Open Source Seeds

I’ve been reading an excellent book called the Omnivore’s Dilemma by Michael Pollan recently. The first section of the book, entitled “Industrial Corn” investigates the state of industrial agriculture in the United States, which it turns out, revolves around commodity corn.

One of the shocking revelations for me from Pollan’s well researched discourse on the agriculture business is that corn growers, despite an almost-50% federal subsidy for growing corn (relative to the cost of growing it), virtually cannot make a profit. Corn growers are paid by two sources: the grain elevator and the government. The grain elevator pays the market rate of around $1.45 per bushel. Then, the federal government subsidies the rest up to a defined “target price”, say $1.87, or $0.42 in subsidy per bushel. However, the total payments to the corn farmer barely cover their costs, and many farmers, including one interviewed by Pollan must take on second jobs to feed themselves. The large corn subsidy is largely passed on to buyers of corn products (to find out why this is, I’d recommend you read the book).

If you drill into American corn farmers’ operating costs, you’ll see that they break down into 21% for seed, 37% for fertilizer, and the remaining 41% spread across a number of smaller categories. Before you take those costs for granted, let’s consider why farmers have to pay for seed. Simply put, farmers work on fixed plots of land, and to make the most money, they need to grow as much corn as they can. Different corn seed varieties, each with different characteristics, have been bred by humans since the Mayans. In the last century, this effort was picked up by corporations, like Monsanto, which found a way to breed corn so that their seeds would produce plants which cannot produce more good seeds. This innovation allowed these companies to monetize innovations which improved corn seed yields, and their well-funded efforts quickly produced better yielding seeds than any freely available seeds (10x growth in corn yields since the turn of the 20th century).

The higher yields from proprietary seeds and inability to produce their own seed keeps farmers coming back to the seed companies every year for a new supply of seeds, which don’t come cheaply. Since the margins of the American corn farmers are so low, this has a relatively large impact on their ability to make a living wage. As you can imagine, this impacts third-world growers even more dramatically. As a result of the price, third-world growers either have to grow less corn using freely-available varieties or pay large sums of money to buy the industrial seeds.

This situation should sound very familiar to anyone who has experience in the software industry. Operating systems are similar - because of lack of a similarly functioning free product, most users have long had little choice but to buy Microsoft Windows. However, the advent of the open source movement, a legal structure around managing the intellectual property behind software whose source code is released to the public, challenged Microsoft’s monopoly on the operating system, giving consumers and business a free alternative. The combination of the new legal structure, as well as a growing global community of collaborators connected to each-other in real-time over the internet, paved the way for the development of the Linux operating system, as well as other free and widely used software products, such as the Apache web server and Firefox web browser.

If an open-source effort around seeds could be started, allowing farmers to collaborate around developing their own open-source breeds of corn, the monopoly that the seed companies have on the American farmer and third-world farmers alike, could be challenged. The key question for the American corn farmer (for corn seeds) is what comparative yield would this open-source corn have to have to get them to the break-even point of profitability relative to the proprietary seeds. Using the cost and revenue structure from this governmental source, if an open-source corn breed could reach just under 85% of the yield of proprietary corn, American farmers would make the same profit. There would be a much greater impact on the third-world, as farmers could collaborate to develop good seeds for different climates, and be able to grow substantially more crops with the same land at much lower cost.

Given the potentially high impact that open-source seeds might have on the American farmer and global poverty, why hasn’t it been done yet? I suspect this is because the model is a harder to apply to seeds. Farmers are less connected to each other than software developers, who are pretty savvy about using the internet to communicate and collaborate. Since collaboration and sharing of collective experience is crucial to the productivity of the open-source software movement, farmers participating in an open-source seed movement would likely have to embrace new communications technologies to collaborate with each other. Also, seeds are harder to distribute, modify, and share than is source code, which can be managed, duplicated, shared, and distributed virtually automatically. A centralized authority (which does not exist in the open-source software world) would likely have to serve as a point of communication and distribution for an open-source seed effort. They’d have to have some resources to store master seeds, grow them to copy them for distribution, and to defend themselves from the almost-certain legal challenges of the incumbent proprietary seed-makers.

The need for the centralized authority is a significant disadvantage relative to the software community. It requires resources, a lot more collaboration than an online newsgroup, and constitutes a centralized point that can be attacked by incumbents. That said, the benefit of open-source seeds is arguably just as large or larger than open-source software: food that can be afforded by everyone can hardly be less important than free software.

Web Voting Systems - Dumb and Dumber

Recently, I was watching an episode of the Colbert Report where Colbert referenced a Time magazine online poll for who is the most influential person. Intriguingly, Steven Colbert currently placed second, behind Rain, a South Korean pop star, and with about half the number of votes. This seemed rigged - so I decided to investigate how secure this particular polling application was.

The first step was to go to the webpage and determine how the voting widget worked. I voted for Colbert and noticed that the voting widget was a flash widget. To determine how the vote was registered, I installed a network monitoring utility called Wireshark to monitor my outgoing HTTP traffic. I ran this and then voted for Colbert from several different browsers, clearing their cookies (in case some cookie-specific message was sent), and changing the vote amount.

I determined that the voting was done with a HTTP request to a url with 3 main parameters: the id for the person you’re voting for, your vote amount, and a special key that depended only on the vote amount. The web service which responded to this voting url kindly sent a message back informing you that you messed something up if you got it wrong. Based on the information I gathered, I wrote a simple script to randomly pick a rating of 80-100, and use random wait times between requests so not to get caught in some pattern-detecting or rate-limiting filter. I was, however, keenly aware of an obvious flaw - I was unable to modify my source IP address (though this is possible in linux). All said and told, I was able to get about 50-100 votes submitted per IP address before my IP was blocked.

Assuming I could vary my IP address, there’s no way that their web service could have detected that my votes weren’t coming from different users’ computers. This is a common problem: a determined “hacker” (you can barely call it hacking, because it’s so easy) can easily swing any voting application on the web which doesn’t do something clever, such as:

• Require a secure login coupled with some kind of identity validation (such as validating a phone number through an SMS)
• Generate a unique id when sending a page out to a user. This user can’t forge their source ip address, because they have to receive the page to send the id back. Then, check the ids sent with votes and eliminate duplicates. This can still be overcome if the hacker has access to a large number of proxy computers, such as a bot-net.

Perhaps the online political polls that had Ron Paul in the lead in early Republican primaries despite his trailing position in ordinary polls might not just have been due to his significant online support. Rather, they may have been caused by a small number of overly determined individuals seeking to have more than their fair share of the vote.

Importantly, this also has repercussions on the way that metrics (such as in Google Analytics) are collected on the web. It’s likely that protecting the critical business intelligence that a web metrics system can provide from outlying behavior planted by hackers will likely become an increasing problem over time. This is particularly malicious, because unlike the harmless web polls, web companies rely on metrics systems on a daily basis to manage the way the acquire traffic, the way they improve their products, etc. The disruption or a random or directed modification of the metrics produced by these systems would have a significant impact on the underlying businesses.

Facebook’s Beacon - What Were They Thinking?

If you don’t follow the Silicon Valley technology gossip train, you probably have never heard of Facebook’s Beacon project. On November 7, 2007, Facebook announced the launch of its Beacon platform, which was basically a way that internet retailers and other sites could alert Facebook of actions that Facebook’s users took on their sites. Needless to say, there was a loud backlash from the Facebook community over privacy concerns, and a number of launch partners backed away from any association with Beacon. In this post I’ll explore the possible motivations behind this move.

In considering why Facebook made a move like this, we should familiarize ourselves with the situation faced by its executives and board. Facebook is a huge site with 35 million monthly unique visitors in the US. It recently took a $240M investment from Microsoft, giving the company a hefty (and utterly ridiculous) $15B valuation. Microsoft’s investment was coupled with a banner syndication deal that guaranteed Facebook the virtual entirety its estimated $150M revenue. Microsoft’s revenue deal is very generous, and likely wouldn’t be nearly as favorable if the Facebook weren’t such a hyped and sought-after venture. However, in reality, social media has had a tough time monetizing through the old tried-and-true internet CPM and CPC models, as discussed in this Economist article.

Given this backdrop, what’s likely happening is that Mark Zuckerberg and investors are scrambling to find a revenue source to replace Microsoft’s generous deal and get Facebook’s annual revenue up to $1.5B (a 10x jump from today), which would allow it to be reasonably valued at $15B. What’s an obvious tried and true way to make bucket-loads of money on the web? Become your own advertising syndication network! This can bee seen by the sheer number of companies in this space. If you were a management consultant, what advice would you give Facebook on how to enter this market? Leverage whatever competitive advantage you have. Well, Facebook has several:

• Media attention- Facebook’s actions draw a lot of press attention
• Traffic - lots of it
• Context - users’ actions, friends, interests, jobs, sex, age

Of these, traffic is key. Having enough users so that a random user surfing around web properties is likely to be a Facebook user with a Facebook cookie in their browser history. Check. Second, context: Facebook knows your age, your gender, and what you like (you said you like Led Zepplin on your profile, and your wall posts indicate you’ve got a penchant for drinking Coors Light). Is this enough for Facebook to claim they can do better banner ad targeting than Doubleclick, which already has a lot of context on you as well, in the form of what sites with Doubleclick banner ads you’ve been to? How could Facebook get more information on what kind of transactions you’re likely to want to make?

Here comes the Beacon strategy (genius!). Facebook has a lot of media attention and momentum - it can use this to its advantage. It dangles a carrot to retailers and companies the web over - send us information about your users’ activities and we’ll advertise it in their friends’ news feeds, free of charge. That’s exactly what Beacon does. The retailers and publishers jumped at the opportunity, hook, line and sinker, including Coke, New York Times, eBay, and Fandango. Just before launch, it seemed like Facebook might just make out like a bandit.

In the end, Facebook’s lunch got thrown in their face by their users. Beacon’s down, but not out. It’ll be interesting to see whether or not they can resuscitate it and realize their goal of advertising syndication domination.

The Myth of The “Invisible Hand”

These days, when you hear debates about government policy towards the enterprise, you’ll often hear the typical rhetoric between two sides who hold overly simplistic arguments and refuse to actually listen to each other (sound familiar?). One side argues that we need tighter governmental regulation, more corporate taxes, etc. The other argues that we should practice laissez-faire, that governmental regulation is anti-capitalist, anti-productive, and only impairs the free market system.

From the last 75 years, we can see that the capitalist system is an extremely powerful system for human organization. It’s a system that provides hope, it encourages innovation, creativity, and hard work. It has given rise to efficient companies which have up to 750,000 employees (unbelievable, given the comparative inefficiency of governments with payrolls that size), to many new technologies, and has improved the quality of life of a lot of people. However, this powerful system also has its negatives. While it, in part, runs off of human greed, this important fuel can sometimes get the best of it - such as in the financial collapse which catalyzed the Great Depression, the current credit crisis, as well as environmental concerns.

The reality is that capitalism is a system of human organization. That’s it. It’s brilliant, but it’s not magic. In a way, it’s a set of rules that help organize things (like the laws of physics or the rules of football). The problem is, systems don’t have a world view. They don’t have feelings. They don’t have goals. Our thoughts towards and treatment of capitalism need to acknowledge this.

We, on the other hand, do have a world view, feelings, and goals. And we shouldn’t just tuck them away because the capitalist system “knows better”. Capitalism is a tool, and we’re not using it to its full potential. To make an analogy with the software world, an operating system is a bunch of computer code with certain levers and hooks. You can turn it on and it’ll run, but it won’t necessarily do anything you want it to. It’s only after you install your own software and configure it does it spring to life and start improving yours. With capitalism, this configuration belongs to us - the people and our government. It’s a matter of creating incentives (which, of course, is not easy). Do we want eergy independence and 100% renewable energy, and fast? Capitalism is the perfect tool, but we need to configure it to work for us.