Tuesday, April 30, 2013

Voice of America's Albanian Services Celebrates its 70th Anniversary

On 13 May 1943, the first Albanian broadcast of the Voice of America went on the air. Only 14 months-old at the time, VOA was already broadcasting hundred of hours of programming in dozens of languages around the world.

In its inaugural program, in German on 1 February 1942, a voice in the ether announced what could well summarize the credo of VOA in the years to come:

"Today, and every day from now on, we will be with you from America to talk about the war. . . . The news may be good or bad for us – We will always tell you the truth."

For a lot of people on the other side of the Iron Curtain, the news kept getting from bad to worse throughout the Cold War. The repression of anti-communist movements was brutal and the list is long: Albania between 1944-1954, East Berlin in 1953, Hungary in 1956, Czechoslovakia in 1968, Poland in 1970s, etc. VOA broadcasts provided a glimmer of hope for those who could listen to its broadcasts at the time, although it must have felt like looking at a star in a cold night -- you know it is there yet it is so far away that it has no practical effect in your life.

People of my generation who had their formative years in the 1980s were fortunate to see the darkness part and ultimately dissipate with the collapse of communism in Eastern Europe between 1989 and 1992. For us in Albania, VOA broadcasts were the only source of news in our own language of the whirlwind of change in those years.

But it was more than just the words coming from the radio sets that affected us. VOA leaders at the time, like Mr. Frank Shkreli, Director of the Euroasia Division, and Dr. Elez Biberaj, Chief of the Albanian Service, put on the air as broadcasters young people who had recently defected to the West.

It was a genial move! At the same time that our conscience processed the words enunciated by the fresh voices of Izabela Islami, Zamira Islami, or Astrit Lulushi, our sub-conscience gradually began to formulate a path out of the darkness. They spoke to us but because they sounded like us, we could be like them.

Such subtle shifts in our psyche are what enabled the first demonstrations of January 1990, the storming of the Western embassies in July 1990, the student demonstrations of December 1990 and the mass protests of 1991 and 1992 that ultimately put an end to the communist regime in Albania. The rest, as they say, is history.

Congratulations to the VOA Albanian Service on this significant milestone!

Wednesday, April 24, 2013

Crowdsourcing and Crowdfunding: What the handling of the aftermath of Boston Marathon's bombing, North Korea, the Statue of Liberty, and Nigerian email scams have in common.

Image from crowdsourcing.org.
The decision by the FBI to invoke assistance from the public in sifting through the volume of images, photos and videos in search of the Boston Marathon bombing suspects was the most recent and visible example of crowdsourcing. More specifically, it was a Macro-tasking type of crowdsourcing, where a large task is presented to the public and each individual has the freedom to work on the solution as they see fit. Other types of crowd sourcing include Micro-tasking, Contests, and Crowdfunding.
In Micro-tasking, a large project is broken down into tiny tasks completed independently by a number of individuals. Amazon's Mechanical Turk or North Korean Mass Games are prime example of this type of crowdsourcing.

In Contests, a crowd is invited to work on a task but only winning or chosen entries receive compensation. On one end of the spectrum are sites for light-weight contests, like designing a logo, picking a tag line or a business name, such as SquadHelp or crowdSPRING. On the other side are heavy-duty sites like InnoCentive where solvers compete on challenges like Improved Asymmetric Synthesis of a 3,4-trans-substituted Piperidine or NASA's challenge for a Simple Microgravity Laundry System.

Image from Forbes.com.
Crowdfunding is one of the forms of crowdsourcing in which the crowd is invited to contribute monetarily towards an individual, goal, project, idea, etc. According to Nesta, the UK's innovation foundation, there were over 450 crowdfunding sites in 2012 with another 250 sites planned to go live in 2013.

At a high level, the business model for these sites is similar. The party seeking the financial contribution makes a pitch on the website describing how much they need, how the funding will be used, and what, if any, incentives they promise to the contributors. The potential backers sift through these pitches and individually or as a team decide to fund them or not. The crowdfunding site itself serves as an intermediary that facilitates the exchange of information and the transfer of funds for successfully funded ventures.

Obviously there are differences, driven by the type of contribution, incentives, motivation of funders, etc. Based on these differences, crowdfunding may be classified in the following four categories:
  • Donation. In this type of crowdfunding, the funders simply donate the money to support an individual or cause, without expecting anything in return. Perhaps the oldest example of crowdfunding belongs to this category. In late 19th century, France donated the Status of Liberty to the United States. Specifically, the donation meant that the French would cover the cost of building the statue and shipping it to New York. The Americans were responsible for preparing the site where it would stand and erecting the status there. A commission headed by Joseph Pulitzer was put together to raise the $300,000 estimated for the project. However by the time the statue was ready in France, they realized the commission had raised only $200,000. Pulitzer, through his network of newspapers, issued an appeal to the American public to donate in order to make up the shortfall. Within five months, $100,000 were raised from small donations, illustrating the tremendous financial power of the crowd if its interests are aligned. A typical crowdfunding site in this category today is gofundme. Within nine days of the Boston Marathon bombing, the site had raised $2,093,716 by 34,026 for its victims with an average donation of $61.50 per donor.
  • Reward. In this type of crowdfunding, the backers are promised a reward or incentive if the idea or project they are supporting comes to fruition. Perhaps the best known example in this category is KickStarter, where as of September 2012 over 65,000 projects had been submitted for funding and almost 44% of them were successful in raising a total of $300 million. KickStarter has an all-or-nothing model, in which projects are funded only if they raise all the money requested by the deadline specified. Other sites like IndieGoGo  transfer the money to the requestor as it is pledged irrespective of whether the target is met or not.
  • Lending. In this type of crowdfunding, the backers lend the money, typically in small chunks, to receivers who pay it back with interest over a predetermined amount of time. The interest rate typically is tied to the borrower's credit history. One of the most popular personal lending sites is Lending Club, which since its inception in May 2007 has handled over 1 million loan requests, approving 12% of them for a total loans amount of over $1.65 billion and almost $142 million in interest paid to investors. (Source: Lending Club, accessed on April 24, 2013.) While potentially these lending sites can be used by entrepreneurs and small business owners, in reality most of the loans (almost 80% of them in the case of Lending Club) go to consumers for debt consolidation and to pay credit cards with higher interest. An interesting twist on the concept is People Capital, which offers loans to college-bound students based not on their credit score, which most of them have not established yet, but based on their future promise. Yet another twist to the model are micro-financing and social landing sites, like the non-profit Kiva, where loans are used to fight poverty and support social causes in emerging markets.
  • Equity. In this type of crowdfunding, entrepreneurs and small business owners are matched with investors to raise money for their business as an alternative to seeking angel investments of venture capital backing. Because the transactions here qualify as equity purchases, they are subject to legislation and regulatory controls, which often is an impediment to the growth of these platforms. This is perhaps the reason why the leading sites in this category are European based, including Symbid, and crowdcube. The passing of the Jumpstart Our Business (JOBS) Act in the United States on April 2012 is intended to encourage funding of U.S. small business by easing various securities regulations, so we should expect Equity crowdsourcing platform targeting U.S. business pretty soon.
  • Scams. Like any other human endeavor, crowdfunding can be used for illegitimate or dishonest purposes as well. I am not talking about abuses of the platforms described above but schemes intended from the ground up to defraud people of their money. Examples are numerous here, including Nigerian emails, Ponzi schemes, fake donation sites that pop up after each tragedy, to name a few.
In conclusion, crowdfunding, as a model of capital distribution, is not new. But the convergence of mobile, cloud and social networking technologies has turned this model into a serious alternative to traditional banking, investment, VC and charity models.

I hope this overview is useful to you in understanding the space. If you have time, follow some of the links I have embedded and get involved. Support a project or idea you find worthy of your backing. if you happen to become inspired and come up with your own project, don't forget to send me the link so I can support and promote you.

Monday, April 8, 2013

Is the Downward Spiral in Enterprise IT Spending Evidence of IT Innovation at Work?

According to +Gartner (Gartner Research, Inc.), the overall enterprise IT market was predicted to slow down remarkably in 2012 with a growth rate of just 0.3 percent. The cumulative annual growth rate (CAGR) for 2011-2016 is estimated to be just 2.6 percent, with sectors like Government and Education actually shrinking.  (See research article by analyst Vittorio D'Orazio, ID: G00239472, 1 November 2012).

Is this a temporary trend, driven primarily by economic uncertainties left over from the 2008 financial crisis? Or is it a permanent effect on enterprise IT inflicted by innovations in the areas of Mobile, Cloud, and Consumer-driven technology?

Other industries have experienced shrinkage due to innovation. A recent example was presented in an article by +Paul Ziobro and Serena Ng (+The Wall Street Journal, Is Innovation Killing Soap Sales?, 4 April 2013, Pg. B1). According to the article, the introduction of pre-measured pod detergents has actually caused an industry-wide drop in sales volumes by 2.1 percent even though the price per load has gone up by at least 25 percent. Apparently, the end-user savings from efficient use of detergent, albeit at a higher price per load, have translated in lower overall volume of sales revenue for the industry.

Questions to Think About:
  • Will pay-as-you-go models associated with X-as-a-Service offerings end up having the same effects on the IT industry?
  • In other words, will efficient use of IT services by end-users actually drive down the growth of IT?
  • Isn't this the conundrum faced by any other utility and should IT planners and strategists factor this global trend in the long-term strategic plans?
Add a comment and take the poll to the right to express your opinion.