Interesting article supporting your earlier claim.
http://www.lifeaftertheoilcrash.net/
I have not read the article in its entirety, but I must say that as I read it I got both scared and, at the same time, incredibly motivated by an expanding opportunity that may be heading our way.
Can you imagine the amount of resources that would become available for alternative energy sources if people could no longer run their automobiles or data centers due to an energy crisis. I believe a crisis of this sort may very well bring economic hardship, but at the same time, a massive re-allocation of capital. Capital investment can fuel huge economic growth.
You mentioned Black Tuesday in our conversation the other day in a comparison of what would happen with an oil peak. This historical crisis was the product of mass speculation and irresponsible lending to individuals investing in the stock market (most of which is now illegal). At least in the tech sector, I would say, that the market is far less speculative than it was during the .com's. Prices are based more on earnings than in most times of economic prosperity in the field. In a comparison with the Great Depression, an energy crisis might very well become a World War II.
The area where I see some of the most speculative pricing is in the oil industry itself. Prices are high in anticipation of a shortage to come; not one that is already here.
The one area I am more fearful than any other is real estate. The irresponsible lending of banks does echo something of a 1929 crash. Mortgage brokers have been preying on the irresponsible lending tendencies of those wanting to keep up with the Jones, and the banks have been playing along. That has already started to fall apart, as is evident with the write down's of huge amounts of loans. These incidents have lead to the recent firings of several CEOs (Citigroup for one, who's CEO lost 8 billion dollars within a year.)
I'm going to post this on my blog at the risk of looking like an idiot so I get some other perspectives. Kanda is my economic advisor and can tear me apart - which I encourage him to do. You hear that kanda. Move this conversation to http://briancochran.blogspot.com
Saturday, December 01, 2007
Wednesday, October 17, 2007
Contests: Pop Culture Contests vs. Creative
As of yesterday, Ceehive is now in the top 5 search results returned for creative competitions. Right behind worth. It appears that we are starting to get a little traffic from this source as well. Incidently, tapatap.com and votigo.com unique visitors are down but attention is getting better. Worth1000.com and ourstage.com appear to be growing wildly. You have to ask yourself, is it better to be a creative competition site today, or a pop culture hot or not. I think you know how I would answer that question :)
Creative Competitions
Pop Culture Contests
Tuesday, October 16, 2007
Virtual Hosting Options
Let me preface this with the statement that I am not a hosting guy. I am a software architect who runs a couple of software centric companies. So take this all with a grain of salt.
As I understand there are basically three ways you can obtain "virtual hosting"
1. Virtual Server - I would stay away from this for all but the smallest apps. It is shared kernel.
2. Virtual Private Server - This actually is more like a high grade version of VMWare (Xen) and it works really well. Everything is dedicated from you point of view and you can do some great management tricks like install a new node in about 5 minutes with zero downtime. Your application may reside on a box with other clients, but they will guarantee you a minimum amount of CPU. The machines on which they do this are all paralleled out like crazy with dual quad cores at least. It actually works out well. Getting a couple of VPS's on different boxes can be a very solid setup. You have instance fail over with the ability to scale up or out quickly.
3. Clustered Slice - I don't know if you will get this one for J2EE. We looked at www.engineyard.com. The idea is that you want a database machine hooked up to a SAN, a web server configured with failover redirectors and up front caching, and app servers with lots of cpu and memory. However, a configuration like this is really expensive for a simple site. The idea is to buy shares or slices of the cluster. This type of configuration requires that the hosting company know the technologies really well.
Of course you can always go dedicated, and you guys will have to decide whether it makes sense. I personally like being virtual because we can add nodes so quickly (slashdot insurance). You need to make sure you have a good hosting provider to go with this option. You may not need that degree of flexibility as your load is probably more steady.
Providers
eApps - These guys have really become a very highly respected hosting provider. I continually hear them mentioned favorably by satisfied customers at ISIA and AJUG meetings and I know of several fortune 100s using them. Ultimately, I think these guys are running at a Sungard Data facility (local to Atlanta, which is nice) and providing support around those cabinets.
Engine Yard/Rails Machine - I am a satisfied Rails Machine customer. They are reasonably priced, performance has been good, and they have been responsive and knowledgable.
Rackspace - I recently heard that these were the guys to beat as far as hosting. They are a little more expensive and are completely dedicated. If you go with them, work to get the price down.
Amazon S3 - I know a ton of organizations who now store all their static content and backups on Amazon's S3 grid. It's very inexpensive and you have availability that it is hard for anybody to match (I think they are at five 9). There are now several tools available to synchronize this with your deployment processes.
As I understand there are basically three ways you can obtain "virtual hosting"
1. Virtual Server - I would stay away from this for all but the smallest apps. It is shared kernel.
2. Virtual Private Server - This actually is more like a high grade version of VMWare (Xen) and it works really well. Everything is dedicated from you point of view and you can do some great management tricks like install a new node in about 5 minutes with zero downtime. Your application may reside on a box with other clients, but they will guarantee you a minimum amount of CPU. The machines on which they do this are all paralleled out like crazy with dual quad cores at least. It actually works out well. Getting a couple of VPS's on different boxes can be a very solid setup. You have instance fail over with the ability to scale up or out quickly.
3. Clustered Slice - I don't know if you will get this one for J2EE. We looked at www.engineyard.com. The idea is that you want a database machine hooked up to a SAN, a web server configured with failover redirectors and up front caching, and app servers with lots of cpu and memory. However, a configuration like this is really expensive for a simple site. The idea is to buy shares or slices of the cluster. This type of configuration requires that the hosting company know the technologies really well.
Of course you can always go dedicated, and you guys will have to decide whether it makes sense. I personally like being virtual because we can add nodes so quickly (slashdot insurance). You need to make sure you have a good hosting provider to go with this option. You may not need that degree of flexibility as your load is probably more steady.
Providers
eApps - These guys have really become a very highly respected hosting provider. I continually hear them mentioned favorably by satisfied customers at ISIA and AJUG meetings and I know of several fortune 100s using them. Ultimately, I think these guys are running at a Sungard Data facility (local to Atlanta, which is nice) and providing support around those cabinets.
Engine Yard/Rails Machine - I am a satisfied Rails Machine customer. They are reasonably priced, performance has been good, and they have been responsive and knowledgable.
Rackspace - I recently heard that these were the guys to beat as far as hosting. They are a little more expensive and are completely dedicated. If you go with them, work to get the price down.
Amazon S3 - I know a ton of organizations who now store all their static content and backups on Amazon's S3 grid. It's very inexpensive and you have availability that it is hard for anybody to match (I think they are at five 9). There are now several tools available to synchronize this with your deployment processes.
Monday, September 10, 2007
Ceehive Entries
Been working on Ceehive a lot lately. Here are some of my entries. Hope you enjoy. You can sign up at http://www.ceehive.com/brian if you like.
Wednesday, August 08, 2007
Thursday, May 10, 2007
Rising Costs, Oligoploies, and Promotional Marketing
A few things have been bothering me lately about the relationship between marketing budgets and hard-to-enter markets, and I finally figured out the source of my frustrations.
First, let me say, I am not an economist. In fact I have no education in the field beyond my 101 course in college, so I am sure my terms and assumptions are rather half-baked.
The premise is this. The price of goods inflates when a market that lacks competition spends large amounts of money on promotional marketing. Companies that have little competition will decrease their focus on reducing their unit costs or increasing their offering through innovation and increase their focus on effectively promoting their offering. In fact companies can establish oligopolies by increasing promotional marketing spending to the point that they substantially reduce the cost to acquire a new customer. At this point, the barrier to entry for a new competitor increases substantially.
Of course this is very natural when new industry is emerging or when innovation in an industry increases the competitive offering of one company over the others in the industry. More alarming, though, is when this phenomenon occurs without major innovation in existing and well established industries.
As gas companies de-regulated many markets saw the emergence of gas marketing oligopolies where no real competition was introduced surrounding the product transmission or distribution, but rather with the administrative and marketing segments of the industry scrambling to scale quickly enough to reduce customer acquisition costs to the point that an oligopoly was formed. Without control over innovation in the product or distribution mechanisms, these firms sole business became acquiring customers via massive promotional marketing efforts.
Marketing contributes more to the cost of pharmaceuticals than does research. When a drug hits the market it usually has between five to twelve years to make money before its patent expires and the drug can be made as a generic. During this period, the drug company often has a micro-monopoly in the form of its patent. The most effective way to recover the drug costs is to reduce the cost of acquiring new customers as much as possible by pursuing as aggressive marketing campaign as possible.
Whether the barrier to entry be excessive capital requirements, network externalities, patent, or other government regulation, it is interesting to observe the correlation between rising costs, promotional marketing, and lack of competition in an industry.
First, let me say, I am not an economist. In fact I have no education in the field beyond my 101 course in college, so I am sure my terms and assumptions are rather half-baked.
The premise is this. The price of goods inflates when a market that lacks competition spends large amounts of money on promotional marketing. Companies that have little competition will decrease their focus on reducing their unit costs or increasing their offering through innovation and increase their focus on effectively promoting their offering. In fact companies can establish oligopolies by increasing promotional marketing spending to the point that they substantially reduce the cost to acquire a new customer. At this point, the barrier to entry for a new competitor increases substantially.
Of course this is very natural when new industry is emerging or when innovation in an industry increases the competitive offering of one company over the others in the industry. More alarming, though, is when this phenomenon occurs without major innovation in existing and well established industries.
As gas companies de-regulated many markets saw the emergence of gas marketing oligopolies where no real competition was introduced surrounding the product transmission or distribution, but rather with the administrative and marketing segments of the industry scrambling to scale quickly enough to reduce customer acquisition costs to the point that an oligopoly was formed. Without control over innovation in the product or distribution mechanisms, these firms sole business became acquiring customers via massive promotional marketing efforts.
Marketing contributes more to the cost of pharmaceuticals than does research. When a drug hits the market it usually has between five to twelve years to make money before its patent expires and the drug can be made as a generic. During this period, the drug company often has a micro-monopoly in the form of its patent. The most effective way to recover the drug costs is to reduce the cost of acquiring new customers as much as possible by pursuing as aggressive marketing campaign as possible.
Whether the barrier to entry be excessive capital requirements, network externalities, patent, or other government regulation, it is interesting to observe the correlation between rising costs, promotional marketing, and lack of competition in an industry.
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