Friday, February 26, 2016
IOT Value Chain
I have been asked to explain Internet of Things (IOT) a few times and where does value lie in IOT. Below is a diagram I have put together to consolidate it into a value chain. Note that the below diagram applies both to IOT in batch and real-time.
Sunday, February 21, 2016
Superbosses and innovation
Mr.Vivek Wadhwa writes in How I realized the incredible impact that great bosses have about the impact of great managers on their specific sectors and individuals. The article further validated for me the fact that breakthrough innovation comes from outside the sector in consideration and that the managers play a key role in making sure that disruptions do not emerge from within the sector. See my blog Innovation is coming from outside the sector here.
Vivek writes:
"Yes, I know that I got lucky in having good bosses; most are jerks who demotivate employees, slow their growth, backstab, and take credit for others’ work. You are usually stuck with whomever you get. But there is nothing that stops you from being a superboss. As you begin to achieve success, start helping others and nurturing your colleagues and subordinates. Show the leadership qualities that you’d like your own boss to have. You will gain as much as the people you help — and build a better company."
Vivek's article can be read here.
Vivek writes:
"Yes, I know that I got lucky in having good bosses; most are jerks who demotivate employees, slow their growth, backstab, and take credit for others’ work. You are usually stuck with whomever you get. But there is nothing that stops you from being a superboss. As you begin to achieve success, start helping others and nurturing your colleagues and subordinates. Show the leadership qualities that you’d like your own boss to have. You will gain as much as the people you help — and build a better company."
Vivek's article can be read here.
Thursday, January 28, 2016
Google's Machine Learning triumph
When Deep Blue won chess match against Kasparov, as a data guy and coder I knew how it was done, its called brute force. Almost 20 years later, Google's AlphaGo program has taken a leap in emulating human experiential learnings in deep neural networks, and winning Go.
"The key to AlphaGo is reducing the enormous search space to something more manageable. To do this, it combines a state-of-the-art tree search with two deep neural networks, each of which contains many layers with millions of neuron-like connections. One neural network, the “policy network”, predicts the next move, and is used to narrow the search to consider only the moves most likely to lead to a win. The other neural network, the “value network”, is then used to reduce the depth of the search tree -- estimating the winner in each position in place of searching all the way to the end of the game."
Google Research article by was of Dr. Mark Vorderbruggen, read here. The article closes with:
"We are thrilled to have mastered Go and thus achieved one of the grand challenges of AI. However, the most significant aspect of all this for us is that AlphaGo isn’t just an ‘expert’ system built with hand-crafted rules, but instead uses general machine learning techniques to allow it to improve itself, just by watching and playing games. While games are the perfect platform for developing and testing AI algorithms quickly and efficiently, ultimately we want to apply these techniques to important real-world problems. Because the methods we have used are general purpose, our hope is that one day they could be extended to help us address some of society’s toughest and most pressing problems, from climate modelling to complex disease analysis."
"The key to AlphaGo is reducing the enormous search space to something more manageable. To do this, it combines a state-of-the-art tree search with two deep neural networks, each of which contains many layers with millions of neuron-like connections. One neural network, the “policy network”, predicts the next move, and is used to narrow the search to consider only the moves most likely to lead to a win. The other neural network, the “value network”, is then used to reduce the depth of the search tree -- estimating the winner in each position in place of searching all the way to the end of the game."
Google Research article by was of Dr. Mark Vorderbruggen, read here. The article closes with:
"We are thrilled to have mastered Go and thus achieved one of the grand challenges of AI. However, the most significant aspect of all this for us is that AlphaGo isn’t just an ‘expert’ system built with hand-crafted rules, but instead uses general machine learning techniques to allow it to improve itself, just by watching and playing games. While games are the perfect platform for developing and testing AI algorithms quickly and efficiently, ultimately we want to apply these techniques to important real-world problems. Because the methods we have used are general purpose, our hope is that one day they could be extended to help us address some of society’s toughest and most pressing problems, from climate modelling to complex disease analysis."
Wednesday, January 27, 2016
The immigrant genius - Schema Violation
By way of Ms. Aruna Viswanathan, in the Wall Street Journal article The Secret of Immigrant Genius:
"Scan the roster of history’s intellectual and artistic giants, and you quickly notice something remarkable: Many were immigrants or refugees, from Victor Hugo, W.H. Auden and Vladimir Nabokov to Nikolas Tesla, Marie Curie and Sigmund Freud. At the top of this pantheon sits the genius’s genius: Einstein. His “miracle year” of 1905, when he published no fewer than four groundbreaking scientific papers, occurred after he had emigrated from Germany to Switzerland."
From the number of entrepreneurial businesses started to the number of patents published in the US alone, one easy answer is that the "Scruffy but determined immigrant, hungry for success, arrives on distant shores. Immigrant works hard. Immigrant is bolstered by a supportive family, as well as a wider network from the old country. Immigrant succeeds, buys flashy new threads."
Yet, the article debunks this myth and shares research showcasing various traits of immigrants that enable the creative disruption anchored in what is called Schema Violation.
Read this excellent article here.
"Scan the roster of history’s intellectual and artistic giants, and you quickly notice something remarkable: Many were immigrants or refugees, from Victor Hugo, W.H. Auden and Vladimir Nabokov to Nikolas Tesla, Marie Curie and Sigmund Freud. At the top of this pantheon sits the genius’s genius: Einstein. His “miracle year” of 1905, when he published no fewer than four groundbreaking scientific papers, occurred after he had emigrated from Germany to Switzerland."
From the number of entrepreneurial businesses started to the number of patents published in the US alone, one easy answer is that the "Scruffy but determined immigrant, hungry for success, arrives on distant shores. Immigrant works hard. Immigrant is bolstered by a supportive family, as well as a wider network from the old country. Immigrant succeeds, buys flashy new threads."
Yet, the article debunks this myth and shares research showcasing various traits of immigrants that enable the creative disruption anchored in what is called Schema Violation.
Read this excellent article here.
Thursday, January 21, 2016
Cars? No. Business/personal services driven transportation? Yes!
I believe the graph below from The Economist says it all from their article The driverless, car-sharing road ahead here:
The tie-ups between automotive companies and the large technology companies announced at CES like "Ford partners with Amazon to connect cars with homes" here, investments "GM is investing $500 million in Lyft to develop self-driving cars" here, and others are now the realization of the a future built upon technology driven services. Will I own a car in 10 years from now, perhaps. Will the new generation in high schools? That remains to be seen.
The tie-ups between automotive companies and the large technology companies announced at CES like "Ford partners with Amazon to connect cars with homes" here, investments "GM is investing $500 million in Lyft to develop self-driving cars" here, and others are now the realization of the a future built upon technology driven services. Will I own a car in 10 years from now, perhaps. Will the new generation in high schools? That remains to be seen.
Wednesday, January 20, 2016
Let's just call it "How much is my dollar worth in the world?"
(Enlarge the image by clicking on it)
The bigger concern for 2016 is the Dutch Disease:
"… as revenues increase in the growing sector (or inflows of foreign aid), the given nation's currency becomes stronger (appreciates) compared to currencies of other nations (manifest in an exchange rate). This results in the nation's other exports becoming more expensive for other countries to buy, and imports becoming cheaper, making those sectors less competitive."
Read an explanation of Dutch Disease here.
Read the complete article from The Economist here.
Tuesday, January 19, 2016
Australia - Mini stratup boom?
What are the ingredients of Silicon Valley that make it the Valley? Is it the Venture Capitalists who understand risk and reward? Is it the US bankruptcy laws that allow for the innovation to find new foot holds? One thing is for certain, it is a culture, and attempts at its replication across the globe have not yielded the same results.
The Economist in From lucky to plucky shares the current trend in business innovation in Australia:
"Mr Lynch (of DesignCrowd) foresees a “mini startup boom” emerging in Australia. And he is optimistic that the interventions of the tech-friendly prime minister can only help Australia go from being the Lucky Country to one that makes its own luck."
One thing is for certain if history is a guide, politics and policy do not create technology booms. Let's watch closely as Australia with a commodities driven economy moves forward in this quest. See the complete article here.
The Economist in From lucky to plucky shares the current trend in business innovation in Australia:
"Mr Lynch (of DesignCrowd) foresees a “mini startup boom” emerging in Australia. And he is optimistic that the interventions of the tech-friendly prime minister can only help Australia go from being the Lucky Country to one that makes its own luck."
One thing is for certain if history is a guide, politics and policy do not create technology booms. Let's watch closely as Australia with a commodities driven economy moves forward in this quest. See the complete article here.
Unicorns and regulations: Prophecy or parable
From the entertaining article Silicon Valley Unicorn Obituaries by Mr. Prabha Kannan in The New Yorker:
"Three unicorns passed away in the Bay Area last week after an extended battle with a particularly virulent strain of valuationitis. Gathered at their bedsides were executives and prominent venture capitalists, who confirmed the deaths. “The virus came out of nowhere,” the treating physician said. “One minute they were thriving entities worth billions, and the next . . . I haven’t seen cases of valuationitis with inflammation of this magnitude since, oh, way back in 2000.”"
Read the complete article here.
From the more sober evaluation from Schumpeter: Toy Story in The Economist:
"The threat of adverse regulation animates the question of whether the hoverboard fiasco is a prophecy as well as a parable. Silicon Valley has long displayed some of the classic characteristics of a bubble: companies vying to build the most eye-catching headquarters and CEOs competing to produce the most extravagant ideas to “change the world”. There are growing signs that private valuations of tech “unicorns” will not hold up when they are subjected to the rigours of the public market. Some unicorns have shied away from going public at the last moment and others such as Good Technology, a mobile-device security firm, have sold themselves at lower valuations than they had hoped. If regulators alter the landscape further, 2016 might be the year that such firms follow the hoverboard and go up in a puff of smoke."
Read the complete article here.
"Three unicorns passed away in the Bay Area last week after an extended battle with a particularly virulent strain of valuationitis. Gathered at their bedsides were executives and prominent venture capitalists, who confirmed the deaths. “The virus came out of nowhere,” the treating physician said. “One minute they were thriving entities worth billions, and the next . . . I haven’t seen cases of valuationitis with inflammation of this magnitude since, oh, way back in 2000.”"
Read the complete article here.
From the more sober evaluation from Schumpeter: Toy Story in The Economist:
"The threat of adverse regulation animates the question of whether the hoverboard fiasco is a prophecy as well as a parable. Silicon Valley has long displayed some of the classic characteristics of a bubble: companies vying to build the most eye-catching headquarters and CEOs competing to produce the most extravagant ideas to “change the world”. There are growing signs that private valuations of tech “unicorns” will not hold up when they are subjected to the rigours of the public market. Some unicorns have shied away from going public at the last moment and others such as Good Technology, a mobile-device security firm, have sold themselves at lower valuations than they had hoped. If regulators alter the landscape further, 2016 might be the year that such firms follow the hoverboard and go up in a puff of smoke."
Read the complete article here.
Sunday, January 17, 2016
Free Basics and India
Mr. Mark Zuckerberg provided India with an excellent opportunity via Free Basics. Its blockage is not a failure but an idea which will be implemented in short order via the astute businessmen of India through their influence on the country's government. Such is capitalism in a socialist country.
The Guardian writes in an article here:
"Rather than teaming up with the developing world’s universally loathed mobile companies to get them to zero-rate your offerings, why not optimize Android for P2P file-sharing of material downloaded and cached at wifi hotspots – file swapping being a very common, sociable practice already in play across the developing world – treating the telcos like the enemies of progress that they have always been, joining with users in subverting and sidelining them?
India’s got millions of activists with an open internet bandwagon we should all be jumping on, and the next billion will go to the company that figures out how to work with them."
Let's watch closely, there are a billion connections waiting to happen, and it is a gold mine for whomever corners the market.
The Guardian writes in an article here:
"Rather than teaming up with the developing world’s universally loathed mobile companies to get them to zero-rate your offerings, why not optimize Android for P2P file-sharing of material downloaded and cached at wifi hotspots – file swapping being a very common, sociable practice already in play across the developing world – treating the telcos like the enemies of progress that they have always been, joining with users in subverting and sidelining them?
India’s got millions of activists with an open internet bandwagon we should all be jumping on, and the next billion will go to the company that figures out how to work with them."
Let's watch closely, there are a billion connections waiting to happen, and it is a gold mine for whomever corners the market.
Saturday, January 16, 2016
Oil benchmarks
West Texas Intermediate (WTI) is now trading on par with Brent, the current international standard. Yet, the alignment of the price and the US export ban having been lifted as of the end of the year 2015, what does the future hold? The Economist write in Crude Measures:
"A good benchmark has to reflect supply and demand for oil wherever it is used. WTI may continue to be influenced by bottlenecks in the American market. Brent reflects the market for oil in north-west Europe. That was once a positive, but as Europe’s share of global demand for oil declines, proximity to the continent is no longer the advantage it was.
That suggests that an Asian benchmark will rise to the fore. The Shanghai International Energy Exchange plans to launch its own yuan-denominated contract this year. The new benchmark will have trouble getting off the ground. For one thing, China’s capital controls make it difficult for foreigners to buy the yuan needed to trade the contracts. The wild swings in China’s equity markets set an unnerving example for investors. But time is on its side."
Read the complete article here.
"A good benchmark has to reflect supply and demand for oil wherever it is used. WTI may continue to be influenced by bottlenecks in the American market. Brent reflects the market for oil in north-west Europe. That was once a positive, but as Europe’s share of global demand for oil declines, proximity to the continent is no longer the advantage it was.
That suggests that an Asian benchmark will rise to the fore. The Shanghai International Energy Exchange plans to launch its own yuan-denominated contract this year. The new benchmark will have trouble getting off the ground. For one thing, China’s capital controls make it difficult for foreigners to buy the yuan needed to trade the contracts. The wild swings in China’s equity markets set an unnerving example for investors. But time is on its side."
Read the complete article here.
Monday, December 14, 2015
Magic in machine learning
I have had the opportunity to work in data-driven analytics across a number of industries, the most advanced ones being the finance and investment folks. Now, I am in the oil and gas sector, where advanced data-driven analytics is starting to find a foot hold though there are skeptics a-plenty. This includes folks to whom a Microsoft Excel is the ultimate analytics tool, and scientists who believe that complex physics cannot be complemented (and in some cases as I believe replaced) by machine learning driven, continuously evolving models.
"… the distinguished differential geometer Eugenio Calabi volunteered to me his tongue-in-cheek distinction between pure and applied mathematicians. A pure mathematician, when stuck on the problem under study, often decides to narrow the problem further and so avoid the obstruction. An applied mathematician interprets being stuck as an indication that it is time to learn more mathematics and find better tools."
Dr. Ingrid Daubechies writes an delightful article in the Wired here, "Machine Learning Works Great — Mathematicians Just Don’t Know Why". She discusses supervised and unsupervised machine learning, with a nod to a bit of magic in machine learning that is still not understood.
"… the distinguished differential geometer Eugenio Calabi volunteered to me his tongue-in-cheek distinction between pure and applied mathematicians. A pure mathematician, when stuck on the problem under study, often decides to narrow the problem further and so avoid the obstruction. An applied mathematician interprets being stuck as an indication that it is time to learn more mathematics and find better tools."
Dr. Ingrid Daubechies writes an delightful article in the Wired here, "Machine Learning Works Great — Mathematicians Just Don’t Know Why". She discusses supervised and unsupervised machine learning, with a nod to a bit of magic in machine learning that is still not understood.
Tuesday, December 1, 2015
Highs and lows of O&G, new models
"KKR & Co led a buyout of Samson in 2011 for $7.2 billion. The company estimated its value at less than $1.5 billion for its prearranged bankruptcy plan.
Dune Energy valued its assets, including about 15.52 million barrels of oil equivalent of reserves, at $229 million in September 2014. The company auctioned them during its bankruptcy for $19 million in July.
Houston-based BPZ Resources fetched less than $10 million for its assets in July, which included licenses to explore for oil and gas covering 1.9 million acres (7,690 square kilometers) in Peru. Last year it valued the assets at $291 million."
How long will it continue? A few good things will come out of this prolonged downturn in oil and gas, including cleansing of the sector from the bottom dwellers, injection of technology to do the same tasks in significantly different ways, new techniques of financial engineering both productive and detrimental (MBAs always have a place upturn or downturn), etc.
Yet, I have not seen any of the significant players in the oil and gas sector come up with novel business models. Here is an opportunity to (1) copy successful methods from other industrial sectors that have worked, (2) leverage advanced information technology, from gaming to analytics (this requires top tier leadership with experiential knowledge), (3) and the most important of them all is to avoid popular definition of insanity: "Doing the same thing over and over again and expecting different results."
With today's West Texas Intermediate around $41, the article's prediction is ominous:
"Becky Roof of AlixPartners, who advises distressed energy companies, said the experience with energy bankruptcies so far partly reflects the type of companies filing: weak, with far too much debt. She said stronger companies will fail next year if energy prices remain low."
I recently wrote about M&A in oil and gas here. Read the complete article at Reuters here.
Dune Energy valued its assets, including about 15.52 million barrels of oil equivalent of reserves, at $229 million in September 2014. The company auctioned them during its bankruptcy for $19 million in July.
Houston-based BPZ Resources fetched less than $10 million for its assets in July, which included licenses to explore for oil and gas covering 1.9 million acres (7,690 square kilometers) in Peru. Last year it valued the assets at $291 million."
How long will it continue? A few good things will come out of this prolonged downturn in oil and gas, including cleansing of the sector from the bottom dwellers, injection of technology to do the same tasks in significantly different ways, new techniques of financial engineering both productive and detrimental (MBAs always have a place upturn or downturn), etc.
Yet, I have not seen any of the significant players in the oil and gas sector come up with novel business models. Here is an opportunity to (1) copy successful methods from other industrial sectors that have worked, (2) leverage advanced information technology, from gaming to analytics (this requires top tier leadership with experiential knowledge), (3) and the most important of them all is to avoid popular definition of insanity: "Doing the same thing over and over again and expecting different results."
With today's West Texas Intermediate around $41, the article's prediction is ominous:
"Becky Roof of AlixPartners, who advises distressed energy companies, said the experience with energy bankruptcies so far partly reflects the type of companies filing: weak, with far too much debt. She said stronger companies will fail next year if energy prices remain low."
I recently wrote about M&A in oil and gas here. Read the complete article at Reuters here.
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