by Dana Blankenhorn
  Volume VIII, No. XXXVIII

This Week's Clue: The Perfect vs. The Good

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This Week's Clue: The Perfect vs. The Good
SSP (Shameless Self Promotion)
Blackberry Finnished
Another Go at Micropayments
Luddism (Continued)
Clued-in, Clueless

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For the Week of September 20, 2004

When a big bill is about to pass Congress a parade of men and women will rise to speak and most will condemn it.

This is not the bill I wanted, they will say. But I can't let the perfect become the enemy of the good.

If every Congressperson demanded perfection from everything they voted for nothing would pass, and nothing would get done. In a democracy, sometimes, you hold your nose and go with the choice that's there. Compromise is the design of the Framers. It's baked into the system, at every level. It's called checks and balances.

This is true in all human relationships, or at least all those which are meaningful. You have to compromise to keep a marriage. You have to compromise with your kids. If you don't you're either unloved or alone. Maybe both.

Businesses don't seem to be run on the same system. Within the bounds of law or (in a public company) proxy fights the boss is the law. Until you screw up and either declare bankruptcy or get fired, it's good to be King. Many entrepreneurs run their companies as kingdoms and do well by that model. Others run their companies as kingdoms and are corrupted by it.

The difference between a good business king and a bad one, it turns out, is usually compromise. The good king (or queen) understands there are other "stakeholders" in the business - employees, their families, customers, society. A good king will work hard to get buy-in from all these stakeholders. A good corporate culture is one way to do this. You inculcate a set of values into all employees so that when they face a critical choice they will act wisely, as the king (or queen) would.

No matter what size your business you have a corporate culture. This can be as simple as your whim. But if you want your company to be salable, or if you want to pass it down through the generations, then you need a more substantial corporate culture. In a small business this usually revolves around the product or service you create. This is how we do things, these are the corners we won't cut, this is how we treat customers. It's not the law, we don't have to, but this is how we do things because value is the result.

One common mistake in business is to assume these corporate values are perfect and inflexible. Another mistake is to let these values become an autopilot, an excuse for not thinking about the competition and (most important) the customers. To work corporate values must always look outward before they look inward. Just as personal values inform how we treat others so corporate values must inform how we treat customers. In the end customers have the ultimate veto power.

This must also be true for faith and politics. There is a line beyond which power cannot go. That line is crossed when people no longer follow you. The genius of democracy is that the crossing is quickly detected, and everyone involved obeys the call to change when the people give it. The lack of such a check gives us all the miseries of tyranny. People (or congregants) go from wanting another direction, then through all the stages of grief into a bleak acceptance which, in this case, denies self-will entirely.

Rapid change favors democracy, free markets, and individual liberty by placing an unbearable cost on all tyranny. Sullen, meek acceptance and the denial of self-will kills companies, and societies, faster-and-faster as Moore's Law advances.

Conservatives love to say that Ronald Reagan or military might won the Cold War. The physical appearance is they did. But in fact change won the Cold War. The Soviet system was unable to adapt to economic change, so that their peoples' denial of self-will gradually became a hidden veto on the leaders. This made the Soviet Union drab, unfashionable, and unable to match Reagan's military build-up. That build-up, in turn, was made possible by rapid technological change, and by the American system's ability to adapt to it. Gordon Moore, and the phalanx of engineers he worked with, won the Cold War.

The American system is not based on perfection, and it doesn't result in perfection. Sometimes good, small companies are destroyed by less good companies that can simply scale better. Sometimes the candidate you want loses in the primaries and you're left with John Kerry (or Al Gore, or Bob Dole). Are you going to let the perfect remain the enemy of the good and go for Ralph Nader (or Ross Perot)? If you do, history shows, your vote doesn't count. Those who participate in the final choice are the only people who make it.

Parliamentary systems allow for this wider choice. Proportional representation may even give such marginal figures a veto over the majority. It's interesting to me that, as the world has marched toward democracy the American system has almost never been copied. The closest analogue I know of is the French Fifth Republic, with a President separate from the Prime Minister. But most democracies are closer to the British model, where the leader of the legislature heads the government, which falls when his (or her) majority does.

Why then does America endure? Scale matters, resources matter, the people matter. But I also like to think that values matter, that the system matters, and at the heart of that system is compromise.

Keep your idealism, but accept the good, and embrace the compromises that change requires. Or, as someone else once said, you can't always get what you want, but if you try sometimes you just might find you get what you need.


Shameless Self-Promotion

I work as a freelance writer in Atlanta, and am on the development team for EgoScout , a new kind of marketplace for cellular data services.

My last book, "The Blankenhorn Effect" won the Computer/Internet category in the 2003 Independent Publisher (IPPY) awards .

You have my permission to forward this newsletter widely. And if you have trouble subscribing let me know. Remember: it's journalism that keeps the Clues coming...


Takes on the News

Blackberry Finnished

Many times over the last 20 years I've seen promising technologies from other countries bought out by U.S. companies which had more money and better distribution.

What goes around comes around. R.I.M. has made a deal with Nokia that essentially makes it a technology farm for Nokia mobile phones.

Proof came later in the week with a new Blackberry that looks like nothing so much as a Nokia mobile phone. Not only that but it works like one and is priced like one.

The "innovations" in the design of the new Blackberry 7100t (even sounds like a Nokia name) involve the design of the keypad. There are 25 keys in all (that's new) including a top row of function keys. But the keys are designed so they can be touched on different sides to deliver different commands.

This is something Nokia users have been playing with for years. It's part of my old Nokia 3595. And it's in other Nokia phones. Most Symbian phone companies like Nokia rely on a central "Navigation Key" which can be pressed in four directions, or downward, delivering different results depending on the menu instructions on the phone screen. Nokia long-ago took this one step further, applying the same idea to all its keys, in order to reduce their number. All R.I.M. has done is apply this to the alphabet. Beyond that, a look at the tiny screen shows all the old Blackberry applications as icons.

The idea here is that you can now use the Blackberry with one hand. But that's just one idea. The other idea is you can now get a Blackberry for about the cost of any other mobile phone. And that idea, too, came from Nokia.

It's a Nokiaberry. And as an independent operation R.I.M. is Finnished.


Another Go at Micropayments

Bitpass has raised $11.75 million to try and solve the continuing problem of micropayment.

The problem is that it costs too much to handle the transaction and settlement to make charging a few cents per whatever worth it.

The buzz that got this latest train rolling is iTunes, which sells songs at 99 cents, and ringtones, which can cost as little as $1.50. Right now iTunes is handling billing through accounts that aggregate purchases while ringtones are running through carriers' billing systems that can only handle a few prices.

I've been watching micropayment solutions rise and fall for many years now, and there are huge hurdles.

Cost is just the first.

Scale is the second, and it's a lot bigger. You have to get a lot of merchants using the system, along with a lot of consumers, in order to make a go of it.

But the biggest hurdle, I think, is the simple mechanics of banking. What people in this business have never really understood is that they are, in fact, acting as bankers.

When I buy something by credit card, the credit card company is loaning me money. They settle with the merchant (subject to a discount) then wait for the billing cycle to complete before being paid back. Even if you pay off your credit card bill like clockwork you've still got at least a month of float there, and money ain't free.

The security of both sides in any transaction is questionable. Is that a legitimate merchant, will people pay the bill after a month for what they're selling? This has to be evaluated and adjusted regularly, just as the credit-worthiness of consumers has to be evaluated and adjusted regularly.

It's not possible for micropayment companies to avoid this as they scale. Once you've got thousands of customers and thousands of merchants, there's a lot of contingent liability floating through every day, awaiting processing.

Even if you run transactions through a bank's debit system, you can't eliminate the float, because the transaction amount must still be high enough to make that transaction worthwhile before you go for the money.

So it's gratifying to note that James Robinson III, former AmEx chairman and still on the board at transaction processor First Data, is being put on the BitPass board by the investors. He knows this stuff. If he gives BitPass his proper attention, the investors should at least know when to pull the plug.

Luddism (Continued)

The growing Luddism of what's left of the U.S. technology press continues to amaze me.

Whenever we see a breakthrough there's some knee-jerk story about either "Big Brother," the government out to get us, or "Little Brother," the criminals and bad guys government is created to fight.

An example can be found in coverage of news that the Riemann hypothesis, an explanation for how prime numbers are distributed, may be at hand. This is one of the great "Millenium Prizes" for mathematics on which the Clay Mathematics Institute is offering a $1 million prize. This is great news.

The claimant is Louis de Branges de Bourcia of Purdue, a French native. We should all be patting him on the back, congratulating him, and staking him to boilermakers (the Purdue mascot is the Boilermaker). Instead, what's the press doing? They're running about like Chicken Littles screaming "e-commerce is broken."

Why? Because modern cryptography is based on the impossibility of divining prime numbers from the huge pack of ordinary numbers that are out there. A successful proof by de Branges could lead to the creation of a system for breaking all primes, and thus cracking all current codes.

The scary leads all point to one quote from one man, Marcus du Sautoy of Oxford University. "If the Riemann hypothesis is true, it won't produce a prime number spectrometer. But the proof should give us more understanding of how the primes work, and therefore the proof might be translated into something that might produce this prime spectrometer. If it does, it will bring the whole of e-commerce to its knees, overnight.

Let's be clear about this. We don't know yet that de Branges has the answer, although we think he may have. Even if he does, the proof is virtually incomprehensible. Even after it's made comprehensible, a "prime spectrometer," an algorithm for deriving prime numbers, would take a long time to develop.

Oh, and there are other routes to cryptography other than the manipulation of prime numbers.

And the headline is that e-commerce is broken?


Clued-in, Clueless

Clued-in is Apache , for rejecting Microsoft's license scheme within Internet standards.

Clueless would be selling the Internet's free soul for Microsoft's Caller ID, which it doesn't anyway.


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