The founders of Siri are working on a new service called Viv that can link disparate sources of information together to answer questions:

But Kittlaus points out that all of these services are strictly limited. Cheyer elaborates: “Google Now has a huge knowledge graph—you can ask questions like ‘Where was Abraham Lincoln born?’ And it can name the city. You can also say, ‘What is the population?’ of a city and it’ll bring up a chart and answer. But you cannot say, ‘What is the population of the city where Abraham Lincoln was born?’” The system may have the data for both these components, but it has no ability to put them together, either to answer a query or to make a smart suggestion. Like Siri, it can’t do anything that coders haven’t explicitly programmed it to do.

Viv breaks through those constraints by generating its own code on the fly, no programmers required. Take a complicated command like “Give me a flight to Dallas with a seat that Shaq could fit in.” Viv will parse the sentence and then it will perform its best trick: automatically generating a quick, efficient program to link third-party sources of information together—say, Kayak, SeatGuru, and the NBA media guide—so it can identify available flights with lots of legroom. And it can do all of this in a fraction of a second.

If I understand the advancement they’ve made, the service (1) will allow third-parties to link in their information or service and define what it is in a structured fashion (so Yelp could define their information set as points of interest, user ratings and reviews, and Uber could make their car service available) and (2) the service knows how to connect multiple information and/or services together so that it can answer a user’s question or fulfill their request.

The Wired article linked above provides an example of what this would look like. A user tell Viv that they need to pick up a bottle of wine that pairs well with lasagna on the way to their brother’s house.

Providing a solution to that requires the interaction of many different information sets and services. Viv would (1) use the user’s contacts to look up their brother’s address, (2) use a mapping service to create a route from the user’s current location to their brother’s house, along with some radius along the route with which the user is willing to deviate from to pick up the bottle of wine, (3) identify what ingredients compose “lasagna,” (4) identify what wines pair well with those ingredients, and (5) find stores within the specified radius of the user’s route that carries that wine.

That’s incredibly complicated. If Viv can do that not just for pre-planned scenarios (like Siri and Google Now currently do), but for arbitrary scenarios provided they have the necessary information and services, then they must also have made an advancement in natural language recognition to support it.

What most intrigues me, though, is the founders’ vision for providing Viv as a “utility” akin to electricity, so that any device could tap into the service and use its power. Effectively, what they are trying to build is a structured, universal data source. I wrote about this idea when Apple released Siri in 2012 and it’s something I’ve been thinking about for the last 5 years. The idea is to structure the world’s data so that it can be retrieved in a useful (read: computer usable) form.

It’s incredibly ambitious. With a sophisticated natural language front-end, users could ask for information on virtually anything and receive it immediately. You could, while cooking (is it obvious I make an application for cooking?), ask for healthy substitutes for butter, or the proper technique for blanching vegetables. The service would also have an API so that other software and services could access it. Imagine a hypothetical research application that allows you to request (not search!) the average temperature for each year in Los Angeles for 1900-2010, and getting back the data, and the data assembled into a chart. And then imagine requesting the average temperature for Los Angeles for 1900-2010 along with the amount of CO2 emissions for each year in the same range. With the data charted.

That’s a rather mundane example, actually. Imagine what kind of analyses would be possible if the world’s data is not only made available, but is immediately available in a structured format, and is constantly updated as the data is produced. There is the potential here, I think, for this to be as important as the advent of the Internet itself.

What concerns me, though, is how will this be made accessible. The article quotes Dag Kittlaus as saying that they envision deriving revenue from referrals made within the service. So, if you buy something through Amazon or request an Uber ride through Viv, they will earn a referral fee for it.

That makes perfect sense and is fairly brilliant. But what about making scientific data accessible? Will that require some kind of payment to access? Will I only be able to access that information through some kind of front-end, like a research application that I’ve paid for (and where the application’s developers pay some kind of fee to get access)? That would certainly be an advancement over where we are today in terms of making data accessible, but it would also prevent incredible innovation that open access could allow. Imagine if Wikipedia was a for-profit operation and, instead of being publicly available, was only accessible through subscription or through some kind of front-end. It would not be nearly the same thing.

It is heartening, though, that they are thinking so deeply about a business model. It would be a shame if such a terrific idea and incredible technology fails (or is absorbed by another company) because they hadn’t considered it. However, I hope they are considering, too, what open access to certain kinds of data (historical, political, scientific) could allow.

Monday’s WWDC Keynote was easily the largest set of changes made to Apple’s platforms since iOS 2 was announced in 2008. The effects of what was announced will be felt and discussed for years to come.
There is a lot to think through and write about, which I will be doing in the coming weeks. However, something struck me during the keynote that felt fairly small but, upon thinking about it afterward, I think could end up being important to Apple’s future success.

Apple announced further updates to their cloud service where you can save all of the photos and videos you take, all of your documents and all of your data. Apple announced that their Touch ID feature, which identifies you using your fingerprint, will now be accessible by third-party developers as well. And Apple announced that a new app and framework for centralizing all of your health and fitness data, which—given your permission—can automatically be sent to your doctor.

That’s in addition to storing your contacts, calendar and reminders, and tracking your location (and keeping that data on your device) over time so your iPhone can provide you with timely updates on how long it will take to get to home or work with current traffic. Combined, Apple is asking you to store nearly all of your intimate information on their devices and servers, and even to provide the most intimate—your health data—to your doctor.

And yet I’ve heard little or no consternation over Apple’s consolidating our most private data, in an era where our government maintains call logs, collects security and encryption exploits, breaks into private services to collect data, and lied to the public about the extent of what they are doing.
That should be surprising, especially considering how much push-back companies like Google and Facebook have received for collecting and using our personal data. On the whole, people seem to trust Apple to respect their personal data.

The reason, I think, starts with that Apple’s business is *not* their users’ data. Their business is selling devices and services to their users. As a result, Apple’s interest in their users’ data is not to generate revenue (which is inherently Google and Facebook’s interest), but rather to use it in such a way that they can create compelling and meaningful products for their customers. Their incentives are aligned with user incentives because of their business model.

Second, Apple takes this relationship very seriously. iOS makes it very clear when applications are requesting access to our personal data. Apple has worked quite hard to make sure that the *user* decides what and how much they want to share.

I don’t think Google or Facebook could announce that they are going to collect their users’ health data and optionally send it to their doctors without some reasonably large amount of criticism and fear of abuse. The reason is obvious: their primary business is utilizing user data to generate revenue, so why couldn’t they do the same with health data?

As time continues, the integration of our smartphones, health tracking devices and the increasingly sophisticated use of the data they generate together will become the primary space where meaningful development occurs in technology. There’s huge potential for what Apple has announced with HealthKit. If it takes off, it will be a single place to store all of our health data. This will not only benefit doctors because they will be able to see it for the first time, but by aggregating it together for each individual (and potentially for groups), we will be able to see trends and correlations related to our decisions and health that we just could not see before.

That has the potential for both better decision-making and for doctors to get ahold of us when something appears to be seriously wrong that we ourselves may not even be aware of. There is incredible potential here, and I think Apple is the only company that can pull it off. This puts Apple in a unique position as we continue into the future and provides a special advantage that no other company has.

Matt Bischoff on the New York Times’ 10-free-articles-a-month limit:

Since The Times’s mobile products are partially supported by advertising, it’s counterintuitive to drive down the number of ad impressions by cutting off enthusiastic users just as they’re getting excited about the content. Ten articles per month just aren’t enough to justify keeping the apps installed; it’s almost insulting. The proof is in the plummeting App Store ratings as well as in the company’s usage statistics, which I suspect show readers returning less frequently since the change.

I read the Times every morning and have for the past five or six years. So let’s be honest: Not only are their subscription plans inscrutable (separate plans for smartphone and tablet access? Why?), but the new 10 articles-per-month limit is clearly designed to coerce people into subscribing. But instead of convincing more people to subscribe, it’s likely to piss more people off and turn them away from the Times.

It appears that the Times doesn’t have a unified strategy to transition their company to digital. Sad.

Last week, Nest was acquired by Google for $3.2 billion.

There are only a few companies that have truly excited me in the last few years, and Nest is at the top. They worked on a very original, very real problem—thermostats were not only a user interface disaster and something nearly everyone hated to use, but also were an opportunity to do something meaningful: use energy more efficiently in people’s homes while also improving their relation with an important but ignored device. In addition, it clearly was the first product in a much larger plan. And it was a very good first step in a very good plan.

So, when I heard that Nest had sold to Google, I felt a pang of disappointment. Not because it was Google (which, if Nest were to be acquired, makes more sense than any other company I can think of), but rather because Nest is an incredibly ambitious company that, I think, had the opportunity to be as important to the next wave of development in personal computing and the Internet as Apple and Google were—and potentially as large. They were a key member in Silicon Valley’s next generation of meaningful companies, I thought.

Of course, nearly every bit of that can (and will) still be true, with the notable exception of remaining independent. They can still do all of that, but they will do so under Google’s banner, and for Google’s benefit. And that’s fine, all else being equal. Before I continue, though, we need to discuss why Nest decided to sell in the first place, and “for the money” doesn’t count, because I know Tony Fadell, Matt Rogers and everyone else there didn’t do it for the cash.

Here’s why they sold, according to Fadell:

I was spending nearly ninety percent of my time on building the infrastructure of the company and I wasn’t able to spend enough time and cycles on what I love doing: products and creating differentiated experiences for our customers. That is where my love is and Google offered to let us focus on that, but with scale that will help bring our horizon closer to us, faster. Google offers to bring that scale to us. For me, ultimately building great products is key.

Fadell cites European distribution as a specific example of what he means by “scale”—physical distribution and dealing with legal issues surrounding something as regulated and disparate as energy. Fadell wants to focus his time on developing products rather than handling all the issues surrounding it.

It’s hard to argue with that. Nest clearly wants to move quickly. The Nest thermostat is a shockingly good first product, and Nest Protect—which they released just two years later—is at least as good. Nest Protect also began revealing their larger strategy. Owning either one of them is great, but owning both of them makes each one better. Since they use your home’s wireless network, the Nest thermostat will automatically augment itself with the Protect’s motion sensors. And more importantly, if the Protect senses rising levels of carbon monoxide, the thermostat will shut off your home’s furnace. Their strategy, then, appears to be modular devices that are convincing on their own, but when used together not only all function better, but begin to form the basis for a connected home.

Being a part of Google will allow them to realize that strategy faster by increasing their resources so they can focus their bandwidth on developing product. Google also is doing industry-leading work in learning systems and web services, which obviously will benefit Nest. Like I said, of all the companies in the world that could have acquired Nest (which, admittedly, is a fairly short list), Google is the best fit.

But Google didn’t agree to acquire Nest entirely for Nest’s benefit. They did it, I assume, because Nest fills in particularly important holes in Google’s capabilities and in Google’s future development. While Google has been very good at building web applications, web services and a mobile operating system, they’ve done very little to prove that they can design and make hardware that real consumers will pay real money for. There’s a lot more involved there than design and supply chain. To a much greater extent, making hardware involves doing businessy things like identifying a target market for it, identifying what price they’ll pay at necessary levels of sales and margin, and then manufacturing a quality product in an efficient enough way to hit that margin. Nest has shown that not only can they do all of that, but they can produce an exceptional product that customers truly love. That’s invaluable, and it’s something Google hasn’t done.

Nest also provides an entry path for Google into the home. Starting into the connected home requires building hardware, and it requires a no-bullshit vision for how the connected home can improve people’s lives in substantive ways. Nest provides both of those things.

It sounds a symbiotic relationship, then. Google can provide Nest what it needs and Nest can provide Google something it needs, too. In Nest’s ideal vision of the relationship, Nest will remain largely independent—their own brand, leadership, teams and products. People and resources may flow across the Nest-Google boundary, but the two entities will nevertheless remain distinct. But in Google’s, Nest will begin to overlap and merge with Google itself. If Google wants the Nest acquisition to result in an improved capability for creating hardware products that consumers really want, then that necessarily requires Nest’s leadership to extend outside of Nest itself—which would require splitting their time, too. This is because while Nest may become functionally a discrete unit within Google (the “connected home” unit, let’s say), if it is to have any effect on the rest of Google, there has to be some sort of cross over. This may mean putting Nest’s leadership (whether that’s Matt Rogers, or another member of the team) in charge of Google’s hardware, or even having people in leadership roles move back and forth across the boundary. In any case, the boundary begins to smear, and Fadell’s reason for doing the deal—to focus his team’s time exclusively on product—begins to seem less likely.

Of course, that’s not necessarily negative. Perhaps a Nest-infused Google, and a Google-infused Nest, is better for everyone involved—Nest, Google, and us. I think there’s a good argument to be made there. But inherently, as that occurs, Nest begins to fade as a distinct entity, and it becomes more Google.

I think the most optimistic comparison for this acquisition is Disney’s 2006 acquisition of Pixar. Pixar remained an independent studio, kept their leadership, kept their campus, kept their culture, and created some of their most artistically and commercial films afterward. In return, Disney received Ed Catmull and John Lasseter’s services for turning around their declining animation department. And turn it around they did; Disney Animation Studios is enjoying something of a renaissance. Frozen, released in December 2013, was Disney’s biggest hit since The Lion King. The Pixar acquisition is one of the most successful acquisitions in history.

That could be how it works out here, too. I suspect, though, that while Pixar has thus far been able to retain its independence, Nest will not retain independence to the same extent. I have two main reasons for thinking so. First, the Disney-Pixar deal was incredibly specific in its intent: the deal was Catmull and Lasseter would oversee Disney Animation and Pixar would remain its own studio. The Google-Nest deal, as far as I can tell, doesn’t appear to be nearly as well-defined. As a result, blurring will happen with relative ease. Second, while in the movie business it’s actually beneficial for Pixar to remain independent in substance and in brand—it allows them to experiment in ways they couldn’t necessarily do if it was all a single studio, and it also allows them to release multiple movies per year in a way that doesn’t feel like Disney movies are competing for people’s attention—that structure doesn’t make nearly as much sense for Google and Nest. In reality, centralizing their hardware operation makes much more sense than continuing Nest as a parallel operation to Google’s other hardware operations. As a result, I think what we are more likely to see is Nest more or less become a part of Google while the brand continues on as Google’s “connected home” brand.

In the short-term, then, I think there’s very good reason to be excited about the deal. I bet we are going to see even more incredible things come out of Nest than we would have seen otherwise, and probably faster as well. But long-term, I’m disappointed. Nest is one of those rare companies that identified a brilliant product idea, in a large market, that would allow them to develop into something much greater in the future. And along the way, they built a first-rate company in all areas. I believe Nest would be one of the most important companies in the world for the next twenty years. And while they may still be integral to personal computing and the web’s future, it will likely be under Google’s banner. For better or for worse.

Michael Belfiore’s excellent profile of Elon Musk:

Thinking it would be pretty cool to land a plant-growth experiment on Mars but finding the cost prohibitively high, Musk started his own rocket company to bring the price down.

Musk is building a space exploration company while much of the technology industry—the self-described home of “disruptive” “innovation”—is building a better way to sext and sell ads.

That might be a little glib, but it’s also largely accurate. How can you not love someone who’s not only built the best electric car in the world, started a successful solar company, and whose motivation story for starting a space exploration story is that he wants to see humans visit Mars?

In an excellent interview with Business Week, Tim Cook explained their thinking for the iPhone 5C:

We never had an objective to sell a low-cost phone. Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost. Therefore, we can pass that on. And we figured out a way to sell 4S at substantially less than we were selling it for before, and we’re passing it on. So we think there will be a lot more people in our tent, and we can really serve a lot more people. And that feels good.

The iPhone 5C is fascinating to me because nearly everyone—including John Gruber—got it wrong: it isn’t a “cheap” iPhone. Rather, it’s something that’s both much more obvious and surprising.

Implicit in the idea that Apple should release a cheaper iPhone is that it would be a secondary model for people who want an affordable prepaid iPhone and for international markets; that is, an implicit assumption was that the iPhone/iPhone 5S would remain the mainstream iPhone. That isn’t what Apple is doing with the iPhone 5C.

Instead, Apple has taken the strategy they’ve followed since releasing the iPhone 4—take last year’s model and make it available at $99—and created a distinct product from it, and made it the mainstream iPhone.

Rather than move the iPhone down market with the iPhone 5C, Apple moved the “regular” iPhone—this year, the iPhone 5S—up market to become the pro version, and establish the iPhone 5C as the “regular” iPhone. The iPhone 5C is now the iPhone that really is good enough for everyone. The A6 processor is fast, so is LTE, and the iPhone 5′s camera is very, very good. The colors lend it a feeling of accessibility, too; it feels less serious than the iPhone 5′s aluminum design, more fun, and the colors allow for a greater feeling of personalization and whimsy. (The cases only amplify that, misplaced circles aside.) It’s a very good phone at a reasonable $99 price-point, and it’s going to look much better in the store to potential customers than last year’s iPhone model did.1

Apple’s marketing certainly seems to be trumpeting this, too. Apple’s home page features the iPhone 5C, not the 5S, and it’s playing heavily on the 5C’s colors. They featured an iPhone 5C ad, not one for the 5S. Tim Cook and Phil Schiller referred to the iPhone 5S as Apple’s most “forward-looking” iPhone yet. Apple is positioning the iPhone 5C as Apple’s iPhone for everyone, and the iPhone 5S for people who want the best.

That makes some sense on the face of it; it allows Apple to sell a “new” iPhone at $99 with 16GB of storage, but with lower cost of goods sold, which means they can maintain their margin. It may also allow Apple to push the envelope a bit more at the top end because they no longer need to manufacture enough iPhone 5Ss to satisfy nearly everyone purchasing a new iPhone at launch. But if the iPhone is under mortal threat from low-end, commodity Android-powered smartphones, then this decision seems bizarre. It won’t compete with those devices. The iPhone 5C is cheaper, but it’s not much cheaper.

But it starts to make a lot of sense if you think that smartphones aren’t so far along that the low-end, cheap models are good enough compared to the iPhone. If Apple can still provide superior hardware and software that, combined, make for a genuinely better device that is palpable for regular customers, then Apple has no need to bloody itself in the low-end washer machine.

And that’s exactly what Apple seems to think. Tim Cook explains what he thinks makes Apple so special, and what makes this strategy possible:

You look at innovation like the iPhone’s camera and the detail that went into the camera. Most people hear the word camera, and they think of hardware. And hardware is really important to it, you know? With the stuff we did with the flash on this. But it’s software, and it’s the silicon—I mean, it’s everything.

So the way I think about Apple is that the magic of this place really comes up at its best when hardware, software, and services come together. And it’s sort of the intersection of those things is where things get incredibly magical. So facilitating that to happen and getting the collaboration level for that to happen is the magic here.

And one of my proudest moments is when other people see that. They don’t know that they’re seeing that, and that’s also the beauty. They don’t have to do it. But look at these (gesturing to iPhones). These are perfect examples where the hardware and the software and the service begin to blend. In some ways you don’t tell one from the other.

The iPhone’s camera is the perfect example of what Cook is arguing. The iPhone’s camera—a cellphone camera!—is now so good that many people have nearly no need for a dedicated point-and-shoot camera. This is only true, though, because Apple has focused on developing the camera in a way that can’t be captured so well on a specification sheet but really does make for a better camera. Rather than boost their sensor’s megapixel count, Apple has kept it steady at 8 megapixels for three iPhone models, and instead has boosted the sensor’s size. They’ve focused on doing rather incredible things with the iPhone’s Image Signal Processor to make for, and choose, better photos. While these things don’t translate well to selling points for cell carrier sales associates, it does make for a truly better camera, and customers do notice the difference. As a result, the iPhone feels like a device in a class of its own.

The obvious choice was to make a more affordable iPhone. I don’t think Apple is religiously opposed to making a cheaper iPhone, but they will only do so if they can make a convincing product. What Cook is saying is that making truly good products comes first. Eventually, I believe, Apple will do exactly that. That shouldn’t be a surprise; the iPhone 5C is highly reminiscent of my first Apple product, and one of my favorite devices ever: the iPod Mini. The iPod Mini had less storage than even the third-generation iPod (10GB versus the Mini’s 4GB), and wasn’t that much cheaper than the third-generation iPod ($299 versus $249), either. Critics at the time were perplexed; if Apple was going to make a lower-end iPod to compete with more affordable competing devices, the iPod Mini certainly wasn’t it.

But it didn’t matter, because it was a damned good product. For me (as a high school student at the time), the lower price finally made it attainable, and the colors were fun in a way the regular iPod never was. The iPod Mini was incredibly successful, and it wasn’t the end; Apple replaced it with the iPod Nano in 2005 at lower prices, and introduced the iPod Shuffle—a completely different kind of music player—in 2005 as well at even lower prices.

I think the iPhone will follow precisely the same path. That is, I believe Apple will build some kind of “iPhone” product for the low-end eventually, but it may not look like an iPhone at all.2

In that sense, what Apple did was incredibly obvious: it’s what they’ve been doing since Steve Jobs returned to Apple. They don’t identify price-points and product attributes and then create a product to fill it, as most companies do. They create genuinely good, convincing products that solve real needs for people first.

If you’ve been concerned about where Apple is going under Tim Cook, this should be a sign that there’s nothing to be concerned about. Apple’s unrelenting focus on making truly great products is not only still there, but seems to be reinvigorated under Cook’s new management team.

There have been a lot of headlines lately with some variation of “Is Innovation Finished At Apple?” I believe the best may still be ahead of Apple.

1. Yes, technically, it’s almost identical to last year’s iPhone 5. But for people looking at several phones, a colorful iPhone is going to be a lot more exciting than the iPhone you’ve seen everywhere for a year. [↩]
2. This may be where Apple’s wrist device fits in. [↩]

Today, Basil received a nice 1.6 update. This update brings a really obvious, simple feature that many other recipe applications include: ingredient scaling. It’s really convenient while in the kitchen to be able to adjust a recipe’s yield according to your needs (the amount of jambalaya you need for two on a quiet weeknight is a little different than the amount you need to make while having guests), and it’s conceptually very simple.

Except it’s not so simple.

It sounds like it, of course; when you think of doing ingredient scaling, it’s just taking an amount at the beginning of a line (“1 item,” “2 tablespoons”) and scaling it by some factor—cutting it in thirds, doubling it, whatever. That’s the approach most applications take for ingredient scaling: they assume all ingredients are phrased such that there is an amount at the beginning of the line and then a food item. Based on that assumption, they identify a number at the beginning of the ingredient line and scale it by whatever scale the user selects. In the basic cases, like “2 cups white sugar”, this works OK. Not great, but OK.

But the problem is that not all ingredients items are the basic case, because there are many ways to express things. What about ingredients like “1 (12 ounce) box of pasta” versus “2 medium cloves garlic (about 1 teaspoon)”; in the first case, the measurement amount shouldn’t be adjusted, but in the second, it should be. In the second case, assuming that you only have to adjust the amount at the beginning of the line can be very confusing while cooking: After I double the recipe, do I use 4 cloves of garlic, or 1 teaspoon? This assumption—made because parsing imprecise language like this is difficult—actually makes cooking harder for the user, because they have to remember how their application fails at correctly scaling ingredients.

A new feature for cooking isn’t helpful if using it actually makes it harder to cook. There are many other cases; what about scaling amounts expressed as words, like “half”? Or what about when you cut “1/2 cup” in fourths and it tells you to use “1/8 cup” rather than “2 tablespoons?”

Scaling ingredients isn’t useful if it makes you think about these things while cooking or doesn’t work for some ingredients. It’s a distraction.

I avoided building a scaling feature for Basil for that reason: I didn’t want to add more noise if it had all of these caveats. But I’m happy to announce that Basil now has ingredient scaling, and it does its best to do the right thing in all of these cases. It handles the cases discussed above, and many others, too. It will do its best to present ingredient amounts in a way that makes sense (no “1/9 cup sugar” or similarly bizarre things).

It isn’t perfect. There are probably cases I’ve missed, or cases it’s not handling properly, but I am committed to addressing those.

Working on ingredient scaling, though, reminded me that problems which seem exceedingly simple and easy to solve on the surface are usually icebergs waiting to sink you. They may look simple, but they tend to conceal much complexity underneath the surface that is only obvious once you’ve thought through the problem. These “yeah, that should be easy to do” features have, more often than not, been the hardest problems to solve in my experience.

This experience is also another lesson that while users like receiving new features and they’re exciting to announce, over the longer term users only want a new feature if it improves their net-experience in some way. If it ends up not being useful in many cases, or adds complexity to the process of using your application, then that feature could make your application less useful than it was before.

Reihan Salam links to a post by Ross Eisenbrey which argues that government, not business or markets, is primarily responsible for innovation we’ve seen in technology:

Mazzucato suggests that, given the extent to which tech companies like Apple and Intel owe their great good fortune to the federal government’s investment in R&D, they should share more of their profits with the taxpayers. Instead, of course, Apple has been offshoring profits to avoid taxation and most of the tech industry is contributing to the efforts of the U.S Chamber of Commerce and the rest of the organized business lobby to cut corporate taxes and shrink the government. As Mazzucato makes clear, cutting taxes and the government is no recipe for an innovative, competitive future—just the opposite. 

Mazzucato points out that many of the iPhone’s core technologies, such as solid state storage, capacitive sensors and GPS, all have their roots in government-sponsored labs. She presumes, then, that government is therefore largely responsible for the innovation itself, and so (1) we should continue supporting government-funded research projects, and (2) those companies that benefit from taxpayer “risk-taking” should “share” more of their profits with the government.

But as Salam points out, companies have no moral obligation to do so. The government funded much of that research for its own purposes. Salam writes:

The U.S. government devised the technologies Mazzucato identifies for its own, usually defense-oriented reasons. Mazzucato implicitly suggests that in a counterfactual universe in which the Cold War had never taken place, and in which defense expenditures hadn’t diverted spending from other domains or forced higher tax levels, etc., innovations in information technology would not have taken place either. The decades that preceded the Cold War, during which there was considerable private sector innovation in early information technologies, suggests that this is not the case, but of course we can’t really say.

What’s worse, though, is that requiring some formative compensation for that research would undermine the very innovation that Eisenbrey and Mazzucato claim that the government was actually responsible for. Salam again:

As Amar Bhidé often notes, an Englishman pioneered the World Wide Web under the auspices of the government-financed CERN laboratory in Switzerland, yet the U.S. has been the main source of consumer internet innovation. U.S. internet firms do not, however, pay the Swiss and other European governments a formal innovation bounty. Part of the reason is that everyone profits from the free flow of knowledge, which is why excessive patents are such an economic scourge.

The reason is that doing so would reduce that free flow of information, and therefore the actual work it takes to create a useful product and bring it to market. Eisenbrey conveniently skips over the 1970s, 1980s, 1990s, and 2000s where technology companies invested huge sums of capital and work into developing these base technologies into something useful for consumers, and into something consumers would buy. There’s an implied derision at that effort as something other than innovation, but it absolutely is, and it’s what actually makes those technologies useful for people. Without those companies continuing to iterate on solid state storage, and without other companies creating salable products that utilize it, solid state storage never would have been anything more than a curiosity in a lab. Similarly, without Intel developing the microprocessor, and without Apple, Microsoft and the PC makers creating PCs for those microprocessors that appealed to consumers, they never would have developed like they have, either. And as a result, those technologies never would have evolved enough to create a handheld, touchscreen phone that’s always connected to the web. It would have been impossible.

Note, however, that story doesn’t minimize the role of government-funded research. Rather, it shows that it plays a role in innovation, but it is not the entire story by any stretch. And it shows, too, why the free flow of ideas and technology is so important. Without it, there can be very little actual innovation, because “innovation” inherently means seeing a connection between disparate ideas and technologies, how they can fulfill a need for people, and putting them together such that it creates something that didn’t really exist before. Innovation may be greater than the sum of its parts, but it is nonetheless the summation of many different things that already exist. Placing formal restrictions on those ideas, such as overbearing patents or, in this case, requirements to pay back more to the government which claims responsibility for them and state direction of innovation, impedes that flow of ideas and innovation as a result.

This is why simplistic stories about where new ideas and products come from, and simplistic moral stories about who deserves what for those ideas and products, can be so damaging—they elide much more complicated systems.

Dr. Drang on “free”:

First, you have to recognize that you’ve been “the product” your entire life. So were your parents and so were your grandparents. Television and radio, newspapers and magazines—they all sell your attention to their primary customers: advertisers. Even things you “pay for” sell you off to advertisers because you really don’t pay for them—you only cover part of the costs. Despite this obvious and longstanding fact of life, while everyone bitches about commercials, no one says TV networks are insidious or underhanded because they run ads.1 I’ve never heard of anyone boycotting Mad Men because they don’t want to be a product sold by AMC.

Chase Oliver:

If you’re selling a vacuum, don’t start by pitching its bells and whistles. Instead, sell a clean home. It’s the reason people look to buy a vacuum in the first place. Once you’ve established that you understand — or better yet, sympathize with — your customers’ needs it becomes easier to justify each feature by tracing it back to the product’s intent.

Yes, yes, yes.

I love that phrase—”sell a clean home, not a vacuum.” I might steal it to explain Design for Purpose.

(Via Marcelo Somers.)

Brian Levin on the concocted Apple tax controversy:

I’m angry because Apple not only engages in the questionable practice of stashing its cash in offshore tax havens, it has become the greatest offender, avoiding US taxes on $74 billion over the past four years. There’s something fundamentally wrong when the wealthiest company in America pays 12.6% in taxes, while my father’s small business, my grandfather’s store and the Korean Deli across the street pay a rate nearly three times higher. And it’s not just savvy accounting or a strategic maneuver—Apple’s tax avoidance has a profoundly damaging effect on our whole country.

(Via Marcelo Somers, who makes a nice response to this as well.)

There’s nothing “questionable” about Apple’s practices. U.S. corporations pay taxes on foreign income (income they earn for sales outside the U.S.) when that income is repatriated, or brought back into the U.S. If it stays outside the U.S., it isn’t taxed. That isn’t “questionable” or “abuse”—that’s how the system is designed. Is it any surprise that Apple, and nearly all companies, keep much of their foreign income outside the U.S. when repatriating it would mean facing a very large tax rate on it?

Minimizing the taxes you pay is neither morally nor legally wrong, or even “questionable.” It’s something we all do, because most people would like to pay only the amount of taxes they’re required to by law, and because it’s morally wrong to expect people to pay more than the law as designed demands. (And for anyone who feels bad for only paying what the tax code demands, feel free to give the Treasury donations. They accept them.)

Moreover, Apple doesn’t keep cash outside the U.S. simply to avoid taxes1; Apple requires capital to fund operations outside the U.S., such as building and operating new retail stores and purchasing capital equipment for manufacturing their products. But, of course, they do keep more cash outside the U.S. to avoid paying taxes on it, which means there is a distortion occurring due to our tax system’s structure—Apple, and most other multinational U.S. companies, avoid repatriating income to the U.S. due to a very high tax rate. This not only creates a more convoluted structure for corporations, but also limits potential investment in the U.S. by U.S. companies. This effect could be reduced by lowering the corporate tax rate or eliminating it altogether.

One other note: some have said that Apple’s done nothing wrong, and it’s the tax system that’s broken. That’s true, but what they seem to imply is that the federal government should simply force U.S. companies to pay corporate tax on all income, whether domestic or foreign, and be done with it. That isn’t precisely a desirable solution, however, since that would (1) encourage companies facing the full brunt of the top tax rate to move outside the U.S., since they have a responsibility to their shareholders; (2) encourage companies to take advantage of the rules to avoid such a high rate, and create more distorted operations and corporate structures as a result; and (3) if the tax system is effective across the entire economy, would then encourage Congress to do precisely what they’ve done all along, which is carve out breaks here and there for certain industries, and create an uneven mess of a tax system all over again.

1. Although they certainly could. Following the tax code’s rules to minimize your tax liability is not wrong, and it’s slightly disturbing to suggest otherwise. [↩]

Farhad Manjoo:

Tesla is trying to create this infrastructure by itself, which means everything’s moving more slowly than it could. If the entire car business worked together to improve this stuff, batteries and charging infrastructure would improve at a faster pace.

So how can Tesla persuade General Motors, Ford, Toyota, Mercedes, BMW, and other car giants—not to mention other car startups that are similar in size to Tesla—to all work together to improve the world’s electric vehicle infrastructure? By licensing its tech to its competitors, in the same way that Google gives Android away to every phone-maker in the world.

That’s exactly what Tesla has started doing.

Interesting idea; I wasn’t aware that Tesla was licensing its motor and battery technology. Getting more electric cars on the road and a shared quick-charging infrastructure in place would certainly benefit everyone involved.

Marco Arment argues that free trials with higher-priced applications in the App Store would undermine people’s tendency to try out a number of applications even if they don’t use them long-term because they’re so affordable:

If the App Store mostly moved to higher purchase prices with trials, rather than today’s low purchase prices and no trials, this pattern would almost completely disappear. Instead, we’d get the free trials for almost everything, and then we’d only end up paying for the one that we liked best, or the cheapest one that solved the need, or maybe none of them if we didn’t need them for very long or decided that none were worth their prices.

In this type of market, the winners can make a lot more, because you can indeed charge more money. But the “middle class” — all of those apps that get tried but not bought — all make much less.

I think Marco’s right. (Please do read his entire piece. It’s very good.)

Since releasing Basil last year, I’ve been thinking a lot about this, and paid upgrades, which is a related topic. Trials seem like they would be a positive thing for developers; users could try out our applications, see how good they are, and then, theoretically, they would be willing to pay a higher price, and would do so at such a volume that our current sales would increase or, at minimum, wouldn’t suffer. Charging $10 for an application sounds a hell of a lot better than charging $2.99 or $3.99.

Marco is right that this would fundamentally change the nature of the App Store. Rather than spend a couple bucks here and there to try out new applications, users would more likely try out a large number of applications and end up paying for the one that best fits their needs. Of course, that may be more fair; users only pay for the application they need, and only the developer who provided it is paid. But as Marco points out, that erodes the entertainment aspect of the App Store.

As a result, since that market would resemble the PC or Mac software market, he argues the outcome probably would, too. A relatively small number of developers and companies will do especially well, and most others will make very little. That’s convincing.

I don’t think there’s a net benefit here for introducing trials. That market may support deeper, more full-featured applications, but it could also throw out one of the App Store’s greatest attributes: the ability for a single developer or small team to take a single good idea, turn it into an application, and make it accessible to a huge audience—all while possibly making a decent income and having the chance to make it a huge success.

Rather than hope for trials or even paid upgrades, I think developers need to utilize the tools we have: in-app purchase and subscriptions. IAP can allow developers to reach a wide audience with a low initial price (or free, even), and make more from those customers who are willing to pay for more. Paper for iPad is an excellent example of how to do this. The application comes with a “pen” drawing tool for free, but pencil, marker, paintbrush and color mixing tools are available through IAP. There’s nothing predatory or abusive about Paper; it’s a beautiful, useful application, and the tools available for purchase make it even more useful.

Those are the kinds of things we should be thinking about. Not only is hoping/waiting for trials unproductive, but it limits what your application is capable of. IAP is an incredible tool that allows for unique, powerful applications for users, all while making it available to a very large audience. That capability shouldn’t be shunned; instead, we should think about how to use it to make businesses that are sustainable for us and useful for customers.

Andrew Ng is helping lead a group at Google dedicated to making giant advances with neural networks:

It was a shift that would change much more than Ng’s career. Ng now leads a new field of computer science research known as Deep Learning, which seeks to build machines that can process data in much the same way the brain does, and this movement has extended well beyond academia, into big-name corporations like Google and Apple. In tandem with other researchers at Google, Ng is building one of the most ambitious artificial-intelligence systems to date, the so-called Google Brain.

Pretty good piece about the increasing overlap of neuroscience and neural network research for technological purposes, but what I want to emphasize is how much Google has invested in neural networks (or “artificial intelligence” generally, if you’d rather, but that term is pretty misleading). Both Apple’s and Google’s futures depend heavily on using user data and other data sources to provide value for users, and Google has a huge advantage here because they’ve been investing heavily in it for a very long time. It’s just as important to Apple, but Apple had to acquire the Siri team to gain the capability. That’s a huge disadvantage.

This isn’t just about speeding up voice recognition or making it more accurate, although that is an advantage Google Now has over Siri—using voice recognition in Google’s iOS search app feels much faster than Siri because it shows you what it thinks you’re saying as you say it. It’s much more than that; since this has been something very important to Google for a long time, and something of an intrinsic organizational competence, Google can move much quicker to develop the capability in Google Now than Apple can. Apple must move even quicker to make it a skill for Apple, too, and to take advantage of their own unique resources that Google doesn’t have.

For just a small fee, you too can have your screenplay analyzed for maximum box office effectiveness:

A chain-smoking former statistics professor named Vinny Bruzzese — “the reigning mad scientist of Hollywood,” in the words of one studio customer — has started to aggressively pitch a service he calls script evaluation. For as much as $20,000 per script, Mr. Bruzzese and a team of analysts compare the story structure and genre of a draft script with those of released movies, looking for clues to box-office success. His company, Worldwide Motion Picture Group, also digs into an extensive database of focus group results for similar films and surveys 1,500 potential moviegoers. What do you like? What should be changed?

“Demons in horror movies can target people or be summoned,” Mr. Bruzzese said in a gravelly voice, by way of example. “If it’s a targeting demon, you are likely to have much higher opening-weekend sales than if it’s summoned. So get rid of that Ouija Board scene.”

How long before a similar process just writes screenplays? And, really, what would be lost?