Are online news aggregators vampires? – Catherine Tucker

MIT Sloan Professor Catherine Tucker

MIT Sloan Professor Catherine Tucker

It isn’t often that an MIT Professor studies “vampire” like entities. However, that is exactly how news aggregators such as Huffington Post and Google News have been described by Mark Cuban of Shark Tank fame.

The reason that Mr. Cuban thinks that aggregators deserve dracula-like appelations is that as he expresses – “Don’t let them suck your blood. Vampires take, but don’t give anything back.” In other words if you produce content the work of such news aggregators is viewed as been purely parasitic.

However, in a recent study I have shown that aggregators are not the blood suckers of the media industry that some have thought they were.

The study focuses on the 2010 showdown between Google News and the Associated Press over digital aggregation of news content by the Google platform. In January 2010, after a breakdown in licensing negotiations, Google News removed from its platform all news articles by the Associated Press, a media consortium that produces and shares news stories among its media members, including both large and small newspapers in the U.S.

The dispute lasted only a few months, but it provided a terrific opportunity to gauge how online traffic is impacted by the inclusion, then exclusion, of aggregated online content on a platform.

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How globalization sunk many Americans deeper in debt – Erik Loualiche

MIT Sloan Assistant Professor Erik Loualiche

MIT Sloan Asst. Prof. Erik Loualiche

From MarketWatch

Even as U.S. policy makers continue to debate the relative advantages and drawbacks of globalization, it’s abundantly clear that international trade is not the benevolent force it was once thought.

For all its promise of boosting incomes and strengthening growth, trade has had a disproportionately damaging impact on regions of the U.S. that have long depended on manufacturing. Recent data shows that these communities have suffered a great deal of economic distress, including high rates of underemployment and joblessness.

These communities have also become much more indebted compared with the rest of the nation, according to my latest research. During the years 2000 to 2007 — also known as the run-up to the Great Recession — overall American household debt doubled. That debt peaked in 2008, at almost $13 trillion. This leverage, however, was not shared equitably. Household debt in regions of the country where manufacturing jobs had shifted overseas grew an additional 20-30% over that period. In other words, nearly a third of American household debt during that time frame can be attributed to import competition with China and other low-wage countries.

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Security surprises arising from the Internet of Things (IoT) – Stuart Madnick

MIT Sloan Professor Stuart Madnick

MIT Sloan Professor Stuart Madnick

From Forbes

My brother can’t function in the morning until he has a cup of coffee. So I use his daily routine as an example.

Picture my brother stumbling down to the kitchen one morning only to find his internet-enabled coffee maker won’t work. There’s a message on his iPhone: “We have taken control of your coffee pot and unless you pay $5, you won’t have your coffee.” This actually hasn’t happened. At least, not yet.

I have been talking about the security threats to common household items connected to the internet – that is, the Internet of Things (IoT) – for several years now, and unfortunately, every other dire warning has come true so far. Upper management has to take greater notice of risks exposed both in the products they produce and the products that they use and take action to mitigate those risks. Recent events underscore this need.

Two years ago an internet-enabled refrigerator was commandeered and began sending pornographic spam while making ice cubes. Baby monitors have been turned into eavesdropping devices and there are concerns about the security of medical devices, such as computerized insulin pumps. In October, thousands of security cameras were hacked to create a massive Distributed Denial of Service (DDoS) against Dyn, a provider of critical Domain Name System (DNS) services to companies like Twitter, AirBnB, etc. Then there is the recent disclosure of CIA tools for hacking IoT devices, such as Samsung SmartTVs, to turn them into listening devices. These are only a few examples highlighting the threats.

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Building 2000 units of a product, part 1: sourcing COTS parts – Elaine Chen

MIT Sloan Senior Lecturer Elaine Chen

From Dragon Innovation Blog

There are many phases of engineering development before you get to a looks-like, works-like prototype. At this phase, the product looks like and works like a final product. Hopefully it has been designed with the final manufacturing techniques in mind.  Like many modern day hardware companies, you probably went the extra mile in validating your market before scaling up your operation. You have probably run a successful crowdfunding campaign. You now have a 1000-2000 unit preorder that you now need to fulfill.  How do you go from the prototyping techniques you have been using to date to sourcing and building a small lot of this scale?

At 1000-2000 units, this is considered a low volume production run. This is a very tricky quantity to build, especially for consumer electronics products with a low cost-of-goods-sold (COGS). In fact, Ben Einstein of Bolt VC famously calls this quantity the “uncanny valley of manufacturing” in his awesome talk about prototyping (see Slide 41).

What’s involved in a 2000-unit build?

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How We Rank The Most Innovative Companies 2017 – Jeff Dyer and Hal Gregersen

Jeff Dyer, Horace Beesley Professor of Strategy at the Marriott School of Management at Brigham Young University

Hal Gregersen, Executive Director of the MIT Leadership Center

Hal Gregersen, Executive Director of the MIT Leadership Center

From Forbes

Most innovation rankings are popularity contests based on past performance or editorial whims. We set out to create something very different with the World’s Most Innovative Companies list, using the wisdom of the crowd. Our method relies on investors’ ability to identify firms they expect to be innovative now and in the future. You can learn more about our research on innovation at The Innovator’s DNA website.

Companies are ranked by their innovation premium: the difference between their market capitalization and the net present value of cash flows from existing businesses (based on a proprietary algorithm from Credit Suisse HOLT). The difference between them is the bonus given by equity investors on the educated hunch that the company will continue to come up with profitable new growth.

To be included, firms need seven years of public financial data and $10 billion in market cap. (Facebook, for example, would rank high on the list if we used only the data since they went public.) We include only industries that are known to invest in innovation, excluding industries that have no measurable investment in R&D, so banks and other financial services don’t make the list. Nor do energy and mining firms, whose market value is tied more to commodity prices than innovation. Big caveat: Our picks do not correlate with subsequent investor returns. To the extent that today’s share price embeds high-growth expectations, one might even anticipate low returns to investors, as these expectations may be difficult to meet.

We use something called the Innovation Premium to compile our list. It is calculated first by projecting the cash flows a company produces from its existing businesses without any growth and look at the net present value (NPV) of those cash flows. We compare this base value of the existing business with the company’s current total Enterprise Value (EV): Companies with an EV above their base value have an innovation premium built into their stock price. You can read a more detailed explanation of our work around innovative companies and leaders in our book The Innovator’s DNA (Harvard Business Press, 2011), written with Harvard Business School professor Clayton Christensen. The following steps outline this approach in greater detail:

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