Incumbent Power and Total War in High Tech

Mario, a senior studying Political Science and History at the University of Washington, is one of my oldest friends. I’ve had the pleasure of learning a lot about political science from him.  In particular, I remember a discussion with Mario on the concept of total war – a type of warfare where every and any asset of a country is used to wage war – and how it’s changed since World War 2 with the advent of nuclear weapons.

XKCD Book Signing @ Y Combinator

I figure that I should probably stop ranting about economics and math for a moment to talk about some of the fun things I’ve had the opportunity to do. Recently, my friend Dave invited me to a book signing event for the geeky webcomic XKCD at the startup incubator/VC Y Combinator (or simply YC) in Mountain View. XKCD is something of a geek pop culture icon: the blog is a collection of in-jokes related to stuff like algorithms, math and physics, and the occasional 4chan pop culture meme. Entrance cost a cheap $50 even, which included a copy of the book, a shirt, a poster (I got two thanks to Dave’s friend Charlie – more on that later), and signing of anything you wanted by the comic’s artist and author Randall Monroe. Proceeds of the night went to XKCD’s scholastic charity and publishing company, Breadpig.

When the Geeks Come Marching In

The Wall Street Journal recently did an article on Palantir, a Silicon Valley software start-up funded by Peter Thiel. Palantir (named after the wizard seeing stones from Lord of the Rings – huge geek cred bonus) originally wrote software for analyzing financial derivatives and securities, a booming business in financial irrational exuberance period of the last ten to fifteen years. But with the Credit Crunch,  Palantir has started to shift its focus away from the finance sector and towards a market that’s pretty unfriendly towards upstarts with disruptive technology: defense contracting.

The Joys of Anti-Competitive Hiring Practices

There are a few things that’re iconically Silicon Valley largely because they’re unique everywhere else but common here. Talking about programming or math at a bar, having gigabytes worth of storage on your keychain, and masses of people with bachelors degrees in either computer science or computer engineering are typical things around here but oddities  elsewhere.

Another unique aspect of Silicon Valley is the practice of freely and frequently moving between tech companies. Loyalty is often a function of neat tech, good pay, and stock options. When tempted with cooler technology to play with, higher pay, and if your stock has already vested, the fact that being hired into another company only means you’re moving down the block  makes horizontal transitions all the more attractive. You still get to keep your friends and your life. But now you’re getting paid more, have a new title, and maybe even a bigger cube.

It’s really a win-win situation. You get more pay as companies try to outbid each other to get you. Your prospective employers get an opportunity to have a fresh and novel way of solving problems come into their company, and maybe even some accidentally-acquired IP (intellectual property) in the form of trade secret-esque solutions that can be applied to solve their problems. For example, if you go from working on the iPod to the Zune you probably won’t bring blueprints on how the iPod works with you. But if you’re confronted with a problem with the Zune that you had when you were working with the iPod, you can solve it efficiently and quickly using the stuff you learned as an engineer at Apple. This kind of stuff is pretty common, especially in software engineering where algorithms are hard to copyright and protect legally.

But just as a lot of companies welcome in skilled employees from their competitors, they often don’t like their rock stars leaving for this reason. When you get hired by some of the big names, you’ll often see CNCs as part of the big stack of papers you sign. A CNC stands for a Covenant to Non-Compete (or a Non-Compete). CNCs are agreements that stipulate that you won’t go to work for a competitor in the same industry following your service at your company. The reason? You’ll upset competitive advantage. To go back to the previous example, if I solve the problem on the Zune that the iPod had once before, the Zune gains competitive advantage on the iPod. With good marketing and advertisement, this technological gain could mean that Apple loses control of the market just because you solved a problem that’s been holding back their competitor’s product.

What most people don’t know is that CNCs are legally referred to as Unconscionable Contracts in California state. Basically, they’re illegal. They can’t be enforced  and usually are just a form of scare tactic to mess with your decision making process when you consider leaving. Without that ability to be legally enforcable, companies sometimes turn to  gentlemen’s agreements to not hire each others’ employees so as to protect each’s competitive advantage. This “no poaching” deal works out well enough to make the constant competition between firms seemingly professional and civilized (sort of like Victorian Age warfare), ignoring the fact that many companies will then sneak behind each others’ backs and hire recruiting firms that’ll do just that (again, sort of like Victorian Age warfare).

But now even this might become illegal given recent anti-trust rumblings from the Department of Justice. The DOJ announced earlier this year that they’d be taking a “harder look” into the technology market, particularly into recruiting practices that engage in these no poaching deals. Now, there’s a lot of drama surfacing that Palm gave Apple the finger on stuff  like this because they were supposedly afraid of  the DOJ’s new trust-braking campaign in tech. Given that the DOJ would probably investigate both companies anyway if there was some sort of collusion going on, this isn’t just a PR stunt from Palm to hurt Apple’s brand. The message on both parts is clear: something is coming.

I’m honestly a bit surprised that this is the place where the DOJ’s trying to make its stand against tech. That’s it? Huge M&A action has been greenlighted by them that dramatically threaten to yield extreme market power to companies like Oracle, and they choose to protect the resource market by tagging hiring practices? Maybe this is being designed to be some sort of RICO type of maneuver that allows them to hit eveyrone at once.

I hope so. Otherwise the lawyers running the DOJ might be drinking as much on the job as the engineers over here in the ‘Valley. And frankly, drunken programming in C++ is a much better idea than drunken corporate law reform.

The Dangers of Sibling Rivalry in the Mobile Processor Market

A long time ago, the word “Pentium” made geeks shake in excitement. For years Intel used the “Pentium” title to refer to their processor brand as a whole (and later – the upper-class of the  brand).  When you bought an Intel processor, you’d get a Pentium: Pentium 2/3/4, Pentium: Extreme Edition, Pentium D.  Now Pentium refers to Intel’s lower-end Core 2 Duo and later Core i7 brand; they’re the same die of the processor with half (or less) amounts of the ultra-speedy on-die L2 and L3 memory cache, effectively reducing performance markedly but making the processor cheaper and take up less power as a consequence.

Of course, you don’t hear about the Pentium much anymore. Instead, you hear about the Atom. This is unfortunately starting to turn out to be a problem for Intel.

What the Hell is Web 2.0?

We ran into the group at Microsoft’s party on top of the Venetian hotel’s Tao nightclub in Las Vegas. Microsoft rented the multi-story bar out for the night to celebrate the commencement of their UI (user interface) design and technology conference, MIX. It was the sort of extremely trendy and chic-tech event that Valleywag would like you to believe is the norm around Silicon Valley. My friends and I got very lucky and were invited to attend, and we soon found our college student selves enjoying Tao’s open bar in the most appropriate and civilized manner as tech conferences like these often dictate.

This is to say, we went and ordered drinks at the open bar by saying things like “yo – give me another Jagerbomb,” or “I’ll take the most extremely expensive thing you have on the menu,” or my favorite “can I just have the bottle and give it back to you or something?”

M&A <3 Recessions.

Maybe it’s all the finance people I’m around right now, but M&A’s quickly taking over my econ-rants recently (especially those late at night over a few drinks with people who have no idea what I’m talking about). Mergers and acquisitions (ie: M&A) is definitely one of the sexier topics in corporate finance. The amount of money usually involved is probably the culprit: multi-million or billion dollar deals are pretty fun, especially if you’re the over-worked investment banker who’s getting a cut behind the scenes.

Theoretically, M&A should be picking up a lot in the next few months. With prospects good for economic improvement in the next fiscal year, some companies are more willing to spend cash to buy innovation rather than develop it in house. This take on the “Buy/Build” question probably has to do with the cost curves for firms in a recession.

Using the Tools of the Enemy

For the last year I’ve been working on a CS research paper on how certain types of algorithms can be applied to solve pertinent problems (Ha! Alliteration!) in business and economics. Finding ways of hacking Bellman-Ford, Min-Cost Max Flow, and Dijkstra to address critical business intelligence issues is a lot of extremely nerdy fun for me. It’s also been getting me thinking about examining the issue from the other side of things:

How can we use the math from economics to solve problems in technology and software engineering?

Passion, Success, and Beavers.

For someone infatuated with mathematics, science, or technology, MIT holds a certain social status as the pinnacle of geek intellectual power and might. Movies emphasize how smart their characters are by saying they went to MIT. Engineers who graduated from MIT ended up making wacky things like Linux (Richard Stallman), Hewlett-Packard, Rock Band, Intel, and the mouse. The mere name conjures up images of brilliant engineers who can make electrons do anything and everything with only effort and caffeine.

How IBM, Dell, and Bank of America Will Melt Your Legs Off.

After using a netbook for a year, I’m getting tired of ultraportability in the face of glaringly deficient speed and performance. I’ve been looking around at notebooks for the last few months trying to find an ideal cheap and powerful computer.

I ran across this laptop review on the Lenovo Ideapad Y550. It’s a pretty slick machine with a good price point, but I’ve been concerned about the battery life and build quality. I was hoping this review (written by a user of the machine) would give me some insight into these qualities of the notebook.

Instead, the review sounds more like the ravings of a lunatic who’s afraid that consumer banks and Dell are Van-Eck phreaking his laptop by “hacking” his “hackable RAM” and doing something with RFID. It gets pretty crazy near the end with something about “electro-therapy” and, well, long story short the guy’s insane.