Platt Perspective on Business and Technology

Reconsidering Information Systems Infrastructure 11

This is the 11th posting to a series that I am developing, with a goal of analyzing and discussing how artificial intelligence and the emergence of artificial intelligent agents will transform the electronic and online-enabled information management systems that we have and use. See Ubiquitous Computing and Communications – everywhere all the time 2 and its Page 3 continuation, postings 374 and loosely following for Parts 1-10. And also see two benchmark postings that I initially wrote just over six years apart but that together provided much of the specific impetus for my writing this series: Assumption 6 – The fallacy of the Singularity and the Fallacy of Simple Linear Progression – finding a middle ground and a late 2017 follow-up to that posting.

I conceptually divide artificial intelligence tasks and goals into three loosely defined categories in this series. And I have been discussing artificial intelligence agents and their systems requirements in a goals and requirements-oriented manner that is consistent with that, since Part 9 with those categorical types partitioned out from each other as follows:

• Fully specified systems goals and their tasks (e.g. chess with its fully specified rules defining a win and a loss, etc. for it),
• Open-ended systems goals and their tasks (e.g. natural conversational ability with its lack of corresponding fully characterized performance end points or similar parameter-defined success constraints), and
• Partly specified systems goals and their tasks (as in self-driving cars where they can be programmed with the legal rules of the road, but not with a correspondingly detailed algorithmically definable understanding of how real people in their vicinity actually drive and sometimes in spite of those rules: driving according to or contrary to the traffic laws in place.)

And I have focused up to here in this developing narrative on the first two of those task and goals categories, only noting the third of them as a transition category, where success in resolving tasks there would serve as a bridge from developing effective artificial specialized intelligence agents (that can carry out fully specified tasks and that have become increasingly well understood and both in principle and in practice) to the development of true artificial general intelligence agents (that can carry out open-ended tasks and that are still only partly understood for how they would be developed.)

And to bring this orienting starting note for this posting, up to date for what I have offered regarding that middle ground category, I add that I further partitioned that general category for its included degrees of task performance difficulty, in Part 10, according to what I identify as a swimming pool model:

• With its simpler, shallow end tasks that might arguably in fact belong in the fully specified systems goals and tasks category, as difficult entries there, and
• Deep end tasks that might arguably belong in the above-repeated open-ended systems goals and tasks category.

I chose self-driving vehicles and their artificial intelligence agent drivers as an intermediate, partly specified systems goal because it at least appears to belong in this category and with a degree of difficulty that would position it at least closer to the shallow end than the deep end there, and probably much closer.

Current self-driving cars have performed successfully (reaching their intended destinations and without accidents) and both in controlled settings and on the open road and in the presence of actual real-world drivers and their driving. And their guiding algorithms do seek to at least partly control for and account for what might be erratic circumambient driving on the part of others on the road around them, by for example allowing extra spacing between their vehicles and others ahead of them on the road. But even there, an “aggressive” human driver might suddenly squeeze into that space, and without signaling that they would change lanes, suddenly leaving a self-driving vehicle following too closely too. So this represents a task that might be encoded into a single if complex overarching algorithm, as supplemented by a priori sourced expert systems data and insight, based on real-world human driving behavior. But it is one that would also require ongoing self-learning and improvement on the part of the artificial intelligence agent drivers involved too, and both within these specific vehicles and between them as well.

• If all cars and trucks on the road were self-driving and all of them were actively sharing action and intention information with at least nearby vehicles in that system, all the time and real-time, self-driving would qualify as a fully specified systems task, and for all of the vehicles on the road. As soon as the wild card of human driving enters this narrative, that ceases to hold true. And the larger the percentage of human drivers actively on the road, the more statistically likely it becomes that one or more in the immediate vicinity of any given self-driving vehicle will drive erratically, making this a distinctly partly specified task challenge.

Let’s consider what that means in at least some detail. And I address that challenge by posing some risk management questions that this type of concurrent driving would raise, where the added risk that those drivers bring with them, move this out of a fully specified task category:

• What “non-standard” actions do real world drivers make?

This would include illegal lane changes, running red lights and stop signs, illegal turns, speeding and more. But more subtly perhaps, this would also include driving at, for example, a posted speed limit but under road conditions (e.g. in fog or during heavy rain) where that would not be safe.

• Are there circumstances where such behavior might arguably be more predictably likely to occur, and if so what are they and for what specific types of problematical driving?
• Are there times of the day, or other identifiable markers for when and where specific forms of problematical driving would be more likely?
• Are there markers that would identify problem drivers approaching, and from the front, the back or the side? Are there risk-predictive behaviors that can be identified before a possible accident, that a self-driving car and its artificial intelligence agent can look for and prepare for?
• What proactive accommodations could a self-driving car or truck make to lessen the risk of accident if, for example its sensors detect a car that is speeding and weaving erratically from lane to lane in the traffic flow, and without creating new vulnerabilities from how it would respond to that?

Consider, in that “new vulnerabilities” category, the example that I have already offered in passing above, when noting that increasing the distance between a self-driving car and a vehicle that is directly ahead of it, might in effect invite a third driver to squeeze in between them, and even if that meant it was now tailgating that leading vehicle and the self driving car that would now be behind it was tailgating it. A traffic light ahead, suddenly changing to red, or any other driving circumstance that would force the lead car in all of this to suddenly hit their brakes could cause a chain reaction accident.

What I am leading up to here in this discussion is a point that is simple to explain and justify in principle, even as it remains difficult to operationally resolve as a challenge in practice:

• With the difficulty in these less easily rules-defined challenges increasing, as the tasks that they would arise in it fit into deeper and deeper areas of that swimming pool in my above-cited analogy.

Fully specified systems goals and their tasks might be largely or even entirely deterministic in nature and rules determinable, where condition A always calls for action and response B, or at least a selection from among a specifiable set of particular such actions that would be chosen from, to meet the goals-oriented needs of the agent taking them. But partly specified systems goals and their tasks are of necessity significantly stochastic in nature, and with probabilistic evaluations of changing task context becoming more and more important as the tasks involved fit more and more into the deep end of that pool. And they become more open-endedly flexible in their response and action requirements too, no longer fitting cleanly into any given set of a priori if A then B rules.

Airplanes have had autopilot systems for years and even for human generations now, with the first of them dating back as far as 1912: more than a hundred years ago. But these systems have essentially always had human pilot back-up if nothing else, and have for the most part been limited to carrying out specific tasks, and under circumstances where the planes involved were in open air and without other aircraft coming too close. Self-driving cars have to be able to function in crowded roads and without human back-up – and even when a person is sitting behind the wheel, where it has to be assumed that they are not always going to be attentive to what the car or truck is doing, taking its self-driving capabilities for granted.

And with that noted, I add here that this is a goal that many are actively working to perfect, at least to a level of safe efficiency that matches the driving capabilities of an average safe driver on the road today. See, for example:

• The DARPA autonomous vehicle Grand Challenge, and
• Burns, L.D. and C Shulgan (2018) Autonomy: the quest to build the driverless car and how that will reshape the world. HarperCollins.

I am going to continue this discussion in a next series installment where I will turn back to reconsider open-ended goals and their agents again, and more from a perspective of general principles. Meanwhile, you can find this and related postings and series at Ubiquitous Computing and Communications – everywhere all the time and its Page 2 and Page 3 continuations. And you can also find a link to this posting, appended to the end of Section I of Reexamining the Fundamentals as a supplemental entry there.

Building a startup for what you want it to become 39: moving past the initial startup phase 25

Posted in startups by Timothy Platt on August 25, 2019

This is my 39th installment to a series on building a business that can become an effective and even a leading participant in its industry and its business sector, and for its targeted marketplaces (see Startups and Early Stage Businesses and its Page 2 continuation, postings 186 and loosely following for Parts 1-38.)

This is a series about startups, and this is a posting in that narrative that addresses business intelligence and its sourcing and development and use, as identified in Part 38 as the equivalent to the air we breathe for its immediate and ongoing importance for even just basic survival. And this is also, in many respects a risk-management focused series too, where good and effective information practices can lead to increased competitive strength and business vitality, and poor practices and their consequences there, can lead to disaster.

I began a discussion of Facebook in Part 38, and both as a source of actionable business intelligence, and as a platform for businesses to make use of that information through: smaller enterprises and startups definitely included. And I said at the end of that installment that I would continue its line of discussion here, by more fully discussing Facebook and how and why it has become so problematical and both for its individual members and the communities (and marketplaces) that they collectively comprise, and for other businesses that would buy access to their vast data accumulations and seek to make use of it for their own purposes. And I begin to address that by identifying Facebook’s information collection, management and commoditization policy and practices for what they are: a tightly interconnected whole that forms the supportive core and the actionable framework of their business model as a whole. And for purposes of discussion of that here, I will refer to all of this collectively as the Facebook gestalt.

What is the Facebook gestalt? I begin by noting the original meaning of gestalt, as applied here in thinking about and understanding the Facebook business model. A gestalt is a larger organized structure that might be natural in origin and nature, or that might be contrived and developed, that should be and even can only fully be viewed and understood as a whole and not as an analytically dissected collection of its perceived parts. Such indivisibility can arise for a number of reasons, with:

• Synergies that would be lost upon part by part description and analysis, and
• An accumulation of emergent properties that cannot be captured at a part by part level,

offering two possible categorically stated sources there. And I would argue that sheer complexity and particularly sheer obfuscating complexity can achieve that same result too. I would argue that all three of these possible reasons for our having to at least consider a gestalt understanding of what Facebook does here, apply in force. So what are they doing and how, in all of this at that company?

• Facebook requires that anyone: individual person or client/member business, who wants to access any content as organized and showing on any of their social media pages, must join their site.
• And when they join, they have to agree to the Facebook terms and conditions in place, with that including an agreed to acknowledgment of Facebook’s right to unilaterally change its personal privacy and information access policy and practices at any time.
• And as a core policy and practice approach, and to maintain “transparency” and “ease of immediate and unhindered use,” on the part of its members, and of all types, a majority of all possible access and visibility decisions that those members could in principle make for managing who can see what of their information, and under what circumstances, are set up as opt-out if they can be managed at all by the members involved. So members can in principle dig through the layered screens of their individual membership’s account management pages. But unless they do so, and except where opt-in is explicitly required by law, they would have to do this to limit or otherwise control their own data and the data that is posted by others to their page walls, as it shows there.
• And any and all information and of all types that is not explicitly opted out and for essentially all third party visibility, can and does enter into the marketable data pools that Facebook effectively commoditizes and markets and sells to its business partner/clients as they seek to more effectively place ads on member pages, in their targeted marketing campaigns.
• Facebook has more recently promised to redevelop their site design and their member page layouts, so as to at least limit the flood of unwanted clutter that has come to inundate any intended content as provided by those Facebook members themselves, or by their actual friends who are also on the site.
• This may cut down on the flood of spam YouTube sourced video clips and other distractions that come from other individual human (and robo) “friends.” But what would this filtering do for third party businesses that seek to market and sell through their targeted Facebook ad placements? It would increase the value of these ad placements by making them more visible to site visitors where they have been getting lost in the spam and related flood too, and degraded in value from that. And it would increase the pressure on those marketing businesses to buy their marketing and advertisement placements more carefully and on the basis of a more refined understanding of how to reach their targeted share of the overall Facebook community. And this means increased pressure to pay more for Facebook’s member-related and member-sourced data.

All of the puzzle pieces that I have just made note of here, fit together, and in ways that cannot meaningfully be parsed apart, and certainly since Facebook as a whole, reached and surpassed a threshold scale in which it became an essential social media channel and for millions: hundreds of millions of people. (There, Facebook claims to have some two billion active members: actively posting member accounts. So if I pick a number that is probably at least of the right order of magnitude, and assume that somewhere around two thirds of those members are robotic in nature: artificial specialized intelligence agents that have been set up and that are run for trolling and related ulterior purposes, that would still leave a very impressively large number of actual human members – at up to 700 million and maybe more.) Either way, two billion or 700 million: that represents an overall target market that few if any marketing businesses could afford to simply walk away from and ignore. And its reach and its commonality of use make it essentially impossible for vast numbers of individual people to simply walk away from Facebook and ignore it too, and certainly when their actual friends and family are on the site too, and posting there and looking for new posts there too.

This, up to here, has outlined something of the conceptual and business process tangle that Facebook offers. They do not charge members to post to their site or to read other members’ pages there with their showing content: at least with direct monetary fees. But they do in effect commoditize those members and harvest their information, and the information attached to their pages by others and with that interconnections metadata included. And they do so the way cattle are harvested for their cuts of meat, to put this somewhat bluntly.

So what should a business do, that sees what might perhaps be an overriding need to be on Facebook and to market their offerings there? What should such a business do when Facebook as a corporate entity makes it so compellingly attractive to them to market and advertise through the site and for doing so much more there too, such as making online reservations (at restaurants and more) and for posting and reading community-sourced reviews and more?

I am going to offer one modest proposal in the direction of addressing that challenge here. Business members of Facebook need to have and use an option whereby they can specify and filter, where their marketing and sales content shows on the site that is limited very explicitly to potential viewers who have opted in to see them. This, in principle, could mean those businesses having an option to send a link to a customer or other who has reached out to them, that would take them to a page where they could specifically opt-in then and there if they so choose. There are ways to do this, and even with that meaning those Facebook members being taken to their own accounts management pages to opt-in or not, though that is only one possible way to manage this type of access agreement transaction. My point is that those member businesses need, and should demand some form of obligatory opt-in for how they do and do not show on the site and to whom. And it should be one that they and their customer base and its members can actively control, and without anyone involved there falling through the cracks in that is currently a way too opt-out only environment.

Facebook would claim that they are already opt-in for member data access. But the more complexly comprehensive and the more complexly interconnected their information management systems become, as can be expected with increased systems scale, the more likely it becomes that any intended opt-in will become compromised as alternative database search query access routes lead to the same result of what amounts to direct member data sharing.

I am going to step back from the specific example of Facebook in a next series installment, to consider online marketing and sales as whole, as they are information and access shaped and driven. And in anticipation of that, I add here, that I will have more to say about opt-in versus opt-out and how opt-out can and does find its way as a default into so many contexts that hold overriding risk management and quality control management significance. And I will discuss this from both a consumer and a small business perspective.

Meanwhile, you can find this and related material at my Startups and Early Stage Businesses directory and at its Page 2 continuation.

Xi Jinping and his China, and their conflicted relationship with Hong Kong – an unfolding Part 2 event: 5

Posted in macroeconomics by Timothy Platt on August 23, 2019

This is the fifth posting that I have offered here since June 19, 2019, to address significant and still expanding conflicts taking place in Hong Kong, arising as a response to actions taken by China’s government and by their hand-picked executive leadership in Hong Kong, that would fundamentally limit the legal rights of citizens there (see Macroeconomics and Business 2, postings 343 and following for Parts 1-4 of this.) And I refer to this set of postings as a “Part 2” in the working title that I have applied to all of these postings because they represent a continuation of an already ongoing story that I first began writing about here in 2014 with two back-to-back installments concerning Hong Kong’s Yellow Umbrella Movement (雨傘運動) (see those Part 1 and Part 2 postings.)

That protest, I have to add here, arose because of the way Xi Jinping’s Communist Party-led government in Beijing reached out to select Carrie Lam and others specifically loyal to them and to their political party, to lead Hong Kong and regardless of how that conflicted with the terms of the treaty through which Great Britain agreed to return Hong Kong to China and ultimately to Chinese control: the: Transfer of Sovereignty over Hong Kong agreement, or the Handover of Hong Kong as it is commonly called, as went into effect in 1997.

I also add here that those 2014 protests were not the first to have taken place there since 1997, when Hong Kong officially became a special administrative region within the People’s Republic of China and with that status to remain in place until at least until 2047. That was not the first time for China to violate the spirit if not the explicit letter of this agreement and the one country, two systems policy that the Beijing government agreed to adhere to, at least until 2047. And 2014 did not mark the first time that the people of Hong Kong publically protested such incursions on the local autonomy that they were promised in that treaty. Protests to China’s ongoing efforts to erode away and limit that autonomy go back at least as far as 2003, though those earlier efforts to retain local control did not gain the global recognition that has been achieved there since 2014. And that global visibility will not go away, and certainly outside of China and for the world at large, and regardless of how actively Xi’s government and their social media and related efforts seek to control the message there.

I offered Part 1 and Part 2 of this 2019 progression of postings on Hong Kong’s current unrest, with a goal of outlining the basic issues and challenges faced. Then I turned in Part 3 to at least begin to discuss how this fits into the ongoing narrative that I have been referred to in this blog, as Xi Jinping’s legacy building efforts, as he seeks to fulfill his China Dream: his Zhōngguó Mèng (中国梦). And I offered Part 4 of this, in large part as an open letter to Xi Jinping, or at least to the people in China who have access to otherwise blocked online content, who I have specific reason to know read from this blog anyway. And at the end of that posting, I referred to Hong Kong as Xi’s kryptonite, citing that term from Western fiction and with more relevant accuracy than it is usually cited for.

I wrote there of my concerns regarding an ongoing succession of mistakes and miscalculations that have very visibly been made, that could lead to a disastrously impactful conflict that no one would want: that no one would intentionally plan for or start. Brinksmanship is like that; if you skirt too close to the edge of a cliff you might inadvertently fall off.

And the conflicts and confrontations continue and with no end in sight, and with a continuing ratcheting up of both the tensions and the demands made and on both sides of this. I wrote in earlier installments to this now-five part narrative, or now-seven part if you include my 2014 postings, about how elements of the People’s Liberation Army’s 74th Army Group have been carrying out antiterrorist exercises approximately one hour away from Hong Kong by commercial flight. And I have noted how Hong Kong police, acting out of uniform, have systematically and repeatedly attacked protestors just to disappear into the crowds and with no official response allowed to find out who had done this. And on the other side I have written at least in passing of how protestors, acting out against Carrie Lam’s and the Beijing government’s actions and proposed actions, have gone from peaceful protest to defacing government buildings and to directly confronting China and their claim to sovereignty over Hong Kong. This has even included at least some protestors raising the United Nations flag and yes – the British Union Jack too, as a direct repudiation of any claims that Xi’s government might make there.

And the first initially low-key arrivals of officers from China’s People’s Armed Police: a paramilitary force that has and is trained to use military weapons and that uses military transport and related support resources, began arriving at the Shenzhen Bay Sports Center and surrounding area on August 11, 2019. And they have been carrying out increasingly visible daily exercises and drills there too, just outside of Hong Kong itself.

What could trigger their being called into Hong Kong? What could trigger an escalation in response beyond that, to include in troops from the 74th or even just from other paramilitary, officially police force units? And how would the protests taking place and the protestors carrying them out respond to that? No one knows and no one in their right mind would want to find out. And with that noted, I turn back to a basic pattern for writing about this unfolding news story, that I first attempted here in my Part 4 installment to this posting progression, as initially went live here on August 15. I offered an open letter to Xi Jinping there, and I offer a second such open letter to him again now, as the one person in China who might be in a position to reach out and reduce the tensions and the risks there. And that one person really is Xi Jinping himself, now.

I offer what follows here as a continuation of that first open letter, and with Xi’s China Dream itself in mind, and both for how he envisions China and its future and for how he envisions himself and his role in that – and his legacy as he seeks to create it out of all of this too.

Dear Chairman Xi,

I recently wrote an open letter to you and to those who you lead in China, concerning a developing crisis that you and all of China, Hong Kong and the world are now facing. And I wrote to you of this because you are in a stronger position to either help resolve this peacefully, or lead it into disaster than anyone else right now, as the leader of both China’s Communist Party and government.

You lead and seek to lead China, according to a vision in which your country can take a position of global leadership. And you base this vision, this dream, your Zhōngguó Mèng on two historical narratives: one positive and the other negative. You base it on visions of what China could become again, as based on what it has been in its golden age during the height of the Qing Dynasty and particularly as that was led by its two greatest leaders: the Kangxi Emperor and the Qianlong Emperor. And you base it upon the century and more of humiliation that China endured as the Qing Dynasty began to fail and in the years and decades that followed. You base it on the lessons learned and never to be repeated of foreign domination from one direction and internal strife and challenge from the other.

I focused in my first open letter on the positive side of this, and on what you can lead the China of your time towards, if you can go beyond the straitjacket of simply trying to redress the negatives and the wrongs historically done, of the time of humiliation that was in fact already developing by the time of the First Opium War and the treaty that ended it. And to be more specific here, I focused there on a need for agility and flexibility in decision and action, and on how that made so much of a difference for the Kangxi and Qianlong Emperors. I turn here to a second point that was fundamentally important to their leadership and that has held crucial importance in China throughout most all of your country’s long history: stability and the imperative of achieving and maintaining it.

I will be blunt. You seek to restore China to a path that the greatest leaders of your nation’s past created – that the greatest of the emperors of that past were able to create and maintain, at least during their reigns. You seek to become, in effect a Kangxi or Qianlong Emperor for China’s 21st century. But with the power that you seek, goes an at-least equally daunting responsibility, and one that predates Communism by centuries and one that will most likely endure well after Communism is gone too. The emperors of China’s past, its greatest included, were all thought of as the Sons of Heaven. And they ruled under the aegis and the pressures of responsibility of the Mandate of Heaven (天命). Emperors reigned in power and authority as the Sons of Heaven and dynasties endured, according to how effectively they could create and maintain peaceful stability in their lands and among their people. And they failed and fell when they no longer could. What is happening in Hong Kong now and what are you doing to address that, that goes beyond you’re reacting out of continued anger at past wrongs done? The currently in-force Handover of Hong Kong agreement is quite clearly included among those wrongs according to your thinking. What are you doing to make this Return as you and your government prefer to call that, peaceful and stable and supportive of the people of Hong Kong, and ultimately for China as a whole too?

You seek to be a modern day Kangxi or Qianlong? Then you must assume the mantle of responsibility that they lived by and held to: that same Mandate of Heaven, by whatever name that you would prefer to call it.

You cannot blame Hong Kong’s ongoing waves of unrest on the British, or on the United States and its government or on any other foreign power and succeed with that story, and certainly not long-term. First of all it is not true, and regardless of how avid your state controlled news agencies are in creating and repeating that story. But secondly and more importantly and certainly for China and certainly if you seek to realize your Dream, that narrative cannot be sustained when all of this chaos ultimately arises as response to decisions that you and your government make, and that people like Carrie Lam make as your hand-picked “Hong Kong leaders” there. Simply pointing elsewhere to accuse others of responsibility and leaving it at that, will only serve to further increase the chaos already taking place. Misdirection cannot and will not address let alone resolve any of the real root causes there.

Mao Zedong fundamentally reshaped China. But at the risk of oversimplifying a very complex period of history, the chaos that he created in the process of doing so, and not just from his Cultural Revolution and Great Leap Forward, went a long way towards China’s isolation from much of the world and its lack of anything like positive influence there as a result. The world saw and the world reacted to that. Do you want to see the China of your day so isolated again? You have your China Dream, your Zhōngguó Mèng, and you have your legacy creating ambitions. Do you want the crisis that Hong Kong has been slipping into become the core pillar of your dream as actually realized, and of your legacy as it would actually be fulfilled? I write you of this because ultimately you are the only one who can decide.

Sincerely, Timothy Platt, Ph.D.

I am now certain to offer a sixth posting in this succession of them as events continue to proceed, and both in Hong Kong and in China. Meanwhile, you can find this and related China and Xi Jinping-oriented material at Macroeconomics and Business and its Page 2 continuation.

Moore’s law, software design lock-in, and the constraints faced when evolving artificial intelligence 8

Posted in business and convergent technologies, reexamining the fundamentals by Timothy Platt on August 22, 2019

This is my 8th posting to a short series on the growth potential and constraints inherent in innovation, as realized as a practical matter (see Reexamining the Fundamentals 2, Section VIII for Parts 1-7.) And this is also my fifth posting to this series, to explicitly discuss emerging and still forming artificial intelligence technologies as they are and will be impacted upon by software lock-in and its imperatives, and by shared but more arbitrarily determined constraints such as Moore’s law (see Parts 4-7.)

I focused, for the most part in Part 7 of this series, on offering what amount to analogs to the simplified assumption Thévenin circuits of electronic circuit design. Thévenin’s theorem and the simplified and even detail-free circuits that they specify, serve to calculate and mimic the overall voltage and resistance parameters for what are construed to be entirely black-box electronic systems with their more complex circuitry, the detailed nature of which are not of importance in that type of analysis. There, the question is not one of what that circuitry specifically does or how, but rather of how it would or would not be able to function with what overall voltage and resistance requirements and specifications in larger systems.

My simplified assumption representations of Part 7 treated both brain systems and artificial intelligence agent systems as black box entities and looked at general timing and scale parameters to both determine their overall maximum possible size, and therefore their maximum overall complexity, given the fact that any and all functional elements within them would have larger than zero minimum volumes, and well as minimal time-to-task-completion requirements for what they would do. And I offered my Part 7 analyses there as first step evaluations of these issues, that of necessity would require refinement and added detail to offer anything like actionable value. Returning briefly to consider the Thévenin equivalents that I just cited above, by way of analogous comparison here, the details of the actual circuits that would be simplistically modeled there might not be important to or even germane to the end-result Thévenin circuits arrived at, but those simplest voltage and resistance matching equivalents would of necessity include within them, the cumulative voltage and resistance parameters of all of that detail in those circuit black boxes, even if as they would be rolled into overall requirement summaries for those circuits as a whole.

My goal for this posting is to at least begin to identify and discuss some of the complexity that would be rolled into my simplified assumptions models, and in a way that matches how a Thévenin theorem calculation would account for internal complexity in its modeled circuits’ overall electrical activity and requirements calculations, but without specifying their precise details either. And I begin by considering the functional and structural nodes that I made note of in Part 7 and in both brain and artificial intelligence agent contexts, and the issues of single processor versus parallel processing systems and subsystems. And this, of necessity means considering the nature of the information processing problems to be addressed by these systems too.

Let’s start this by considering the basic single processor paradigm and Moore’s law, and how riding that steady pattern of increased circuit complexity in any given overall integrated circuit chip size, has led to capacity to perform more complex information processing tasks and to do so with faster and faster clock speeds. I wrote in Part 7 of the maximum theoretical radius of a putative intelligent agent or system: biological and brain base, or artificial and electronic in nature, there assuming that a task could be completed, as a simplest possibility just by successfully sending a single signal at the maximum rate achievable in that system, in a straight line and for a period of time that is nominally assumed necessary to complete a task there. Think of increased chip/node clock speed here, as an equivalent of adding allowance for increased functional complexity into what would actually be sent in that test case signal, or in any more realistic functional test counterparts to it. The more that a processor added into this as an initial signal source, can do in a shorter period of time, in creating meaningful and actionable signal content to be so transmitted, the more functionally capable the agent, or system that includes it can be and still maintain a set maximum overall physical size.

Parallelism there, can be seen as a performance multiplier: as an efficiency and speed multiplier there, and particularly when that can be carried out within a set, here effectively standardized volume of space so as to limit the impact of maximum signal speeds in that initial processing as a performance degrader. Note that I just modified my original simplest and presumably fastest and farthest physically reaching, maximum size allowing example from Part 7 by adding in a signal processor and generator at its starting point. And I also at least allow for a matching node at the distant signal receiving end of this too, where capacity to do more and to add in more signal processing capacity at one or both ends of this transmission, and without increase in timing requirements for that added processing overhead, would not reduce the effective maximum physical size of such a system, in and of itself.

Parallel computing is a design approach that specifically, explicitly allows for such increased signal processing capacity, and at least in principle without necessarily adding in new timing delays and scale limitations – and certainly if it can be carried out within a single chip, that fits within the scale footprint of whatever single processor chip that it might be benchmark compared to.

I just added some assumptions into this narrative that demand acknowledging. And I begin doing so here by considering two types of tasks that are routinely carried out by biological brains, and certainly by higher functioning ones as would be found in vertebrate species: vision and the central nervous system processing that enters into that, and the information processing that would enter into carrying out tasks that cannot simply be handled by reflex and that would as such, call for more novel and even at least in-part, one-off information processing and learning.

Vision, as a flow of central nervous system and brain functions, is an incredibly complex process flow that involves pattern recognition and identification and a great deal more. And it can be seen as a quintessential example of a made for parallel processing problem, where an entire visual field can be divided into what amounts to a grid pattern that maps input data arriving at an eye to various points on an observer’s retina, and where essentially the same at least initial processing steps would be called for, for each of those data reception areas and their input data.

I simplify this example by leaving specialized retinal areas such as the fovea out of consideration, with its more sharply focused, detail-rich visual data reception and the more focused brain-level processing that would connect to that. The more basic, standardized model of vision that I am offering here, applies to the data reception and processing for essentially all of the rest of the visual field of a vertebrate eye and for its brain-level processing. (For a non-vision comparable computer systems example of a parallel computing-ready problem, consider the analysis of seismic data as collected from arrays of ground-based vibration sensors, as would be used to map out anything from the deep geological features and structures associated with potential petrochemical deposits, or the mapping details of underground fault lines that would hold importance in a potential earthquake context, or that might be used to distinguish between a possible naturally occurring earthquake and a below-ground nuclear weapons test.)

My more one-off experience example and its information processing might involve parallel processing and certainly when comparing apparent new with what is already known of and held in memory, as a speed-enhancing approach, to cite one possible area for such involvement. But the core of this type of information processing task and its resolution is likely to be more specialized, non-parallel processor or equivalent-driven.

And this brings me specifically and directly to the question of problem types faced: of data processing and analysis types and how they can best be functionally partitioned algorithmically. I have in a way already said in what I just wrote here, what I will more explicitly make note of now when addressing that question. But I will risk repeating the points that I made on this by way of special case examples, as more general principles, for purposes of increased clarity and focus and even if that means my being overly repetitious:

• The perfect parallel processing-ready problem is one that can be partitioned into a large and even vastly large set of what are essentially identical, individually simpler processing problems, where an overall solution to the original problem as a whole calls for carrying out all of those smaller t standardized sub-problems and stitching their resolutions together into a single organized whole. This might at times mean fully resolving the sub-problems and then combining them into a single organized whole, but more commonly this means developing successive rounds of preliminary solutions for them and repeatedly bringing them together, where adjacent parallel processing cells in this, serve as boundary value input for their neighbors in this type of system (see cellular automation for a more extreme example of how that need and its resolution can arise.)
• Single processor, and particularly computationally powerful single processor approaches become more effective, and even fundamentally essential as soon as problems arise that need comprehensive information processing that cannot readily be divided up into arrays of similarly structured simpler sub-problems that the individual smaller central processing units, or their biological equivalents, could separately address in parallel with each other, as is the case in my vision example or one of my non-vision computer systems examples as just given.

And this leads me to two open questions:

• What areas and aspects of artificial intelligence, or of intelligence per se, can be parsed into sub-problems that would make parallel processing both possible, and more efficient than single processor computing might allow?
• And how algorithmically, can problems in general be defined and specified, so as to effectively or even more optimally make this type of determination, so that they can be passed onto the right types and combinations of central processor or equivalent circuitry for resolution? (Here, I am assuming generally capable computer architectures that can address more open-ended ranges of information processing problems: another topic area that will need further discussion in what follows.)

And I will of course, discuss all of these issues from the perspective of Moore’s law and its equivalents and in terms of lock-in and its limiting restrictions, at least starting all of this in my nest installment to this series.

The maximum possible physical size test of possible or putative intelligence-supporting systems, as already touched upon in this series, is only one way to parse such systems at a general outer-range parameter defining level. As part of the discussion to follow from here, I will at least briefly consider a second such approach, that is specifically grounded in the basic assumptions underlying Moore’s law itself: that increasing the number of computationally significant elements (e.g. the number of transistor elements in an integrated circuit chip), can and will increase the scale of a computational or other information processing problem that that physical system can resolve within any single set period of time. And that, among other things will mean discussing a brain’s counterparts to the transistors and other functional elements of an electronic circuit. And in anticipation of that discussion to come, this will mean discussing how logic gates and arrays of them can be assembled from simpler elements, and both statically and dynamically.

Meanwhile, you can find this and related material at Ubiquitous Computing and Communications – everywhere all the time 3 and also see Page 1 and Page 2 of that directory. And I also include this in my Reexamining the Fundamentals 2 directory as topics Section VIII. And also see its Page 1.

Dissent, disagreement, compromise and consensus 35 – the jobs and careers context 34

This is my 35th installment to a series on negotiating in a professional context, starting with the more individually focused side of that as found in jobs and careers, and going from there to consider the workplace and its business-supportive negotiations (see Guide to Effective Job Search and Career Development – 3 and its Page 4 continuation, postings 484 and following for Parts 1-34.)

I have been successively addressing each of a set of six workplace challenges that would explicitly call for negotiating skills and effort and that can arise for essentially anyone who works sufficiently long-term with virtually any given employer (see Part 32 for a full list of them, with appended links to where I have individually discussed those negotiations-demanding contexts up to there.) And as part of this narrative, I began discussing the sixth and more complexly comprehensive final entry to that list, and its issues in Part 32: a negotiating challenge that in a fundamental sense encompasses all of the first five already considered here, and more:

6. Negotiating possible downsizings and business-wide events that might lead to them, and how you might best manage your career when facing the prospects of getting caught up in that type of circumstance (see Part 32 and also Part 33 and Part 34.)

Perhaps the single most important point that I have raised so far in this series, and certainly in this negotiating context is that “one size fits all” approaches do not and cannot work for you, and certainly if you seek to reach a best for you possible resolution from your communications and negotiating efforts. I outlined in Parts 32 and 33, at least in brief sketch format, a series of specific scenarios that can bring an employer to consider and even actively pursue a downsizing, and why they would do this. Then I stepped back to consider a set of more generally stated, “points held in common” issues that, all of my more specific downsizing scenarios come to share, and both for how they arise and play out and for how you as an impacted-upon employee there might better respond to all of this.

I concluded Part 34 by stating that I would add more detail to that set of more general principles and then turn to consider individual scenarios when delving into the details of how best to negotiate them. But on further reflection, I have decided to start with the individual downsizing scenarios that I will cover here and then tie that flow of discussion together with further higher level, more general principles-oriented comments. So with that noted I begin this core discussion of this posting by briefly listing the scenarios again, referring back to Parts 32 and 33 at this time for anyone who would want to read more of their details. And I do so with the following, admittedly general principle in mind, that I have found to be vitally important in any negotiating context, work-related or otherwise:

• You cannot effectively negotiate absent an understanding of what you have to, and can negotiate about.
• And knowing that calls for understanding the context and circumstance, and the goals and priorities of the people who you would face on the other side of the table for this.
• And as a crucial part of that, this also includes knowing as fully and clearly as possible, what options and possibilities they might and might not even be able to negotiate upon.

I have offered this point of multiply validated observation, several times now in this series. And I repeat it again here. This is, among other things, where you would calculatingly, strategically break away from the trap of going into a potentially crucially important negotiating opportunity unprepared, and where you can break away from whatever your unconsidered default approach to that, might limit you to. And with that in mind, the specific downsizing scenarios that I have raised in this series and that I will at least begin to specifically address here, are:

1. A business’ markets have dried up and can no longer generate and maintain the revenue flows needed to maintain it, at the scale that it has operated at. And to distinguish this from other possible scenarios to come, I approach this one as a response to challenges arising from outside of the business itself, as for example might occur during a trade war and as a response to tariff barrier-limited trade and market activity.
2. A business is no longer competitively up to date for its ongoing reliance on what have become competitively obsolete legacy technologies. And its senior management is going to have to make fundamental changes in what the business does and how, if it is to remain viable as an ongoing enterprise.
3. A business sees need to bring itself into better, more competitive focus where that can mean outsourcing functional areas that offer value, but that might not be cost-effective to maintain in-house.
4. A business is facing a possible or even inevitable merger or acquisition with another business, where staff rightsizing, to use a popular euphemism, is going to mean eliminating what will become redundant work positions and dismissing the employees who hold them, and at essentially any and every level of the new combined table of organization that would be created out of this.
5. A new, more senior manager or executive who wants to do some personal empire building within their new employer’s systems can use a downsizing and reorganization in their area of oversight responsibility to put their name on how things are done there.

These scenarios all address circumstances where good employees who have offered real value from their work at a business, can be caught up in layoffs. But that noted, they are all separate and distinct from each other too. Let’s begin addressing them for purposes of this ongoing line of discussion, by considering who at least categorically might be at risk in them.

• Scenario 1 (an outside-challenged narrative) as offered above, might very easily come to impact upon essentially every area of the table of organization and certainly if this challenge persists. A first wave of layoffs might focus on a first affected area of the business such as production and distribution. But prudence would dictate that employees in essentially any and every part of the business might at least categorically find themselves at risk there too, and certainly with time. This, for example, is where you might find overlap between the above-offered Scenarios 1 and 3, though that is only one way in which ripple effect layoffs might be considered in a more-Scenario 1 context.
• Any Scenario 2 (inside-sourced challenge) event is certain to directly affect employees who hands-on carry out what have come to be seen as sources of avoidable loss and inefficiency: in this case for performing legacy technology work and not necessarily just in production itself. Obsolete and competitively limiting back-office support, and parts and supplies inventory management can come under fire here too, and so can the people who work in any part of this business who come under review, when the types of change management evaluations that are called for here are made and when any inefficiencies that they are involved in are brought to light too. There, downsizings that take place are almost certain to proceed in waves, with an increasing range of impact as successive layoffs coming from them that begin with the most overtly problematical parts of a business, expand out to address what are seen as more peripheral but still significant problem areas there too.
• Scenario 3 (the in-house versus outsource scenario) tends to follow business sector and industry-wide patterns and certainly as what begin as in-house specialty functions become more standardized and when they develop into business sectors and industries in their own right. Consider the emergence of cloud storage and computing options as a by-now standard alternative to in-house networked server farms for businesses as a working example of that. Though this scenario can and does sweep up those who work in more traditional areas of a business too. Consider benefits and pension management, among other activities that would fit into Human Resources as a service, that can readily be outsourced to a support providing specialist business for that, as a working example of this phenomenon.
• Scenario 4 is likely to sweep up people working in essentially any and every area of a business, for those enterprises that enter into the mergers or acquisitions that drive them. The only exception to that essentially open-ended reach of impact that might realistically arise, would be found in services of one of the businesses involved, that in effect drive these business combinings. That, for example, might very well include specialized product development or production capabilities in a business that is being acquired by a larger corporation, where that business is entering into this primarily to acquire that functional competence: that excellence in its own systems and for what it can bring to market.
• And Scenario 5 is, in contrast to the first four, a more localized phenomenon and even if it can only take place if a would-be empire builder can convince senior management as a whole, and probably the board of directors too, that their plans would benefit the business as a whole too.

And with that noted, I have to add that no one at a business can or should feel complacent if there is talk of a possible or impending downsizing. As proof, consider Scenario 4 and the functional parts of a smaller but already-successful early stage business that has and owns a core innovation and a specialized production capability for exploiting it, that a larger business sees absolute need to bring into their own systems if they are to remain competitive and certainly if they are to expand their lead for that. In principle, such an acquiring business would take more of a hands-off position in working with this high value acquisition, so as to avoid challenging and limiting, or even killing off the source of new value that they have decided to buy and perhaps pay dearly for. But I have seen acquiring businesses step in and all but squash the value out of such acquisitions, in an attempt to bring them into conformity with their own corporate cultures in place and their own corporate visions. And this can mean clearing out, or driving out employees in that type of acquisition who do not seem to fit into the new systems and ways that they would now have to work within.

• Never take your continued employment with a business that is facing a downsizing, automatically for granted and regardless of whatever reasoned workplace vulnerability analyses you can arrive at or that you might hear floating around, that might indicate that others would be at greater risk from this than you.
• That noted, such analyses can prove useful, as I will discuss further on in this posting progression, when negotiating your position there.

Up to here, this narrative has at least briefly addressed the Why of downsizings, and something of the Who of them and certainly for who would more likely be vulnerable for getting caught up in them. I am going to continue this line of discussion in a next series installment where I will more directly consider who, on the business side of these events, decides on pursuing a downsizing and how, and who there would actually carry this out. And after that, I will use this overall understanding of the Who, What and Why of these downsizings, to discuss negotiating tactics and approaches per se, that you might want to consider when facing what would hopefully be more fully known and understood circumstances that this would take place in.

Meanwhile, you can find this and related material at Page 4 to my Guide to Effective Job Search and Career Development, and also see its Page 1, Page 2 and Page 3. And you can also find this and related postings at Social Networking and Business 3, and also see that directory’s Page 1 and Page 2.

Some thoughts concerning a general theory of business 30: a second round discussion of general theories as such, 5

Posted in blogs and marketing, book recommendations, reexamining the fundamentals by Timothy Platt on August 16, 2019

This is my 30th installment to a series on general theories of business, and on what general theory means as a matter of underlying principle and in this specific context (see Reexamining the Fundamentals directory, Section VI for Parts 1-25 and its Page 2 continuation, Section IX for Parts 26-29.)

I began this series in its Parts 1-8 with an initial orienting discussion of general theories per se, with an initial analysis of compendium model theories and of axiomatically grounded general theories as a conceptual starting point for what would follow. And I then turned from that, in Parts 9-25 to at least begin to outline a lower-level, more reductionistic approach to businesses and to thinking about them, that is based on interpersonal interactions. Then I began a second round, next step discussion of general theories per se in Parts 26-29 of this, building upon my initial discussion of general theories per se, this time focusing on axiomatic systems and on axioms per se and the presumptions that they are built upon. As a key part of that continued narrative, I offered a point of theory defining distinction in Part 28, that I began using there in this discussion, and that I continued using in Part 29 as well, and that I will continue using and developing here too, drawing a distinction between:

• Entirely abstract axiomatic bodies of theory that are grounded entirely upon sets of a priori presumed and selected axioms. These theories are entirely encompassed by sets of presumed fundamental truths: sets of axiomatic assumptions, as combined with complex assemblies of theorems and related consequential statements (lemmas, etc) that can be derived from them, as based upon their own collective internal logic. Think of these as axiomatically closed bodies of theory.
• And theory specifying systems that are axiomatically grounded as above, with at least some a priori assumptions built into them, but that are also at least as significantly grounded in outside-sourced information too, such as empirically measured findings as would be brought in as observational or experimental data. Think of these as axiomatically open bodies of theory.

And I have, and will continue to refer to them as axiomatically closed and open bodies of theory, as convenient terms for denoting them. And that brings me up to the point in this developing narrative that I would begin this installment to it at, with two topics points that I would discuss in terms of how they arise in closed and open bodies of theory respectively:

• How would new axioms be added into an already developing body of theory, and how and when would old ones be reframed, generalized, limited for their expected validity and made into special case rules as a result, or be entirely discarded as organizing principles there per se.
• Then after addressing that set of issues I said that I will turn to consider issues of scope expansion for the set of axioms assumed in a given theory-based system, and with a goal of more fully analytically discussing optimization for the set of axioms presumed, and what that even means.

I began discussing the first of these topics points in Part 29 and will continue doing so here. And after completing that discussion thread, at least for purposes of this digression into the epistemology of general theories per se, I will turn to and discuss the second of those points too. And I begin addressing all of this at the very beginning, with what was arguably the first, at least still-existing effort to create a fully complete and consistent axiomatically closed body of theory that would address what was expected at least, to encompass and resolve all possible problems and circumstances where it might conceivably be applied: Euclid’s geometry as developed from the set of axiomatically presumed truths that he built his system upon.

More specifically, I begin this narrative thread with Euclid’s famous, or if you prefer infamous Fifth postulate: his fifth axiom, and how that defines and constrains the concept of parallelism. And I begin here by noting that mathematicians and geometers began struggling with it more than two thousand years ago, and quite possibly from when Euclid himself was still alive.

Unlike the other axioms that Euclid offered, this one did not appear to be self-evident. So a seemingly endless progression of scholars sought to find a way to prove it from the first four of Euclid’s axioms. And baring that possibility, scholars sought to develop alternative bodies of geometric theory that either offered alternative axioms to replace Euclid’s fifth, or that did without parallelism as an axiomatic principle at all, or that explicitly focused on it and even if that meant dispensing with the metric concepts of angle and distance (where parallelism can be defined independently of them), with affine geometries.

In an axiomatically closed body of theory context, this can all be thought of as offering what amounts to alternative realities, and certainly insofar as geometry is applied for its provable findings, to the empirically observable real world. The existence of a formally, axiomatically specified non-Euclidean geometry such as a an elliptic or hyperbolic geometry that explicitly diverge from the Euclidean on the issue of parallelism, does not disprove Euclidean geometry, or even necessarily refute it except insofar as their existence shows that other equally solidly grounded, axiomatically-based geometries are possible too. So as long as a set of axioms that underlie a body of theory such as one of these geometries can be assumed to be internally consistent, the issues of reframing, generalizing, limiting or otherwise changing axioms in place, within a closed body of theory is effectively moot.

As soon as outside-sourced empirical or other information is brought in that arises separately from and independently from the set, a priori axioms in place in a body of theory, all of that changes. And that certainly holds if such information (e.g. replicably observed empirical observations and the data derived from them) is held to be more reliably grounded and “truer” than data arrived at entirely as a consequence of logical evaluation of the consequences of the a priori axioms in place. (Nota bene: Keep in mind that I am still referring here to initial presumed axioms that are not in and of themselves directly empirically validated, and that might never have even been in any way tested against outside-sourced observations and certainly for the range of observation types that that perhaps new forms of empirical data and its observed patterns might offer. Such new data might in effect force change in previously assumed axiomatically framed truth.)

All I have done in the above paragraph is to somewhat awkwardly outline the experimental method, where theory-based hypotheses are tested against carefully developed and analyzed empirical data to see if it supports or refutes them. And in that, I focus in the above paragraph, on experimental testing that would support or refute what have come to be seen as really fundamental, underlying principles and not just detail elaborations as to how the basic assumed principles in place would address very specific, special circumstances.

But this line of discussion overlooks, or at least glosses over a very large gap in the more complete narrative that I would need to address here. And for purposes of filling that gap, I return to reconsider Kurt Gödel and his proofs of the incompleteness of any axiomatic theory of arithmetic, and of the impossibility of proving absolute consistency for such a body of theory too, as touched upon here in Part 28. As a crude representation of a more complex overall concept, mathematical proofs can be roughly divided into two basic types:

Existence proofs, that simply demonstrate that at least one mathematical construct exists within the framework of a set of axioms under consideration that would explicitly sustain or refute that theory, but without in any way indicating its form or details, and
Constructive proofs, that both prove the existence of a theorem-supporting or refuting mathematical construct, and also specifically identify and specify it for at least one realistic example, or at least one realistic category of such examples.

Gödel’s inconsistency theorem is an existence proof insofar as it does not constructively indicate any specific mathematical contexts where inconsistency explicitly arises. And even if it did, that arguably would only indicate where specific changes might be needed in order to seamlessly connect two bodies of mathematical theory: A and B, within a to-them, sufficiently complete and consistent single axiomatic framework so as to be able to treat them as a single combined area of mathematics (e.g. combining algebra and geometry to arrive as a larger and more inclusive body of theory such as algebraic geometry.) And this brings me very specifically and directly to the issues of reverse mathematics, as briefly but very effectively raised in:

• Stillwell, J. (2018) Reverse Mathematics: proofs from the inside out. Princeton University Press.

And I at least begin to bring that approach into this discussion by posing a brief set of very basic questions, that arise of necessity from Gödel’s discoveries and the proof that he offered to validate them:

• What would be the minimum set of axioms, demonstrably consistent within that set, that would be needed in order to prove as valid, some specific mathematical theorem A?
• What would be the minimum set of axioms needed to so prove theorem A and also theorem B (or some other explicitly stated and specified finitely enumerable set of such theorems A, B, C etc.)?

Anything in the way of demonstrable incompleteness of a type required here, for bringing A and B (and C and …, if needed) into a single overarching theory would call for a specific, constructively demonstrable expansion of the set of axioms assumed in order to accomplish the goals implicit in those two bullet pointed questions. And any demonstrable inconsistency that were to emerge when seeking to arrive at such a minimal necessary axiomatic foundation for a combined theory, would of necessity call for a reframing or a replacement at a basic axiomatic level and even in what are overtly closed axiomatic bodies of theory. So Euclidean versus non-Euclidean geometries notwithstanding, even a seemingly completely closed such body of theory might need to be reconsidered and axiomatically re-grounded, or discarded entirely.

I am going to continue this line of discussion in a next series installment, where I will turn to more explicitly consider axiomatically open bodies of theory in this context. And in anticipation of that narrative to come, I will consider:

• The emergence of both disruptively new types of data and of empirical observations that could generate it,
• And shifts in the accuracy resolution, or the range of observations that more accepted and known types of empirical observations might suddenly be offering.

I add here that I have, of necessity, already begun discussing the second to-address topic point that I made note of towards the start of this posting:

• Scope expansion for the set of axioms assumed in a given theory-based system, and with a goal of more fully analytically discussing optimization for the set of axioms presumed, and what that even means.

I will continue on in this overall discussion to more fully consider that set of issues, and certainly where optimization is concerned in this type of context.

Meanwhile, you can find this and related material about what I am attempting to do here at About this Blog and at Blogs and Marketing. And I include this series in my Reexamining the Fundamentals directory and its Page 2 continuation, as topics Sections VI and IX there.

Xi Jinping and his China, and their conflicted relationship with Hong Kong – an unfolding Part 2 event: 4

Posted in macroeconomics by Timothy Platt on August 15, 2019

This is my fourth posting, all coming out since June 19, 2019, to address the significant and still expanding conflicts taking place in Hong Kong, arising as a response to actions taken by China’s mainland government in Beijing and by Xi Jinping’s decisions and actions there (see Part 1, Part 2 and Part 3.) And this is my sixth such posting if you include the two 2014 entries that I initially offered here, in response to the events that have come to be known as Hon Kong’s Yellow Umbrella Movement (雨傘運動) (see those Part 1 and an Part 2 postings for further related background material and perspective.

I began writing my more recent above-cited postings here, as addressing a Part 2 continuation of what happened in 2014 and of what led up to that so public a confrontation. But in a real sense, more recent events can perhaps best be seen as a direct continuation of 2014 and its challenges. It is just that more recent actions taken, and both by senior members of Hong Kong’s government who were installed in office there by the Communist Party of China, and by Xi and his government itself, have stoked fresh flames from what were still burning embers of discontent.

I said at the end of my most recent installment to all of this that I would come back to this set of issues “in the coming weeks.” But the pace and the consequence-creating impact of recent events have prompted me to write and post that early. And I do so with a great many possible starts to this updating note in mind, that I could choose to from.

I recently found myself comparing these events to a classic Greek tragedy, and there are at least potentially some important points that the two hold in common. I explain that here as an at least intended cautionary if hopeful note as I know that at least some people in China have been reading what I have been offering here. A classic Greek comedy is a theatrical work in which problems and challenges arise, but in ways that allow for a more positive resolution. Everyone does not die in some way in the end. That does not mean humor; it does not necessarily have to include witty lines or comedic acting that would provoke laughter from the audience. It means that good prevails and that people survive and move on. A classic Greek tragedy on the other hand, is marred by what becomes doom realized, and with that as an increasingly inevitable outcome.

• If Xi Jinping and his government and the forces and voices at his command stay their current course in their effort to control and subjugate the peoples of Hong Kong, and if the protesting people of Hong Kong stay their course in demanding their rights and freedoms in the face of that, Xi is in danger of forcing a name change there, where this type of event becomes known as a classic Chinese tragedy.

A second possible start to this note is that I might offer it as what amounts to an open letter to Xi Jinping and his more senior advisors, and I particularly focus on Xi himself here because ultimately it is going to be up to him to make the decisions and take the actions that will determine if this ends as a tragedy or not. Xi, perhaps above all else, seeks to be the supreme leader in China and a true world leader as a consequence of that. Consider this responsibility as part of the cost that is automatically going to be included in any such ambitions and certainly as effort is made to realize them. The How and What of any resolution to the unrest and even chaos in Hong Kong today, are up to Chairman Xi, as is any possible If.

I displayed my own brand of hubris in Part 3 to this, by offering a concerned third party’s perspective on what might be done to at least lesson the tensions in Hong Kong, and in the halls of power in Beijing too over this, which I repeat here in at least abbreviated form at the risk of boring my readers:

• Xi and his Communist Party and government see a fundamental need to have people in political and governmental power in Hong Kong, who support them and who believe in what they seek to do. But when Xi and members of his Party and government overtly put their own hand-picked puppets into senior positions of authority in Hong Kong and its government, they poison those would-be leaders for their ever being accepted as legitimate there.
• And they poison the prospects that they themselves would ever be accepted in Hong Kong as in any way honoring the terms of the treaty that China signed with Britain, turning Hong Kong back to China, with the terms of autonomy that that treaty specified.
• So this is where Xi in particular has to look to and reconsider his true goals and priorities and certainly long-term. Does his China Dream, his Zhōngguó Mèng (中国梦) revolve around a Carrie Lam staying in toxically dysfunctional power in what should be one of China’s most valuable assets: the port city of Hong Kong? According to the terms of that Treaty, Hong Kong is set to fully return to China’s and Beijing’s control in 2047: in just a few short years when measured against the centuries that Chinese history is measured in, and that Xi himself cites as the foundation of his China Dream.

This is the backdrop and stage setting to that at least potentially classical tragedy in the making: this conflict of needs and of vision that we are witnessing unfolding in the news and every single day now. And with that noted, I actually turn to Chairman Xi, or at least to his fellow countrymen and women who read my postings, to offer that open letter. And I begin it with the fundamentals: with what I hope at least to be a fair and balanced, if selective consideration of Xi’s China Dream itself, and what it means.

Dear Chairman Xi,

I write this to you as leader of the single most important and powerful organized body and power base in your nation, overwhelming any possible challenge that could conceivably come to it from your nation’s government on its own, its military with its system of military and political officers and with those political officers really in command there, and its still embryonic private sector. I write to you here and now as the supreme leader of your nation’s Communist Party. And I write to you as the creator and bearer of your China Dream: a distillation of all of your development plans for China and of all of your more personal legacy creating ambitions as well.

You seek to restore China to the greatness that you see in its past from before the humiliations of the First Opium War and all that led up to it, making that tragedy inevitable. And you seek to redress the wrongs done and the grievances suffered coming out of the unequal treaties, with the first of them, ending the First Opium War a particularly painful part of that story, and certainly now. It was, after all, the Treaty of Nanking that ended that war, as a total defeat for China and not just militarily. It was after all that treaty that tore Hong Kong from China, making it a British colony and a more effective gateway into your country as British and other foreign forces did as they wished and throughout China. Extraterritoriality and the immunity that British, and soon other foreign nationals held, from having to honor and obey Chinese law and even in the heart of your nation, was only a small part of that. And I stress that and your loss of Hong Kong here because it is Hong Kong that I write this for, and your hopes and dreams for China as a whole.

You look back to earlier days of greatness, and most certainly to the golden age of the Qing Dynasty, before it began to fail and at least in part from the onslaught of foreign challenge. You look back to the days of the Kangxi Emperor and his grandson the Qianlong Emperor, and the 138 year span of time in which their rule led to stability and strength. And you look to the chaos and humiliations that followed, and with a goal of reversing them to restore what you see as China’s true place in the world. But at the risk of displeasing, I would offer you some thoughts as to how the Kangxi Emperor and the Qianlong Emperor actually achieved the stability and prosperity that their leadership led to, and with the expanded reach and influence that the China of their days achieved.

What was their greatest strength that they were able to bring to bear there? There are, of course, many possible answers to that, but the one that I cannot help but think of here was in how they knew when and how to be rigidly insistent and when and how to be flexible and even on what would seemingly be set and established principles and practices that would not allow for that. And the key area that comes to mind for me there, is not more internal to the country. It is not in how their numerically lean bureaucracy worked flexibly with provincial officials and through them with more local officials and to the ultimate benefit of all and to China as a whole. It is in how those emperors and the people who reported to them and who carried out their orders, managed the intricacies of the tribute system, that bound what were seen in China as their vassal states to their rule. And this system both defined and shaped all of the international trade that led to China emerging as a globally significant power during the Qing Dynasty’s golden age. And then failures in that system ultimately led to the downfall of the Qing Dynasty and the emergence of the century and more of humiliations that you seek to redress through the realization of your China Dream.

Officially and as a matter of established process and practice, any foreigners from any nation who sought to enter into business and trade in China outside of the tribute system and its protocols and restrictions, were deemed to be pirates and smugglers, and pirates and smugglers tended to be dealt with quite harshly if caught. But openly if unofficially, entirely separate alternatives to the traditional tribute system, as had officially held sway for centuries, were allowed and even unofficially supported – when they offered greater long-term value to China and their Emperor’s Court. I cite by way of example, the fact that Japan absolutely refused to enter into China’s tribute system and certainly not as a lesser supplicant nation and throughout the Tokugowa Shogonate (徳川幕府). But even with that, Japan served as a major trade conduit and one of real value to China, in its dealings with the West during this period, with a tremendous ongoing flow of trade that ultimately went in and out of China, going through the Japanese city of Nagasaki. Japan-enabled trade and the flow of new knowledge from the outside world that came with that, significantly contributed to the China of the Qing Dynasty, and to that China becoming and remaining the power that it was during this golden age. And it was the breaking of this system and partly with the advent of the unequal treaties, partly from internal challenges in China and partly – and even significantly from China’s failure to learn and internalize new scientific and technical advances that were developed in the United States and Europe in the 19th century, that led to the chaos that followed.

But I am not writing this with a goal of sharing a history lesson, and certainly not to someone who I would expect knows more of China’s history than I ever will. I offer this brief note thinking to today and to the days to come. I mentioned the distant land of Japan as an example of how China’s revered and expected tribute system could be set aside, or creatively adapted as called for in meeting specific needs and circumstances. But a seeming myriad of such exceptions, large and small, were allowed to play out in China’s own port cities too, and in fact wherever China and Foreign might meet, and at least beneficially for all and with stable good coming from that.

You revere the golden age of China and seek to restore it? It was not built on brittle, fragile intrangence. In fact, rigid and unconsidered intrangence and seemingly wherever possible was one of the hallmarks of the late and failing Qing Dynasty, as it found itself hemmed in and thwarted by forces it could neither change nor adapt to, as it successively fell from failure into failure. Look at how what had been a mutually supportive system of governance in China, collapsed and from internal rebellion and from the proliferation of disconnects between the Forbidden City and its leadership, and China’s provinces and more local governmental leaders.

Look to Hong Kong now and what do you see? Look to Hong Kong in light of the lessons of history, but not just the history of the humiliation of the First Opium War and of Britain’s seizure of that city as tribute in the Treaty of Nanking, that a Chinese Emperor and all of China were forced to swallow. Look to Hong Kong with 1997 and with 2047 in mind and ask yourself if a brittle, intransigent approach to righting perceived wrongs NOW, is the type of path that the leaders of China’s golden age would have turned to and as their only possible course of action. If you seek to be China’s leader into a new golden age, what path should you take here, to address and reduce the tension and the risk of an outright break there, with calls for Hong Kong independence that could not be withdrawn so easily?

I just learned today as of this writing (August 15, 2019) that at least some of the people protesting in the streets in Hong Kong are now carrying United Nations flags and British flags too: the Union Jack. By now everyone with any interest or concern as to what is happening in Hong Kong today, knows at least something as to how both sides – protesting citizens, and police and related agents of the state, have come to resort to progressively more violent and confrontational means to promote their causes. If you are China’s leader, where are you in all of this? Are you prepared to sit back and rigidly allow this to become that classic tragedy, or are you willing to lead, and away from that? This really is up to you now and history will judge you on the basis of how you rise to or fail to rise to this challenge.

Sincerely, Timothy Platt, Ph.D.

I am certain to offer a fifth posting in this succession of them as events continue to proceed, and both in Hong Kong and in China. Meanwhile, you can find this and related China and Xi Jinping-oriented material at Macroeconomics and Business and its Page 2 continuation.

Innovation, disruptive innovation and market volatility 48: innovative business development and the tools that drive it 18

Posted in business and convergent technologies, macroeconomics by Timothy Platt on August 13, 2019

This is my 48th posting to a series on the economics of innovation, and on how change and innovation can be defined and analyzed in economic and related risk management terms (see Macroeconomics and Business and its Page 2 continuation, postings 173 and loosely following for its Parts 1-47.)

I have been discussing two-organization based, innovation discovery and development scenarios here since Part 43 when I began outlining and analyzing:

• University research labs and the university-as-business systems that they function in, as original sources of new innovation,
• And invention acquiring, for-profit businesses that would buy access to these new and emerging opportunities for development and sale

as organizations of these two types come to work together through technology transfer agreements. And my goal here is to expand that line of discussion to include a wider range of participating organizations. I raised a possibility for that in Part 47, when I made note of how larger companies can and do at least occasionally divest themselves of patents that they hold, but that do not supportively fit into their current or planned business model and its needs. IBM is known for having sold off tens of thousands of patents in that way as they have, as a business, redefined themselves to remain competitively effective in the face of overriding change and its challenges. (See, for example IBM Has Sold Over 15,000 Patents Since 1991; Google is its biggest customer, where this news piece only addresses part of a still larger and longer-term patent divestiture story for this business.)

For purposes of this line of discussion and this posting in it, it does not matter as much what types of businesses are involved in these transactions. It only matters that one of them holds effective control if not direct outright ownership of at least one trade secret, patent protected or otherwise access-limited innovation that another would want to be able to benefit from, and that second organization is both willing and able enough to secure control of this for itself to make a transaction for managing that transfer, a viable option. Under these circumstances, the precise business models and business plans of the enterprises involved, do not particularly matter except insofar as that type of information would add insight into the nature and details of whatever those businesses could negotiate an agreement upon in this specific context. And that means relevant information concerning these businesses that fall into four fairly specific question-defined categories, that are all fundamentally grounded in a same set of operational and strategic concerns:

• What value would the initially owning business gain, or retain if it were simply to maintain tightly controlled, access limited hold over the innovation or innovations in question here?
• What value could it develop and secure from divesting at least contractually specified control over the use or ownership of this innovative potential?
• And from the acquiring business’ perspective, what costs, or loss of positive value creating potential would it face, if it did not gain access to this innovation and on terms that would meet its needs?
• And what positive value would it gain if it did gain access to this, and with sufficient ownership control and exclusivity of use so as to meet its needs?

I posit this entirely in cost and benefits terms, and in terms of risk and benefits where the more disruptively novel the innovations under consideration are in this, the less firm data will be available to calculate a priori, what the actual costs and benefits would be, as efforts are made to answer the above four questions. That places this type of analysis at least significantly in a risk management arena.

Timeframes enter this narrative here, as even the most dramatically new and novel innovation as initially conceived, is going to have a time limited shelf life. And this can be expected to hold true with particular force if an innovation in question offers dramatic new sources, forms or levels of value that would not have been possible before it. As soon as word of its existence gets out, efforts will be made to bypass any ownership or licensure-based access restrictions to what it can do, with duplication of initial discovery and innovation pursued by others and either by directly copying it with knock-offs or through efforts to create similar if analogous product offerings that would capture similar forms and levels of new value, or both. And with this, I cite my above-noted IBM example again. On the whole, the thousands of patents that that company has sold off, have still held value for at least select business-to-business markets and sectors, and for specific types of potentially acquiring businesses. But it is likely that many of them were worth less on an open market of this sort when finally sold off, than they were initially worth. And some of them have undoubtedly fit into a “cut your losses” pattern where it had in fact cost more to initially develop them and secure patent protection over them, than could be fully recouped from their ultimate sale.

I am going to continue this discussion in a next series installment where I will add in the complexities of scale, and for both the divesting, or licensing business and for the acquiring one. And I will also discuss the issues of direct and indirect competition, and how carefully planned and executed transfer transactions here, can in fact create or enhance business-to-business collaboration opportunities too, where that may or may not create monopoly law risks in the process.

Meanwhile, you can find this and related postings at Macroeconomics and Business and its Page 2 continuation. And also see Ubiquitous Computing and Communications – everywhere all the time 3 and that directory’s Page 1 and Page 2.

Xi Jinping and his China, and their conflicted relationship with Hong Kong – an unfolding Part 2 event: 3

Posted in macroeconomics by Timothy Platt on August 12, 2019

This is my third posting offered as part of an in- the-news analysis of current events in Hong Kong, as they revolve around the deep seated sources of conflict that exist between that former British colony, and China’s Beijing government (see Part 1 and Part 2.) And this sequence of postings is itself, a continuation of a pair of related postings that I initially offered in 2014 as part of another series, that reported on and analyzed a series of events that I would refer to here as the Part 1 that I name these postings in terms of: Hong Kong’s Yellow Umbrella Movement (雨傘運動) and its protests over China’s Beijing government and their Communist Party, interfering in and suborning local Hong Kong elections in order to put their hand-picked candidates in office there: Hong Kong’s current most senior executive branch government official included: Carrie Lam. And now there are protests in the streets and beyond as well, as Xi Jinping’s Beijing government, and Carrie Lam and her government have sought to fundamentally suborn the rights of Hong Kong citizens to fair and impartial trials if they are brought up on criminal charges in Hong Kong itself.

I wrote my earlier, 2014 postings: An Inserted News Update re Hong Kong and an immediate continuation of that, with a real sense of trepidation, thinking back to the events leading up to the 1989 Tiananmen Square protests and the crackdown and massacre that ended that ordinary citizen-based reform movement attempt. Would Xi Jinping follow the same type of violently repressive course that his predecessor in power, Deng Xiaoping did in Tiananmen Square? Deng and the people who he had to work with and accommodate in shared power, looked back to the days of Mao Zedong and to his use of repressive power as a means of societal control. And they thought that if they acted according to that pattern, as was used in initially building the system and the power base that they relied upon, they would achieve similar results. But the China of Mao’s days was cut off and isolated and it was possible to carry out massive repressions, and certainly in more isolated areas of their country and no one would see, from the outside. No one, they thought would care.

Then Deng began to open up China to the world, reaching out to potential friend and foe alike in order to reshape his own and China’s images, and the conversation that took place around both. Xi has if anything, tremendously expanded that opening up and way beyond what his predecessors since Deng could achieve. And that has helped him to advance his China Dream: his personal legacy building dream and ambitions. But that opening up has also ripped away any possible veil that a Mao might have tied hiding his more repressive measures behind: a veil that was already gone by the time of the Tiananmen Square massacre, and that could not conceivably offer any cover now in 2019 and certainly in a globally visible international port city such as Hong Kong.

So I wrote my recent Parts 1 and 2 postings on the turmoil in Hong Kong, with a greater sense of confidence that reason and a search for calm would prevail, than I felt when writing my above-cited 2014 postings, and certainly as cooler heads did prevail then. But more recent events that have developed since I wrote and posted them have given me pause for thought and cause for concern again. I am not so sure that reason can prevail this time, at least long-term, and even if Xi’s government did try to bring the Yellow Umbrella Movement protests of a few years ago to a peaceful end, avoiding direct conflict and the prospects of escalating violence that neither Xi nor anyone else could simply turn off, once started.

• I am not concerned about the possibility that Xi or others in his government would set out to in some way intentionally create a larger scale and globally visible Tiananmen Square massacre, Part 2. I see that as beyond the realm of possibility and certainly where intention could shape actual realized events.
• I am not even particularly concerned that Xi and his government would display the possibility of more intentionally planned out use of military or other large-scale force as a visible Plan B, and certainly when that force capability is still an hour and more from Hong Kong by airlift, and even if elements of his People’s Liberation Army have been carrying out large scale antiterrorism exercises and visibly so as briefly discussed in Part 2 here. There, a display of force can remain just that: a display and without any follow-through beyond that.
• But I do, however, feel real concern that Xi’s and particularly Carrie Lam’s brinksmanship efforts to suppress what have become larger and more widespread protests, and with no end in sight to them, might lead to escalating violence with police and even local-to-Hong Kong, Chinese military garrison involvement that they cannot simply rein in and stop once started – until that is, they have that massacre Part 2 event to deal with.
• I am concerned about the possibility of Xi and his military and his government, and Lam and her puppet government and her available forces, taking steps that carry ever-increasing risks that they cannot contain, with that too likely leading to escalations that they would in retrospect find worse than those arising from the Tiananmen Square massacre itself. Brinksmanship as policy and practice creates too great a risk of accident and of unintended action and reaction, and with what in this type of context would be explosive results.

I add here that the 74th Army Group that is providing the troops and support systems for carrying out those antiterrorism exercises, has a storied history that prominently includes their having active fought in what in the United States, is called the Korean War. When Chinese forces entered North Korea in that conflict, to prevent the military annihilation of Kim il Sung’s forces, most of the Chinese forces that the American and South Korean military faced were drawn from the 74th. And elements of the 74th have actively invaded the northern reaches of Vietnam, most recently in the years after American forces were withdrawn from the area as an end to the United States, Vietnam War, doing so as part of a show of force to demonstrate China’s authority in the region, and in order to “correct” what the Beijing government saw as “border irregularities”. But while units from a wide range of army groups were involved in the events that we know of as the Tiananmen Square massacre, that did not include any direct involvement or participation of elements of the 74th. That, along with their willingness to fight if so ordered, that is so central to the 74th’s history and tradition, was undoubtedly a significant factor in the selection process when deciding which People’s Liberation Army units would do this. But simply deploying and involving military units that are free of any taint of Tiananmen Square involvement themselves, cannot do much to change either the levels of risk that these exercises create as an obvious threat message, or the marketing message that deploying them in particular, might hold for the world at large.

I stated above that the current unrest in Hong Kong is continuing without any let-up and in fact at a seemingly ever-increasing level of intensity. And that in fact is true, with protests impacting on transportation and communications systems and in fact on essentially all of their basic infrastructure systems – and certainly where this would visibly impact upon a deeply involved globally spanning international community that is grounded in trade through Hong Kong. For some recent news references in support of that contention, see:

Chinese Official Warns Hong Kong Protesters Against ‘Color Revolution’,
Protesters Plan to Swarm Hong Kong’s Airport, a Symbol of Efficiency,
Hong Kong Protesters Descend on Airport, With Plans to Stay for Days,
Hong Kong Protesters Defy Beijing Warnings, as Police Fire Tear Gas and
Hong Kong Protesters’ New Target: A News Station Seen as China’s Friend.

Officially China has sought to redirect any possible blame for this conflict happening, away from itself and away from the decisions and actions of their hand-picked executive official in place in Hong Kong: Carrie Lam. And in keeping with their current trade war tensions with the United States, as initiated by the president of the United States, Donald Trump, this has included their making accusations of Hong Kong’s unrest, arising as a consequence of US meddling. See, for example:

China’s Theory for Hong Kong Protests: Secret American Meddling.

But ultimately this conflict all arises from two sources, both of which are or at least were under the control of China’s Communist Party, their national government and Xi Jinping himself:

• Their insistence of managing and even overtly taking control of Hong Kong’s local elections, when they first installed Carrie Lam in office there, leading up to and causing the Yellow Umbrella Movement,
• And their insistence on continuing to support her and even when that means their supporting decisions and actions that can only cause harm to the current leadership of China: Xi Jinping himself, and his hopes for fulfilling his self-perceived destiny as a great leader.

I have not worked with a national government as a consultant for a while now, and I have never served in that capacity in any dealings with China and their government or Hong Kong, which I intentionally label here as being separate, still. (Just ask Hong Kong’s current protestors if you are uncertain as to why I would make that distinction.) But that point of detail acknowledged, if I were to take on a work assignment of that type now and in China, and if I were asked for my advice as to how to actually end this current and ongoing predicament, I would most likely at least start that by suggesting that:

• While Xi and his government want to see people elected or appointed to positions of power in Hong Kong, who would look and act favorably towards China as a whole and its Party and government, the price for that is too high if it means Beijing having to overtly install a local Hong Kong leader. Such an act can only serve to poison any possibility of that leader ever being accepted as anything other than a puppet, owned by and controlled by Beijing.
• So whatever her expected positive value or virtues as seen from Xi’s perspective, Carrie Lam started out in her current office as a liability and as a toxic one. And the fact that her election essentially immediately led to the Yellow Umbrella Movement and the fact that the tension and unrest that erupted then has never really gone away since then, and the fact that it has erupted again and with even greater force now – and specifically as a consequence of her continued actions, should be telling the decision makers in Beijing something.
• Xi Jinping has his China Dream, and it is solidly grounded in an at least partly fantasized vision of China’s golden age of power and influence, and of respect as achieved in the days of the Great Qing when that dynasty and its China reached a zenith of authority and position and both regionally and even globally. But if he can only see his legacy building vision in terms of recreating this Qing dynasty dream, and if he cannot avoid getting caught up in the snare of its here-and-now unrealistic details, what can and will come of his own China Dream as a whole?
• At the risk of being presumptuous, I would cite by way of advice here, a passage from one of China’s historically most revered documents: the Tao Te Ching, to the effect that a little fish, overly handled soon spoils. Hong Kong is no little fish, but it is small in comparison to the sweep of Xi’s ambitions, and of his dream. And if his manhandling of this continues, the stink that comes from that spoiling will spread out globally, and with consequences to match.
• This is a time when Xi and his government should step back, disavowing a disaster of their creation, with positive measures replacing them in support of Hong Kong’s rights under the terms of the treaty that returned this vital port to China in the first place. And as a first step there, Xi and his government should disavow themselves from Carrie Lam, offering her in private a way out and even if that means offering her a less visible or impactful paid position in Beijing or some other mainland city. And they should open up the process of replacing her as a presumably Hong Kong leader, with a more open, involving and transparent process – and even if that would mean their facing a replacement who would at the very least start out more confrontational towards them than they would like.
• The treaty that China signed with Great Britain as part of the handover of Hong Kong to their ultimate control, is set to continue in force until 2047. Xi and yes, his successors in power have time and reason to take a long-game approach here and to look and think and plan much further forward than they seem to be doing now, for the self-defeating short-sightedness they seem to be showing now.

Do I expect any of this to happen? No, not now and certainly given the way events continue to unfold and both in Hong Kong and as coming from mainland China as well.

I expect to add a fourth installment to this progression of them in the coming weeks as Hong Kong has become Xi Jinping’s kryptonite, to cite a reference from Western fiction. Meanwhile, you can find this and related Xi-oriented material at Macroeconomics and Business and its Page 2 continuation.

Planning for and building the right business model 101 – 44: goals and benchmarks and effective development and communication of them 24

Posted in startups, strategy and planning by Timothy Platt on August 10, 2019

This is my 44th posting to a series that addresses the issues of planning for and developing the right business model, and both for initial small business needs and for scalability and capacity to evolve from there (see Business Strategy and Operations – 3 and its Page 4 and Page 5 continuations, postings 499 and loosely following for Parts 1-43.) I also include this series in my Startups and Early Stage Businesses directory and its Page 2 continuation.

I have been discussing three specific possible early stage growth scenarios that a new business’ founders might pursue for their venture, in recent installments to this series, which I repeat here for smoother continuity of narrative as I continue addressing them:

1. A new venture that has at least preliminarily proven itself as viable and as a source of profitability can go public through an initial public offering (IPO) and the sale of stock shares. (See Part 33 and Part 34.)
2. A new venture can transition from pursuing what at least begins as if following an organic growth and development model (as would most likely at least initially be followed in exit strategy 1, above too) but with a goal of switching to one in which they seek out and acquire larger individually sourced outside capital investment resources, and particularly from venture capitalists. (See Part 35.)
3. And a new venture, and certainly one that is built around a growth-oriented business model, might build its first bricks and mortar site, in effect as a prototype effort that it would refine with a goal of replication through, for example a franchise system. (See Part 36 through Part 39.)

I initially focused on those business development models themselves, with a goal of fleshing them out with the types and levels of detail needed for purposes of this series and this portion of it. Then I continued discussing and analyzing them as working examples of how a business’ founders and managers would more likely address a specific set of business performance requirements that they would face when working to make their specific enterprises succeed:

A. Fine tuning their products and/or services offered,
B. Their business operations and how they are prioritized and carried out, and certainly in the context of that Point A and its issues, and
C. Their branding and how it would be both centrally defined and locally expressed through all of this.

I have already at least touched upon all three of these functional processes and the goals they would be directed towards achieving, since Part 39 and leading up to this posting, focusing on Points A and B in those five series installments. My goal here is to continue this line of discussion by focusing in at least some detail on the above Point C, turning back to reconsider Points A and B in its context as needed. And in that:

• Think of Points A and B as addressing the issues of what a business does and how, and Point C as addressing how that business presents the fruits of that combined effort to the world.

And with that noted and my above-repeated business development models in mind, I begin to more formally address Point C and its issues by posing a set of three basic if essential questions:

• What constituencies and potential constituencies would ventures following each of the above-repeated business development approaches need to effectively reach out to and connect with?
• What basic messages would they have to convincingly and even compellingly share with those audiences, to create value for themselves from their marketing efforts?
• And where and how would they best accomplish this?

Interaction and two-way communications, of necessity, enter into all of these questions and into how they would be understood operationally, and addressed. And I begin considering the first of these questions with that in mind, by noting that the constituencies and potential constituencies that it cites, fit into at least two fundamentally important, distinct groups: at least potentially business and business model-supportive stakeholders, and outwardly-connected and response-connecting marketplace participants.

The first of those groups are effectively defined by the business development strategy that is being attempted if not already actively pursued, and certainly for purposes of this discussion with its topical focus. And to take that out of the abstract, let’s begin by considering my above-offered:

Development Scenario 1 (the would-be IPO business): Any business that would go IPO has to be prepared to secure the positive support and recommendation of a set of potential high level investors and investment influencers, as key early participants. And I begin discussing that by noting those influencers: stock market analysts and particularly those with real followings. They more generally do not any put any of their own personal financial skin in this game as they make their investment recommendations; they do not generally run out and buy shares in the companies that they positively recommend, as most respectable stock market analysts would see their own investment in a business that they have just recommended others to buy, as representing a conflict of interest challenge that they would rather do without. But they do offer more immediate business valuation and longer-term value-prospects analyses that others would and in fact do pay close attention to. And their analyses and reviews can go a long way in establishing the price per share that an IPO would at least initially go for, with the aggregate total valuation as determined from that for all shares offered, serving as a benchmark valuation of the business as a whole, at least for that day.

For an explicitly investor example, I would cite larger institutional investors and aggregated publically traded funds managers, and particularly those who seek out new ventures to add to their funds’ portfolios. Early adaptors can be crucially important there, and word of mouth, viral marketing is important there too where large numbers of individually smaller investors can play a determinative role in how an IPO roll-out proceeds and for what comes of it as an initial public evaluation of a new business and its overall value.

I have only touched upon a few of the business development-oriented stakeholder categories here, that an IPO-facing new venture is going to have to successfully reach out to if its IPO is to really succeed for it. But this should suffice at least for here in this phase of this overall line of discussion. Bottom line, all of the stakeholders types that I have even just briefly made note of here, as well as others that I could have delved into, are going to be looking for secure places that they can invest portions of their available liquid capital in, and with at least reasonable prospects for gaining positive returns on investment from their buying into this new business. And this brings me directly to the market-facing side of my Who-oriented first due diligence question as offered above, and the importance of coordinately marketing to that group of stakeholders too: purchasing consumers and end users.

That last statement could very reasonably be seen as my opening a door to a more general discussion of marketing per se and at all levels. But for purposes of this narrative, I would focus on how early marketplace outreach from a new venture, and early market-sourced response back to it, can and does fundamentally shape how potential business development-oriented stakeholders as just discussed, respond to a new business investment opportunity, or even if they do so at all.

Investors and investment influencers look for new businesses that have a real potential for success in their markets. Let me stress that point by noting that I am not necessarily saying that they look for already-achieved marketplace success and certainly at the level of revenue flows already achieved and profits reaped. Google, famously all but took over the search engine side to the online experience and for huge widespread demographics of internet users, before they really determined how best to monetize this reach and influence as a realized flow of profits and overall fiscal strength. But their early success at becoming the leading search engine, and globally, brought them tremendous cash infusions and positive marketing spin from day one of their first day of trading as a new IPO.

• Market impact and marketplace success drive investor decision making.
• And certainly in an IPO context, where vast amounts of liquidity as capital investment funds are at stake, visible success in securing the backing of investors can only serve but to enhance and strengthen marketplace position too, and for what that can say about rapid growth potential if nothing else.

I am going to continue this discussion in a next series installment where I will turn to consider my second, venture capital-backed business development scenario, from the perspective of this same Who question. Then after completing that, and continuing on to address the third above-repeated scenario as well in light of that same question, I will address the remaining two questions that this Who question came with, in a similar scenario-by-scenario manner.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 5, and also at Page 1, Page 2, Page 3 and Page 4 of that directory. And you can find this and related material at my Startups and Early Stage Businesses directory too and at its Page 2 continuation.

%d bloggers like this: