Nostradoofus

Free advertising offers I’ve received from AdCenter:

July 2006: $30
Feb 2007: $100
Mar 2007: $200

Tables don’t communicate the drama as well as a graph:

On current trends, within a few months, it will be cheaper for MSFT to just buy out my business than to convince me to try their ad system.

At any rate, $200 is a lot of money, so I visited AdCenter and found the front end has been completely overhauled, but contains the same amateur-hour website errors.

1. Incompatible with Safari browser. Safari is inconsequential for the general population (probably 2%), but widely used by web designers (probably 30%) — AdCenter’s primary target audience. But OK, I can use Firefox.
2. Fails silently on incompatible browsers. AdCenter doesn’t bother to detect and warn of incompatible browsers — it simply fails in various comical/nonsensical ways, halfway through whatever task you were attempting. Browser detection (”sorry, this site is incompatible with Safari”) is vanishingly easy to implement, so it’s utterly amateur for an organization MSFT’s size to ignore it.
3. Credit card entry page is 1200 pixels wide. Good thing I upgraded my monitor last month. Clearly no one outside the ivory tower tested this app, or they would have noticed most people don’t have a monitor this big.
4. On Firefox, the voluminous “Terms and Conditions” legalese appears in a tiny text box only 2 lines high by 20 characters wide. It’s like reading Tolstoy through a keyhole.
5. On credit card validation, received mysterious “Alert: www.contentmedianetwork.com has sent an incorrect or unexpected message. Error Code: -12263.” I click “OK,” and am greeted with “Thanks for signing up!” So everything is OK now? Who was contentmedianetwork.com? What was error -12263? The mysterious unexplained errors are nothing like a normal Web experience. They remind me more of… Windows.
6. Inside the app’s campaign center, web pages load forever, evidently to keep a live connection with the server. How can that scale? They keep a connection open for every user simultaneously?

It is absolutely shocking how far behind Microsoft is in this arena.

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The previous post (”Adaptive Morality“) implied that the American obesity epidemic results from one of two things: (i) immoral behavior, or (ii) some new cause which currently has low awareness.

The latter seems more likely. Why? One reason is that obesity arose abruptly in America only in the past 20 years, after over 60 years of gustatory plenty. But the bigger clue is a related, very odd epidemic: thin parents with fat children. Since parents exercise some control over their children’s diet, slim parents would tend usually to result in slim children, barring some new obesity cause with heretofore low awareness.

Here are some possibilities. These are unproven hypotheses, merely correlated trends: both of these have arisen in the past 20 years, exactly concurrent with the obesity explosion.

• “First-person shooter” video games. I suspect that the chronically activated adrenal response from hours of fight-or-flight action games may flood susceptible individuals with cortisol, causing weight gain. (3/21/07 Addendum: There is some evidence obesity correlates with video games but not television — consistent with the adrenal argument.)
• Unregulated, powerful, poorly understood stimulant cocktails like Red Bull. Again, I suspect, but can’t prove, that these may chronically activate adrenaline and flood one with cortisol.
• Prescribed child stimulants like Ritalin, again because of a potential cortisol link. (3/21/07 Addendum: Eric cites that child stimulants are actually prescribed for weight loss. Since stimulants are known to fail long-term — all weight is regained when drugs are stopped — we seem to have made a case for immoral behavior by parents or their doctors.)

Correlation is not causation. But it would be worth some research.

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Morality is a mutually agreed behavioral rule set that arises among groups to assign immediate personal benefits and costs to positive and negative externalities. Specific rules, then, are adapted to the specific externalities in a given group in response to awareness of the externalities.

Examples. Random killing always has negative externalities for all groups, so murder remains universally wrong. But when penicillin, birth control and welfare are invented, the externalities of STDs and starving unwed mothers are reduced, so premarital sex becomes de facto acceptable after millenia of taboo.

Obesity has both a personal externality (you live poorly and die early), as well as a public externality (health costs). A newly developed country like South Korea gains awareness of this only over time, so the moral rules don’t respond immediately. So one would expect a brief explosion of obesity, followed by a recovery.

But wait a minute. For decades, the US has enjoyed a diet rich in fat and sugar, and practically unlimited in quantity. Beginning about 40 years ago, 3 simple rules (eat only when hungry, no sugar, no saturated fat) became widely known and publicly promoted. So why did the obesity epidemic began only 15 years ago? Are we becoming immoral?

Possibly, but there is another potential explanation: some new cause of obesity, for which there is low awareness.

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The goal of government is to maximize quality of life for its citizens. The functional requirements for achieving this are covered pretty well in the Constitution: basically justice, domestic safety and economic opportunity.

Serving those requirements are an infinite variety of potential actions, so it makes sense to prioritize based on return on investment to the nation collectively. This provides the greatest good, for the greatest number, in the shortest time. High-ROI policies should be done immediately, and low-ROI policies should be delayed. Extreme examples:

HIGH ROI – Teach people to read, write, and use the Internet.

LOW OR NEGATIVE ROI – Pay farmers not to grow things.

The top priority should be for policies that simultaneously decrease spending and increase quality of life. The number of such options is surprisingly large. To name just a few:

• All government document filing should be via Web browser, with no surcharge. This by itself could save a double-digit percentage of all government spending, through decreased staffing. For example, to renew your driver’s license in California, currently the fee is higher over the Internet than in person, even though the latter service costs 10 times more to provide. The latter service should cease to exist — all renewals should be web-based. This should also be true for filing court documents, paying property taxes, and a thousand other government interactions. Billions of hours are wasted on both sides, at public expense, by making you write something down on paper, deliver it to a live person in an office, and having them transcribe the info into a computer. The money saved should be applied to providing public Web access at libraries and government offices, and to educating everyone in how to conduct such business over the Web — a very high-ROI use of funds.
• Phase out services provided in non-English languages. Not that English is superior — on the contrary, Spanish is objectively better, as it’s more grammatically consistent, easier to learn, and easier to pronounce. (Bonus: it’s also better for poetry, because so many words rhyme.) No, the reason is simply that standardization yields huge return on investment, and most people here already speak it. Nearly all other large nations with diverse linguistic heritage — India, Philippines, Indonesia, and many countries in Africa — standardize on a single language for government and commerce. Not to do so here means that we pay money to decrease our own economic output, which is, to be succinct, crazy. The money saved should be applied to providing free English lessons to anyone who can prove legal U.S. resident status — again, a very high-ROI use of funds.
• Derive military vehicles from standard commercial platforms. Currently, army jeeps and trucks are developed as they were in World War II — purely to “effectiveness” specifications, with little regard for return on investment. As a result, in 90% of real-world applications, a Humvee provides less utility than a loaded Chevy Suburban, but costs three times as much because it is produced in low volume. Simply armoring a Suburban saves money, increases reliability, and lets soldiers travel in plush leather comfort. Kidding about the leather.

The point here is that we are missing obvious opportunities to improve output, benefiting the lives of all Americans, for free or even negative cost.

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America’s failure in Iraq stems partly from errors and half-truths in our own cultural narrative, e.g.:

• America is the richest country in the world.
• America is a liberator.
• America exemplifies liberty and justice.
• Guns are a fundamental right.
• Celebrate diversity.
• Vietnam taught that you can’t win a guerrilla war.

To expand on that:

“America is the richest country in the world.” False. The statement confuses prosperity, which we have in abundance, with wealth, which we lack. On an equity basis, America, as the world’s largest net debtor, is actually the poorest country in the world. Support for the invasion was predicated on a mistaken idea that we can afford it. In the short run this is true, in exactly the same way that you could go out right now and buy a car with your credit card. The pain comes later. We are financially overextended, and our top priority is to fix that. We should think locally, focusing on productivity growth, until we fix our trade and budget deficits.

“America is a liberator.” False. What we did during World War II was so amazing that the global halo persists to this day. But it has not really been true since the Marshall Plan (if it was indeed ever true). America is just another nation, with just another set of national interests. This “liberator” concept is hype that confuses people worldwide, especially here, and undermines our reputation for truthfulness. Believing our own hype here led directly to the misapprehension that we would be welcomed as occupiers in Iraq.

“America exemplifies liberty and justice.” This was more or less true from 1965-2001, compared to other nations. Thereafter, ironically, as we have crowed ever louder about our example to the world, liberty and justice have eroded here and abroad — and everyone in the world knows it but us. This has led us to believe mistakenly that our moral authority permits us to take unilateral geopolitical action without consequences. Oops — there were consequences.

“Guns are a fundamental right.” Here, domestic politics caused brain damage to foreign policy. In 2003, the U.S. could easily have disarmed the entire nation of Iraq, making it effortless to tell friend from foe: anyone armed and out of uniform is a foe. Instead, civilians are permitted to run around with Kalashnikovs. Why? Almost certainly because of the imperative back home that we shall not take civilians’ guns away.

“Celebrate diversity.” Half true. Diversity is good, but celebrating it is often bad. To state this another way, ethnic and religious diversity benefits America economically and culturally, but petty tribalism causes self-segregation. Entrenched over generations, self-segregation destroys nations. Petty tribalism is instinctive. As a result, many people, particularly the uneducated, have a tendency to slip into it in the absence of mitigating forces. Re-instill those mitigating forces, and tribalism fades: note how ethnic civil wars often end when leadership makes it illegal for public institutions to organize by ethnic affiliation, essentially making it impossible to “celebrate” diversity politically. Lee Kuan Yew’s Singapore is a good example: beginning around 1960, you could create any kind of political party you wanted, as long as it was not affiliated with the Malay and Chinese ethnic groups that dominate the country. By institutionalizing the tendency to ignore ethnic affiliation, Lee ended the internecine civil warfare that had dogged post-colonial Singapore. By contrast, in today’s Iraq, it seemed natural for American policymakers — ignorant of history, and accustomed to “celebrating” diversity back home — to permit Sunni, Shia and Kurdish political parties. Combine this with civilian AK-47 ownership, and you have instant civil war.

“Vietnam taught that you can’t win a guerrilla war.” Wrong. Vietnam taught that you can’t win a guerrilla war MILITARILY. It taught that you can’t back a corrupt government and expect popular support. And it taught that you may have to compromise politically to regain peace. Great Britain understood this 150 years ago, and resorted to playing warlords against each other to maintain order. Not pretty, but consider the alternatives in Iraq right now.

Time to stop believing our own hype, stop mindlessly repeating domestic buzz phrases, and instead see things as they are.

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Microsoft says its biggest strategic threat is Google. If true, then their most critical tactical initiative is MSN AdCenter, which competes directly for Google’s revenue. Yet my experience with AdCenter was utterly amateur-hour, unbecoming a Fortune 500 firm in any industry. The disconnect between top-down strategic initiatives and bottom-up execution suggest basic operational problems at the firm. Some highlights…

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October 2005 through April 2006

• Frequent 500 errors, forced logouts, all progress lost.
• All browsers except IE6 failed silently, no error message. IE 7 crashed.
• Support (800-852-3568) connects to some poor sap’s personal cell. No calls returned.
• Ads only run in Singapore. Can’t they scale up to run in a major market? Maybe the poor guy with the cellphone will call back and explain.

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July 5, 2006:

MSN today sent me two $30 gift certificates to try AdCenter again. There followed a comedy of errors:

• Account funded, ads approved, but no ads appear. This has been true for months. “Support” does not respond.
• Account thinks I’m in Singapore, and doesn’t let me change the setting.
• Started over today with a new account. Explicitly entered USA, yet my location is again recorded as “en-sg” (Singapore).
• New account system forwards me to a blank page at MSN. No buttons, text, instructions — nothing. Had to browse away, return, log out, log back in.
• Waited 20 minutes for a “credit check” on my MasterCard. Huh? Any one-man shop can instantly determine validity of U.S. credit cards.
• Unable to save new ads: browser shows “missing object reference” error. Googled an ASPX programming forum and was able to guess the workaround: log out and back in. Nontechnical users would stall here.
• Long delays on each page load. While waiting, I was able to log into Google Adwords, check status, and log out — all before the MSN AdCenter page had finished loading.
• Entered my ad text. On hold again while the ad is approved. Stay tuned…

My overall sense is that this system was not designed to handle the pace of the modern Web. It feels like something from five years ago. Today, customers expect credit cards to be approved instantly, as with Adwords. They expect advertisements to go live instantly, as with Adwords.

And above all, there should be no “A” bugs in the signup and login paths. For a startup, this would be egregious. For a market leader, it’s unconscionable.

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September 12, 2006

Microsoft emails me a product launch advertisement for MSN Live Search. Email was sent with the wrong mime type, arriving as an unreadable pile of naked HTML code.

Astonishing. Fly-by-night solo spammers in emerging countries send me hundreds of emails per day, and none have formatting problems. Microsoft is a huge multinational with a reputation for quality execution at all levels. How can their bulk mail performance be two standard deviations worse than the average Russian mobster’s?

I’d ignore it as a onetime screwup, were it not for all the rookie moves in Adcenter — errors routinely avoided by
twentysomething web service development teams of just a few people, on shoestring budgets and GPL platforms.

The only way adCenter could make so many mistakes is if someone in the management chain just doesn’t care. Is the team leader a wealthy, bored MSFT lifer?

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October 12, 2006

My credit card expired, visited AdCenter to update it, and the dance began again…

• AdCenter’s entirely static home page takes 6 seconds to load over my dedicated T1.
• AdCenter uses a login name distinct from email address (a previous-century design rule).
• Requested my login name by email. Response didn’t arrive from MSFT for two hours.
• Now I have my login name, but need my password. Another two hour wait.
• This 4-hour retrieval process takes 5 minutes at Adwords. No hyperbole.

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October 20, 2006

Finally received adCenter password reset info. It requires copying a 512-bit validation code (five hundred and twelve bits, no kidding) back to the browser, along with the new password.

The password reset function in AdCenter failed silently, no error message. Second try, it worked. Went to log in with the new password. Again failed silently on the first try, worked on the second. Tried this on my other AdCenter account, and the same thing happened: fails once, works the second time. I.e., this is a 100% bug in the login path of a shipping product. This could ONLY be shipped by a project manager that does not care about quality.

Finally, I’m all logged in and ready to go and… nothing. Contrary to PR announcements, adCenter still doesn’t support my Mozilla-based browser, and still fails silently: no error messages and half-working pages.

Forget this. Every other piece of my workflow works fine. I’m not firing up IE just to get an extra 3 clicks a month from this also-ran. Sheesh.

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The Zune is Microsoft’s recent entry into the handheld music player business. I explain this for posterity, as the product will likely be little remembered 5 years from now.

Currently, the Zune PR whisper machine likes to say the hardware was done by the xBox designers, somehow implying that’s an advantage. That’s mistaken. The xBox is a strategic and software success, but absolutely not a great hardware design.

xBox beat PlayStation because Sony failed to understand what everyone else in IT has understood for 25 years: it’s extremely valuable to create a stable software layer to abstract programming from hardware. This “abstraction layer” makes it inexpensive for both hardware maker and software maker to preserve backward compatibility across major hardware revisions. It also allows programmers to re-use code and knowledge for a longer period of time, which reduces software investment cost. Since game software is a high fixed cost, low variable cost business, a relatively small reduction in development cost can turn a big loss maker into a big profit maker. Multiply this across the hundreds of software titles available for a game platform, and you start to see the value of the abstraction layer.

Microsoft’s core business for over 20 years has been to build that sort of abstraction layer for PCs. For xBox, they simply built a similar layer atop a competently executed video game machine, and the battle was over. Microsoft didn’t win, so much as Sony fumbled. A competent software roadmap for Playstation 1/2/3 would have made it impossible for Microsoft to get a foot in the door.

Now, back to the ill-fated Zune. In music players, architectural control does not depend upon a client-side abstraction layer, because the media is not software, but simply music data. There’s no advantage for Microsoft in being expert at operating system development.

Instead, the key feature in music players is ease of use, which means software design and seamless integration. Say what you want about the roller coaster that is Apple Computer, but if there is one thing they have consistently done for over 20 years, it’s simple, elegant software design and seamless integration. It’s their hallmark.

Unlike Sony, Apple does not lack insight or execution. Their reputation is profoundly the opposite. Since 2001, they have become a rare combination: a design-driven firm that appreciates the value of architectural control. They have pursued that control relentlessly with iTunes, using superior integration and ease of use to establish their position, and then network effects to remain there.

Apple still lacks scale. If they’re beaten in the music business, that will have been the reason. It will have nothing to do with product quality, because there is no meaningful way to outperform what Apple already offers. It’s good enough. Their 70% share is proof of this.

Built into that compliment, however, is a bigger risk for Apple: the iPod is maturing rapidly. It may turn out to be a onetime sale with no followup, rather like the PalmPilot. 99% of the music buying public already can fit every song they own on a $300 iPod. Why ever buy another? To continue to grow, or even to sustain sales, Apple is almost forced to move up to cellular phones. That is a very big, very risky step.

The safest way to tackle this might be to turn the iPod into a WiFi phone. There is no organized competition, the system can plug directly into Apple’s existing iChat system, and it then becomes a network effects business, in which 30 million iPod owners can all phone each other. In certain settings, e.g. high schools and colleges, practically everyone has an iPod, so there is critical mass. Also, students are price sensitive to cellular airtime, while a WiFi phone would be free.

Still risky, but perhaps a logical next step.

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I noticed something interesting on the way to work this morning — a new handpainted sign reading, “Trapped in a 1% mortgage? Call 555-5555.”

For the second quarter of 2006, California mortgage defaults were up nearly 70% over 2005. The default rate doubled in San Diego and Riverside counties, as well as in Northern California excluding the Bay Area.

In previous regional real estate downturns, default rates typically don’t spike until well after prices peak. Hopeful homeowners hang on as long as they can, making payments and listing their properties for sale. As a result, normally, a real estate bust follows the slow timetable now playing out in Florida. But out here in California, lending practices from the past several years may serve to accelerate a downturn.

The big difference is teaser rate mortgages, in which a homebuyer pays only 1% for a couple of years, after which the rate resets to a variable based on short-term US rates. Because the Fed has raised rates so much, the reset can cause the homeowner’s mortgage payment to abruptly double (or more). Finance types have speculated for some time that teaser-rate mortgages might accelerate defaults in a downturn. Now it appears actually to be happening.

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The ocean is so warm in southern California this year that mahi mahi, native to the waters off Hawaii, are being caught just a mile off Newport Beach. Deep sea fisherman have reported surface water of 83 degrees (warmer than Hawaii, and at least 10 degrees warmer than the local norm) several miles northwest of San Diego.

My normal kayak fishing routine has been disrupted, as the kelp forests south of Newport are vanishing in the heat. Instead, medium-sized semitropical schoolfish can be seen in 30 feet of water just off Crystal Cove State Beach.

This would be unusual, but not unheard of, if this were an “El Nino” year, in which ocean currents bring tropical water up here. But this is not an El Nino year. Instead, a much more unusual new weather pattern has taken hold. The local ocean is simply heating up, and not circulating. The coastal air is warm, still and, oddest of all, very humid. Totally unlike typical California weather.

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Americans surprised at their global unpopularity might consider how we are performing against this partial list of the most obvious, basic rules of civilized behavior.

1. Justice, not revenge.
2. Lead by example.
3. Treat enemies with decorum.
4. Speak precisely and succinctly.
5. Admit and apologize for mistakes.
6. Avoid condescension.
7. Don’t flaunt prosperity.

(By coincidence, this list has significant overlap with a more complete, more general and more revered list of seven things not to do.)

Each time you read a public statement from our President or his staff, check it against this list, and ask yourself how we are doing.

When our representative on the world stage calls a head of state a “midget,” or a “sawed-off runt,” are we treating enemies with basic decorum and avoiding condescension? Is his dogged mispronunciation of “nucular” precise and clear?

Don’t rush to judgment either way on this. Just memorize the list, and compare it to what you hear America saying in the papers.

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