The Week in Geek – Jan. 5, 2008
Decode your DNA for $1,000
Sergey Brin isn’t the only entrepreneur in the family. His wife, Anne Wojcicki, has a new startup, 23andMe, which will take a vial of your spit, then offer up an analysis of your chromosomes (you’ve got 23 pair, hence the name). The web-based report indicates ethnic origins, genetic propensity for certain conditions, and IDs mutations that may mean less medical risk. 23andMe isn’t in the diagnosis business – they won’t tell you if you’ve got a disease. But the site does offer an ‘odds calculator’, among its extensive user-education tools. Also – it’s important to remember that the offering is nowhere close to comprehensive. The 1,400 conditions currently tested represent only about 5% of developed-country diseases. Many conditions are multi-genic, resulting from the ‘subtle interplay’ of several genes. We have no idea of the complex relationship between genes and environment that likely determines most conditions. And you might still be just plain lucky or unlucky, regardless of the odds suggested by your specific pattern of A, G, T, and C. Still, for someone with no available genetic history (e.g. adoptees like myself), 23andMe can be compelling, if you can get over the scariness of perhaps learning you’re prone to something nasty and untreatable. Coming soon, social-networking features allowing those with specific genotypes to share findings and insights. And since the test is done on a chip, expect it to get both cheaper and more comprehensive over time. It’s Day One of patient-initiated, gene-based health-care, and this technology will rock the entire healthcare industry, shifting power in the patient-doc relationship, challenging the insurance industry, and forcing legislation.
Google’s Next Big Dream
A BusinessWeek cover story chronicles how Googler Christophe Bisciglia used his ‘20% time’ (the free time Google engineers get to pursue pet projects). This initial side-effort, which started as a ‘Google 101’ class at the University of Washington has morphed into an industry partnership with IBM, backed by the CEOs of both firms. The idea behind the class was to teach students how to solve complex problems by harnessing the increasingly massive computing power of the ‘cloud’, networks of internet-accessible computers programmed to work in parallel. This is how Google ‘works’. Teams of commodity processors are specifically programmed to deliver super-computer results to devices as slim as cell phones, doing everything from hunting down search results to zooming in on satellite images. And this massively parallel computing is being enlisted tackle tasks such as developing medications, predicting weather, fighting spam, simulating crash tests, and finding ads you’ll respond to. Most computer science students don’t know how to code for these problems, but expertise in harnessing cloud-style computing is in desperately high demand. Google’s cloud has perhaps a million or more servers. Four new data centers were added in 2007 alone, at an average cost of $600 million each. BusinessWeek points out that “the cloud never ages. When its individual pieces die, usually after about three years, engineers pluck them out and replace them with new, faster boxes. This means the cloud regenerates as it grows, almost like a living thing.” Google and IBM aren’t alone in this space. Microsoft and Yahoo are also building vast server farms all over the world. Amazon is making a business out of renting computing & storage space on a utility-style payment basis, more akin to an energy utility than a web retailer. And the phenomenon is global. IBM is helping Vietnam develop cloud resources, while Microsoft has a mega cluster going up in Siberia. Are we heading toward a world that leverages one big, massively-parallel computer network? My favorite comment on this comes from Clay Shirky (via Tim O’Reilly). Shirky recalls the (perhaps apocryphal) story of IBM’s Thomas Watson who allegedly said at the birth of the mainframe, that the world would need perhaps five computers. Says Shirky “[Watson] overestimated by four“.
Wired Unmasks Founder of VC Slagfest The Funded.com
Serial entrepreneur Adeo Ressi isn’t a household name, but he’s built and sold three businesses. Over holiday break 2006 he also built a social networking site where entrepreneurs can anonymously rate, rank, and provide feedback on venture capital firms. The once pseudonymous “Ted”, Ressi recently managed his unmasking in a Wired Magazine exclusive. Like any review site, comments on TheFunded.com run the gamut from thoughtful to axe-grinding vitriol. Some data is viewable to all, but full membership in the private community of 3,000+ is approved through a four-point vetting process. The community give-and-take is valuable not only to entrepreneurs, but potentially to the LPs that invest in funds (pensions, endowments, wealth-managers), as well as the host of attorneys, consultants, and advisors that cater to entrepreneurs. And VCs may want a peek at what others are saying about them and their competitors. Wired’s story reveals the heated battle between the haters and cheerleaders. Ressi claims more than 80% of the site’s members are starting their second or third venture-backed company, and have had at least one liquidity event. While there’s no excuse for cruel, crude, or brutish behavior, all VCs are going to disappoint the overwhelming majority of entrepreneurs since such a small percentage of pitches result in deals. And I can tell you from personal experience – if you’re a ‘hard grader’, you’re going to get lower evaluations. Wired offers a great quote from Josh Kopelman, a well-reviewed partner at First Round Capital:”We have looked at 2,000 businesses and said no to 1,980 of them. [TheFunded is] like having a Zagat guide where 90 percent of the people who are writing reviews can’t get a restaurant reservation.”
Commentary: Yet another information asymmetry, flattened by the Net. The rise of sites like this raises interesting questions about long-term social impact. Are these sites likely to produce a generation that is more savvy, more sincere, or more cynical? When nearly everyone is subject to Yelp-style feedback, does this mean we’ll develop thicker skin and a super-sophisticated BS-radar? Or are we likely to become increasingly emotionally fragile? Will we be more self-promoting? Keen to ‘game-the-system’? Will we be more honest or less, perhaps for fear of the increased exposure to taking controversial and unpopular positions?
Apple: More Than Just a Pretty Face
Ahead of MacWorld, BusinessWeek offers new data on the rocket ride that is Apple, Inc. While sales of electronics rose just 2.7% this past holiday season, Apple is projected to see a 29% during the same period. The Mac operating system now totals a record 8% market share. Since 2004, the catalog of iTunes content (songs, TV shows, films) has increased 600%,. The number of iPod accessories have increased tenfold, to 3,000, with Apple collecting a fee from fees from third party products sporting the “Made for iPod” logo.
Amazonmp3 Scores Majors for DRM-free Music
The labels want more control in pricing. Amazon wants a credible presence in digital music downloads before CD sales crater. So by being price flexible and ‘not Apple’, Amazon has managed to score DRM-free downloads from every major label except Sony. Warner Music, the firm’s latest catch, brings artists from Aretha to Zeppelin to Amazon. And while the firm’s 2.9 million songs are about half of what’s on iTunes offering, Amazon’s top 100 songs are a dime less than iTunes, the top 100 albums are a buck cheaper. Amazon also pays affiliates 4x more than iTunes. Using the easily installed Amazon MP3 downloader, songs can be dropped directly into iTunes or Windows Media Player. It’s not as elegant as the sublimely integrated iTunes, but it’s still very easy to use. It will be interesting to see how this “minor savings but with a minor inconvenience” impacts market share. Amazon is clearly in digital media for the long haul, and the firm has a solid record of strong, iterative improvement. Their interface and recommendation engines are gold-standard good. But even if Amazon’s share increases to a solid and influential slice of digital downloads, there’s no evidence that consumers will abandon their iPods, or that anyone is closing the innovation gap with Cupertino. Amazon seems to recognize this, too, offering up $15 in free downloads accompanying any digital music player it sells (including iPods). Indeed, iPods were once again the electronics hit of Amazon’s killer-good holiday season. So if Amazon benefits from iPod success, and there’s no real threat to iPod sales, who really gets hurt here? Is it media firms that lose digital sales the longer they keep certain products away from Apple users? NBC’s insistence on pulling TV content off of the #1 platform for portable media looks like the “Biggest Loser”. With the writer’s strike about to drop us into reality-TV hell, why squander a chance to increase interest through downloads by blocking easy access by iPod users? As long as users can’t conveniently download NBC shows on iPods, the content is trapped in a share-limiting prison.
NetFlix, LG Partner for SetTop Box
Reed Hastings announces NetFlix will partner with LG to offer a set-top box capable of downloading movies on demand. NetFlix offers over 6,000 titles via streaming (a fraction of the 90,000+ available via US mail), but streamed titles can only be viewed using a PC. One novel wrinkle: the LG deal isn’t exclusive, so NetFlix hopes other consumer electronics firms will offer boxes with a sort of ‘NetFlix’ channel built into all sorts of gear, from cable boxes to DVD players. The kingmakers in this game would be Cisco (Scientific Atlanta) and Motorola, the two largest cable set-top box providers. But offering NetFlix-ready gear may repel cable firms that would rather keep all content flowing through their own video-on-demand offerings.
Also in the world of video standards battles – Warner Bros. backs Blu-ray, in a potential knock-out blow to rival HD DVD.
IBM Makes Chip Speed Advance
By replacing the wiring connecting multiple cores inside a microprocessor with pulses of light, IBM is on track to shrink supercomputers down to laptop size within a dozen years. Chips may soon contain ‘hundreds, even thousands’ of cores, while requiring only about as much power as a light bulb, a miniscule slice compared to the juice needed to run today’s massively parallel systems.
Intel Looks Beyond Silicon
It’s still about a decade away, but Intel belives new chips will rely on compound semiconductors, material made from a combination of elements from the third and fifth columns of the periodic table. Compound semiconductors made with indium gallium arsenide and indium aluminum arsenide are so promising because electrons zip through these chips faster but requiring less voltage than silicon counterparts. This means chips run cooler and can be shrunk smaller. Moore’s Law outlives silicon!