opposed to the iOS standard of information being displayed in cut-outs into the background. I believe this may have been started by Pinterest but there’s a large number of apps now using this style as a clean way of presenting information (see Figure 1.2 and also Mailbox, Gmail, and many more). There’s a less common idea of vertically stacked cards which is most prominently used in Google Chrome and Evernote.This is a way of displaying various screen modes as layered on the Y-axis which, although interesting, doesn’t feel right just yet. I do think we’ll start seeing a lot more apps trying to implement it as a navigational tool, however.
Another trend is the removal of button frames from apps (see Figure 1.5 on the next page for examples), leaving only the icon as the tappable indicator. Although this could be seen as mimicking Android, I think it’s fair to say that the idea of needing a button frame to contextualize tappable icons is getting outdated now. There’s been a progessive move by various apps to remove them, Facebook being the latest to take the plunge.This started noticeably with the hamburger icons but has been pretty pervasive with a number of major developers. I’m not convinced Apple will necessarily remove them from their native styling but they may at least de-emphasise them. Continuing on from this I’ve even noticed, in some key apps which have only recently been redesigned such as Facebook and iOS native music player, the removal of the back button (the arrow shaped frame containing the word “back”) and its replacement with a simFigure 1.3 ple arrow icon. In case of the redesigned iOS Music app, they have replaced the word “Back” with an arrow icon but kept the arrow-shaped frame, an incredibly subtle and almost illegible styling. I do expect this to be a move they adopt going forward: to start using more icons as visual cues instead of literally spelling out actions for users with words. There’s familiar standards in UI iconography now to able to rely upon them being trigger enough to the user. (see Figure 1.6) In this style, I decided to have a go at redesigning one of the native iOS icons which, to me, are in dire need of a spring cleaning (Figure 1.4).
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Figure 1.4
Figure 1.5
Figure 1.6
I chose the Messages icon simply because it displays the three factors that I believe need addressing in iOS design and especially in the launcher icons: the gloss, the stripes, and the loud colours. I tried to apply the stylings and approaches that I discussed before and made another simple change, pulling the Label text down in boldness to Helvectica Neue Medium and upping the font size to 26px to give it clearer counters and a smoother, more legible readability. The colour’s still bright, as I don’t believe the pastel tones that are popular at the moment reflect iOS styling enough, but I tried to at least tone it down a notch.
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I WANTED TO WORK AT APPLE REALLY BAD, AND NOW NOT SO MUCH... About a month ago, after years of designing in various industries, making websites for small-time clients, working at failed and debatably successful startups, and fiddling with random side projects, I had been offered an interview at Apple. I couldn’t believe it. I had just totally revamped my portfolio, and I was now actually good enough to be considered as a candidate at Apple. In my eyes, Apple is, hands down, the most highly-regarded company a designer could work for. They set an interview date, and I started to brace myself for a bunch of gotcha questions and hard design problems that I would have to whiteboard in front of a design team. I had also assumed such a big company would take many rounds of interviews to make a final decision. I was pleasantly surprised when I only had to interview with three people for less than an hour, and the interview was pretty standard. I drove back to SF from Cupertino, and I replayed the interview in my head. It seemed like it went well, but I didn’t want to get ahead of myself. I didn’t want to be disappointed if they rejected me.
It turned out it did go well. I received a call the same day, and they told me I knocked it out of the park. They offered me a contract position as a mobile designer. Wow! I was so ecstatic that I had screamed when I got off the phone. My parents and family were super excited when I told them the news. I had posted the news to Facebook, and I had never gotten so many likes and congratulations on anything before. I got more likes when I announced that I got a job at Apple than when my daughter was born. People that I friended years ago and never talked to since were sending me messages. I changed my title on Twitter, and suddenly people started following me that probably never would have a week before. People were so excited for me that I decided to celebrate with drinks one night, and the turnout was amazing. It felt so great to have people want to celebrate this achievement with me. I couldn’t sleep the on the nights leading up to my start date. I was nervous and excited. I felt like getting an offer from Apple had validated my talent as a designer. I thought about the long, unorthodox journey that lead me to Apple. I wondered,
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I felt more like I was a teenager working at a crappy retail job than a professional working at one of the greatest tech companies in the world.
“What does this mean for my career? What will I be working on? Where will this take me? Will I ever finish the iPhone app I’ve been working on on the side?” I had so many questions. Then I started. I immediately was uneasy about the rigid hours and long commute, but at least I could be one of those notorious tech people whizzing to and from San Francisco on a private bus with wifi (I’m especially intrigued by the bus thing because I grew up in San Francisco and have seen the cultural
I got more likes when I announced that I got a job at Apple than when my daughter was born. and economic shift that’s resulted from this tech boom and the last. Now ironically I was one of the techies who some people think is ruining the city.) I hardly (hardly meaning never) saw my daughter during the week because the hours were so inflexible. I had also taken a substantial pay cut, but I figured I was making a long-term career investment by working for such a prestigious company. On boarding was super bumpy, and they had so many passwords, accounts, and logins that it took nearly a month just for me to get on the server. There were meetings all the time which were disruptive to everyone’s productivity, but they seemed to be a necessary evil in a company that’s so large with such high-quality products. It was all a bit bothersome, but nothing that would be a big problem in the long-term I thought.
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Then my immediate boss (known at Apple as a producer), who had a habit of making personal insults shrouded as jokes to anyone below him, started making direct and indirect insults to me. He started reminding me that my contract wouldn’t be renewed if I did or didn’t do certain things. He would hover over my back (literally) like a boss out of Dilbert and press me to finish some mundane design task that he felt urgently needed to be examined. He was democratic about his patronizing and rude comments, but it didn’t make me feel any better when he directed them towards my team members. I felt more like I was a teenager working at a crappy retail job than a professional working at one of the greatest tech companies in the world. I tried to tough it out and look at the bright side of things. I was working at Apple with world-class designers on a worldclass product. My coworkers had super sharp eyes for design, better than I had ever encountered before. I loved the attention to detail that Apple put into its design process. Every single pixel, screen, feature, and interaction is considered and then reconsidered.The food in the cafe was great, and I liked my new iPad Air. But the jokes, insults, and negativity from my boss started distracting me from getting work done. My coworkers that stood their ground and set boundaries seemed to end up on a shit list of sorts and were out of the inner circle of people that kissed the producer’s ass. I started to become one of those people that desperately wanted Friday evening to arrive, and I dreaded Sunday nights. Few of my friends or family wanted to hear that working at Apple actually wasn’t so great.They loved to say, “Just do it for your resume.” or “You have to be the bigger man.” or “You just started.You can’t leave yet.” This morning I got up a bit later than usual, and I missed the one Apple bus that stops by my house. I ended up driving to work in slow traffic. I was thankful I didn’t have to drive every day. But I was still thinking that I’d rather be taking my daughter to her preschool like I did on some mornings before I started at Apple. I got into work and immediately had to go
to another meeting. It went fine, and then I got back to my desk.Without so much as a hello, my boss hit me with another weird low-blow insult wrapped up nicely as a joke. I tried to ignore it and get back to work, and I realized I just couldn’t focus at all on my job. I was too caught up thinking about how I should deal with the situation. Should I put in my notice? Could I make it to the end of my contract? Could I switch to a different team? How could I find a new job if I was always stuck in Cupertino? Maybe I should bop my punk boss in his nose? No don’t do that, Jordan. Then at lunch time I wiped the iPad data clean, put the files I had been working on neatly on the server, left all their belongings on my desk, and I got in my car and drove home. I left a message for my boss and told him he’s the worst boss I had ever encountered in my entire professional career and that I could no longer work under him no matter how good Apple might look on my resume. The third party company that contracted me is furious because I’ve jeopardized their relationship with Apple, and of course they feel that I’ve acted highly unprofessionally by walking out. I’m not really proud of
myself for doing that, and I do feel terrible for destroying the long relationship I had with the recruiter who helped me land the interview. This is all an especially difficult pill to swallow because I was so excited to work for Apple. I’m not sure if this will haunt me or not, but all I know is that I wanted to work at Apple really bad, and now not so much. Many people have noted that I should have reached out to HR. It’s debatable if it would have helped the situation, but I didn’t feel there was anyone to turn to. It was unclear who exactly I even worked for or who I should share my grievances with. I was contracted by one company, yet paid by another contracting company, and then I worked at Apple.To this day, I never once encountered anyone from HR while at Apple, as I wasn’t technically employed by them.Also, as I stated, the coworkers who spoke out against my boss seemed to be ostracized from his inner circle. I didn’t want to be on his shit list too. Furthermore, I mistakenly believed that I should just suck it up and take it one day at a time. But I reached a breaking point and ended up leaving in a way that I did not plan on.
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GOODBYE, POPCORN TIME! This experiment has come to an end
We started Popcorn Time as a challenge to ourselves.That’s our motto.That’s what we stand for. We are enormously proud of this project. It is the biggest thing we’ve ever achieved. And we’ve assembled an amazing team in the process, with people we love to work with. And to be honest, right now every single one of us has a knot in our stomachs. We love Pochoclín and everything it stands for, and we feel that we are letting our amazing contributors down.The ones who translated the app into 32 languages, some of which we weren’t even aware existed. We stand in awe at what open source community can do. We are startup geeks, first and foremost. We read Techcrunch, Reddit and Hacker News. We got frontpaged in Hacker News twice. At the same time. We got articles on Time Magazine, Fast Company, TechCrunch, TUAW, Ars Technica,Washington Post, Huffington Post,Yahoo Finance, Gizmodo, PC Magazine and Torrent Freak, just to name a few. And we got some action on TV and Radio shows, and this doesn’t even include the many interviews we had to reject due to the barrage of media attention. And they were not chastising us. They were cheering for us. We became the underdog that would fight for the consumer. Some people we respect -scratch that- some of our heroes spoke wonders of Popcorn Time, which is a lot more than what we wanted to get out of an experiment we threw together in a couple of weeks. Popcorn Time as a project is legal.We checked. Four Times. But, as you may know, that’s rarely enough. Our huge reach gave us access to a lot of people, from newspapers to the creators of many sites and apps that had a huge global reach. We learned a lot from these people, especially that standing against an old fashioned industry has it’s own associated costs. Costs that no one should have to pay in any way, shape or form.
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You know what’s the best thing about Popcorn Time? That tons of people agreed in unison that the movie industry has way too many ridiculous restrictions on way too many markets. Take Argentina for example: streaming providers seem to believe that “There’s Something About Mary” is a recent movie.That movie would be old enough to vote here. The bulk of our users is not in the US. It’s everywhere else. Popcorn Time got installed on every single country on Earth. Even the two that don’t have internet access. Piracy is not a people problem. It’s a service problem. A problem created by an industry that portrays innovation as a threat to their antique recipe to collect value. It seems to everyone that they just don’t care. But people do. We’ve shown that people will risk fines, lawsuits and whatever consequences that may come just to be able to watch a recent movie in slippers. Just to get the kind of experience they deserve. And maybe, that asking nicely for a few bucks a month to watch whichever movie you want is a bit better than that. Popcorn Time is shutting down today. Not because we ran out of energy, commitment, focus or allies. But because we need to move on with our lives. Our experiment has ut us at the doors of endless debates about piracy and copyright, legal threats and the shady machinery that makes us feel in danger for doing what we love. And that’s not a battle we want a place in. xoxo, Pochoclín.
THE BITCOIN BUBBLE AND THE FUTURE OF CURRENCY A few days ago, the value of all the bitcoins in the world blew past $1 billion for the first time ever. That’s an impressive achievement, for a purely virtual currency backed by no central bank or other authority. It’s also temporary: we’re in the middle of a bitcoin bubble right now, and it’s only a matter of time before the bubble bursts. There are a couple of reasons why the bubble is sure to burst. The first is just that it’s a bubble, and any chart which looks like the one on the next page (Figure 2.1) is bound to end in tears at some point. But there’s a deeper reason, too — which is that bitcoins are an uncomfortable combination of commodity and currency. The commodity value of bitcoins is rooted in their currency value, but the more of a commodity they become, the less useful they are as a currency. Still, it’s worth taking a look behind the bitcoin bubble, because there are fascinating implications for anybody who cares about payments, or currencies, or trust. First, though, let’s go back to the night of Sunday June 12, 2011. That was the date of the first big bitcoin heist: a theft of such simplicity and audacity that it might well be considered the perfect crime. A man — we know him only as “All In Vain” — went to bed that night with his Windows computer turned on and connected to the internet. On that computer was a wallet containing 25,000 electronic coins. When he woke up on Monday morning, the wallet was still there. But the money was gone. Those 25,000 coins were, at the time, worth some $500,000; today, they are worth about $3.5 million. If All in Vain had noticed the theft within a couple of minutes of it happening, it’s conceivable that he could have got his money back. But he was asleep — and ten minutes after the theft occurred, it was utterly permanent and irrevocable.The only way All in Vain could get his money back would be if the thief were to simply transfer it back into his wallet.
No one will ever find the person who stole All in Vain’s coins. That’s because the coins were designed, by another pseudonymous internet denizen known only as Satoshi Nakamoto, to be the perfectly anonymous payment mechanism for a digital world. That’s one of the things about bitcoins: once you send them, they’re sent. Similarly, if someone sends you bitcoins, you know for sure that you own them.You don’t need to know or trust the sender — all you need to know is that the coins have arrived in your virtual wallet, ready for saving or spending.
We’re in the middle of a bitcoin bubble right now, and it’s only a matter of time before the bubble bursts. Bitcoins were designed to be – and, in many ways, are – the perfect digital currency: they’re frictionless, anonymous, and cryptographically astonishingly secure. For anybody who’s ever suffered the incompetence of a bank, or bristled at the fees involved in just spending money, either domestically or abroad – that is to say, for all of us – the promise of bitcoin is the holy grail of payments. Especially since, to all intents and purposes, bitcoins are invisible to law enforcement and the taxman. Those strengths are also weaknesses. No one wants to risk losing millions of dollars worth of currency overnight, just because they were outsmarted by some computer hacker. Still, for the time being, bitcoin is in many ways the best and cleanest payments mechanism the world has ever seen. So if
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Bitcoins were designed to be the perfect digital currency: they’re frictionless, anonymous, and cryptographically astonishingly secure
we’re ever going to create something better, we’re going to have to learn from what bitcoin does right – as well as what it does wrong.
out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts.
The source code for bitcoin is free and public, which means that just about every hacker and cryptographer in the world has had a crack at it. And they’ve all come to the same conclusion: it really works. There are question marks over just how anonymous it is and just how scalable it is, but when bitcoins first arrived in early 2009 – right at the height of a massive global crisis of capitalism – they had immediate and magnetic appeal to the anarcho-utopian crowd of techno-libertarians who drive an enormous amount of innovation online.
Nakamoto’s no paranoiac crazy: what he’s saying here is not all that different from what Warren Buffett wrote in his 2012 letter to shareholders.
Such people, including Satoshi Nakamoto, are far from unique in their mistrust of all existing financial institutions. What sets Nakamoto apart is that he turned that mistrust into a philosophy, the most important driving force behind the bitcoin project. When he introduced bitcoin to the world in February 2009, Nakamoto boasted that his new currency was “completely decentralized, with no trusted parties”.And he explained in some detail what he saw as the problem in need of a solution: The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it
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Investments that are denominated in a given currency include money-market funds, bonds, mortgages, bank deposits, and other instruments. Most of these currency-based investments are thought of as “safe.” In truth they are among the most dangerous of assets. Over the past century these instruments have destroyed the purchasing power of investors in many countries, even as these holders continued to receive timely payments of interest and principal.This ugly result, moreover, will forever recur. Governments determine the ultimate value of money, and systemic forces will sometimes cause them to gravitate to policies that produce inflation. From time to time such policies spin out of control. Even in the U.S., where the wish for a stable currency is strong, the dollar has fallen a staggering 86% in value since 1965, when I took over management of Berkshire. It takes no less than $7 today to buy what $1 did at that time. If you hold dollars, you’re trusting the US government not
to destroy your wealth. Bitcoin, by contrast, is based on mistrust — it’s specifically designed so that it’s every man for himself. All in Vain was blamed by many in the bitcoin community for his stupidity: what was he thinking, keeping his wallet on a Windows computer attached to the open internet? But even with bitcoin, people nearly always end up trusting someone – and the entity they’re trusting often turns out to be unreliable. MyBitcoin, turned out to be a fraud; Mt Gox was hacked. The latest hot new bitcoin company is Coinlab, but given how much money can be made by hacking into these companies, and given that law enforcement authorities are unlikely to make any attempt to go after the perpetrators, there will always be a pretty substantial risk that clients will lose their money. The level of mistrust built into bitcoin is both feature and bug – most of us actually like being able to outsource our wealth-hoarding to some large trusted institution, rather than burying $1,000 under a black volcanic rock in a dry stone wall next to an old oak tree, or wrapping $90,000 in hundred-dollar bills in aluminum foil and hiding it in the freezer. Looking after your own coins is dangerous, and requires a pretty substantial level of tech-savviness. But trusting someone else to look after your coins requires the very trust that bitcoin was designed to circumvent. Bitcoin’s built-in mistrust of institutions doesn’t just set it apart from fiat currency, it also sets it apart from other virtual currencies, such as Facebook credits in the US, QQ coins in China, or Linden dollars in Second Life. All those currencies are closely controlled and guarded by the companies that invented them – and have very little value outside that particular ecosystem. (That said, credits in World of Warcraft are valuable enough that Chinese prison guards reportedly force convicts to perform monotonous tasks within the game for 12-hour stretches at a time, building up credits which can then be sold for many times the guards’ official salary.)
Some of these virtual currencies are roughly the same order of magnitude as Bitcoin in size, although it’s hard to make apples-to-apples comparisons. Revenues from Facebook credits are running at a rate of about $1 billion a year, for instance, and the market in QQ coins was so big in 2007 that the Chinese central bank, fearing that it was losing control of the money supply, cracked down on their use, calling on companies to stop trading in them. In this latest bubble, bitcoin transaction volume has managed to exceed $30 million in one day, and most days are seeing volumes of more than $5 million. That works out to about $2 billion in volume per year, so long as the bubble doesn’t burst. But the biggest difference between bitcoin and other virtual currencies is that bitcoins are the only one which have speculative value. What’s more, because they’re not tied to a corporate parent, bitcoins appeal to the web’s anarcho-libertarians in the way that no other virtual currency can. Bitcoins hold exactly the same gleaming promise for techno-utopians as gold does for Glenn Beck. They’re a scarce resource, and there’s no government or corporation which can control that resource. Bitcoins, like gold, are beholden to no government; they can’t be printed by any central bank, and they certainly won’t be subject to hyperinflation, since the global supply of bitcoins will never exceed 21 million. Like gold, bitcoins are mined; but unlike gold, no one can stumble over some large seam and make a fortune. Mining for bitcoins involves an enormous amount of computer power, and very little luck, and the global rate at which new bitcoins will be mined is both predetermined and slowing down. There were about 3 million coins outstanding at the beginning of 2010, there are about 11 million coins outstanding today, and we’ll get to 14 million in early 2014. Come 2021 or so, assuming bitcoins are still used then, the rate of growth of bitcoins will be so low that to a first approximation the money supply will be constant. This carries with it its own
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People betting on a decline of trust in government have been stocking up on gold and bitcoins...
problems, as we’ll see. But there’s no risk that some central bank will print millions of new bitcoins, thereby diluting or inflating away the value of existing ones. As the reverberations from the financial crisis continue to echo, people betting on a decline of trust in government have been stocking up on gold and bitcoins. (Or rather, gold or bitcoins: although they can be equally zealous and vehement about their respective asset classes, there’s surprisingly little overlap between goldbugs, on the one hand, and the bitcoin community, on the other.) These are the perfect assets for rugged individualists, who trust their guns or their ultra-secure passwords more than they do their country. And in times of global turmoil, as we’re seeing today, such assets can perform very well.
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The immediate impetus for the current spike in bitcoin prices, of course, is the events in Cyprus. There, the government, under extreme pressure from the European Union, first proposed taking all bank accounts – even the insured ones – by at least 6.75%. That didn’t work, but now uninsured account holders at Cyprus’s two largest banks stand to lose most of their money. It’s a stark reminder of the dangers associated with depositing money in a bank. Bitcoin has become suddenly popular in Cyprus for obvious reasons: no government can confiscate your bitcoins, or prevent you from transporting them out of the country. (On the other hand, if your bank account is frozen, it’s hard to find the money needed to buy coins.)
More generally, bitcoins could be emerging as a very useful currency in police states, or anywhere that monetary policy could fail catastrophically. At the end of 2011, for instance, there was a significant uptick of bitcoin activity in Belarus and Ukraine, two countries at severe risk of hyperinflation. If you want to protect your wealth from the policies of your national government, or from the inflationary policies of a heterodox central bank, then bitcoins can be a very good way of doing so in a largely undetectable manner.
Bitcoins could be emerging as a very useful currency in police states, or anywhere that monetary policy could fail catastrophically. Of course, acquiring bitcoins in such countries can be non-trivial: there’s not a lot of liquidity on the major internet exchanges from people looking to sell bitcoins and buy the Ukrainian hryvnia. And even if there were, your local Ukrainian bank might frown on sending lots of hryvnia to Mt Gox. But it’s conceivable that people in Ukraine and Cyprus, especially information workers, might start working for bitcoins, spending them on goods and services, and introducing them into the local economy that way. At which point one can envisage the coins getting the same kind of status, at least among the information elite, that dollars had in the Soviet era.
Bitcoins, then, are like cash — but they take the idea a step further than has ever been possible. If you give me a $100 bill, the transaction is anonymous and untraceable, but we both need to be in the same place at the same time. And it helps if we both live in a country where the US dollar is an accepted unit of currency. With bitcoins, transfers can take place across continents and timezones with no problems, no timelags, and only minuscule transaction fees. No banks are involved; no central bank controls the money supply; no taxes ever need to be paid. Once you’ve obtained a stash of bitcoins, they’re yours to do with as you like. And there’s lots that you can do with bitcoins.You can convert them into any of a dozen currencies, on various online exchanges. (Although at that point you’re going to start needing a bank account.) You can gamble with them in online casinos. Or you can just go out and spend them.The list of things which have been bought with bitcoins is very long, and is by no means confined to laptop computers and computer-programming services. Hotels take them, a sock manufacturer in Massachusetts is famous for accepting bitcoins, and the more enthusiastic members of the bitcoin community regularly do things like split checks at a restaurant – even one which doesn’t take bitcoin itself – by transferring coins to the person paying in dollars. And then, more notoriously, there’s Silk Road – a site which is not only a hub of bitcoin activity, but also played an important role in the first bitcoin bubble, the vertiginous rise in market value of bitcoins in 2011 which made the rest of the world sit up and pay attention to what was going on. Silk Road — and bitcoins — hit the public consciousness on June 1, 2011, a couple of weeks before the All in Vain heist. That’s when Gawker’s Adrian Chen published an article headlined “The Underground Website Where You Can Buy Any
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The price of bitcoins, which had never before traded in the double digits, soared in just one week to as much as $33 apiece
Drug Imaginable”. His post was viewed more than 1.5 million times, and caused a sensation, with Senators Joe Manchin, of West Virginia, and Chuck Schumer, of New York, writing an outraged (and entirely ineffective) letter to the Attorney General and the head of the Drug Enforcement Administration, demanding Silk Road be taken down. Bitcoins were – and still are – the only currency accepted on Silk Road, and overnight they became a speculative bet on the online future of illegal trading. The price of bitcoins, which had never before traded in the double digits, soared in just one week to as much as $33 apiece.
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The value of bitcoins, it turns out, is highly sensitive to media coverage: a year earlier, in July 2010, the influential technology site Slashdot posted a short item about bitcoin which sent the price soaring tenfold — from less than a cent to about 7 cents per bitcoin — also in a few days.And a single post on Time.com in April was enough to double the price of Bitcoins in a week, from 80 cents to $1.60. Even the article you’re reading now is appearing now because of the current bubble, and will, at the margin, help to continue to inflate it. For speculators, the math is incredibly compelling. If you spent $100 on bitcoins the day after the Slashdot article came out,
If the currency of a country ever fluctuated as much as bitcoins did, it would never be taken seriously... those coins would have been worth $72,500 when the Gawker article came out just under a year later. And they would have been worth $250,000 a week after that. Today, they would be worth more than $1 million.There aren’t many perfectly legal investments which offer that kind of return. All of which helps explain the current bitcoin bubble as well. Each time the value of a bitcoin hits a new high or a new milestone, there’s more press coverage of the phenomenon, drawing new people in, and sending the value of bitcoins even higher. Indeed, if you chart the value of bitcoins against the number of times that they’re being talked about on Twitter, you’ll see a very strong correlation. And because of the Cyprus connection, mainstream publications have a handy real-world news hook, now, with which to explain the bitcoin phenomenon. This is actually a serious problem, if you’re trying to put together a currency, rather than a vehicle for financial speculation. If the currency of a country ever fluctuated as much as bitcoins did, it would never be taken seriously as a medium of exchange: how are you meant to do business in a place where an item costing one unit of currency is worth $10 one day and $20 the next? Currencies need a modicum of stability; indeed, one of the main selling points of bitcoin was that it couldn’t be destabilized by government institutions. But that comes as scant comfort to people watching the value of a bitcoin behave like some kind of demented internet stock during the dotcom bubble. And just like demented internet stocks, bitcoins have seen busts as well as bubbles: in the second half of 2011, for instance, the value of bitcoins retreated from their peak around $30 each to a low point closer to $3. (Today, they’re trading above $140.) In reality, then, bitcoin doesn’t really behave like a currency at all. In terms of its market value, it looks much more like a highly-volatile commodity.That’s by design: bitcoins were created to be the most fungible commodity the world had ever
seen – to the point at which they would effectively erase the distinction between a commodity and a currency. But is that a good idea? Dollars are a universally accepted unit of account: if something in the world has a price, it has a price in dollars. Dollars are not, on the other hand, physical commodities. The overwhelming majority of dollars in the world are deposited safely and electronically in banks: there’s something weird and self-defeating about the kind of people who keep their savings stuffed under the mattress. In Hollywood, if you show someone counting out huge sums of cash, that’s an easy way for the director to say that he’s a criminal. Bitcoin was constructed to behave like a currency: it’s very easy to use bitcoins to pay for goods and services, especially if what you’re buying is in a different country. Right now, there’s literally no way to build a website selling some kind of service, and have a meaningful fraction of the world’s online population be able to pay you for that service. Bitcoin was designed to solve that problem; to be, in effect, the lingua franca of online commerce. But it’s very hard to be a currency when you’re also a commodity, governed by rules of scarcity and subject to speculative attack. And it’s also very hard to be a currency – or even a commodity, for that matter – when you’re as small as bitcoin is. Even now, at the top of a huge bubble, the total value of all the bitcoins in existence is the equivalent of about 2,000 standard gold bars -- not remotely enough to revolutionize the global payments and currency systems as we know them. Given the choice between something old and solid, on the one hand, and something new and virtual, on the other, the market is still voting for the asset class which has proved its worth over millennia. On a good day, at the top of the bubble, the trading volume
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in bitcoins can be more than $20 million. But by the standards of global currency markets, those kind of figures aren’t even a rounding error. The foreign exchange markets see volume of $4 trillion per day.That’s 200,000 times greater than what we’re seeing in the bitcoin market, and it happens on a regular, day-in and day-out basis. On top of that, there are really no traders in bitcoins, since for the time being it’s (almost) impossible to bet that the price of
If they succeed, they fail. If millions of people started using bitcoins on a regular basis, the soaring value of bitcoins would actually be disastrous. bitcoins will go down. As a result, there’s no reliable source of liquidity in the bitcoin market: there’s no bank or trading house which you can be sure will be there if and when you want to sell your coins. And just to make bitcoins even less attractive, it’s far from clear that bitcoins are even legal. The FBI is on the record as saying that “it is a violation of federal law for individuals… to create private coin or currency systems to compete with the official coinage and currency of the United States”. And laws against operating an unlicensed money-transmitting business have
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been used against electronic currencies in the past, and would seem to apply equally to bitcoin. The biggest problem with bitcoins, however, is conceptual: if they succeed, they fail. If millions of people started using bitcoins on a regular basis, the soaring value of bitcoins would actually be disastrous. You’ve heard of hyperinflation: this would be hyperdeflation. Take a gold bar valued at $600,000. At $60 per bitcoin, the value of that bar is 10,000 BTC. But then assume that bitcoins rise in value to $600 apiece, and then to $6,000, and then to $60,000 — as would have to happen if the fixed number of bitcoins was being used to store hundreds of billions of dollars in value.Then the value of the gold bar would plunge, in bitcoin terms — to 1,000 BTC and then 100 BTC and finally just 10 BTC. The same thing would happen to all other goods and services in the world, including your own salary. Everything would be constantly going down in price, if you thought in bitcoin terms. Inflation is bad, but deflation is worse. The reason is that in a deflationary environment, no one spends money — because whatever you want to buy is sure to become cheaper in a few days or weeks. People hoard their cash, and spend it only begrudgingly, on absolute necessities. And they certainly don’t spend it on hiring people — no matter how productive their employees might be, they’d still be better off just holding on to that money and not paying anybody anything. The result is an economy which would simply grind to a halt, with massive unemployment and almost no economic activity. In a word, it would be a Depression. In order to have economic growth, you need monetary growth as well — and that’s something which is impossible to achieve in a bitcoin-based system. Currencies such as the dollar, with a central bank which can print money at will, have succeeded for a reason. As economies grow, the money sup-
As social media promotes a culture of sharing, users feel more inclined to create and share something of their own
ply has to be able to grow with them. And that’s why bitcoin can never really succeed over the long term. Rick Falvinge, then, the founder of the Swedish Pirate Party who has invested his entire net worth in bitcoins, might be a multi-millionaire right now, but he is doomed to end up a poor and disappointed man unless he changes his mind. His coins will, at some point, become worthless, rather than turning him into some kind of visionary cyberbillionaire. But that doesn’t mean Falvinge isn’t onto something. There’s a lot to be said for a fast, efficient, peer-topeer payments system which bypasses centers of authority and which has negligible transaction costs. It just doesn’t need to be its own currency. Historically, the government has subsidized the most common forms of payment – coins (which are often worth less than they cost to mint), notes, and checks. But it stopped doing that when credit and debit cards came along:Visa and Amex and Mastercard, as well as their web-savvy successors like PayPal and Square, are all run on a for-profit basis by companies looking to make billions of dollars by skimming off a small slice of every transaction. A peer-to-peer payments system, allowing anybody on the internet to pay anybody else on the internet without having to sign up with some financial-services behemoth first, could revolutionize global commerce. It would have to be able to
work with any currency, including bitcoin; it wouldn’t need its own unit of account. It would have to be flexible, too: some transactions would be cashlike and irreversible, while others would allow some kind of chargeback. And, most importantly, it would work with, rather than against, today’s established monetary institutions.Yes, it would be disruptive, and could cost them quite a lot of money in terms of lost interchange fees from plastic cards and ATMs. But it wouldn’t aspire to delegitimize them – quite the opposite. Because it turns out that financial-services companies are a very important part of any democracy. It’s because we place so much trust in banks, after all, that they are forced to take on a great deal of responsibility. Banks and central banks are given an important job to do, are regulated and scrutinized, and can be held responsible for their actions. The population of the entire country, as represented by the government, stands behind bank deposits and promises to honor them even if the bank goes bust. Money, in other words, is a key ingredient in the glue which keeps the social compact together. (What we’re seeing in Cyprus is in large part a demonstration of what happens when that compact starts becoming unglued.) Bitcoin, in that sense, is anti democratic. It’s based on mistrust rather than trust, it refuses to take any responsibility onto itself – indeed, it doesn’t even have a self to take re-
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sponsibility onto. It’s nihilistic, and an attractive alternative only to things which are downright bad. And in any event, bitcoin is never going to work as a global payments system. Not only does it suffer from having a slow-growing money supply and a metastasizing transactions file which has to live on every user’s computer, it also encourages destructive computer hacking. The way that the money supply grows, in the bitcoin system, is by people harnessing the power of hundreds or thousands of computers to solve very complicated mathematical tasks, earning bitcoins for doing so along the way. And the easiest and cheapest way of doing that is to do so illegally, by stealth: set up a “botnet” of hacked computers to do your bidding for you. The incentives, here, are very bad indeed. I do have hope that in the future, someone, somewhere, is going to learn from bitcoin’s mistakes, and build a better system. One which needs less technological expertise to use; one which can grow organically, instead of only at a predetermined rate; one which is designed to be used primarily as a payments mechanism, rather than as a store of value and a unit of speculation. When that happens, cash will start looking decidedly anachronistic, as will wallets. We’ll have everything we need on our phones and in our web browsers, which we’ll be able to use for everything from paying for on-street parking to sending flowers to a friend in New Zealand to buying and selling shares of Google and Apple on the New York Stock Exchange. If we want to keep our money in a bank, we can; if we don’t, that’s fine too. And of course we can keep it in any mix of currencies we want as well.
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In the very early days of the world wide web, there were attempts to build a payments tag deep into the very architecture of HTML web pages. Those attempts failed, killed by a financial-services industry very suspicious of anything new. And as a result, the web has evolved along an advertising model, where instead of users paying for content, we have advertisers paying for users. But a universal payments system with no friction or interchange costs could change that model dramatically. And it would certainly help to level the playing field – for good and for bad – between skilled service-sector workers in countries like India and Russia and China, on the one hand, and their counterparts in countries like Germany, Japan, and the US, on the other. Payments walls, these days, are extremely effective barriers to trade, and if they come down, then we’ll get much more trade, with transactions getting orders of magnitude smaller than what we’re seeing now.The disruption – and the global wealth creation – could be truly enormous. It’s impossible to know when – or even whether – this is going to happen. Bankers in general, and central bankers in particular, tend to be extremely conservative, and anything which could facilitate money laundering or other illegal transactions is going to have a lot of difficulty getting traction. Bitcoin took off quickly because it never asked for permission; its successor is going to have to be a lot more diplomatic. But whatever it looks like, in the end, we can be sure of one thing: it will owe a very large debt to Satoshi Nakamoto and his audacious attempt to invent a whole new currency. Bitcoin isn’t the future. But it has helped to light the way ahead.
#HOWTO: COACHELLA A brief rundown of a brand that are killing it digitally.
The amount of inbound marketing ads veering small businesses into a false sense of security is starting to grind my gears. “Follow these 3 easy steps and drive traffic by 30%”. This is precisely the reason for this new #HowTo archive. Because if you want to convert leads into sales or drive traffic to social media outlets, you look at the best, and you learn from the best. Look at brands that have proven expertise in the social media space and use their strategy as a blue print for growth. It might sound unimaginative, maybe a little uninspiring if you’ve just been hired by a brand to increase their digital voice, but hey thats the internet, and you don’t need to be a creative mastermind to crack it. Today’s edition of #HowTo will feature Californian festival giants Coachella and their impressive arsenal of digital marketing tools. In my humble opinion Coachella should be the poster boy of what can be attained in the events industry through digital marketing. This made for an easy choice for todays article. That and the fact that I’ve always had a soft spot for music festivals. They allow people to forget about their day jobs, their families, their troubles and responsibilities all in the name of venturing out to god knows where for 3 days to do you know what with you know who. That being said, its great to see the hustle and bustle of the US festival scene alive and well. For years it seemed like the US were struggling to produce quality festivals against the backdrop of European greats like Glastonbury and Benicassim but Coachella is a shining example of how California indeed knows how to party, and party they will do in abundance. With 158,000 visitors sprawled over 2 weekends, Coachella’s accumulated attendance resembles that of a small city. However, this figure is a split in the sea compared to what they have attained on a digital scale. With 1 million on Facebook and a further 522,000 on Twitter, they have twice the online presence of their closest contender, Lollapalooza.
So what exactly are Coachella doing to achieve that crazy consumer reach? Well, apart from the desert location and being an oasis of pure awesomeness, they use every known mainstream social media outlet at their disposal with extreme effectiveness. FourSquare, Instagram, Google+, Tumblr you name it they’re on it. This accompanied with a user friendly corporate web page and kick-ass mobile app makes for a strengthened relationship between the brand and the consumer. Technology The birth of mobile marketing has revolutionised the ability of brands to reach consumers and you can be sure that Coachella will be out in force this year with the latest and greatest in Geo targeting and RFID. Lets start with the latter.This years wristbands are activated by the user online prior to entry using the bands embedded Radio Frequency Identifier (any tampering will void the wristbands activation so you can leave the scalpel at home). Coachella co-branded with Spotify on this one to bring festival-goers the #WeWereThere campaign. On site there will be dozens of stations where guests can swipe their bands and share their location on Facebook. This allows them to collect custom Spotify playlists based on where they are and who is playing. Using location based services like Geo targeting, festival goers can then relive and rediscover their festival experience as it happened.This aims to bring a personalised experience to an audience already uber passionate about music. I applaud Spotify and Coachella on this one. Users check in a few times a day, act as ambassadors for the Coachella brand spreading the good word, and the festival goers receive their digital post cards upon exit of the festival aggregating all the sites they visited and playlists they collected over the weekend.Win-Win. Live Streaming Tickets for Coachella sold out in a swift 20 minutes last year and you can be damn sure that the hype generated around the
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event on social media had something to do with it. Particularly in the events industry, it is critical that brands interact not only with attendees, but also fans of the brand. Coachella did this by providing the people at home with engaging content that aligned with the brands voice, thus fuelling exponential demand for ticket sales the following year. What better way to vocalise a brand and fuel somebodies determination for next years ticket sales than to stream Wu-Tang Clan and Dr. Dre right to their front room? The Coachella Content Community Those unfortunate enough to miss out on ticket sales are able to follow the conversation at #Coachella, #WeWereThere or #CoachellaLive. This exposes the Twitter landscape to an entire realm of content uploaded by the users. Simply type Coachella into Twitter and you’ll be bombarded with reams of status updates, photos and videos of the weekends escapades. This offers the marketing team at Coachella the chance to relax, put on the cruise control and let the fans do the work.Viral video’s, celebrity gossip, snippets of live performances, Coachella enjoyed unparalleled free marketing by promoting their hashtags throughout the weekend. In addition, Coachella co-branded with H&M to bring the #KissForA-
Cause campaign.The campaign saw the fashion moguls install a photo booth and donate $1 to combat aids for every photo that was shared with #KissForACause. Maintaining a strong social media presence throughout a major festival is no easy feat. As you can imagine, updating a Facebook status is not a high priority for most people in the midst of festival madness. Coachella managed to reverse this situation. Through a combination of incentives, co-branding and experimentation with new technologies, Coachella have seen their online presence surge, creating an ecstasy of social media awesomeness in the process. With European festivals scheduled to kick off in late June, it will be interesting to see if they follow in the steps of Coachella and experiment with new social media technologies. It wasn’t long ago when the Americans could only dream of festivals of Glastonbury-like proportions. Now, It would appear that the wheel has come full circle with the US now setting the trends for the European festival scene. And now you know #HowTo. Mammoth Marketing.
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