So, time to change the theme to something that is more interesting for me. From now on I’ll be focusing more on things that I am really passionate about: music, science, technology and the digital future. Stay tuned.

• The netbook. People already have portable devices suitable for reading news in web format. What is the real benefit of having to drag around yet another device?
• You might argue then, why a book reader is OK while news reader is not? Well, there are 2 things: 1) people rarely read more than a few articles in each newspaper so the need for paper like display is questionable 2) book reader is small form-factor while news reader is large form-factor. And then again, you don’t carry around dozens of magazines or papers so the usage scenario is totally different from book reader one.
• Price. There is tremendous amount of information available online, so why pay for it? If you really want to have the occasional paper, just pick one up as a paper version. No need to carry around another gadget just in case.

I understand this incentive from monetary perspective, as moving content to digital distribution channel might make for huge saving in the future when the whole logistics involving printing and distribution could be cut down. But once again, a good idea really should have more into it than the idea itself. Just take a deep look into the consumer behaviour and current capabilities to get the information they need and a dedicated device could be rendered pretty useless. You know, people are using their phones to listen music and web browsing and there must be a reason for that. And that reason is to not having to carry around so much stuff.

Also, these figures have some additional skew, since the return rate of Xbox 360 has been, according to some sources, as high as 33% in the early life of the console. I repeat, 33%. The return rate of PS3, according to retailers, has been around 1% (with some reports referring return rate of 0.2%). So if you add all this up, actually PS3 has been performing better than Xbox 360 both based on pure numbers, but also in terms active consoles due to the marginal return rate. Remember, sales figures normally quote the number units that have been put into the distribution channel.

While I own a PS3 as it makes a good Blu-ray player and DLNA client, I have no preference whatsoever regarding which console performs better in terms of sales. However, I find it very annoying that people who are paid for doing their job, can not even perform the simplest math and are making big headlines with information that is either intentionally biased or simply overlooked.

Why is this a good idea? Well, it tackles some of the problems with print-first newspapers:

• Low production costs with hyper-local targeting due to print on demand, that makes possible highly targeted advertising with substantially lower prices than traditional printed media
• Engaging readers to the actual publication process that hopefully makes the paper more interesting to the readers
• True web to print approach. Not only is the content pulled from the web, the paper can also take advertising directly from advertisers’ online campaigns, thus making ad production cost for print version practically zero
• A concept that can be rolled out, not only nationally but also internationally, without stellar costs

While I’m skeptical about the success of this effort (hey, it’s part of my nature!), I am certain that this concept has some truly great implications on how the future of printed media could look like.

From the opinion piece by Mar-Vic Cagurangan in Business Mirror:

There is nothing like the traditional ink-on-paper with full-time nosy reporters, wielding the good old pen and notebook or voice recorder, spending hours in the courthouse or the session hall, hunting stories day in and day out, annoying people with persistent phone calls. That’s not cheap.

“What is cheap,” New York columnists Ellis Heican writes, “is some self-absorbed nitwit sitting in front of a computer in his bathrobe, stealing the facts that some hardworking, lowly-paid newspaper drone just spent hours collecting.”

And to continue along the same lines, Paul Mushine writes in Wall Street Journal:

The problem is that printing a hard copy of a publication packed with solid, interesting reporting isn’t a guarantee of economic success in the age of instant news. Blogger Glenn Reynolds of “Instapundit” fame seems to be pleased at this. In his book, “An Army of Davids,” Mr. Reynolds heralds an era in which “[m]illions of Americans who were in awe of the punditocracy now realize that anyone can do this stuff.”

No, they can’t. Millions of American can’t even pronounce “pundit,” or spell it for that matter. On the Internet and on the other form of “alternative media,” talk radio, a disliked pundit has roughly a 50-50 chance of being derided as a “pundint,” if my eyes and ears are any indication.

So, what is the faulty logic behind these opinions? To begin with, we need to bring up a couple of issues that have been arising lately. First of all, the problem with newspapers is not the end product itself. The problem is the unsustainable business model in the long term and the fixed cost structure of running a newspaper. Consumer behavior has changed so the current model needs to evolve.

The business model as such is not dead end, however media spend is fragmenting as media consumption is evolving and current macroeconomic situation is actually turning something that was thought to be a cyclical downturn into real secular change in media mix of the advertisers. So there is a lot of money to be made, but sources of revenue are divided into small streams and are really hard to tap into, unless you have an agile organization with a flexible cost base. Does not sound like New York Times to me.

Secondly, blogs and “citizen journalism” might have started as a playing field of amateurs. However there is not any single reason why professional journalists could not start a blog, or some other form of online medium, on their own. I believe there always will be a need for high quality journalism, but it just might be that what we now call a newspaper is no longer the relevant medium for the online generation, nor is the one-size-fits-all general news portal.

There are many blog-like online services with high quality articles, very up-to-date information and experts in their respective fields. Sure, you have to follow a few dozen blogs around different subjects to have a same kind of “general media” experience you have with newspapers, but the upside is that the different specialized services have more and deeper content than any single general newspaper could afford to have. This is actually something that a newspaper simply cannot compete with.

From consumer, or reader if you will, point of view I get more out of my Google Reader than any single newspaper could provide: a broad variety of topics that are of my interest, 24/7 updated content and all of this for free. Heck, I can even link to the content I find interesting and promote it to others for immediate consumption in social services like Facebook and Twitter or simply sending it as a direct email or instant message if it involves some not so conventional humor. And all of these services also work very well via mobile handsets.

Regarding media going online, I think the prime example in Finland would be the rebirth of Uusi Suomi as pure online medium, with a different structure compared to traditional news media. I dare to say that no one would build anything like current newspaper companies, given the chance to build it ground up with current technology and in current multichannel consumer environment. Of course, there is a long way to go to reach the masses of Finland’s leading newspapers and newspaper web sites. However, when you do not have the burden of the past to drag along, you do not need to have massive readership (read: prospective eyeballs to look at the advertising) for achieving profitability.

And finally the usual argument that nobody is going to replace the work of paid journalists for free, is your grandfather’s argument. People are publishing massive amounts of content (or should I say intellectual property) for free. Enthusiasts have built an end-to-end computing environment for free. People are giving away arts and music for free. The thing is, generations change and with generations the culture is changing and dragging social changes along.

The cultural disruption enabled by the new technology is even more important than the technological one. I think this is something that goes totally forgotten whenever stressing the importance of technological change, although any self-respecting journalist should know the social and cultural effects of inventing the first truly efficient way to distribute information, namely the printing press. What we are now seeing is just as big change in the way information is distributed, whether it is a news article, classified ad, video on YouTube or some tweet on Twitter. Every bit of information can be shared, or broadcast, globally in real-time.

To sum it all up, I think there are a couple of things that are more real challenges within newspaper industry:

• Organizational inflexibility leading to suboptimal performance and inflated cost base. Consolidating operations in panic does not fix the underlying problems. How come each and every journalist promoting newspaper as a medium, underlines the cost of making a newspaper and somehow equals high cost with superior quality?
• Cultural inflexibility and resistance to change. It is the Internet’s fault! Well, no it is not. I think Clay Shirky made some very clever points about newspapers being like Russians in his interview in The Guardian. If there is something the industry really does not need is arrogant attitude towards the change.
• Losing touch with the online generation, and with that the cultural phenomenon. If you do not resonate with your audience (or worse, have none), how are you going to sell anything to them? Remember, the online generation of today are the media consumers and buyers of tomorrow.
• How do you compete with free (ad-supported or not) while being profitable? It is easy to fight free with free, but profitability is another issue. Maybe the traditional economics of scale do not work that well in online, except for ad networks. Is your cost base at the same level with the free competition? Probably not.
• How do you cope with the fact that cheap mass distribution of information is available to anyone? What is the real advantage of a newspaper if the news are in Twitter instantly and some professional blogger has an analysis out even before the ink has dried? Let’s face it: the newspaper industry no longer has monopoly on information.

I think these are tough questions and by looking at the situation, especially in the U.S., there are no answers yet.

The thing is, Google solution basically fulfills the need of smaller or medium sized business. No, the offering does not have all the functionality of Microsoft Office or OpenOffice.org. However, how many features does one really ever use? With Docs, working with basic documents is pretty straightforward. As a bonus, they are stored externally to the cloud, so there are no backups to make, and 25GB mail storage per account should pretty much be enough even for serious business use. There are also nice features for sharing and collaborating with integrated Google Talk that eases distributed and out-of-office work with Apps.

So far, the only problem for me has been offline usage. While I’m rarely totally offline (3G/EDGE works pretty much anywhere), I’d sometimes like to take the documents with me. Google Gears should fix this problem, but for some reason Gears does not function that well on Mac OS X. I think I’ll need to look deeper into that, but one can always export the documents for offline work and re-import them back. The ease of use compensates for that, as I already have two machines at home (a laptop and a desktop) and since the productivity tools are online, there is no need to sync any files to server storage – you always have up to date documents available in the cloud even when working on any temporary computer. No USB drives, no syncing, no copying – it just works.

I must admit that for a long time, I thought that online office suite would not work well enough for any serious use. Now, I think the online approach is only sensible way. Too bad this has not yet gained too much ground in the enterprise space as online tools could easily replace the basic Excel spreadsheets and Powerpoint presentations without the patch nightmares and biannual major version upgrades.

Next up is moving my web hosting to Amazon’s EC2 cloud. I’ll report back on the experiences as soon as I have the time to do it.

Michael Lockwood: The Labyrinth of Time. This book deals with the different explanations of time itself. For anyone who has gone deeper in the theoretical physics, time (or arrow of time) is one of the unsolved mysteries and it also has deep relation to my favorite subjects, namely entropy and causality.

Derek Parfit: Reasons and Persons. Parfit has good arguments against our traditional view on ourselves and our view on rationality and morality. I’m interested in human decision making process in general, so this makes a good read.

Kevin D. Hoover: Causality in Macroeconomics. This relates to my last post about causal business decision making. I need to understand the subject better.

C.G. Jung: Synchronicity. The other side of the causal coin. Jung’s argument for acausal connections of events.

J.G. Ballard: Kingdom Come. Fiction about the ultimate manifestation of consumerism. Or is it actually fiction anymore?

For Finns, I could also recommend Pekka Teerikorpi’s “Miljoonan vuoden yksinäisyys“, as it really is a good one about history of science. Not a traditional history book, but loaded with a scent of melancholy and exceptional way to connect events via cultural history.

More recommendations coming when I manage to get into some of my unread books, the pile is now about 150 centimeters high, and this is not a joke :-)

In essence causality can be described by means of logic so that from event A follows event B. To put it simply, from action follows reaction – the principle of cause and effect. Causality also raises a lot of philosophical questions, most importantly about the free will of humans, as the law of causality implies that effects are predetermined and such free of any decision making processes. The philosophical debate on causality has been going on for since the times of Aristotle so I’m not going to dig any deeper into that. I’ll just say that delving into the philosophy of causality is pretty mind bending and will cause a lot of sleepless nights.

So why I started thinking about this question in the first place? Well, I did not actively start thinking on it – rather the question asked itself when doing some thought experiments on business decision making processes, especially trying to predict the future conditions of given business.

Businesses put a lot of effort in crafting right investment portfolios and the process usually follows the same pattern: investigate market situation, try to predict how market develops, pretend to spot any white spots in the market and finally formulate a strategy and action plan according to aforementioned data. The problem with the process is that it never produces desired output. Why? We never really know for sure. A competitor did this, the market evolved as that and the consumer needs were those. But we really never know which bits of all things actually had an effect on our own market performance. We can try to understand, but in the end of the day, we do not know for sure.

The point is, it is totally impossible to try to predict the future using the numerical methods since it is also impossible to predict the past. Trying to tie things together using such coarse grained data is naive, as is even trying to analyze microscopic bits of data – there simply is too much information. Take consumer behavior. How is it possible to predict an adoption model for new technology? I’d say it is nearly impossible. It is not only the maturity of the technology itself, or its perceived usefulness to the consumer. There are so many microscopic level fluctuations that precise predictions are not possible. One can have absolutely fabulous technology and still fail in the marketplace and on another hand some mediocre offering can still beat the competition. Or both could fail due to lack of consumer interest, although the market data showed an explicit interest for our particular innovation. Well, maybe we asked the wrong people. Or maybe the consumers’ perception of the product was different from ours although we knew exactly what the consumer wanted using focus groups. Or or or. :-)

This was the thing that made me to try to understand causality. And out of that thinking I’ve come up with some conclusions, although my thinking is still evolving as I write this and I’m certain that I will change my mind about these as my own take on the subject matures.

First of all, instead of trying to predict, you should accept that trying to make precise predictions based on financial climate is quite useless, and in many ways dangerous. Secondly, market data gets you nowhere, it only limits your possibilities to succeed if you use market data as your dominant guide. Thirdly, you need visionary people in your organization in order to succeed. I’ll come to that later, as for me visionary means something else than majority of people. Or at least my understanding on the subject is starting to clarify.

I think I already described some of the problems with so called precise predictions. It is impossible to have precise view on what is going to happen if you do not even know how you got to the present situation. I’m not saying that one should not try to consider future possibilities, but one should not focus on finding the path instead of walking it. The problem with predictions is, that they will affect your day to day decision making processes and as predictions are based on fuzzy data, they will eventually guide you to the wrong place. And you do not even realize how you got there, since you trust the data.

To the second one is tougher one. Businesses tend to be overly focused on market data with monthly reporting of market share, tiny fluctuations in the cash flow and sales performance. While measuring business performance is of course very important thing, short sighted visibility of the data can easily lead too much to opportunism and making decisions with too much focus on current operative environment, lacking the possibility to evaluate the consequences on longer term. And it is the long term that really matters. It is you who should guide the company, not numbers or macroeconomic environment.

The third one is the toughest one. Many organizations focus on hiring the brightest talent in the market, with the delusion that having the brightest minds will produce the best outcome. This is usually wrong as leadership based purely on intellect will lead to implementing too much logic to the core of business, whereas humans, and such consumers and markets, are not logical. This leaves no room for risky innovation and easily leads to safe bets and protectionism. Instead, one should try to find people with a vision. Having a vision is not about having unrealistic view on the consumer needs, building a tunnel vision on opportunities, or egoism, but having true, intuitive, talent of seeing causal lines.

Since causality is something that you can not ever fully control, the only way to true success is the ability to see the future instead of predicting it. The ability to see causal lines is a gift, something some people (true visionaries) have and something that rarely, if ever, can be learned. Having a visionary leader also leads to have a solid vision and values, that resonate with the customers, to follow even when times get tougher. Visionary people tend to follow the vision, not market data. If one sacrifices the core values and vision of the company for short term suboptimal financial wins, the consumers will gradually be alienated and the game will sooner or later be over no matter what.

So the success very much depends on accepting the future as it formulates and adapting to the changes, not on trying to slow down market development and disruptions. Causality shares similar attributes with entropy in that it eventually wins the game.

So, that’s about it. I think this all started after so many healthy companies started destroying their future in the current economic turmoil and forgot why they actually exist, what is the purpose of the company. There are two exceptions to this, namely Apple and Google, that actually quite stubbornly follow their vision even in the slowing consumer demand and decline in media sales respectively. And they both are lead by visionaries. And they both are quite successful in what they do.

• Mobile, location aware, microblogging: systems like Jaiku automatically know from where you’re blogging. Your presence stream by definition is hyper-local. Multiply the amount of users in a given territory 24/7 and you have more local representatives able to publish events, realtime, than any news organization
• Flickr & YouTube: with current mobile handsets it is dead easy to upload videos and images to 3rd party services. You can attach these to your presence stream effectively becoming a multimedia reporter on the go. While the quality might not be as good as for professional reporters, at least I’d rather see events unfolding in realtime, not after all the interesting has happened.
• Technology investment: none. Just use existing services.
• Aggregating a local news portal: use Yahoo Pipes for regional filtering and a piece of PHP to put the RSS streams together and you have a graigslist of local news. With virtually zero investment.