"disruption" entries

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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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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From Industrialism to Post-Industrialism

Leveraging the power of emergence to balance flexibility with coherency.

Download a free copy of Building an Optimized Business, a curated collection of chapters from the O’Reilly Web Operations and Performance library. This post is an excerpt by Jeff Sussna from Designing Delivery, one of the selections included in the curated collection.

In 1973, Daniel Bell published a book called “The Coming of Post-Industrial Society”. In it, he posited a seismic shift away from industrialism towards a new socioeconomic structure which he named ‘post-industrialism’. Bell identified four key transformations that he believed would characterize the emergence of post-industrial society:

  • Service would replace products as the primary driver of economic activity
  • Work would rely on knowledge and creativity rather than bureaucracy or manual labor
  • Corporations, which had previously strived for stability and continuity, would discover change and innovation as their underlying purpose
  • These three transformations would all depend on the pervasive infusion of computerization into business and daily life

If Bell’s description of the transition from industrialism to post-industrialism sounds eerily familiar, it should. We are just now living through its fruition. Every day we hear proclamations touting the arrival of the service economy. Service sector employment has outstripped product sector employment throughout the developed world. 1

Companies are recognizing the importance of the customer experience. Drinking coffee has become as much about the bar and the barista as about the coffee itself. Owning a car has become as much about having it serviced as about driving it. New disciplines such as service design are emerging that use design techniques to improve customer satisfaction throughout the service experience.

Read more…

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Four short links: 23 December 2014

Four short links: 23 December 2014

Useful Metrics, Trouble at Mill, Drug R&D, and Disruptive Opportunities

  1. Metrics for Operational Performance — you’d be surprised how many places around your business you can meaningfully and productively track time-to-detection and time-to-resolution.
  2. Steel Mill Hacked — damage includes a blast furnace that couldn’t be shut down properly.
  3. Cerebros — drug-smuggling’s equivalent of corporate R&D. (via Regine Debatty)
  4. Ramble About Bitcoin (Matt Webb) — the meta I’m trying to figure out is: when you spot that one of these deep value chains is at the beginning of a big reconfiguration, what do you do? How do you enter it as a small business? How, as a national economy, do you help it along and make sure the transition happens healthily?
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Four short links: 17 June 2014

Four short links: 17 June 2014

Decentralised Consensus, Disruption Critiqued, Digital Reputation, and Stuff That Matters

  1. Erisa platform which allows developers and users to deploy consensus driven applications which rely on decentralized architecture and a consensus driven blockchain database backend. Open source (modified MIT).
  2. The Disruption Machine (New Yorker) — long detailed critique of the “disruption” hypothesis of Clayton Christensen, particularly questioning the case studies cited in The Innovator’s Dilemma.
  3. Web Reputation Systems and the Real World (Randy Farmer) — Don’t cross the streams. Good digital reputations should always be context-limited: the nature of the inputs should constrain the use of the reputation scores that are output.
  4. Bill and Melinda Gates Commencement Speech (Quartz) — excellent urging to work on stuff that matters. The pessimists are wrong in my view, but they’re not crazy. If innovation is purely market- driven and we don’t focus it on the big inequities, then we could have amazing advances and inventions that leave the world even more divided.
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Four short links: 30 January 2014

Four short links: 30 January 2014

In-Game Economy, AI Ethics, Data Repository, and Regulated Disruption

  1. $200k of Spaceships Destroyed (The Verge) — More than 2,200 of the game’s players, members of EVE’s largest alliances, came together to shoot each other out of the sky. The resultant damage was valued at more than $200,000 of real-world money. […] Already, the battle has had an impact on the economics and politics of EVE’s universe: as both side scramble to rearm and rebuild, the price of in-game resource tritanium is starting to rise. “This sort of conflict,” Coker said, “is what science fiction warned us about.”
  2. Google Now Has an AI Ethics Committee (HufPo) — sorry for the HufPo link. One of the requirements of the DeepMind acquisition was that Google agreed to create an AI safety and ethics review board to ensure this technology is developed safely. Page’s First Law of Robotics: A robot may not block an advertisement, nor through inaction, allow an advertisement to come to harm.
  3. Academic Torrentsa scalable, secure, and fault-tolerant repository for data, with blazing fast download speeds built on BitTorrent.
  4. Hack Schools Meet California Regulators (Venturebeat) — turns out vocational training is a regulated profession. Regulation meets disruption, annihilate in burst of press releases.
Comment: 1
Four short links: 20 November 2013

Four short links: 20 November 2013

Disruption, Telepresence, Drone Mapping, and TV Malware

  1. Innovation and the Coming Shape of Social Transformation (Techonomy) — great interview with Tim O’Reilly and Max Levchin. in electronics and in our devices, we’re getting more and more a sense of how to fix things, where they break. And yet as a culture, what we have chosen to do is to make those devices more disposable, not last forever. And why do you think it will be different with people? To me one of the real risks is, yes, we get this technology of life extension, and it’s reserved for a very few, very rich people, and everybody else becomes more disposable.
  2. Attending a Conference via a Telepresence Robot (IEEE) — interesting idea, and I look forward to giving it a try. The mark of success for the idea, alas, is two bots facing each other having a conversation.
  3. Drone Imagery for OpenStreetMap — 100 acres of 4cm/pixel imagery, in less than an hour.
  4. LG Smart TV Phones Home with Shows and Played Files — welcome to the Internet of Manufacturer Malware.
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Six disruptive possibilities from big data

Specific ways big data will inundate vendors and customers.

Disruptive PossibilitiesMy new book, Disruptive Possibilities: How Big Data Changes Everything, is derived directly from my experience as a performance and platform architect in the old enterprise world and the new, Internet-scale world.

I pre-date the Hadoop crew at Yahoo!, but I intimately understood the grid engineering that made Hadoop possible. For years, the working title of this book was The Art and Craft of Platform Engineering, and when I started working on Hadoop after a stint in the Red Hat kernel group, many of the ideas that were jammed into my head, going back to my experience with early supercomputers, all seem to make perfect sense for Hadoop. This is why I frequently refer to big data as “commercial supercomputing.”

In Disruptive Possibilities, I discuss the implications of the big data ecosystem over the next few years. These implications will inundate vendors and customers in a number of ways, including: Read more…

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Four short links: 19 April 2013

Four short links: 19 April 2013

Sterling on Disruption, Coding Crypto Fun, Distributed File System, and Asset Packaging

  1. Bruce Sterling on DisruptionIf more computation, and more networking, was going to make the world prosperous, we’d be living in a prosperous world. And we’re not. Obviously we’re living in a Depression. Slow first 25% but then it takes fire and burns with the heat of a thousand Sun Microsystems flaming out. You must read this now.
  2. The Matasano Crypto Challenges (Maciej Ceglowski) — To my delight, though, I was able to get through the entire sequence. It took diligence, coffee, and a lot of graph paper, but the problems were tractable. And having completed them, I’ve become convinced that anyone whose job it is to run a production website should try them, particularly if you have no experience with application security. Since the challenges aren’t really documented anywhere, I wanted to describe what they’re like in the hopes of persuading busy people to take the plunge.
  3. Tachyona fault tolerant distributed file system enabling reliable file sharing at memory-speed across cluster frameworks, such as Spark and MapReduce. Berkeley-licensed open source.
  4. Jammit (GitHub) — an industrial strength asset packaging library for Rails, providing both the CSS and JavaScript concatenation and compression that you’d expect, as well as YUI Compressor, Closure Compiler, and UglifyJS compatibility, ahead-of-time gzipping, built-in JavaScript template support, and optional Data-URI / MHTML image and font embedding. (via Joseph Misiti)
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Aereo’s copyright solution: intentional inefficiency

Aereo's backward architecture could be the thing that keeps it in business.

Aereo, an online service that sends free over-the-air television broadcasts to subscribers, scored a big win in court this week.

At first glance, it would seem the service has to violate copyright. Aereo is grabbing TV content without paying for it and then passing it along to Aereo’s paying subscribers.

So how is Aereo pulling it off? Over at Ars Technica, Timothy B. Lee deconstructs the service’s blend of tech and legal precedent:

Aereo’s technology was designed from the ground up to take advantage of a landmark 2008 ruling holding that a “remote” DVR product offered by Cablevision was consistent with copyright law. Key to that ruling was Cablevision’s decision to create a separate copy of recorded TV programs for each user. While creating thousands of redundant copies makes little sense from a technical perspective, it turned out to be crucial from a legal point of view …

… When a user wants to view or record a television program, Aereo assigns him an antenna exclusively for his own use. And like Cablevision, when 1,000 users record the same program, Aereo creates 1,000 redundant copies. [Links included in original text; emphasis added.]

Creating lots of copies of the exact same content is inefficient. No one can argue that point. But if you can get past the absurdity, you have to admit Aereo’s architecture is quite clever. Take thousands of tiny antennas, combine them with abundant storage, and now you’ve got a disruptive service that might survive the onslaught of litigation.

Note: Aereo’s recent win only applies to a request for a preliminary injunction. Further court proceedings are likely, and you can bet there will be a long and winding appeals process.

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