FAQ
Frequently Asked Questions About SNS
Excerpted from the June 23rd 2005 issue
Q. What is Anderson’s background, and where does he get off talking about things like biochemistry and physics?
A. My background is in science: I took a BS and MS in Marine Biology and Marine Biochemistry at Stanford, and then did additional Ph.D. work at the University of British Columbia on Biochemical Ecology, before deciding that my dream of academic research was not well-grounded in a deep understanding of my own acerbic and erratic personality. In other words, business looked better.
I did learn to program an IBM 360 to do Traveling Salesman puzzles at midnight during this period, but the real programming came later with PCs, when I started two software companies, which grew into a 37-product vertical market operation just before I blew it up by trying to do what even IBM failed to do: produce re-usable modules for small-midsize business software customization.
I then started a strategy consulting company (Technology Alliance Partners), and had the good luck to work for some great software and telecoms companies, like Aldus (Adobe) and McCaw, at a time when DNA was not being exchanged between Box and Pipes guys. This led to SNS, which seems to have been the first paid newsletter on the Web.
Q. Is it true you started The Whale Museum?
A. Yes, but we’re not talking about that right now. I suspect I’ve had more types of jobs than Mark Twain. The Whale Museum, now 25 years old, was the first in the world to be based upon whale biology, and not how to kill whales. Next question?
Q. How many subscribers – er, members – do you have?
A. We never answer that question. But it’s in the thousands, and it is probably the largest subscription base at our pricepoint. Of course, what really matters is Who is on it: our membership includes the top officers of most leading companies in computing and communications, as well as global finance.
Q. Is it true you predicted Steve Jobs’ return to Apple almost two years ahead of time?
A. Yes. And while we’re on it, the real guy who saved Apple was then-CEO and SNSer Gil Amelio, who had the courage (or strength of ego) to bring Steve back when no one else would even touch the idea. They ought to have a statue of Amelio on Infinite Loop Drive.
Q. Why does SNS claim to have a higher prediction success rate than anyone else?
A. Given my scientific background, I wanted to prove it was more accurate than the usual journalist op-ed pieces, usually written at year end. For 18 months, we did a quarterly report back to all subscribers on all predictions, right, wrong or undecided. At that point our readers objected to the constant counting, and we stopped, with a success rate of over 93%. No one has done that, or matched it, since, that I am aware of.
Q. Do accurate predictions matter?
A. Now that’s a stupid question! But it turns out that they only matter if the reader thinks they are accurate. I’ve found that readers are as interested in having their own basic assumptions challenged as they are in prediction accuracy; in our surveys, these kind of fall out 50/50.
Q. How do you make accurate predictions? Can anyone do it?
A. Anyone can certainly improve their success rates; like anything in life, I suspect there will always be a ladder of achievement.
It turns out that accurately predicting outcomes requires a structured view of the world, and that the technology world particularly lends itself to such a view. Specifically, one must understand:
The technology, a given, and where most folks stop.
How that technology fits into the product.
How other companies’ technologies also fit into that product or family of products, since their well-being is wedded to the outcome. This means their power is as well. When you look at the Xbox, for example, you see a keiretsu of companies betting their futures together.
The personalities of the CEOs involved. If Bill Gates (technically now chairman) wants something, he’ll go after it in a different way than, say, John Chambers.
The global markets where the product will be sold. Is Japan down? Will China steal or buy it? Will Europe consume millions? Understanding global technology markets, as we know from FiRe, is itself a non-trivial task.
Currency moves. Large shifts in the Yen/dollar ratio, or the dollar/euro ratio, will have a strong effect on product success in foreign markets. Today, foreign markets generally comprise more than 50% of gross sales.
Political agendas. Despite the pain it gives some of our U.S. readers, one must coldly assess the financial plans and acumen (and other policies which, like war and budget follies, have strong financial effects) of world governments in order to predict domestic and global economic outcomes.
All of these threads need to be seen in a form of pattern-recognition (something we all do every day, but which we can all do much better with practice). This is how you learn how to weigh these factors independently, and as a group.
I probably shouldn’t say this, but I used to take a blue pen to Bill Gates’ public business magazine cover stories, and just write No or Not in front of or after each declarative sentence, like this made-up 1990s exchange:
Interviewer: Well, Bill, is Novell (Sun, Apple, Netscape, AOL, etc.) a competitor that you worry about much?
Gates: They’re just not what we think about when we go to work each day; we focus on building great products. (NOT)
(Translation: Our Word product chief has their guy’s kids’ pictures nailed to his cartel wall, and he sends this poor guy birthday cards on their birthdays. We have special one-way file translators that only allow customers to switch our way. The whole company knows that Novell (etc.) is Public Enemy Number One, and WE WILL CRUSH THEM INTO TINY NANOPARTICLES OF DESERT DUST!!!)
Q. Are there certain predictions that you’re particularly proud of having made?
A. You’re only as good as your last performance, so I’m proud of the Europe collapse call right now. But historically, there have been lots of good moments, and a few real screw-ups. Here are a few of the winners:
Every part of the MS/Justice trial.
Microsoft “smoothing” financials.
The Yen/dollar ratio since 1995, with no mistakes.
The advent of the CheapPC and WorldPC form factors.
The 1997 global currency collapse (and Japan’s role).
Years of sales projections for PCs and cellphones.
The so-called Telecom Collapse, and how it really happened.
The pre-ordained Iraq Attack, and the lack of WMD.
Picking the SNS Four Horsemen (Microsoft, Intel, Cisco and Dell) almost ten years ago, without wanting to change them since.
Predicting the first successful unfriendly takeover of a software company (Lotus, by IBM), which was the substance of the first issue of SNS.
China’s firing of rockets over and around Taiwan.
Each Japanese Prime Ministerial election winner since 1995.
Amazon’s first year of positive cash flow, and first year of consistent profitability.
Closing and redistributing our brand-new buy-and-hold technology hedge fund in late 2000.
The collapse of pensions and the pension-assurance system, which is just unfolding this year; this prediction is not yet fully realized.
And a few zingers:
Predicting commercial shipments of DSL in the US based on AT&T press releases, and then watching the company dump the plans and sell Paradyne into oblivion.
Writing about “Fireman” Greenspan’s potential effect on the House of Nasdaq, and still not believing the level of damage possible (yes, that was $6T in value washed down the fireman’s gutter).
Or, one of my favorites: successfully predicting the ouster of Venezuela’s Hugo Chavez, only to see this Castro wannabe returned to power 24 hours later.
Q. Is it true that, while working as a reporter, you wrote a series of stories leading to the first convictions in federal court relating to the U.S. Savings and Loan Scandal?
A. Yes, but we’re not talking about that right now. The bank was Queen City Savings and Loan. And three guys went to jail. And I got death threats, which was something new. Next question?
Q. What is the Beach Palace Hotel II?
A. World headquarters. Because we’re a small outfit, we need to puff things up as much as our members’ patience will allow. SNS started in my house, then moved a year later to The Beach Palace Hotel, which only one human being outside of family was ever allowed to see. It was a shack on the water, directly in the storm path of our largest bay, and when winter came the front of the building would literally lift up and fly.
BPHII is also on the water, but a bit more substantial, looking west to Vancouver Island over Orca feeding grounds.
Q. Why do you expose your members to your crazy ideas in physics theory, evolution, memory design, etc.? Why do you think they care?
A. This is a great question. First, here is the fun and exciting part. I care a great deal about the reputation I’ve earned for successful predictions. You might say, well, what could be harder (or bigger Brain Candy) than predicting technology outcomes? Answer: predicting the next Theory of Everything in physics, or biology.
When I first wrote Resonance Theory (later excerpted in various pieces in SNS), no one had ever published a string theory in physics. To this day, nothing in that original paper has been found wrong, and today the majority of physicists think some form of string theory will ultimately be the correct TOE. Further, Resonance is the only string theory today based on the fundamental properties of physics, and not on found (Euler’s) mathematics.
So: I take these things seriously, and don’t expect them to be wrong. They are of huge consequence if they are right. Does knowing the future of physics or evolutionary theory, with a reasonable likelihood of success, give readers an advantage? Perhaps, for some, it really does. I hope it gives them all a serious intellectual thrill.
Certainly, knowing the future of memory devices, i.e., what I’ve called Spherical Memory, has to be useful to many of our members.
Q. Some people would claim that SNS, through a powerful readership, now creates its own “bow wake,” and that predictions become somewhat self-fulfilling. Is that possible?
A. Yes. I think it’s the best part of the work. It’s impossible to gauge completely, but I like the concept of having good ideas that go out and prosper, particularly if they bring a benefit to the world. Some of them are small and fun: making up the word AORTA (Always On RealTime Access), and then having it used for the first broadband Net in Europe.
By now, there are a lot of fun stories in this vein. Talking Bill Gates into embedding NT, then his best OS, into a chip (that decision, in XP form, makes even more sense today). Having lunch with Leif Pagrotsky while he was Trade Minister of Sweden, and recommending they conduct conditional 3G (vs. “pure”) auctions; and hearing later that day that they’d made the decision. (Sweden remains a leader in broadband wireless because of this smart move on their part.) Floating around in Iceland’s Blue Lagoon with a new attorney friend after giving the keynote at the first annual Icelandic Telecommunications Conference, and later getting an email from him: “our conversation in the Lagoon in 2001 affected the implementation of 3G in Iceland for the better.”
And I just thought we were floating around.
Q. OK, this is getting pretty long and boring, we’d better wrap it up.
A. That isn’t a question.
Q. How is Project Inkwell coming along?
A. Thanks to the hard work of CEO Bruce Wilcox and everyone else involved, our efforts to contribute to the re-design and accelerated deployment of appropriate technology for K-12 (pre-university) students is doing great. The website (www.projectinkwell.com) may just also have the most advanced research compilation extant on the relation between One to One Computing and enhanced student performance.
Our membership now includes AMD, Averatec, CDW, Classlink, Clearwire, DataSlide, EduSmart, EKOS International, Fourier Systems (Dell’s CE Platform partner), Gateway, IDEO, Inspiration Software, Library Video Company, Microsoft, National University, Pearson Inc., Promethean, Quality Education Data, Red Hat, Reuters, SimDesk, Sun Microsystems, and VIA Technologies. Inkwell has been endorsed by the United States Departments of Commerce and Education, School Districts, and State Education offices, and has earned the support of several state governors.
Workgroup meetings are held quarterly at various locations from coast to coast. Past meetings have been held in California, Maine, Virginia, Washington, D.C., Utah, and Washington State.
Q. Is it true you were a commercial fisherman?
A. Yes, but that’s not what we’re talking about today. I was a gillnetter, fishing for salmon, staying up all night all summer in Puget Sound, running boats up to Alaska, and walking that lovely balance between making money as High Boat out of Friday Harbor and trying not to get killed through some silly accident. Next question.
Q. Can we stop now?
A. I thought you’d never ask.