- How Geeks Opened up the UK Government (Guardian) — excellent video introduction to how the UK is transforming its civil service to digital delivery. Most powerful moment for me was scrolling through various depts’ web sites and seeing consistent visual design.
- Tools for Working Remotely — Braid’s set of tools (Trello, Hackpad, Slingshot, etc.) for remote software teams.
- Git Push to Deploy on Google App Engine — Enabling this feature will create a remote Git repository for your application’s source code. Pushing your application’s source code to this repository will simultaneously archive the latest the version of the code and deploy it to the App Engine platform.
- Amazon’s 3D Printer Store — printers and supplies. Deeply underwhelming moment of it arriving on the mainstream.
A conversation with Sean Taylor, Hilary Mason, and John Myles White about how ratings affect our thinking
Is popularity just a matter of simple luck–of some early advantage compounded by human preference for things that are already popular? A paper published today in Science offers some insight into the way that popularity emerges in online ratings. Lev Muchnik, Sinan Aral, and Sean Taylor were able to set up a randomized experiment on a popular Reddit-like message board in which they gave some posts a one-point upvote on publication and others a one-point downvote. Posts that were “born lucky” ended up with 25% higher scores on average than those without modification.
In our latest podcast, Renee DiResta and I are joined by Sean Taylor, Hilary Mason and John Myles White to talk about Sean’s findings and about ratings, rankings and reviews in general. Bits and pieces that come up in the podcast:
- Anchoring and adjustment
- Daniel Kahneman’s Thinking, Fast and Slow; his Nobel Prize lecture is worth watching, too
- Amazon reviews both satirical and just poorly informed
- Health inspection results can be predicted from online reviews
- Restaurant grades are less effective in the age of Yelp
- Speaking of Yelp:
Velocity 2013 Speaker Series
Why should we at all bother about notions such as risk and safety in web operations? Do web operations face risk? Do web operations manage risk? Do web operations produce risk? Last Christmas Eve, Amazon had an AWS outage affecting a variety of actors, including Netflix, which was a service included in many of the gifts shared on that very day. The event has introduced the notion of risk into the discourse of web operations, and it might then be good timing for some reflective thoughts on the very nature of risk in this domain.
What is risk? The question is a classic one, and the answer is tightly coupled to how one views the nature of the incident occurring as a result of the risk.
One approach to assessing the risk of Amazon going down is probabilistic: start by laying out the entire space of potential scenarios leading to Amazon going down, calculate their probability, and multiply the probability for each scenario by their estimated severity (likely in terms of the costs connected to the specific scenario depending on the time of the event). Each scenario can then be plotted in a risk matrix showing their weighted ranking (to prioritize future risk mitigation measures) or calculated as a collective sum of the risks for each scenario (to judge whether the risk for Amazon going down is below a certain acceptance criterion).
This first way of answering the question of what the risk is for Amazon to go down is intimately linked with a perception of risk as energy to be kept contained (Haddon, 1980). This view originates from more recent times of increased development of process industries in which clearly graspable energies (fuel rods at nuclear plants, the fossil fuels at refineries, the kinetic energy of an aircraft) are to be kept contained and safely separated from a vulnerable target such as human beings. The next question of importance here becomes how to avoid an uncontrolled release of the contained energy. The strategies for mitigating the risk of an uncontrolled release of energy are basically two: barriers and redundancy (and the two combined: redundancy of barriers). Physically graspable energies can be contained through the use of multiple barriers (called “defenses in depth”) and potentially several barriers of the same kind (redundancy), for instance several emergency-cooling systems for a nuclear plant.
Using this metaphor, the risk of Amazon going down is mitigated by building a system of redundant barriers (several server centers, backup, active fire extinguishing, etc.). This might seem like a tidy solution, but here we run into two problems with this probabilistic approach to risk: the view of the human operating the system and the increased complexity that comes as a result of introducing more and more barriers.
Controlling risk by analyzing the complete space of possible (and graspable) scenarios basically does not distinguish between safety and reliability. From this view, a system is safe when it is reliable, and the reliability of each barrier can be calculated. However there is one system component that is more difficult to grasp in terms of reliability than any other: the human. Inevitably, proponents of the energy/barrier model of risk end up explaining incidents (typically accidents) in terms of unreliable human beings not guaranteeing the safety (reliability) of the inherently safe (risk controlled by reliable barriers) system. I think this problem—which has its own entire literature connected to it—is too big to outline in further detail in this blog post, but let me point you towards a few references: Dekker, 2005; Dekker, 2006; Woods, Dekker, Cook, Johannesen & Sarter, 2009. The only issue is these (and most other citations in this post) are all academic tomes, so for those who would prefer a shorter summary available online, I can refer you to this report. I can also reassure you that I will get back to this issue in my keynote speech at the Velocity conference next month. To put the critique short: the contemporary literature questions the view of humans as the unreliable component of inherently safe systems, and instead advocates a view of humans as the only ones guaranteeing safety in inherently complex and risky environments.
Amazon Slash Slashed, Indies Out, Printing for Peace, Massively Online Orthographic Build System
- Kindle Worlds Fine Print — Amazon’s fanfic publishing system has a few flaws: no pr0n, no crossovers, no slash, and Amazon Publishing will acquire all rights to your new stories, including global publication rights, for the term of copyright. I can’t see this attracting pinboard’s most passionate users.
- XBox One Won’t Allow Indies to Self-Publish Games — When it comes to self-publishing, Microsoft is the odd man out. Both Sony and Nintendo allow developers to publish their own games onto PlayStation Network and Nintendo Network, respectively. Microsoft’s position stands in stark contrast to Sony, which has been aggressively pursuing indie content for PS4. (via Andy Baio)
- 3D Printers for Peace Competition (Michigan Tech) — We are challenging the 3D printing community to design things that advance the cause of peace. This is an open-ended contest, but if you’d like some ideas, ask yourself what Mother Theresa, Martin Luther King, or Ghandi would make if they’d had access to 3D printing. (via BoingBoing)
- covim — Collaborative editing for vim. My dream of massively multiplayer troff can finally be realised.
Amazon patent may address payment privacy concerns, Warby Parker outfits store with sensors, and Alipay launches sound wave payments.
Editor’s note: This will be the final installment of our Commerce Weekly series.
Mobile payments security, privacy concerns rise; Amazon may have a solution
The race is on to democratize mobile payments, to create a solution that improves the payment experience for consumers and merchants to the extent that it will replace traditional payment methods. Some experts, however, are concerned that technology developments are failing to address increasing concerns with security and privacy.
Kirk Ladendorf reports this week that smartphone security software company NQ Mobile noted a rise in worldwide phone malware threats from 24,000 in 2011 to 65,000 in 2012. In an interview with Ladendorf, Gavin Kim, chief commercial officer at NQ Mobile, warned that “[s]martphone sales are booming, and they are becoming a much more targeted device by hackers.”
Brent Warrington, CEO of online and mobile payment company SecureNet, disagreed, telling Ladendorf that he’s “comfortable and confident in the level of security of [payment] transactions” through his company, noting that the transaction information is “encrypted from end to end.”
While security concerns may be getting addressed, Ladendorf says that privacy advocates don’t see the same attention being given to privacy concerns and the “potential misuse of growing mountains of electronic data tied to the spending patterns of individual consumers.” Ladendorf notes that the same advances that make mobile payments more enjoyable and convenient also make it easier for companies to mine consumer data. He quotes from a McClatchy newspaper interview with Jeff Chester, executive director of the Center for Digital Democracy, in which Chester said, “[Mobile payment] is about exposing your financial behavior to a daisy chain of financial and other marketers who have a very detailed understanding of where you are, how you spend your time and what you buy.”
Wal-Mart and Google pursue speedy delivery. Elsewhere, more reasons for retailers to fear smartphones, and mobile may be eBay's best bet.
Wal-Mart wants to crowdsource delivery, while Google chases same-day
On the heels of launching its in-store delivery locker program to compete with Amazon Locker, Wal-Mart has announced it’s toying with the idea of having in-store customers deliver online orders to speed delivery times. Reporting on the news at Reuters, Alistair Barr and Jessica Wohl note that, in essence, Wal-Mart would be experimenting with the growing crowdsourcing trend that works well in so many other areas, so why not for Wal-Mart delivery? They write:
“A plethora of start-ups now help people make money by renting out a spare room, a car, or even a cocktail dress, and Wal-Mart would in effect be inviting people to rent out space in their vehicle and their willingness to deliver packages to others.”
Barr and Wohl mention a few of the “why nots” — numerous legal, regulatory and privacy obstacles — but report that Joel Anderson, chief executive of Walmart.com, believes it to be a viable plan. “This is at the brain-storming stage,” he says, “but it’s possible in a year or two.”
At Bloomberg’s Businessweek, Susan Berfield points to the bigger picture: “Even if the idea never moves past the hypothetical, the fact that Anderson is even talking about it signals how serious a threat Walmart considers Amazon.” Wired’s Laura Heller agrees, noting that though there are “far too many unattractive variables” for this program to become a reality, “it shows the retailer is thinking outside of the box when it comes to competing with its online competition, Amazon.”
Google's stores, Best Buy's online price match, Amazon's retail domination strategies, and Square's Business in a Box.
Google takes on brick-and-mortar; Best Buy takes on ecommerce
The Google retail store rumor ignited again this week. Seth Weintraub reported at 9to5Google that “[a]n extremely reliable source has confirmed to us that Google is in the process of building stand-alone retail stores in the U.S.” to be opened in time for the 2013 holiday season. The Wall Street Journal’s Amir Efrati followed with confirmation from “people familiar with the matter,” though one of those people said it wouldn’t happen this year.
Across the board, analysts seem to think it’s a good idea. Alyson Shontell at Business Insider noted that as Google becomes more of a hardware company — with its Android devices, Google Glass, and self-driving cars — analysts say it’s time for Google to work on its brand image, which will require consumer interaction, something the company hasn’t done much of up to this point. Google executives seem to agree — Weintraub reported that retail store plans started to solidify along with plans to offer Google Glass to mainstream consumers. “The leadership thought consumers would need to try Google Glass first hand to make a purchase,” Weintraub wrote. “Without being able to use them first hand, few non-techies would be interested in buying Google’s glasses (which will retail from between $500 to $1,000).”
Google buys Channel Intelligence, digital wallets continue an uphill battle, and "social commerce" boosts ecommerce.
Google acquires Channel Intelligence, pursues Amazon shoppers
In a recent post at Wired, Marcus Wohlsen took a look at the success of Google’s switch last fall to all-paid product listings — such as the top result for a search for iPhone 5 — and how it fits in to Google’s plans to compete against Amazon on the shopping front.
Chris Lien, CEO of Marin Software, noted to Wohlsen that shoppers either start their searches at Amazon or at Google and that Amazon has been encroaching on Google’s turf as it becomes more of a “commerce search engine.”
In order to compete, Wohlsen writes, Google is establishing itself as a place not only to research products, but also to buy them. Lien says Google likely doesn’t intend to start its own warehouses, but rather to “package the sale from search to checkout” and let merchants take it from there. Marin Software marketing VP Matt Lawson told Wohlsen, “What you’re going to see [Google] do is do everything they can to enable marketers to sell through their platform.”
This week, Google took a major step in that direction with its acquisition of Channel Intelligence (CI) for $125 million. In a post at Forbes, TJ McCue describes CI as specializing in product ecommerce, offering data-driven services aimed at increasing online sales, and he highlights one of the company’s most successful products — the CI Where-to-Buy button.
Engadget’s Donald Melanson updated his report on the acquisition with a statement Google released regarding the purchase:
“We want to help consumers save time and money by improving the online shopping experience. We think Channel Intelligence will help create a better shopping experience for users and help merchants increase sales across the web.”
Cashwrap brings Isis to iPhone, Target's price match goes year-round, and Shopgate makes products the point of sale.
Here are a few stories that caught my attention in the commerce space this week.
NFC-enabled Cashwrap case equips iPhone with Isis
At the 2013 International CES this week, Incipio and AT&T announced the launch of Cashwrap, an NFC-enabled iPhone case that equips iPhones with the Isis Wallet, currently only available for NFC-compatible Android phones. According to a post at 9to5Mac, the case will be available in March and will cost $59.99 to $69.99.
9to5Mac shot a short video of the product from the CES show floor (the Cashwrap representative mistakenly indicates the case will support iPhone 5 — at launch, it will support iPhone 4 and 4S):
When Isis launched in October, some questioned the viability of the payment platform and whether or not it was addressing a real problem. In a report at Consumer Reports, Jeff Blyskal concluded: “Isis, like Google Wallet, still seems to require a lot of work and needless complexity for the questionable convenience of paying by cell phone.” Now, on top of the complexity and questionable convenience of NFC payment, iPhone users must not only attach an appendage to the phone, but fork over a not-so-insignificant amount of cash — all for a payment platform that’s only available in Salt Lake City and Austin, and only at select retailers.
At Telecoms.com, Elliott Holley covered a recent report by financial research firm Celent that says the issues NFC payment technology has faced thus far are only going to be compounded in 2013 and that NFC payment solutions will be overshadowed — perhaps ultimately replaced — by cloud-based wallets. Celent senior analyst and author of the report Zilvanas Bareisis told Holley that not only is using the technology still much more difficult than swiping a credit card, but in markets such as the U.S., “the infrastructure bill is huge and convincing retailers and merchants is difficult.”
Holley highlights a key insight from the Celent report:
“Part of the problem for NFC digital wallets is that while the physical POS world is dominated by cards and the mobile equivalent is to have payment credentials inside the phone and sent to the POS via NFC, the online world is dominated by cloud-based wallets such as PayPal. That makes it difficult to bridge the online-offline convergence of customers who use their mobiles while shopping to read product reviews, compare prices and order online, or pick up an item from a local store, according to Celent.”
The same-day delivery battle, NFC in vending machines, and Google as information central for holiday shoppers.
Here are a few stories that caught my attention in the commerce space this week.
The high price of instant gratification
The Wall Street Journal’s Greg Bensinger took a look this week at the e-commerce same-day delivery trend, a service eBay, Wal-Mart and Google have been experimenting with in order to better compete with Amazon, which has offered same-day service in select locations since 2009.
The obvious benefit for e-commerce retailers is being able to improve the customer experience — providing the convenience of online shopping with the instant gratification of brick-and-mortar shopping. The biggest obstacle is cost. EBay, for example, has hired couriers, paying $12.50 per hour and 55 cents per mile, Bensinger reports, but only charges $5 to deliver a minimum $25 order. Industry analyst Kerry Rice told Bensinger, “Retailers are clearly subsidizing this service to improve the customer experience. Amazon created this monster and everyone has had to jump on board to compete.”
Amazon operating at a loss to draw consumers into its ecosystem is pretty par for its business model, and its deep pockets mean companies are going to have to get creative to successfully compete. Wal-Mart is perhaps in the best position not only to compete with Amazon on this front, but perhaps even overtake and lead the same-day delivery field. Walmart.com chief executive Joel Anderson highlighted for Bensinger Wal-Mart’s advantage: “We have 4,000 Wal-Mart stores and local goods within five miles of most customers.” Each store basically serves as an online distribution center, a scale that Amazon could be challenged to meet, even taking into account its aggressive distribution center expansion plans.
In related news, Google reportedly shelled out more than $17 million to buy Canadian locker storage startup BufferBox this week. As many outlets reported, Google may be positioning itself to compete against Amazon’s Locker delivery service, which allows customers to have goods delivered to secure pick-up stations rather than home addresses.