My New Blog

As you probably know by now, I am not updating this blog anymore.
I have a new blog which I try to update regularly. You can see it at: http://www.exponentialbusiness.info/
The subjects of the new blog are similar to this one but I try to write about them more from the business aspects and less from the technical aspects.
You can subscribe for Email updates in the new blog in a similar manner as you subscribed to this one. You can find the subscription form either here, or in the right sidebar on the front page. Obviously, you can also subscribe to my RSS feed.

I hope to see you all as readers and commenters of my new blog.

Analyzing the economy of MLM plans

Its amazing how many MLM plans there are on the net.
There is also a lot of hype around those plans. Many plans are advertised as an option to have a great option to get rich quick on the internet. There are many experts for using these plans. But, what is the economic sense of these claims, if there is one?

I didn't find any decent economic analysis of this phenomena. So I started to write some myself.

If you find a serious economic analysis of MLM plans please drop me a note in the comments

Economics and Politics of Networks

If you follow my blog you can see that my latest interest became the fascinating world of network economics. There are a lot of exponential phenomena in this realm and it is really the new frontier of the Internet.
I found a book about this subject. It is called "The Wealth of Networks". Although it was written back in 2006 it seem really interesting. You can download the book from the net or buy it from Amazon.
When I will read it I will post here a review. If you read it yourself please share your thoughts in the comments section.

Khen

Economy, Cloud and Exponential phenomena

Cloud Computing is basically an economic phenomena and not a technical one. The heart of the cloud computing phenomena is scale.

This brings us to the subject of Economy of Scale. In an economy of scale a business gets advantage from its scale.

One of the best ways to have the required scale is to use exponential phenomena. Most of the network effects are exponential, so we can try and use network effects to get to big scale.

I already wrote about the Technological Network Effect. One can find an exponential phenomena also in MLM plans. The WWW itself is an exponential phenomena. By using links you get an exponential explosion of content. The best evidence is Google's enormous scale.

The phenomena of social networks is also an exponential one. The connections between the people in the social network increases exponentially.

Exponential phenomena are indeed a great force. We should learn how to analyze and predict those phenomena. There are some modern tools we can try to use when analyzing exponential phenomena, such as modern economy theory and chaos theory. But the application of these tools is not simple, since we are used to think in linear terms.

I want to try to apply those modern tools to exponential phenomena in future posts. If you have some ideas of how to apply interesting tools to interesting exponential phenomena please write about it in the comments section.

Multi-Level Marketing

About two month ago I wrote about Network Effects. What fascinates my in Network Effects is their exponential nature. Our human brain is used to think about linear phenomena. It is very hard for us to deeply understand and predict exponential phenomena.
Another exponential economic phenomena is the phenomena of MLM (Multi-Level Marketing). This is a way to build a marketing organization by compensating an affiliate marketer for bringing more affiliate marketers to market the company's product or service.
A powerful combination is to combine MLM and the web to create Online MLM. This is a powerful economic activity which harness the power of the online world to do marketing in a wide scale.
There are many who think MLM is just a scam. You can find a good criticism of MLM in the following link: http://www.vandruff.com/mlm.html. Even though the criticism can have merits in some MLM plans, I don't think it proves that MLM plans can't produce a good, healthy and stable organization.
In a later post I plan on showing why Vandruff's arguments does not rule out all possible MLM's programs. But in the meantime you can try a some Online MLM yourself. Choose a program in the Internet MLM page and join it using my sponsorship link.

Khen

Information in the "Information Age"

As you all know we are living in the "Information Age". From this title it is clear that Information is an important element of our lives. But, what is Information?
There are many answers to this question. We can go to the computer scientists and they can tell us that Information is just a set of bits. When we go to the layman we will get a different answer, something along the lines of "Information is knowledge that helps us do things" (well, this leaves us with a greater question of "what is knowledge?").
I think that indeed everyone in every context should define for himself the meaning of the word Information. It is good that Information has become such an important word. If people will try to forget words like God and try to see words like Money as a means to acquire Information, then maybe our world will look better.

Khen

Technology Network Effect

Network effect is a fascinating phenomena. The name relates to an economic effect. According to wikipedia "a network effect is the effect that one user of a good or service has on the value of that product to other people".
The power of Network Effect comes from Metcalfe's Law which "states that the value of a telecommunications network is proportional to the square of the number of connected users of the system".
There are many examples of things that succeeded because of Network Effect and of things that failed because they didn't have enough Network Effect.
In the age of the Internet the competition for using the Network Effect is fiercer then ever. There are many factors which influence the power of the Network Effect.
One of the main factors is how open the technology is. The Internet itself (i.e. TCP/IP protocol) was established mainly due to the openness of its underlying technology.
As you can see above, the Network Effect is defined as the effect of one user. This implies that every user counts and every user should be aware of the effect he creates in the network.
With this awareness comes responsibility to do the right thing. It is like voting in a democratic process. Unfortunately not all users take this into account when doing their decisions. For example, whenever a user chooses to use MS-WORD file format and not ODF format he creates further Network Effects in favour of the monopoly in office formats and against an open alternative.
The latest issue of Network Effect on the Internet is now the H.264 video format. You can read Christopher Blizzard's blog post about this issue. I think we should all help make the Internet open by supporting Mozilla's decision to not support H.264 video format and demand from the sites we use to support open formats such as Theora.
We can further discuss Network Effect examples in the comments section.

Khen Ofek

Aspects of Paradigm Shift

My friend Daniel recently posted regarding Paradigm Shift.
This made me thinking about the different aspects of a paradigm shift.
First there is the technical aspect. If it is a system then the technical aspect will be apparent in its architecture. If it is a science then the technical aspect will be apparent in the current theories.
But, there are more aspects. The most important aspect is the people. Both the system architecture and the theories of a science can't change their paradigm if the state of mind of the people working on them is not changed. Even if there are objectively compelling reasons for the paradigm shift, if the people have not changed their mind it won't happen.

Since it is very hard to prove the need for a paradigm shift, we are left with politics. Whoever is more politically strong will decide if we need a paradigm shift and to which direction.

Khen Ofek

Engaging communities against Linux and OpenOffice.org

I like paradoxes. Paradoxes of all kinds always facinate me. They enforce you to think and often reveal deep understanding on how things work. You can read my analysis of the Paradox of the Cloud in an earlier post.
This is why I was amused to read Glyn Moody's blog post about a Microsoft's job description.
Microsoft wanted to recruit somebody to fill the “Linux and Open Office Compete Lead, US Subsidiary (CSI Lead)”. Glyn was concentrating on what CSI job description meant for OpenOffice.org. But, I want to stress here the paradox that is apparently inherent in how Microsoft treats the Open Source community.
According to Moody's blog post the job ad contains the following words: "The core mission of CSI is to win share against Linux and OpenOffice.org by designing and driving marketing programs, changing perceptions, engaging with Open Source communities and organizations, and drive internal readiness on how to compete with Commercial Linux and participate with Open Source Communities."
What caught my eye is the paradox of "win share against Linux and OpenOffice.org by ... engaging with Open Source communities and participate in Open Source Communities". Linux and OpenOffice.org are Open Source communities, among other things. So, how can Microsoft engage and participate with Open Source communities and act against them?
I think this paradox is not coincidental. Microsoft's engagement with Open Source communities is not aimed for the better of Open Source, but for the better of Microsoft against Open Source. It doesn't have to be like that, just look at the engagement of RedHat and IBM in Open Source communities and you can see that a good engagement is not against something but for something.
The only one that can solve this paradox is Micrsoft itself, and until that happens, Open Source communities should not trust Microsoft.

Khen Ofek

Subscription By Email

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Khen Ofek

Symmetry in Software

Symmetry is a powerful concept in mathematics and physics. It is used to analyze and construct elegant theories. Take for example the Supersymmetry theories in particle physics. They provide an elegant way to describe the zoo of particles.

The abstract definition of symmetry deals with the notion of invariance. When an entity has a property which is invariant under certain transformation we say that this entity is symmetric under the transformation. The most famous symmetries in mathematics are present in geometry. In geometry we find geometrical figures which exhibit various kinds of symmetries. Those geometrical figures are often said to be esthetic or elegant because of their symmetries. Symmetry in general is part of being beautiful.
The first time I heard about symmetry in connection with software was several years ago when I went to hear a lecture by Jim Coplien. His lecture talked about symmetry and symmtery breaking in SW.

Since symmtery is such an abstract concept in mathematics, it can be applied in many ways to SW. One of the most effective ways of using symmtery is doing a refactoring. When you are doing a refactoring you want to change the structure of the SW while leaving the functionality invariant. That is, the SW should be functionaly symmteric under the restructuring transformation.

Another application of symmtery can be found in the Object Oriented concept of polimorphism. When we use polimorphic elements, either compile time polimorphism or run-time polimorphism, we are counting on the fact that the actual code should be invariant when we change the element to one of its polimorphic instances. That is, the code is symmteric under the transformation of replacing the polimorphic elements.

Yet another, quite trivial, example is comments in the code. We can say that the funcionality of a code is symmteric under the transformation of changing the comments.

I said that symmtery can often be connected to elegancy and beauty. We can find elegance and beauty in a good SW design and symmtery is often used in elegant design. We can even appreciate the symmtery using our sense of visual beauty when we describe the design using diagrams. The same design can be percieved more elegant if it is presented in a symmteric diagram than if it is presented in a chaotic diagram.

If you have more examples for symmtery in SW you are welcome to write about them in the comments. I will further post symmtery examples whenever I come across interesting examples.

Khen Ofek