Dana Blankenhorn

Opportunity Lives Here

Think of this as Volume 14, Number 32 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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More than 15 years after the Web was spun it is still filled with opportunity.

What marks many of today's opportunities is that they're not about machine work. Machine work is the low-hanging fruit of the Web. Machine work has an immense profit margin, and incredibly low costs.

Google does machine work. Its success proved that, when machines face man online, machines are going to win. Yahoo was, originally, a directory, and invested heavily in sites like Geocities and Broadcast.com which required human work to fill them with stuff. Google, meanwhile, invested in machines, in software to parse the Web in various ways, and proved that's the way to the greatest profit.

This does not mean people have no place. It just means profit margins aren't quite as fat.

I have written many times here about the opportunities in my own field, journalism. Many of them still remain. The way to approach them, as always, is from the business side, defining an under-served market, place or lifestyle for which you have passion (and about which you have some knowledge), then organizing that market, and finally offering sellers the chance to meet buyers through entertaining editorial.

This is CNN's real problem. It has nothing to do with what the yahoos who argue about "journalism's failures" think. The channel never really defined its audience, its target market. Fox did. MSNBC (finally) did. So did dozens of other cable success stories. CNN never did -- they said they were a news station, and above all that. Bullshit. No one is above all that.

Let their failure be your guide in your journalism endeavors. And now with no further ado, some new niches for you to profitably explore:

Sheikhs of America

Think of this as Volume 14, Number 31 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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What may appear to journalists, or even historians, to be an ideological war usually turns out, in America, to be a choice between economic interests.

In our time the choice is on the title of this blog. It's a choice between energy defined by resources, which come out of the ground, or by devices that harness the energy all around us.

A new Thesis is born when the crisis leader turns definitively toward the new economy, explicitly rejecting the old. And it's brought on by the old economy seizing political power in an attempt to hang on against the new.

In other words the fight of our time is not between left and right, liberal and conservative, Democratic or Republican. It's between devices (the alternative energy of windmills, solar cells, tidal energy, and geothermal) and resources (coal, oil, natural gas). The former should define wealth, not the latter. And it's the climate bill that matters, nothing else. 

The current situation can be seen in the graph above from the Environmental Law Institute. We're subsidizing resources. We're choosing oil, coal and gas over other forms of energy, through the instrument of government. This is what the President must change if he is to seize the crisis of our time and put our economy on a sustainable path.

Toward the Cloud

Think of this as Volume 14, Number 29 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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Over the years I have had nearly as many desktop PCs as cats.

We counted last night.

Kaleidocat (below, in 1979), Nuisance, HeyCat, Lo Meow, McDummy, FurPur, Salem and Rosanna, Indy, Missy, and the incumbents, Midget and Foxy Roxy.

My first PC was a Kaypro, shown on the right in 1983.

I thought it was sweet. CP/M, two floppy drives, an 8-inch green screen, and a case that, while it claimed to be "luggable," was really more like the tube-and-parts cases my dad's TV repair shop had in the 1960s. It weighed 26 pounds. 

Then came my IBM PC, bought for a project that became Harbinger EDI. I upgraded it with a hard drive, and then bought a no-brand AT. There was another no-brand (built from parts) bought for Windows 3.1, another (a Gateway I think) bought for Windows 95, and I seem to remember buying another for '98. Then there was the current box, another no-name built from parts, bought in 2004.

So that's 12 cats and 8 PCs. Of course I'm not counting the laptops I've owned, at least a half-dozen in all, or the four PCs I've bought for the kids.

The desktop era ended this week with my latest purchase, an MSI A6200 laptop I had first seen in the hands of a model at last year's CompuTex show. It's more powerful than any desktop I've owned, and today's "docking stations" are just boxes that sit to the side and let you connect anything else you want with USB ports. That means I can replicate my old desktop environment, with an extra monitor, a fancy keyboard, an external mouse, nice speakers.

It's a turning point. Where once I always needed two machines -- one for here and one for the road -- now I get it all with one. The new laptop cost less than half what my old Kaypro did, $700 against $1,800. And the software cost is also lower than ever. Windows is (unfortunately) bundled and everything else is downloaded, free.

Anyone involved in this business in any way needs to understand why this is so. Moore's Law is the flip and easy answer.

It's also misleading.

Rampant Hooverism

Think of this as Volume 14, Number 25 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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The Great Recession could easily become a second Depression due to a global outbreak of Hooverism.

The two cures for the First Depression, and any such collapse, are money and demand. In this case TARP supplied the money. The stimulus was supposed to supply the demand but is proving insufficient. That's partly down to where it went -- tax cuts and unemployment benefits have low multiples compared with investments in real capital goods.

The reaction to this shortage of demand by policymakers in Europe and America is the same. Cut demand. Raise taxes, reduce services, increase unemployment.

There is no answer there. How does laying people off put people to work? How does spending less cut your debt if you're also, by doing so, earning less? How does raising taxes, taking money out of the private economy, help anything?

The word for that policy is Hooverism. It is precisely what Herbert Hoover did in the face of the Great Depression. He refused to accept that the private sector was stuck, that someone needed to step up and buy stuff we needed to have made. By the end of his term in office unemployment was nearly 30%. Sounds awful, but the broadest rate of our current unemployment is 17%.

Hooverism is the final triumph of fear. It holds that when bankers and businessmen lose their nerve politicians should too.

It is stupidity writ large.

College athletics is all politics

The big mistake made by sportswriters looking at college athletics is to over-estimate the extent to which their stories are about money, when they're really all about political influence.

Fact. College athletics does not contribute directly to the education enterprise. All the money that goes in stays in. It's either paid to coaches in salary or goes into facilities. 

For kids, college athletics is a money sink. As more schools find they have to play the political game of college athletics, kids are charged for it.

My own son, now at Georgia State, is having to pay $85 per semester this year so GSU can field a football team. Why? Because football makes them a player in the legislature. It means they're no longer just a "commuter school" but a big-time competitor for funding alongside Georgia Tech, Georgia Southern and the University of Georgia.

That's what college athletics is about. It's about winning the loyalty of legislatures for the rest of a school's agenda. When the big state school dominates the headlines, it dominates funding. That's the money sportswriters should be following, not the TV contracts but the appropriations.

Journalists in FoxLand

If this century teaches any lesson above all others it is this.

It doesn't pay a decision maker to listen only to what you want to hear.

George W. Bush did. He destroyed himself by it. He refused to take delivery of news from Iraq, or New Orleans, or the housing market, that differed from his world view. He actually seemed to believe he could create his own reality.

We paid for it.

Defending an Atlantan

Having lived in Atlanta for nearly 30 years, I have been witness many times to the degrading attitude my original hometown of New York takes to this place.

Of course, it's the same attitude New York takes to every other place in America. It looks down at us. It assumes a right to define us, to buy and sell us, to treat us as its economic and cultural subjects.

New York does not know best. You have only to look at the fate of Turner Broadcasting in the hands of Time Warner to know that. CNN is crap. The company disinvested in The Cartoon Network, which had been successful, for short term gain. It's sad, and I know Ted Turner would agree.

Usually Atlanta falls meekly under the gaze of the Big Apple. At least white Atlanta does. Black Atlanta -- that's something else. You don't see black rap or R&B artists kowtowing to their New York counterparts. They have succeeded in bringing a little power down here, and that's actually good for everyone, white and black.

Something similar has finally happened in TV thanks to Tyler Perry. He came here less than 20 years ago from his birthplace of New Orleans, penniless. Now he's worth a great deal of money. He has built his own production studio on property formerly owned by Delta Airlines in southwest Atlanta.

Convenient Enemes

The way you push back against what seem like heavy odds is to find a convenient enemy. (The painting is called Fisherman, by Roland Heath. From his blog, with permission.)

I've been one. It's no fun being a convenient enemy. But the convenient enemy gets no sympathy, and can be used to bulldoze through what seem like impossible problems.

More important, a President can use convenient enemies to make a larger point, and win that point, so that opponents who once appeared all-powerful become amenable to compromise or can be bulldozed.

In this President's case, his two biggest problems right now involve financial reform and energy reform. He is fortunate in that history has given him two very convenient enemies, Goldman Sachs on the one hand and Don Blankenship on the other.

I'll explain.

Republicans are re-running their health care strategy with financial reform. That is they're united in opposition, not just to a specific set of proposals but to the idea that anything can be done while Democrats are in power. The same is true with climate change legislation.

With health care, the President had to compromise-and-compromise with his entire party -- even the most rigidly opposed -- in order to get a bill passed over that opposition.

This time he's going to use the convenient enemies. He's going to win through because convenient enemies work both in Congress and before voters. No one wants to stand with the convenient enemies when voters go to the polls -- you're likely to be hung alongside them.

Facing the Fear of Otherness

Think of this as Volume 14, Number 14 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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If you've never been to China it can be the most fearsome place imaginable. You think of communist drones, chained to machines by their slave masters, and you think of a government plotting our economic destruction.

That's not China. (I know it's horribly blurry, but these people are ballroom dancing in a park in Chengdu. We Tai Chi, they do the foxtrot.)

China is a far more complex place than you imagine. But this I know. Most of its 1.3 billion people are just like you and I. They want the same things for their children we do. They're mainly just trying to get ahead.

What they fear most, on the whole, is chaos. Chaos destroyed China throughout the last century, it took 100 years away. The chaos of the late 19th century, when China was carved up by Europe. The chaos of the warlord era, the chaos of Japanese occupation, the chaos of civil war, and the chaos Mao Zedong unleashed repeatedly, trying to beat the China-ness out of his people.

Chinese people, I learn, date the history of modern China to only 1978. In these 32 years they have built a great Industrial society, the dominant producer of goods on our planet. This has given hundreds of millions things they never dreamt of before. Cars. Refrigerators. Apartments in the sky and, for a lucky few, fabulous wealth.  (This is Zhang Yaqin in 1978. He is now global vice president for Microsoft, and heads its Chinese research group.)

What built China? Capitalism, we say. Order, they say. In fact is was both. Capitalism needs order just as liberty needs order. Our Constitution gives us Ordered Liberty, not "freedom." It is a system under which we set the limits, and where we have the power to both enforce them and change them. But there are limits. Without law and order capitalism as a system can't exist.

China's government is many things. It is complex, it is opaque, it is bureaucratic, it is powerful. The one thing it's not is communist. Chinese people have fewer guarantees of health care than we do. Everything is a competition. Getting more than a rudimentary education requires passing an ever-harder series of exams. The price of failure in anything is incredibly high. Everyone is a slave to the market, not the party, and the "oppression" we complain of there is the last thing from most minds.

But there's another absolutely vital point you must know about China. They have many more problems than we do, much bigger problems, and most people there know it. There are tensions between the fast-developing coast and the interior. There are ethnic problems. There is pollution. There is the problem of an economy that must slow and a currency whose price must rise, and wherever its leaders turn lies the possibility of chaos large and small.

There is no doubt who has the better hand to play between Hu Jintao and Barack Obama. It's Obama. It's us. (To the left, Hu's expected successor, Xi Jingping.)

It is this knowledge that needs to guide our hand.

We have an opportunity to turn today's great competition into something both sides can win. We remain the stronger side. We can make concessions.

But concessions don't matter unless they're offered in a spirit of equal humanity. We need to learn more about each other -- our governments, our elites, our media, our people. On both sides.

We need more honest translations of what Chinese are writing, and they need more honest dialogue from us. Both sides need to understand the needs of the long term, the need of our grandchildren to have a breathable atmosphere and drinkable water, and the need of China to evolve into a post-industrial society, not just an industrial one. 

The Internet is our secret weapon in that, and while we can protest China's "great firewall," is must be from an understanding that the effort is self-defeating on their part. The great challenges facing both sides require free inquiry, free minds and open hearts if they're to be solved. And solutions can come from anywhere, from anyone. Building walls against possible solutions is building a wall against yourself.

We can be more open, and from that example so can they.

My point is the enemy in this case is not China. It's not China's government, not its people, not its businesses. The enemy is fear, our fear of them, their fear of us. It's the same enemy I faced 35 years ago, the same fear my friend faces every day of his life.

Engagement is the victory. Isolation is the enemy.

The Great Education Opportunity

Think of this as Volume 14, Number 11 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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What we have learned in the last 15 years is that, for the Internet to take over an industry, the old industry must die -- or go through a near-death experience.

Many industries have died and been reborn online since the Web was spun. Travel agents once dotted every corner. The Yellow Pages was once the most-thumbed publication  in the house. Newspapers once weighed more than magazines. Each has gradually been replaced by the Web.

Some industries have adapted, usually when they lacked profits with which to fight back. Libraries are still vital because they have Internet-linked computers and broadband, and because they use the Web to let people get the books they want, not just those on the local shelves.

But profit-making industries die harder deaths. The death of newspapers has been tough to watch, and since the Web has yet to replace them on a local level, its advocates have a case. Health care is mid-way through its transformation, but meanwhile we have a system where the poor outbid the middle class for care.

The latest industry to feel the lash is education. A lot of people, especially young people, are terribly stung by this. The cause of this crisis is the current economic slowdown, but that only exposed obvious flaws in higher ed's business model.

In other words, higher education is a great opportunity.