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Can the Real Estate Industry Be Remodelled?

By | Startups, Technology

We have become more accustomed to the idea of industry disruption since the internet and technology revolution took off but it is nothing new. In fact, industry disruptors have been around for more than 100 years. The classic example is the Ford Motor Company. Before they made the automobile available to many, wagon and carriage businesses, and the makers of buggy whips were the dominant industries. Ford revolutionized transportation and became a major disruptor.

The industries that suffer most from disruption are those whose players have no real differentiation — or, worse, are disadvantaged. For example, ride-sharing companies such as Uber, found it easy to disrupt the taxi industry because GPS systems and smartphone technologies had eroded the competitive edge that was previously held by the geographical knowledge base taxi drivers used to hold.

In addition, industries ripe for disruption are normally those where there are clear inefficiencies or lack of organization. The activity chains are overly complex and information flow is slow and error prone.  This leaves the door open for improvement. The real estate market is one of those industries.

We have identified the following companies who believe they have found some inefficiencies and are attempting to alleviate them by changing the way the residential real estate is bought and sold. They want to remodel the industry.


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Opendoor was founded in 2014 and is headquartered in San Francisco, California. Opendoor buys houses and owns them, acting as a middleman (as opposed to a matchmaker) in residential real estate transactions. They will not, however, buy every house. Qualifying properties include single-family homes built after 1960 with a value between $125,000 and $500,000. Their business model is two fold. They charge service fees which start at 6% and rise to 12% for more risky properties, and earn from any difference between what it buys houses for and what it sells them for. They also work with real estate agents and offer to pay full buyer commissions, as well as seller commissions if a sale comes from an agent.

Their total funding amount to date has been $320 million from 4 series rounds and roughly 50 investors.


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OfferPad was founded in 2015 and is headquartered in Gilbert, Arizona.  They claim to be a direct home buyer that will “…buy quality homes at competitive prices…and remove the hassle of selling your home…” Like Opendoor, they will buy your home as it is and without the seller’s needing to make repairs or upgrades to the home to get it sold. Additionaly like Opendoor, OfferPad’s service is limited to certain cities and house profiles.  Homes must be built after 1960 with a value that does not exceed $500k. They charge $7,500 as the OfferPad service fee and an additional 3% in closing costs.  The average commission of 6% of the sale price is deducted from proceeds at closing.

Their total funding amount to date has been $260 million from 2 funding rounds and one investor. The funding was debt financing.


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Knock was founded in 2016 and is headquartered in Atlanta, Georgia.  Knock is an online home trade-in platform. Launched by founding team members from, the company uses data science to price homes accurately, technology to sell homes quickly and a dedicated team of professionals to guide homeowners through the selling process. Knock believes that the problem they are solving is illiquidity. They state that 47 percent of home buyers need the money out of their existing home to make the deposit and get the mortgage on their next home. They employ technology to guarantee market price for your home in 6 weeks or less, even if Knock has to buy it. The fees that Knock charges are very similar to Opendoor and Offerpad. In addition, they charge an 8% interest rate for at least 60 days.

Their total funding amount to date has been $34.5 million from 3 funding rounds and 9 investors. The latest round was a series A.

The question is: Are these companies really disrupting anything? It is usually the commission that sellers are hesitant about when thinking of selling a property. These startups still charge a commission plus extra fees to the seller for the convenience and service. In addition, not all their services are accomplished online, as with traditional real estate you still have the staff coming to your home for the offer, inspections, and the walk through.

As in all these cases, they don’t really seem to be reinventing real estate sales as much as they are adjusting the marketing message to the customer. There is most definitely a market segment for their business models but it does not seem to be for everybody. If you want the best deal for your home you can probably still do just as well with a traditional realtor if you are not in a hurry.

These new business models are quite risky and places pressure on their pricing and valuation models. It is still not sure how they will manage in a real estate downturn. They could potentially rent if they find themselves stuck with a load of inventory, however that would all depend on the current debt agreements they have in place.

Nobel Prize-winning economist Robert Shiller, and founder of the Case/Shiller Index, when asked to comment on Opendoor’s business, said to Forbes,

“Bid-ask spreads, he notes, reflect information asymmetry, and if home sellers know more about their properties than Opendoor does, it will be vulnerable. With so many variables, Shiller says, some of which may be anecdotal, such as whether the schools in the neighbourhood are getting worse, it’s difficult to build a precise model.”

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WMD – Words of Mass Destruction

By | Politics, Psychology, Technology

On April 23, 2013, I was sitting at my desk watching the stock markets on my screen. I happened to be in a chat room with a number of other traders at that moment. Some were discussing their current Apple trade, others were concentrating on some options, and others just looking for their daily setups for their next trade.

I happened to be looking over at my twitter feed, when suddenly I saw this tweet show up from the Associated Press (This screen grab was taken by somebody else at the time before the twitter account was blocked and the tweet deleted).

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My first reaction was to tell the others. “Hey, did you guys see that a bomb just went off at the White House?” Just as the words came out of my mouth, the news began to spread like wild fire as more people became aware of the tweet. At that instance the stock market took an instant nosedive. Everybody started to scour all the other news sources to see if they could verify what we saw.

Just as quickly, the market reversed course and made a recovery. The Associated Press came out and said that the message was the work of a hacked @AP account. The account was immediately suspended by Twitter. Regardless, that tweet of an explosion at the White House was enough to tank the markets as much as 1% in those few seconds. The fact that the “fake” news was coming from a reputable source made the impact all that more powerful. Responsibility for the attack was later claimed by the Syria Electronic Army, a group that is reported to have the tacit support of Bashar al-Assad, although that could not be independently confirmed.

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The combination of a connected world, speed of delivery and the sheer volume of information seems to have created a weapon that we have never seen the likes of. At least, not one of this size. This weapon has been used in the past, but it has only been used sparingly and by only a few players at a time.  In addition, it was only implemented in certain situations in history.

So what has changed? Well, now this weapon is implemented daily. It is in the hands of many, although some wield more power than others, the small players still have the ability to make use of this weapon in a very efficient manner. The weapon is misinformation.

Why is it so powerful? Each time a reader encounters one of these stories on Facebook, Google, Twitter or really anywhere, it makes a subtle impression. Each time, the story grows more familiar. And that familiarity casts the illusion of truth. The more sensationalized a story, the more it has the ability to spread. A story that casts a wide net attracts a large number of viewers. In today’s connected world, a large audience translates to money.

Although many companies and individuals attempt to “stretch the truth” or outright create “fake news” as a strategy to gain followers there are many other motives to do so. The Government has employed a strategy of misinformation for years as a means of rallying support for their causes. On February 5, 2003, Powell appeared before the UN to prove the urgency to engage a war with Iraq. Powell himself stated later: “I, of course, regret the U.N. speech that I gave,” he said, which became the prominent presentation of their case. In May 2016, Powell said,  “At the time I made the speech to the UN, President George W. Bush had already made the decision for military action.”

Donald Trump has been the US President for over one year now, yet that has not stemmed the constant barrage of conspiracy theories around his win concerning potential collusion with the Russians. What it has done though is to present the power of misinformation in forming people’s opinions. Regardless of the fact that the stories we have heard are true or not, the seeds have been sown.

These false ideas that enter our psyche create feelings of doubt and suspicion. This in turn creates anxiety within the masses. The manipulative power of today’s social media tools (see here) coupled with our need to satisfy our addiction for more information, in order to quell these doubts, creates a powerful tool in the form of WMD, words of mass destruction.

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Maslow and the New Economy

By | Psychology, Technology

Abraham Maslow was a pioneer in humanistic psychology. He devoted much of his career to describing human needs and defining human potential. He believed that people have two kinds of needs, deficiency needs and growth needs. Deficiency needs are what you need to survive, such as food, water and shelter. Growth needs are quite different. They are needs to become more and more yourself. Each person wants to develop the abilities and talents he finds in himself. Some call it destiny and others call it fate. Some call it finding your purpose in life. Finding your purpose eliminates self doubt, inner conflict and confusion.

Maslow observed that it is extremely difficult to work on your growth needs if you have deficiency needs. The more energy a person must devote to obtaining food and shelter, or building up their own self-respect, the less time they have to identifying their purpose, or as Maslow called it “Self-actualization.” Self-actualization is not a process that has an end; it is a way of being, of continuously becoming more yourself.

As we now live in an environment which seems to be dominated by smart phones and computers we thought it would be interesting to revisit Maslow, and using his framework, identify what smart phones and particularly social media has done for us as individuals.

Maslow presented his work as a pyramid, or as it is called, “Maslow’s Hierarchy of Needs.”

Self-Actualization Needs

The need to fulfill one’s unique potential

Psychological Needs

Esteem Needs: To achieve, to be competent, gain approval and recognition

Belongingness and love needs: To affiliate with others, to be accepted and belong

Fundamental Needs

Safety Needs: To feel secure, safe and out of danger; Psychological Needs: Satisfy hunger, Thirst, Sex Drives

On the lowest level are the needs that every human must satisfy to stay alive. We need to nourish ourselves with food and water, and our natural sex drives are what keep humanity from becoming an extinct species. On the same level is shelter and safety.

It is not always so obvious today with apartments, housing, supermarkets etc. everywhere you look but in our ancestors day you can clearly see that from their waking hour the main objective was to find food and water for the day. Once that was done, they spent time securing their caves from potential threats. I don’t think they spent much of their day pondering thoughts of acceptance or what their calling may be.

On this level we can ask ourselves how smart phones or your social media accounts have helped. It is clear that they don’t provide actual nourishment or shelter. It can be argued to what extent they fulfill psychological or self-actualization needs and we discuss this further on in this post.  There are other technologies that are enabling new and innovative ways of building. Advances in biotech are allowing us to understand living organisms more so that we may find better ways of nourishing the planet and its inhabitants. In addition to technologies enabling creation, there are equally just as many technologies that are enabling destruction. Regardless of technology, each individual still has to think about satisfying their basic needs daily. It can be argued that for all of our recent technological innovations that have increased efficiencies, they have also put many individuals out of work. Statistics show that the homeless population in rich countries such as the US are growing. There are an estimated 553,742 people in the United States experiencing homelessness on a given night, according to the most recent national point-in-time estimate (January 2017). This represents a rate of approximately 17 people experiencing homelessness per every 10,000 people in the general population. Regardless of any technology, the fundamental needs of these people are not being met. These needs are their priority every night.

Those who have satisfied their fundamental needs move to the next level. They then become concerned with psychological needs. The need to affiliate with others, to be accepted and belong.  They have esteem needs which include the need to achieve, to be competent, gain approval and recognition.

This is the level where smart phones have taken over the lives of many. All of the current technology powerhouses such as Google, Facebook, What’s App, Instagram, Snapchat and so many more, have exploited this human need for belonging and affiliation with others. We have previously written about how these companies have gone to great efforts to analyze our actions and behaviors so that we are drawn to their platforms and stay as long as possible. It becomes an endless loop which can also cause opposite negative effects of loneliness and depression as people find themselves locked in a virtual world of many yet isolated from everyone.

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Our connected world has brought many people, separated by great distances, together. So it is not all bad, but like anything, too much of a good thing can produce harmful effects. Many users have managed to satisfy those psychological needs of belonging through these devices. Yet that dopamine and adrenaline rush produced from those feelings of love and acceptance from the 20 likes you may have received from your “friends” has also produced problems of addiction. It keeps you coming back for more. At this point, it is difficult to break free of that cycle and move to the top need on Maslow’s hierarchy, the need for self-actualization.

Those individuals that have their fundamental and psychological needs satisfied begin to ponder self-actualization needs which may include the pursuit of knowledge and beauty, or whatever else is required for the realization of one’s unique potential. Maslow believed that although relatively few people reach this level, the needs lie dormant in all of us.

Technology has not really produced anything ground breaking in terms of helping one to reach a level of self-actualization. Maslow observed that self-actualizing people are exceptionally spontaneous. They are not trying to be anything other than themselves. They know themselves well enough to maintain their integrity in the face of opposition, unpopularity, and rejection.  The people that Maslow studied also had a rare ability to  appreciate even the simplest things. They approached their lives with a sense of discovery that made each day a new day. They rarely felt bored or uninterested. It should be noted that no amount of wealth, talent, beauty, or any other asset can totally shield someone from frustration and disappointment. A certain degree of stress is built into the human condition.

All our technology innovations may enable us to reach certain objectives a bit quicker, although at the same time, they can restrict us from moving ahead. In the end, we are no better off considering that human needs have not considerably changed over our thousands of years of history.

Are you aware of anybody who has reached self-actualization? Have you made it there yet? You may find it interesting to ask yourself which needs are you currently spending most of your days trying to satisfy or how far you have to go before you can sit back and comfortably reflect on what your real life purpose is.

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We have seen the future and it is DNA storage!

By | Science, Technology

Technology advancements in the last 10 years alone have made our world more connected than it has ever been, providing people a simpler and faster means of documenting and sharing memories. Millions of people are taking pictures, recording movies or producing reports and messages on a daily basis. However, our digitally connected world is now creating information at an unprecedented rate. Each year roughly 16 zettabytes are being produced (one zettabyte = one billion terabytes). The research group IDC estimated that by 2025 we will be producing over 160 zettabytes a year.

Although all this data may be seen as a treasure trove for researchers, advertisers or data analysts, we are finding that current storage technologies are not able to keep up. This torrent of information may soon outstrip the ability of hard drives to capture it. Since we’re not going to stop taking pictures and recording movies, we need to develop new ways to store them.

Our daily production of photos, documents, messages and movies are not the only sources of data. Advancements in the world of biotechnology and genomics in particular promise to be producing vast amounts of data.

It has been 18 years since the first draft of the human genome sequence in 2000. However, the draft human genome sequence was merely a first step. A deeper understanding requires many more sequenced genomes, as well as cheaper and faster sequencing methods. In order to achieve this we need vast amounts of computing power and storage. According to a report published in the journal PLoS Biology, it is estimated that by 2025, between 100 million and 2 billion human genomes could have been sequenced. If we add the errors incurred in sequencing and preliminary analysis, the number of data that must be stored for a single genome become 30 times larger than the size of the genome itself. The data-storage demands for this alone are estimated to be as much as 2-40 exabytes (1 exabyte is 1018 bytes). Biologists and computer scientists are now worried that their discipline is not geared up to cope with the coming genomics data flood.

Curiously the problem of the masses of data that can be extracted from the human genome may in fact provide a solution for storage needs. In the 1970s Frederick Sanger of the Medical Research Council’s Laboratory of Molecular Biology and his colleagues published a paper on a particular genome and indicated that it may contain a message from aliens. The thesis was not taken very seriously but the possibility was enough to intrigue many scientists, in particular one Harvard biologist named George Church. Church began to wonder if one could encode messages into biological DNA.

Along with two Harvard colleagues, George Church translated an HTML draft of a 50,000-word book on synthetic biology into binary code and converted it to a DNA sequence. DNA molecules are long sequences of smaller molecules, called nucleotides — adenine, cytosine, thymine and guanine, usually designated as A, C, T and G. Rather than creating sequences of 0s and 1s, as in electronic media, DNA storage uses sequences of the nucleotides. Church and his team coded 0s as A or C and 1s as G or T—and “wrote” this sequence with an ink-jet DNA printer onto a microchip as a series of DNA fragments.

To store a picture, for example, you would start with its encoding as a digital file, like a JPEG. That file is, in essence, a long string of 0s and 1s. Imagine the first eight bits of the file are 01111000; they are broken into pairs – 01 11 10 00 – which correspond to C-G-T-A. That’s the order in which you join the nucleotides to form a DNA strand.

Church and his team were successful in encoding around 650kb of data and retrieving it, which led the team to predict a storage potential for their method of more than 700 terabytes per cubic millimetre.  This was by far the largest volume of data ever artificially encoded in DNA. It illustrated a data density for DNA that was several orders of magnitude greater than that of state-of-the-art storage media. It is believed that a single gram could hold roughly a zettabyte of data. A few kilograms of DNA could theoretically store all of humanity’s data.

There are still numerous challenges to overcome, such as storing (the act of storing data in DNA is a lot easier than getting it back out), proper retrieval and archiving. DNA is slow and expensive to make as it requires pinpoint precision to ensure every single molecule is coded accurately. So, at the moment, mass production is not an option, however as DNA synthesis continues to improve, scientists believe that it can one day become a realistic permanent storage device for all our data.

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The Dark Side of Email

By | Marketing, Technology

The invention of e-mail created huge efficiencies in the world. Messages that used to take weeks to receive now arrive instantaneously. However, with every great step foreword there always seems to be a portion of the population that embraces the dark side of innovation.

Mail promotions at one point used to be expensive. Even if a company did have a large address list, they still needed to print out their flyers, pay for postage to have them delivered or pay someone to deliver them. After that, there was no easy way to judge the success of the mailing campaign. It was not a viable marketing strategy for many businesses to embrace.  E-mail changed all that. It became easy to send out hundreds of thousands of emails to strangers, not once but as many times as desired at next to no cost.

As hard as I have tried to filter spam, as it has become to be known, still infiltrates my inbox. No filters have been strong enough to eliminate all of them. Spam is not a simple problem, and the chances that we are able to eliminate it completely one day are quite low. It is a cat and mouse game whereby for every measure taken to eliminate spam there is a counter measure taken by spammers to increase their distribution efficacy. Unfortunately, spammers have only begun to explore the range of options and techniques open to them, and this digital waste is inevitable in any open system of communication.

On May 3, 1978, Gary Thuerk, a marketer for the Digital Equipment Corporation, sent out his message to 393 of the 2600 people on ARPAnet, the DARPA-funded so-called “first Internet.” His motivation was effectively to sell something. He was selling Computers, or more specifically, information about open houses where people could check out the computers. By taking this action he annoyed a lot of people but worst, he also had some success. Although not many, but a few recipients were interested in what he was promoting. That was enough to validate the action.

On April 12, 1994, husband and wife team of lawyers, Laurence Canter and Martha Siegel sent out what became known as “The famed Green Card Spam incident.”  They bulk posted, on Usenet newsgroups, advertisements for immigration law services.  The couple defended their actions citing free speech rights.  They later wrote a book titled “How to Make a Fortune on the Information Superhighway“, which encouraged and demonstrated to people how to quickly and freely reach over 30 million users on the Internet. This incident is noteworthy as it marked the beginning of the flood of spam.

These two incidents have been well documented but it is to merely to impress upon you how long the problem has been around. Today,  statistics show, as of the most recently reported period, spam messages have accounted for 59.56 percent of e-mail traffic worldwide. According to, in 2016, the United States accounted for the majority of unsolicited spam e-mails with 12.08 percent of global spam volume. The most common types of spam e-mail were healthcare and dating spam.

Initially, I thought that I could avoid a large part of unwanted e-mails by creating a dedicated e-mail address that I would use solely for reputable services that I sign up for.  Then, strangely enough, this email seemed to be showing up in my inbox but attached to a number of services and products that I never signed up for.

So how did they get my email?  Not surprisingly, spammers are very resourceful and have come up with a variety of ways over the past 20 years which include the following methods but not limited to:

Buying illegal lists – There have been an increasing number of high profile hacking events where millions of emails have been stolen from company servers and ISPs.  In addition, there have also been incidents where dishonest employees of ISP’s will sometimes download information directly from their work servers. These e-mail lists then find there way onto the open market where they are sold to spammers.

Harvesting programs – Also known as “crawl and scrape” programs, are also commonplace. Any text on a web page that contains “@” character is fair game for these programs, and lists of thousands of addresses can be harvested within an hour via these robotic harvesting tools. While harvesting requires a lot of bandwidth, it is simple: Simply download the right pages from select Web sites and extract the e-mail addresses that are available. There are a variety of these programs available that may be employed:

  • Web spiders: Spammers employ Web crawlers and spiders that harvest e-mail addresses from Web sites. It’s common for Web sites to include mailto: URLs as well as unlinked user@domain addresses. These Web spiders are not unlike the spiders and Web crawlers used by Yahoo, Google, and others that scan the Internet’s Web sites in order to keep Web search indexes fresh. If your e-mail address if visible on your website then you are a target.
  • Newsgroups: This is simply extracting e-mail addresses from Usenet newsgroups with a simple shell or Perl script.
  • Groups, blogs, and discussion boards: Yahoo! and Google have their groups and mailing lists, many of which make their members’ e-mail addresses available. There are thousands of blogs and discussion boards that contain easily acquired e-mail addresses.

Test messages – In this method, spammers send test e-mails to recipients whose addresses they simply guess.  They conclude that if they do not receive a nondelivery receipts (NDRs) back from the domain that the e-mail address must be legitimate. However, more servers are now opting out of sending NDRs to avoid this.

Unsubscribe links – Many spam messages include an opt-out or unsubscribe link so that the recipient can request not to receive more spam. However, often the real purpose of unsubscribe links is to confirm a valid, active e-mail address. If a company has purchased your e-mail you could still unsubscribe and take yourself off the list, however, if the company is not legitimate then you are simply confirming to them that your e-mail is valid.

Malware – Spammers sometimes use Trojan horses, viruses, and worms to extract e-mail addresses from individual user’s computers.

Dictionary programs – These products will generate alphabetic/numeric combinations of addresses in sequence. While many of the results are incorrect, these dictionary programs can create hundreds of thousands of addresses per hour, guaranteeing that at least some will work as targets for spam.

Curiously, in my inbox, I often find legitimate companies advertising their services. Therefore, these companies have either purchased a stolen or harvested list. So that gets me thinking about the company that purchases such a list. Do they have a marketing department that has actually promoted such a strategy?

According to a study conducted in 2008 by researchers at the University of California, Berkeley and UC, San Diego, it was found that spammers were getting a response just once for every 12.5 million emails they were sending — a response rate of 0.000008% (Despite that, though, spammers were still able to turn a profit). That’s a miserable response rate, and well below the 2.15% rate that legitimate direct mail companies report. However, spam is still considered cheaper than legitimate marketing when working at the spammers scale, and can apparently still be effective at generating profits. Therefore, many companies still attempt to employ these strategies.

In this New Economy, too many companies are focusing on promoting “digital marketing” strategies that will hopefully get as many people to their storefront as possible. Yet there is obviously too much focus on “digital” and not enough on “marketing”. You can see it in your mailbox daily. Products and services that don’t apply to me still target me. It is purely a carpet bomb approach.

These companies should start asking different questions if they want to remain viable. Instead of asking, “How can we push as many people as possible towards our storefront,” they should be asking,  “what is the customer’s problem and how can we add value towards helping solve it?”

Great products and services that add value will always get noticed. This will breed a force of fanatical users and fanatical users are the best sales force any company can have, and more effective than any spamming campaign could ever hope to be. Just ask a company like Apple.

Everybody was Quantum fighting, those computers were fast as lightning ….

By | Science, Technology

Quantum computing is a critical new arms race and the reasons are quite clear. It will render existing cyber security methods useless. So far China is leading the pack in terms of efforts and investments in quantum computing. There is little evidence that the US government is concerned about this based on comparative amounts of spending budgeted for this area.

The Hutch Report has published a well written PDF that describes the technology in layman’s terms and objectively presents the opportunities and threats in the Quantum Computing race. This report can be downloaded for free here.

Here is an excerpt:

The ability of a quantum computer to crack pretty much all of the current encryption systems, in the time that it takes you to read this sentence, would make the global financial system highly vulnerable to attack, not to mention state security. In addition to racing to build stable and scalable quantum computers a critical challenge of this arms race includes developing and deploying cyber security and quantum-resistant encryption.

U.S. officials and scientists have already voiced their concerns stating that the country that holds quantum supremacy will have an edge in everything from business to national security to the military. The Trump administration’s intention to reduce the federal budget with cuts to scientific projects has only stoked that worry.

Although the U.S. currently remains at the forefront of quantum information science, their lead is slipping quickly as other nations step up efforts to get there first. China holds the top two positions in the Top 500 list of the world’s fastest computers and the Chinese understand very well the potential power that quantum computing promises. For this reason they have allocated extensive funding towards the goal of producing a functional quantum computer before anyone else. On 37 hectares (nearly 4 million square feet) in Hefei, Anhui Province, China is building a $10 billion research center for quantum applications. This news comes on the heels of the world’s first video call made via quantum-encrypted communications and the completion of a quantum encrypted fiber optic trunk cable.

In comparison, the European Union is committed to invest $1 Billion over the next 10 years into their quantum computing projects while the U.S. government currently allocates about $200 million per year to quantum research (a recent congressional report noted that inconsistent funding has slowed progress). And many of the projects vying for grant money appear to be thinly veiled shams set-up as resellers or consulting firms with not much behind them.

According to an article in the National Review, “In 2016, 4.2 billion computerized records in the United States were compromised, a staggering 421 percent increase from the prior year. What’s more, foreign countries are stealing encrypted U.S. data and storing it because they know that in roughly a decade, quantum computers will be able to get around the encryption.”

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It’s got the moves like Jetson!

By | Science, Startups, Technology

It all starts with a vision and that comes from imagination. The vision of flight is nothing new as we now have thousands of flights transporting millions of passengers daily. However, in spite of that there has always been the dream of getting into your car and taking off in flight.

This idea has continuously popped back into our imagination over the years from as far back as there have been cars. We have seen memorable examples over the years from George Jetson transporting his family in his flying car to the depiction of the flying car from Back to the Future. We have seen them in the Blade Runner, The Fifth Element, Total Recall, Reboot, Spaceballs, Batman Beyond, and Star Wars. So why have they not become reality?

In fact, they are not that difficult to manufacture. We already have the expertise.  In trying to imagine the world of flying cars, the technology is probably the easiest part to predict. The hardest part is how to balance regulations, and all the potential dangers that could come with thousands of cars flying up above a city.

This is not stopping companies from moving forward though. The Hutch Report visited the Geneva Car Show this year to discover what this new economy is producing in the way of cars for the future.

In addition, to the regular new design launches of combustible engine cars, there was an obvious move towards all electric vehicles as well as self-driving vehicles. But surprise, surprise, this year saw the unveiling of two flying vehicles, one which is ready to be commercialized.

The Hutch ReportThe Pal-V Liberty models on the market will be the limited Pioneer Edition. The Pioneer Edition marks the launch of the flying car era. Worldwide, only 90 vehicles of this edition will be sold. After the delivery of the Pioneer Edition models, PAL-V will start the delivery of the PAL-V Liberty Sports models. The PAL-V Liberty Pioneer Edition will be the very first certified commercial flying car ever delivered, a world premier.

The Hutch ReportIt can currently be purchased for € 499.000.00 ($615,000.00). It will cost € 25,000.00 to reserve a PAL-V Liberty Pioneer Edition. The contract is transferable within the country of registration and you have to expect 9 months before scheduled delivery. There are 10 lessons near to your home or place of work and the fee is a non-refundable deposit. Anybody purchasing one of these flying cars will of course be required to get a pilot’s licence to fly one.

Italdesign and Airbus had their world premiered of the Pop.Up, the first modular, fully electric, zero emission concept vehicle system designed to relieve traffic congestion in crowded megacities. The Pop.Up is a modular system for multi-modal transportation that makes full use of both ground and airspace.

It is presented as a system concept consisting of three layers: an Artificial Intelligence platform that, based on its user knowledge, offers alternative usage scenarios; a vehicle shaped as a passenger capsule designed to be coupled with two different and independent electric propelled modules, the ground module and the air module. Other public means of transportation (e.g. trains or hyperloops) could also integrate the Pop.Up capsule; and an interface module that dialogues with users in a virtual environment.

It combines a small two seater ground vehicle with a vertical take-off and landing (VTOL) air vehicle, thus bridging the automotive and aerospace domains.

At the heart of the concept is a capsule: designed to accommodate passengers. The capsule transforms itself into a city car by simply coupling to the ground module, which features a carbon-fibre chassis and is battery powered. For long journeys with traffic congestion, the capsule disconnects from the ground module and is carried by a 5 by 4.4 metre air module propelled by eight counter-rotating rotors. In this configuration, it becomes a urban self-piloted air vehicle. Once passengers reach their destination, the air and ground modules with the capsule autonomously return to dedicated recharge stations to wait for their next customers.

The financing, ingenuity and expertise is now obviously available to produce these vehicles on a much larger scale. As far as demand goes, we don’t think that there will be any lack of interest as more than a few consumers would jump at the chance to escape the painful commute on a congested highway. How to manage the infrastructure is the biggest problem and that usually only becomes an issue once the problems begin to accumulate. As an example, we have a greater interest in electric cars. There are more and more of them arriving on the market yet we lack the infrastructure to charge these vehicles. We spoke with a Tesla owner at the car show that explained our he had to plan his trip from the Netherlands to Geneva very carefully in order to have the charge necessary to reach his destination. “I still have about 100km of charge left with which to find a charging station.”

We have millions of cars creating more and more traffic congestion. We have problems of substance abuse behind the wheel that causes potential harm to others. We still have manufacturing faults that find their way into the market, putting vehicle owners in potential danger. Of all the traffic fatalities in the past few years, “Ninety-four percent were the result of human driving error,” said Damon Porter, director of state government affairs at the Association of Global Automakers.

It is a nice dream to imagine being able to get into your car, take off above the crowds and get to your destination in comfort and style in no time at all, but reality may have other plans.

The Hutch Report

The Better Life Fallacy

By | Psychology, Technology

The world has been innovating at a rapid pace over the past 20 years like no other time in history. Technological advances have created the likes of companies such as Uber, Task Rabbit and Airbnb. In this new connected society we now have new powerful social networking platforms such as Facebook, Instagram, and Linkedin. We have everything that we ever wanted to know at our fingertips with tools such as Google. We have new communication tools such as email, text messaging, Twitter, Snapchat, What’s App, or Skype. We are seeing the reduction of brick and mortar stores, slowly being replaced by online Mega Stores suchs as Amazon, Alibaba, and Priceline, driving down prices. Traditional television is being replaced by the likes of Netflix and YouTube.

These changes have removed the gatekeepers from a number of industries. You don’t require a publisher to sell a book, you don’t need a record label to sell music, you don’t need to be a journalist to publish news. Soon we may not need banks to transfer money with the introduction of cryptocurrencies such as Bitcoin and Ethereum.

With all of these changes in our society, you would think that the results have all been for the betterment of us all. After all, our lives are more efficient now, are they not? We have more time on our hands, don’t we? More jobs have been created, have they not? The information and news flow in the world is more transparent isn’t it? The internet, ipads and iphones have produced better educated children haven’t they? People are generally happier now that they can have what they want when they want it, aren’t they? We think the jury is probably still out on all these points because the truth is, the reality has not lived up to all the promises.

While we can translate smartphones and the Internet as tools of efficiency, these efficiencies have in fact made people’s lives more sedentary, which in turn has a negative impact on health. The message always seems to be that you don’t have to move from your seat, just press a button and the world comes to you. Search the net for the best buy, get it delivered right to your door. Buy your groceries online and have them delivered to your door. Find the best restaurant nearest you.

Why go outside to play sports when you can play them online? Playing sports outside now seems so strange. Intead of actually playing sports, people are sitting down and playing them on their screens. Multiplayer used to be real interaction between people. Now you sit alone in a cyber world and pretend that you are really interacting with people. This is causing psychological problems of isolation. In addition, the amount of violence steaming across our screens has reached never before seen levels. This is is causing us to become desensitized to it, which we wrote more about here.

Now that we spend so much of our time looking down into these smartphones, people are starting to experience new kinds of aches and pains. Just recently a study showed that smartphone related neck pain has been on the increase.  According to a study at Harvard Medical School, researchers found that reading e-books had an adverse impact on “overall health, alertness and the circadian clock, which synchronizes the daily rhythm of sleep to external environmental time cues”

We have highlighted here how google search is modifying our brain’s ability to think and how our attention spans are being slowly eroded. Having all the answers at your fingertips seems to be removing the need to think about problems. As the old saying goes, “use it or lose it,” as it applies to our brains in this case. We wrote about the social media casino here, explaining how big social media companies are manipulating our brains so that we stay longer on their platforms.  This increases their revenues while at the same time they are creating problems of smartphone addiction among the masses.

The new world of text messaging and Snapchat has done nothing for english spelling skills. Texting has become any every day task that many teenagers engage in on a day to day basis. Many of those text messages that are sent often contain textisms. The use of textisms is starting to become more accepted among the younger generation. There are now worries from both media sources and educators that texting may have a negative effect on the literacy skills of students. In addition, the constant scrolling and texting is causing increasing cases of repetitive strain injuries.

In a always connected world there doesn’t seem to be anywhere to hide. If you want to use the technology you have to give something up. That something is your privacy. Long gone are the days of having an unlisted telephone number and staying offline to keep your information safe from prying eyes. It doesn’t take much effort to find anyone’s address and contact information. We can go on google and basically stand infront of a 3D picture of their house. People don’t seem to worry about letting this technology track every move they make, freely giving out their location on Google Map and putting their entire life story on Facebook.

We keep making things smaller and thinner giving the impression that it is saving room but at the same time we are producing more and more gadgets that don’t provide much more than the ones you already posses. Think about all the families with multiple gadgets doing the same things.  Televisions, that now come with access to the internet, computers, iPads, big smartphones, smaller smartphones, iPods etc..

The companies producing these products, want you to have all of them and repurchase them as often as possible. For this reason we have multiple upgrades with very little value added with each one. If your smartphone, ipad or television breaks, getting it repaired is no longer even an option. We used to have an industry built on reparations. Now it would cost you more than the price of the product to get it repaired, so we dispose of the old one and purchase a new one.  This is creating huge amounts of waste in our environment. It is dding to the current levels of toxicity in our air and land. These products are rarely disposed of properly, causing deadly chemicals to leak into the ground. Companies in Asia that manufacture the electronics are not properly regulated and therefore have been responsible for emitting toxic fumes into the air.

This new economy has changed the face of the middle class and consumerism in general. Americans now owe more than ever before, with household debt hitting a record of nearly $13 trillion. And auto loans, home loans and credit card debt are all still on the rise, according to the Federal Reserve Bank of New York. While at the same time, the richest 1% now own more than half of all the world’s household wealth, according to analysts at Credit Suisse (These millionaires – who account for 0.7% of the world’s adult population – control 46% of total global wealth that now stands at $280 trillion. At the other end of the spectrum, the world’s 3.5 billion poorest adults each have assets of less than $10,000. Collectively these people, who account for 70% of the world’s working age population, account for just 2.7% of global wealth).

So are we living a better life? You be the judge.

The Hutch Report

The 4 Cryptocurrency Opinions To Avoid

By | Cryptocurrency, Technology

The level of trading activity in Bitcoin and other cryptocurrencies has begun to attract the attention of the general public. It seems to be everybody’s favorite subject these days. Discussion and debates about Bitcoin are raging at dinner tables across the nation and around the world. In addition, the number of articles outlining Bitcoin’s future trajectory have increased daily. In spite of the number of financial media channels having previously written it off as a mania, now provide its viewers the latest daily quotes.

It is not so much the promise of this new peer-to-peer technology that operates with no central authority or banks. Nor is it interest in the fact that a collective network carries out the issuance of bitcoins and manages the transactions that have captured the attention of the public. There are a number of early adoptors who have become extremely rich off of the increase in value of Bitcoin and the so called alt-coin market. It is the dream of quick riches that is really driving the interest.

Whenever a technology begins to reach fever pitch, as we are seeing with cryptocurrencies,  a large number of self-proclaimed experts begin to appear. They are suddenly gifted with incredible prediction power. They know where the price will be in 3, 5, 10 and even 20 years. They happen to know that no government will be able to control it or stop it. They seem to know that it will eventually take over the world as the primary form of currency for all transactions.

However, these are not the only voices being heard from the rooftops. There are also those with equally impressive predictive powers. Those that seem to know where the top is. The point where Bitcoin ceases to move up, reverses and begins its long slide back towards where it began. Those  that seem to know that no solutions will ever be found to the current technological challenges that a decentralized digital currency currently faces. Those that seem to know that cryptocurrencies will never be a replacement for the platform of fiat currencies on which our economies currently function. They seem to understand all the weaknesses of these digital currencies and where their limits are.

Nassim Nicholas Taleb, author of “The Black Swan,” presents a convincing case on our inability to predict events with hard-edged analysis. At the same time he stresses to protect yourself from highly improbable events. Therefore, the first thing that should be done is to avoid the following 4 outspoken opinionated groups on the subject of Bitcoin. These groups are all supporting their own interests, which don’t always coincide with the interests of the individual.

1) The Financialists

The Central Bankers and their affiliate bankers around the world see themselves as the guardians of the global economy. In addition to providing a variety of services to the public that enable the economy to function rather smoothly on a daily basis, banks are still for-profit institutions and their principle goal is to generate profits. This is often done by way of complicated products with unsusual naming conventions. They control the money transfer and credit system, therefore, they weild a large amount of control towards the stability of the system. For this reason, they will not tolerate any outside technology that threatens their position. The initial reactions to Bitcoin were that of a pure fad. Further analysis sees them now trying to discover ways to regulate it, or create their own digital currency where they have the full control to profit from it. Their opinions are changing daily based on their confidence in how to manage its evolution. They are worried and rightly so as the initial concept of a decentralized digital currency would make many of their services redundant.

2) The Technologists

Bitcoin and the blockchain are based on technology. They have, not surprisingly, attracted the attention of the technology and developer community. They believe because it is based on technology, and they understand technology that it provides them with more powerful forsight. Once the value of Bitcoin began to rise, the startup community began to move into action and started developing a variety of ideas such as wallets, new exchanges, a variety of platforms etc. It has now become the hot area to be involved in. So hot that public companies that have nothing to do with Bitcoin or the blockchain have changed their names to incorporate the term blockchain only to see their shares rise immediately. The technologist are on a crusade and want you to join the crusade. However, it is wise not to forget that at one point there was once a product called a Betamax cassette which was superior to the competing VHS cassette only to lose out and be banished to history. Apple computer produced a much higher quality product and software than the PC and Microsoft option at the time. Apple computer only managed to acquire 5% of the PC market, much to the surprise of the followers who understood the value behind the technology.

3) The Evangelists

The leader of this group and one of the most vocal has been Andreas Antonopoulos. Antonopoulos became involved with Bitcoin in 2012. He has written two books on the subject, describing in detail the technical rules governing Bitcoin in a way that a novice could understand, and has given more than 200 talks (many of them free) about Bitcoin. Antonopoulos obtained his degree in Computer Science and Data Communications and Distributed Systems from University College London. With his help the Bitcoin evangelists have an ever increasing choir. Some of them understand the technology and find its possibilities fascinating. There are the bandwagon jumpers who want to join the club and fit in with the “cool crowd.” There are those that see it as a great way to transfer money around without the peering eye of the government, or truly a new medium of exchange not governed by any central authority.

Then there are also those who have dreams of striking it rich. Ironically, Antonopoulos, after having spent the last five years of his life traversing the globe and educating people about Bitcoin found himself not only NOT taking advantage of the run up but found himself in debt, until a wrath of Bitcoin evangelists donated to his cause. This came just at the moment when he was questioning what he was doing it all for.

4) The Governmentalists

Governments are the farthest from being Bitcoin advocates. This is not because they don’t believe in digital currencies. In fact, they would garner more control by ridding the economy of hard currency and make everything digital. This would enable them to gain tighter control of the money supply or increse their efficiency of tax collecting. What they don’t appreciate is loss of control. The idea of a collective decentralized managing transactions and digital currency issuance is an idea that they will never accept. Why? They require a centralised authority (which is them). We wrote about the ways in which governments could shutdown cryptocurrencies. It is, therefore, no surpise that they are fighting vehemently against the idea.

So who should you listen to? This is one of those situations where you must truly take matters into your own hands. You have to acquire the knowledge necessary, educate yourself and decide for yourself how this new system of digital currency could affect you personally. This means choosing your information sources carefully. If you do listen to any of these groups, be cynical and don’t take what they say at face value. Double check and do your own research. Depending on who you speak to, you will be labelled as blind if you don’t buy into it or labelled as an idiot if you do. In the end, it is the market as a whole who will ultimately decide the fate of cryptocurrencies.

The Hutch Report

Computer Generated Headlines – Read All About It!

By | Technology

Everybody seems to be lacking time in what we call the New Economy.  In the past few years there has been a wave of innovation in order to address this. There are now more productivity tools and apps on the market than ever before. We have tools to help us stay focused better, improve our channels of communication with friends and co-workers, create projects easier, take better notes, keep your notes better organized, or how to identify distractions in your life so you can cut them out.  All these tools are meant to save you time out of your busy day to do the things you love. Still, nobody seems to be finding that time.

In addition to a lack of time, we need to deal with the massive amounts of information that we are presented with on a daily basis. We spoke about this here (The Hutch Report). There are thousands and thousands of articles being produced and published every minute and there is just not enough time in the day to read them all, along with all our other activities. In order to filter out all the noise we skimm through the headlines hoping to gain an understanding of the big picture.  The Skimm, ( does just that by providing editorial contents and headlines targeted to women.  Authors and publishers know this so it is imperative that they create the perfect headline that will catch the reader’s eye, also known as click bait, and hopefully tweak their attention enough to where they read the full article.

But wait, this is the New Economy and anything that can be automated and made more productive will be. This includes headlines. I discovered this quite by accident well before there was a New Economy, smartphones or social media.

When I began getting interested in the financial markets I used to spend a lot of time reading all kinds of newspaper articles.  I rarely missed the Wall Street Journal’s daily overview of the previous day’s market action. As time went on I started to notice that there was one headline that would pop up extremely often, “The Dow ends lower on profit taking.”  I didn’t understand the meaning of the headline. How would the writer of the article even know that this was profit taking? When I took losses on my investments, headlines such as that began to get me annoyed.  I thought to myself, “Doesn’t the Dow ever end lower because investors have been forced to take losses?”

I paid more attention to the wording of these headlines and as I did I started to see more and more contradictions.  I found it curious that no matter what the financial markets did, all these newspaper journalists seemed to have an understanding as to why it was, and managed to encapsulate that in a pithy headline. I began to question the validity of the information I was consuming.

One day by chance I met someone who was working for the Dow Jones Newswire.  I jumped at the opportunity to gain more insight as to how these journalists managed to analyze the day’s activities on the financial markets and identify the catalyst for their movement in such a short amount of time.

The representative from Dow Jones Newswire told me that the markets were constantly changing so it was far more convenient to have the computers generate the headlines.  I learned that they have a database of headlines that are related to any general world news events that may be happening during the day. This could be anything from a company takeover, to gold going up, to gold going down, to oil going up, or to the rumblings of war in the Middle East. For example, if the market drops off the open and oil has gone up, the morning headlines may read, “Dow falls on higher oil prices”. During the day, however, it is not uncommon to have the market reverse and end the day up.  The headlines would then read, “Dow rises on higher oil prices.” These are the contradictions that I recognised that began to show up daily.

This was a revelation because I now understood that the headlines I was reading were actually completely arbitrary and computer generated. In my mind, this reduced  their “news” value to essentially zero because it was not providing me with the big picture overview I wanted.

From the time of my discovery that the Dow Jones Newswire was using a headline generator, the amount of content being produced has gone up exponentially. The ability to make sense of it by way of new technologies such as artificial intelligence has in turn become much more sophisticated. A North Carolina-based startup named, Automated Insights, founded in 2007 and backed by the Associated Press, Samsung and Steve Case built technology to automatically take raw data and translate it into narratives that look like they’ve been written by a human. It uses a technology called Wordsmith to generate stories. Typically, Automated Insights works with large customers to create the templates that the Wordsmith software fills in. The company claimed it was producing hundreds of millions of pieces of content for customers that included Yahoo and Microsoft.

Wibbitz is an AI-driven production software that USA Today has used to create short videos. It can condense news articles into a script, string together a selection of images or video footage, and even add narration with a synthesised newscaster voice.

The large media companies are using all options to become more efficient and more profitable. So now, not only are headlines computer generated but we are moving into an age where complete articles will be written by computers.

As explained in his book “The End of Big”, Nicco Mele explains that it is not all doom and gloom for the future of journalism and journalists. Much of the fact finding mission is now going direct by way of user generated media. The proliferation of blogs and other small grassroots news and opinion Web sites are undercutting the current economic model of news by fragmenting audiences. A segment of the market, such as, The Skimm, is making an effort to “Humanise” headlines and provide the reader with as much information as possible in an efficient manner.

The big challenge facing us now is that as these computer algorithms get more sophisticated, it is getting more and more difficult to identify what is computer generated and what is human generated. If your goal is to be more productive and save time by glancing over headlines in order to understand the big picture, you may be putting yourself at a disadvantage as these headlines may not be providing you the complete picture. Your best bet is to carefully choose your information sources, and that includes companies that propose to summarize the daily news for you, such as Bit·of·News. But beware!  Bit·of·News is powered by PyTeaser, a news summary algorithm that ranks sentences in a news article according to how relevant they are. The top 5 sentences are used to form a “summary”.

In the end, you may find yourself reading a computer generated summary of a computer generated headline that has been constructed from a computer generated article. Although, for the moment as far as I know, the one thing that is not yet computer generated is the actual event being written about!