|From: Ron||1/7/2020 6:06:34 PM|
|Bots Are Destroying Political Discourse As We Know It |
They’re mouthpieces for foreign actors, domestic political groups, even the candidates themselves. And soon you won’t be able to tell they’re bots.
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|From: Glenn Petersen||1/12/2020 3:27:35 PM|
|Hollywood Bets On a Future of Quick Clips and Tiny Screens|
Entertainment startup Quibi has already won over industry A-listers with its vision for short-form mobile streaming. But will it catch on with viewers?
January 8, 2019
Katzenberg says he spent three hours convincing Whitman to be the CEO of Quibi. “If you don’t ask, you don’t get it,” he says.Photograph: Rozette Rago
TV, but on phones! You know—for kids?
That’s it. That’s the pitch.
The company making that pitch is called Quibi—a portmanteau of “quick bites.” Its product: less-than-10-minute fiction, reality-show, and news videos streamed exclusively to mobile devices. The shows will be high-end, glossy even, with the production values that only international news divisions and Hollywood studios can manage, but they’ll have the rough shape of user-generated content. Disney, but YouTube. Amazon Prime, but TikTok.
Even Quibi’s origin story sounds like a pitch, this time for a buddy comedy: Ex-studio mogul partners with a former big-shot tech CEO for one last big score. The mogul is Jeffrey Katzenberg, former chief of Walt Disney Studios, the K in Dreamworks SKG, most Hollywood of Hollywood people. The CEO is Meg Whitman, former CEO of eBay and Hewlett-Packard. In a world dominated by a market of 18- to 44-year-olds, two old pros come out of retirement to show the kids how things are done.
This is What Hollywood Is Talking About Now.
Partially that’s because the entertainment business is very open to innovation in a time of great change—by which I mean, everything is on fire and people are running around screaming. The old studio-and-network, theater, and broadcast system is melting into a bubbling cauldron of subscription-based streaming services and online video, and the younger viewers at whom advertisers always want to flash their logos are fleeing the old transmission systems for newer ones with weirder names.
Amid that chaos, Quibi has raised $1 billion in investment capital from every major Hollywood studio and most of the major tech companies. It has corralled an A-list tsunami to make programs—Steven Spielberg, Steven Soderbergh, Guillermo del Toro, Anna Kendrick, Zac Efron, Chrissy Teigen, Jennifer Lopez, Antoine Fuqua, Sam Raimi, Catherine Hardwicke, Idris Elba, Kevin Hart, Lena Waithe, NBC News, ESPN, BBC. The whole thing launches in April with a year of advertisements already sold. It’ll cost $4.99 a month with ads or $7.99 without, and the phone company T-Mobile has already promised to bundle subscriptions to customers—neither Quibi nor T-Mobile would say how many.
Quibi is a thing that is happening. Whether it is a thing millennials and Gen Zers will actually look at is a whole other question. It’s what Katzenberg and Whitman are pitching, hard, in a keynote address at CES in Las Vegas. But really, it’ll get answered only when Katzenberg and Whitman press the button to turn the thing on.
Ask people why they signed up to make a thing for Quibi, and they’ll talk about the general clustereffery that show business has become, but they’ll also say, simply, “Jeffrey.” That’s Katzenberg, who is a macher. He is late to our meeting in a glassed-in Quibi conference room because his earlier meeting with Spielberg ran long. He has to leave a little early because he has a phone call scheduled with Tommy Hilfiger. Status: signaled.
In between, Katzenberg explains that he and Whitman have known each other for 35 years, since he was running Disney and she was a VP there. Katzenberg led the Disney animation renaissance—Lion King, Beauty and the Beast, etc.—that the company is still revisiting with live-action remakes.
But things change. He got ousted, with acrimony, in 1994, and just weeks later announced he was starting a new studio with Spielberg and David Geffen … sparking a whole other animation renaissance (Shrek, Kung Fu Panda, etc.). And now, he says with perhaps some satisfaction, people in Hollywood are joking that if you’re not on a project with Quibi, you’re not really a people in Hollywood. (This seems like the right time to disclose that Roger Lynch, CEO of WIRED’s parent company, Condé Nast, is on Quibi’s board, and WIRED is in early talks about having a show on the streamer.)
After Disney, Whitman went on to a series of heavy-hitter companies, from Hasbro to eBay—when, as she says, it was nonobvious that people wanted to buy stuff online. She left HP after six years at the helm; Katzenberg says he was on a plane to Silicon Valley that night to offer the CEO job at Quibi. She was planning to go travel; he pitched her for three and a half hours. He needed what she knew. “If you don’t ask, you don’t get it. If you don’t take a swing, kick the ball, run with it, you don’t score,” Katzenberg says. “I’ve always come from the school: Go for the unattainable. This is honestly the second time in my lifetime when I actually got the absolute perfect, unattainable partner.”
“What was the first?” I ask.
“Steven Spielberg and David Geffen,” he says.
The guy can do a meeting, I’m saying. And it was good teeing-up, too, because this is roughly when Whitman joined us in the conference room.
Despite what everyone else I talked to said, Katzenberg’s own hypothesis for why a large fraction of Hollywood signed up to make Quibi shows has little to do with him, or even with technology. Broadly, it’s a little bit “show” and a little bit “business.”
The “show” part is the next turn of the evolution of story structure, he says. Movies are a couple of hours of story meant to be consumed in a gulp; TV shows you can choose to see as either a unit of 22 minutes or 42 minutes (that’s show minus commercials), or as a however-many-hours-long story taking one season or many.
But in all of those formats, the secret, irreducible unit is the act. As in a play, these are story subsections, akin to chapters. Movies have them, though smart screenwriters disagree about how many and how long they ought to be. In radio and broadcast TV, commercials became de facto act breaks—an hour-long show has roughly five, in the modern construction. “And the first act break is always at—” Whitman says. “—eight and a half minutes,” Katzenberg finishes.
So while short online video seems more like the purview of a social network or YouTube, the fact is that TV and moviemakers already understand the qui in Quibi. (It’s short for “quick” in case you’ve forgotten. Yeah, I’m not really sure about the name either.) They’re already making shows with acts of 10 or so minutes.
They can already imagine series with those constraints—whether they’re single stories told over multiple episodes or anthology-type shows like Sam Raimi’s 50 States of Fright, which will tell different scary stories set in every US state. “What Quibi is doing is taking these two proven sciences and actually converging them together for our ‘lighthouses,’” Katzenberg says, “in which we’re telling a two-hour story in chapters that are seven to 10 minutes long.”
There’s further inducement—a quibi pro quo. The rise of multiple streaming networks, restructurings at various studios, and an ongoing fight between TV writers and the agencies that represent them all sum up to lots of new opportunities for writers, producers, actors, and the production folks who make entertainment for screens. The old, predictable systems and schedules for making all that stuff no longer apply.
That’s scary, but it also creates a landscape of experimentation. “It might be worth thinking of Quibi the way we think of Darpa. Darpa’s job is to think of new stuff that might not work, but if it works it’ll be very important,” says John Rogers, a veteran television writer and showrunner (who doesn’t have a Quibi show). “You can’t predict what the audience is going to respond to. If you could, all television would be good and high-rated, and there would be no executives.”
That’s not only true for drama and comedy. At NBC News’ famed New York headquarters in Rockefeller Center, producer Madeleine Haeringer is building a whole new newsroom for Quibi shows—two every weekday, one a day on weekends. She’s hiring new correspondents, producers, editors, and crew. They start rehearsals in February, aiming not for a traditional anchor-throws-to-correspondents structure but something more in-depth. “Working within that construct is actually pretty great for me,” says Haeringer, who started her news career at NBC, launched Vice News on HBO, and came back to run the Quibi shows.
TV news is already about short bites; the freer Quibi format actually gives Haeringer more flexibility to go in depth, she says. “A lot of the evening news shows don’t do [segments of] two minutes or more, and that’s fine. It’s great for them. But if I need seven minutes, I can do it.”
That sounds good for news—but why not do it online, or on NBC's own incipient streaming network Peacock? “It’s an emerging platform,” Haeringer says, “and if that’s where viewers are going to be, we want to get to them.
Phones, you’ll hasten to say, have two orientations—horizontal landscape and vertical portrait. Reasonable online video networks could differ on which is better for the viewing experience.
Quibi will do both. Everything it streams will have two versions, landscape and portrait, and (thanks to some clever buffering technology) your view will smoothly shift from one to the other when you rotate your phone; the audio stream unifies the two. The tech folks at Quibi call this Turnstyle, and they say that one of their business advantages is being able to focus on technological innovation like phone-turning rather than prosaic stuff like content management software to organize video or uninterruptible streaming servers.
Breaching those technological barriers made companies like Netflix and Amazon Prime possible. They also made those companies expensive to launch and maintain. Now, though, what was bespoke wiring under the hood is commodity hardware and software, much of it open source. This is what analysts call “last-mover advantage.”
Turnstyle, though, is new, and creative types are finding interesting uses for it already. Quibi’s tech leads showed me a news program demo where infographics moved from above the talking head’s head in portrait to left-of-screen in landscape. In a more cinematic demo, a long depth-of-field shot revolved into a wide master on the turn.
Quibi uses a technology called Turnstyle to allow seamless transitions between portrait and landscape views. This show, the car-stunt series Elba vs. Block, will premier later this year.
Give directors a new set of tools, and they’ll use them. Catherine Hardwicke directed the teen drama Thirteen and the teen vampire/werewolf drama Twilight, so when her agents brought her the script for Quibi’s Don’t Look Deeper—part girl-coming-of-age and part sci-fi—she was inclined toward it. The opportunity to shoot something in a novel way clinched the deal.
First, Hardwicke and her director of photography did a test. They shot a scene twice—horizontal in the morning and vertical in the afternoon—and tried editing both. Eventually Hardwicke decided they could get good quality from shooting widescreen and then making the portrait view in the edit, reframing shots by panning-and-scanning during post production. “We mostly just went for it, shot the most beautiful, composed horizontal frames we could, and then it took us about three more weeks to compose in vertical,” Hardwicke says.
Don’t Look Deeper will have 14 episodes totaling just under two hours, and her actors have all done movies—Don Cheadle, Emily Mortimer, and relative newcomer Helena Howard. Hardwicke says the resources she had added up to roughly a $10 million budget—sort of midway-ish between Thirteen’s $1.5 million and Twilight’s $37 million. But Don’t Look Deeper doesn’t act like a movie. “It’s more nonlinear and more fun. We have a cold open in each episode, and each episode ends in some kind of cliffhanger, like ‘holy shit, did that just happen? Fuck, what are we going to do next?’” Hardwicke says. “It added an energy I really liked.”
The upcoming sci-fi drama series Don’t Look Deeper also takes advantage of Turnstyle.
The experiments get weirder from there. Steven Soderbergh is shooting Wireless, his cliffhangery suspense thing, his usual way—with a high-end digital camera aimed at actors acting. But since a lot of the character interaction takes place via phone, every actor also shoots their scenes with devices that capture their texting and video chatting. Their phones capture them through the front-facing camera, and another device strapped to the back shoots outward, as if through the rear-facing camera, for the phone’s POV. Soderbergh’s landscape edit will be the traditional one; the portrait edit will use the phone footage. You, the nominal viewer, will flip-flop between the two.
Gimicky or intriguing? Hard to know. I can tell you that WIRED’s original iPad edition had different landscape and portrait versions of every page. They were meticulously executed, and if readers had shrugged any harder they’d have dislocated their shoulders. We had the numbers. It was a different time!
Meanwhile, the Quibi programming grid is full of concepts higher than Brad Pitt at a Snoop Dogg party. On Jennifer Lopez’s reality show, she’ll give $100,000 to someone in her life who influenced her, and then that person has to give half of it to someone who influenced them, and likewise all the way back up the line. (Would it suck to be the 10th person in line, who by my math would get about $95? Eh, that’s a decent night out.)
For a dating show, Quibi will post profiles of prospective daters on Monday, viewers will send back their videos of why they should go on the date on Tuesday, they’ll pick Wednesday, go on the date Thursday, and then show the results in an episode on Friday. Katzenberg says one of his favorites is Barkitecture. “This is Cribs,” he says, “but for dogs.”
Quibi will have 35 high-gloss narrative shows—Katzenberg’s aforementioned “lighthouses”—in the first year, along with 115 “alternative” shows and daily “quick bites.” So that’s one lighthouse, five quick bites, and 25 “essentials” per day, from the jump. “That is over 180 minutes of original content that we put up every day,” Katzenberg says. “A broadcast network in prime time publishes 135 minutes. So we’re 35 percent more original content every day.”
No one in television or online video knows what’s going to happen next, Whitman says: “A lot of what we’re doing here is based on our judgment and our experience and some research.”Photograph: Rozette RagoThat’s the “show” part; now we can talk business. According to Quibi’s research, in 2012 people watched an average of six minutes of video a day on their phones. By 2018 it was 60 minutes, and though the final numbers aren’t in, in 2019 it was 75 minutes. It’s even higher, Whitman says, among younger viewers, though she didn’t share that specific demographic breakdown.
Some of that digital video is movies or series television—premium longform. Some of it is user-generated or “semiprofessional,” whether long or short. But none of it, Katzenberg and Whitman believe, is premium but also short-form. Or at least, none that’s curated in one place. The trends tend toward that kind of content, Whitman says, and the business area is a “white space,” new customer behavior that opens an opportunity for a business that latecomer entrants would have a hard time copying. It also has a large potential market cap. “I’ve seen every business plan in Silicon Valley for the last 20 years, and virtually none of the time are those four all at work,” Whitman says. “Those four are all at work here.”
Some dollar figures might prove it. By Whitman’s accounting, user-generated or semipro video gets made for anywhere from pennies per minute to thousands of dollars per minute. Premium longform shows cost $10,000 to $100,000 per minute. That means 10 minutes of show can cost $1 million—uneconomical for the vast majority of what’s on YouTube. “YouTube can’t sell a million dollars’ worth of advertising to cover that piece of content,” Whitman says. “That’s why our monetization model is subscription plus advertising, because we have to generate enough funds to go buy this quality of content in its short form.”
Quibi provides the (high) budget, paying creators or other studios the cost of production plus 20 percent, which is nice. That content gets licensed to run on Quibi only for seven years, but the rights belong to the creators, who never lose ownership of their intellectual property. Theoretically that means whether Quibi launches successful shows with cultural oomph or merely goes pfft, the creators can eventually take their ball to some other court. “We have given people a financial incentive and ownership in their own work that they have never had before in this town,” Katzenberg says. “Or at least they haven’t had it for a really, really long time.”
The pitch to advertisers is designed to be just as compelling: brand safety. Quibi’s year of pre-sold pre-roll comes from heavyweight transnational brands like Walmart, Pepsi, Google, Progressive, and ABInBev (so Budweiser or some other beer). Those companies are watching the demographics they covet flee ad havens like prime-time TV, magazines, and newspapers for the web.
But putting an ad up alongside user-generated content can be algorithmic roulette. Today’s Twitch narrator or Instagram make-up applier could be tomorrow’s Nazi or #metoo-villain. “If you think about the tens of billions of dollars that are still spent on network broadcast television, in prime time, every one of those advertisers knows they have to move those dollars elsewhere as the audience is moving,” says Tom Conrad, Quibi’s chief product officer. “And so you say, well, where do you go with that money that has the same characteristics of that network?”
Not to be grandiose, but dealmaking like this suggests a new direction for television (or whatever we’re going to call video entertainment transmitted via the wireless internet). Quibi is a Hollywood startup, a studio-like entity doing something interesting with the internet, as opposed to a Silicon Valley tech business doing something interesting with content. The technology might be cool, but it’s not important (as long as it works). The dealmaking, though? That could make Quibi, um, quibiquitous.
I leave the well-appointed offices of Quibi, two floors of open-plan in the heart of Hollywood’s industrial studio zone, in the frame of mind one should have on leaving a good pitch meeting. I’m thinking, well, maybe it could work (and I’m regretting slightly my decision not to fill my pockets at the Candy Wall). Then, when I get downstairs, I have to sidestep a film crew striking a shoot in the building’s ground floor, and I remember that until something in this town is concrete, it’s filigree. A Hollywood "yes" generally means "no."
Just up the street I walk past a soundstage under construction, open to the world, a featureless white box with curved corners empty of everything except stardust, potential, and a couple of scissor lifts. Maybe Jeffrey Katzenberg and Meg Whitman are running the Big Con, and if I went back to the building today I’d find two empty floors, a couple of broken chairs, and wires dangling from the ceiling.
I mean, almost certainly not. But believing that Quibi is the next big thing does require buying into a few basic concepts. You have to believe, for example, that the people watching more video on mobile devices want video optimized for those devices as opposed to just, like, pressing pause. “The under-25 crowd has grown up with short-form video, from YouTube to Snapchat to really short form on Vine and TikTok,” says Ben Carlson, senior vice president and general manager of streaming platforms at the analytics company MarketCast.
But, he adds, when successful iterations in those media like Between Two Ferns or Awkward Black Girl moved to more “grown-up” media, that leveling-up—leveling-over?—came with increases in length and more traditional formats. “There is ample evidence of a desire for short-form content on a mobile device,” Carlson says. “What is as yet unproven is what happens when you set Hollywood professional storytellers out to do content specifically for that.”
One possible advantage Quibi has—and I’m just spitballing here—is that because its shows have a unique format and delivery mechanism, people will remember where they watched. Carlson says people often have trouble attributing which streamer carries which show, as when people protested the show Good Omens at Netflix even though it ran on Amazon Prime.
Maybe a Quibi show won’t be subject to the same kind of network brand confusion suffered by each of the other 75 bazillion TV programs. Quibi will need that kind of differentiation if it’s going to succeed; HBO Max powers up in May, and NBCUniversal’s Peacock unfurls in April. Quibi is launching into a crowded sky.
Maybe phones-only quick bites are a brand differentiator, but that won’t help if Quibi doesn’t have a hit. For now, Carlson says that Quibi shows like the documentary series on the rivalry between DC and Marvel Comics, produced by the Russo Brothers—makers of the last two Avengers movies—and a Reno 911 revival have gotten the most chatter. The Spielberg and Del Toro shows? Not so much. Of course, that could all change once they actually debut.
You further have to believe that people will pay for something they already get for free. You can already watch short videos on your phone, for the cost of your mobile subscription. To be fair, consumers have made that transition before, with music and television. Now, potential paying customers will have to ask whether it's worth adding another $60 a year to a credit card bill already laden with entertainment options? Amazon Prime video is essentially a perk that comes with faster delivery, so maybe you keep that. Cable often comes with home internet. Netflix … maybe. Disney+ is a yes for families and nerds; DC Universe even more so. CBS Online is using Star Trek as a wedge into new TV business models, a tradition in the industry. And that’s not even counting music services, videogames, newspapers, and magazines. At some point, people are going to start to say no. If Quibi is that point, the company has a problem.
Quibi (or something like it) isn’t the only possible answer to all these questions. The this-is-fine fire in which Hollywood now burns extends at least as far north as Mountain View, where YouTube, that maximalist provider of video-to-mobile, is preparing for a future that’s the opposite of the one Quibi pitches. Fully 70 percent of YouTube watch time is on mobile, but the company’s fastest-growing locus is the big screen at the front of the living room—250 million hours of video watched a day on a billion devices as an approximate replacement for cable TV.
Relative to mobile, what people are watching on that screen is a higher-than-usual proportion of premium stuff like full TV episodes, movies, and livestreamed events. “As more and more folks are getting smart TVs, they’re all HD-capable, and YouTube has the largest library, so it sort of makes sense,” says Kurt Wilms, head of living room at YouTube. (His official title is project manager.) “Folks are looking for content similar to traditional television, so we’re trying to make it easier for a viewer to select content and lean back.” (Yes, it’s harder to search with a scroll wheel and a remote than with a phone keypad. YouTube technologists are spending a lot of money on voice search, Wilms says.)
No one in television or online video knows what’s going to happen next. Whitman and Katzenberg have been good at seeing the future a few times already. “A lot of what we’re doing here is based on our judgment and our experience and some research. I think it’s hard to research products that don’t exist,” Whitman says. “But once we launch, it’s all about the data. We have no legacy tech platform and we have no legacy data platform. So all this is being built de novo, purpose built. Which is actually really fun.”
That’s why people are willing to spend money to try something as manifestly outlandish as Quibi. Young people are watching a lot of free video on their phones. They might be willing to pay for it if it was better. So why not?
That’s it. That’s the pitch.
Updated 1-9-20, 1:45PM ET: An earlier version of this story incorrectly stated that 215 million hours of YouTube are watched on televisions a day. It's 250 million hours.
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|From: Glenn Petersen||2/2/2020 11:03:40 AM|
|The man who changed disruption—and saw his own theories get disrupted|
What I learned from Clayton Christensen, the author of The Innovator’s Dilemma.
by Christian Sandström
MIT Technology Review
Jan 29, 2020
I met Clayton Christensen only once. It was 2012, and thousands of business scholars were gathering in downtown Boston for the Academy of Management, the industry’s biggest conference of the year. People from all around the world presented papers, networked, applied for jobs. Keynotes were delivered in gigantic lecture halls packed with hundreds of curious PhD students, aspiring postdocs, and tenured professors.
Not everything felt like a rock concert, though. Two years earlier, I’d defended my doctoral thesis on Christensen’s theory of disruption, and I was keen to present some of my arguments to anyone who would listen. Our paper was assigned to a small seminar room. There were hundreds of such backwater sessions, and usually only the coauthors and a few acquaintances from last night’s cocktail party showed up.
A few minutes before the session started, Christensen entered the room. I was stunned. Why would someone of his status even bother to find our paper in this haystack of academic research? But he listened carefully, and his presence was calm and focused. After our presentation, Christensen made a couple of remarks—most of them reflective and self-critical—and acknowledged some of our arguments.
This man was clearly not in the game to gain prestige or try to push an agenda. He came across as humble, thoughtful, and curious in a way that left me astonished and impressed.
When I heard that Clayton Christensen had died—aged 67, from complications caused by the leukemia he had been fighting for some time—I thought about my experience in Boston back in 2012. After all, if we are going to discuss his legacy, that first and only impression seems as a good point to start as any.
Christensen’s own doctoral dissertation, defended at Harvard Business School in 1992, concerned the disk drive industry from the early 1970s up until the 1990s. He investigated every technological change during this era and tried to relate these shifts to changes in industrial leadership. The data told an interesting—and initially confusing—story.
Previous research had tried to answer the question of why organizations found success so difficult to keep going over long periods, but it mostly looked at a company’s internal capabilities. If a business built on what it was good at, went the received wisdom, then it could defend itself against new, smaller entrants unless they came up with some entirely novel approach.
Christensen’s data suggested otherwise. It wasn’t the emergence of radically new technology that helped David outsmart Goliath. Rather, it was the emergence of a new generation of smaller disk drives that created insurmountable problems for established players. Why?
Over the coming years, Christensen developed and refined his thoughts on what was happening. Invoking some out-of-favor concepts from the 1960s and 1970s, he highlighted how the demand to serve current, profitable customers in the short-to-medium term seemed to captivate companies. The needs of these customers made it seem irrational to invest in other initiatives, and so, he contended, these firms ended up brittle and vulnerable to being blindsided. He argued that companies were being misled by the very same practices—such as listening to their customers, or designing next-generation products for existing users—that had made them successful in the first place. Firms performed well by adhering to the needs of key actors in the environment, but over time, the environment started to impose a great indirect control over firms, eventually putting them in deep trouble. The theory was beautifully counterintuitive.
These ideas were clarified into a coherent framework in his famous 1997 book The Innovator’s Dilemma, and, as they say, the rest is history. Christensen’s ideas spread like a wildfire. They were intriguing and exciting to everyone who came across them, both in academia and in industry.
By the 2000s, Christensen had reached academic stardom. He was an outstanding communicator and author, and his books about disruption had a huge impact: Intel’s acclaimed CEO Andy Grove notably said The Innovator’s Dilemma was the most important book he had read in a decade, and Christensen was celebrated regularly as the world’s greatest management thinker. But as the work became more widespread, his original ideas became more diluted. By 2010 or so, “disruptive innovation” meant the same thing “radical” had meant in the 1990s. At conferences and corporate events, among startups and in tech media coverage, “disruption” became omnipresent—at the expense of its original meaning and identity.
On several occasions, Christensen tried to restore the original ideas behind the disruption concept, but ironically, his ideas now faced a form of innovator’s dilemma themselves. Their meaning was beyond the control of the mind where they were born.
As “disruption” became progressively more well known, the concept increasingly faced another threat: becoming too powerful. Christensen’s theory of disruption was never the only one that suggested when and why entrants displace incumbents in business—after all, decades had been spent studying how such things took place. But as his work was watered down, many scholars, consultants, and corporations began to focus on only this one framework, disregarding the entire edifice of knowledge that his work was part of.
For sure, the “Christensen effect” mattered when one company pushed another out of the limelight, but there were many other factors that mattered too. And you could produce an interesting analysis if you applied the theories of The Innovator’s Dilemma to business—but the conclusions would often be invalid if they did not pay enough attention to the rest of reality. A company’s capabilities, organizational routines, managerial cognition, and network effects were just some of the factors that clearly mattered—and yet, time and again, experts tried to make predictions based solely upon Christensen’s theories. I know I am guilty of several such mistakes.
For those of us who did this, the natural and unfortunate reaction was then to blame Christensen’s work for our failed assessment or inaccurate forecast. But the problem was less the theory of disruptive innovation and more our collective will to attribute more explanatory power to a single theory than is possible.
Christensen’s work was one theory concerning industrial dynamics and technological change. It was never the theory. Elevate any idea to that sort of position and you are bound to generate disappointment. Combine it with other concepts and theories and you can find a much greater impact.
So the innovator’s dilemma faced an innovator’s dilemma of its own. It’s not just companies that are dependent on and vulnerable to an environment beyond anyone’s direct control. Ideas are too.
Keys to success
Clayton Christensen was not the first brilliant scholar or charismatic professor to write and speak about technology and innovation, and he will not be the last. So why was he so remarkably successful? What was the true source of competitive advantage that separated him from others?
He inspired a generation of scholars, including me, to think seriously about how businesses are affected by technology; he helped countless companies and provided valuable knowledge to hundreds of thousands of students who read his books and related papers.
My moment with him suggests an answer. His accomplishments were enabled by the same character that cast its light across that tiny, half-empty seminar room in Boston. You can only speak about failure if you are humble and graceful. You can only explain why well-managed firms fail by being thoughtful. And you can only develop truly remarkable concepts by being self-critical, curious, and open-minded.
Christian Sandström is associate professor of innovation management at Chalmers University of Technology and the Ratio Institute in Sweden.
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|From: Glenn Petersen||2/8/2020 2:20:18 PM|
|A dark web tycoon pleads guilty. But how was he caught?|
The FBI found Eric Marques by breaking the famed anonymity service Tor, and officials won’t reveal if a vulnerability was used. That has activists and lawyers concerned.
by Patrick Howell O'Neill
MIT Technology Review
Feb 8, 2020
Illustration by Caroline Matthews, Creative Commons Attribution 4.0 International License.\
When the enterprising cybercriminal Eric Eoin Marques pleaded guilty in an American court this week, it was meant to bring closure to a seven-year-long international legal struggle centered on his dark web empire.
In the end, it did anything but.
Marques faces up to 30 years in jail for running Freedom Hosting, which temporarily existed beyond reach of the law and ended up being used to host drug markets, money-laundering operations, hacking groups, and millions of images of child abuse. But there is still one question that police have yet to answer: How exactly were they able to catch him? Investigators were somehow able to break the layers of anonymity that Marques had constructed, leading them to locate a crucial server in France. This discovery eventually led them to Marques himself, who was arrested in Ireland in 2013.
Marques was the first in a line of famous cybercriminals to be caught despite believing that using the privacy-shielding anonymity network Tor would make them safe behind their keyboards. The case demonstrates that government agencies can trace suspects through networks that were designed to be impenetrable.
Marques has blamed the American NSA’s world-class hackers, but the FBI has also been building up its efforts since 2002. And, some observers say, they often withhold key details of their investigations from defendants and judges alike—secrecy that could have wide-ranging cybersecurity implications across the internet.
“The overarching question is when are criminal defendants entitled to information about how law enforcement located them?” asks Mark Rumold, a staff attorney at the Electronic Frontier Foundation, an organization that promotes online civil liberties. “It does a disservice to our criminal justice system when the government hides techniques of investigation from public and criminal defendants. Oftentimes the reason they do this kind of obscuring is because the technique they use is questionable legally or might raise questions in the public’s mind about why they were doing it. While it’s common for them to do this, I don’t think it benefits anyone.”
Freedom Hosting was an anonymous and illicit cloud computing company running what some estimated to be up to half of all dark web sites in 2013. The operation existed entirely on the anonymity network Tor and was used for a wide range of illegal activity, including the hacking and fraud forum HackBB and money-laundering operations including the Onion Bank. It also maintained servers for the legal email service Tor Mail and the singularly strange encyclopedia Hidden Wiki.
But it was the hosting of sites used for photos and videos of child exploitation that attracted the most hostile government attention. When Marques was arrested in 2013, the FBI called him the “largest facilitator” of such images “on the planet.”
While in control of Freedom Hosting, the agency then used malware that probably touched thousands of computers. The ACLU criticized the FBI for indiscriminately using the code like a “ grenade.”
The FBI had found a way to break Tor’s anonymity protections, but the technical details of how it happened remain a mystery.
“Perhaps the greatest overarching question related to the investigation of this case is how the government was able to pierce Tor’s veil of anonymity and locate the IP address of the server in France,” Marques’s defense lawyers wrote in a recent filing.
In the original indictment, there is little information beyond references to an “investigation in 2013” that found a key IP address linked to Freedom Hosting (referred to in the document as the “AHS,” or anonymous hosting service).
Marques’s defense lawyers said they received only “vague details” from the government, and that “this disclosure was delayed, in part, because the investigative techniques employed were, until recently, classified.”
Peter Carr, a Justice Department spokesperson, said the letter is “not in the public record.” The defense attorneys did not respond to questions.
The NSA found a dangerous flaw in Windows and told Microsoft to fix itThe secretive security agency identified the vulnerability and is taking public credit as part of an effort to “build trust.”
US government agencies regularly find software vulnerabilities in the course of their security work. Sometimes these are disclosed to technology vendors, while at other times the government decides to keep these exploits for use as weapons or in investigations. There is a formal system for deciding whether an issue should be shared, known as the Vulnerabilities Equities Process. This is meant to default toward disclosure, under the belief that any bug that affects the “bad guys” also has the potential to be used against American interests; an agency that wants to use a major bug in an investigation has to get approval, or else the bug will be publicly disclosed. US officials say the vast majority of such vulnerabilities end up disclosed so that they can be fixed, ideally increasing internet security for everyone.
But if the FBI used a software vulnerability to find Freedom Hosting’s hidden servers and didn’t disclose the details, it could still potentially use it against others on Tor. This has observers concerned.
“It’s not uncommon to play these games where they hide the ball about the source of their information,” the EFF’s Rumold says.
Tor is free software designed to let anyone use the internet anonymously by encrypting traffic and bouncing it through various nodes to obfuscate connections to the original users. Users could include Americans sick of being tracked by advertising companies, Iranians attempting to circumvent censorship, Chinese dissidents escaping national surveillance, or criminals like Marques attempting to stay ahead of international police. The users are diverse in every way, but software vulnerabilities can affect all of them.
In a 2017 criminal case, the US government put the secrecy of its hacking tools above all else. Prosecutors chose to drop all charges in a case of child exploitation on the dark web rather than reveal the technological means they used to locate the anonymized Tor user.
Freedom Hosting’s closure was the first in a series of stunning successes by international law enforcement that shut down some of the most high-profile criminal websites in history.
Two months after Marques was caught, the free-wheeling marketplace Silk Road was shut down in another FBI-led operation. After facilitating at least hundreds of millions of dollars in sales, Silk Road became a symbol of the apparent invulnerability of the criminals inhabiting the dark web. Although it lasted less than three years, it was clear that Silk Road’s founder, nicknamed Dread Pirate Roberts, felt invincible. Close to the end, the anonymous figure was giving interviews to magazines like Forbes and writing political essays about his cause and the ideology behind it.
Then, in October 2013, Ross Ulbricht—a 29-year-old online bookseller—was arrested in San Francisco and charged with running Silk Road. He was eventually sentenced to life in prison, a punishment that far exceeds whatever Marques might receive at his sentencing date in May.
Freedom Hosting and Silk Road were just the most well-known dark web sites that were brought down by law enforcement despite the anonymity that Tor is meant to provide.
“We can’t have a world where a government is allowed to use a black box of technology from which spring these serious criminal prosecutions,” Rumold says. “Defendants have to have the ability to test and review and look at the methods that are used in criminal prosecutions.”
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|To: Glenn Petersen who wrote (6582)||2/10/2020 10:17:57 PM|
|From: Glenn Petersen|
|What Happens When QAnon Seeps From the Web to the Offline World|
By Mike McIntire and Kevin Roose
New York Times
Published Feb. 9, 2020
Updated Feb. 10, 2020, 1:55 a.m. ET
A rally in Washington in September for QAnon, an online conspiracy theory that has steadily migrated offline.Credit...Tom Brenner for The New York Times
A city council member in California took the dais and quoted from QAnon, a pro-Trump conspiracy theory about “deep state” traitors plotting against the president, concluding her remarks, “God bless Q.”
A man spouting QAnon beliefs about child sex trafficking swung a crowbar inside a historic Catholic chapel in Arizona, damaging the altar and then fleeing before being arrested.
And outside a Trump campaign rally in Florida, people in “Q” T-shirts stopped by a tent to hear outlandish tales of Democrats’ secretly torturing and killing children to extract a life-extending chemical from their blood.
What began online more than two years ago as an intricate, if baseless, conspiracy theory that quickly attracted thousands of followers has since found footholds in the offline world. QAnon has surfaced in political campaigns, criminal cases, merchandising and at least one college class. Last month, hundreds of QAnon enthusiasts gathered in a Tampa, Fla., park to listen to speakers and pick up literature, and in England, a supporter of President Trump and the Brexit leader Nigel Farage raised a “Q” flag over a Cornish castle.
Most recently, the botched Iowa Democratic caucuses and the coronavirus outbreak have provided fodder for conspiracy mongering: QAnon fans shared groundless theories online linking the liberal billionaire George Soros to technological problems that hobbled the caucuses, and passed around bogus and potentially dangerous “treatments” for the virus.
About a dozen candidates for public office in the United States have promoted or dabbled in QAnon, and its adherents have been arrested in at least seven episodes, including a murder in New York and an armed standoff with the police near the Hoover Dam. The F.B.I. cited QAnon in an intelligence bulletin last May about the potential for violence motivated by “fringe political conspiracy theories.”
Matthew Lusk, who is running unopposed in the Republican primary for a Florida congressional seat and openly embraces QAnon, said in an email that its anonymous creator was a patriot who “brings what the fake news will not touch without slanting.” As for the theory’s more extreme elements, Mr. Lusk said he was uncertain whether there really was a pedophile ring associated with the deep state.
“That being said,” he added, “I do believe there is a group in Brussels, Belgium, that do eat aborted babies.”
The seepage of conspiracy theorizing from the digital fever swamps into life offline is one of the more unsettling developments of the Trump era, in which the president has relentlessly pushed groundless conspiracies to reshape political narratives to his liking. In promoting fringe ideas about deep state schemes, Mr. Trump has at times elevated and encouraged QAnon followers — recirculating their posts on Twitter, posing with one for a photograph in the Oval Office, inviting some to a White House “social media summit.” Recently, during a daylong Twitter binge, Mr. Trump retweeted more than 20 posts from accounts that had trafficked in QAnon material.
QAnon began in October 2017, when a pseudonymous user of the online message board 4chan started writing cryptic posts under the name Q Clearance Patriot. The person claimed to be a high-ranking official privy to top-secret information from Mr. Trump’s inner circle. Over two years and more than 3,500 posts, Q — whose identity has never been determined — has unspooled a sprawling conspiracy narrative that claims, among other things, that Mr. Trump was recruited by the military to run for office in order to break up a global cabal of pedophiles, and that Special Counsel Robert S. Mueller III’s investigation would end with prominent Democrats being imprisoned at Guantánamo Bay.
The anonymous posts subsequently moved to 8chan, where they remained until August, when that site was taken offline after the El Paso mass shooting. They now live on 8kun, a new website built by 8chan’s owner.
Some QAnon fans are hardened conspiracy buffs who previously believed other fringe theories, such as the bogus claim that the Sept. 11 terrorist attacks were an “inside job.” But many QAnon adherents are everyday Americans who have found in Q’s messages a source of partisan energy, affirmation of their suspicions about powerful institutions or a feeling of having special knowledge. Some are older adults who discovered the theory through partisan Facebook groups or Twitter threads, and were drawn in by the movement’s promises of inside information from the White House (some QAnon devotees even believe that Mr. Trump posts himself, under the code name “Q+”). Others are seduced by the movement’s wild, often violent fantasies, including claims that Hollywood celebrities are part of a satanic child-trafficking ring.
In online chat rooms, Facebook groups and Twitter threads, QAnon followers discuss the hidden messages and symbols they believe to be exposed in Q’s posts, or “drops” — for example, because Q is the 17th letter of the alphabet, a reference by Mr. Trump to the number 17 is seen as a possible signal of his support for them.
They watch “Patriots’ Soapbox,” a YouTube call-in show devoted to coverage of QAnon, and other niche media projects that have popped up to fill the demand for Q-related content. Reddit barred a cluster of QAnon groups from its platform in 2018, after a spate of violent threats from members, and Apple pulled a popular QAnon app from its app store. But other social platforms, including Facebook, Twitter and YouTube, still host large amounts of QAnon content. In general, these platforms do not prohibit conspiracy theories unless their adherents break other rules, such as policies against hate speech or targeted harassment.
The frequent introduction of new symbols and arcane plot points to dissect and decipher has given QAnon the feel of a theological study group, or a massive multiplayer online game. In interviews, several adherents described QAnon as a “lifestyle” or a “religion,” and said it had become their primary source of political news and analysis.
“It’s more of a cult than other conspiracy theories,” said Joseph Uscinski, a political-science professor at the University of Miami who studies fringe beliefs. “QAnon is not just an idea; it’s an ongoing thing that people can sort of get into and follow along with that keeps them entertained.”
With its core belief that the president is heroically battling entrenched evildoers, QAnon may be the ultimate manifestation of Trump-inspired conspiracy mongering. From the start, it was inexorably bound up with “Make America Great Again” communities online: The New York Times found last year that some 23,000 of Mr. Trump’s Twitter followers had QAnon references in their profiles.
But QAnon has steadily migrated offline to Trump campaign rallies, where dozens of supporters can be found with Q paraphernalia, carrying signs and commiserating about the theory. In recent months, QAnon adherents have complained that security officials keep people from bringing their gear into the rallies; the campaign said it permitted only approved signs and licensed merchandise at its events.
Harry Formanek, a 65-year-old retiree who attended Mr. Trump’s Florida rally in November wearing a QAnon T-shirt, said he learned about the theory after hearing allegations that top Democrats were running a child-sex ring out of a Washington pizza parlor — the hoax known as “Pizzagate,” which was something of a precursor to QAnon. Now, he said, he spends roughly an hour a day on QAnon-related websites and believes, among other things, that Mr. Trump signals his support with Q-shaped hand gestures during public appearances.
“My friends think I’m crazy,” Mr. Formanek said. “I mean, the proofs are just undeniable.”
With its growth in popularity, QAnon’s tangible presence is not limited to clothes, bumper stickers and campaign signs, all of which can be found for sale on Amazon and at other retailers. The theory also showed up at Mesa Community College in Arizona, where an adjunct professor of English, Douglas Belmore, began working it into classroom lectures. He was fired last summer after students complained.
Mr. Belmore announced his dismissal on Twitter, saying, “Why aren’t more professors, teachers, cops, pastors, and woke Americans everywhere NOT talking about this?” Later, he tweeted, “I pray that you see The Truth about POTUS and Q and their War against the trafficking of children,” and posted a video clip of Mr. Trump at a rally pointing to a baby wearing a Q onesie.
On the campaign trail during the past two years, at least six Republican congressional candidates, as well as several state and local politicians, have signaled some level of interest in QAnon. Danielle Stella, a Republican congressional candidate in Minnesota whose campaign’s Twitter account has “favorited” QAnon material and used a QAnon-related hashtag, was suspended from the platform in November after suggesting that the Democratic incumbent, Ilhan Omar, be hanged for treason.
In an email responding to questions about her position on QAnon, Ms. Stella said through a campaign aide: “The decision to side with Twitter regarding my suspension for advocating for the enforcement of federal code proves that The New York Times and Twitter will always side with and fight to protect terrorists, traitors, pedophiles and rapists.”
In San Juan Capistrano, Calif., Pam Patterson, a city council member, invoked QAnon in her farewell speech to the body in December 2018, reciting a Q posting as if it were Scripture.
“To quote Q No. 2436,” she said, “for far too long, we have been silent and allowed our bands of strength that we once formed to defend freedom and liberty to deteriorate. We became divided. We became weak. We elected traitors to govern us.”
Lin Bennett, a state legislator in South Carolina, spoke approvingly of QAnon on social media but later backed away from it, telling Charleston’s Post and Courier newspaper in May, “I got tired of looking at that stuff.”
And in Montana, an elected justice of the peace, Michael Swingley, was reprimanded in November by a state judicial board for using his official email account to send an angry message to a journalist who had written an article skeptical of QAnon. Mr. Swingley wrote that, regardless of “whether Q is real,” patriots were uniting because of it and “your world of fake news and liberal agendas that give away our country to foreigners and protect the Clintons and Obamas is coming to an end.”
Beyond the mainstreaming of QAnon in certain Republican circles, a bigger concern for researchers who track conspiracy theories is the potential for violence by unstable individuals who fall under its sway, particularly in the fraught political climate of the 2020 election. In its intelligence bulletin identifying QAnon as a potential domestic terror threat, the F.B.I. warned that partisan conspiracy mongering in the United States was being exacerbated by “the uncovering of real conspiracies or cover-ups” by political leaders. Social media was serving as an incubator for groundless theories and inspiring followers to take action, it said.
“Although conspiracy-driven crime and violence is not a new phenomenon,” the bulletin said, “today’s information environment has changed the way conspiracy theories develop, spread and evolve.”
Mr. Uscinski said that because some people with a conspiracy mind-set are willing to entertain political violence, it was perhaps inevitable that as QAnon attracted a bigger following, it would eventually come to include a dangerous, if tiny, subset of adherents.
“Once you reach a threshold of people,” he said, “that particular apple is going to show up in the barrel.”
The F.B.I. bulletin cited two episodes it said involved QAnon followers. In one, a 30-year-old Nevada man, Matthew Wright, armed himself with an AR-15-style rifle, a handgun and extra ammunition, and drove an armored truck onto a bridge near the Hoover Dam in June 2018. There, he engaged in a 90-minute standoff with police officers while demanding the release of an inspector general’s report on the government investigation of Hillary Clinton’s email practices.
After his arrest, Mr. Wright wrote letters to Mr. Trump and other officials, calling himself a “humble patriot” and making references to the QAnon slogans “Great Awakening” and “Where we go one, we go all.”
“I simply wanted the truth on behalf of all Americans,” Mr. Wright wrote, adding that he hoped those “responsible for purposely damaging our beloved country be held accountable and be brought to justice.”
In Arizona, the leader of a local veterans-aid group in Tucson, Michael Lewis Arthur Meyer, 39, was arrested in July 2018 after occupying a tower at a cement plant that he insisted was sheltering a child-sex-trafficking ring. Mr. Meyer “alleged a law enforcement cover-up and referenced the QAnon conspiracy theory as he and armed group members searched” for the nonexistent ring, according to the F.B.I. bulletin.
After the bulletin was prepared, there were additional incidents in Arizona and Colorado. Timothy Larson, 41, was accused in September of taking a crowbar to the altar inside the Chapel of the Holy Cross in Sedona, while yelling about the Catholic Church and sex trafficking. Mr. Larson’s social media posts are filled with QAnon references and pro-Trump memes.
And in December the police in Parker, Colo., charged Cynthia Abcug, 50, with conspiring with fellow QAnon believers to kidnap one of her children, who had been removed from her custody. Ms. Abcug believed her child was being held by Satan worshipers and pedophiles, according to her arrest warrant.
Also recently, Anthony Comello, 25, said in a New York City court in December that his belief in QAnon had led him to murder a mob boss, Francesco Cali, who he asserted was part of the deep state cabal working against Mr. Trump. Mr. Comello’s defense lawyer, Robert C. Gottlieb, said in a court filing that after the 2016 election, his client’s family “began to notice changes to his personality” that worsened over time.
“Mr. Comello’s support for QAnon went beyond mere participation in a radical political organization,” Mr. Gottlieb wrote. “It evolved into a delusional obsession.”
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|From: Glenn Petersen||3/1/2020 9:57:14 AM|
|Bernie's plan to hike taxes on some startup employees|
February 28, 2020
Sens. Bernie Sanders (D-VT) and Chris Van Hollen (D-MD) introduced legislation that would tax nonqualified stock options at vesting, rather than at exercise, for employees making at least $130,000 per year.
The big picture: Select employees at private companies would be taxed on monies that they hadn't yet banked.
The legislation is officially designed to "end tax advantages that allow CEOs to contribute unlimited amounts to special executive retirement plans," with proceeds going to "shore up multiemployer pension plans for 1.7 million workers." Startup employees are collateral damage, much like they would have been had similar language not been stripped from the 2017 tax bill.
What to know:
Why it matters: Many of the affected employees, even though well-compensated, may be unable to afford the taxes.
- This only applies to employees making more than $130,000 per year and vesting more than $100,000 worth of stock per year.
- That means it would be most likely affect employees at later-stage startups, where the strike prices are higher.
- The proposal doesn't have a grandfather clause, but does include a nine-year transition period (i.e., this wouldn't apply until paying 2029 taxes).
Tax attorneys tell me that this legislation would likely result in companies shifting more from stock options to restricted stock units (RSUs), and also changing vesting periods to quarterly or yearly (because paying taxes monthly would be an administrative nightmare for both companies and employees).
- Imagine you make $130,000 per year at a privately held company and have $200,000 worth of annual options vesting.
- You obviously are required to pay regular taxes on your $130,000 income, but now also must pay taxes on $100,000 worth of stock options (again, the first $100k is excluded).
- Or, put another way, you make $130,000 but are paying taxes on $230,000.
- Not only might you not have the cash, but there's also the possibility that the stock will later go to zero or liquidate lower than your strike price — but the bill includes no claw-back mechanism. So you've now paid taxes on money you never saw.
Sources familiar with the legislation tell me that there could still be tweaks to the language, so don't be surprised if all of this gets addressed. Particularly given that a top Sanders campaign advisor is Rep. Ro Khanna (D-CA), whose district includes such Silicon Valley burgs as Cupertino and Sunnyvale.
- But there are negative consequences to both: Companies typically provide fewer RSUs than options, because there's no strike price, and longer vesting periods could result in unhappy employees feeling compelled to stick around longer than they otherwise would.
The bottom line: This isn't about how much people pay in taxes. It's about when they pay it. It would make more sense for the timing to match the receipt.
Go deeper: Wall Street is scared of Elizabeth Warren
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