"Hype is the fog of business" or "you should've known something was up when Netflix bought the billboard company"

How do you decide if a business scenario is viable? What heuristics do you use? How do you form your informal informative priors? How do you decide the necessary conditions for success have been met? Obviously, there are endless possible answers for these questions, but most probably fall under the general categories of looking for things you would associate with success, growth, drive, and competence.

Consider Netflix. The scenario that has been put forth to justify the extraordinary market The company has recently reached is that it has a reasonable chance of achieving a near monopoly of online media distribution. This would seem to be an unbelievable claim but it does have what we might call heuristic support. Things we can all observe which make the arguments seem somewhat more credible.

Though Netflix is a notoriously secretive company, there are still a number of established facts that back up its case. The subscriber base is undeniably large and growing. The company has an excellent reputation and fantastic name recognition. Its shows generate a tremendous amount of buzz and you can't argue with all those Emmys (actually, you can, but more on that later).

There is, however, one piece of context which is absolutely essential for understanding these indicators of success and yet which is routinely underplayed or omitted entirely from the conversation. Netflix has taken hype to a new level.

To be clear, no one would ever suggest that the entertainment industry is a PR virgin.
Planted news stories, awards campaigns, "creative decisions" designed solely to get attention, the fairly open quid pro quo that drives almost all entertainment journalism. None of the techniques that Netflix uses to promote itself are new, but the scale is unprecedented.

Obviously, some of this has to be inferred, but the inferences are all straightforward and largely undeniable. To live in LA particularly west of the 110 and north of the 10 is to be besieged by outdoor advertising for Netflix, particularly around the longer and longer Emmy season when it seems that every available surface will bear the letters F YC.

Likewise, you can draw fairly reliable inferences about PR spending by looking for certain kinds coverage. If you see a cover story, and interview, a what's on [client's name] tonight article or anything that reads like a press release, the odds are very good that it was either initiated or nurtured by a PR agent. Here too, Netflix has taken old approaches and pushed them to a new level.

We also need to take into account indirect PR, business decisions that are nominally made for some other reason, but have the real purpose of generating buzz. Everyone does this, but, once again, Netflix goes much bigger. The company spent hundreds of millions of dollars promoting art-house fare like Beasts of No Nation and documentaries  like Icarus (ass far as I know, Netflix was the first to mount “best picture”level Oscar campaigns in the documentary category). Though thrse are deserving films, in terms of viewership, their marketing budgets are impossible to justify, but if your objective is getting journalists to talk about your company, it's money well spent.

Netflix also has a history of commissioning award bait shows going all the way back to House of Cards. Emmy awards play a special role in this process. Within the industry, they aren't taken all that seriously. Their impact on viewership has long been question and increasingly who gets the nominations and awards is seen as a function of who's willing to pony up the big campaign budgets. (This point was beautifully illustrated when Tatiana Maslany couldn't get a nomination despite incredible buzz and reviews. It was only after the snubs became news that she broke through).

None of this is intended as a criticism of Netflix. Marketing and self-promotion are a part of the game and you can't blame the company for being so good at it. The ads and carefully cultivated press coverage help drive subscriber growth and support the narrative that makes the skyhigh stock prices possible. You can hardly fault management for increasing revenue and maintaining market cap. You can, however, blame analysts and journalists who fail to recognize the impact of this unprecedented marketing and PR push and who casually throw out references to buzz and Emmy awards as if they meant anything at all in this context.

A few moments with Dick Cavett

I've got a post coming up about the IP value of various TV genres. At the very bottom are talk shows which can pull great numbers initially but which have been almost worthless when syndicated or repackaged as anything more than low rated nostalgia fare.

That's not to say that some of these shows aren't worth watching (lots of good TV isn't particularly marketable TV).  Cavett holds up remarkably well, especially when he had a geenuinely interesting guest.

Here are a few notable examples.


The Dick Cavett Show Richard Pryor 12 16 85






Richard Burton on The Dick Cavett Show July 1980




This Marlon Brando interview is extraordinary and is one of the best examples you'll ever find of handling an uncooperative subject.




Truman Capote

Health Care and the poor

This is Joseph.  And I am confused.

Jon Chait:

The state-level Republican crusade to deny the Medicaid expansion also hurt insurers. Medicaid wound up soaking up costly patients, freeing insurers to cover a healthier population. (Two studies found this result.) That’s why, Solomon confirmed to me, “in most states [insurers] do support expansion in my experience.” The clear and consistent pattern is one of Republicans repeatedly threatening insurers, to the point of withholding payments they were legally owed, in order to prevent poor and sick people from getting insurance. It is bizarre that Ackerman concludes that the GOP doesn’t actually care about denying insurance to the poor and sick (a goal it has in fact pursued fervently) and instead cares about profits for insurers (a goal it has in fact undermined relentlessly).

This really does seem to be correct.  If profits were the goal, then this strategy seems to be an odd way to go about it.  It is true that there could be a larger goal in mind that suggests short term pain to keep health care profits high, but it sure is not a direct link.

It also suggests that we are heading towards some sort of tipping point in the United States.  Health care costs are getting higher and higher.  Regulations generally prohibit cheap substitution (you can't create a clinic with non-MD/RNs to service those who can afford nothing more) in the health care market and pricing transparency is low, making comparison shopping hard. It seems like a mild regulatory approach is unpopular and unsustainable, given the political polarization.

One way or another, there are some interesting times ahead.

The dangers of Twitter

This is Joseph, stealing Mark's normal beat.

It seems Elon Musk tweeted that he had buyers lined up to take his company private at $420 per share.  Really.

The surprise tweet comes as Mr. Musk’s long-combative stance against Tesla’s short sellers has grown testier in recent months. He has repeatedly used Twitter to chide investors who are betting against his company, sometimes offering vague positive outlooks for the company that seemed to boost the stock, hurting short sellers’ positions.

This highlights one of the challenges of social media, as it is not impossible that this news could affect short sales.  So it is very, very important that he really have this funding lined up. 

Josh Marshall points out that this could go wrong. 

I think that this is a challenge of social media platforms, where this type of news can be rapidly sent out without the normal slow vetting of traditional media outlets.  This might all be fine, but it seems to create a lot of possible problems for Tesla, which may not have been obvious at the moment that the tweet was made. 

SCOTUS game theory

This is Joseph

I want to talk about this tweet in terms of game theory:

What I am interested in is whether this would ever be a good strategy.

So, first of all, would this work.  Well, if the "doctrine" was followed, it would allow whoever won the 2020 election to name Ruth Bader Ginsburg's replacement.  So the main advantage, in this scenario, would be to make the Republican party look good, by showing how they are a party of principal.  That seems an odd goal for a sitting justice to try and make a partisan organization look good as a goal.  The open seat would motivate liberals, but it would also motivate conservatives and act as a unifying force in both coalitions.  I am not sure that this helps liberals, on net.  It might hold together the conservative coalition, under tough conditions, even more so.

If the "doctrine" was ignored then there would be another Republican nominee to the Supreme Court, meaning six of nine justices were nominated by Republicans.  Insofar as this matters, and people act like it matters a lot, then it is a major win for the Republicans.  After all, what is the point of delaying the appointment of a new Supreme Court Justice at the end of Obama's term if there wasn't some sort of benefit?

It also seems to deeply misread the psychology of the justice involved.  If she wanted to lock in her side, why would she not have retired at 81 (like Anthony Kennedy) and given Obama a clear shot at naming a successor?  Clearly, she feels competent to do her job (and the evidence that she can is compelling) and doesn't like to play these games with timing her retirement.  Fair enough.  If she did decide to play games, why would she do it in order to maximize the gains of the Republican party at the cost of liberals?  You can say what you want about Donald Trump, but he has not been a noted feminist firebrand and a lifetime of fighting for gender equality seems to position one to not want to go out of one's way to hand him another nomination.

Finally, the five year plan actually makes a lot of sense for a justice who is trying to be non-political.  This has her retiring in 2022 or 2023.  Long enough before the end of the next president's term that confirmation should happen if it is possible at all.  It's well before anybody has any idea who the next president will be and so it cannot be motivated by partisan considerations.  The opening is still part of the election discourse, but not in an immediate way that pulls oxygen away from the issues.  It's a good plan.

So I don't see how switching to a 2020 retirement would be a more optimal strategy.

Mark?

Kevin Drum on Medicare for all

This is Joseph

This as a remarkable development:

The libertarians at the Mercatus Center did a cost breakdown of Bernie Sanders’ Medicare for All plan and concluded that it would save $2 trillion during its first ten years

(via Kevin Drum)

There is some nuance here:

 There is the rub. The federal government is going to spend a lot more money on health care, but the country is going to spend about the same.

“Lower spending is driven by lower provider payment rates, drug savings, and administrative cost savings,” Yevgeniy Feyman at the right-leaning Manhattan Institute told me. “It’s not clear to what extent those savings are politically feasible, and socially beneficial.”

(One concern is whether cuts to prescription drug spending would discourage medical innovation. It’s simply hard to know — Mercatus projects a $61 billion drop in drug spending in one year, but there would still be hundreds of billions of dollars spent annually on medications.)

But, that said, it is a remarkable inflection point.   Sure, making health care less profitable would slow the pace of innovation but there are already some issues with how the market focuses innovation.  There is a lot of social good in new generations of antibiotics, but these tend to be underdeveloped in a system that rewards chronic disease medication discovery.

At a certain point you need to wonder just how large would be disincentive effects be (it is a big world), could we change drug patent rules to mitigate the impact, and could we invest in drug research directly, say via the national Institutes of Health.  Because half of that 2 trillion dollars in savings might well fund the best research environment imaginable . . .

The biggest problem is structural -- how do you redirect private health care spending into taxes?

One thought that I increasing wonder about is whether this should be a state level program.  Canada requires all provinces to have a Medicare program, but allows significant differences between provinces.  I am not convinced a single federal program will drive innovation as quickly as 50 separate states all trying to puzzle out the best way to make it work.

Really? This was actually advanced as an argument?

This is Joseph

How does one even parody this?

At the same time, the draft says that people will drive less if their vehicles get fewer miles per gallon, lowering the risk of crashes.

If the goal is to discourage driving by making it more expensive, there are an entire suite of carbon tax, gas tax, and congestion tax proposals that I think bear looking into.  These will recue driving and make everyone safer.  Or what about cheap bus service?  These big and heavy vehicles are pretty safe for their passengers and tend to have better safety records than single occupancy vehicles.

What if we reduced parking in cities?  Would that not make people drive less?  Or banning cars altogether?

I mean if the goal is to get people out of cars, why would decreasing fuel efficiency standards (to make the gas cost per mile less) even be in the top ten reason?

Now I know that the argument is also to make the cars cheaper (so people buy kore modern cars) but the wonderful thing about a super-high gas tax is that you could use some of that money to reduce tariffs and sales tax on new cars.  Everyone wins.

The thing with cars is that there is an efficiency (in terms of transport) and safety trade-off.  We can rethink it, but this seems like the worst policy decision to make in order to accomplish the stated goal.

Socialism and its sub-textual meaning

This is Joseph.

I want to start with this tweet:

And then point out this article:

The reason this generation of democratic socialists are willing and able to do that is not simply that, for some of them, the Soviet Union was gone before they were born. Nor is it simply that this generation of democratic socialists are themselves absolutely fastidious in their commitment to democratic proceduralism: I mean, seriously, these people debate and vote on everything! It’s also because of the massive collapse of democratic, well, norms, here at home.

Part of it also might be that programs that are quite compatible with a primarily capitalist country are labeled as socialist.  It's a devastating critique when the Soviet Union, and all of it's human rights abuses is around, but it runs the risk of making the label . . . non-specific.

In any case, I think it is pretty clear that almost any functional government with control some aspect of the economy: by printing currency, buying military equipment, or enforcing laws.

The interesting debate is where does government have a comparative advantage.  Clearly full state control of industry would be bad.  But does anybody see the medical market as completely libertarian?

Food for thought.

Netflix Exit Strategies -- Comcast?

I apologize for writing these out of order, but one of the lessons I've learned as a blogger is that, if you want to speculate on something, get the post up quick because events have a way of moving faster than you could imagine and a position can go from bold and provocative to yesterday's news overnight.

For that reason, I want to jump ahead in the Netflix thread to exit strategies. Right now the company is sitting in a classic corporate throne of Damocles, king of the world but with a sword dangling over its head. Having a market cap bigger than Disney's is wonderful, but that stock price is based almost entirely on a highly questionable narrative. How do you gracefully cash out in such a situation?

One possibility I'd like to open up for discussion is some kind of merger or acquisition with Comcast (with the question of who would be acquiring whom rather bizarrely up in the air). There is something of a precedent here with AOL Time Warner, but Netflix and Comcast are a far better fit.

The two companies already have an extremely close working relationship. As previously mentioned, in the all important children's division, Netflix is largely dependent on licensing properties from the NBC/Universal library. NBC also produces (and apparently owns) one of Netflix's highest profile shows, Kimmy Schmidt.

Netflix also desperately needs guaranteed access to a major content library. We currently have a thread going about how the "plan" for Netflix to produce its way out of this problem is unworkable and probably insincere. Though not on par with Disney or Warners, NBC/Universal does have such a library.

The Disney Fox deal means that the House of Mouse now owns a controlling interest in Hulu. This has got to leave Comcast feeling somewhat out in the old. Pairing up with Netflix would put the company roughly on an even footing with its rival.

And finally, with the uncertain future of net neutrality, the business logic of the partnership is even stronger.

I'm writing and posting this in haste so I well may end up repenting it in leisure, but if we are on to something, I'd very much like to be to say you heard it (and discussed it) here first.

More on transit from Alon Levy

This is Joseph

This tweet thread by Alon Levy is worth reading in full.  In particular:

Tech has been extremely successfully in solving a specific class of problems.

That said, the real issue is that US transit has some serious limitations and challenges.  Alon goes on to talk about how both New York and DC have let their transit system degrade.  Trying to limit transit expansions and improvements may work on the margin, but the ultimate issue is that roads (or air-lanes or whatever) need to be regulated as public goods. That makes every transit discussion inherently political.

I also want to highlight Matt Yglesias' response:

I think that this take is right on.  Paradigm changing is all well and good but it does make sense to build on the firmest foundation of best practice for transit.

Checking in on MoviePass

MoviePass Hikes Subscription Fees, Limits Access to Films

The company is strapped for cash and has introduced a series of measures that it hopes will keep itself solvent. They include jacking up the prices from $9.99 to $14.95 per month over the next 30 days, as well as limiting access to nearly all Hollywood blockbusters within their first two weeks of release. The company’s parent company, Helios and Matheson, said these steps will reduce its cash burn rate by 60%.

But the company still faces major questions about its sustainability. On Friday, MoviePass borrowed $6.2 million, including $5 million in cash, in order to stay afloat and meet its financial obligations. Beginning on Wednesday, its creditor can ask MoviePass to pay up to $3.1 million of the money it borrowed.

Monday, May 14, 2018

Yes, we're losing money on every transaction, but we have a plan to increase volume

[Apologies for letting this one sit in the queue for so long. I plan to do a fairly long post on the various absurdities of this business plan, but I realized that the company may not be able to wait for detailed analysis. Therefore, I'm just going to hit a couple of high points in this and an upcoming post.]

I suspect that most people (maybe especially those who read this blog) have become thoroughly jaded to bad business plans running on new economy hype and Silicon Valley money. Many of you probably feel that you seen it all before, that you have lost the capacity to be shocked by how stupid an idea can be or by how many millions it can raise.

I more than sympathize. In a world where Tesla is valued higher than General Motors and Bitcoin is... well, Bitcoin, it is difficult to come up with the topper. That said, sometimes a piece of business logic, while perhaps not the stupidest or the most overvalued, nonetheless manages to stand out through a blinding lack of self-awareness.

Many companies have used the losing-money-but-making-it-up-in-volume argument over the past few years, but I don't know that I've ever seen it stated in quite such naked terms.

From an interview with Mitch Lowe, CEO of Moviepass.

[David Pogue] The math doesn’t really work out, does it? Let’s say you go to the movies twice a month. In New York, that’s $360 of movie tickets a year — but you’re paying MoviePass only $120 a year. MoviePass is losing $240 a year, just on you. Multiply that by MoviePass’s 2 million subscribers, who are currently buying 6% of the nation’s movie tickets. How is that sustainable?

...

Pogue: You must go through your life explaining how MoviePass works. And everybody says exactly the same thing back to you…

Lowe: Which is, “how can you possibly afford such an amazing deal?”

Pogue: Yeah. How do you make money?

Lowe: There’s two groups of people that go to the movies. There’s 11% that go 18 times a year, and they buy half of all the movie tickets in the country. 5.5 billion tickets.

There’s another 200 million people (89% of moviegoers) that only see the blockbuster hits. They go to four maybe five films a year. They see “Star Wars” and the Marvel films. Our product is priced to reactivate those casual moviegoers, to get them to go see the great independent films that now they say, “I’m just going to wait and stream at a later date.”

...

Lowe: People have told us they’re starting movie clubs, and now they’re going with a bunch of friends, going to the movies every week together and then going out afterwards. We have a guy who said, “I’m going to turn 40. I’m going to go to a movie for 40 days in a row leading up to my 40th birthday.” But what’s even cooler is people are seeing films they never would have seen without a MoviePass card.

Pogue: But I’m confused about that, because every time someone goes to a movie, you’re losing more money. Don’t you secretly prefer people who don’t use the card as often?

Lowe: They [the people who see a lot of movies] become more valuable to us. They evangelize the service. They become more valuable to our partners, the studios, exhibitors.

Understanding Netflix – – children's programming isn't child's play

Whenever an extraordinarily high.value for a company appears to be based primarily on a good narrative, you should always examine the bullish story for red flags, both in terms of questionable claims and notable omissions. In the case of Netflix, there is no omission more notable than the lack of discussion of children's programming.

There was perhaps no more important market in the adoption of every major advance in television history, from the initial postwar boom to cable television to home video. If someone is discussing the next step in the evolution of the medium and isn't spending a reasonable amount of time on children's programming, you should, at best, take what's being said with a grain of salt and at worst, dismiss it entirely.

This is particularly true with Netflix. If you have been following the standard narrative at all, you've heard ad nausea about the extraordinary amounts of money that the company is paying for original content. You've heard how all this money is building up a tremendous content library that will allow Netflix to compete with, even dominate the big media companies.

But these numbers, regardless of how immense and awe-inspiring they may be, are largely meaningless without proper context. If we want to evaluate the claim that Netflix is pursuing (and has a reasonable shot at achieving) media dominance, we need to dig into the details of intellectual property and how the strategies are playing out in different market segments. There is no more useful place to start than with children's programming.

The conventional narrative that Netflix is using its massive content spending to eventually achieve monopoly status implicitly assumes that the company is building a content library of such size and quality that it will no longer be dependent on any of the major studios for programming. As previously mentioned, even before the Disney acquisition of Fox, this was almost impossible, so unlikely that one has to question whether or not the company itself was sincere about these claims.

Netflix has always been relentlessly focused on two objectives: subscriber growth and hype. When it comes to intellectual property, however, the record is far more mixed. Proponents have a number of explanations for this, but most of them seem to come down to either

1. It took a while for the present strategy to evolve and be put into place.

2. There will always be a few outliers.

In these discussions, the subject of children's programming is generally avoided. Perhaps because it does not at all the standard narrative nor is it covered by either of the standard excuses.

To belabor the obvious, the greatest value of a Batman or a Scooby Doo lies less in what you've done in the past and more in what you have the option of doing in the future. Rights to characters and derivative works is the gift that keeps on giving. Even if you license another company to make use of your character, the result (in addition to getting a nice fat check) is usually to enhance the value of your intellectual property.

If Netflix were truly serious about its goal of world domination, it would need to be building a catalog not just of shows, but of valuable characters and franchises. The quickest way to do this is to simply buy some well-established property. Unfortunately, almost all of the really well-known options are held by the handful of major studios and they have no intention of letting them go. Nonetheless, there are some smaller players who would be worth acquiring if you genuinely wanted to build a catalog. As far as I can tell, Netflix is not pursuing these.

The slower and far more difficult path is to start from scratch, introduce a large number of characters and potential franchises that you own outright then promote the hell out of them. There does appear to be a little bit of activity in this area but not nearly enough to qualify as a serious effort.

Instead, Netflix continues to base its children's programming largely on licensed properties. Unless something surprising is going on beneath the surface (and I do have some questions about the company's future relationship with NBC/Universal), it would appear that much, possibly most, of their content spend in this area not only does nothing to build up their intellectual property; it actually serves to enhance the IP of the very companies it is supposed to annihilate.

Here's a list of current or pending Netfilx original kids shows that don't appear to meaningfully contribute to the content library:

Kong: King of the Apes, Voltron: Legendary Defender, Home: Adventures with Tip & Oh, Skylanders Academy, Legend Quest, Spirit Riding Free, Lego Elves: Secrets of Elvendale, The Magic School Bus Rides Again, Stretch Armstrong and the Flex Fighters, Trolls: The Beat Goes On!, The Boss Baby: Back in Business, Spy Kids: Mission Critical, Harvey Street Kids, The Epic Tales of Captain Underpants, and She-Ra and the Princesses of Power.


Obviously, we don't know the details of these agreements it's possible Netflix is getting some kind of rights to derivative works or is cutting a better deal than we might expect (though it should be noted that historically the company was known for over, not underpaying). With that said, it certainly appears that they are not at all focused on building the kind of content library they would need if serious about their stated goals.

At least not in the areas that count the most.

Light rail versus self-driving cars

This is Joseph

Consider:

“We are definitely going to have pushback,” said Brad Templeton, a longtime Silicon Valley software architect who preaches the potential of “robocars.” (He believes the subway paved over in concrete for autonomous vehicles could transport more passengers than rail can.) “I regularly run into people who even when they see the efficiency numbers just believe there is something pure and good about riding together, that it must be the right answer.”

and

“Don’t build a light rail system now. Please, please, please, please don’t,” said Frank Chen, a partner with the venture capital firm Andreessen Horowitz. “We don’t understand the economics of self-driving cars because we haven’t experienced them yet. Let’s see how it plays out.”

Now I typically love Brad Templeton's analysis.  Look at this great article, for example. But I do think there are some issues with this approach.  I certainly don't think my like for public transit is about being with other people -- that is actually one of the major downsides of a light rail system is dealing with other passengers who are sick or unaware of personal hygiene standards.  There are other issues.

One is the geometry one:

Highways today can carry about 2,000 cars per lane per hour. Autonomous vehicles might quadruple that. The best rail systems can carry more than 50,000 passengers per lane per hour. They move the most people, using the least space. No technology can overcome that geometry, said Jarrett Walker, a Portland-based transportation consultant. 

Which is brought up in the same article.

Another issue is the average age of cars on the road, which right now is 11.5 years. This means, in the absence of subsidies or very aggressive regulation, it is going to be something like 30 years before we could have all self-driving cars.  Many of the efficiency gains come from the self driving cars being the dominant type of car on the road.

Also, cars that make 2 trips (to pick up and then return) are going to use more road space that a car that is driven and then parked.  Now it might be the case that you can get it down to a reasonably small percentage of total miles -- technology is cool.  But that also weighs into the geometry argument.

So I hope that self-driving vehicles are coming.  But I don't see that they necessarily solve issues of congestion -- you make driving more pleasant and people will be willing to do more of it.  They might radically improve safety (which would be awesome) and they might make commuting time much, much more pleasant.  These are goods, in and of themselves, which don't need a pure robocar future to harvest.

But it seems like a tough gamble to stop current transportation planning until the new technology is mature enough that my type of objections can be answered.

This is how you cultivate IP.

Since we're in the middle of a thread about the business of television, content libraries, and intellectual property, I thought it would be a good time to look at examples of doing it right, particularly since these examples give me an excuse to post more Friday videos.

Cartoon Network Groovies were a great illustration of how to take characters from the catalog (some like Atom Ant and Quickdraw McGraw, all but forgotten) keep them in the public eye, package them in an appealing way, and even make them surprisingly hip.

Imagine a channel that showed a bunch of music videos during commercial breaks. These videos featured footage from the shows the network aired, and sometimes even had original animation made for it. And here's the kicker: many songs were done by prominent artists like They Might Be Giants, Will.i.am, and even Devo. Prepare to be surprised, as this was Cartoon Network during the late 1990s/early 2000s.

Tech industry approaches in other fields

This is Joseph


I found this twitter thread by Dr. Sarah Taber to be pretty thought provoking.  The real interesting part is at the top:

What this makes me wonder is whether the approach of tech translates well to other industries.  The windows PC was a major productivity improvement and the occasional blue screen of death was annoying rather than fatal.  On average, it made productivity a lot higher and the clients were willing to put up with these problems in exchange for the increased productivity.  Just think of how much better a word processor is than a typewriter at conducting a writing project.  In terms of revising work, it has simply been a game changer.

This starts to be less ok when the costs of failure are high enough.

Or consider this example, also from Sarah Taber:

The fast improvement approach of Tech has some really awesome features, but it isn't really geared to dealing with these long term issues.

Now, I want to be clear.  Computer and software technology has been miraculous.  It makes sense to wonder what other areas this technology can be applied to.  And all processes have error rates and problems -- tech just have a different set of failure points to traditional industries.

That said, there are problems that require a different approach.  It may be faster to hammer a nail than to use a screw, but the screw solves different problems and has different performance characteristics than the nail.  So we should be open to switching to nails, but keep a clear head about how these approaches may show faults when applied to areas other than the ones in which they were developed.