Author: mark

  • What in the world…

    Someone just arrived at my blog by Googling:

    WHAT IN THE WORLD IS GOING TO HAPPEN TO THESE PEOPLE IN THE US WITH THEIR SOCIAL SECURITY CHECKS

    A reminder of the hard problems Google’s engineers are working on.

  • My new favorite "we're screwed" graph

    Yesterday FT.com’s Alphaville posted a graph showing that the US treasuries CDS graph had inverted for the first time ever.

     

    What that means is that the cost to insure against default on 1 year US Treasury Notes costs more than it does to insure a 5 year note. This goes contrary to economic liquidity preference theory – meaning that investors generally see bonds with a longer maturity as being riskier so to insure them usually costs more.

    So why does it cost more to insure a 1 year treasury bond? Investors see the risk for the US government as significantly higher in the short term and that psychology creates this weird effect.

    Footnote: I’ll make this clearer in another blog entry but for now I’d like to add that I see the risk of an actual default by the US government is extremely close to zero. If we don’t get our act together by August second, we don’t automatically default. We just have to gradually make harder and more irresponsible decisions about who to pay and what to defer. Those decisions have a forcing effect on our political system as pressure will rapidly mount beyond calls from disgruntled constituents to calls from creditor’s lawyers.

     

     

  • Every national curriculum should require web programming for graduation

    Every primary and high school curriculum should include a mandator web programming course the same way it includes math and a first language.

    When’s the last time you used pythagoras? How about Euclids proof of the infinitude of primes? Both of these are popular in high school math curriculums.

    My sister one of the best chef’s in Cape Town. She writes about food and runs a restaurant review site. She doesn’t use pythagoras that often I’ll bet. But she recently asked me for shell access to the server her blog is hosted on so she could run “chmod 775 *” on a directory to fix a permissions issue. She’s also buying templates from Themeforest and knowing PHP would help her customize them and fix a few bugs.

    Most non-programmers think of programming as a 3 to 4 year computer science degree, a course of advanced calculus thrown in as a prerequisite for graduation and the ability to write a basic compiler or operating system.

    Here’s the truth: Most programmers spend 99% of their careers writing very simple code that is not that different from english. Most of it is a knowledge of syntax rather than opaque math or implementing complex algorithms. Ask any one. Most of them will tell you the last time they used calculus in programming was in school.

    It’s my strongly held belief that everyone should start learning basic programming starting age 7 and the course should continue through to graduation from high school and should be prerequisite the whole way. It should include the following:

    • PHP. It’s open source and the most popular programming language on Earth for many applications beyond just Web. My computer science grad friends are probably freaking out that I’ve chosen a loosely typed language that doesn’t require variable declaration and isn’t purer OO, but it’s the most popular language and it’s what real people actually use to get the job done.
    • Javascript. It runs in every browser and now on many servers.
    • HTML. Obviously.
    • CSS. Obviously.
    • SQL using MySQL.
    If a country were to require all it’s students to graduate from high school with a working knowledge of the above, it would be vastly more competitive. That’s the goal of a national education curriculum.

  • Why startups are attracting so much investment

    There has been plenty of speculation during the last 2 years that we’re in a tech investment bubble. It seems every blogger is trying to “call it”.

    It hasn’t burst yet and if AirBnB’s $112 million round of funding announced today is anything to go by, it ain’t going to burst any time soon.

    Lets pretend the US dollar is going to continue to fall in value. You have an appetite for some risk and you’re watching your dollar denominated wealth dwindle away.

    You could invest in bonds, but we all know that’s not very chic right now since even sovereign debt defaults.

    You could buy currency, but just when you thought the Euro was safe, turns out half the Eurozone is in crisis and the charter doesn’t even have a clause for a member state defaulting. It “just wan’t supposed to happen”.

    You could buy gold, but that looks like one hell of a bubble waiting to burst. [Although my prediction is that it will keep rising until early next year]

    Hey what about Treasury Bonds. Well we already had that conversation about August 2nd earlier today, so forget that.

    What about commercial or private real-estate. History has shown that has always been a safe investment …if you exclude recent history.

    All this makes the US software sector look extremely attractive. Even *gasp*, startups!

    Software companies make more money if the dollar falls. For example Google’s Q2 2011 international revenue made up 54% of the total and is increasing. If the dollar falls, expect Google to bring back the free food and tea trolley.

    Software is not as affected by rising interest rates (which are coming) as, for example, companies that need to borrow big to finance land, oil rigs, multi-year construction projects, etc.

    The software labor force is completely dynamic. Software developers can work remotely and many companies (like WordPress) have entirely distributed teams. So if India or China gets expensive, we’ll just move it back on-shore. But more importantly, because software labor can be based anywhere it is a much more efficient market than running a US based law firm for example.

    The target market is also dynamic and can quickly be switched from one country to another. Unlike brick and mortar businesses, switching from selling in the UK to China simply requires a team of translators and to stop spending ad money and resources on the country in question and divert is somewhere else. No physical stores to shut down, no plant to move, no warehouse to dispose of.

    And of course once you’ve written the software, the ongoing cost of running a software company is not much at all. Sure you need to keep innovating, but if the company stops writing software tomorrow the revenue keeps flowing.

    The US has a track record of being the best at software. It’s rare to see a viable foreign competitor for the likes of Google, Facebook, Microsoft, Oracle, CA technologies, IBM, Accenture etc. I’m not discrediting awesome companies like SAP, but they are rare.

    Companies like AirBnB, Facebook and Groupon represent a new breed of software company that is more efficient, nimble and profitable. They don’t require a on-the-ground sales team like IBM, Microsoft and Symantec. The team can be based anywhere, their server resources are distributed across the globe and all their revenue and costs are completely dynamic and distributed and can adapt continually to the rapidly changing environment.

    In the current investment and risk environment, software startups are, understandably, just about the sexiest thing since, well, this:

     

  • Disappeared from Hacker News … again. So I'm done.

    I get wierded out when an opinion piece I posted about the impending debt default is on the home page of Hacker News for 20 minutes and climbing – and then gets disappeared.

    The article is still posted on HN, no message that it’s flagged as spam, no email. Just a little tweak that disappears me from everything except “new”.

    This has happened more than once. It and an increase in comment negativity has driven me off. I’m done.

    Goodbye HN, fare thee well.

     

  • What will happen if we default on August 2nd?

    With Greece defaulting – not a “technical default” or “restructuring” as it’s being branded but a real live default – the stage has been well set for August Second if the USA does in fact default on it’s own debt.

    I tend to percieve the sky as falling earlier than most because I grew up in an environment of political instability. That said, I worry that we have underestimated the incompetence of our legislators. They may not realize how serious the consequences are if we don’t do something – anything – to solve the issue coming up on August second. They rarely have to solve a problem that is truly time critical because – well hell we’re the United States of America and we set the damn clocks the way we see fit.

    The rare instances of time critical decisions required from our lawmakers are usually related to war. Sad and cynical as it sounds, wartime is an incredible opportunity for any government to push through ideological agendas  – like the patriot act – that are enthusiastically adopted by opposing lawmakers and the populace while emotions run high and we’re willing to trade some liberty for some safety and another excuse to wave the flag.

    But this isn’t one of those times.

    Ideological forces are strongly opposed in our government and any decision is going to leave a bitter taste in everyone’s mouth. So no one wants to make the decision. Which is why I’m worried there may be no decision by August 2nd and we will be well and truly fookered.

    What will the consequences of a default on August 2nd be? Here are my bullets and they’re all pure speculation:

    • Interest rates in this country will start to rise and continue for some time. Remember, the Federal Funds rate was over 20% in June 1981.
    • The housing market will start a double collapse due to a rapid rise in mortgage interest rates.
    • In the uncertain environment, housing sales will stall and the terrifying housing data in September, October and November 2011 will have a knock on effect i.e. home sales will completely stall.
    • This will precipitate what should have occurred in 2008 and 2009 had the banks not been bailed out. The assets underlying many of their creative financial products will drop massively in value causing many banks to fail, this time without a bailout.
    • Because the dollar is the world’s reserve currency and many countries are holding Dollars, US debt and dollar denominated debt, a world financial crisis of epic proportions will begin to unfold.
    • If ratings agencies actually downgrade US debt, the effect will be catastrophic. Many banks, countries and other organizations are required to keep a specific mix of risk on their balance sheets. This will force world-wide balance sheet restructuring as countries and companies move away from the US dollar or dollar denominated debt – specifically US government debt.
    • The dollar will increase the rate of it’s current slide.
    • Gold prices will hit $1800 in September/October and $2200 or more by year end.
    • Credit will once again dry up wreaking havoc among businesses and banks.
    • Expect massive layoffs world wide as businesses deal with lack of access to credit and batten down the hatches preparing to weather the storm.
    So what good will come of this?
    • With a declining dollar, US exports will earn more money.
    • There will be a massive power restructuring in corporate America as incumbents fail by the hundreds, opening up opportunities for young, innovative businesses.
    • Some wealth will be transferred back from the wealthy holding US dollars to the true innovators in this country as the dollar declines and the value of exports increase.
    • Manufacturing jobs will return to the USA as it becomes cost effective for other countries to use our labor force and base operations in the USA.
    • Our politicians will be exposed as incompetent and old power bases and old boy networks will crumble giving way to new blood, new ideology and possibly a new political party in the United States.
    I’d love to hear your  prognostications in the comments, good and bad, of what will happen if we don’t raise the debt ceiling by August 2nd…

  • Which revision/source/version control software to use

    I got a question in the comments of my previous post re this, so I’m going to weigh in real quick:

    I’ve used CVS, Subversion (SVN) and Git and dabbled with a few commercial products.

    Use “git”. Here’s why:

    • If it’s not already the most popular, it will be soon.
    • It is used for the Linux Kernel and was designed by Linus Torvalds, creator of Linux. If it can handle Linux’s source and a distributed team that size, your project will do just fine.
    • It’s incredibly fast, which is important if you have lots of source and larger files.
    • It’s very robust. This was one of the original design considerations.
    • It’s designed to work well with a distributed team.
    • It’s extremely well supported and many complementary open source and proprietary products are available for git. Check out GitHub for example.
    • It specifically fixes flaws in previous revision control systems like CVS so there are many learnings built in that make it better than older systems.
    • If you plan to collaborate on an open source project, you’re probably going to be using Git anyway.
    I still have some of my legacy projects on Subversion purely because my deployment system is built on subversion. But everything new I do is on Git, both open and closed source.

  • Which programming language should I learn?

    I’ve been asked this question twice in the last 2 weeks by people wanting to write their first Web application. So I’m going to answer it here for anyone else interested:

    If you want to write Web applications you need to learn the following languages: Javascript, PHP, HTML, CSS and SQL. It sounds like a lot, but it really is not. You can learn enough of each of these languages to write a basic Web application within a week. Trust me. It’s easy!

    PHP is the guts of your Web application. It is the language that runs on your web server. It is also the only language where you have a choice about learning it or learning another language. You must learn HTML, CSS and Javascript and 99% of web programmers learn SQL to talk to a database. But there are many other languages to choose from that can do the same thing that PHP does.

    However, if you are starting out writing web applications, PHP is the first server language you should learn and here is why:

    1. PHP is used by a huge number of websites, both big and small. Most of Facebook is written in PHP. Wikipedia powered by Mediawiki is written in PHP.
    2. WordPress, the worlds most popular open source blog platform is written in PHP. If you know PHP you can change it any way you like or even contribute to the community. WordPress is used by eBay, Yahoo, Digg, The Wall Street Journal, Techcrunch, TMZ, Mashable and of course the whole of WordPress.com is powered by WordPress written in PHP.
    3. Most of the worlds best content management systems are written in PHP.
    4. The PHP community is massive and supportive, unlike the Ruby on Rails community for example.
    5. 99% of web programmers can understand PHP, even though some don’t realize it. (like Perl Developers)
    6. PHP is a mature language which means the bugs have all been ironed out and it runs fast!
    7. If you Google a question you have about PHP, you have a much higher likelihood of finding an answer than any other server programming language.
    8. Don’t learn Perl because even though it’s a mature, fast and popular language, it’s harder to learn than PHP.
    9. Don’t learn Java because Java is better suited to launching spacecraft and running systems that control oil rigs or banking software than Web applications. It is strongly typed which means that you need to write more lines of code to get the same thing done. It’s also harder to learn because it’s a purer object oriented language . It also is owned by Oracle which means it’s a commercial language and that means Oracle will continually be trying to sell you stuff by making things seem harder than they are and claiming they have the answer to the problem they created in your mind.
    10. Don’t learn .NET because it’s also a commercial language and pretty much everything made by Microsoft either will cost you money or will break a lot.
    11. Don’t learn Ruby because the guys who run the community are total a-holes who will insult you for asking beginner questions. Ruby is also way less popular than PHP or Perl even though it’s used to power Twitter. It’s also the reason Twitter is down so often.
    12. Don’t learn Brainf*ck, Cobol, D, Erlang, Fortran, Go, Haskell, Lisp, OCaml, Python or Smalltalk because these are languages that people tell you they know to show off. Some of them have specific advantages like parallelism, being a pure object oriented language or being compact. But they are not for you if you are starting out. In fact, the combination of PHP and Javascript will give you 99.99999% of what all these languages offer.
    You also need to learn two presentation languages: HTML and CSS. They are actually part of each other because HTML is not too useful without CSS and vice versa.

    HTML tells the browser the structure and content of a page. e.g. Put a form after a paragraph and have one field for email and one for full name.

    CSS tells the browser how to make that page look e.g. Which fonts to use, what size they should be, what colors, how wide or tall things on the page should be, how thick borders should be, how much padding to use and how thick to make margins.

    Then you also need to learn a data storage language called SQL which lets you talke to a database to store things like visitor names, email addresses and so on. For example, using SQL you can tell a database to store an email address and full name by saying “INSERT INTO visitors (name, email) values (‘Mark Maunder’, ‘mark@example.com’);. There are other ways to store data and a popular terrorist movement calling itself NoSQL has formed in the last 4 years and they spend their time sowing fear and doubt about SQL and confusing beginners like you. The reality is that 99% of web applications use SQL and continue to use SQL. It works, it’s fast, it’s easy to learn and everyone understands it. It’s used by WordPress, Wikipedia, Facebook and everyone else who counts, whether they like it or not. Just learn SQL!! I also recommend you use MySQL to store your web application’s data (even though it’s owned by Oracle) because it’s the most popular open source database out there. PHP applications use MySQL more than any other database engine on the web.

    To summarize, so far you need to learn:

    • Javascript (a programming language that runs on inside your visitor’s browser)
    • PHP (a programming language that runs on the server)
    • HTML (a presentation language that tells the browser the structure of a page)
    • CSS (a presentation language that tells the browser how to make a page look once it’ knows the structure)
    • SQL (a data access language that lets you store and retrieve data from a database)
    Each of these languages runs or executes in a certain place or environment:
    • Javascript runs inside the browser of someone who has visited your website. What’s cool about this is that it uses your visitor’s CPU and memory instead of the resources on your server.
    • PHP runs on your own web server. Most websites use a kind of “container” or application server to run PHP called Apache Web Server with something called mod_php installed. Apache handles all the web server stuff like receiving the request for the document and making sure it’s formatted correctly. It then passes the request to mod_php which is executing your PHP code. This actually runs your web application written in PHP, your program sends the response back to Apache which sends it back to your visitor.
    • HTML is interpreted by a visitor’s browser and tells the browser how to structure the page as it loads.
    • CSS is also interpreted by a visitor’s browser and tells the browser how to make the HTML look.
    • SQL is a language that you use inside your PHP application to talk to a database like MySQL. You will actually write SQL in your PHP code but it will be sent to the database engine which is where it is interpreted and executed. The database then sends your PHP code whatever it asked for, if anything. (sometimes you’re just inserting data and not asking a question)
    As you progress you will get familiar with the platforms you run each of these languages on. They include:
    • Linux is the operating system you will run on your server. Everything else on your server runs on top of Linux. Linux lets your web application talk to the server’s hardware.
    • Apache Web Server running mod_php. This is the application server you will use to run your PHP code. It will receive the web requests, forward them to your PHP code, and receive the response which is forwarded to your visitor.
    • MySQL database engine. You will talk to mysql using SQL which is written inside your PHP code.

    One last note to help you in your language decision making. It’s important that you understand there are a few phenomenon that may confuse you in your language research:

    The first is that some software developers have little life beyond writing software and have large egos. One of the few things they have to impress you with is their own intelligence. They will try to make programming sound harder than it actually is. It’s not hard. It’s easy.

    Secondly, an arrogant programmer may regale you with a list of programming languages to choose from and tell you that he or she knows them all. They may make the choice sound complicated. It’s not. They’re just showing off. Choose PHP and the set of tools listed above and you’ll be fine.

    Third, remember that there is always something new and shiny coming out that will get a lot of attention and is advertised to “change the way we…” or will “make everything you know about programming irrelevant”. Ignore the noise and stay focused on the basics. Until a new language, operating system, application or piece of hardware has been around for a while (usually at least 5 years), it’s going to be full of bugs, run slow, break often and it will be hard to get help by Googling because few people are using it and have had the problem you’re having.

    Lastly, many companies like Google and Facebook spend a lot of time and energy trying to attract the best software engineers in the world. Google associated themselves with NASA purely for this reason, even though they’re in completely different businesses. To draw attention to themselves as thought leaders in software they talk a lot about languages like Erlang, Haskell and so on. The reality is that their bread and butter languages are pretty ordinary – languages like C++ and PHP. So don’t get confused when you see Facebook talking about using Erlang for real-time chat. They’re just showing off. Their bread and butter is PHP, HTML, CSS, SQL and Javascript, like most of the rest of the Web.

    Who am I and how dare I express an opinion on this? I’ve been programming web applications since 2 years after the Web was invented. I’m the CEO and CTO of a company who’s web apps are seen by over 200 million unique people every month. I also own the company.  I’ve seen languages and platforms come and go including Netscape Commerce Server, Java Applets, Visual Basic, XML, NetWare, Windows NT, Microsoft IIS, thin clients, network computers, etc.

    The Web is Simple. Programming is Easy. Now go have fun!!

     

  • So… Greece just defaulted

    Here’s a little reminder that sovereign debt is unsecured. Greece just defaulted. And for some reason only Reuters are calling it like it is. Expect fireworks tomorrow. Here’s the story:

    http://blogs.reuters.com/felix-salmon/2011/07/21/greece-defaults/

  • Trial, Error and the God Complex

    My new favorite economist Tim Harford did a great TED talk recently chatting about our assumption that an expert approach is needed to problem solving. He argues that instead we should rely more on trial and error, a method that has proven very effective both in nature and business.

     

    If the loading animation won’t disappear then try viewing the video on this page.