The Data Factory

You’re the product, but when you’re sold, it’s only a lucky few who get rich. The Data Factory – How Your Free Labor Lets Tech Giants Grow The Wealth Gap article tells that technology lets big companies distribute tools that turn us into volunteers who contribute our time and data while they profit. It wasn’t always like this. To earn a profit, companies used to have to do the dirty work themselves.

But technology changed all that, as former journalist and legendary investor Moritz explains. “Data factories” have spawned a golden age for entrepreneurs but make it tough for everyone else. Check out the full video of his Disrupt keynote presentation here:

The data factories get free labor. They distribute what seem like useful services to the world, things like YouTube, Facebook, Twitter, LinkedIn, Etsy, or Kickstarter. Those services help people share, connect, find jobs, sell their own goods, or fund a project. But in actuality, they also collect troves of data and earn tons of money for the tech giants without forcing them to do much work.

During the presentation, Moritz named several building blocks of the data factories: huge expansion of bandwidth, increased storage capacity, growth of computational power, app expansion, massive reduction of cost of tools and a new generation of free tools.

Those same tools and platforms have also given way to a “personal revolution” that’s delivered unprecedented productivity and reach to small businesses and entrepreneurs. You don’t need nearly as much money to start a business anymore.


  1. Tomi says:

    45% of U.S. Jobs Vulnerable To Automation

    “A new report out of Oxford has found that the next 20 years will see 45% of America’s workforce replaced by computerized automation. ‘The authors believe this takeover will happen in two stages. First, computers will start replacing people in especially vulnerable fields like transportation/logistics, production labor, and administrative support. Jobs in services, sales, and construction may also be lost in this first stage. Then, the rate of replacement will slow down due to bottlenecks in harder-to-automate fields such engineering.”

  2. Tomi says:

    Report Suggests Nearly Half of U.S. Jobs Are Vulnerable to Computerization

    Oxford researchers say that 45 percent of America’s occupations will be automated within the next 20 years.

    Rapid advances in technology have long represented a serious potential threat to many jobs ordinarily performed by people.

    he authors believe this takeover will happen in two stages. First, computers will start replacing people in especially vulnerable fields like transportation/logistics, production labor, and administrative support. Jobs in services, sales, and construction may also be lost in this first stage. Then, the rate of replacement will slow down due to bottlenecks in harder-to-automate fields such engineering. This “technological plateau” will be followed by a second wave of computerization, dependent upon the development of good artificial intelligence. This could next put jobs in management, science and engineering, and the arts at risk.

    The authors note that the rate of computerization depends on several other factors, including regulation of new technology and access to cheap labor.

    “Our findings thus imply that as technology races ahead, low-skill workers will reallocate to tasks that are non-susceptible to computerization—i.e., tasks that required creative and social intelligence,” the authors write. “For workers to win the race, however, they will have to acquire creative and social skills.”

  3. Tomi Engdahl says:

    Armed With $14M In New Funding, Bright Wants To Take On LinkedIn With A Data-Centric Approach To Recruiting

    Bright, a startup that is betting that data science and machine learning algorithms will be central to hiring and finding jobs

    Similar to CareerBuilder, Monster and others, Bright serves as a platform that job seekers can search for jobs that match their interests. But Bright aims to take this one step further my extracting more than just keywords to match job finders with recruiters. As CEO Steve Goodman explains, there is an inefficiency in the labor market where in jobs that are in the range of $30,000 to $80,000 in salary; where recruiters are overwhelmed by applications. He says many job seekers are eliminating a “spray and play’ strategy on sites like Monster to as many jobs in generalized sectors like sales.

    So Bright’s alogrithm takes into account location, past experience, and more to match Pepsi applicants with Coca Cola recruiters, and these applicants will receive higher bright scores than others. The algorithm also takes into account synonyms. So if someone lists Java on their resume, Bright’s technology will assume they are also strong in Apache.

  4. Tomi says:

    CONTROLLING CHAOS: Twitter’s Wild Ride From Doodle To IPO

    In the fall of 2010, Twitter was in chaos.

    The micro-blogging site, which had been founded four years earlier, still wasn’t generating much revenue despite having 145 million users. The site was still crashing constantly. The staff were at each other’s throats.

    Chaos, moreover, was not an unfamiliar state for Twitter to be in.

    Twitter’s first CEO, Jack Dorsey, had taken the company from idea to reality, but then made a mess of the place before getting fired. Twitter’s current CEO, Evan “Ev” Williams, had overseen huge user growth but was now moving too slowly and indecisively.

    Twitter’s board decided it now had to fire Williams, too.

    On October 4 2010, Williams resigned as Twitter’s CEO. Costolo took over.

    With Twitter set to go public at a $15+ billion valuation next month, the company’s success seems as though it has always been smooth sailing.

    When Costolo was handed Twitter three years ago, the company was a mess. Its four-year history was bloodied with founder feuds, failed products, office politics, and executive turnover.

    People close to Twitter during its first five years describe the company as “chaotic,” “stressful,” an “absolute mess” and “a zoo.”

    That’s because founders establish a company’s culture. And Twitter’s founders fought a lot.

  5. Tomi Engdahl says:

    Here’s The Evidence That The Tech Sector Is In A Massive Bubble

    The stock market is at an all-time high. Tech startups with no revenue have billion-dollar valuations. And engineers are demanding Tesla sports cars just to show up at work.

    Here’s the evidence that we’re in a new tech bubble, heading for a crash, just like the dot com bust of 1999.

    Interest rates are effectively at 0%.

    The stock market is at a peak, which is exactly what you’d expect in a zero-interest environment.

    In the tech sector specifically, there has been a recent run-up in deal prices.

    It’s not just tech asset prices that are high. Salaries are high, too.

    Twitter svp/technology Chris Fry got a $10 million pay packet. He only joined the company last year.

    It’s not just wages that are expensive. Company valuations are rising too.

    Companies with broken business models are highly valued.

    Companies without meaningful revenue are highly valued.

    Companies with no revenue at all are highly valued.

    Yahoo is again paying top dollar for companies with no meaningful revenue, just like it did in 1999.

    Companies are making dumb decisions: This startup chose beef jerky over a 401 (k) plan.

    Companies are making dumb decisions (part 2): There are more Facebook ad agencies than regular ad agencies.

    Serious investors are beginning to suspect a tech bubble has formed, and that a crash is coming.

    Andreessen Horowitz is pulling up the ladder.

    One of the most legendary tech investors, Tim Draper, thinks we’re at the end of the curve.

  6. Tomi Engdahl says:

    When a great product hits the funding crunch

    Building a great product is not enough

    Funding goalposts continue to move

    Monetization won’t save you if it’s not combined with growth

    A modern startup’s costs are all people costs

    “Milestone awareness” and clear product roadmaps

    Good luck, guys

  7. Tomi Engdahl says:

    Would You Buy A Car From A Vending Machine?

    Consider the poor auto saleperson: the source of much mistrust, the butt of countless jokes. Most of us tend to keep anyone who works on commission at arm’s length, but car salespeople are flat-out loathed. In fact, a recent study showed that car salespeople are the least trusted professionals in America, ranking even below members of Congress. Ouch.

    How can that perception be changed? Dealerships could do away with commissions and bonuses, for starters. Or they could follow the lead of a company called Carvana and get rid of salespeople altogether.

    Carvana is an online dealership based in Atlanta, Georgia. It’s claim to fame is that it allows customers to shop for cars online, secure loans online, even schedule test drives online. And when it comes time to pay up, that’s often done entirely online, too.

    According to Carvana, customers set up a test drive or purchase a vehicle online before visiting the vending machine, which is located in West Midtown

    Will the idea catch on? Honestly, we’d be surprised if it didn’t.

    If you’ve ever used a car-sharing service like Zipcar, you know how simple and easy it can be — especially compared to a traditional rental car outlet.

    This is all part of a larger trend of removing humans — who can be unpredictable and error-prone — from the sales process.

  8. Tomi Engdahl says:

    Software Is Reorganizing the World

    For the first time in memory, adults in the United States under age forty are now expected to be poorer than their parents. This is the kind of grim reality that in other times and places spurred young people to look abroad for opportunity. Indeed, it is similar to the factors that once pushed millions of people to emigrate from their home countries to make their home in America. Our nation of immigrants is, tautologically, a nation of emigrants.

    Yet while our ancestors had America as their ultimate destination, it is not immediately obvious where those seeking opportunity might head today. Every square foot of earth is already spoken for by one (or more) nation states, every physical frontier long since closed.

    With our bodies hemmed in, our minds have only the cloud — and it is the cloud that has become the destination for an extraordinary mental exodus. Hundreds of millions of people have now migrated to the cloud, spending hours per day working, playing, chatting, and laughing in real-time HD resolution with people thousands of miles away … without knowing their next-door neighbors.

    The concept of migrating our lives to the cloud is much more than a picturesque metaphor, and actually amenable to quantitative study.

    Perhaps the single most important feature of these states of mind is the increasing divergence between our social and geographic neighbors, between the cloud formations of our heads and the physical communities surrounding our bodies. An infinity of subcultures outside the mainstream now blossoms on the Internet — vegans, body modifiers, CrossFitters, Wiccans, DIYers, Pinners, and support groups of all forms. Millions of people are finding their true peers in the cloud, a remedy for the isolation imposed by the anonymous apartment complex or the remote rural location.

    Yet this discrepancy between our cloud subculture and our physical surroundings will not endure indefinitely. Because the latest wave of technology is not just connecting us intellectually and emotionally with remote peers: it is also making us ever more mobile, ever more able to meet our peers in person.

    The future of technology is not really location-based apps; it is about making location completely unimportant.

    When physical goods themselves can’t be digitized, our interface to them will be.

    Silicon Valley is nothing special. The geography of physical concentration is incidental and not worth fighting over.

  9. Tomi Engdahl says:

    Facebook’s Zuckerberg: US gov ‘blew it’ on mass surveillance
    By all means MINE THAT DATA, just tell us about it… bitch

    Facebook supremo Mark Zuckerberg – whose company is routinely criticised for its dubious data-mining practices – has attacked the US government for being secretive about its online spying activities.

    “I think the government really blew it on this one. And I honestly think that they’re continuing to blow it in some ways and I hope that they become more transparent in that part of it,” he told ABC News.

    Zuck argued that a balance was needed to allow American citizens to live in a safe country where they are protected by spooks while, at the same time, being kept in the loop about mass surveillance – something the Facebook chief arguably knows a thing or two about.

    “The future of our economy is a knowledge economy.”

  10. Tomi Engdahl says:

    Digital GIANTS in BLOODY battle to put your EYEBALLS in a JAR
    Who will capture the screen?

    As consumers become ever-more attached to their gadgets – variously glued to PCs and tablets, and, after-hours, laptops, game consoles and mobiles – the gigantic digital businesses are competing with each other to capture and monopolise users’ screen time on internet-connected devices. And all of the contenders are using many monumentally large data centres and data vaults.

    For the first time in human history, businesses can hope to have access to consumer eyeballs for several hours a day and become electronic comfort blankets for digital entertainment, mail, mapping, photo albums, e-tailing, search and social media – either through endpoint device capture or internet activity dominance, or both.

    The influence of the “FAGAMe” group of businesses is becoming pervasive, global in scope, and capturing a hitherto unattainable amount of individual consumer spending through the colossally concentrative effects of internet access to favoured destinations.

    Just six businesses are becoming the dominant internet destinations for consumer eyeballs. Here they are with their dominant consumer-facing activities:

    Facebook for social media;
    Apple for phones, tablets, digital entertainment and mapping;
    Google for search, phones, mapping and mail;
    Amazon for e-tailing and book readers and digital books;
    Microsoft for desktops/notebooks, search and mail; and
    eBay for e-tailing and payment

    These businesses are sticky; they have such scale and such a deep interaction with their users that their potential for growth is simply awesome.

    If the device a consumer uses to connect to the internet is “owned” by one of the big six, then they have an initial and enduring advantage. So far, four of the six have this aspect covered:

    Apple – desktops, notebooks, tablets and smartphones
    Google – Chrome and Android-running notebook, tablets and smartphones and smartphone hardware
    Amazon – Kindle Fire and tablet and Kindle ebook reader range
    Microsoft – desktop, notebook, and nascent tablet and smartphones, search and mail

    Facebook and eBay don’t have their own devices and rely on being the dominant internet destination for social media (Facebook) and alternate e-tail site (Amazon). Both are vulnerable in the medium and long term because of this.

    The market capitalisations of the big consumer internet six reflect this thinking:

    Facebook – $114bn
    Apple – $505.1bn
    Google – $354.4bn
    Amazon – $176.5bn
    Microsoft – $319.9bn
    eBay – $67.3bn

    These six consumer internet giants have a reach into consumers’ lives that’s simply unprecedented and their collective effect on analogue-based businesses is deeply destructive

    Apple and pals are helping to kill physical entertainment media supply (bye bye Blockbuster, farewell music CD and film DVD). Whole swathes of digital media retail jobs have been swallowed since iTunes and electronic music media became popular. The same is the case with the brocks-and-mortar sector since Amazon and its cohorts arrived with their digital product etailing and its online retail with physical fulfilment from enormous and cleverly automated warehouses. Thousands of people work in these centres but tens of thousands, hundreds of thousands, lose retail jobs out in bricks-and-mortar-shop land.

  11. Tomi Engdahl says:

    The Danger of Turning Cynical About Silicon Valley

    Actually, one line of thinking suggests that typical economic indicators drastically underestimate the social value of cheap internet-enabled entertainment. But the simplest answer is that while consumer-facing apps get most of the press, they’re only one piece of the startup ecosystem. Last quarter, within the dominant “Internet” category, the most venture capital deals were done in the areas of business intelligence and analytics, followed by advertising, HR and workforce management, and customer relationship management — all ways of using the Internet to make other businesses more efficient. By contrast, only 2% of deals went to social companies.

    The positive economic impact of the startup sector in no way diminishes the merit of other critiques against it, but recommends an approach that seeks to improve the industry rather than discredit it. Addressing Silicon Valley’s gender and class problems becomes even more urgent when one realizes the outsized role that the ecosystem plays in defining our economic lives.

    Building useful products may not be the same thing as saving the world, but neither is it the same as doing nothing. Let’s not lose sight of the difference.


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