Uh, didn't Socrates kinda beat hell out of people with this technique back in the day?

True confession: I am a business professor who does not understand the financial crisis. Ask me to explain things like derivatives and I'll look blankly at you. My credentials in economics, negotiation and law should qualify me to speak, but often the news leaves me slack-jawed with confusion. Bring me to a panel discussion, and I'll ask dumb questions. In short, I am a role model. I want my students to be more like me.

Each semester, I introduce my students to a key idea: I want them to join me in the fight against the fear of looking dumb. Overcoming that fear can save them from serious traps.

Ask the dumb questions (Seth Freeman, USA Today, 13 Jan 2009)

See also: Dumb is the new smart ("Public Offering," the Columbia Business School blog)

(via bNet)

Countdown to India's version of Sarbanes-Oxley in 5... 4... 3...

Looks like India is having its very own Enron/Arthur Andersen moment, but this time the players are Satyam and PricewaterhouseCoopers:

The chairman of India’s Satyam Computer Services resigned on Wednesday after confessing to fixing the IT outsourcing company’s books for the past “several” years, the country’s first major fraud case to emerge following the global financial crisis.

In a letter to Satyam’s board, B Ramalinga Raju admitted wildly inflating Satyam’s margins to paint a picture of good performance and retain his management position, in one of the worst scams to have hit India’s outsourcing sector.

“It was like riding a tiger, not knowing when to get off without being eaten,” Mr Raju said, explaining how the fraud got out of control over a period of years.

Satyam is India’s fourth biggest IT outsourcing firm by revenue and is listed in New York and Mumbai, and the scam has rocked the country’s business world.

Satyam chief admits to falsifying books (Financial Times, 7 January 2009)

Making sure you can get five bars in Hell

Denis O'Brien professes not to understand why Wall Streeters think his telecom business is risky. He says this while sitting in an office in Papua New Guinea that is protected by razor wire and a half-dozen guards carrying shotguns and pistols. O'Brien's Jamaica-headquartered company, Digicel Group, began offering cheap cell phone service recently in this Pacific hellhole. The murder rate in PNG is one of the highest in the world, corruption is rife, and the government recently threatened to seize 130 cell towers that O'Brien had erected at a cost of $120 million.

Is there anyplace as inhospitable to capital as PNG? Haiti would qualify. O'Brien has put money in there, too--several hundred million dollars. Five of his workers in Haiti have been kidnapped so far. In East Timor O'Brien is pursuing a license despite a rebel uprising this year that left the country's president with a bullet in his chest. And then there's Fiji, where he had to abandon cell towers for a time after a coup.

He concedes a bit to the worrywarts by noting that his experience in Fiji was a "nightmare." But he's not about to stop putting capital in dangerous places. "If you just focus on risk, you can't do a thing," he says. A swashbuckling entrepreneur of 50 who swears often in his Irish brogue, O'Brien has built a $2.2 billion personal fortune by dominating the mobile business in a dozen poverty-stricken countries (in all, he's in 27 countries and territories). Combining shrewd political instincts, a relentless drive to cut costs and a little Irish charm, he's put phones into the hands of 7 million people in seven years.

Babble Rouser (Forbes.com - from Forbes magazine, 11 August 2008)

(via)

Maximize *what*?

At Boing Boing, Cory Doctorow points us to a fantastic rant at Crooked Timber:

...I have a real bee in my bonnet about the claim made by Richard Posner that ” The managers of corporations have a fiduciary duty to maximize corporate profits”. It raises a whole load of topics relevant to plenty of my favourite economic hobby-horses as soon as you start to look remotely critically at what the seemingly simple phrase “maximise corporate profits” actually means anyway.

Pretending not to understand the meanings of common English phrases is a stock tactic for creating the impression of profundity (cf philosophers, who are always pretending not to understand the meaning of words like “is”, “would” and “must”). But sometimes you have to do it – my view is that in any view of the world more complicated than a very elementary blackboard model, the phrase “maximise profits” can’t be unpacked into a coherent decision rule which rules out any of the things which Posner talks as if it does. First, let’s look at some things that it can’t possibly mean...

What obligation? Maximise what? (Crooked Timber)

(via)

We're dead, we're over, we're roadkill, we're AltaVista.

Look, I would never admit this to anyone in public, but the truth is that our deal with Google marks the end of the first great battle of the Internet era -- call it Internet 1.0 -- and we've lost. That's what it means. We've capitulated. We've surrendered. We're dead. We're over. We're roadkill. We're AltaVista. We're Lycos. We've admitted we can't survive on our own and have turned to our biggest enemy to save us. When they write the history of the Internet, Yahoo! might be more than a footnote, but not much more.

Sure, we'll try to spin it otherwise, but we won't have much luck because we're about as good at spinning as we are at running our company, which is to say, not very. Have you ever seen our PR people in action? Me either. Do we even have any PR people? I have no idea. Whatever we're paying them, it's 100% too much. Who else could go into a PR battle against Microsoft and come out looking like the low-IQ side of the equation? Honestly, I've never ever in my entire life seen an organization that handles marketing and public relations as badly as we do, except maybe Facebook, but that's only because they don't do anything at all. They don't even try.

The Secret Diary of [Steve Jobs] Jerry Yang: The first great battle of the Internet is over...

Information overload: it's official

We’ve hit information overload: The amount of data people create now exceeds the amount of space available to store them.

People sent emails, took digital pictures, processed credit cards and generally did things that collectively created 281 exabytes of data by the end 2007, according to the research company IDC. (“Exabyte” sounds made up, but it’s a real term meaning 1,000,000,000,000 megabytes.) IDC also added up all the computer drives, backup tapes, CDs, DVDs, memory sticks and other devices that store data and estimated that their total capacity is only 264 exabtyes.

There aren’t data just drifting in the ether somewhere. A lot of the data that get created—say, an Internet phone call–never get stored. Other data get erased or recorded over. It’s the digital equivalent of a conversation going in one ear and out the other. But for the first time in human history, we couldn’t save all this information if we wanted to, according to IDC.

It's Official: There's Too Much Information (Wall Street Journal Business Technology Blog)

...but where's step 2?

With reference to this post, commenter Mike asks, "But where's step 2?"

Mike: exactly.

For the uninitiated, "Step 3: Profit!" is a meme from Metafilter... someone notices a phenomenon (Step 1), skips over step 2, where you figure out how to monetize it--ideally by listing Step 2 as a placeholder with a question mark--and goes directly to step 3, where we're all on Easy Street.

(It apparently has its origins in a joke from an early episode of South Park about the business plans of the Underpants Gnomes.)

Before you dismiss this entirely, please consider that this was the entire business model that won billions of dollars in VC funding during the last dotcom boom.

social graphs = social networks

There's a lot of buzz now about business strategies revolving around "social graphs."

If you've ever tried to figure out what a "social graph" really is as a term of art (it has to do with a branch of mathematics called graph theory) and how it's actually different from what we've all been calling "social networks," Dave Winer helpfully explains this for you:

Graphs are useful for modeling stuff that goes on in computers. They are also part of a field of math called combinatorics that's related to statistics, and also related to a highly theoretical area of math called topology...

...[B]efore we talked about social graphs we called them social networks, and you know what -- they're exactly the same thing, and social network is a much less confusing term, so why don't we just stick with it? (Answer: we should, imho.) So if you don't want to sound like an idiot, call a social graph a social network and stand up for your right to understand technology, and make the techies actually do some useful stuff instead of making simple stuff sound complicated.

If you're a specialist in any field of endeavor, you can probably come up with many examples of how a "term of art" in your field has a subtly--or radically--different meaning as a word in common English usage.

If you're trying to communicate with people, here's a big hint: Use the word--or the meaning--that they're likely to understand.

How to avoid sounding like a monkey (Dave Winer, Scripting News, 21 September 2007)