Month: November 2005

My cousin Douglas is blessed with two young daughters, a wonderfully warm wife, and a 21-year-old au pair from Brazil named Sabrina (photo).  Sabrina spent three years at university in Brazil before coming to the U.S., but she studied business rather than English.  The result has been some rather surprising conversations.

“Doggie, I need a ride to [English language] school,” Sabrina said one morning.

Once Doug and Sabrina were alone in the car, Sabrina mentioned that she wanted to talk about her thesis.

“Doggie, I need to fok.”

“Excuse me,” my cousin replied.  “Could you say that again?”

“I need to fok.”

They went back and forth for awhile until Doug remembered that Sabrina had a habit of dropping the last syllable of a word.

“Do you mean to say ‘I need to focus’?” Doug asked.

“Yes!  Exactly.  I need to focus.”

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Suppose that a hedge fund promises to return, say 20 percent annually, regardless of whether the market goes up or down.  There are lots of such funds that promise big returns without too much risk.  Now consider the situation of the managers of General Electric. As of October 29, 2005, finance.yahoo.com shows that GE has a return on equity of 17.62 percent annually. If the managers of GE believe the claims of the hedge fund managers, wouldn’t the best thing that they could do for GE shareholders be to sell all of GE’s businesses and put the money into the hedge fund returning a risk-free 20 percent? Even Microsoft only shows a 12.6 percent return on assets and 19.93 percent return on equity. Only Google, the world’s fastest company to reach $1 billion in revenue, beats the hedge fund geniuses, with a return on equity of 22.8 percent.

What am I missing?  Why don’t most big companies sell all of their business units and put the $$ into hedge funds?

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My cousin got tickets for a lecture by Stephen Hawking at Oakland’s Paramount Theatre last Thursday night.  The venue is gorgeous, by the way, and anyone visiting the Bay Area should try to attend at least one performance here.  The 3000 seats were just about sold out.  The lecture began with a gushy woman from a local science museum thanking the sponsors.  This struck me as odd because, at almost $100 per ticket, the audience had paid more than $200,000 to attend.  Even in an era of cosmic inflation, I couldn’t figure out how $200k wouldn’t cover expenses.  Hawking was wheeled out on stage after this intro.  He controls the sequence of text strings being fed into a speech synthesizer via eye blinks.  Unlike at most computer nerd conferences, there was no TV camera pointed at Hawking and no projection of his face, so folks sitting more than a few rows back couldn’t really see what he was doing.  Hawking’s lecture was a 45-minute explanation of Cosmology with PowerPoint slides and was very sketchy.  If you had not read a book such as Simon Singh’s brilliant and clear Big Bang recently, you’d have learned almost nothing.

The question and answer period at the end was a little more interesting.  Hawking selected from previous interview questions for which he had already laboriously prepared answers.  His favorite show on American television is the Simpsons.  He hates George W. Bush for (1) wanting to send humans to Mars, and (2) wanting to limit Federal funding for research on new stem cell lines.  I thought that this hatred for W. was odd.  There are a lot of wasteful things that the government does, and few of them are as much fun as a mission to Mars (I hope that they send old adventurous private citizens rather than government employees whose death will plunge us all into mourning).  The anger over the stem cell funding debacle made even less sense, being so far outside of Hawking’s research area (you could argue that it is within his personal area, given that he suffers from ALS, but (a) Hawking is very old and basic research is unlikely to prove helpful within his lifetime, and (b) scientists pride themselves on being dispassionate).

Let’s review the reality of stem cell research funding in the U.S.  The Federales won’t fund research on new stem cell lines, only on old ones.  This leaves folks who want to work on new lines with the following options:  (1) a $3 billion fund established by the State of Caliornia for stem cell research; (2) the $billions in private biomedical research funding from foundations such as Howard Hughes Medical Institute; (3) the $billions in private biomedical research and development funding from drug companies such as Merck.  If working on stem cells is an automatic path to results and glory for researchers and funders, it would seem that quite a bit of money is available.  Why then get so angry with W. for having an opinion?

One possible explanation:  Solidarity with other scientists against laypeople.  The idea that a layperson could have an opinion and interfere with scientific funding decisions is anathema to a fraternity of scientists.  Today the boneheads, lacking even a basic Ph.D., are questioning the need for research on new stem cell lines.  Maybe tomorrow they will start questioning whether it is wise to spend $100 billion on a new accelerator to study inflaton particles.

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One of the things that I did down in Silicon Valley was attend a lecture by Alan Cooper, notable for his authorship of the book About Face in 1995 and his criticism of exposing the hierarchical file system and the RAM/disk distinction to end-users.  Cooper’s latest project is “ending the death march”, figuring out how to fix the chronically broken process of software development.  Cooper starts from the proposition that software development projects are opaque to management, generally failures, and therefore management underfunds and understaffs them, hoping that, if failure is inevitable, at least it will be a cheaper failure.

Cooper wants to see interaction design, the software’s behavior, made more explicit in the design.  He notes that he has met two kinds of programmers in this world: (1) those who like to get stuff right, and (2) those who like to ship product and get it into users’ hands.  His proposal is “the Triad” in which three kinds of people are given equal status on the project:  Interaction Designers, Design Engineers, and Production Programmers.  The design engineers figure out how to get state of the art technology and algorithms into the product and they may write a lot of test code that will eventually be chucked.  The production programmers handle all of the edge cases and compatibility/installation/deinstallation concerns.  He presented a lot of graphs for CEO-types about measuring return on investment at various stages.  I didn’t understand these.

I personally enjoyed seeing Cooper’s elevation of interaction design.  In the course that we teach at MIT, we try to hammer into students the importance of planning the data model (what can be represented in between clicks and sessions) and page flow (the interaction design itself) before writing the pages.  For all too many systems, the interaction design is only specified implicitly in a huge pile of CGI scripts or whatever.

The question for commenters is “Do we believe that changing the management process can fix software development?”

Let’s look at some potential arguments against Cooper’s proposal.

First, it is unclear that the average software project is underfunded or understaffed.  The U.S. govenrment regularly throws $billions at seemingly fairly simple software projects that a handful of expert programmers ought to be able to do by themselves.  A typical project has lots of mediocre programmers on it whose contributions are negative.  In this sense, the project is clearly overstaffed because it would go faster if you fired 50 percent of the people.

Second, the fundamental tools and debuggers for software have changed but little in 50 years.  During that time, many tens of thousands of organizations have executed software development projects.  Among these tens of thousands of organizations, every conceivable management structure has already been tried.  If there were a silver bullet, it would already have been discovered by one of these companies, perhaps randomly, and then propagated to the world at large.

Third, when genuine progress has been made in software development productivity and software quality, it has come from improved tools such as SQL (a declarative language that replaced a lot of unreliable and unreadable imperative code).  Maybe the reason software development projects fail is that we’re using the same tools, the programmers have the same IQ as in decades past (or perhaps lower as the smart ones trot off to professional schools), and the requirements have become more complex.

Fourth, when you see a company whose products are better than competitors, it is usually because they have programmers with higher IQs, not a magic management technique.  Google has the smart people; the federal government (and its contractors) has the dullards.  Google gets innovative stuff out on time; the federal government ends up years behind schedule on a simple rewrite.

Fifth, over the life cycle of a software product, we already almost have the kind of structure and division of labor proposed by Cooper.  The programmers who like blazing new trails, albeit somewhat sloppily, show up on Day 1.  They solve the hardest algorithm problems and get a working v1.0 out the door.  By the time v3.0 is shipped, natural turnover within the development group has resulted in the code being worked on only by production programmers who like methodically sweating the details.

Some arguments in favor of Cooper’s proposal:

Managers of software development projects tend to be so incompetent and lacking in information that they can’t recognize and reward the strong contributors (this results in the best programmers getting paid only 20-30 percent more than the mediocre ones (compared to a 500 percent ratio in most areas of law, for example)).

Making the interaction design explicit makes it easy for decision-makers to evaluate whether programmers are accomplishing anything.

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A few random quotes from Californians…

“The state of software is such that we now have toilets that understand when a person is standing in front of them, but not computers.” [computer-human interaction expert]

“McAfee Coliseum” [sign on the enormous baseball stadium in Oakland; there are so many security holes in Microsoft Windows that you can earn enough money to sponsor a stadium by attempting to paper over the C programmers’ bugs]

“I picked the navigation system that I liked and then bought the car that came with it.” [computer-human interaction expert; car turns out to have been the Acura RL]

“The avocados are from the front yard; I just picked them up from the driveway.  We have another 100 in the garage if you want some.  The orange juice is from the back yard tree.” [Nobel Prize winning physicist and suburban farmer in Palo Alto]

“We could have airline service and even 747s on the 10,000′ runway at Moffett (old military field in Mountain View; very lightly used by the government now), but the City of San Jose spends a fortune lobbying against it so they can continue to collect fees at the San Jose airport.” [Flight instructor at the Palo Alto airport.]

“I’m going out to a company party.  Unfortunately most of the people there will be programmers.  They’re just the dullest people in the world.  It is even worse because I’m a woman and they are afraid to talk to women…. I hope that you’re not a programmer.” [Software marketing executive sitting next to me on American Airlines.]

Last night:  Good night and good luck with my friend Toby (aged 76, so she lived through the era).  We both enjoyed it.

Tonight:  Some sort of multi-media lecture by Stephen Hawking at Oakland’s Paramount Theater (my cousin got the tickets).

Tomorrow:  Hacker’s Conference in Santa Cruz.

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Here is a 51-minute audio clip of me talking about the SmartPhone + Dock >> PC idea.  (I think that the first portion of the MP3 has to do with BayCHI administration announcements.)  If you hear background noise, it is people walking out of the somewhat hot and stuffy room.  The speaker who preceded me was scheduled to talk for 30 minutes, but spent 1.5 hours going through a PowerPoint presentation.  Edward Tufte likes to remind people always to end early, but apparently not everyone heeds his advice regarding this or the evils of PowerPoint.

Normally I try to delete comments that fall into the “this sucked” or “this was great” category (on the grounds that other readers have already consumed the posting in question and aren’t interested in someone else’s opinion of its quality, but only in an alternative perspective on the same subject).  In this case, however, I’d appreciate some feedback on whether this kind of audio clip has value to readers/listeners.  If people love it, perhaps I’ll try to do more.

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I’m off to California and Mexico for three weeks, but thought that I would stick in a reminder to folks who are staying in Boston to drop by the Museum of Fine Arts.

Ansel Adams is the big show right now.  The photographs are drawn from a private collection and include lots of stuff we haven’t seen before.  It is not just “one damn mountain after another”.

MITers will love the two shows that can be loosely categorized as “stuff belonging to William I. Koch.”  Koch was the scion of a Midwestern oil family, studied chemical engineering at MIT, won the America’s Cup sailboat race the first time he entered, and built up a big energy business for himself.  Koch has a house on the Cape and a tax-avoiding residence in Florida, both normally filled with fantastic art treasures from 500 B.C. through contemporary.  It is not a huge collection, because everything has to fit in the two houses, but the Picassos and Modiglianis are familiar.  There is a comprehensive Western collection of Remington sculpture and Russell paintings.

Koch loves boats and therefore the museum has a couple of America’s Cup entrants mounted on poles in the front.  Koch also owns models of nearly every yacht that has ever raced in an America’s Cup.  The models are displayed on the first floor.

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Some friends were discussing Radcliffe College the other day.  When Harvard College, its sibling institution within Harvard University, decided to accept female students, the school was left with a huge endowment and no students.  The bureaucrats running Radcliffe responded by running a fellowship program for female scholars, nearly all of whom were older than college age and working on obscure academic subjects.  Radcliffe faded into oblivion and eventually most of their endowment was stolen by the larger university.

Could they have done something different with their hundreds of millions of dollars?

My idea was that they should have aggressively shucked off their reputation as a snobby northeastern school for rich girls, but kept their mission of educating women aged 18-22.  The growth in U.S. population is happening mostly in the Southwest so the new Radcliffe would be there, perhaps in Phoenix, Santa Fe, or Los Angeles.  To ensure that the graduates took up powerful places in society, the school would have only three majors:  Pre-Med, Pre-Law, 5-year MBA.  To make sure that the press and the public would recognize the new demographic, the school would accept only “women of color”.  No white or Asian-American students would be permitted to apply.

The new school would have been called “Radcliffe Southwestern Pre-Professional College for Women of Color”.  Compare to what they are actually doing these days: http://www.radcliffe.edu/ .

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Approaching his 70th birthday on December 1, Allen complained that ageing was a “terrible thing”. “It’s all just bad news. You deteriorate physically and die!” he said. “All the crap they tell you about — you know, dangling your grandchildren on your knee, and having a kind of wisdom in your golden years — it’s all tripe,” he said. “I’ve gained no wisdom, no insight, no mellowing. I would make all the same mistakes again, today.”

Source: “Sex scandal was my luckiest break, claims Woody Allen”, Sunday Times, November 2, 2005

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The October 3, 2005 issue of Fortune magazine carries a “wall street: special report” called “The Money Game” by Marcia Vickers. This details the investment strategies of David F. Swensen and Jack R. Meyer, who managed the endowments of Yale and Harvard, respectively. While most mutual funds that pick stocks underperform indices, both schools have consistently earned a much better return than the stock indices. How did they do it? Below are their allocations.

Note that Harvard’s total is 105 percent because of leverage, i.e., situations in which they’ve borrowed money to purchase investments. Conspicuously absent from these portfolios are heavy investments in American companies run by Harvard and Yale graduates. “Domestic Equity” are publicly traded stocks such as GE and Microsoft. Harvard and Yale have faith that their graduates will make a lot of money for themselves, but no faith that they will make money for their shareholders.

	Harvard	Yale
Domestic Equity	15%	14%
Foreign Equity	15%	14%
Private Equity	13%	17%
Fixed Income (bonds)	27%	5%
Real Assets	23%	25%
Absolute Return (hedge funds)	12%	25%

 

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