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Feb
03

Elven Blood Critic and Applying Social Psychology to Social Network applications

Posted by Wenhan

The application I am going to review is Elven Blood. Mainly because I am precisely the target market to NOT play this type of applications. 

Summary of what the presenting team said about the application that you think is most important.

 Presenting Team says: 

  1. This is a niche application that targets a small group of gamers.
  2. Stories/Quest is presented in Bite sized so people can play them in a short period of time.
  3. Players abuse the invite system because of the reward (more game moves) that they can get when inviting friends.
  4. Developers could not catch up with the speed at which users complete the game thus leading to stagnation among the top users.
  5. Revenue source is by in game Cost per Acquisition (CPA) advertising. Acquisition = Survey completion, signups, purchase etc
  6. The developers used the same game platform to develop other genres of games to target other groups of users.

Zhou Wenhan comments:

 This is a niche application that targets a small group of gamers.


Hmm…I find it hard to actually agree with this point. Facebook applications are usually mass market and rarely do niche applications actually succeed. The main reasoning that niche applications can find 1million users from Facebook’s pool of 100 Million users is flawed. Firstly one has to look at how Facebook applications spread. Mostly this is through invites. When you get an invite, you evaluate the applications probably in this order by 1) what it does (does it interest you) 2) how it looks (does it look professional) 3) cost of using the application (is this hard to use) 4) ROI (Benefit / cost).

For a mass market application, it is likely that you will at least try the application because it should pass stage 1 & 2. For a niche application, the likeliness that it will even pass stage 1 is unlikely. 

For example, if 1 user sends out 20 (maximum allowed) invites a day and a mass market app has a 25% chance of infecting one of your friends, the mass market app will get 5 more users.  

However if you are talking about a niche application, say the conversion rate is 5%. This means that for each person that sends out 20 invites, one more new user joins.  

In 5 days, here are the numbers of users for the 2 applications

Mass Market: 625

Niche: 16

 So obviously Facebook’s invite systems do not benefit niche applications because the apps virality is low.

 Stories/Quest are presented in Bite sized so people can play them in a short period of time

 This is something that I think the developers did right both in the game design point of view. In presenting stories in bite size, it appeals to causal gamers who do not want to invest much time into a game. Plus because Facebook use goes up during work and that one should not be caught playing games during work, bite size ALT TABable games are surely the way to go! 

Because the games are bite size, players get the feel of progression and hence do not demand much from the game in the way of features. I.e. if you are going to sit down and play the game for 1 hour, it better be good looking, fun etc. If the game just takes me 10 clicks a day to move through, I will care less about the graphics and features.

The developers used the same game platform to develop other genres of games to target other groups of users.

The thing about software is that can scale and it can be replicated. This means that software developer and deployment is a fixed cost and not a marginal one. Software once developed can be reused which means clones are free and derivatives of the original are cheap to produce.

 The same applies to the earlier phase of learning to develop on/with a platform. Learning to develop on a platform is hard and time consuming but once you are experienced in a platform, you can churn code out very fast.

 So knowing this “feature” of software, it is not surprising why companies are choosing to replicate their backend into other derivatives product. The Return on investment makes sense as the investment has already been paid and you just need so more artist, marketing cost to get another application running. 

 FYI: check out getafreelancer.com. Do a search for eBay clones. You will see many low bids because the developer has already made the same thing 3 years ago and they just keep selling it to the next sucker who wants to buy and setup his own eBay clone.

 

(Original) and not so Original Thoughts about Social Network Applications

 Ok, so I am going to write a little post about how to apply social psychology to Social Network applications. Most of ideas are generated when I was reading this Book (Lessons from Yes! 50 Scientifically Proven Ways to be Persuasive) which is a book about social psychology applied to marketing, sales and general persuasion. (Highly Recommended Summary Here )

 The ideas are useful because they apply what is known in social psychology to a social network application where most of the social behaviour actually flows over. 

Principle

Existing/ Future Application Features

Examples

An ounce of personalize extra effort is worth a pound of persuasion

Allowing users to personalise an application invite either by a custom text message. The content of the message should be written by the sender specially for the receiver.

Personalising a Graffiti Card

The herding instinct

  • By saying many people are doing it

 

Showing a number of users who have installed the application.

Monthly Active Users

Top 50 Application List

  • By referencing people similar to the target audience

User testimonials about the application

Friends who have installed application

Friends who have installed application

  • Increasing social approval of an action

 

Allowing users to reward other users for appropriate actions.

Voting on good Graffiti

Digg on a story

Comments on Blogs

Get a small commitment before asking for successively bigger ones

Making the first few steps easy

Easy levelling process for RPG games like Elven Blood for the 1st 10 Levels.

Newbie protection( more experience players cannot kick you butt)

 

To increase the possibility of following through – Commitment should be voluntary, active and publicly declared to others

Ask for voluntary, active and public commitments.

Causes: Abel Ho joined Society Against Child Abuse. 

The amount of information that a preceding message has affects the positive influence on the next message. The less information, the more influence the second message is.

For example, if you lift two objects – a heavy one first and then a light one – you will probably estimate the weight of the second one as lighter than if you had just lifted it by itself.

http://www.takebackyourbrain.com/2007/the-psychology-of-persuasion-perceptual-contrast/

 

Present 3 Options to a user. 1 is hard to accomplish and 2 are easy. It is likely that the user will choose one of the 2 easy options.

Options to Increases Blessings (Elven Blood) 

Try this short test below. Imagine you need blessings in Elven Blood and this option is presented to you. Which would you choose? 

1. Complete a survey (2 Blessings)

2. Invite your friends (1 Blessing)

 Got your answer above? Now try this option group below

1. Purchase XXX (10 Blessings)

2. Complete a survey (2 Blessings)

3. Invite your friends (1 Blessing)

Now it is more likely that completing a survey is actually the more popular choice with the addition of the Purchase XXX option:)

People will be more likely to complete task and programs if there is an indication that there is already some progress towards completion instead of no progress even if the amount of actual work to completion is the same.

When starting a user on a task, give them a starting bonus instead of starting from scratch

Pet Society: Currently you start with a chest with a TV and a Sofa. They are not the best but at least you have something. Image if you started with nothing but a Pet. Would you be less likely to play with the game?

For an RPG, give users a boost in reaching the next level instead of starting them from zero. They will be more likely to want to complete that level.

A game implementation would to allow XP to spill over or only allow this in levels where you discover gamers have trouble completing.

Jan
22

Hougang Minced Meat Fishball Noodles (NUS)

Posted by Wenhan

img_02701

  

It’s one of the new stores in NUS. BTW: if you think Engine food still sucks, then you might not have been to Engine canteen for a long time. Most of the stalls there are very very and in IMHO engine probably has the best canteen food in NUS now. This is a great improvement from when I was a freshman. Most of the old stores have been replaced. PS: I was in the food tasting committee to bring in some of the new stores( and kick out old ones too)! 
First time I ate the Fried Meat Ball noodle, I thought that the serving was pretty small. Maybe it’s the bowl shape or something but it just seem small. However when I finished the noodle, I was filled! so its only a visual mis-perception.
Taste wise, the fried meat balls are pretty special. never seen it anywhere. The noodles are springy to my liking.
Taste: 4/5
Price: 5/5


Hougang Minced Meat Fishball Noodles (NUS)
TechnoEdge Canteen 10 Kent Ridge Crescent

Jan
20

CS3216: Platforms

Posted by Wenhan

So I have decided to take a new format to writing the CS3216 blogs. You can still find the overview of the class below but they will be in raw typed notes. Instead I will be digging deep into an issue that the class brought up in my mind.

In the class, it’s about developing on evolving platforms. And that begets the questions why platforms are so attractive to both the companies creating them and the developers making stuff for the platform and the users using the platform. Platforms exist in: social network applications, mobile application, Internet, game consoles,

Simply put, platforms enable efficiency in a system by

1) Developer Efficiency: Restricting what you can do

This is counter intuitive. But by decreasing the number of ways a certain function is implemented, this also means that developers can focus less on the implementation and more of the design and the product feature. This means that the production time is shorten

This also means that in the narrowed evolution path, products evolve much faster, they die much faster and application commodization is quickly reached. This means also means that being first to platform is very important because once commodization (Developers have learnt all the skills to build almost all the app) has reach, network effects of your application play a strong influence in the sustainability of your application.

2) Distribution Efficiency: Platform handles distribution and /or Sales/marketing.

Sales and distribution is a large reason to go with a platform. Developers want to develop and most of the time they are crappy salesman. Most nascent products suffer mainly from brand awareness. Platforms with product discovery features like iTunes store “Top 50″, “Most Popular” Facebook applications etc solves this problem. This is a huge plus to products with mass market appeal and high quality because this means that most likely you will get into the most popular list and stay there. Give the product awareness and you have half of your sales problems solve. (The rest being product fit, competition and purchase). Contrast this to an internet only application. How do you gain awareness? Well one option is spend loads of money but that unlikely with an app that might not even monetize. It is obvious which you will choose if you are going for a simple mass market application.

3) Strong network effects => ever increasing market share for those in the platform.

Once a platform is dominant or seen to be dominant, it’s a natural monopoly because there is no reason to rock the boat. Everyone in the platform is happy and every out of the platform is busy switching in from the sinking ship. Just ask the HDDVD guys.

Whoa sounds like heaven!

But good things never last! Haven’t you learnt? Take a look at the S curve, the innovator’s dilemma and you will see again and again how platforms get out platformed. So platforms need to evolve to upgrade themselves.

Personal Thoughts

I am not too sure that platforms should ever reach commodization level because if it does, this means that the user excitement will be leaving it soon. All the features and cool applications that one can make have been seen and people get bored of it. Without this excitement, PR and news stories decreases and developers then jump onto the next new exciting platform.

Plotting Platform on S Curve (consumer targeted Platforms)

Facebook (near Stagnation: luckily they are using web as a platform which means applications are very flexible),

Windows (time to switch S Curve man),

IPhone (Tornado: getting all the attention right now. How long more before commodization? At least they restrict developers with NDA (past) and a high financial barrier to entry),

Closing Notes: I hope the above makes sense…I am not sure if does ha-ha. Any thoughts especially counter thoughts are welcomed!

Links:

http://sloanreview.mit.edu/the-magazine/articles/2008/winter/49201-2/strategic-options-for-platformleader-wannabes/

http://blog.programmableweb.com/2007/09/19/what-is-a-platform/

S Curve: A picture Tells a thousand words

Raw Class Notes:

Companies are building platforms which means developer recruitment is as important as ever

How to recruit developers? Development programs, technical support, distribution channel,

App store, Xbox live market place,

Which is the most important? ROI (return = distribution reach,

Why platforms work

Simplify developers, use companies’ brand and marketing entry point to consumers

MDA again $50K. Why is this a magic number?

Why is there a mac in the picture? Cross platform compatible?

One person 7 teams

Which is why platform creates awareness…why getting into top 50 is so impt for app store, my getting on most popular list matters

UX tech

WPF: nice tech….but why would I use it?

Flash has 98% of market

Backend considerations?

Is compression better

But why use silver light? More libraries available in flash.

Look at the past….what similar scenarios have happened before

Late entrant, early entrant, software, developer network effects

Switch when..

Completely new way of doing something

Rapidly growing market size

How to installing apps

Difference between building a desktop app and silver light app

Why don’t MS use WPF for windows and office? To kick start dev libraries, code etc

Do we get free visual studio?

imaginecup?

So many things, so little time

A simple solution to a well defined problem!

Somehow the message is always a diverse, coordinated team…all TR modules except 2202 teaches these

Jan
14

CS3216 First Lesson

Posted by Wenhan

 

Intro To CS3216  (For Non – CS3216 Readers) 

This is a module that teaches how to develop applications on various platforms. In this semester, it will be using the Facebook API, Facebook connect and Microsoft WPF(Probably mainly silverlight). Students work in small teams of 4-5 for 3 assignments and 1 final project. For assignment and project, you can choose pretty much anything you want(except porn, gambling, violence, tibet, gaza..). There is a strong emphasis on how the project should make a difference to the world.

Why this post?(and 13 more)

Apparently, the “evil” doctor Ben has decided to try something new and this is the result. It’s called blogging for credit! What a great way to increase Search Engine Optimization for the module! Plus it’s a fun module that many NUS students should take! And if you go by last semester’s statistics, you have 50% of getting an A.

(PS: SEO = Links with keywords around the link)

Oh and a plug! I assume Microblogging counts as credit too so http://twitter.com/cs3216 is a twitter account where you can follow for CS3216 stuff. just @cs3216 if you want to send any msg to the followers! (Teaching Team, if you want control of this account, I am all too happy to give it you!)

The first lesson. 

Nothing much learnt this lesson. Mainly the focus on how the module is going to be ran and how we can expected to contribute. I really liked the show and tell part of the module because it really shows how everyone is talented in some way. I am sure there wasn’t enough time to show and tell all that a person is interested in so I am looking forward to at least knowing everyone in the class over the semester.

Probably the most interesting moment for me was when Dr Ben asked students “what are you doing at NUS?”. I found it very interesting that the answer was ” I am year X student from SoC/biz”.  I would think that answers would have been more philosical. My answer? “At first, I came in because it was already decided for me by societal pressures. Then I realised University is a great place to prepare for life because it widens your network of friends and also gets you acclimatized to Real Life. Now that I am finishing my final Semester, I am again making the transition to REAL REAL life by making sure that I will at least be finacially OK and also make a difference to the world through my Projects. “

Jan
05

BOOK SUMMARY – PREDICTABLY IRRATIONAL: THE HIDDEN FORCES THAT SHAPE OUR DECISIONS

Posted by Wenhan

 

Book Description: 

Irrational behaviour is a part of human nature, but as MIT professor Ariely has discovered in 20 years of researching behavioural economics, people tend to behave irrationally in a predictable fashion. Drawing on psychology and economics, behavioural economics can show us why cautious people make poor decisions about sex when aroused, why patients get greater relief from a more expensive drug over its cheaper counterpart and why honest people may steal office supplies or communal food, but not money. According to Ariely, our understanding of economics, now based on the assumption of a rational subject, should, in fact, be based on our systematic, unsurprising irrationality. Ariely argues that greater understanding of previously ignored or misunderstood forces (emotions, relativity and social norms) that influence our economic behaviour brings a variety of opportunities for re-examining individual motivation and consumer choice, as well as economic and educational policy. Ariely’s intelligent, exuberant style and thought-provoking arguments make for a fascinating, eye-opening read. 
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved. 

 

My Review Rating: 4/5 Stars.

This is an insightful way of how our mind works and why we are often irrational in our decision making. This is useful if you are a consumer or working in the field of marketing as you will be able to learn some guidelines that might help you consume less or help your customers consume less.

Related Book Summary: LESSONS FROM YES! 50 SCIENTIFICALLY PROVEN WAYS TO BE PERSUASIVE

 

BOOK SUMMARY

1.    The Truth About Relativity Why Everything Is Relative – Even When It Shouldn’t Be

a.     Choices are rarely made without a reference to other similar choices and their worth. When making a decision, we make our choices based on the array of choices presented. Decoy choices are choices inserted into the mix to “help” people choose a product.

b.     Groups of choices that are similar to each other are preferred over isolated choices that have hard to compare attributes.

c.     Relativity also plays to our emotions of contentment and creates the keeping up with the Jones syndrome. One can solve this by moving to a smaller circle where the objectives might be different or the less competitive.

2.    The Fallacy Of Supply And Demand – Why The Prices Of Pearls And Everything Else Is Up In The Air

a.     The chapter starts with the discovery of black pearls in Tahitian. An entrepreneur harvested the pearls and tried to sell them to the world. Initial efforts failed. However when the pearls were marketed with the finest gem stones, sales took off.

b.     The price anchor was set to a similar level as precious stones. Once we set a price to a product, our mind becomes used to the fact that it cost a certain amount. Any amount below will be considered cheap and any amount above will be considered expensive. This is regardless of the actual value of the product. This is called arbitrary coherence.

c.     An experiment involving suggesting initial prices by having participants write a number then bid for a product proved a correlation of the written number and the average bid price. Also when the participants were willing to pay a certain price of one product, their willingness to pay for other items in the same category was also similarly affected.

d.     Self herding is the habit formation of establishing a new price anchor and continuously reinforcing the anchor without thought. To create new anchors in a space where there are already anchors, the author suggests that one creates a product positioning that is highly differentiated.

e.     Thus since our initial anchors have far reaching consequences, we should consider the value when we purchase a first product.

3.    The Cost Of Zero Cost – Why We Often Pay Too Much When We Pay Nothing

a.     When product choices are placed together and a certain product is free, the free product creates a large relative value that distorts the choices. In a transaction, there is a return on investment. However once a product is free, there is no visible and direct loss created thus the return is infinity and thus the free choice is almost always the overwhelming choice.

4.    The Cost Of Social Norms – Why We Are Happy To Do Things But Not When We Are Paid To Do Them

a.     There are 2 worlds in which we exist. One is dictated by market norms and the other by social norms. We usually try to keep the 2 markets and the people that we interact with in each separate.

b.     When money enters into a transaction/request, it becomes a market and people will view the request relative to the market.

c.     People work equally hard when the norm is social compared to when the pay is market competitive. If the pay is reduced, the performance drops. However if the payment was not in monetary terms (gift), social norms take place. But when the price of the gift is mentioned, the market norms return. Hence we should keep the two entirely separate.

d.     Mentioning money also affects behaviour of people. When money was mentioned or suggested, people became more self reliant and less willing to ask for help. In other words, they were more rational and market oriented.

e.     When a market norm and social norm converges, the social norm is easily removed but is hard to get reestablish even when money is removed from the context.

f.     Social motivations are cheaper and more effective that monetary motivations and should be incorporated into policy making to help people make sound decisions.

5.    The Influence Of Arousal – Why Hot Is Much Hotter Than We Realise

 

a.     The experiment was first conducted when the student was in a normal state. Then the experiment was then conducted again when the student was in an aroused state. The results were that in an aroused state, our choices were less rational and could not be predicted by ourselves in a cold state.

b.     We should give ourselves time to cool down and analyze choices instead of making snap decisions.

6.    The Problem Of Procrastination And Self Control – Why We Can’t Make Ourselves Do What  We Want To Do

 

a.     This chapter explores why it is so easy to lose sight of our goals and self control. We might not understand our own lack of self control. Commitments are necessary for keeping us on track. They could either be self proposed or imposed by another authority. There is reason to believe that commitments imposed by another authority might be more effective.

  7.    The High Price Of Ownership – Why We Overvalue What We Have

 

a.     In general the ownership of something causes the value of the thing to increase only in the owner’s perspective because it is easier to attach emotional experiences to the object. The owner also focuses more on the aspect of the loss of the object and its benefits.

 

b.     The more work we put into something, the more sense of ownership we get and thus higher satisfaction from using the product (IKEA effect). Ownership can also take hold partially causing virtual ownership where we imagine ourselves using the product before we own it.

8.    Keeping Doors Open – When Options Distract Us From Our Main Objective

 

a.     We feel compelled to keep as many choices available without due consideration to opportunity cost. When we are trying to keep our doors open, we also lose our focus on our current activities. The need to keep the choices open is due to our tendency towards loss aversion.

 

b.     When we narrow our choices to the final 2 choices, it is now even much harder to make a decision because the two are so similar. The author suggests making a decision and getting on with our lives.

  9.    The Effect Of Expectations – Why The Mind Gets What It Expects

 

a.     Expectations affect our experiences. If an expectation was set before using the product, our conclusion will likely be similar to the expectation. When the expectation was not set, the conclusion was made on the basis of the product. If the information supplied to manage the expectation was shown after the product was used, this information had little effect as the expectation would already have been set by the product experience.

 

10.  The Power Of Price – Why A 50-Cent Aspirin Can Do What A Penny Aspirin Can’t

a.     Placebos run on power of suggestion and they work because the person taking the medicine expects it to work. The expectation derives from a belief that the medicine works and the body becomes conditioned to the presence of the medicine and starts a physiological response.

b.     The more expensive the item, the stronger its placebo effect.

11.  The Context Of Our Character Part 1 – Why We Are Dishonest And What We Can Do About It

 

a.     There are 2 types of dishonesty. One is a highly criminal dishonesty where the decision making is based on how much they can steal. The second is committed by the average person where the object is often not money and less decision making is made.

 

b.     When given the opportunity, most honest people will cheat. Once tempted to cheat, the magnitude of cheating did not increase beyond a certain point.

 

c.     Honesty has an internal monitor that activates when the amount is large. When the amount is small, it is passive and the dishonest act does not get register on the virtue counter.

 

d.     The honesty monitor can be activated in certain ways. One could put up a sign reminding a person of honesty or a mirror for self reflection. All these ways helped in bringing up the contemplation of the internal moral benchmark.

  12.  The Context Of Our Character, Part 2 – Why Dealing With Cash Makes Us Honest

 

a.     When the object of dishonesty is cash, we are very unlikely to commit the dishonest act even though it might be a small amount. When the object is not cash but a product of similar value, we are inclined to commit the dishonest act. When cash is a step removed from our dishonest act, our dishonest rate goes up.

  13.  Beer And Free Lunches – What Is Behavioural Economics And Where Are The Free  Lunches

 

a.     We should base our decision making on how we really behave instead of how we are modelled to behave in classical economic theory.

 

b.     We are far off from really understanding ourselves and we underestimate the external influences to our decision making.

 

c.     PS: if you want to participate in this journey, log on towww.predicatblyirrational.com

You might also be interested in:
BOOK SUMMARY OF HOT, FLAT AND CROWDED

TodaysTen.com: Daily Top Ten List to jumpstart your knowledge
Dec
22

Test for Hereing

Posted by Wenhan

PLease ignore if you see this. I am testing a new feature callled embedable maps for food bloggers!

This is a map that centers on a restaurant. It also shows other restaurant nearby that you have reviewed.

Yhingthai Place
#01-01 Talib Centre 36 Purvis Street
Tel: 6339 2520

This is a map that shows all your reviews! Woah, so much!

Dec
11

Summary of Hot, Flat and Crowded

Posted by Wenhan

This is the complete summary of the Book, Hot, Flat and Crowded by Thomas L Friedman. 

Yup, he is the same guy who wrote that the world is flat a few years back that highlighted how the internet and global supply chains is flattening the world. Now he is on to his next book that is highlighting Hot= Climate Change and Global Warming, Flat = Globalisation and Crowded = the growing middle class. Here is the first part of my summary.

Part 1: Where we are 

1. Where birds don’t fly

American has gotten distracted by its war on terror and has become more insulated and loss its path from global leadership. Friedman argues that green is a new national strategy to take its economic to its new heights.  

2. Today’s Date 1E.C.E

The trends of Hot, Flat and crowded are converging. 

1.     Hot= Global Warming

2.     Flat= Globalisation of marketplaces

3.     Crowded= Growing competition for resources  

The convergence of these 3 trends increase the magnitude of problems: energy supply and demand, petrodicatorship, climate change, energy poverty and biodiversity loss 

We have to do something about these 5 problems as they determine peace, security, economic growth and human rights. 

Part 2: How we got there

3. Our carbon copies

This chapter focuses on energy supply and demand. 

The American lifestyle is wasteful and being emulated in developing countries. If all of them reach American standards, the demand will be so high the Earth will not be able to provide the current level of resources to all. There will be intense competition for resources which will lead to conflict. 

Thus a more sustainable growth model is required. The US needs to take leadership as it is the country using most of the resources right now. 

4. Fill em up with dictators

This chapter focuses on petrodicatorship which is a political development in oil producing country. 

As energy demand exceeds supply, oil prices rises which then gives oil producing countries a lot of money. The influx of Oil money influences politics in countries and turns it less democratic and more anti American. It also fuels terrorism and armies. 

First Law of Petro Politics: As oil prices does up, the less freedom in petrolist countries 

Thus reduction of oil use is necessary. 

5. Global Weirding

This chapter focuses on climate change. 

Climate change is real and proven. We are not sure if they will happen even faster than previous predictions. We are not sure of the changes that might happen because we have not accurately modelled the complexity of the climate. 

We need to increase national awareness of climate change. 

6. The Age of Noah

This chapter focuses on biodiversity loss. 

Rapid climate change and human development destroys biodiversity. Loss of biodiversity directly affects human life quality. Degrading the environment means that we have to do more that the climate used to do for us. 

Later is too late and we have to stop biodiversity loss now. 

7. Energy Poverty

This chapter focuses on energy poverty in developing countries. 

1.6 Billion people do not have access to electricity grid. Without energy, almost all aspect of life is affected. The poorest are the ones most affected by climate change.

Without electricity, one has no access to machines and communication necessary for making a living in this flat world. 

This keeps the poor poorer. 

With communication and electricity, we can move to a more sustainable work life style 

8. Green is the new red white and blue

We have passed the point where we cannot put off dealing with the 5 problems.

The true costs of the problems are becoming clear in a transparent flat world which demands accountability. 

America must take the lead because if it does not it will lose its global competitive edge. America can because it still has innovation, research and capitalist funding that is still leading edge in the world. 

Plan A (There is no Plan B) 

Code Green: Friedman proposes a Code Green Plan and highlights the need for a whole new system to power the economy. Need to replace the entire input of the system (dirty fuel) 

The components of the Plan are Clean Electrons, Energy Efficiency and Conservation 

Clean Electrons: We need to simulate innovation to find a source of electrons that is abundant, clean, reliable and cheap. 

Energy Efficiency and Resource Productivity: In the short term, we must reduce the demand because Clean Energy will not be here soon. 

Ethic of Conservation: Responsibility for the earth. Changing our lifestyle to something that has less effect on the earth  

What We Need: A system of government policies, regulations, research funding and tax incentives that would stimulate a system for innovating, generating gland deploying clean electrons, energy efficient and resource productivity along with an ethic of conservation 

On the next summary, I will cover the remaining portions of the books.

Part 3: How We Move Forward

9. 205 Easy Ways to Save the Earth

In this chapter, Friedman lists how many parties are jumping on the green bandwagon regardless of if they are really going green. He argues that the media is positioning green as the next big thing and mis-leading people into thinking that it will be easy to achieve.

He goes on to show how it is really hard to go green. He shows examples of the rapidly increasing demand on energy, the amount of investment we need to make into alternative energy and the amount of time to start these sources of energy and how hard it will be to achieve all these three. The second example he shows is that to stop the doubling of CO2 by 2050, we would have to make several major changes to the current life style all of which are also hard to achieve.

10. The Energy Internet: When IT Meets ET

The energy internet is the convergence of information technology and energy technology. This and the next 3 chapters describe a system of clean power, energy efficiency and conservation. The current power grid is built patchwork and dumb. Major regions are not interconnected and prices are set by regulation instead of market forces. The system was setup without the total cost of ownership in mind.

A scenario is painted 20 years into the future where the grid is connected to your home appliances and dynamic energy load balancing is done based on the instantaneous price of electricity. The utilities are now incentized to help your save energy and even give you loans and rebates to make your house and your appliances more efficient.

11. The Stone Age Didn’t End Because We Ran Out Of Stones

Clean energy is going to be the next global industry. We need a clean energy input to power the grid described in the previous chapter. However we have had no exponential breakthroughs yet and Friedman says that this is because of both the barrier of innovation and more importantly that we haven’t really tried. We need to create a market of clean energy. Current energy markets are dominated by the interest of oil, coal and gas companies and we need to level the playing field so the market can adopt clean energy.

A price signal is required to make sure investors will invest in the creation of clean tech companies and their products. A stable price signal will stimulate demand and confidence and pull our R&D efforts up the learning curve.

Price signals should show the true cost of burning fossil fuels. There are several ways that it could be implemented such as Carbon Taxes or Cap-and-trade schemes. Friedman concludes it doesn’t matter as much which system is implemented but the speed of the implementation.

12. If It Isn’t Boring, It Isn’t Green

We need to nurture all the cost-effective energy efficiency because it is cheaper than generating electricity. This chapter focus on how standards and regulations can optimise and lead to efficient energy usage.

Friedman uses the case of GE’s Transportation EVO Train of how tighter environmental regulation and standards drive innovation which leads to more efficient products that command a higher market premium. He also brings examples from the auto industry and air conditioning products.

Green building design can also cut operating cost even though construction cost might be higher.

The current utility incentive system has to be redesigned. Instead of aligning profits with the consumption of energy, states should reward utilities from helping to make energy use more efficient.

Transportation has to be electrified as we can then directly control the emissions from transportation. A smart grid can use the off peak power and even out loads throughout the day by exchanging power between parked cars and the grid.

13. A Million Noahs, A Million Arks

We need to develop a system for preservation of our natural assets because the degradation of these assets directly affects the quality of life. Each preservation system will need to be different depending on the local environment. There are 6 components.

1)      National government policies to set aside areas for conservation and other areas for development

2)      Economic opportunities for the local community to thrive without harming the local biodiversity

3)      Investors with an interest in keeping the biodiversity intact and make profits

4)      Local government who is able and willing to preserve and protect the areas

5)      Experts with the ability to do biodiversity assessment to assess which areas should be protected

6)      Education programs for the people so it is less necessary to plunder the natural world around the

14. Out Greening Al-Qaeda (Or Buy 1 Get Four Free)

Out greening is a competitive issue (economically and military). When you adopt a competitive greening strategy, you get more than 1 advantage. Being cheapest also means greenest. We need to change the current mindset of carbon neutral to pro green. Carbon neutral means a cost to the companies. But if you get the green strategy right, you can use it as a competitive tool to outcompete your competition.

Part 4 China

15: Can Red China Become Green China

China has a pollution problem because of the waste and pollution of its industry. China cannot do take the same path of dirty industrialization as the west has done because it would mean serve health problem to its citizens.

The government has realised this and has been taking small steps to go green while still keeping the economy red hot. Executing a green plan however is not easy because of the large inertia and the lack of control over local governments. Transparency in the ground is requiring for citizens to police polluters by using media outlets and civil rights movements. This is possible with the government endorsing this movement.

China is having an emergence of a clean tech industry. Buildings play a large part in the environmental policy of China mainly because of the number of buildings erected.

The US needs to take the moral ground in leading clean energy because China will follow us as it has no choice but to follow the world standard.

Part 5 America

16. China for a Day (But Not For Two)

America has been discussing greening for too long with too little action. Decisions carry too much divergent priorities. The difference between the China and US is that it takes the US takes too long to decide but measures are implemented while China can mandate in an instant but the plan might not be correctly implemented.

Decision making is being impacted by traditional energy companies that oppose any incentive to clean energy. They use advertising to mislead voters.

Congress is also negligent is letting funding go to the wrong projects instead of science and development. Government need to be funding basic research so as to seed the breakthroughs required to solve the green problem.

There is too much red tape involved in construction of a power plant. It took 11 years to connect a wind farm 275 Miles to Los Angeles. This is too slow compared to the speed at which China is building power plants of one every 2 weeks.  

17. A Democratic China or a banana republic

Change will be painfully disruptive and everyone needs to be involved in bringing attention to the issue. The benefit is not immediate but it has to be done for our children.

We need a strategy to move the general public.

The energy climate era represents a new set of dangers and opportunities. We need leaders to solve this multi generational multi faceted multi trillion dollar problem.

Nov
27

Book Summary of Hot, Flat and Crowded by Thomas L Friedman

Posted by Wenhan

This is Part 1 of the book I just finished reading. Hot, Flat and Crowded by Thomas L Friedman. Yup, he is the same guy who wrote that the world is flat a few years back that highlighted how the internet and global supply chains is flattening the world. Now he is on to his next book that is highlighting Hot= Climate Change and Global Warming, Flat = Globalisation and Crowded = the growing middle class. Here is the first part of my summary.

Part 1: Where we are

 

1. Where birds don’t fly

American has gotten distracted by its war on terror and has become more insulated and loss its path from global leadership. Friedman argues that green is a new national strategy to take its economic to its new heights.  

2. Today’s Date 1E.C.E

The trends of Hot, Flat and crowded are converging.

 1.     Hot= Global Warming

2.     Flat= Globalisation of marketplaces

3.     Crowded= Growing competition for resources 

 The convergence of these 3 trends increase the magnitude of problems: energy supply and demand, petrodicatorship, climate change, energy poverty and biodiversity loss

 We have to do something about these 5 problems as they determine peace, security, economic growth and human rights. 

Part 2: How we got there

3. Our carbon copies

This chapter focuses on energy supply and demand.

 The American lifestyle is wasteful and being emulated in developing countries. If all of them reach American standards, the demand will be so high the Earth will not be able to provude the current level of resources to all. There will be intense competition for resources which will lead to conflict.

 Thus a more sustainable growth model is required. The US needs to take leadership as it is the country using most of the resources right now. 

4. Fill em up with dictators

This chapter focuses on petrodicatorship which is a political development in oil producing country. 

As energy demand exceeds supply, oil prices rises which then gives oil producing countries a lot of money. The influx of Oil money influences politics in countries and turns it less democratic and more anti American. It also fuels terrorism and armies. 

First Law Of Petro Politics: As oil prices does up, the less freedom in petrolist countries 

Thus reduction of oil use is necessary. 

5. Global Weirding

This chapter focuses on climate change. 

Climate change is real and proven. We are not sure if they will happen even faster than previous predictions. We are not sure of the changes that might happen because we have not accurately modelled the complexity of the climate. 

We need to increase national awareness of climate change. 

6. The Age of Noah

This chapter focuses on biodiversity loss. 

Rapid climate change and human development destroys biodiversity. Loss of biodiversity directly affects human life quality. Degrading the environment means that we have to do more that the climate used to do for us. 

Later is too late and we have to stop biodiversity loss now. 

7. Energy Poverty

This chapter focuses on energy poverty in developing countries. 

1.6 Billion people do not have access to electricity grid. Without energy, almost all aspect of life is affected. The poorest are the ones most affected by climate change.

Without electricity, one has no access to machines and communication necessary for making a living in this flat world. 

This keeps the poor poorer. 

With communication and electricity, we can move to a more sustainable work life style 

8. Green is the new red white and blue

We have passed the point where we cannot put off dealing with the 5 problems.

The true costs of the problems are becoming clear in a transparent flat world which demands accountability. 

America must take the lead because if it does not it will lose its global competitive edge. America can because it still has innovation, research and capitalist funding that is still leading edge in the world. 

Plan A (There is no Plan B) 

Code Green: Friedman proposes a Code Green Plan and highlights the need for a whole new system to power the economy. Need to replace the entire input of the system (dirty fuel) 

The components of the Plan are Clean Electrons, Energy Efficiency and Conservation 

Clean Electrons: We need to simulate innovation to find a source of electrons that is abundant, clean, reliable and cheap. 

Energy Efficiency and Resource Productivity: In the short term, we must reduce the demand because Clean Energy will not be here soon. 

Ethic of Conservation: Responsibilty for the earth. Changing our lifestyle to something that has less effect on the earth  

What We Need: A system of government policies, regulations, research funding and tax incentives that would stimulate a system for innovating, generating gland deploying clean electrons, energy efficient and resource productivity along with an ethic of conservation 

On the next summary, I will cover the remaining portions of the books.

Part 3: How We Move Forward

9. 205 Easy Ways To Save The Earth

10. The Energy Internet: When IT Meets ET

11. The Stone Age Didn’t End Because We Ran Out Of Stones

12. If It Isn’t Boring, It Isn’t Green

13. A Million Noahs, A Million Arks

14. Out Greening Al-Qaeda (Or Buy 1 Get Four Free)

 

Part 4: China

15: Can Red China Become Green China

 

Part 5: America

16. China For A Day (But Not For Two)

17. A Democratic China Or A Banana Republic

 

 

 

Nov
24

Term Insurance vs Whole Life Insurance Strategy

Posted by Wenhan

So for the last few weeks my girlfriend and I have been evaluating insurance policies for her. Basically it came down to a debate of 1) “Whole Life” – (WL) or 2) “Term + Invest the difference” – (TID). Before this evaultion, I always believed in “Term + Invest the difference” because the cost was lower and the returns from stock investment would be more than that I can get from whole life.

However there is always a nagging doubt that term might not be the right choice because it doesn’t cover you in old age which is the time when you might need insurance the most. In the end after much discussion we came up with a strategy that both of us thinks make financial sense. Thanks to my girlfriend whom helped put the nagging doubt to rest by crystallising my thoughts.

First let’s make sure you understand both term and whole life insurance

Term

“With term insurance, you’re covered only during the life of the policy, while you’re paying the premiums. If you carry a term life insurance policy for 50 years, regularly pay the premiums, and then quit paying and die a year later, you’re out of luck. (Well, you’d be out of luck regardless – but, in this case, your beneficiaries are out of luck, too.) 

Whole Life

“Whole life insurance, meanwhile, is designed to cover you for your whole life. These policies charge you a fixed premium each year, one that’s typically higher than term insurance. The advantage touted by insurance companies for whole life insurance is that, while part of the premium covers what term insurance would cost, the surplus resides in an account that pays interest and accumulates a cash value. As this “accumulation account” grows, your premiums can decrease over time. Eventually, in some cases, the interest earned can pay the premiums for you. So, you won’t be paying any more premiums, but you’ll still be covered for the rest of your life. http://www.fool.com/foolu/askfoolu/2002/askfoolu020725.htm

 So if you distill the 2 polcies these are the differences between the 2

 1.     Forced Savings in WL

2.      Cost of premiums (WL is more expensive)

3.      Coverage after 60-65 years old (That WL has whereas TID doesnt)

 Of the 3 differences, only the coverage after 60-65 years old  cannot be replicated by a TID strategy so that is what we based our decision upon. 

Since the main diffierence of WL and TID is that WL covers you after 65 years old, we should then only buy WL for that function and only intend to use its insurance after 65 years old.

The strategy goes as follows

“Before 65, buy enough whole life that you will need in old age and then whatever amount of term you need to get enough coverage for current times. After 65 discontinue your term policies and hold on to your WL policies.” 

The reasoning goes like this:

Before age 65 is when you have the most liabilities (loans, dependants etc) which means that the need for insurance will be highest at this point. However to get whole life is way too expensive for the average person to consider so  the cheapest option is term insurance with a critical illness rider. Plus getting whole life also means that you are probably wasting money in old age since you do not need that much coverage.

After 65, most of your liabilities will have been repaid and your dependants would have grown up and thus you no longer need the insurance to ensure their livelihood or pay off debts if something happens to you. Also after 65 years old, term insurance cost also skyrockets so it is not something that is worth keeping for its cost.

Yup, so that’s the strategy. As for timing and how much to get, it based on each individual but do remember that $100,000 might not be worth much when you are 65 years old so that you need to increases your coverage as inflation catches up.

I think the most important lesson is that one should always think about what they are buying and why they are buying it. If you are reading this, most probably you have already done much research on financial planning. But most people will not have research on what to buy so go out and spread the message to them.

In the next blog post, I will discuss which WL policy we chose and why we make that selection.

Nov
14

Hmm…so how do I improve Hereing.com?

Posted by Wenhan

Ok…so I have step on a minefield and it blew off my legs…

I am making sure this does not happen again so I am inviting food bloggers to give me suggestions here just so I know what they are thinking.

There are a few things that I hope I can be more clear about.

1) Do you all really mind the linking of your blog post from other places?

2) How do you view food blog aggregators like foodlah.com and foodbuzz.com

3) What is your primary motivation for writing a food blog

4) Who is your target audience for your blog?