FEATURED STORY

9.3 trillion reasons fintech could change the developing world

Modern fintech is going to create formal, standard records about economies where none existed before.

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Request an invitation to Next:Money, O’Reilly’s conference focused on the fundamental transformation taking place in the finance industry.

A relatively commonplace occurrence — credit card fraud — made me reconsider the long-term impact of financial technology outside the Western world. I’ll get to it, but first, we need to talk about developing economies.

I’m halfway through Hernand de Soto’s The Mystery of Capital on the advice of the WSJ’s Michael Casey. Its core argument is that capitalism succeeds in the Western world and fails everywhere else because in the West, property can be turned into capital (you can mortgage a house and use that money to do something). The book uses the analogy of a hydroelectric dam as a means of unlocking the hidden, potential value of the lake.

But in much of the world, it is unclear who owns what, and as a result, the value of assets can’t be put to work in markets. In the West, we take concepts like title and lien and identity for granted; yet, these systems are relatively new and don’t exist around the world. As de Soto noted in his book, in the Soviet Union, unofficial economic activity rose from 12% in 1989 to 37% in 1994. Read more…

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Real-world interfaces are in an awkward and playful stage

The O'Reilly Radar Podcast: Josh Clark on the world as an interface, avoiding data rash, and the importance of play.

Subscribe to the O’Reilly Radar Podcast to track the technologies and people that will shape our world in the years to come.

World_Alarm_Clock_Bob_Bob_FlickrIn this week’s episode of the Radar Podcast, O’Reilly’s Mary Treseler chats with Josh Clark, founder of design agency Big Medium (formerly known as Global Moxie). Clark talks about the changing nature of his work as the world itself becomes more of an interface, how to avoid “data rash,” and why in this time of rapid technology growth it’s essential for designers to splash in the puddles.

The world is the medium

The influence of the Internet of Things is beginning to touch every aspect of our lives, from how we communicate to how we work to how we play. This fundamental shift away from screens to the real-world around us not only is influencing how designers approach their craft, but is changing the medium itself in which designers work. Clark talked about this shift and how it’s affecting his own work:

Over the last couple of years, I’ve found the nature of my work has been changing as well as my interests. I think the culture of digital design is changing, too, as we start moving off of screens. It felt like an opportunity to redefine my own work, so I also did that with my agency and changed its name to Big Medium. The idea of that being that the Internet itself is a pretty big medium, and in fact starting to expand beyond the bounds that we’ve traditionally associated it with, which is the screen. Increasingly, as we’re seeing connected devices — the smart phones were kind of the leading edge of this, but now we’re starting to see wearables and the Internet of Things — this idea that the Internet is becoming embedded in our environment and in everyday objects means that anything can be an interface.

My work is starting to engage more and more with that truly big medium, which is the world itself. Finally, the world is the interface, which of course it always has been, but now we’re able to create digital experiences that belong to the world that we actually move in instead of us having to dive into the screens.

Read more…

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Here’s why finance is about to be disrupted

O'Reilly's Next:Money event helps business leaders understand the fundamental shifts reshaping finance.

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Request an invitation to Next:Money, O’Reilly’s conference focused on the fundamental transformation taking place in the finance industry.

Editor’s note: We’re approaching an inflection point in all things “money” — currency, transactions, markets, and capitalism itself. Fundamental changes in the financial industry, driven by technology but with implications for every business and government, are beginning to manifest, bringing both disruption and opportunity. We created O’Reilly’s new conference, Next:Money (September 9-10 in San Francisco), to help business leaders understand and act on this shift. Below, Next:Money program chair Paul Kedrosky lays out the forces and patterns that are reshaping the financial industry.


Finance has the three main characteristics of an industry likely to be transformed by technology:

  1. It traffics in bits, not atoms.
  2. Its services are often delivered remotely.
  3. There is little need for human contact.

Unlike other sectors with these characteristics — e.g., media, advertising, and travel services — finance hasn’t been disrupted. Despite huge technological change and a series of financial crises, the league table of the largest financial firms today, both in the U.S. and around the world, remains much the same as it has always been.

Granted, the $1.2-trillion U.S. financial services industry isn’t homogenous. Its main components — banks, brokers, asset managers, markets, payment networks, insurers, and credit card companies — are very different, and have seen widely varying degrees of technology-induced change. In no sense, however, is this industry as transformed by new companies and new business models as one would expect, given its disruption-ready characteristics.

So, why haven’t entrepreneurs transformed finance? There are (at least) five reasons: Read more…

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The state of augmented reality

A look at AR today and how we need to design it for tomorrow.

Attend O’Reilly’s Solid Conference, June 23–25, in San Francisco. Solid is our conference exploring how the collision of software and hardware is fueling the creation of a software-enhanced, networked physical world. Helen Papagiannis will speak at Solid on June 24.

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Screenshot of the Google Sky Map app.

Unlike virtual reality (VR), augmented reality (AR) provides a gateway to a new dimension without the need to leave our physical world behind. We still see the real world around us in AR, whereas in VR, the real world is completely blocked out and replaced by a new world that immerses the user in a computer generated environment.

AR today

The most common definition of AR to date is a digital overlay on top of the real world, consisting of computer graphics, text, video, and audio, which is interactive in real time. This is experienced through a smartphone, tablet, computer, or AR eyewear equipped with software and a camera. Examples of AR today include the translation of signs or menus into the language of your choice, pointing at and identifying stars and planets in the night sky, and delving deeper into a museum exhibit with an interactive AR guide. AR presents the opportunity to better understand and experience our world in unprecedented ways.

AR is rapidly gaining momentum (and extreme amounts of funding) with great advances and opportunities in science, design, and business. It is not often that a whole new communications medium is introduced to the world. AR will have a profound effect on the way we live, work, and play. Now is the time to imagine, design, and build our virtual future. Read more…

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How Shazam predicts pop hits

The O'Reilly Radar Podcast: Cait O'Riordan on Shazam's predictive analytics, and Francine Bennett on using data for evil.

Subscribe to the O’Reilly Radar Podcast to track the technologies and people that will shape our world in the years to come.

record_player_from_1920s_Marcin_Wichary_FlickrIn this week’s Radar Podcast, I chat with Cait O’Riordan, VP of product, music and platforms at Shazam. She talks about the current state of predictive analytics and how Shazam is able to predict the success of a song, often in the first few hours after its release. We also talk about the Internet of Things and how products like the Apple Watch affect Shazam’s product life cycles as well as the behaviors of their users.

Predicting the next pop hit

Shazam has more than 100 million monthly active users, and its users Shazam more than 20 million times per day. This, of course, generates a ton of data that Shazam uses in myriad ways, not the least of which is to predict the success of a song. O’Riordan explained how they approach their user data and how they’re able to accurately predict pop hits (and misses):

What’s interesting from a data perspective is when someone takes their phone out of their pocket, unlocks it, finds the Shazam app, and hits the big blue button, they’re not just saying, “I want to know the name of this song.” They’re saying, “I like this song sufficiently to do that.” There’s an amount of effort there that implies some level of liking. That’s really interesting, because you combine that really interesting intention on the part of the user plus the massive data set, you can cut that in lots and lots of different ways. We use it for lots of different things.

At the most basic level, we’re looking at what songs are going to be popular. We can predict, with a relative amount of accuracy, what will hit the Top 100 Billboard Chart 33 days out, roughly. We can look at that in lots of different territories as well. We can also look and see, in the first few hours of a track, whether a big track is going to go on to be successful. We can look at which particular part of the track is encouraging people to Shazam and what makes a popular hit. We know that, for example, for a big pop hit, you’ve got about 10 seconds to convince somebody to find the Shazam app and press that button. There are lots of different ways that we can look at that data, going right into the details of a particular song, zooming out worldwide, or looking in different territories just due to that big worldwide and very engaged audience.

Read more…

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Cultivating change

Cultivate is O'Reilly's conference committed to training the people who will lead successful teams, now and in the future.

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Attend Cultivate July 20 and 21, in Portland, Oregon. Cultivate is our conference looking at the challenges facing modern management and aiming to train a new generation of business leaders who understand the relationship between corporate culture and corporate prosperity.

Leadership has changed — and in a big way — since the Web started upending the status quo two decades ago. That’s why we’re launching our new Cultivate event; we realized that businesses need new types of leaders, and that O’Reilly is uniquely positioned to help engineers step up to the job.

At the start of the 21st century, Google was in its infancy; Facebook didn’t exist; and Barnes & Noble, not Amazon, was the dominant force in the book industry. As we’ve watched these companies grow, we’ve realized that every business is a software business, and that the factors that made Google, Facebook, and Amazon successful can be applied outside the Web. Every business, from your dentist’s office to Walmart, is critically dependent on software. As Marc Andreessen put it, software is eating the world.

As companies evolve into software businesses, they become more dependent on engineers for leadership. But an engineer’s training rarely includes leadership and management skills. How do you make the transition from technical problems to management problems, which are rarely technical? How do you become an agent for growth and change within your company? And what sorts of growth and change are necessary?

The slogan “every business is a software business” doesn’t explain much, until we think about how software businesses are different. Software can be updated easily. It took software developers the better part of 50 years to realize that, but they have. That kind of rapid iteration is now moving into other products. Read more…

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