Dan on March 19th, 2017

Back in July 2015 I wrote a post about how Apple looks like the next Microsoft.   I think the last year and a half as proved my theory to be on track, and I am seeing more and more articles in agreement.

The latest comparison?  In the early 2000’s, Microsoft was the leader in smartphones with its Windows CE platform.  Along came Apple with a better product and pretty much killed it off.   A few years ago, Apple had the lead with Siri, the voice virtual assistant that was far ahead of the competition.  Now, Siri may be running a distant 3rd, behind Google Assistant, and more importantly Amazon’s Echo.

How could Apple let Amazon take over the market for virtual assistants?  Echo now has a huge number of partners, and this years CES was dominated by Echo.  The Echo now has so many partners, I don’t see how Siri can catch up now.

I heard an interesting theory as to why successful companies such as Microsoft and Apple find it so hard to follow up a big hit with a successor.  The theory was that there are so many companies trying to find the next big thing, that it is rare for the same company to win more than once.  And companies that have an installed base to maintain and monetize are further distracted from innovating by managing their existing product line.  The theory assumes a fair bit of success involves plain old luck – though luck can be defined as ‘when preparedness meets opportunity’.

So I will continue to watch this interesting parallel playing out with Apple.   With all the big players in the consumer electronics market – I will be curious to see if Apple can find magic once again.

Dan on March 3rd, 2017

Snap (SNAP), best known for it’s SnapChat app, is the latest tech IPO, the largest since 2014.  I have never used the app, don’t really follow the company,  and for the most part feel like most people that this is way overvalued and may end up with the same painful stock price route of GoPro.   However, I did have a couple thoughts on  yesterdays IPO.

tacobell
  1. Yes, it’s likely overvalued, but they do have an innovative marketing angle which has the potential to unleash something big.  Snapchat allows you to put various filters on the picture of yourself, to make it more amusing to whomever you send the picture to.   Key to this is their ability to support sponsored filters – filters branded to the company developing the filter – an example of which is the Taco Bell filter on the right. Sure, its kinda silly (but this whole app that they built a 33 billion market cap around is pretty silly),  but as far as building brand awareness and ‘hipness’, it seems to me to be pretty unique.  Any company looking to strengthen its relevance should find this more intriguing than any banner or pop up ad.  Teenagers are the primary demographic for this app, so  it would be an interesting ad choice when promoting a movie and its characters, or other product aimed teens.  It is sure more interesting than  TV advertising, banner ads or popups.  It will be interesting to see if this gets traction, or if the founders of Snapchat find other innovations in advertising.
  2.   Economist Steve Liesman of CNBC had an interesting offhand comment when talking about the IPO.   He essentially stated this exemplifies what is wrong with the economy and why growth is so slow.  Snap is a company getting a 31 billion market cap,  bigger than Paccar and Nordstrom combined.   Snapchat has 1,200 employees – Paccar and Nordstrom combined have 95,000.   Snapchat has 550 million in long term assets (i.e. plant and equipment) – Paccar / Nordstrom have 9.5 billion in long term assets.  The new economy requires very little capital investment – which is great for 1200 people, but it siphons away capital from companies that spread it across the economy.  Maybe this helps explain why the Fed can’t get growth going even at near zero interest rates.

I won’t be following Snap closely, but it may turn out to be in interesting story going forward. It will be interesting to see if this is the next Facebook or the next GoPro.

Dan on February 21st, 2017

I have been critical of Microsoft’s strategy with Visual Basic for awhile now – it has been treated as a second class .net language, slowly falling behind C# as far as new features and functionality.  The official word was it would be separate but equal, but reading between the lines I felt it was on its way out.

Recently, Microsoft came out with a blog post clarifying the future of Visual Basic.

It appears Microsoft is going to position Visual Basic as a simpler, more straight forward .net language with the focus on new developers.  I think this is a great move.  C# is a great language, but with all the different features and constructs, it can be overwhelming for even seasoned developers.  We definitely need a language that is the gateway to c#, and  I agree that it makes sense to keep the feature set limited so new developers can understand the basics of .Net.  The world doesnt need two languages that do the same thing (which is how VB and C# have been competing).

An interesting quote from the article:

An interesting trend we see in Visual Studio is that VB has twice the share of new developers as it does of all developers. This suggests that VB continues to play a role as a good, approachable entry language for people new to the platform and even to development.

I have always enjoyed VB, and I also enjoy C#.  Because I jump back and forth between legacy apps (VB) and new development (C#), I don’t have a problem switching between the two.  So new developers that start in VB, once they understand .net and want more power, can start to switch to C#.  But if the developers are just running simple programs, or building forms over data, they will do fine in VB and can stay in VB.  Any C# developer that says they can’t code in VB is lying.. (and I have heard a few developers claim this..)  And its not terribly difficult to migrate VB.Net to C# if an application grows.

So kudos to Microsoft for defining this strategy.  I hope it works out for Microsoft, and they once again are able to capture the hearts and minds of developers.

Click on the link below to read the full blog post.

The .NET Language Strategy


Dan on February 9th, 2017

I am a fan of Twitter the product – I think it provides a unique niche for news and events in a time where more people are getting engaged in social networks.  However, this week I finally threw in the towel and closed out my position just barely breaking even.

Why? I am reminded of a quote I heard from Jordan Ritter on Triangulation.  To paraphrase, ‘the most important thing for an organization is a good team. A great team can be successful with an average product, but a bad  team will screw up the next Facebook every time’.

That’s how I feel about Twitter – great product, but the current team is not making the moves to make it work.   I had hoped when wunderkind Jack Dorsey returned as CEO, he would provide the leadership necessary to make the team move the product forward.  After a year and a half, I am seeing few signs of improvements.  And if you looked at the stock based compensation numbers for its employees, it looks closer like a pre-bubble bust company of the early 2000’s.  Factor in that earlier in the year several companies looked into buying Twitter, and all walked away after due diligence.

Hopefully someone will buy out the company and build a great product and make product enhancements to better monetize the platform and make it easier for new users to get engaged with.  I still think this platform has potential to be great, but I am on the sidelines until I see signs of a great team in place.

As we start a new year, I felt it was time to hold a mythical business meeting with the mythical marketing department here at Vertical Financial Systems (VFS).  A lot has changed in technology since VFS was founded, and I got to thinking about what the future holds for small business technology.

So I asked myself the marketing department – where will the small business spending on technology services go in the next few years?  Here are some thoughts that came out of that ‘meeting’:

Spending on business websites may be almost nothing going forward.  For a few dollars a month, anybody can spin up a website in WordPress at GoDaddy or SquareSpace or any number of providers, using pre-defined templates and designs.  No hiring designers, coders, system admins, nothing.  Just hire an English major (or better yet an intern) to write up your pages and you are in business.  In the 2000’s this was a pretty decent business for a large number of people, but I can’t see why most businesses would spend a lot of money on that anymore.

The rise of smartphones has made that platform the application platform of choice.  Unfortunately, it is still painfully expensive (as compared to web development) to build out an application.  Plus, you have to write it essentially twice – once for Android, once for IOS (though few people are writing for Microsoft anymore).  Software is slowly coming out to make this development easier, but I think we are still a few years away from getting the costs significantly down.  The pain isn’t only in your client’s pocketbook – trying to be an expert on both platforms is no fun either.

But I do think the phone is the future application development platform.  Websites may evolve to be just brochure sites – provide info about your company and service, but not heavy functionality for existing customers.  Stuff like checking order status and billing may still live on the web for light customer service, but the heavy application development should be on the mobile device where native access to GPS, email, camera, etc  is available.  Interestingly, in a previous post I mentioned I got a Wink Hub, and the only way to control that is via a smartphone app – there is no website application or login where it can be managed.  Perhaps the future is just starting to arrive.

Content creation should still be a big market – but not static website content, custom, relevant content pushed to your customer.   Information pertinent to your customer should be selectively pushed to their inbox or smartphone – special offers, account notifications and the like.  So getting content created uniquely for each customer, based on what you know about the customer, seems like the big technology winner.  In order to engage customers, the fusion of marketing and technology will need to be stronger than ever before.  Thinking about this reminds me of the launch of Internet Explorer 4 (circa 1997) – where the big talking point was push technology where you could have web pages pushed to your PC.  The vision was fatally flawed, as web pages were just beginning to be dynamic, and frankly nobody really wanted all that content stored on their PC.  Content deliver has to be smart and targeted.

So to summarize, Web applications are not the big growth industry moving forward, and smartphone application development is still too expensive for many small businesses.  So while we are in this technological transition, it probably is a good time to build up on push technologies, and work to make your existing applications smarter about what your customer or lead is interested in, and  push relevant content to your customers.  This investment will payoff regardless of what platforms emerge in the future.

Lots to think about in the coming year.   Regardless of what new technologies or trends emerge, as always there will be a lot of new things to learn and decisions to be made.

 

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Dan on January 18th, 2017

I have had a chance to tally up the results from my second year of solar panel power production.  When  I purchased the solar panels in 2015,  I had estimated a six year payback based on estimated production, and on the subsidies payed on power generated.  For 2016, I generated 3.45 megawatts, which was down 13% from 2015:

 

solar chart

Solar Power Generated 1/1/15 – 12/31/16

 

I am assuming the two primary factors for the production drop off is 2015 was a exceedingly sunny year make it hard to match, along with the gradual drop off in efficiency of the panels over time.  I will be surprised if following years show the same level of dropoff.  Interesting, this year showed better production numbers for the last 5 months of the year vs 2015, so that gives me hope that its not a panel issue.

In my payback analysis I had budgeted $2,098 of revenue a year, and my check for 2016 came in at $1,853.  So early on it looks like 6 years might be optimistic.  The other danger to the 6 year payback is the possible lowering of incentives on home power generation.  The money available always seems to be at risk,  but it appears possible that incentives will be less then originally estimated.   House Bill 1048 was introduced to finalize the incentives (see bill summary here) so a lot will depend on if this passes this year.  Interestingly, this bill does include incentives past 2020, which I did not include in my payback analysis, so that is a plus.

The maintenance of the panels has been a pleasant surprise, an occasional hosing off of the panels from ground level, and once or twice a year I get up on the roof and wash and squeegy them.   In the spring the pollen was pretty dense on the panels, and I did notice an increase in production after a cleaning.

On a related power note, while I was out checking power meters, I checked my usage meter and my usage was 8.4 megawatts, up 4% for the year.  This surprised me a bit – since in 2015 we ran more air conditioning and in 2016 I replaced a number of lights with LEDs.  However,  I will attribute the increase in usage to the additional time I spent working from home in 2016, thus leaving more lights and heat on (maybe the refridgerator door being opened more often?).  Anyway, I am targeting a reduction in usage for 2017.

In summary, I am  still pleased with the investment, and am now shooting for a 7-8 year payback which still isn’t too bad.  Solar panel prices continue to drop, and when I get around to needing to replace my roof the solar shingles look like they might be ready.  So I plan to be in the power business for many years to come.

A followup to my previous post on the programming churn.  In my many years of programming, the thing I find amusing is how programming has gone back and forth between centralized and distributed computing.  Talk about a churn, re-envisioning architectures with new languages where old is new.

For example, when I first started coding the mainframe was king – central processing with multiple dumb terminals.  COBOL, Assembler, CICS where the tools of the day.  In the mid 1980’s ‘client server’ computing was hailed as the new world order, taking advantage of the power of these new PCs that were starting to appear in businesses.  One problem – the infrastructure in the 1980’s made it complex (and slow) for two machines to talk to each other – networking was in its infancy, and cross company communication was via modems and phone lines.  In the early 1990s, client server started to mature with software like Fox-pro, Microsoft Access and Visual Basic, as well as better PC based databases.

Then in the mid 1990’s the Internet came along, and from the late 1990’s til early 2010’s, the pendulum swung back to the server model – where all the processing was done on the server and dumb html pages were served up to the browser.   The model was eerily similar to mainframes.  New development in client server pretty much died as browser based apps became the new normal.

Did I say client server died?  Wait, like a zombie it is back, this time in the form of javascript, javascript libraries, and JavaScript frameworks.   JavaScript running in the browser has evolved from simple form validation to a full blown programming platform.  First JQuery started the flood of code onto the browser, now frameworks like AngularJS or React have pretty much brought us the return of fat client computing.

In the 80’s the infrastructure was the bane of client server – this time around, its the language.  By most accounts JavaScript is a terrible language that was pressed into service because it was the only cross platform language available.  So to get around the ugliness of JavaScript, it has been somewhat abstracted by libraries that generate JavaScript.  In someways its a convoluted mess (this is a great post discussing the current challenges..).  The current tooling is painful also – the whole front end world seems disjointed.

Lets not even get to the current horror story of if you want to build a phone app, you have to build the app twice (with very little code sharing) – one for Android, one for IOS.

So will client server win out?  I think in a couple of years the current hot mess will be cleaned up as the language and tooling improves.  One complicating  factor will be the rise of the internet of things – which will bring forth a zillion tiny devices that can talk to each other.  Yes your washer can talk to your dryer, your lights can talk to your doorbell, etc.  This is going to drive a whole new architecture of applications.  These ‘client’ devices will be pretty dumb – though some maybe servers since all they supply is data (lightbulbs, switches), and some may be considered clients because they have a user interface (thermostats, garage door openers).  This is going to blur the lines between what is a client and what is a server.

So maybe the the whole concept or servers and clients will disappear, finally putting an end to the client server debate.  One thing for sure though – there will be new languages and software architectures to learn, to keep the programming churn alive and well.

 

Dan on December 21st, 2016

I was in a discussion with a family member who was heading for vacation, and he asked me if I had any reading recommendations.  Most years I rarely get through more than a book or two, but this year for some reason I plowed through a bunch of books.  I typically read histories and biographies, yet sprinkle in a little popular fiction when I want to give my mind a rest.

So since my year has been so productive, I decided I better put together a ‘best of list’ of the stuff I read this year.   Since the fiction I read is just pop culture stuff, and usually pretty old, I didn’t include it.  So I decided to limit it to history this year.

So, without further ado, here is my list of favorite history books I read this year.


 1.  Astoria: John Jacob Astor and Thomas Jefferson’s Lost Pacific Empire: A Story of Wealth, Ambition, and Survival

We all know about Lewis and Clark, and their exploration to the Pacific.  Soon after Lewis and Clark, in the early 1800’s, John Jacob Astor saw the business opportunity of this unexplored land and tried to build a huge monopoly in fur trading.    Even though I have grown up in the Pacific Northwest and traveled extensively around this region, I wasn’t aware of this interesting story.  As I sit here during a dreary December Day, I can only imagine the mental struggles this party went through.  In addition to a great adventure story, an interesting business angle too.

 


2. D Day Through German Eyes

A short book – only 140 pages – so it is a quick about the German soldiers stationed on the French coast on D-Day.  As part of a German propaganda effort the author interviewed a number of soldiers prior to the invasion gathering patriotic stories.  The author then tried to track down a number of these soldiers after the war to hear their story of what happened to them the day of the invasion.  An angle on WW2 you don’t often hear, and you realize how tragic the war was for everybody involved.

 


 My friend and avid history Buff Tony recommended this to me,  and really enjoyed it. This book covers the rise of the Navy post-sailing ships and the politics behind it.  If you enjoy 20th century history, this is a good introduction to where it all got started in the 1880’s.  A time of massive military buildup by Britain and Germany, and a shift in allegiances in Europe that lead to the WWI.

 An account of the US Ambassador to Germany’s posting in Berlin starting in 1933.  Interesting perspective of prewar Germany, though it does get a little soap-opera’ish with the stories of the daughter’s dalliances. It does provide a feel for what it must feel like to see a government steer towards tyranny.

A book recommended by a friend – The Grumpy Geezer.   Didn’t know much about it, but  really enjoyed it.  A true first person account of a pilot in Vietnam in the late 60’s.  The writer is not a professional writer,  but the story he tells of his experiences is engrossing, and give an interesting peek into how the soldiers felt about the war.  Reads like a journal, and I think anybody who is a pilot would especially enjoy it.

If you like my #2 pick Dreadnought, you will want to read this pseudo-sequel.  This picks up the story after World War I with the starting with Paris peace conference and the politics behind the Versailles Treaty.  I was expecting to read more about how the Allies shafted Germany, but most of the focus of the book is on all the other decisions that were made carving up countries.  It makes you realize that much of the decisions made in 1919 are responsible for many of the issues of today.  And if the world was given one historical ‘do-over’ in the 20th century, this period of time might be a good candidate.

For 2017 I have solicited input from several people, and have a large reading list ahead of me. My resolution this year is to try to stay away from WWI or WWII – as I typically gravitate to that era and need to broaden my horizons. There is lots of good history out there – so if you don’t feel like physically travelling anywhere next year, I recommend you travel in the fourth dimension and read some history.
Dan on December 8th, 2016

I have been waiting for several months now to jump into the smart home arena.  But I had been waiting for a clear winner to emerge.  Apple home, smartthings, Nest – a bunch of big players involved, but all seemed to have their drawbacks.

Finally,  I started seeing good reviews for the new Wink 2 hub, so I went ahead and took the plunge and bought one. The Wink Hub is a central unit that controls all sorts of smart switches, outlets, and other things. I wanted something compatible with ZWave devices, which is an emerging open standard that the Wink Hub supports.

For my initial setup, I also ordered a GE smartswitch which allows control via any ZWave hub like Wink2.  My first simple smarthome test for this was to use this switch on my porchlight and have it go on and off on schedule.  I was surprised at how easy it was to set everything up.  Plug in the Wink2 Hub, and hook it to your router.  Then I downloaded the phone app, created an account, and easily got the hub attached to my  home network via the phone app.

Once that was completed, On the phone app I clicked add a product, and it was super easy to add my GE light switch and set a schedule for on/off.

There are a ton of products you can get that hook into the hub.  You can also set up ‘robots’ that you can script actions for.  For example, if you hook up a motion detector, you could do something like ‘if motion is detected by the detector, and its after sunset’, turn on all the lights and turn on a radio.  You can also do things based on whether or not you are home, if you enable the app to sense where your phone is.

They also have an API, so because I am a geek I will be writing my own programs to potentially integrate into external things – such as temperature (obtained from weather underground via their API), or link to my solar panels to determine if the sun is out.  They have shades I can hook into your hub, so I can ping my solar panels every afternoon, and if the sun is out, close the shades in our living room.

Interesting stuff.  I do think this Wink 2 hub is a breakthrough product for bringing the smart home to the masses.  I am excited for all the new geeky things  I do with it.

Dan on November 30th, 2016

I typically have been a bottom up investor- look for companies I think are undervalued, and invest in the hope that others will see the bargain out there and raise the price.  This is called ‘Bottom up Investing‘, focusing on the individual market vs the stock sector or the asset class.

However, the market action of the last month has shaken my belief that bottom up investing is rational.   Since the Presidential Election, stocks in the Financial and Industrial sectors have taken off, on really no fundamental news.  For example, take a look at Columbia Banking (COLB)  and the Vanguard Financial ETF (VFS) over the last 3 months:

colb

No news, no management changes, just a lot of stock being pumped into the financial sector because of the new administration.

Here is another example, FLIR Systems (FLIR) systems, in the industials sector, compared to the Vanguard Industrials ETF (VIS):

flir

Again, no news, just happens to be in a sector where money managers are moving money too.  FLIR Systems has a number of industrial products centered around imaging and surveillance cameras – I hope this doesn’t reflect a belief that this administration is going to ramp up spending on domestic surveillance, but this isn’t a positive sign.

And what caused this huge shift in sector allocation?  My best guess is Trumps leaning towards rebuilding infrastructure and piling up bigger government debts.  That’s a lot of money moving around based on an administration whose policies are murky at best.

So, should I abandon bottom up investing and switch to top down investing?  No.  I won’t abandon it – I cling to the belief that undervalued companies will be recognized eventually.  However, I do think I need to increase my focus on watching asset class and sector indicators.  It does appear in this world where so much money is managed by a small pool of investors, there is is something to watching what the so called ‘smart money’ finds attractive.