Archive for November, 2008

I received an email this morning from a friend who paraphrased Monty Python’s Blue Parrot sketch to describe the financial meltdown:

This financial system is no more! It has ceased to be! ‘It’s expired and gone to meet its maker! ‘It’s a stiff! Bereft of life, it rests in peace! If you hadn’t nailed ‘it to the tax payer’s perch it’d be pushing up the daisies! ‘Its metabolic processes are now ‘istory! ‘It’s off the twig! It’s kicked the bucket, it’s shuffled off its mortal coil, run down the curtain and joined the bleedin’ choir indivisible!! THIS IS AN EX-FINANCIAL SYSTEM!!

It may be an ex-financial system for now but as with all cycles — natural or man-made — I’m confident of a turn-around. Soon I hope, at some point for sure. In that spirit let me turn the paraphrase around and back to the original. Enjoy, happy turkey (or tofurkey) to all and long live the parrot!

Was the meltdown of the financial system predicted by events in the online virtual world Second Life more than a year ago?

Alan Greenspan, former head of the Federal Reserve, admitted last month that lending institutions could not always be trusted to regulate themselves. Really? Then maybe the 2007 collapse of Second Life’s virtual bank Ginko Financial can be instructive. In a post for MSNBC.com Jeremy Hsu writes,

Virtual economies in games such as Second Life and EVE Online may seem trivial, but they actually can provide real-life lessons on the patterns of free markets and unfettered capitalism. Researchers and self-described virtual economists have observed how virtual entrepreneurs establish themselves and compete, as well as how a lack of self-regulation can lead to dramatic banking failures, scams and even corporate espionage.

“I don’t view ‘Second Life’ as a game,” said Robert Bloomfield, an accounting researcher at Cornell University in Ithaca, New York. “I view it as a market space.”

Should we have seen it coming? Reuters reported on 2L’s unregulated banking in 2006 and Wired magazine reported a run on the virtual banks of Second Life was possible months before it happened. And a panel discussion a year ago about the virtual financial crisis and “take over” of Geko Financial in Second Life seems to be particularly prescient. In that incident, Lindon Labs effectively shut down Second Life’s unregulated in-world banking system with predictable consequences:

The end came when panicked investors began withdrawing their virtual money, known as Linden dollars in the game and exchangeable for U.S. dollars at a rate of roughly 250 Linden dollars to one U.S. dollar. Ginko did not have enough reserves to pay up. When the bank finally announced it was finished, an equivalent of $750,000 in real-world U.S. dollars went up in smoke. The collapse not only wiped out time spent earning Linden dollars in the game, but also hit the wallets of players who had legally paid U.S. dollars to buy Linden dollars. 

“The ‘Second Life’ financial markets have pretty much been unregulated,” Bloomfield told LiveScience. “There are accusations that people are doing everything from questionable behavior to outright fraud.” (Jeremy Hsu’s report for MSNBC continues here.)

Questionable behavior and outright fraud? I’m not an economist by a long shot but those words do ring true about now. And though virtual worlds are, well, virtual, by providing a portal to human behavior they can deliver real value in unexpected ways… if we pay attention.

R. L. Burnside’s (1926—2005) timeless blues boogie “It’s Bad You Know” was the perfect setup for the adventures of Tony Soprano and his capos. Week by week we knew they were going to be so bad that it would be good, that Burnside would keep setting it up and that Tony seldom failed to deliver.

This morning when I received this reassuring (sic) email from CitiBank all I could think of was Burnside’s song and wish for those good, bad old days:

Good news! Citibank is participating in the FDIC’s Temporary Liquidity Guarantee Program. Through December 31, 2009 2008, all of your non-interest and interest bearing checking deposit account balances are fully guaranteed by the FDIC for the entire amount in your account.

So the fact that Citibank is in a temporary liquidity program through the end of December is the good news? Let’s see, that gives me about five weeks to find a solvent financial institution before we have to round up the posse and march on Citibank’s vault.

If that’s good, it’s bad you know. At least we can still enjoy the music:

Click on the image twice for a full size view.

It’s Friday and time for an art attack. Whichever art you practice the act of making art means doing things because they feel right. Not from an intellectual construct, but a flow from idea to expression to idea to expression until you know the thing is done. At least that’s what came to mind when I saw this video (props to Ecks) and the mural (photo above) by the artist Blu. Enjoy the ride.

MUTO a wall-painted animation by BLU from blu on Vimeo.

More Blu: http://www.blublu.org/
Even more Blu: http://www.vimeo.com/1958872

Is it safer “on the edge” in economically turbulent times like these?

In his recent blog post Innovate or Wither - Personal Strategy for Times of Change, my colleague Lee Wilson asserts that in times of rapid change and market disruption, “…the cutting edge is the safest place to be.”

Although he was talking specifically about educational publishing and technology, I think the underlying truth can be applied widely. Lee writes,

If there is rapid change the inclination of most people is to circle the wagons around the familiar. But, when the market is moving, breaking camp and moving forward is actually a lower risk approach. If you are taking risks in your job and trying to invent the future you are actually in a safer position than those who cling to the status quo.

Several weeks back I posted a video clip from the Dow Jones’ Media & Money conference where several media and marketing executives argued that now is a great time to start a new business. It may sound counter-intuitive but this was echoed by venture fund partner I know who feels the risk profile of digital media services and content compares more favorably to brand-name investments than it has in years.

Everyone running for cover means there is more opportunity on the edge these days. And while your 401K may have dwindled to a dot-401 remember it’s all a matter of your perception and confidence, and those are things you can control.

In this video from the 2008 Dust or Magic Institute, Warren Buckleitner talks about how children’s portable computing devices are changing childhood and comes to some insightful conclusions.

Born the same year as BF Skinner’s teaching machine (1958), Warren Buckleitner has been reviewing children’s technology products now for over half of his life. After five years in the classroom and ten years at the High/Scope Educational Research Foundation, he established Children’s Technology Review earning him SIIA’s First Journalism Codie Award for “Best Software Reviewer.”

Warren is an advisor to Consumer Reports WebWatch and teaches both at NYU and the Rutgers Graduate School of Education. He is also a regular contributor to the New York Times Circuits page, and writes for Parents, PARADE, Disney Family, Scholastic Parent & Child and others. Warren founded the Dust or Magic Institute (www.dustormagic.com) and the Mediatech Foundation (www.mediatech.org). He likes to try to IM with his two teenage daughters, who are his best teachers.

For more information about Warren and booking speaking engagements and workshops, visit his media links page.

Tanya Van Court, Senior Vice President and General Manager of Nickelodeon’s Noggin, ParentsConnect and Nick Jr.com, presents Nick’s new standards-based early childhood learning site, myNOGGIN.

Designed for preschoolers through first graders, myNOGGIN is an educational service that provides the same high quality, Noggin learning experience that children love and parents trust, with an extra bonus: it’s totally personalized!

Guided by national standards in preschool education, myNOGGIN makes the most of the time children spend playing online with a “connected learning” approach. We start with topics and tales that grab children’s interest, mix in favorite characters then use these ingredients to present concepts and skills that help kids learn. Why is this approach so effective? Because combining play with learning encourages children to dig deeper and develop a richer understanding.

For more information visit myNOGGIN.com. For more videos from Dust or Magic visit http://dustormagic.blip.tv.

Mark William Hansen, who leads product development at Lego, talks about their transition from a toy company to developers and publishers of an immersive 3D virtual world set to launch in early 2009.

For more on Lego Universe read the Reuters story Virtual World is Lego’s Latest Brick Trick and visit the Lego corporate site. For an historical perspective, view Mark William Hansen’s 2006 presentation on Lego Universe. For more videos from the 2008 and 2007 Dust or Magic Institutes visit http://dustormagic.blip.tv.

Debra Lieberman, Ph.D talked about using interactive games to improve health knowledge, skills and behaviors this morning at the eighth annual Dust or Magic conference.

Health Games Research is an $8.25 million national program of the Robert Wood Johnson Foundation that is directed by Debra and supports research to enhance the quality and impact of interactive games used to improve health. Game platforms of interest range from game consoles, handheld game devices, arcade machines, Web sites and multiplayer online worlds, to exertion interfaces (dance pads, cameras pointed at players, motion-detecting remote controllers), robots, interactive television, electronic toys, context-sensitive programs or other emerging technologies that are becoming more affordable and accessible.

For more information about Debra’s program visit http://www.healthgamesresearch.org/. For more videos from Dust or Magic visit http://dustormagic.blip.tv.

Since I started using Hulu and more recently learned about the open-source video aggregation software Miro and the video sharing plugin Kaltura, it seemed to me that Tivo’s days were numbered. Evidently I’m not the only one.

In her Halloween post on the Wired Blog Network, Meghan Keane observes “the future of the company which defined the DVR is likely to depend on dumping the magic box altogether,” and reports that Daniel Taylor, an analyst at Yankee Group, says that the “TV-Killer” may find itself facing irrelevance long before television networks have to face up to the problem:

DVR and video on demand are struggling for relevance today. The challenge that Tivo faces — the challenge that any device-based service faces — is how they’re going to address user behavior. For every one person who plans ahead to tape shows they’ll miss, there are nine other that want to go online now that they’ve missed it.

The key words “…the challenge that any device-based service faces” is spot-on. Old media and proprietary technologies are dying, while web media and open-source is ascendent. Adapt, as Tivo is trying to by transforming itself into a web video offering, or become irrelevant. Shift happens.