Kickstarter and Indigogo are two of the biggest crowd funding sites around, and both have launched highly successful products. Now, one of those successes... Occulus Rift... has been sold for over $2 billion dollars. That's a great feather in the cap of crowd funding, but it now raises new questions about this cutting-edge form of funding.
Think about it! If you were a traditional investor, you might get some sort of equity in the firm. Traditional investors who put up money last year, got a return of 2,000%. A $500 investment then would return $10,000, after just a year. However, those who invested in Occulus Rift a year earlier through Kickstarter only have the outdated earliest version of the product for their investment.
So, if you're using cloud funding sites like they're Amazon, and you just want to be the first one on the block with the shiniest toy, you'll do fine. However, if the product really takes off and sells for billions as the new Internet Wonder, you just may spend a LOT of time kicking yourself for not holding out for a share of the stock!
George bush couldn't pronounce it, but outsourcers can manage it! In the wake of the Fukushima Daiichi nuclear meltdown, the governments of Europe have been rethinking their nuclear policies. Germany is set to close all of it's nuclear power plants. In the UK, the future of nuclear power is not so clear cut.
Nuclear is not particularly popular, but no one wants a coal plant, or any other pollution producing industrial plant, next door either. The UK may not be ready to get out of the nuclear-power industry, but it is ready to close down outdated nuclear power plants. And, the government of the UK plans on decommissioning the plants... by outsourcing the work.
If the UK moves towards nuclear power or away from it, many opportunities will be created for outsourcing contracts as old power plants and old technology is retired. That will hold true regardless if our new power is nuclear, coal, shale oil, wind or solar.
Last year, there was an audacious plan to outsource the entire procurement process for the UK military. It would have been the biggest outsourcing project in history. However, it didn't happen. Even the biggest outsourcing firms said, No." It was too big, too risk, and too likely to fail.
Now the UK government is trying again. With one little difference. Now the deal of the century, is a bunch of still big... but much smaller deals. And that makes sense. Just as too big to fail has become the watchword for Wall Street, too big to succeed needs to be a caution for outsourcing.
Mega deals are mega risky. Spreading the risk between multiple vendors just makes sense. Even for the government!
Once again, our friends over at Yelp! are in the news again! We all know that outsourcing our advertising and social media for our businesses can yield big results. Talk to your friends and many will tell you that they go to Yelp! When they are looking for a new service or place to eat. What's the problem? Well, some people... maybe thousands of people... believe that Yelp! operates like an extortion racket. If you don't pay Yelp!, something terrible could happen to your business. Customers will stay away, the competition will grow faster than you, your business could fail... unless you buy their ads.
There was a big lawsuit from businesses back in 2010, that said that Yelp! had unfair business practices, and now it's time for another investigation. Is Yelp! really engaged in criminal activity? Probably not. But the line between extortion (or harassment) and agressive marketing is pretty thin. we tend to think that cloud services are somehow ""beyond"" these questionable practices of the past. But look at the services that Yelp! replaces. Marketing firms that send you junk mail, misleading ads, marketers calling you while you're trying to eat dinner. Marketing, in any form, is often annoying and sometimes very questionable!
Yelp! has successfully packaged a combination of aggressive marketing practices that has made it a force to be reckoned with. However, to businesses and customers alike, their aggressive marketing can look a lot like bullying. Many businesses will telll you that Yelp! is their biggest source of new customers, while others will tell you that it is their biggest source of lost revenue. Love 'em or hate 'em, Yelp! .... and their business practices... is here to stay.
The latest word on Snowden is that he spoke to his supervisors about what he saw as abuses of power, or at least very strange happenings at the NSA. Snowden tells us that the general reaction was that he should stop trying to blow the whistle on a spy group because that is never... you know... good for your health.
When these NSA managers were investigated, they said... "Snowden? Nope, he never said anything to me." Obama said that even if said that he would have been protected by whistle blowers laws. Well, Mr. Snowden, who is not a Harvard-trained lawyer... such as President Obama... noted that the laws only protected government employees, not outsourced workers. Apparently, Snowden was right.
However, this week, the Supreme Court has leveled the playing ground for the 4 million workers (mostly outsourced, non-governmental workers) that have top secret clearance and perform work similar to Snowden. All workers will now be protected by the whistle sections of the Sarbane Oxley legislation. By providing this protection, can we prevent the next Edward Snowden? Maybe, maybe not. However, if outsourced workers have some level of protection, then it might give the next "extreme whistle blower"" some other path to follow than illegal disclosure.
Many people say that the Internet isn't real, it's completely virtual. It's not owned by anyone, and not controlled by any single government. That being said... well, its a bit of hogwash. The pre-Internet was really a conglomeration of earlier US Military networks with connections into major universities (who were the recipients of military research grants). So, the earliest Internet was really jointly owned by US universities, the Military and some other government organizations. Over time, as the Internet became a distinctly different animal than it's predecessor, the government has wanted to get out of it's role as a manager. And now, it has.
This week the US government gave up it's last role, managing the DNS (Domain Name Service) which provides us with important human understandable addresses for vital Internet website, such as, oh I don't know, perhaps "http://outsourcing.about.com/"? Yes, the government has permanently outsourced the Internet to private industry.
With all of the recent attention to "Net Neutrality", there has been almost no attention given to the privatization of the Internet. What if it is decided that there will be new rules about who gets a new address, or how corporate claims over previous ownership of web site names are settled? What if private industry thinks the price for addresses should be much, much higher? Maybe all of you outsourcers and cloud service providers will need to pay a lot more to stay in business? Hmmm... maybe the government should stay in charge of the Internet?
The rising price of fuel, plus the added uncertainty global climate change, has begun to eat away at the value of offshoring of manufacturing. It costs more to move materials back and forth across the world. And as more heat energy enters the oceans, storms at sea become more violent and unpredictable. Storms can sink cargo ships (and their very expensive cargo) as products move from offshore factories on their way back to America. Storms can also strand ships at sea for weeks, until the weather is safe enough to bring ships into port.
Now there is talk about drone cargo ships. Without the space and amenities on board to support a human crew, these ships wil consume less fuel, cost less to maintain and lower the cost of moving cargo around the world.
Is this enough to offset the rising costs of offshore manufacuring? It's hard to say, but we can look towards this and other advancements in automation and robotics, as a way for outsourcing will remain competitive. Who knows where the next big thing in robotics will come from!
During this year's truly horrible winter in New York City, I was thinking. "Y'know. This is like the horrible winters when I was a kid." And it was, except for one thing. Whenever there was a blizzard, it was time to put chains on the tires. Today, not so much. Tires have gotten much better. All cars and trucks have power steering, anti-lock brakes, and a variety of far more sophisticated electronic support systems.
You don't notice how much these small, incremental changes drive the big changes. The winters have been so mild for the last couple of decades, that this was the first time I had a chance to make a real comparison. Likewise, some outsourcing programs developed under exceptionally mild conditions, and may now show unexpected changes. Such as America's space program.
Our primary space vehicle for manned space travel was the space shuttle. But the last shuttle mission was in 2011. The daily servicing of the International Space Station, and other NASA projects, has been outsourced to a variety of private industry companies that developed their own rockets. However, the transportation of personnel to and from space has been considered too risky to be handled b private industry (yet) and is still performed by the government. The Russian government!
During the first decade of the 21st century, old cold war tensions between the US and Russia thawed. Now the frost of the winter has been followed by the new frost between the US and Russia. As Russia takes over the Crimea, and possibly all the Ukraine, what will happen to our astronauts as we continue to put pressure on Russia? We can feed them with US private industry rocket shipments, but we can't get them back from space without the help of the Russian space program. Maybe Richard Branson's Virgin Galactic Spaceport can sell us a ticket the Space Station!
PHOTO: All Rights, Microsoft Corporation
WOW! There's a lot of chatter about the plans to shrink the military. Drones, robots, even 3-d printers will dramatically change the need for "feet on the ground" in the next war. IT takes a lot of effort to recruit, train, transport and support every soldier we put anywhere in the world. And any general prefers to lose equipment than human beings. A more robotic military has immense implications for the future of warfare, and of politics. One of the many hidden implications of robot warriors will be a second army... one made up of the outsourced workers that are needed to support all of this rapdly changing equipment.
While everyone is watching the number of military personnel, which will drop from the 500.000's to the 400, 000's, there is another group of 140,000 civilian contracted workers. In addition to this, there are thousands, if not tens of thousands more, that may be embedded in contracts. If you buy 10,000 drones, robots or self-driving personnel carriers, you will probably get some number of technical support personnel. Outsourced workers.
What has changed dramatically in the latest wars is that civilians used to be banned from the battlefield. A civilian taking an active role on the battlefield, but not wearing a military uniform, would be considered a spy, traitor (more recently, terrorist), and subject to immediate execution. Not exactly a hiring incentive.
The current state of warfare requires more outsourcing, and more outsourcers on the battlefield, to ensure that the machinery of warfare works. The amount of technology on the battlefield will rapidly increase, and where there is technology you must have technicians. The military has learned that military support technicians are not enough. They need civilians who are closer to the technology, and who need to be on the battlefield to deeply fixes. Get ready for a lot of changes in the rules of war.
PHOTO: All Rights, Microsoft Corporation
Fake medicine is nothing new. It used to be endemic, so to speak, in the US. All the different pill shapes and capsule colors are part of the system that helped to identify fake medicine. Today, more fake medicine comes from outside of the US that from inside. We can thank outsourcing, and long supply likes for this new trend!
While just about every fake good on earth is produced in China, it is India that is the more likely culprit for fake medicine. Which is why the US Food and Drug Administration (FDA) commissioner, Margaret Hamburg is currently touring India. Many infractions have been found: unsanitary conditions, hair and other contaminants, and a $500 million fine was levied for generally poor-quality controls at one of India's largest pharmaceuticals. As bad as these issues are, the closing of the worst of these factories creates the ideal conditions for fake suppliers to pick up the slack.
Ironically, Indian firms make more profits from selling generic medicines to the US, than all of their medical sales within India. If they make the changes needed to keep selling to the US market, it will raise the cost of operations in their factories, and put their medicines beyond the means of most India patients.
Bad outsourcing has many consequences, and cleaning up bad outsourcing can have equally significant consequences (at least in the short run). Maybe it does make more sense to buy meds in Canada!