Dec
10
Facebook steps in the privacy trap
December 10, 2007 | Leave a Comment
Put this down as “words to the wise.” Facebook, the rocketride social networking site got its hand slapped again over its disconnected from customers’ point of view on what folks want shared.
This week, Facebook suffered its second product roll-out gaffe of the year, when user outcry over its new Beacon advertising feature reached such a level that CEO Mark Zuckerberg was forced to issue a public apology for the way the company handled the launch. Last year, the company suffered a similar humiliation when its NewsFeed product earned the ire of users.Facebook apparently hasn’t yet learned that online social networks are successful only when they provide features that simultaneously pass two tests:
- First, features cannot disclose any information that people would never disclose offline. If a feature fails to pass this test, users will leave the site or engage in vehement protest.
- Second, features need to help people broadcast information that friends or other recipients will find helpful. If a feature passes this test, users are guaranteed to take it up in droves. Otherwise, people will opt out or ignore the feature.
Facebook has failed the first test twice already. It did so for the first time when it released the News Feed feature, which broadcast users’ activities on
Facebook to people in their network, without giving users ability to withhold information from the feed. The company did not learn from its experience and suffered the same fate when it introduced the Beacon. Many surprises were ruined when the Beacon broadcast purchases of engagement rings. More seriously, feeds of a friend buying a book on Living with AIDS violated fundamental privacy laws. Facebook realized the gravity of the problem and has moved quickly to make it easier for people to opt out of Beacon.
Why Facebook Beacon Will Not Stick with Users - Harvard Business Online’s Conversation Starter
For the record, we aggregate data, but share nothing personally identifying.
Blogged with Flock
Tags: Facebook, privacy, Beacon
Nov
26
In Hospice Care, Longer Lives Mean Money Lost - New York Times
November 26, 2007 | Leave a Comment
Think of this as a sign of things to come. The net gets thinner and thinner and we live longer and longer. Our institutions are simply not built for the longevity we’re experiencing and are expecting to continue to experience.
In Hospice Care, Longer Lives Mean Money Lost
CAMDEN, Ala. — Hundreds of hospice providers across the country are facing the catastrophic financial consequence of what would otherwise seem a positive development: their patients are living longer than expected.
Over the last eight years, the refusal of patients to die according to actuarial schedules has led the federal government to demand that hospices exceeding reimbursement limits repay hundreds of millions of dollars to Medicare.
The charges are assessed retrospectively, so in most cases the money has long since been spent on salaries, medicine and supplies. After absorbing huge assessments for several years, often by borrowing at high rates, a number of hospice providers are bracing for a new round that they fear may shut their doors.
In Hospice Care, Longer Lives Mean Money Lost - New York Times
Blogged with Flock
Sep
24
New version is live
September 24, 2007 | Leave a Comment
It seems like it’s been forever since we decided to start from scratch (second time we’ve done that) and rebuild our site . . . and in the process our business model. From where you sit, if you’re looking at the site, nearly everything has been changed . . .
Spiffy new visual design by Kerrie Malone, a wonderful visual and UI designer up in Seattle.
Complete UI overhaul by DXM (who someday may even do their own website).
Expert portals. Lots more of these to come, but the key concept is that we’ll be adding more and more subject matter experts who, in turn, will bring you help and encouragement in the form of decision tools based on what they know.
The decision plan builder itself is so different from what it was it’s almost hard to describe. Go find a decision and give it a try. Watch how a custom decision plan is built right before your eyes as you interact with the expert in the plan builder itself.
There is more cool stuff on the way, most noticeably, a new evaluation tab, calculators, and other decision tools.
Have fun
kah
Technorati Tags: Decision Making, Decision Street, DXM, Kerrie Malone
Aug
16
Decisions have consequences
August 16, 2007 | Leave a Comment
As a follow up to the post on mortgage debt . . .
Decisions have consequences. The next thing to watch for with these hedge funds is are they willing to live with the consequences of their decisions and do right by their investors or will they close up shop and restart the fund. Most investors don’t realize this, but hedge funds have a built in hedge for themselves in this situation and it comes at the expense of the investors.
The typical hedge fund manger gets paid on a scheme called 2 and 20. That is they get 2% of the total assets of the fund each year and they get 20% of all profits. The big money comes from the 20% piece. Profit is measured from what they call the high water mark, which is the highest value of the fund in the past. So in a situation like today, where a major fund drops in value dramatically, it could be years before the hedge fund managers are able see any of their 20% money again.
Let’s walk through a simple example. Suppose one share of a hedge fund was worth $150 a month ago and this was it’s highest value ever. $150 would become the high water mark. Due to this “once in a lifetime†situation, the fund lost 33%, meaning shares are now worth $100. The hedge fund managers now need to increase the value of the fund to over $150, the high water mark, before their profit share compensation kicks in. To go from $100 to $150 is a 50% increase. Even for the best funds, this can take years.
Rather than endure years of hard investing work just to get back to even, an alternative used by more than a few fund managers, is to close the fund. Then they turn around and start a brand new fund with the same people and the same strategy and go back to the same investors for money. There is usually a story—we improved the risk management analysis, brought in better people, set this one up better… Really all they did is reset their high water mark. Now when they increase the value of a share by $50 they get to keep 20% of that or $10. If a hedge fund manager can pull this strategy off, it is potentially worth millions in personal compensation. But, these millions come straight out of investors’ pockets.
Watch to see how many go down this road.
CK
Technorati Tags: black swan, cognitive bias, Decision Making, Decision Street, hedge funds
Aug
16
The black swan of mortgage debt
August 16, 2007 | Leave a Comment
A piece in the Wall Street Journal today about hedge fund managers has got my hackles up. As you most certainly know by now, the debt markets are in a complete panic, in theory because of a melt down in sub-prime mortgages. The general shape of the narrative is that . . .
- Banks and brokers made loans to people with less than perfect credit on very generous terms.
- Now those loans are “re-indexing”, meaning the payments are going up (way up).
- The borrowers can’t pay.
- So the loans are going upside down.
There of course is more to the story than that. Scratch deeper and you find that . . .
- Clever financial types packaged those mortgages into all manner of “mortgage backed securities” which allowed institutional investors to buy them by the bushel: too much arcana to go into here other than to point out that this was like bundling up a bunch of Chevrolets and selling the bundle as a Mercedes Benz.
- Meanwhile, all those mighty and mightily compensated hedge fund guys were off doing other clever things using lots of debt.
- During that same meanwhile, all those mighty and mightily compensated private equity guys were off buying up every company in site, also using lots of debt.
And then it all started to unravel which brings me to the point of this rant and the piece in the WSJ with this lead . . . [read]
Running a hedge fund means never having to say you’re sorry, at least not in so many words.
That isn’t to say some hedge-fund managers don’t have a lot to feel bad about. In the past few weeks, some of the biggest names in hedge-fund land — Goldman Sachs Group, Highbridge Capital Management, AQR Capital Management, Renaissance Technologies — have certain funds that
lost as much as a third of investors’ money as stock and credit markets seized up, and stocks moved in unexpected ways, in reaction to the spreading subprime-mortgage debacle.None of these highly paid managers are prostrating themselves before their clients, begging forgiveness, however. Instead, in letters to clients, they point fingers at other hedge funds, once-in-a-lifetime events and their own computer programs.
Black Mesa Capital, a Santa Fe, N.M., hedge fund captured the “don’t blame us” spirit with its letter last week, blaming “unprecedented market events,” including “a very large or several very large trading entities, possibly very large hedge funds…liquidating massive” portfolios. The managers, Dave DeMers and Jonathan Spring, said they are taking “unprecedented actions” to fix its problems, a response to the “unprecedented market events.” (Read
the full letter.) The fund lost about 10% in the first eight days of August. Black Mesa didn’t respond to a request for comment.
The word to focus on here are “unprecedented.” In other words, without precedent, novel, unexamined, never happened before . . . all bolex.
Two thoughts here . . .
Every bubble pops, and that’s what happened here. The debt orgy that fueled all these seemingly different activities built a house of cards. The minute someone runs for the exit, everyone does. From there we move into panic and then a rout. This is hardly unprecedented.
These guys aren’t worth what they were getting paid on the way up. They were lucky. In the limited world view their models captured, they were geniuses. Everything they built was based on a set of assumptions that there were no black swans. But there were. There are always are. Investors are getting hammered, bu they’re not giving back their fees. Something to think about next time, eh?
For the rest of us . . .
All I can say is hang on and don’t panic. It’s the wrong time to be selling, unless you have to.
When you’re making your own decisions, about whatever they are, ask yourself one simple question? What happens if I’m wrong (about each of my critical assumptions)? You won’t necessarily be able to hedge every risk you face, but having a conversation about “go wrongs” is the mark of a good decision maker.
kah
Technorati Tags: black swan, cognitive bias, Decision Making, Decision Street, decision traps, hedge funds, sub prime
Jul
31
More on the “retirement savings crisis” in America
July 31, 2007 | Leave a Comment
The Center for Retirement Research at Boston College is the torch bearer for thoughtful and thorough analysis of what’s going on with retirement in America. If you’re interested in the topic, you should regularly check out their site.
Here’s the lead on their most recent briefing, entitled: Is There Really a Retirement Savings Crisis? An NRRI Analysis . . .
The National Retirement Risk Index (NRRI) has shown that even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes, nearly 45 percent will be ‘at risk’ of being unable to maintain their standard of living in retirement. That is, these households are projected to have replacement rates — retirement income as a share of pre-retirement income — that fall more than 10 percent short of a target rate designed to maintain their pre-retirement living standard. More realistic assumptions regarding earlier retirement and reluctance to annuitize 401(k) balances or tap housing equity would put the percentage ‘at risk’ considerably higher, as would the inclusion of rapidly growing health care costs. Yet, recent academic articles and press stories question whether Americans are facing a retirement income crisis…
The key to understanding this piece is the NRRI. The National Retirement Risk Index provides a measure of the percent of working-age American households who are ‘at risk’ of being financially unprepared to retire. As you might expect, this varies by age group (or cohort). The differences in how the NRRI is calculated and recent scholarly work attempting to define the concept of “optimally saving” for retirement has led to some amount of confusion and pointless debate among people with an axe to grind. If you want to get into the math, read the article, but if you don’t, I’ll summarize the summary . . .
When to reconcile the math between the various approaches, they all point to the same conclusion: Plan on working longer and saving more. The younger you are, the more likely you are to run short of money . . . assuming you don’t have a major and extended health crisis in which case you are guaranteed to run out of money.
kah
Technorati Tags: Decision Making, Decision Street, Elder Care, Family Care, Retirement
Jul
31
A self-funded Mountain View startup company with nine employees, Decision Street Inc., has created a template and guided dialogue to walk people through the nuances of a major life decision with all the ramifications that entails.
“The decision to give up your life to care for another family member is a big, big deal,” says Kevin Hoffberg, COO and cofounder of Decision Street.
“We think people can and should think about it in a high quality way. What does it mean in terms of social security? Future income? Because economically, you may be better off paying for someone to provide the care. It’s a choice people tend to step past because they feel guilty.”
Nice!
kah
Technorati Tags: Decision Making, Decision Street, Elder Care, Family Care, Long Term Care, Long term health care, Kevin Hoffberg
Jul
31
New look and feel coming
July 31, 2007 | Leave a Comment
We’re dying to share the new look of the site with you . . . but we can’t just yet. Here’s what’s coming.
- Complete refresh of visual design: new layout, new color palette, new navigation. The site will be much lighter and cleaner feeling.
- Major overhaul of the user experience. There is some major kluginess right now with how people experience our decision templates. That will all be fixed in our next release. The transitions will all be cleaner and you’ll be able to watch your plan being built as you interact with the template.
- Introduction of “expert portals.” Instead of only being able to search for decisions by topic, you’ll also be able to search by author, who in many cases will be a noteworthy expert in that field.
Stay tuned . . .
kah
Technorati Tags: Decision Street
Jul
30
A number of people pointed me towards a lengthy piece in the New York Times called Cancer Patients, Lost in a Maze of Uneven Care. As you would expect by the title, it’s not a complimentary piece. Here’s a snip . . .
“It’s patchwork, and frustrating that there’s not one person taking care of me who I can look to as my champion,†Ms. Pasqualetto [The lead on the story is about her experience] said recently in a telephone interview from her home near Seattle. “I don’t feel I have a doctor who is looking out for my care. My oncologist is terrific, but he’s an oncologist. The surgeon seems terrific, but I found him through my own diligence. I have no confidence in the system.â€
It was a sudden immersion in the scalding realities of life with cancer. This year, there will be more than 1.4 million new cases of cancer in the United States, and 559,650 deaths. Only heart disease kills more people.
Cancer, more than almost any other disease, can be overwhelmingly complicated to treat. Patients are often stunned to learn that they will need not just one doctor, but at least three: a surgeon and specialists in radiation and chemotherapy. Diagnosis and treatment require a seemingly endless stream of appointments. Doctors
do not always agree, and patients may find that at the worst time in their lives, when they are ill, frightened and most vulnerable, they also have to seek second opinions on biopsies and therapy, fight with insurers and sort out complex treatment options.The decisions can be agonizing, in part because the quality of cancer care varies among doctors and hospitals, and it is difficult for even the most educated patients to be sure they are receiving the best treatment. “Let the buyer beware†is harsh advice to give a cancer patient, but it often applies. Excellent care is out there, but people are often on their own to find it. Patients are told they must be their own advocates, but few know where to begin.
“Here it is, a country with such a great health system, with so many different breakthroughs in treatment, but even though we know things that work, not everybody who could benefit gets them,†said Dr. Nina A. Bickell, an associate professor of health policy and medicine at the Mount Sinai medical school in Manhattan.
So called “patient directed” decision making has become fashionable in some circles in recent years. Indeed, one of the most profound and useful applications of the decision science we use is in the area of woman’s breast cancer. I use the word “fashionable” with reservation. It’s a wonderful thought that patients have a role in their own care decisions. But it also feels increasingly like permission for the medical establishment to punt its own dysfunction to the person least able to deal with it: the patient.
Although we’re not keyed up yet to support medical decision making right away, it is an area we plan on supporting as soon as we can. In the meantime, you can use one of the “make your own decision” tools to help yourself. You can also be in touch with Jeff Belkora who leads the work at UCSF on patient directed decision making.
kah
Technorati Tags: Cancer, Decision Making, Decision Street, Health Care, Jeff Belkora
Jul
21
Hammerin’ and sawin’ on the street
July 21, 2007 | Leave a Comment
Somewhere, somehow we lost our bloggin mojo. Not sure why, but it feels like it’s time to get back at it.
Since sneaking (sort of) into public beta we’ve been watching users and reading the statistics and have come to some conclusions . . .
- The user experience is still bad. In particular, the rough transition from the “wizard” part of the application to the plan part is awful.
- The decision table (evaluation) part is hard to understand.
- The site looks pitchy patchy.
- We need more content.
Other than that, it’s great!
So we’re hard at it to fix those bits up.
We’ve engaged DXM to help us in a UI deep dive. The wizard functions will soon sit right on top of the plan part, so user will be able to see what’s going on the entire time. A little “keyhole” function will let users see what choice is recommended in real time. Every time a relevant change is made, the choices will change to reflect the new input.
We’ve engaged Kerrie Malone to help us with a major visual design hose out. The initial sketches are just so cool I can barely stand it.
We’ve begun to engage all sorts of interesting authors and experts on a range of topics to build decisions and expert portals for us.
Soooooooo . . . expect to see a bunch of big changes to the site in the coming weeks, with most of it showing up in early September. In the meantime, keep plonking away and let us know what you think.
kah
Technorati Tags: Decision Making, Decision Street, Kerrie Malone, DXM