Tag: Wired

Online Education and Self-Driving Cars

Last week, I noted that former Stanford professor Sebastian Thrun enrolled 160,000 students in an online computer science class. That inspired him to set up a new company, Udacity, to pursue online education. A new article in Bloomberg BusinessWeek adds some additional color to the story.

Barrett Sheridan and Brendan Greeley answer a question many folks asked about the students: how many actually finished? Answer: 23,000 finished all the assignments.

Second, they note that professor Thrun is also at the forefront of another potentially transformative technology: self-driving cars:

Last fall, Stanford took the idea further and conducted two CS courses entirely online. These included not just instructional videos but also opportunities to ask questions of the professors, get homework graded, and take midterms—all for free and available to the public.

Sebastian Thrun, a computer science professor and a Google fellow overseeing the search company’s project to build driverless cars, co-taught one of the courses, on artificial intelligence. It wasn’t meant for everyone; students were expected to get up to speed with topics like probability theory and linear algebra. Thrun’s co-teacher, Peter Norvig, estimated that 1,000 people would sign up. “I’m known as a crazy optimist, so I said 10,000 students,” says Thrun. “We had 160,000 sign up, and then we got frightened and closed enrollment. It would have been 250,000 if we had kept it open.” Many dropped out, but 23,000 students finished all 11 weeks’ worth of assignments. Stanford is continuing the project with an expanded list of classes this year. Thrun, however, has given up his tenured position to focus on his work at Google and to build Udacity, a startup that, like Codecademy, will offer free computer science courses on the Web.

I wish Thrun success in both endeavors. Perhaps one day soon, commuters will settle in for an hour of online learning while their car drives them to work.

P.S. In case you missed it, Tom Vanderbilt has a fun article on self-driving cars in the latest Wired.

Netflix Avoids the Sunk Cost Fallacy

The highlight of this month’s Wired magazine is a profile of Netflix and its CEO, Reed Hastings. The theme is Netflix’s strategy to thrive even as their business model changes (e.g., as on-line streaming replaces DVDs by mail).

The opening paragraphs document an impressive willingness to change course:

It had taken the better part of a decade, but Reed Hastings was finally ready to unveil the device he thought would upend the entertainment industry. The gadget looked as unassuming as the original iPod—a sleek black box, about the size of a paperback novel, with a few jacks in back—and Hastings, CEO of Netflix, believed its impact would be just as massive. Called the Netflix Player, it would allow most of his company’s regular DVD-by-mail subscribers to stream unlimited movies and TV shows from Netflix’s library directly to their television—at no extra charge.

The potential was enormous: Although Netflix initially could offer only about 10,000 titles, Hastings planned to one day deliver the entire recorded output of Hollywood, instantly and in high definition, to any screen, anywhere. Like many tech romantics, he had harbored visions of using the Internet to route around cable companies and network programmers for years. Even back when he formed Netflix in 1997, Hastings predicted a day when he would deliver video over the Net rather than through the mail. (There was a reason he called the company Netflix and not, say, DVDs by Mail.) Now, in mid-December 2007, the launch of the player was just weeks away. Promotional ads were being shot, and internal beta testers were thrilled.

But Hastings wasn’t celebrating. Instead, he felt queasy. For weeks, he had tried to ignore the nagging doubts he had about the Netflix Player. Consumers’ living rooms were already full of gadgets—from DVD players to set-top boxes. Was a dedicated Netflix device really the best way to bring about his video-on-demand revolution? So on a Friday morning, he asked the six members of his senior management team to meet him in the amphitheater in Netflix’s Los Gatos offices, near San Jose. He leaned up against the stage and asked the unthinkable: Should he kill the player?

Three days later, at an all-company meeting in the same amphitheater, Hastings announced that there would be no Netflix Player.

In short, Reed Hastings is not a man who gets locked in by sunk costs: he’s willing to kill projects (or, in this case, spin them off) even if he’s got years invested in them. A good example for my students when we discusses costs in a few weeks. And just another example of the strengths of Netflix’s culture.

Craigslist’s Business Model

The magazine Wired regularly publishes some of the most interesting articles about economics and the modern world. Last month, for example, they had a great article about the antitrust threats looming over Google. The month before, it covered the economics of Somali pirates, which I never found time to write about. And the month before that, it discussed how Google, not eBay, is really the master of auctions.

This month, Wired provides an in-depth look at craigslist.

For those who don’t already know, craigslist is the place to post classified ads on the web. According to Wired, it is the world’s “most popular dating site,” “the most popular job-search site,” and “the nation’s largest apartment-hunting site.” Not to mention the myriad other things you can buy, sell, trade, give, receive, etc. on the site.

How did craigslist achieve this dominance? The article doesn’t provide a crisp answer, but it does offer some gems about how the company operates.  You should read the article for the full effect, but here is a sample:

On innovation:

Think of any Web feature that has become popular in the past 10 years: Chances are craigslist has considered it and rejected it. If you try to build a third-party application designed to make craigslist work better, the management will almost certainly throw up technical roadblocks to shut you down.

Continue reading “Craigslist’s Business Model”

Google and Antitrust

The August Wired has a nice article about the increased antitrust scrutiny that Google is facing. (Updated July 28, 2009 I would usually insert a link to the article, but I couldn’t find one online; sorry, but I am working from the dead-tree-and-ink version that the postman dropped off.)

Early on, the article notes some ironies of the current situation:

More than 15 years ago, federal regulators began making Microsoft the symbol of anticompetitive behavior in the tech industry. Now, a newly activist DOJ may try to do the same thing to Google.

It is an ironic position for the search giant to find itself in. [CEO Eric] Schmidt not only campaigned enthusiastically for the very Obama administration that appointed [DOJ antitrust chief Christine] Varney, but also was one of the most devoted opponents of Microsoft in the mid-’90s, eagerly helping the government build its case against the software firm.

A few weeks ago, I described some of the arguments that Google might use to defend itself. The Wired article elaborates on one of these: it’s fine for a company to be a monopoly if, as John Houseman used to say, they earn it. It then points to the other issues that may raise concerns:

Continue reading “Google and Antitrust”

Google: Master of the Auction

People usually think of eBay as the master auctioneer of the internet age. As this month’s Wired points out, however, Google is the real master.

People usually think of eBay as the master auctioneer of the Internet age.  As this month’s Wired points out, however, Google is the real master.

Google famously uses auctions to decide which ads appear in which positions when you do a search.  But Google takes auctions much further:

Google even uses auctions for internal operations, like allocating servers among its various business units. Since moving a product’s storage and computation to a new data center is disruptive, engineers often put it off. “I suggested we run an auction similar to what the airlines do when they oversell a flight. They keep offering bigger vouchers until enough customers give up their seats,” [Google Chief Economist Hal] Varian says. “In our case, we offer more machines in exchange for moving to new servers. One group might do it for 50 new ones, another for 100, and another won’t move unless we give them 300. So we give them to the lowest bidder—they get their extra capacity, and we get computation shifted to the new data center.”