When the world seems “broken” the incentives are wrong.

Pretty much every time I notice something in the world that seems "broken" the analysis eventually leads me to think that the incentives are structured in a way that causes the brokenness.  Take the recent mortgage crisis, and look at what was driving the behavior of the key stakeholders:

Real Estate Agents:  Both buyers and sellers agents are paid a percentage commission on the sale price.  This means that the "knowledgeable representatives" on both sides have a financial incentive to get houses to sell at the highest price possible.

Mortgage Brokers:  Again, usually paid either a flat commission, or a percentage commission.  Either way, they earn exactly zero dollars for the mortgage they say shouldn’t happen.

Mortgage Lenders: This group was a major part of the real problem.  Mortgage lenders, through bundling and selling of mortgage backed securities, had no incentive to turn away bad loans.  The mortgage backed securities were selling at a value that didn’t account for the risk using standard economic formulas, so the lenders had an incentive to accept risky loans and sell them, passing the risk along to people who had no ability to understand the risk they were accepting. Basically the more they could get a potential homebuyer to promise to pay, the more money they made.  No incentives to push down the price of homes.

Appraisers: This is the group that should have been the safety net, but it seems that they’ve turned into yes-men (and women) for the Real Estate Agents and the Mortgage Lenders.  They are well insulated from liability by the formulas they use, and are dependent on Agents and Lenders for referrals so that they can make a living, so they have no incentive to challenge the value of an overpriced home.

Home Buyers: This group seemed, as a whole, to believe that as long as they planned to sell their house every few years, they should buy as much house as they could afford in order to maximize the future profit.  As a whole it looks like we bought into all of the advertising that claimed that houses were a great investment, touting huge yearly percentage gains in value, even though the fine print read "past returns are not a guarantee of future performance."  Greed, and the blind hope for turning a profit led this group to accept the inflated values as a reason to buy.

Home Sellers: Finally we get to the one group that should have been putting upward pressure on home values.

So, we now have a correction of sorts underway.  Home buyers are wary of getting into the market for fear that the values will continue to drop.  Mortgage brokers and lenders know they can’t bundle and sell risky mortgages since there will be too much scrutiny, but they do seem to be trying to lock in anyone that has a good to excellent credit rating.  I haven’t seen any real changes in the real estate market, but I’d be amazed if there isn’t at least some fear of liability if an agent helps someone buy an overvalued home.

The current climate of fear and risk aversion has slowed the bad behavior, but nobody seems to be talking about fixing the system.  If we come out of this and the incentives haven’t changed, then the bubble will just grow, and pop, again.

Old New Traffic Bump

I usually don’t worry much about the traffic on my blog, but when I logged into the control panel today this caught my eye:

Page Views showing 800 views on the day Raymond Linked

 Now I already was expecting a bit of a bump since Raymond had given me a heads-up about the link, but I’m always curious exactly what traffic a link will bring.  Between December 31st and New Year’s Day about 900 extra views compared with my normal baseline is a pretty good reach for a pile-of-links post referral.  The results say a great deal more about Raymond’s reputation for putting up interesting links than anything else!

Impressions and Observations from PDC08

I just finished up my first time attending Microsoft’s Professional Developers Conference and wanted to capture a few random observations.

This conference is beyond huge!  I was trying to unit-ize my perception of the size, and all I could come up with is “several football fields” worth of people.

The conference was run very well.  The event staff did an amazing job.  I did notice that they held some pretty strict people-routing rules and some of the attendees would get upset when they were told to go to the center doors of the Big Room in order to get to a meal that was in hall G or K.  If you’ve ever been responsible for maintaining order with a large gaggle of people you would recognize that they were doing it right.  If you wait until the line becomes a problem, it’s too late to fix it.  You have to send people along the path that a long line would take in order to keep this from becoming a problem.

The Cloud is coming.  Microsoft’s Azure has a ton of promise and it’ll be interesting to see how it rolls out over the next decade.  I’ve always been a big fan of Amazon’s S3 and EC2, and it’s awesome to see Microsoft hit this space with a coherent broad strategy that covers not just silo’d implementations of storage and computation, but an ecosystem that can field complex applications in the cloud, on-premises, or any combinations of the two.

When developers file into a room, they seem to default to a sort of “worst-fit” algorithm, filling up the rows of chairs in the least efficient manner possible, causing the presenters and coordinators to have to go through several rounds of defragmentation in order to get the room to capacity.

It was great to meet some of the other Microsoft bloggers that I’ve been following for years.  I went to Raymond Chen’s talk even though it’s been a long time since I wrote any code that even came close to a Win32 call, but it was an interesting talk just the same.  I also stopped by the Win7 table in the Microsoft Pavilion and shook his hand.  It was a bit of a geek fan-boy thing to do, but I’ve enjoyed reading his blog for a long time, and it was cool to meet the man behind the blog.  Raymond was very friendly and approachable, and it was interesting to see that his face-to-face personality matched up exactly with what I had come to expect from years of reading The Old New Thing.

Scott Hanselman’s talk was awesome, entertaining, and educational all at the same time.  He’s another of my favorite bloggers and I’ve been a subscriber since long before he joined Microsoft.  He was pretty busy after the session, so I didn’t make the time to do the fan-boy introduction, but it was cool to see Scott in person.

I also got to meet Charlie Kindel.  It was a bit awkward since the last time we spoke I was an outside blogger who was spending a ton of time on Windows Home Server.  Since joining Microsoft last December, I really haven’t made time to do much of anything related to Windows Home Server, so we didn’t have much to talk about.  Still, it was good to finally meet Charlie and the WHS sessions at PDC were very interesting. (Developing Connected Home Applications and Services for Windows Home ServerExposing Connected Home Services to the Internet via Windows Home Server) CJ and crew did a great job with the presentations and demos.  I’m still a huge fan of WHS as a key part of any home network, and as a central nervous system for the smart home going forward, I just don’t have the time necessary to evangelize the platform like I did before.

The gender divide at the conference was very pronounced.  I’ve been in Microsoft’s Charlotte office for nearly a year now and even though it’s no where near 1:1 there, I’ve gotten acclimated to a less skewed environment enough that I really noticed the gap at PDC.  It’s a shame that the industry is so far behind on this.

The geeks as a whole seemed to be making healthier choices from the provided snacks. The fruit tables seemed to get a fair amount of action, and the Ho-Ho’s and Twinkies seemed to stay on the tables for quite a while longer.  I’m sure that plenty of extra calories were consumed this week, but it didn’t seem to be too far off the unhealthy end of the spectrum.

The folks from the Dev Teams were here to really connect with customers.  The “Ask the experts” were the formalized version of this, but extended post-session Q/A sessions and lots of business card swapping means that real connections were being built.  It seems that if you came to PDC, you could reach out and get some real people to talk to about almost anything that Microsoft does.

Lots of international participation.  Hearing people having side conversations in various languages and then instantly switch to perfect English for another conversation reminded me how much it seems like Americans are behind the curve with languages.

That’s it for my random observations. All in all it was a great conference!

 

One Man’s Over-Simplified View of the Stock Market

It’s a bit troubling to watch investments freefall like they did last week.  It seems like everyone is expecting the government to be able to pull some sort of brake to stop the freefall, but in actuality there’s very little that the government can do that will have an immediate effect on the stock market. 

In my mind, I have over-simplified the pricing of stocks to this:

[Stock Price] = α[intrinsic value] x ß[extrinsic value multiplier]

Every stock valuation equation that I’ve ever seen ends up being some derivative of the above, where the intrinsic value is pretty constant and is related to the company’s holdings and it’s ability to generate consistent profits. The extrinsic value is subjective and can vary widely and can be seen more as a measure of the confidence that the pubic has in a company.

Over the last few weeks, the real inherent value of the companies that make of the DJIA, the S&P, and the market as a whole has not really changed.  What has changed it the perception of the extrinsic value, i.e. the potential for continued growth in value and earnings, and the ability of the company to weather a slump in the economy.

Now the interesting dilemma facing those in power right now is that everyone is screaming that they need to fix ß when the only way to fix ß is to set up a system that protects α, and that gives confidence to the public that you will continue to support α in the future.

As much as I am instinctively against the idea of the current bailout bill, there are some facets of it that make sense, and I think we’ll start seeing some progress in the next few weeks.  The bailout bills’ main focus is to break-up the gridlock that we currently have in the short-term liquidity markets.  This protects α by helping companies that have real value to avoid folding simply because they can’t get the short-term loans they need in order to operate. This helps us avoid a real reduction in the intrinsic value of companies, and in the long run that should be the focus of every leader who is currently attempting to help solve this crisis.

Disclaimer:  This post is not financial advice, I may have a business degree but I don’t claim to have any special expertise in economics.  I just had a few ideas I wanted to spout off. 

 

Minor Changes for One Man Shouting

It’s been a pretty long time since I blogged regularly.  A lot of great stuff has happened over the last two years, and I’ve found that I don’t have a lot of time or energy left for blogging, and it’s pretty easy to let it slide.  I still stand by my "No apologies needed" stance for taking a break from blogging, but I’ve been thinking that I’m going to start blogging more regularly, but it might not be quite the same as before.  I figured that it was worth a post to kind of let subscribers know where I’m thinking I’ll be taking this blog in the future.

My previous style was mostly commentary on the technology industry and transitional media (blogging, podcasts, online video), mobile technology, and pretty much anything else I read online and had an opinion on.  I never talked about work, steered clear of politics, and pretty much just stuck with technology. 

In the future, I might talk a bit about work (although anything related directly to the work I do will likely be over at my work blog). I might touch on social issues (not "political" social issues, but broader topics like productivity, communication, motivation, etc.), and I’ll probably still talk about technology, but just keep in mind that I work for a big company and that puts some practical limits on the types of speculation that I can do, and might bias my opinions a bit.

For those of you who follow this blog to actually keep up with me personally, the new job is going great.  I look forward to going to work everyday and am constantly being challenged and having to learn new things (that’s what makes a job fun right?).  The family has gotten pretty settled here in Matthews, NC.  My daughter is into her second year of the Horizon’s program, our middle son is getting started with preschool, and our youngest son is just over a year old, and learning to cause trouble by watching big brother and sister and trying to do whatever it is that they do.  Tammy does an amazing job of keeping our schedules all straight, and keeps our house and family running smoothly.

That’s all for now.  I’ve got a few posts rattling around in my head, so I hope to post more soon!

Piling on: Our team rocks, and they’re hiring…

 


Matt and Patrick have both posted recently that our team is still looking for more full-time hires.  Patrick points out many of the perks, and Matt highlights how working for Microsoft in Charlotte can be a great opportunity.


I just wanted to add my thoughts into the mix.  I’ve only actually worked 2 weeks, and now I’m out on “ICL” which is how they refer to Infant Care Leave at Microsoft.  In addition to all the stuff Patrick highlights, this ICL thing is by far my favorite benefit so far.  Even though my youngest son was born before I joined Microsoft, they allowed me to take the same 4 weeks off that any new Microsoft dad gets.  (I’ll refer any questions about how this works to someone in HR, I believe you just have to take it within 6 months of the child’s birth.)


In the first two weeks, the team has been awesome, helping me get machines set up the right way, teaching me the tools that we use to manage workload, bringing me up to speed on the messaging technologies we support.  I’m very psyched to get back to work, but for now I’m making the best use of my ICL by getting the family moved down to Charlotte.  The truck left today with all of our stuff, and if all goes according to plan, we’ll be starting the new year in a new (to us) house down in Charlotte.


In summary, the benefits are awesome, lots of great perks, challenging and interesting work.  If you have ever thought about working for Microsoft but didn’t really want to consider moving to the west coast, seriously consider these openings, and feel free to contact me via the link on this blog if you have any questions for a “new-hire”.

Media Utopia

(Warning, semi-rambling post ahead…)

Lately I’ve been thinking about how we use media.  A little over a year ago, we joined the DVR revolution with DirecTv’s DVR option, and this taste of flexibility has highlighted exactly how far behind technology we’re lagging in consumer experience.  The DVR is a nice little island utopia.  As long as we’re at the TV with the DVR, the kids have their pick of their favorite shows.  My wife and I can watch a show that we missed, or that we recorded because it was too late for us to stay up.  Unfortanely as soon as you sail away from the island, all is lost.  The DVD player in the car can only serve up movies that we have physical discs for (what an archaic concept!).  My Zune only holds music, videos and pictures that I explicitly put onto is (I don’t keep a lot of media on my computer, so I have to go out of my way to sync stuff.)  My family pictures, home movies, and other digital media mostly lives on our Windows Home Server, which makes it very accessible to our home computers, but not very useful on the road.

What would utopia look like?  Media shared everywhere. If my family owns it, I want it available wherever.

In practice, it’s not this simple.  How would data get from the DVR to the server?  How do you deal with devices with limited storage (come to think of it, every device has some sort of limit)?  How does data get onto the Zune, into the car, etc.

I’m thinking that a simple provider-subscriber model could work.  Each device would advertise it’s content using a format that could describe the media in enough detail that subscribers could make sense of it, and then they could make decisions about retrieving the media (RSS with enclosures might work as-is or with minor extension).  Each device would also have a configurable subscriber profile that would define what it would actively retrieve, or what it would make available by reference.  So, for example:

  • DVR Records a bunch of shows.
  • DVR publishes listings with metadata via RSS.
  • Windows Home Server retrieves RSS from DVR.  Based on its settings WHS will actively retrieve some shows that I’ve set to archive and save them on the server.
  • These shows will be added to WHS’s published RSS, with some sort of UID included so that the DVR doesn’t think it needs to copy them back.

or:

  • WHS stores some home movies.
  • WHS publishes a listing of home movies via RSS.
  • DVR subscribes to this listing, and makes them available via the DVR _by reference_, basically it doesn’t make a local copy, but you can view the movies on your TV by selecting them through the DVR interface after which they are streamed from the WHS.  (Wouldn’t want to waste the DVR’s limited drive space by making a local copy.)

The scenarios go from there.  You could set priorities for devices with smaller storage like my Zune30.  It could actively retrieve the most recent 2 episodes of each of my kid’s favorite shows, as well as the most recent episodes of Las Vegas (the one show I try to watch each week), and maybe also a few podcasts that WHS has downloaded for me. 

Ok, that last sentence made this a bit more interesting.  The subscriber/provider model extends. I can subscribe to internet feeds to acquire content.  If I want to, I can publish a feed of select home movies and my family members can subscribe to them.  The data flow might go:

  • Digital Camcorder uploads to Client computer. 
  • Client computer publishes via RSS. 
  • WHS subscribes to RSS and retrieves and archives media (archive action might actually remove it from client depending on settings). 
  • WHS adds home movies to its published feed.  
  • After reviewing the movies on the server I tag a few as “Share_Family” and they become available on a feed that is accessible from the internet. 
  • My extended family then can subscribe via their own WHS or a client application and the content will automatically be transferred to their local repository.

Feeds should be configurable, so that I can build custom feeds that filter by tag, time, format, media type, etc.  So basically each provider will have a single subscription endpoint, but the feed can be filtered, or alternately the client can retrieve the entire feed, and filter locally.  Also, authentication should be an option so that you can make a public/private distinction, or even control access in a more granular manner.

Ok, this has devolved into a bit of stream-of-consciousness rambling, but hopefully it conveys that the technology to do this is available today, but that the implementation is lagging.  DRM is a hurdle to open integration like this, but it’s not an insurmountable one.  Hopefully media companies will realize that if they make their content available and give consumers the freedom to use it in flexible ways, then the consumers will actually be more likely to consume the content.

(Disclaimer:  This post is pure speculation by me.  It does not convey any information from my current or future employers.  I do not know if anything like this is in development, I just wanted to throw out some ideas that might make the consumer experience better in the future.)

Samsung SCH-u740, 5 Months Later

Back in June, I switched from a first-gen Motorola Q to a non Windows Mobile phone, a Samsung SCH-u740.  I’m still using the u740, and have some thoughts about how it stacks up to my previous phone.

Overall, it’s a bit of a mixed review for me.

Things that are much better about the u740:

Unlimited Mobile Web w/ VCast – Instead of paying $40 a month for unlimited data, I get unlimited Mobile Web by paying $15 a month for VCast.  My phone data use centers mostly around checking email and reading RSS feeds.  The mobile clients for both Live Hotmail and Gmail are very usable.  I recently switched form Newsgator to Google Reader, and while I used to read feeds all the time with Newsgator’s mobile reader, the mobile version of Google Reader is painful enough to use that I hardly ever open it up.  Regardless, Mobile Web is more than capable of allowing me to consume information (aka waste time) when I have a spare minute, and offset some other time that I would’ve spent staring at a regular computer.

Fast Application Startup – When you hit the camera button, the time to ready is very speedy compared with Windows Mobile.

Things that I miss about the Motorola Q and WinMo in general:

Pocket IE – As much as I cursed the partial compatibility of Pocket IE, it was leaps and bounds above the browser in Mobile Web.

QVGA Screen – Simply put, more pixels means more data on the screen, period.

Open platform – I like to tinker, and being able to try different applications, or even write some code every once and a while is nice.  No such luck with the u740

Summary

If not for the difference in data costs between the two, I would probably be back on Windows Mobile already. I know Windows Mobile data users probably actually use considerably more data than Mobile Web users, so I get the reasoning behind the price differential, but it’s too big of a monthly hit for me to justify it right now.

What I’d really like to see is a Windows Mobile 6 device in the same form-factor as the u740, and then if Verizon could cut their data plan back to $20 to $25 a month, I’d probably be sold.

What has Rick Been Up To? Part 2 – Putting on a Blue Badge

Let’s see… Since my life wasn’t busy enough with a new baby in the house, writing a book, trying to keep up with the whole MVP thing, and just in general having a very busy life, I have decided to add one more layer of complexity into the mix.

As of December 3rd, 2007, I will be joining Microsoft as an Escalation Engineer working in the Charlotte, NC office.  An unintended consequence of this is that I’ll no longer be able to hold the Microsoft MVP title for Windows Home Server.  From what I understand, I can continue to “serve” as an MVP until I take my spot as a FTE, and then my MVP status gets retired. 

Various friends and readers who have communicated with me in the past may know that I’ve had ambitions about working at Microsoft for a long time, and this final “fit” came together over the last couple months.

It’s a busy time, so I’m not going to promise anything quickly, but I have some rough notes around which I’m formulating a few blog posts about the Microsoft recruiting process and my own “journey”.  I think my “To Blog” list is at about 6 posts deep, and I’m not sure when I’ll get around to it.

In the mean time, if anyone is looking for a great family home in the Lexington Park MD area, check out: http://45693Spruce.com

Also, we’ve confirmed that one of my older kids has a bad cat allergy, so we’re trying to find a home for the last of our three cats, details can be seen here: http://www.animalrelieffund.org/animals/detail?AnimalID=321793

Windows Home Server MVP’s Appearing…

Over the last couple of days, the listing of WHS MVP’s on Microsoft’s MVP Site has been slowly growing.  It looks like most folks received notice of the award late on Monday, but they won’t appear on the listing unless they mark their profile to be visible to the public.

At this time I’m seeing Grey Lancaster, who has been on the listing since the category was added to the MVP site.  I’m guessing he may have been an MVP that was previously assigned to a different competency, but who got moved over to the WHS group.

Other appearances include Ken Warren.  If you ever frequent Microsoft’s WHS Forums, it seems that Ken manages to answer 90% of all questions posted. (Totally made-up statistic, but that’s the way it seems).

Also included is Terry Walsh, who runs the We Got Served blog.  Terry manages to collect and generate a great deal of information and news about WHS. His site is often the first place I see new information on WHS.

I’m very honored to be included in the list of awardees as well!  I’m not sure yet what all this MVP status really means, but I’m looking forward to finding out over the next year!

Hopefully the listing will grow a little bit more as WHS MVP awardees fill out their profiles and mark them as visible.  There has been some very strong community involvement in WHS since the early Beta days, and it’s great to see that Microsoft recognizes the positive impact of folks that make time to be involved.