The Ethics of Clickbait

I wandered out onto the Internet a few days ago to visit one of the aggregation sites I frequent, and there it was, in big bold print, like a tabloid headline at a checkout counter at the grocery store: “Why is Taylor Swift Buying Up Porno Sites?” If you check out the story, you will find that the pop singer in question isn’t purchasing pornographic web sites, or any other kind, in fact; the article is about public figures buying domain names that include their own name, in order to keep anyone else from starting porn sites (or other unauthorized web pages) under those names. I’m not going to comment on the ethics of that because I don’t believe there is another side to it; creating pornographic material of any kind using the name or likeness of another person without their permission is wrong, and needs no further debate. But the concept of tabloid-style headlines that are used to mislead a person into clicking on an otherwise dull news story (or worse) seems worth a closer look…

We should probably begin by noting that tabloid headlines have existed for at least a century now, as have a variety of other sensationalist publishing practices. The story you found inside many print publications was rarely as interesting as the headline made it sound, precisely because headlines have always been part of a publication’s marketing efforts. Accurately presenting the contents of your articles, rather than adding misleading headlines to draw people to read them became one of the marks of a reputable news organization, and the same standards (good and bad) carried over into radio and television programs once those became available. One could reasonably suggest that Internet headlines following the same standards (collectively known as Clickbait) would be no better or worse than their paper-and-ink predecessors…

On the other extreme we have Internet ads featuring pictures of attractive models, exotic locations, world leaders, unfamiliar plants and animals, or even company logos that have promote stories or entire websites that have nothing to do with the pictures. And while some of these links are clearly fraudulent – there is no magic secret that will change the dimensions of your genitals or motivate outrageously attractive members of the opposite sex to throw themselves at you, to take only the most obvious examples – it isn’t always clear when an online sources is merely amusing and when it is an outright criminal deception until you have clicked on the link. We could simply ignore all Internet headlines and all proffered links, of course, and perhaps we should, but this still does not address the ethics of the situation itself…

The legality of misleading Internet ads, and the extent to which they can be or even should be subject to the same standards of truth in advertising required in other media, is one of those subjects that is still evolving as our society adjusts to life online. My question is much more direct, and hopefully more appropriate to a business blog: what responsibility do we, as managers, have to accurately present links to information, websites or products online as what they honestly are? And under what circumstances is it ethically acceptable to use a salacious or titillating headline in order to draw attention to a story, website or link that does not deserve that attention?

If we are presenting information to the public as Internet journalists, then we must hold ourselves to the same standards of integrity as a print or electronic-media journalist assuming we wish to have any credibility at all, but what if our only goal is to amuse, entertain and develop online relationships with potential customers – as well as convincing them to purchase our products and/or services, of course? If it presents our advertising material to potential customers, generates sales, creates revenue, keeps our company running, generates jobs and salaries for our employees, and produces a reasonable return for our owners it is difficult to say that there is any real harm in convincing people to click on a picture of an attractive model that leads to a website that has nothing to do with the picture. However, no matter how benign our motives might we, we are still misleading the public and using up their bandwidth under false pretenses every time we do this…

It’s worth thinking about…

The Cost of Space

There was an interesting article on the Vox website a week or so ago about the relative costs of exploring and colonizing space relative to the amounts our government spends on other things. It’s no secret that I have been in favor of space exploration for as long as anyone can remember, going back to early childhood when I watched Neil Armstrong step out onto the surface of the Moon for the first time and “helped” (to the extent that a six-year-old can help) my father build a plastic model of the Apollo spacecraft. But over the years since Apollo space travel has lost a lot of its popular support and interest, and increasingly people seem convinced that moving beyond Low Earth Orbit is prohibitively expensive under any conditions short of a full-blown Cold War pissing contest. It turns out that this isn’t exactly the case…

For example, the cost of building and deploying the F-35 Joint Strike Fighter, everybody’s favorite high-tech boondoggle, is running about $29 billion per year (projected) over the course of its 50 year service life. The cost of a manned mission to Mars is estimated at about $5 billion per year over 20 years – about $100 billion compared to $1.5 trillion, if you prefer. Granted that no one has ever built the equipment to go to Mars, the price differential might not be quite as high as it appears; my point here is that a Mars project could run 100% over budget and still leave $19 billion a year over for F-35 units…

If that is too speculative – and I can see how it might be, given the currently unknown issues involved in interplanetary travel – how about something more down to Earth? Ask anyone you like which the US spends more money on, NASA or the Post Office, and see what they say. Most people would tell you that the USPS is supposed to make money, or at least break even; there are years where it loses money, but not that much. According to the USPS and NASA websites, however, our government lost $5.5 billion on the Post Office last year, while NASA’s Planetary Science program (that’s everything they’re working on that relates to the planets, moons and asteroids) received just $1.35 billion. To be fair, the whole of NASA’s budget is bigger than what we lost on the Post Office – it’s about $16 billion according to the agency’s own 2015 projections. But we should also note that this is still only a third of what we lost on Medicare fraud according to the GAO – not what we spent on actually providing Medicare benefits to the people who qualify for them, but what the Federal government lost on overpayments, benefits sent in error, and outright fraud…

If that’s not crazy enough for you, consider that according to the GAO, in 2013 the Federal government’s Office of Personnel Management spent just under $85 million on payments to Federal retirees who were, at that time, already dead. Again, that’s not counting death benefits or payments made to spouses or dependents; that’s the money literally thrown away. By contrast, the New Horizons spacecraft, which is due to reach Pluto later this year, costs about $78 million per year. And that’s not even counting silly things, like the fact that the U.S. Mint loses $105 million per year on pennies and nickels – pennies cost more than 1 cent to make, and nickels cost more than 5 cents to produce…

Why does he tell us this? I hear some of you asking. After all, it’s not as though I can tell you what we stand to make on our investment; I can’t even tell you for certain what the benefits of commercial utilization of space are likely to be. My point here is that the income from things as simple as communications satellites, memory foam, advances in electronics and the so-called “space metals” is already incredible, and all of the commercial space flight thus far is just barely scratching the surface of that potential waiting a few thousand miles overhead. There may be good reasons why we should not go to space; there may be more important or more immediate uses for the necessary resources here on Earth. I’m just saying that whatever those arguments might be, cost isn’t one of them…

How Would It Look?

Some time ago in this space I brought you the story of a tragic natural gas line explosion in California, and how the utility company who owned the lines had been accused of giving all of its senior management personnel lavish wages, raises and bonuses using the money that they claimed was being used to upgrade the line and improve safety measures. At the time it seemed fantastical, the stuff of Dilbert cartoons and comedy scripts about unscrupulous business leaders, more concerned with fattening their bank accounts than they were with the safety of thousands of innocent people. Now it turns out that things were actually much worse than that…

According to a story in this week’s Los Angeles Times, the utility company in our story, Pacific Gas and Electric (PG&E) had indeed requested permission from the Public Utilities Commission to use $5 million worth of ratepayer (customer) money on the gas line replacements and upgrades, as I reported in the earlier post. However, it turns out that this was the second time all of this had happened; the Company had also requested $5 million in 2007 to perform the same work, and had given it to their senior managers as wages and bonuses that time too…

The Times does not speculate on how many more times PG&E might have tried the same maneuver before they were finally caught, or whether they ever would have been had a tragic and completely preventable disaster not occurred. I believe that we are justified in asking that question under the circumstances, however; and if I was one of the people whose lives and property were placed at risk so that a bunch of very wealthy people could become a little bit wealthier, the question would be more of a lawsuit and less of a rhetorical device…

The thing that puzzles me the most about the situation is that no one inside or outside the company seems to have questioned these rather questionable decisions. Some sources have claimed that amount of the misappropriated funds goes as high as $100 million and took place over a much longer period, and the fallout from the scandal has resulted in national attention of the very worst kind, changes in Federal law governing gas pipeline safety, and indictments that could result in fines of as much as $1.4 billion, none of which even considers the ongoing civil trials for injuries, wrongful death, and destruction of private property…

Popular culture fantasies (and nightmares) aside, most companies in real life will tend to avoid wildly irresponsible actions even when the possibility of natural gas explosions isn’t present, if only to avoid being the subject of countless blogs, Internet news stories, television programs and eventually even books and movies in which the intelligence of their leadership is compared unfavorably to that of a newborn gerbil. In the case of a publicly-held or investor-owned company there is a very real chance of a stockholder’s revolt (or the equivalent) during which the entire senior management team and the Board of Directors who were supposed to be supervising them will all effective get fired, and even a private company would have to be worried about banks refusing to loan them money (because they might not be around long enough to pay it back), investors refusing to buy their bonds (ditto), or vendors refusing to sell them anything on credit (see above)…

Nor would any reasonably sane businessperson expect the sort of misbehavior PG&E has been accused of remaining confidential during the Internet age. Exposure and scandal were already a problem generations ago – look up the curious events that happened at the Watergate complex in the early 1970s, if you don’t believe me – but today it’s a virtual certainty that anything the company does will leak out eventually. The era when any company could go about its business and not care about how any of its actions would look in the media has been gone for decades, or possibly centuries, and it is far past time that managers of all types and levels stopped making choices that even a rodent born a few minutes ago would consider insane…

A New Era

Over the years in this space I have brought you stories about products and services that appear to be hoaxes, and some that I can only wish were not. I’m not naïve enough to believe that PenguinWarehouse.com was ever a real business, or crazy enough to try keeping a live penguin as a pet if it was, but I was deeply disappointed to learn that the service purporting to send people you don’t like a box of elephant droppings was a hoax, and quite cheered to learn that the company that will send people you don’t like a selection of obscenely-shaped greeting cards was real. Now, however, the Salon.com website has brought us the story of what may be the new winner in this category, which if true has the potential to usher in a new era of Internet-based pranks…

I’ve never actually heard anyone use the obscenity “Eat a Bag of Dicks” (hereinafter EABOD) outside of cyberspace; it seems to be common on certain discussion boards, in occasional comments sections, and of course in online chat over video game networks, but I can’t recall anyone actually shouting it in public except as a reference to one of the above cyber interactions. However, according to the Salon article, it would appear that there is a new company calling itself “Dicks by Mail” that will send your specified recipient a large bag of gummy candy in the shape of male genitalia, along with a gift card containing the aforementioned EADOB invective. The company is promising complete anonymity, although I suppose that if you wanted the recipient to know that you had sent them a bag of obscenely-shaped candy you could always arrange to have it sent to your own address and then add a more personalized message…

Now, clearly this isn’t a serious product or a serious service. If all you want is to insult someone, with or without the use of obscenity, there are far more convenient, cost-effective, and untraceable ways to do that. For that matter, if your recipient really likes gummy candy and isn’t particularly fussy about what shape said candy is in, they might not actually mind receiving such a package. The company insists that its product and service are not intended to bully or threaten anyone, and that they will not be party to any such actions if they find out what their customer is up to, stating that anyone who would use this service to do actual harm should in fact EABOD themselves…

How this will work out in the long run I can’t imagine. There has always been a small but devoted market for obscenely-shaped candy and pastry, including offers made over the Internet during the last few years to supply chocolate models of parts of the sender’s anatomy that would not normally be something you would show to another person, let alone make a mold from and cast in chocolate. None of these companies has precipitated the collapse of our civilization, or indeed ever risen above the level of somewhat risqué novelty products, and it seems likely that even within the culture of Internet gamers no one is likely to take the EABOD offering all that seriously…

On the other hand, as e-commerce continues to develop there will be fewer and fewer limitations on the products that can be manufactured, sold and shipped from websites, and we should probably note that there are concepts which are common online that could lead to consumer products that would be even more disturbing than the EABOD product referenced in the linked story. If this venture proves to be economically successful I would fully expect that you will be able to economically and untraceably send people whom you do not like a whole range of insulting, embarrassing, or simply disgusting products within a few years…

This would, in fact, be a new era in both e-commerce and Internet communications. Just not in a good way…

What’s in a Name?

Some years ago my wife was telling me about some of the amusing – and occasionally embarrassing – email addresses that people had included on their hiring paperwork, and speculating that this would eventually catch up with them over the course of their career. Most of said employees were graduate students at the time, and few of them had much work experience outside of academia. Consequently, most of them had never had occasion to consider if telling your new employer that your email was “HisGoldenLady@whateveritwas.whatever” might have a negative effect on your subsequent career prospects – or, for that matter, on your chances of getting a job in the first place. The problem has always been that given the huge number of email accounts currently in use, and the subjective nature of resume screening at most employers, it has never been completely clear what effect (if any) such email addresses actually have on your career – until now…

The story comes to us from the Daily Mail website, which means we have to take it with at least some amount of salt (the Daily Mail has had an unfortunate habit of not fact-checking its stories, going back to before Internet news sites were a thing), but apparently a team of researchers at a university in Amsterdam have just completed a study where they asked a group of recruiters to read resumes that were identical except for the “applicant’s” email address, and comment on how likely they were to select that individual for an interview. Participants in the study were significantly less likely to consider a given applicant if their email address included “cute” words or terms, multiple underscores, or anything else that seemed inappropriate for a job application. One can only imagine what their reaction might have been to the terms of endearment, double and triple entendre, or outright sexual references you occasionally see college students using as personal emails…

Now, we should probably also note that the study involved a relatively low number of participants, and also found that spelling errors, formatting errors, or even random changes in font would also have severely negative impacts on your chances of getting a job interview. But even accepting that further research to reproduce the results on a much larger scale would be necessary before we could formulate any hard-and-fast rules about email and employability, the fact that this study found any significant results at all is kind of amazing; rather like discovering that a shaggy-dog story you often tell over a few beers at the pub turns out to have solid scientific support. It makes me wonder how many of our other funny stories will turn out to be facts of life in the Internet age – and it brings home to me again that our world is changing in unexpected ways…

There are people my age, and even younger, who still don’t really “believe” in email – only use it when they are unable to avoid doing so, prefer to use voice, fax and even snail-mail whenever possible, and actually seem to believe that the whole thing will go away again if we all ignore it hard enough. This is understandable, of course; there have been those who stubbornly resist every new technology. What is rather more bizarre is that even people who love email and spend most of their time using a computer (including some people who grew up online and should really know better) don’t seem to grasp the inherent vulnerability of information you put online. Anything you write on the Internet will remain available somewhere no matter how hard you try to find it and expunge it, and no matter how romantic your email address seemed when you registered the account, it’s still going to be available to anyone who tries to communicate with you via email…

And none of this even mentions unfortunate email addresses created by work-based systems by combining letters of the user’s first and last names to create something completely obscene – but that is a story for another day…

Start Paying

People my age who are reluctant to dive into new technologies and new products are frequently accused of getting more conservative and/or cautious with age, but the truth is that I wasn’t a particularly early adopter of new products or technologies when I was young. Today, after witnessing any number of new ideas that looked wonderful right out of the box but took years to fully mature, it has become second nature to me to wait and see what happens to a product before I consider buying one. The first few generations of mp3 player had issues, for example; it wasn’t until three or four years later that an iPod version appeared that was actually reliable, and the same could be said for most types of smart phone, tablet, or even laptop computer. So when Apple Pay came out, offering to provide you with a revolutionary new way to buy things (“Store all of your credit cards in your phone!”) I was immediately skeptical of the idea. Now it appears that Bank of America, Citigroup, Capital One, American Express, Chase, and several of the other “Launch Partners” who got in on the ground floor with Apple’s new service are wishing they’d been a little more skeptical, too…

You can find the New York Times article here, if you want to, but it appears that thieves have been stealing credit card numbers and using Apple Pay to charge things on the linked accounts at an amazing new rate – estimates go as high as 6% of all Apple Pay transactions, compared to 0.1% for traditional credit cards. Or, to look at it another way, $6 out of every $100 on Apple Pay versus ten cents per $100 on traditional credit accounts; more than sixty times the “usual” rate for identity theft. One might reasonably expect all of the affected banks to be screaming bloody murder at Apple, or at least demanding that the company do something about the situation. But the really interesting thing about this case is that not only are the various financial institutions bending over backwards to avoid angering Apple, but it might not be Apple’s fault this fiasco is occurring…

As near as I can tell, all of the financial institutions in this story were so worried about being left out in the cold under Apple Pay that they failed to require anything more than basic credit card information (the kind that identity thieves steal every day in job lots) before allowing a user to upload credit card information onto their phone. Even the sort of security questions, billing address and telephone information, or passwords normally used for online transactions would have made a difference, but none of those measures were used. Even worse, when the issues with Apple Pay began to emerge, several of the banks detailed general customer service call centers – rather than actual fraud prevention teams – to deal with the situation. As a result, there have been numerous reports of thieves actually calling in themselves to tell the banks not to flag an account that is being used in another state or country (the old “we’re on vacation this week” scam repurposed for a new generation)…

Now, I don’t mean to suggest that the original oversight wasn’t completely understandable; new technologies and methods for separating consumers from their money that actually work don’t come along every day, and if Apple Pay ends up being as pervasive as some of their other products and services then any financial institution would have to be crazy not to try to get in on the ground floor. What is less excusable is failing to implement industry standard security measures at the same time, or at least devote appropriate anti-theft and anti-fraud support, although both would have been better. It seems highly unlikely that Apple would have objected to greater security, given that they also have a vested interest in getting as many people to use Apple Pay as possible. And, in fact, now that this story has gotten out and people are having second thoughts about the whole concept, Apple has started working with the banks to provide more account information and security measures…

Maybe once the technology companies and financial institutions get all of the bugs worked out, I’ll look into Version 3.1 or 4.3 of Apple Pay, or however many iterations it takes before the risks involved are no higher than any other form of credit card account. In the meanwhile, I may still be coming off as a grumpy and conservative old man, but at least I’m not having to call my credit card provider and demand to know why I am being billed for $12,000 worth of kumquats purchased in a country into which I have never set foot…

You’ve Got to be Kidding…

It was one of those moments when you just assume that someone on the Internet is having a joke, either on you or on the world in general. On one of the news aggregation sites I like to visit was a headline about a guy starting a crowdfunding appeal to raise money to follow his girlfriend to Miami for Spring Break – on the grounds that she would dump him if he doesn’t rush to her side. I hit the link hoping to find the legend “April Fools!” somewhere on the other side…

Unfortunately, there was no such comforting word. You can pick up the original story from the Washington Post site if you want to, but I’m afraid the headline was correct: “Boyfriend to crowdfunders: ‘Girlfriend will dump me unless you send me to Miami spring break.’” It turns out that the young man in our story is convinced that “the sun just melts all the morals in Miami,” and unless he is there to “overseeing all parties and fun activity for the duration of the trip” his relationship will be over. Post reporter Peter Holley (whose article provided all of the above quotes) recounts these events with a remarkably straight face, not even stooping to humor when the modest amount requested ($300 USD) falls short by more than two-thirds of the total ($91 out of $300 requested), which is definitely better than I could have managed in his place. But as humorous as this story appears, I do believe it is covering a more serious issue…

Done correctly, crowdsourcing is one of those very rare new ideas that really can change the world for the better. Just over the past few years we’ve seen dozens, or possibly hundreds, of business ventures that would never have been able to obtain finding through traditional channels assemble the capital needed to launch successful ventures. Audio, video and publishing projects that no one would ever have gotten to see have been produced; new technologies that could improve the quality of millions of lives have been developed, charitable projects have gotten the support to serve people who would otherwise have been neglected, and deserving companies have been able to go on providing jobs to their employees, goods and services to their communities, and an honest living to their owners. Unfortunately, not all of these stories have ended well…

Last summer we heard the story of the young man who decided to request $10 on Kickstarter to make potato salad – not thousands of dollars to feed the hungry, or even money for groceries until payday, but just enough money to make a bowl of potato salad to see if he could. He ended up with well over $50,000 and a vast chorus of critics, all denouncing the stunt and bemoaning the fact that crowdsourcing projects asking for money to pay medical bills or feed the hungry were being ignored in favor of a bowl of potato salad. If you look around any of the major crowdsourcing sites you will find dozens of projects just as silly as this one, and dozens more posted by people who really do need help and have nowhere else to turn, nearly all of which remain unfunded or even ignored. And every day, the number of people asking for your support increases, until eventually finding even one worthwhile project will take longer than anyone has to spend surfing the Web…

It makes you wonder how many worthwhile projects are never going to be heard of at all because someone is trying to convince people to help him follow a woman who may or may not actually be his significant other around on a vacation that she apparently took without him. Or, for that matter, because of any number of other cute, funny, silly, satiric, sarcastic, naïve, inappropriate or delusional projects that collectively make this wonderful new form of capital development that much harder to use for people who actually need help…

Already on the Street

In an amusing follow up to my Apple Watch post from earlier this week, CNN Money is reporting that cheap knock-off versions of the Apple Watch are already on the street in several major Chinese cities. Literally cheap, in this case; some of the knock-offs have been observed selling for as little as $40 US compared to a starting price of $349 for the cheapest model from Apple. The fakes aren’t that sophisticated yet; they’re mostly Android-based devices that don’t look anything like an Apple product or come anywhere near the performance level the Apple Watch is supposed to have. It’s hard to believe that these products are fooling anybody, especially considering that the real Apple Watch isn’t available for sale yet, but it does illustrate just how much of a problem knock-offs are becoming…

Traditionally, when you mention knock-offs, people will assume that you are talking about clothing or fashion accessories that have been made to look like a designer label but are actually just cheap copies made using inferior materials and/or workmanship. Depending on the complexity and quality of the original, it can take months or even years before the knock-off products achieve a fully convincing copy, but eventually many of these items will reach a point at which only an expert will be able to tell the real thing from a sophisticated copy. Knock-offs of electric or electronic products can work the same way, with black-market companies churning out cheap versions intended to fool the customer into believing they are getting the real thing, but there are also cases in which a competitor in the same industry will purchase the original product, take it apart, and then develop their own version of the same technology under their own brand…

How often this happens, and to what extent one product is an unauthorized copy of another, are legal questions that have kept battalions of lawyers busy over the years, and complicated international trade between countries that have strict laws against theft of patents and intellectual properties and nations that do not. What I find remarkable about the story linked above is the speed with which this seems to have happened, and the related factor of how easily the counterfeiters (called “shanzhai” in Chinese) have managed to produce a fake version of an Apple product. Even granted that the counterfeit products don’t begin to have the functionality or style of the real thing, it can no longer be denied that they have gone to market over a month before Apple will be ready to do the same…

Any time a large and powerful company takes forceful action to protect its designs, inventions, or brand image, there always seems to be some amount of push-back, as people assume that the company is being greedy and using its legal power (and money) to destroy potential competitors. And while, at least to some extent, that is probably true, it seems worth pointing out that sometimes the company really is being ripped off by small-time operators who know full well that they are stealing somebody else’s property. I don’t know what Apple is going to do about this rising trend in counterfeiting, or how it is likely to affect their sales in the future – but it does seem as though they should consider getting their products to market a little faster, or at least leaving less time between the introduction and the date the product is made available for sale…

Present But Not Accounted For

In yet another installment in our seemingly endless saga of airlines behaving badly, a local television station here in Michigan is reporting that a passenger on a Southwest Airlines flight was mistakenly notified that he had failed to show up for his flight that morning, and all of the other flights on his itinerary were being cancelled. This would be upsetting if he had received the message hours or even days before his flight; it would be somewhat amusing if he had received the message weeks after his return home. What makes the story noteworthy is that the passenger received this notice while he was actually aboard the airplane, during the flight…

You can pick up the original story here, if you want to, but the gist is simple enough. When the hero of our story arrived at the gate and attempted to board the aircraft, the ramp agent attempted to scan the bar codes on his boarding pass – a method of tracking passengers that is becoming increasingly common at US airports. Unfortunately, the scanner failed to read the codes on the first and second try. Since the line was long and the time to departure was short, the agent gave up and just let the passenger board, no doubt planning to manually enter the boarding information later. In the event, however, the agent either forgot about the manual update or was too busy to take care of it before the company’s computer system noted the “no-show” and cancelled the man’s non-refundable ticket…

I’ve written in this space before about the somewhat questionable ethics of non-refundable tickets, but apparently I missed the single most corrosive aspect of such products: the fact that people with non-refundable tickets miss their flights just as often as anyone else, and will then make up whatever preposterous story they can think of in order to convince the airline to refund their money or replace their ticket. After a few years (or possibly less, in some cases) of listening to stories that are filled with whining, vitriol, or outright insults to their intelligence, the airline’s customer service personnel have gotten fed up with the entire situation and are apparently refusing to listen anymore – it’s hard evidence or nothing, and the passenger in our story didn’t keep a receipt from either airport, let alone retain his boarding pass…

Now, I don’t want to rag on Southwest Airlines in particular; I know that all of the major airlines have regulations like this, and I imagine that all of them are having the same issues with their customer service personnel, at least to the extent that they weren’t already. What I think is getting lost in this story is just how lightly the airline is getting off, given the potential disaster they were courting. The linked story is mainly focused on the airline cancelling their customer’s non-refundable ticket and refusing to refund the replacement ticket he had to buy to get home following their screw-up, but imagine if they had given away his seat before the airplane left the ground. Southwest generally doesn’t have assigned seating, which means they would have been left with an airplane with 180 passenger seats and 181 people aboard - and no way to tell who the imposter really was…

Even worse, though, would be the case in which the passenger really didn’t board, but his luggage already had. This would violate any number of Federal safety regulations, possibly resulting in massive fines or other sanctions against the company – which would still be less of a fiasco than if the passenger had placed a bomb in his checked luggage and then failed to check in. In this case, the airline didn’t get around to cancelling the passenger’s ticket until he and his luggage were already in the air, which means that no one had the chance to take note of his absence and pull his suitcase out of the cargo hold, either. And while it’s true that the odds of a random murderous psychopath attempting to bring down any specific airplane are very small, they aren’t quite zero – and I wouldn’t want to be the one who tried to use that as a legal defense in either civil or criminal proceedings…

Who is the Customer?

I was reading about the new Apple Watch product in the Los Angeles Times over the weekend, and wondering if Apple knows something we don’t, or if they’re just getting ahead of the market again. The truth is that the company has made the right call a number of times in the last two decades, but not always; Apple has had their share of ideas that didn’t fly or just weren’t ready. Their introduction of the first real smart phone changed the telecommunications industry, not just the cell phone industry, forever, and they were also right about the tablet computer. But at the same time, they introduced the Newton PDA well before such devices achieved common usage, and never really did compete effectively with Palm Pilot for that market. The question here is whether there is anyone out there who wants a remote display and control node for their smart phone that you wear like a watch – and, more to the point, if anyone is willing to pay $349 USD and up for such a device…

If you’re not familiar with the Apple Watch – and you may not be, since the things are not for sale as of this writing – the descriptions of it that we have seen so far suggest that it really is a watch; you wear it on your wrist and you can use it to tell what time it is. You can also use it to get weather reports, stock quotes and reminders from your calendar, or to send and receive text messages and play music. The units will have a limited ability to tie into health-related applications on your telephone, and can monitor the number of steps you take during a workout and similar factors. Naturally, you will need to have a functioning smart phone on your person for any of these functions to work; the watch itself will not have cell phone or Wi-Fi connectivity. In fact, it’s really more of a peripheral for your phone – and, in the case of the gold-plated ones, a fashion statement – than the two-way wrist communicators beloved of some science fiction settings. The real question is who is going to buy the things?

As the Times reporter correctly notes, a lot of young adults today don’t even wear watches anymore; you will generally see them checking their phones for the time. But older customers, who do wear watches, are far less likely to see a use for a remote/peripheral device for their phones. One of the true advantages to an old-fashioned analog watch is that it will continue to function even if your cell phone’s battery is dead, the local cell network is down, or you happen to be an inconvenient distance from the nearest cell tower. And unlike certain markets and segments Apple has invaded in the past, in this case there is no population of users for them to take over, because this product category has never existed until now…

Now, I don’t want to sound like I’m beating up on Apple. Every company has to find the ideal balance between how much of their time they spend making money off of products and properties they already own, and how much of their time they spend exploring new products or technologies that will help them to make money. Apple has gotten this question right more often than not; there’s a reason they are still around and still profitable after nearly 40 years. They’ve got a lot riding on the new product category this time, though; the Apple Watch is the first major new product type to appear under their new CEO’s leadership, and if it fails badly enough this could cost the company in terms of investor confidence and cost of capital, not just money wasted on developing, producing and marketing a product no one wants to buy…

If Apple has guessed right, then wearable computers (and peripherals) really are the next big thing, and we can probably expect to see an increasingly sophisticated array of wrist-mounted computing platforms appearing over the next few years, some of which may eventually replace the smart phones they are currently just connected to. If they are wrong, the Apple Watch may be about to join the Newton, the Lisa, and the Apple TV system as ideas whose time just hadn’t arrived yet. And if Apple is able to leverage the development of the Watch system into a new product line or category that they can sell, then the actual success of the Apple Watch is irrelevant; the company will make back its money through later developments of the same technology – just as they did in all of the above cases…

Coming Soon to an Auto Mall Near You!

Over the years we’ve discussed a number of the emerging technologies that promise to one day produce cars that don’t require gasoline or other fossil fuels in order to run – including some which are already in use, like the biofuel diesel projects and the Tesla Motors all-electric vehicles. There’s one I keep bringing up which has, so far, failed to produce any street-legal production cars, despite its popularity in science fiction and the fact that the actual technology has been around since the 1960s: the fuel-cell power plant. This is the same device that was used to generate electricity onboard the Apollo missions; a relatively simple device that uses compressed hydrogen and a catalytic reaction to generate power, leaving water as the only by-product. They also have the advantage of not needing large batteries filled with lead and other heavy metals like the electric cars, or using food crops to make fuel, like the E85 projects…

From a technical standpoint, the big problems with fuel cell vehicles have always been the weight and bulk of the units, the difficulty in storing and dispensing pure hydrogen safely, and the cost of making the cells in the first place. From a business standpoint, the much larger issue has always been that no company with the resources to mass-produce such a vehicle has ever been interested in making one, which means there has also never been a financial incentive for anyone to produce service stations capable of refueling one. Tesla Motors has experienced some of the same issues with its electric cars; while they are still developing a network of charging stations, unless there are enough customers to keep such stations in business, no one is going to operate one. So far, there are only a handful of stations that can provide hydrogen for fuel-cell vehicles, all of them in California – but that could be about to change…

A story last week in the Washington Post describes a new offering from Toyota called the Mirai, which is being described as the first production car to use a fuel-cell power plant. This may be a bit of an exaggeration, in that the Mirai is only going to be produced in limited numbers (700 this year and 2,000 next year), but the same Post story mentions that Hyundai has already started producing a fuel-cell version of the Tucson-class SUV, and Honda’s first fuel-cell type will be available next year. If these vehicles perform as well in a business sense as they perform in the physical sense it seems likely that we will gradually see production increase, as it did in the case of the Prius-class hybrid and as it is starting to with the Tesla electric products. And there is reason to believe that these vehicles will take off and sell, given their advantages over all previous technologies…

Some of the advantages are practical, of course. A fuel-cell type like the Mirai will have significantly greater range than the Tesla electric cars, and will require three minutes to recharge, rather than the 30 to 60 needed by an electric vehicle. Toyota is also pricing them at about 70% of what the primary Tesla car is selling for. But the big difference should come in terms of industrial base and infrastructure. I will yield to no one in my respect for Elon Musk and the folks at Tesla Motors, but for all of their technical and financial brilliance, they do not begin to have the industrial resources of Toyota, let alone the Honda and Hyundai corporations, and who’s even mentioned access to capital or distribution channels yet? Toyota has the ability to build up the number of fuel-cell vehicles gradually over time, exporting them to more and more states as the fueling stations to support them come on line. If two or three major competitors are also dumping hydrogen-powered vehicles into the US market, it will very rapidly become economically viable to support and fuel these cars, and the whole cycle will begin to pick up speed…

There are still problems to work out, of course. It remains to be seen if the oil companies will pick up on the opportunity to sell hydrogen through their existing infrastructure (at the moment, most of the hydrogen is being delivered in various hydrocarbon storage media, and could be distributed through slightly-modified gas stations), or how long it will take to educate the public about the potential of hydrogen-powered vehicles. But if production volume starts to rise, and the price continues to drop, fuel cell vehicles might take off in exactly the same way gasoline-powered cars did a century earlier, and for almost exactly the same reasons…