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Saturday, January 25, 2003

Startup Stimulation

No, the real answer on stimulating this economy isn't a tax cut for you and me and/or folks poorer than you and me. The real way to get this economy going again is to get rich folks to stop traveling the world and get them to invest in a new company.

Now, how do we do that? Well, make it cheaper to start a new company. Let's say we have a 18-month window where it's free to start a company. The government stops charging fees and taxes to new companies. They make it much easier to incorporate. They match investment in new companies. Imagine if Larry Ellison were to get $6 million to match the $6 million he invests in a new company.

The problem with this whole idea? It isn't politically feasible. It looks like we're giving money to the rich. No one likes doing that. But, it's the way to get the economy rocking and rolling again. [The Scobleizer Weblog]

Actually, this already exists in the form of Small Business Investment Corporations, VC funds that leverage SBA funds.  These are generally smaller funds (which allowed them to avoid the cramdowns the megafunds are experiencing),  they focus on early stage investments,  and the structure of the program provides and incentive to invest rather than sit on their money.  And these are the funds that are investing now.

Scoble is right that stimulating small business investment is a key factor for recovering an economy based on small businesses. 

12:08:05 PM    comment []

Relationship Density

An interesting article on Network Science in the NY times [g!]:

...Yet just which network model describes human society remains a subject of fierce debate. Mr. Barabasi [Linked] believes the human social network is scale-free with the expected smattering of richly connected hubs. Mr. Watts disagrees. "If you asked people to list the number of people they recognize, that could be scale-free, everyone recognizes Michael Jordan," he said. "But if you said, `Who would you trust to look after your kids?' That's not scale-free. As you start to ratchet up the requirements for what it means to know someone, connections diminish."

From "Six Degrees" (W. W. Norton)

A network cluster in which Ego has six friends, each of whom is friends with at least one other.

Is society a small-world network of the sort Milgram was interested in? Mr. Watts spent the past year trying to test that idea, using the Internet as a proxy for the world population. Whatever the results, he says, it's clear that human psychology has not yet adapted to the implications of a connected world.

"We like to think of our world as full of atomized individuals," he said. "But decisions people make and the actions they take are so hopelessly entwined with the behaviors of everyone else that it's difficult to draw the boundaries around the individual." When it comes to choosing a CD or explaining the success of Harry Potter, your preference may matter less than the network's.

But some scholars dismiss the network hypothesis altogether. Judith S. Kleinfeld, a psychologist at the University of Alaska at Fairbanks, prompted a flurry of media attention last year when she published an article questioning the validity of Milgram's small-world findings. Given the prevalence of networks from power grids to airports to the Internet it's tempting to assume that human society is a network as well, she says. But ultimately, that is impossible to prove.

"Duncan assumes the world is a matrix," Ms. Kleinfeld said in a telephone interview. "He wants to know how you get from one point on it to another. But what if the world isn't a matrix? What if people aren't all connected? What if they're islands in space?" ...

The world is a matrix, you just can't see it. 

However, for the big world point of view, see Kleinfeld's Six Degrees and Could It Be A Big World After All?

Watts raises an interesting question: if a relationship requires a certain density of connections, does it change the distribution of the network?

If you want to help answer this question, one way is to participate in Watt's Small World Research Project.  If you want to learn about Watt's supposition, his new book is Six Degrees: The Science of a Connected Age.

11:06:54 AM    comment []

SQL Virus: SQL virus reports. A picture named graph.gif6:30AM Pacific. Heard a report on NPR that some kind of Internet-wide denial of service attack is underway. They quote Microsoft saying it's serious. If you have more information, esp Web pages I can point to, please post a comment on my Radio weblog. Thanks.

Reports: CNN, BBC, Slashdot, Beta News, Google, AP, Reuters.

Lawrence Lee: "Here's a chart from the Internet Traffic Report with global packet loss for the past 24 hours."

Freedom.Org: "Quick fix is to firewall port 1434/UDP traffic, and reboot the affected SQL servers."

Slashdot: "If you run Microsoft SQL Server, make sure the public Internet can't access it."

Beta News: "The attack used a buffer overflow to execute code on a vulnerable SQL Server, causing that system to randomly seek out other computers to infect and in the process consume massive amounts of bandwidth."

[Scripting News]

RSA 'broken': according to this paper by Adi Shamir (he's the 'S' in RSA), new hardware called TWIRL can break a 512 bit RSA key in 10 minutes on a $10,000 machine - 3 to 4 orders of magnitude improvement over current techniques. 1024-bit keys would take a year on a $10M machine. Bye-bye standard 128-bit 'security'...[Chris Gulker]

9:33:22 AM    comment []

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