Trust Me

Seriously, why doubt?

Sam Antar, convicted white collar criminal, says trusting is stupid clearly and explicitly:

President Ronald Reagan said:

“Trust, but verify.”

As a convicted felon, I say:

“Don’t trust, just verify.”

“Verify, verify, verify.”

As a criminal, I considered people’s humanity as a weakness to be exploited.

The inclination to trust first and then verify, gave me the upper hand.

The criminal always has the initiative.

While you initially trust us, we work on ways to solidify your trust before you verify.

Hopefully, you will never verify.

However, if you do verify, we will have corroded your skepticism to a large degree.

A word of advice from this convicted felon to the capital markets, securities analysts, journalists, the accounting profession, investors, and others:

The word “trust” is a professional hazard you can leave at home before you go to work.

A criminal says “Don’t trust”. Yet computer security experts talk about a “trust” model. When are we going to move beyond trust to verify? A google search finds endless examples of sites reassuring users that they are “trustworthy”. It should not be a surprise then that computer users are used to just entering their password or clicking o.k. when a security dialog comes up. Users are asked to always trust without any understanding. What does it mean when a certificate cannot be authenticated?

Furthermore, we now have “trusted” applications getting computer owners into trouble.

For example:

• Andre Vrignaud is a such a victim.
  

  Comcast cut off broadband access to Andre Vrignaud. A month earlier, Vrignaud said he had a “polite but irritated” conversation with Comcast’s Customer Security Department about how much data he was using. He told them he had no idea how he used so much and wondered if his roommates may have hit the limit because they watched Netflix HD streaming movies and listened to Pandora’s internet-streamed music radio.

  Why can’t Vrignaud limit easily on his end?
  Once again, a google search reveals how important being able to control and manage at the application level.

• How about the case of Matthew Brady? He is an innocent victim, like many others, framed by a poor computer security model.
  

  Until recently [story dated Tuesday, January 16, 2007], the 16-year-old Arizona boy faced life imprisonment for possessing child pornography; each of the nine images on his computer carried a possible 10-year sentence.

  The caution: Your computer could be storing and distributing child pornography without your knowledge. It could be what is called “a zombie.” A virus, worm or “bot” may have almost invisibly infected your operating system, perhaps when you opened an email attachment or clicked on the “wrong” (not necessarily adult) website.
  The “infection” allows another person to remotely access your hard drive. Often, the third party tries to capture financial information such as bank account numbers. Often, he stores data on the hard drive and uses your computer to distribute spam, including pornography.

  Benjamin Edelman, a computer security expert, indicates how quickly a computer can become infected. “I recently tested a WindowsMedia video file…On a fresh test computer, I pressed Yes once to allow the installation. My computer quickly became contaminated…All told, the infection added 58 folders, 786 files, and an incredible 11,915 registry entries to my test computer. Not one of these programs had showed me any license agreement, nor had I consented to their installation on my computer.”

  The Bandy’s two-year nightmare might be winding down, but the family has been financially ruined by over $250,000 in legal costs.

Instead of trust, as Sam suggests: “Don’t trust, verify, verify, verify”. No application should be given a blanket “trust” but rather a conditional trust. An application should not even be allowed to ask for a blanket trust.

Instead the application must ask for permission and indicate why it is asking for the permission:

• write to a specific directory
• send data to an internet site
• receive data from an internet site
• All data sent or received is logged
• Any data the application wants to send or receive needs explicit permission from the user.

The user must be able to selectively deny or condition a granted permission at any time (not just when an application is starting) :

• Granted for 10minutes
• Data sent/received is logged
• Data transmission rate is no more than 1mb/sec
• Data transmission rate is no more than 10megabytes/month
• Data stored for only 10 days
• Data is stored is no more than 10megabytes
• CPU usage is capped as a percentage.

It is up to the application to behave well if the permission is or it is denied permission. And if it doesn’t like the permissions then well – don’t run.

The application is a guest and needs to respect the rules as a guest.

Trust. is. stupid.

So I ordered, A few days later…

For over a month now I have been paying for everything with coin! No bills, no credit cards. The only exceptions have been my transit card and online transactions, including the coin purchase. $100 dinner, all in coin! $180 drug prescription – all in coin! Babysitting? coin!

Instead of carrying a wallet I now carry a money bag! People have asked about the weight. A $1 coin weighs about 8g so a $1000 weighs about 17.6 pounds. $50 dollars weighs about a pound. This must be horrible! Actually, no:

1. I carry my laptop with me anyhow so an extra pound is not horrible.
2. It is easy to control spending, carrying the extra weight means I just take exactly what I am willing to spend and no more. Really easy to stay in budget when all you have is coin!

The reactions have been all over the place:

• “Are these quarters?”
• “Are they collectables?”
• “Are they gold?” ( Uncirculated $1 coins are shiny )
• “What? Fine.” (And then dumps them in the drop safe)
• “Are they real?”
• “Do I have to take them to the bank?”
• “I love them, you are taking Caltrain, right?” (Coffee house)
• “We don’t pass them out as change.” (Safeway)
• “Sounds like a good idea but don’t you have to spend time converting them to bills?” (Safeway manager – apparently the idea of using money as money is a new concept)
• “I am going to give them to my wife” (A waiter who bought up the $100 in $1 coins that we paid for dinner with)
• “My company gives them out as a sign of good luck during the New Years.”
• “I am going to give these to my kids in the Christmas stockings”

Clearly, the Mint has a ways to go in the educational department, if cashiers are uncertain if the $1 coin is even money!

This program is a great deal for consumers. This is a cash advance through the U.S. government! WTF? Yeap! Lets look at a “traditional” cash advance:

1. Go to bank
2. Present credit card
3. Ask for $1000 in cash.
4. Get $1000 in cash
5. Pay credit card bill of $1000 + super cash advance high rate of interest (25%).

Now a U.S. Mint cash advance:

1. Go to U.S. Mint website.
2. Enter Credit card information
3. Ask for $1000 in coin
4. Get $1000 in coin (5-7 days later)
5. Pay credit card bill of $1000 + low purchase interest rate ( 0% if you pay in full )
6. Get cash back from credit card company for “purchase”

This is also a great deal for the U.S. Government as well:

The intended purpose of the Circulating $1 Coin Direct Ship program is to make $1 coins readily available to the public, at no additional cost, so they can be easily introduced into circulation—particularly by using them for retail transactions, vending, and mass transit. Increased circulation of $1 coins saves the Nation money. The immediate bank deposit of $1 coins ordered through this program does not result in their introduction into circulation and, therefore, does not comply with the intended purpose of the program.

According to the Bureau of Printing and Engraving, $1 bills last only 42 months in circulation:

A $1 coin will last 25 years, 7 times longer than a $1 bill. This lifespan difference would mean that replacing the $1 bill with the $1 coin would save the U.S. government $500 million, however:

The Government Accountability Office’s (GAO) stated potential [ANNUAL] savings of up to $500 million in a report issued in September 2002, which was calculated on the premise that the U.S. government cease production of the paper dollar bill. However, the Native American $1 Coin Act of 1997 and the Presidential $1 Coin Act of 2005, which authorize both the Native American $1 Coin and the Presidential $1 Coin, do not call for the elimination of the paper dollar which is produced by the Bureau of Engraving and Printing. Consequently, dollar coins and dollar notes co-circulate in the marketplace.

(Update: ANNUAL was confirmed with a tweet from us mint)

Unfortunately, Safeway is not helping. My local Safeway is just sending the $1 coin back to the bank. This is my letter to them.

The US Mint is trying to increase the circulation of the $1 Coin through the $1 Coin Direct program. ( http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?langId=-1&storeId=10001&catalogId=10001&identifier=8100 )

On this page, the U.S. Mint states:
“The intended purpose of the Circulating $1 Coin Direct Ship program is to make $1 coins readily available to the public, at no additional cost, so they can be easily introduced into circulation—particularly by using them for retail transactions, vending, and mass transit. Increased circulation of $1 coins saves the Nation money.” ($500 million according to https://answers.usmint.gov/app/answers/detail/a_id/164 )

I have spent numerous $1 coins at my local Safeway and other retailers. However, I recently discovered that my local Safeway is taking the $1 Coin OUT OF CIRCULATION by continuously not using the $1 Coin for change. I urge Safeway to change this policy. I furthermore urge that the automatic change dispenser be altered so as to issue $1 coins in addition to the quarters, dimes, nickels and pennies.

Please help save our government money and use the $1 coin as currency!

One final note, do NOT help out the U.S. Mint by destroying $1 bills, it looks to be illegal (18 U.S.C. § 333 : US Code – Section 333: Mutilation of national bank obligations):

Whoever mutilates, cuts, defaces, disfigures, or perforates, or
unites or cements together, or does any other thing to any bank
bill, draft, note, or other evidence of debt issued by any national
banking association, or Federal Reserve bank, or the Federal
Reserve System, with intent to render such bank bill, draft, note,
or other evidence of debt unfit to be reissued, shall be fined
under this title or imprisoned not more than six months, or both.

As as been pointed out in a series of comments on techcrunch ( I would post the link to the techcrunch post except with facebook comments I can’t use google to find the comment thread any more),

1. No business pays sales tax for the goods they sell, businesses just collect sales on behalf of the taxing agencies.
2. Services such as taxcloud make compliance trivial with a in-the-cloud API service
3. States are working to stream line the definitions of what is subject to sales tax, so compliance is further simplified.
4. Internet companies are not being asked to pay taxes to states and local governments that they don’t use.
5. Internet companies are being asked to collect sales tax from the consumer who does use the state and local government services.

Therefore sales taxes ARE being paid by the beneficiary of the person/company being taxed – the person recieving the goods is the person paying the tax. Amazon’s refusal to collect a tax that Amazon is not actually paying is now even more galling. Amazon suffers no financial impact except to connect with a service such as taxcloud, adding the sales tax to the purchase and then sending the tax collected quarterly to each of the 50 states. So a company the size of Amazon is whining about 200 extra checks a year having to be sent? Get over it, Amazon and collect the tax already! Or is Amazon’s business model so fragile that it can’t take the hit?

Original post in which I fall into the trap of thinking that Internet businesses are paying sales tax:

Once again Internet VC’s just don’t get the real world. Brad Feld is of that “illustrious crowd” with his latest post

(Update: Sometime I need to take a breath before I post antagonistic sentences like the above, especially since I do not know Brad. In my defense, I have dealt with a long list of technophiles that think the solution to every problem involves more technology. These same technophiles don’t spend time to understand the needs of people who are tech-indifferent. But since I don’t know Brad personally, I can’t say that for certain about Brad. However, Brad’s statements that I quote below lead me to believe he is a technophile who does not understand technophobes or techno-indifferents.)

it’s just evidence that organizations like Downtown Boulder, Inc. don’t really understand the actual business economics of having a vibrant entrepreneurial community in their downtown.

This is an interesting statement about an organization that existed for businesses before the internet. Suddenly, Downtown Boulder, Inc. “doesn’t understand business and entrepreneurial communities”? How incredibly egotistical! Has Brad ever tried to understand a business in Boulder? Has he even run (or worked in) a brick and mortar store? Rather than try to understand the businesses in his own community – Brad feels like he is privileged to lecture them?

I would be willing to bet that Brad enjoys the Boulder community and downtown created by Downtown Boulder, Inc. Brad is in Boulder because of their work, not the other way around.

Lets look at some of the events listed on the DBI website:

• Winter Sidewalk Sale
• Fashion Under The Flatirons
• Tulip Fairy & Elf Parade
• Taste of Pearl
• Bands on the Bricks
• Noon Tunes
• Open Arts Fest
• Fall Festival
• Munchkin Masquerade
• Switch on the Holidays
• St. Nick on the Bricks
• Lights of December Parade

Under, First Fridays, this organization is clearly giving back to the community:

Boulder Creative Media-Plex – 1906 13th Street Suite 101 (downstairs)
1/2 block off the Pearl Street Mall

First Friday January 7th, 6 – 9pm: Art for the People – The art of ZMA, The Art of Sexy

Boulder Community Media (BCM) is a Colorado based 501(c)(3) organization dedicated to democratizing media and making it accessible to all. BCM provides artists of all ilks opportunities for the community to see their work.
BCM provides the Boulder Creative Media-Plex as a 5,000 sq ft venue in downtown Boulder for digital and visual artists to convene and collaborate.

Where is Foundry mentioned? So Brad bitches about the Downtown Boulder, Inc. but yet, DBI is creating a community and Brad Feld is contributing ….nothing…..

Why should DBI listen to him? Brad contributes nothing and offers little.
Pop quiz: Did the great Boulder downtown attract Brad or did Brad create the great downtown?

Continuing Brad Feld’s self-imposed victimhood,
Brad doesn’t bother to understand taxes

There is no basis for amazon paying state sales tax as they don’t use
any state or local resources! Presumably thats what the sales tax is
for, not to protect local merchants.

Excuse me?????

Brad, here is a partial list of local resources that Amazon directly BENEFITS from:

Amazon (and all other internet based stores) do use and depend on local resources to be able to sell:

1. The highways and airports used to deliver the goods ( contrary to popular myth, gas taxes only pay 51% of the road system cost). Poor roads increase deliver cost and decrease both reliability and timeliness.
2. Police protection: (paid for in part by sales tax!)
   1. Amazon is getting the benefit of police protection of the shipment. Quite simply, Amazon can ship something and have reasonable certainty that the package will in fact arrive.
   2. If the package is stolen enroute, Amazon gets the benefit the Colorado legal authorities will investigate the robbery.
   3. If Amazon shipment is robbed, the Colorado prosecutors will actually pursue an arrest and conviction.
   4. Fraud protection and prosecution
3. Fire protection
   1. The distribution warehouse used by Amazon shippers meets fire code regulations. ( local Colorado tax dollars at work. )
   2. If there is any sort of fire, the local fire department will be available to put the fire out. ( no tax dollars, no firemen )
4. a reliable electrical infrastructure
   1. its hard to for customers to connect to the Amazon website if the power keeps dropping out.
   2. electricity is produced in power plants which require their own fire/police protection
   3. power plants produce pollution. Or maybe Brad would like some dirty brown clouds (Colorado gets most of its power from coal-fired plants)
5. garbage /recycling systems used to process the packaging waste products
6. the e-waste problem from the batteries and printed circuit boards.
7. the brake dust and smog generated by the UPS delivery trucks

Take any of these benefits away and Amazon’s business falls apart.

Some basic rebuttals to some counter-arguments:

• The shipping company (UPS/DHL) pays taxes “on behalf of the shippers” and therefore Amazon shouldn’t have to:
  1. This argument moves the goal posts. The question is does Amazon derive any benefit from the local services and resources. Any taxes UPS pays is irrelevant to the question of Amazon’s benefiting from the local Colorado taxes.
  2. The shipper does not care too much about fraud. Amazon shipping something to a Colorado business or resident and then not getting paid is not UPS’s problem. The package was delivered, UPS expects to be paid.
• Amazon only uses services that would be already supplied. This relies on the “single drop of beer” argument. ( A guy goes into a bar and asks the price a drop of beer. Bartender: ‘free’. Man: please fill my mug with drops of beer.) The reality is the individual effect may be small but everyone needs to contribute to the commons otherwise we have the Tragedy of the Commons
• Amazon should only pay for an (itemized list) of local services that it directly uses. Really? Quick.. list every government service that you and your family use…. Did you remember:
  • Police
  • Fire
  • County Weights and Measures – the people who make sure that a gallon of gas is not 7/8 of a gallon
  • Water and Sewer – or do you prefer outhouses
  • Planning departments – or maybe it is o.k. if the house next door is replaced with a 30-story office building?
  • Parks and Recreation
  • Public Schools – yes I am sure your kids go to the best private school. If it helps to think of public schools as a place to store other peoples kids so they are not robbing your house, feel free to.
  • Courts
  • Prisons
  • Highway department
  • Search and Rescue

How about if the internet companies stop feeling so entitled and started contributing?

Here are some lameness notes about Google Docs Spreadsheet Webform that I found:

Connecting a webform to a spreadsheet has not been appreciably enhanced since feature was introduced, specifically:

• Cannot add notification rules to email others (or email lists)
• Cannot customize the report
• Cannot add minimal permissions based access to the webform and summary. For example, I would like:
  1. people to login
  2. enter information in the web form fields
  3. have one of the columns( UserSubmitting ) be the login user id (automatically generated like timestamp is)
  4. Be allowed to see a summary of only the data that has their login id in the UserSubmitting column
• Allow multiple selection fields to be computed based on a VLOOKUP. For example, if the person enters “2 yellow” as the reading choice, the book choice should be based on an sheet:
  

  Reading level	Book Title
  1 yellow	Snowmen Play
  1 yellow	Dogs and Cats Living Together
  2 yellow	Bunnies and Hungry Dogs with sharp teeth
  …

• No ability to select from a list or enter an alternative not on the list.
• No ability to enter a value for a field and then have it apply for multiple entries. This would be simple to do by having multiple pages. On the Thank you for submitting page, the user would have a link that would allow them to go back to marked pages. This could be configured when creating page breaks when creating the webform.
• I know how to do this, but there is no cookbook/boiler plate examples for embedding the form in another webpage.

Final lameness, Gmail does not allow emailing tarred/gzipped google summary page because it contains executable content!

Paul Rubin’s falsehoods:

Paul Rubin’s First Falsehood

1) Privacy is free. Many privacy advocates believe it is a free lunch—that is, consumers can obtain more privacy without giving up anything. Not so. There is a strong trade-off between privacy and information: The more privacy consumers have, the less information is available for use in the economy. Since information helps markets work better, the cost of privacy is less efficient markets.

Its not that “privacy is free” anymore than “freedom is free”. Privacy is the right to not be watched all the time. Clearly the groups working on privacy are expending time and energy. Does not sound free to me.

But lets take a closer look at the fallacies.

Fallacy #1.1 : “consumer privacy means the economy has less information” and “information helps the markets work better”.

Paul does not make a case that the consumers’ private information is the information needed to make the markets work. He just says consumers give less information and that information is needed for an efficient economy.

Fallacy #1.2: “helps”

How much value is derived from the consumers private information? Notice that Paul himself is fudging with that wussy word “helps”. Does the economy function 10% less efficient? 5%? 3%? What exactly is the realized benefit to the economy?

Fallacy #1.3: The consumer realizes some benefit

Does the consumer giving up the information realize any tangible value? Or is the economic value realized only to the recipient of the information. Most transactions involve an exchange of value. Does the consumer realize anything of value? How many sites ask for private information and then offer nothing useful. Or worse turn out to be scam sites.

Paul Rubin’s Second Falsehood

2) If there are costs of privacy, they are borne by companies. Many who do admit that privacy regulations restricting the use of information about consumers have costs believe they are born entirely by firms. Yet consumers get tremendous benefits from the use of information.

Think of all the free stuff on the Web: newspapers, search engines, stock prices, sports scores, maps and much more. Google alone lists more than 50 free services—all ultimately funded by targeted advertising based on the use of information. If revenues from advertising are reduced or if costs increase, then fewer such services will be provided.

Fallacy 2.1: Uncle Sam is counting on you! Give up your privacy or the world will end!!

This assertion is simply ludicrous. I know it is sooooo last century, but does anyone remember broadcast TV? maybe radio? Did everyone remember to “register” with your favorite FM station before listening to the free music?

Of course not! Did the advertisers refuse to advertise on radio for the last 70 years because they didn’t have targeted information about the listeners? How about newspapers? Of course not!

Clearly the economy managed to function quite well without demanding private information from consumers.

Fallacy 2.2: News flash: advertising revenue is already down. And it ain’t because of privacy groups.

The basic economics of online advertising is flawed. There is simply so many places to display ads that the value of each display ad even on a popular site like Facebook is in the range of about $0.00002 ( yes, Dorothy much less than a penny) And this is for a site like Facebook which has a lot of private information about its users.

Fallacy 2.3: News flash: Advertisers can use the information

Reality here is that most ad buyers still have very limited mechanisms to segment their target audience: sex, approximate age and that is about it.

All that detailed information the consumer is being asked to give up? for the most part unused.

Fallacy 2.4 The companies depend on the information they are gathering to make enough money to stay in business and without the information the companies will disappear.

Completely without substance. Companies that fold in Silicon Valley go out of business for many reasons. The most common reason is spending all the invested capital before figuring out how they will make money. Viable internet companies don’t go out of business. Once an internet business becomes cashflow positive, the company is successful. Consumer privacy issues have never changed a viable internet business into a failure. The more usual case is that in spite of gathering all this private information, the company couldn’t figure out how to make money with the information.

Paul Rubin’s Third Falsehood

3) If consumers have less control over information, then firms must gain and consumers must lose. When firms have better information, they can target advertising better to consumers—who thereby get better and more useful information more quickly. Likewise, when information is used for other purposes—for example, in credit rating—then the cost of credit for all consumers will decrease.

Fallacy 3.1: Fallacy of the win-lose by implication scenario: “consumers have less control over information, then firms must gain and consumers must lose.”

Paul is arguing the inverse here. He is implying a falsehood, if “consumers have more control over information, then firms must LOSE”. Apparently, Paul can not imagine a scenario where firms manage to function without the consumers’ private information. Paul really needs to revisit the economic history of this country. Maybe Adam Smith can help him out. Once again, the economy managed to function without privacy being invaded.

Fallacy 3.2 Red Herring: Credit scores are not an online privacy issue.

Credit gathering for the purpose of issuing loans are a specific transactions already covered by consumer law. Online privacy is all about information gathering that is not needed for a specific immediate transaction.

Paul Rubin’s Fourth Falsehood

4) Information use is “all or nothing.” Many say that firms such as Google will continue to provide services even if their use of information is curtailed. This is sometimes true, but the services will be lower-quality and less valuable to consumers as information use is more restricted.

For example, search engines can better target searches if they know what searchers are looking for. (Google’s “Did you mean . . .” to correct typos is a familiar example.) Keeping a past history of searches provides exactly this information. Shorter retained search histories mean less effective targeting.

Fallacy 4.1: Google does not need past history to correct a search.

I have search history turned off. And I have had no problems. If this is indeed such a problem for google, then every library patron who searches the internet from a public computer must have this “problem”. After all my search for “butterflies” is going to be blended with the search history of every other library patron.

Fallacy 4.2: The “lower” quality is some how meaningful

At a certain point, additional precision is meaningless. For example, if you ask your kids where they are, is it really more useful if they reply “I am 3.4 meters from the front door facing to 3degrees to the north, sitting down.” or if they say “I am at home”.

Paul Rubin’s Fifth Falsehood

5) If consumers have less privacy, then someone will know things about them that they may want to keep secret. Most information is used anonymously. To the extent that things are “known” about consumers, they are known by computers. This notion is counterintuitive; we are not used to the concept that something can be known and at the same time no person knows it. But this is true of much online information.

Fallacy 5.1 “Anonymous data”

It is relatively easy to deanonymize data. Netflix was forced to cancel their second planned contest because it was demonstratively easy to deanonymize the Netflix data. This was in spite of Netflix doing their best to prevent exactly that. So a motivated company trying to anonymize can’t do so. A less motivated company is going to do better?

Fallacy 5.2 Deanonymizing takes a lot of effort.

In fact, zip code, age, gender deanonymizes 87% of all data. Anyone asking “Happy birthday! How old are you?” at your birthday party has enough information. Netflix is now facing a lawsuit about this.

The suit is also asking the court to stop Netflix from launching its promised second contest to improve the recommendations — this time giving out user data that includes ZIP codes, ages and gender, along with movie ratings and ID numbers substituted for user names.

That’s a foolish idea on Netflix’s part, according to University of Colorado law professor Paul Ohm, who in a blog post in September called the idea “a privacy blunder that could cost millions of dollars in fines and civil damages.” Ohm, a former Justice Department lawyer, recently authored a legal paper calling into question the practice of anonymizing data, essentially finding that if data is useful to researchers, it could also, by definition, be re-identified.

Read More

I think Netflix would disagree with Paul Rubin.

Paul Rubin’s Sixth Falsehood

6) Information can be used for price discrimination (differential pricing), which will harm consumers. For example, it might be possible to use a history of past purchases to tell which consumers might place a higher value on a particular good. The welfare implications of discriminatory pricing in general are ambiguous. But if price discrimination makes it possible for firms to provide goods and services that would otherwise not be available (which is common for virtual goods and services such as software, including cell phone apps) then consumers unambiguously benefit.

Fallacy 6.1 Price discrimination is o.k. no matter what it is based on.

Paul Rubin is willfully ignoring Redlining:

Redlining is the practice of denying, or increasing the cost of, services such as banking, insurance, access to jobs, access to health care, or even supermarkets to residents in certain, often racially determined, areas.

The term “redlining” describes the practice of marking a red line on a map to delineate the area where banks would not invest; later the term was applied to discrimination against a particular group of people (usually by race or sex) no matter the geography. During the heyday of redlining, the areas most frequently discriminated against were black inner city neighborhoods. Through at least the 1990s this practice meant that banks would often lend to lower income whites but not to middle or upper income blacks.

Reverse redlining occurs when a lender or insurer particularly targets minority consumers, not to deny them loans or insurance, but rather to charge them more than would be charged to a similarly situated majority consumer.

Paul Rubin, as a economics professor you should know about Redlining.

Paul Rubin’s Seventh Falsehood

7) If consumers knew how information about them was being used, they would be irate. When something (such as tainted food) actually harms consumers, they learn about the sources of the harm. But in spite of warnings by privacy advocates, consumers don’t bother to learn about information use on the Web precisely because there is no harm from the way it is used.

Fallacy 7.1 Consumers understand and are willing participants in giving up their privacy.

The Facebook privacy policy is longer than the U.S. Constitution:

If you guessed the latter, you’re right. Facebook’s Privacy Policy is 5,830 words long; the United States Constitution, without any of its amendments, is a concise 4,543 words.

Considering how vague the Facebook policy is, most consumers have no idea what the meaning of the policy is.

Fallacy 7.2 : Ignorance means permission.

Presuming that consumer ignorance is because there is no harm is a huge leap. The consumer has no ability to ask Google, Netflix, or Yahoo for an exact list of who got their information. No phone number to call, no email address that will be responded to. Even a motivated consumer is in the dark.

Paul Rubin’s Eighth Falsehood

8 ) Increasing privacy leads to greater safety and less risk. The opposite is true. Firms can use information to verify identity and reduce Internet crime and identity theft. Think of being called by a credit-card provider and asked a series of questions when using your card in an unfamiliar location, such as on a vacation. If this information is not available, then less verification can occur and risk may actually increase.

Fallacy 8.1 Gathering information reduces fraud.

The opposite is true. By having more private information stored on more computers at more companies there are more opportunities for hackers to gain access to the information. The hackers only need to penetrate the company with the weakest security.

Paul Rubin’s Ninth Falsehood

9) Restricting the use of information (such as by mandating consumer “opt-in”) will benefit consumers. In fact, since the use of information is generally benign and valuable, policies that lead to less information being used are generally harmful.

Fallacy 9.1 : “The information is valuable but not really.”

If the information is so valuable, why shouldn’t consumers be allowed to protect it?

Paul Rubin’s Tenth Falsehood

10) Targeted advertising leads people to buy stuff they don’t want or need. This belief is inconsistent with the basis of a market economy. A market economy exists because buyers and sellers both benefit from voluntary transactions. If this were not true, then a planned economy would be more efficient—and we have all seen how that works.

Fallacy 10.1 Advertising doesn’t work!

Do I really need to say more? Advertising has no ability to induce demand. Women with 300 pairs of shoes really need and want 300 pairs of shoes.

Paul Rubin’s Upcoming Falsehood!

Coming next week, Paul Rubin will write an article about the evils of cash purchases. Paul will explain how cash purchases deprive desperately poor banks of needed purchase information.

I might add more later but enough with the pustulance!

Update ( 30 aug 2010 ) : Apparently the NYTimes has noticed that consumers really do care about online privacy:

“Retargeting has helped turn on a light bulb for consumers,” said Jeff Chester, a privacy advocate and executive director of the Washington-based Center for Digital Democracy. “It illustrates that there is a commercial surveillance system in place online that is sweeping in scope and raises privacy and civil liberties issues, too.”

• In effect, a fan page becomes more like a bumper sticker popularity contest than a real business presence or one of deeper engagement
• In a “twitter-esque” move, Facebook is trading volume of interaction with depth of interaction.
• Facebook will be able to sell engagement more broadly

The battle to pick the one “word” is meaningless and impossible.

Thinking points:

• My kids like their classmates
• My kids like chocolate.
• My kids like Rush’s music.

When my kids click “like” on their classmates FB page – are my kids “fans” of their classmates?

When my kids click “like” on the Hershey FB page – are my kids “fans” of any Hersheys’ Chocolate, just the milk chocolate? or are they fans of the Hershey company?

When my kids click “like” on the Rush FB page – are my kids fans of Rush? Like some of Rush’s songs but would never go to a concert?

Mimic the real world

Any social network website should look first to the physical world social network interactions and try to mimic those. Attaching words to a relationship between people is hard. Facebook is not alone in this problem. All social network sites fail in these ways:

1. No measure of relationship strength – casual, sexual, deep love, or acquaintance.
2. No measure of relative and fuzzy relationship strength ( “I like Peter about the same as Paul, and I like Daniel more than Paul”)
3. No time component – relationships if not maintained diminish
4. No context – workplace only? professional? activity-centric ( i.e. a bicycling club )?
5. Age/Culture
   • Example: Middle East v. Germany – very different. In one women are forced to cover up, in the other prostitution is legal. So in Saudi Arabia, “liking” an unmarried woman may invite a visit from her brothers. In Germany, someone may be “liking” their favorite hooker! (Similar cultural differences exist within the U.S.)
   • Age/Generational: someone who grew up in the 1990′s has different meanings attached to words than someone who grew up in the 1970′s
6. No consideration of the type of the primary parties in the relationship. Is this relationship between 2 people, a person and a product, a person and a company, or two companies?
7. No consideration of the power structure in relationship: Does an employee “like” their manager so they get the next raise?
8. No secondary relationships – ( “I like Rush because my hot, hot girlfriend loves Rush. Oh, I just got dumped by that hot, hot now-ex-gf. I don’t listen to Rush any more.” )
9. No asymmetrical relationships allowed. Both parties have to agree to a relationship for the FB connection to be made. LinkedIn has the same problem.

So Facebook is just spinning their wheels looking for that magical word – and yes they are heading to the lowest common denominator as a result.

what Facebook is really getting wrong

But Facebook’s biggest problem is not “Like” v. “Fan”. Their biggest problem is their casual disregard for the social contract Facebook used to have with their users – not the legal TOS. But the unwritten social contract that was expressed in the marketing message and the way people use FB.

FB is stomping all over that social contract with their continuous “privacy” tweaks. Anything entered into FB is bound to be revealed by “default” to be public at some point. Go away on vacation for a month and come back and discovered that half your love life has been defaulted to be announced to your manager.

If Mark Z. and the rest of Facebook’s management can’t understand their own relationship with their own users, then it is impossible for Mark, et.al. to realize that relationships are too complex to be devolved to a single universal word.

1. name (check)
2. company (check)
3. address (check)
4. read the Acceptable Use Policy, Beta Agreement and the Terms of Service… uh, oh

Beta Agreement:

2.  You will not disclose any Confidential Information to a third party, including without limitation a GoGrid Competitor, or use it for any purpose other than to facilitate beta testing.  However, you may disclose Confidential Information to the extent required by law, provided you give GoGrid advanced notice reasonably sufficient to allow it to contest such disclosure.  “Confidential Information” refers to any information regarding the Service unless such information is: (a) provided at the GoGrid Website (http://www.gogrid.com) and made available to Internet users without an account or password; (b) already publicly known other than through your act or omission; or (c) made available by GoGrid to customers of the Service after beta testing and after the official public launch of the Service.

3.  You agree that violation of the provisions of this Beta Agreement might cause GoGrid irreparable injury, for which monetary damages would not provide adequate compensation, and that in addition to any other remedies available, GoGrid will be entitled to injunctive relief against such breach or threatened breach, without the necessity of proving actual damages.

Danger, Will Robinson, Danger. At GoGrid’s sole discretion, they can go after me for lots of money and high-legal fees. According to a strict reading of this agreement, my balance and usage information is GoGrid’s confidential information.

It gets worse with GoGrid’s Acceptable Use Policy

A. The following activities are expressly prohibited:
2. Intellectual property infringement, including violations of copyright, trademark, and patent rights, and use or distribution of pirated software.

B. Disruptions & security:
GoGrid may suspend Service in whole or in part if it reasonably suspects an AUP violation. Customer will reimburse GoGrid for any expenses resulting from Customer’s violation of the AUP, including attorneys’ fees. GoGrid may also disable Customer’s service if GoGrid suspects that such service is the target of an attack or in any way interferes with services provided to other customers, even if Customer is not at fault. GoGrid does not issue refunds for terminating service due to any of the causes above.

So if GoGrid gets any sort of DMCA notice, legitimate or not, GoGrid can decide to take company’s website offline without compensation. If an Amplafi user is abusing the service, GoGrid will shutdown our entire service.

This arbitrary exposure to business disruption is unacceptable. If any corporate officer agreed to these terms I would fire them.

GoGrid’s (unacceptable) Terms of Service:

4. Acceptable Use.

(ii) Notwithstanding any provision to the contrary in this Agreement, and without limiting any of GoGrid’s rights or remedies, GoGrid may suspend Service in whole or in part in the event that GoGrid reasonably suspects an AUP violation. Reasonable suspicion pursuant to the preceding sentence includes, without limitation, a third party notice or claim that Customer’s use of the Service infringes on third party rights. GoGrid will make reasonable efforts to notify Customer before any such suspension, unless the AUP violation calls for immediate action to prevent injury or liability, in GoGrid’s opinion and at its sole discretion. Suspension pursuant to this Subsection 4(a)(ii) may continue so long as GoGrid reasonably suspects an AUP violation. GoGrid is not liable for any Service suspension authorized by this Subsection 4(a)(ii), or for any related loss, even if the suspected AUP violation did not occur.

GoGrid will shutdown Amplafi’s website for any reason at all. “Reasonable effort to notify” is not defined and is highly subject to interpretation.

6. Maintenance & Security.
GoGrid is not responsible for providing physical access to or copies of software, data, or content stored on GoGrid’s equipment under any circumstances and is not required to provide network access (i) after any termination or suspension of Customer’s Service or (ii) in the event of hardware failure, abuse by hackers or other third parties, improper administration by Customer, or other interruption of network access.

GoGrid will shutdown an account for arbitrary reasons and then discard all customer data…. if this is a day that ends in a ‘y’.

8. Warranties, Disclaimers, & Limitations of Liability.
(b) GOGRID WILL NOT BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, EXEMPLARY, PUNITIVE, OR MULTIPLE DAMAGES, EVEN IF ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES. GOGRID’S MAXIMUM LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT WILL NOT EXCEED THE TOTAL AMOUNT OF FEES PAID BY CUSTOMER DURING THE 12 MONTHS PRECEDING THE INJURY GIVING RISE TO THE CLAIM.

And you can’t do squat about it.

Sorry! No sale!

We decided to go with Rackspace.

Rackspace (reasonable!) Terms of Service

7. Law/AUP. You agree to use the Services in compliance with applicable law and our AUP, which is incorporated by reference in the Terms of Service. You agree that Rackspace may, in its reasonable commercial judgment consistent with industry standards, amend the AUP from time to time to further detail or describe reasonable restrictions and conditions on your use of the Services. Amendments to the AUP are effective on the earlier of our notice to you that an amendment has been made, or the first day of the next Renewal Term. You agree to cooperate with our reasonable investigation of any suspected violation of the AUP. In the event of a dispute between the parties regarding interpretation of the AUP, our commercially reasonable interpretation of the AUP shall prevail.

Wow! A ToS requires that the Customer be proactively notified!

8. Your Information. You represent and warrant to Rackspace that (i) all information you provide to Rackspace for purposes of establishing and maintaining the Services is accurate; (ii) if you are an individual, you are at least eighteen years of age; (iii) you will not use the Services for the development, design, manufacture, production, stockpiling, or use of nuclear, chemical or biological weapons, weapons of mass destruction, or missiles in any country listed in Country Groups D:4 and D:3 of Supplement No. 1 to Part 740 of the United States Export Administration Regulations, and (iv) you will not provide access to the Services to any person (including a natural person or government or private entity) located in or a national of embargoed or highly restricted country under United States Export Regulations, which include as of June, 2008, Cuba, Iran, Iraq, Libya, North Korea, Sudan, or Syria. You agree that Rackspace may, without notice and without liability to you report to the appropriate governmental authorities any conduct by you or any of your EUs that Rackspace reasonably believes violates applicable law, and provide any information that it has about you and your EUs in response to a formal or informal request from a law enforcement or government agency or in response to a formal request in a civil action that on its face meets the requirements for such a request.

Notice the last line, the request must be official — not just some sort of automated DMCA notice generated by a spambot in Hollywood.

12. Suspension/Termination.
(a) Suspension of Services. You agree that Rackspace may suspend the Services if: (i) Rackspace reasonably believes that the Services are being used in violation of the AUP; (ii) you fail to cooperate with any reasonable investigation of any suspected violation of the AUP; (iii) Rackspace reasonably believes that suspension of the Services is necessary to protect its network or its other customers, (iv) as required by a law enforcement or government agency, or (v) if the Card cannot be charged for payment in accordance with Section 5. You agree to pay a reasonable fee for reinstatement (“Reinstatement Fee”) following any suspension.
(b) Termination by You. The Terms of Service may be terminated by you at any time as long as all Fees then due together with unpaid Recurring Fees for the remainder of the Initial Term or the Renewal Term, as the case may be, are fully paid on the business day following the termination date.
(c) Termination by Rackspace. The Terms of Service may be terminated by Rackspace prior to the expiration of the Initial Term or any Renewal Term without liability as follows: (i) upon seventy-two (72) hours notice if you are overdue on the payment of any Fee; (ii) you materially violate any provision of the Terms of Service or the AUP, and fail to cure the violation within ten (10) days after receipt of a written notice from Rackspace describing the violation in reasonable detail in our sole discretion; (iii) upon twenty-four (24) hours notice if the Services are used in violation of a material term of the AUP more than once, or (iv) upon twenty-four (24) hours notice if you violate Section 8 (Your Information).

Notice the explicit difference between GoGrid’s termination policy and Rackspace. Rackspace says that they will suspend unilaterally. GoGrid goes right to termination. Rackspace explicitly lists out timeframes. Rackspace imposes a 10-day advanced written notification requirement upon themselves. Furthermore, Rackspace requires that the violation be material ( i.e. significant ) and repeated.

14. Confidential Information.
Information that is developed by a party on its own, without reference to the other’s Confidential Information, or that becomes available to a party other than through violation of these Terms of Service or applicable law, shall not be “Confidential Information” of the other party. Each party agrees not to use the other’s Confidential Information except in connection with the performance or use of the Services, as applicable, the exercise of its legal rights under these Terms of Service or the Order Form, or as may be required by law. Each party agrees not to disclose the other party’s Confidential Information to any third person except as follows: to its respective service providers, agents and representatives, provided that such service providers, agents or representatives agree to confidentiality measures that are at least as stringent as those stated in these Terms of Service; to law enforcement or government agency if requested, or if a party reasonably believes that the other party’s conduct may violate applicable criminal law; as required by law;
or in response to a subpoena or other compulsory legal process, provided that the disclosing party must give the other party written notice of at least seven days prior to disclosing Confidential Information under this subsection (or prompt notice in advance of disclosure, if seven days advance notice is not reasonably feasible), unless the law forbids such notice.

Wow, once again a reasonable time to hire legal talent to address a legal issue.

Rackspace Acceptable Use Policy:

Copyrighted Material
You may not use the Rackspace Cloud’s network or Services to download, publish, distribute, or otherwise copy or use in any manner any text, music, software, art, image or other work protected by copyright law unless:
• you have been expressly authorized by the owner of the copyright for the work to copy the work in that manner; or
• you are otherwise permitted by established copyright law to copy the work in that manner.
It is the Rackspace Cloud’s policy to terminate in appropriate circumstances the services of customers who are repeat infringers.

What a difference the lawyers can make! GoGrid’s ToS, AUP, and Beta agreement are completely one sided and read like some free consumer service, not something that should be entrusted with any serious business. Rackspace’s agreement is balanced. Gives everyone an opportunity to seek legal advice. And more importantly, treats the cloud services as running serious business applications.

Its worth noting that under GoGrid’s AUP, ToS and Beta agreement — Facebook, YouTube, and many other popular legitimate services would be shutdown.

No thanks, GoGrid.

Because of MacOSX Unix roots, I made the switch to MacOSX confident that my personal computer would be safe.

This faith has been severely shaken. I now regard MacOSX as one of the most INSECURE operation systems.

MacOSX has a dangerous default DNS/DHCP configuration. Even worse, this dangerous configuration can not be fixed from the UI. Even the command line fix is difficult. And worst of all Apple is aware of this and does nothing.

There are 5 bits of background you should know:

1. DNS is a fundamental part of the internet. DNS is the ‘name resolution’ service that converts ‘mail.google.com’ into the ipaddress: ’74.125.19.19′ which is what your computer really uses to contact GMail servers so you can read your email. This conversion from the human readable ‘mail.google.com’ to ’74.125.19.19′ is analogous to the post office converting the postal address on your snail mail envelope to a Zip+4 encoding that is printed at the bottom of the envelope. This encoding is what is actually read by the postal service mail sorting machines to determine where your snail mail goes. Now imagine that the postal service’s encoding machine was compromised. This compromised postal encoding machine was changed so that no matter what the Zip+4 code was supposed to be the machine always encoded the location of Dick Cheney’s house. As a result, all your mail that was processed by that compromised postal service would go first to Dick Cheney. Dick Cheney would get a chance to open all your snail mail, read it, copy it, etc. He could then reseal the original envelope, reencode the envelope with the correct barcode and put the envelope back in the postal service system to be delivered to the correct address. so that no matter what address you had actually printed on your envelope. All this would happen without you being aware of the problem nor able to stop it from happening.

   Everything internet related depends on correct translation of ‘apple.com’ or ‘bankofamerica.com’ to the correct IP address, not some third party server. How does the your machine know that it is communicating with apple.com and not some evil server? Your computer relies on the DNS lookup being correct. If the DNS lookup is compromised then when your software update runs to check for the latest security patches it is really installing a virus from evilserver.com not apple.com.

   There has been recent concern about DNS spoofing. ( links ). Being the cautious person that I am, I decided to explicitly listed opendns.org‘s DNS servers (208.67.222.222 and 208.67.220.220) as the DNS Servers to trust in my Network configuration. I felt pretty cocky and safe.

2. The second bit of the puzzle is DHCP. In order to talk to the world, computers need to have their own personal unique ipaddress (it’s very own ZIP+4 code). Every time you go into an internet cafe and pop open your laptop, your laptop uses the DHCP service to figure out what unique ipaddress (192.168.1.101) it should use while you are in that cafe. DHCP is nice because otherwise you would have to manually figure out and set an ipaddress for your computer that is different than everyone else’s laptop. And if someone else picks the same address as you did, all of a sudden your internet connection starts behaving odd. In addition to supplying a ipaddress, the DHCP server also supplies a DNS server that should be used. This is useful when you have your laptop at work and you need to go to an internal website such as http://go/wave Notice there is no ‘.org’, or ‘.com’ after ‘http://go/’ this means that ‘go’ is only visible when you are at work and can access the internal DNS server using the information that the corporate DHCP server supplied to your laptop.

   So to summarize DHCP supplies your laptop with the information needed for the world to talk to your laptop ( by assigning an ipaddress to your computer) , and helps you find out about the world (by telling your computer about the corporate DNS server). DNS servers enables your laptop talk to the world by giving your laptop a ‘go-to-machine’ for all its addressing questions.

3. Third, DNS servers are usually big expensive computers secured by “smart people”. However, the DHCP server is really just a bit of software running on a Linksys router at your internet cafe. Your internet cafe’s Linksys router probably has the default password and no one ever checks on it. There are millions of this routers, with minimal security, no one checking on them and your laptop is trusting these unsecured routers with the keys to your kingdom. Your laptop is asking this router — “tell me which DNS server to trust?”
4. Fourth, Lets say that you are paranoid enough to say ” ohh this is bad. I am not going to trust such a router in a greasy, dark corner with telling my precious laptop which DNS server to trust.” So if you are like me you configure your laptop with an explicit list of DNS servers thinking that your laptop, especially your oh-so-secure Mac would never disobey you about something so critical as DNS.
5. Fifth, you would be wrong. The insecure MacOSX does disobey and it does trust that greasy spoon router over you. MacOsX doesn’t let the user (YOU!) say that only certain machines are allowed to be your laptop’s DNS servers! Furthermore even if you have supplied your own custom DNS servers that you trust, the insecure MacOSX trusts the greasy spoon DHCP server’s DNS servers over your trusted DNS servers. And there is NO way to convince MacOSX otherwise.

This means that if the DHCP server at your internet cafe has been compromised you are as well.

How I found out

So here I am feeling all cocky and safe. I type in my company’s web address, ‘amplafi.net’ and amplafi.net resolved to 113.29.236.168 which offered that the website was for sale!… I freaked out!

I discovered my MacOSX laptop was insisting on trusting these EVIL DNS servers 206.13.28.12 206.13.31.12 . Was the 10.5.8 OSX patch that was installed 6 hours ago really what it seemed? Who knows? When I installed updates to Firefox plugins was I really installing the correct versions or a compromised version that would report back to some site in Russia all my bank account information? I have no way of knowing.

This is the really scary part about everything. John Simpson reports:

Under 10.4 and earlier, when I specified a custom nameserver, the system would use only the nameserver(s) I specified. However, under 10.5 Apple has apparently changed that behavior, and uses my specified nameservers in addition to the DNS servers specified by the DHCP server. It shows the DHCP-provided server IP on the list, greyed out, so you can’t delete it.

For a while, I adopted a “grin and bear it” attitude — after all, the DHCP server at home is handing out the IP of my internal Linux server (also running djbdns) as the DNS server, so I was only unsafe when I used the laptop outside the house. However, with the recently announced vulnerability in the DNS protocol, the massive world-wide patch effort by major DNS vendors, and the fact that many networks haven’t applied the patches yet, I don’t really feel safe relying on anybody else’s nameservers.

I tried calling Apple about this, but it turns out that my AppleCare contract doesn’t cover technical support such as this.

My next approach was to just brute-force search the system for anything relating to DHCP. It took a while, but I was able to find the file which needed to be changed, and figure out the necessary changes. Basically, I found a file which controls which options are used by the DHCP client when handling a response from a DHCP server. I removed the DNS-related options from this list, and after rebooting the system, the laptop now ignores the DNS server options being sent by the DHCP server.

The file I found is named IPConfiguration.xml, and it’s buried in this folder: /System/Library/SystemConfiguration/IPConfiguration.bundle/Contents/Resources. You need to create a copy of that file, edit the copy, and remove a few entries in the DHCPRequestedParameterList key. (The entries to remove are those for 6, 15, and 119.) I have added full details on this process to my djbdns setup page, in the section titled Disabling DNS servers from DHCP.

Thankfully I found this web page from 2008(!) that showed how to fix this problem (thanks John M. Simpson):

It is possible to make the DHCP client ignore the “DNS server” options in the DHCP response. It’s not for the faint of heart, but if you’ve been able to handle the rest of the instructions on this page, you can handle this bit as well.

I have done this on my own laptop (a MacBook Pro) and it does work.

Be aware that this is a GLOBAL change. If you do this, your machine will not use the DNS servers specified by any DHCP server. This may affect your machine’s ability to easily work with corporate networks (especially those using Windows Active Directory) or other networks which use private DNS namespaces.

$ sudo -s
Password: You will not see your password as you enter it.
# cd /System/Library/SystemConfiguration/IPConfiguration.bundle/Contents/Resources
# vi IPConfiguration.xml

Find this block...

        <key>DHCPRequestedParameterList</key>
        <array>
                <integer>1</integer>
                <integer>3</integer>
                <integer>6</integer>
                <integer>15</integer>
                <integer>119</integer>
                <integer>95</integer>
                <integer>252</integer>
                <integer>44</integer>
                <integer>46</integer>
                <integer>47</integer>
        </array>

Comment out the 6, 15, and 119 entries. The result should look like this:

        <key>DHCPRequestedParameterList</key>
        <array>
                <integer>1</integer>
                <integer>3</integer>
                <!-- commented out so that Bad DNS servers coming from DHCP servers
                are not used.
                <integer>6</integer>
                <integer>15</integer>
                <integer>119</integer>
                -->
                <integer>95</integer>
                <integer>252</integer>
                <integer>44</integer>
                <integer>46</integer>
                <integer>47</integer>
        </array>

Save your changes.

Be sure to flush the DNS cache.

On MacOsX:

dscacheutil -flushcache

I have tried John’s suggestion and those scary DNS servers are no longer present. But has my machine been compromised already? I will be visiting the apple store in a few hours asking for answers.

The story continues. I was sitting next to a customer. On her windows box she was picking up the same bad DNS servers. It wasn’t until later when I got home that I discovered all this information. I suspect (but am not completely certain) that windows will not override an explicitly specified DNS server.

Update: So after talking with some people, its pretty clear that MacOsX shares this issue with Windows XP because offering out internal DNS servers is part of what DHCP does. However with Windows XP, it is easy to explicitly lock down the DNS servers.

How to lock down a Windows XP box with safe DNS servers:

On Windows:

To clear Windows DNS cache:

ipconfig /flushdns

If you work 100-hour weeks, no one (investors, co-founders, employees) can blame you if things don’t work out, right?

And I like to think I’ve worked a lot smarter since then [missing dinner with spouse].

The life of an entrepreneur can be rough, but at least it’s a life of your choosing. The same can’t be said for your family. Give then a chance to make their own choice.

In other words, it is the default choice in the valley and in the technology sector. And its a stupid choice. 168 hours in the week. 100 hours at work. Allow 8 hours/day for sleep. Drive-time to/from work of 1 hour. This leaves exactly 13 hours for the employee to do *anything else*.

A few years ago, I had a job with the best work-life balance. This start-up had with only 7 engineers with 30-ish total people. Between November and January, we built a Paypal integration and a major piece of functionality that got the start-up their first bits of solid revenue. Everyone took their normal holiday vacation. Every programmer worked 9-5. No weekend work. We completed the project on-time.

The company is LinkedIn. We achieved this because Jean-Luc Vaillant was fanatically about knowing exactly what was to be built and automated tests so he knew exactly where the code was. Those tests had to pass each and every night. No new work was to be done until all the previous night’s failed tests were fixed.

Every later employer had to live up to this reasonable bar. Sadly most fail and most projects are late.

They fail because the managers listen to the siren song singing the lies:

• that says that automatic tests are optional;
• “trusting” the developer to adequately test by hand is good enough;
• that there is more time to do-it-again than to do it right
• that documentation is optional and it better to have team members figure out anothers work than it is to demand that the creator document;
• and that long hours are better than sane hours

While Chris does touch on the work-life balance with his wife, he misses some key points. If the team is working 100-hours/week:

• the team has no reserve capacity – if a short-term sprint is needed to wrap up a project – forget it
• the team starts to waste time at work: web surfing and game-playing. So while physically there, they are neither productive nor getting a break from the work environment.
• as soon as there is any corporate setback – moral collapses. When it looks like the company is going to be the next Google, employees will justify to themselves that working ridiculous hours will pay-off. This illusion is dispelled at the first severe setback.
• someone outside of work is always telling the employee how stupid they are to work such long hours. The wife, the husband, the kids, the mother, or just the friends who are going up for that most excellent ski trip to Lake Tahoe.

So my advice to employers:

• Get rid of the game room. Make employees have fun outside of the building.
• Cut the power to the employees computers at midnight. Make them sleep so they can think and not make silly mistakes.
• Do a postmortem on every crisis. Without blame and with automation ONLY, look for ways to make sure that the crisis can never, ever repeat. Working “harder” or requiring greater “perfection” is NOT the answer.
• Reward employees – not for working harder, freeing up ‘capacity’. Did some developer, IT person, or janitor do something or automate something that freed up 20 minutes/person/week? In a 30-person startup, those 20 minutes saved is the same as hiring a full-time person for 3 months! Get everyone to look for these “small” time-savers. Work now becomes less onerous, more enjoyable, and your headcount stays down.

Expanding on the last point with some examples:

• Automatic tests — avoids developers acting like monkeys do manual tests.
• Buy the absolute fastest machines. My latest machine took me from 15 minutes builds to 1m30second builds. I started running the tests all the time!
• Virtual assistants to handle the random shit that an employee might have to do during the day
• Every 6 weeks, a mobile oil change service so that no one needs to run to Jiffy Lube
• Outsourcing human resource issues

Spend the time to discover those “small, annoying” things that seem to petty to complain about — but that impact a significant percentage of the company.

Remember for a small 30-person startup saving 1hr20m/person/week ( i.e. 16min/person/day ) is the same as hiring another person. And in the process, enables everyone to step back from the brink.

Google has their famous 20% “free” time to work on new projects. Every startup should have 20% “free-up” time to make existing projects less painful.

While I am working hard at amplafi I am working even hard on making sure that my family knows I much rather be with them than coding.

Also read Steve Blank’s post on the Lies told Entrepreneurs.

Strongly, strongly agree with:

Ask me what I see lacking most in startups in Europe and I’ll say hunger, drive, and lofty goals.

For me my hunger and drive come directly from wanting to change the world for my children.

So I equally strongly DISagree with:

worked four jobs for the money to launch their venture, without giving a second thought to “quality of life” or “spending time with the kids.”

For me sacrificing the hours between 6:30-9:30pm that I spend with my kids is a false choice. I sacrifice that time only when absolutely necessary and never more than 2 days in a row. Once I have those 3 hours with family, I am emotionally recharged and able to focus completely on building my company, Amplafi.

I am not alone in this. Chris Yeh and Steve Blank : Lies Entrepreneurs Tell Themselves share my feelings.

My personal reality is the least successful company demanded the worse and longest hours. And the most successful startup asked the most reasonable hours. We work from 9-5. No weekends. No missed holidays. You might have hear of it. Its called Jean-Luc Vaillant did his job and managed his people well.

Shitty long hours is not a badge of honor. Its a sign of bad prioritization and resource management. Sure some times the long hours are necessary… just like a sprint is necessary at the end of a marathon. But you don’t sprint the entire length of the marathon. And unlike a marathon in a startup, there is no rest after crossing the first finish line – just another finish line in the distance.

A startup that is sprinting constantly better hope that they get bought before exhaustion sets in. Otherwise their competitors that have paced themselves better will pass them up and their best people will burned out and quit. Any little stumble, any sign that success and glory are a few months away… and the startup starts spending time looking for fresh blood.

“We don’t like it”

I love all these people who whine about taxes.

Don’t like taxes? Move to Somalia. No functioning government since Bush the First – a libertarian paradise.

The anti-tax people complain about taxes but want the benefits of:

• a functioning University system so that there are high-quality people to work at your cool start-up
• a public school system that at the very least keeps kids off the street. (50% of California’s budget)
• roads
• police
• prisons ( 10% of California’s budget )
• state parks
• a functioning emergency system for the next airline crash or the next earthquake
• airports
• Caltrain
• weights and measures people to make sure that when you buy a gallon of gas you get your full gallon
• code enforcement to make sure a restaurant is not serving 3 month-old rotten meat and the kitchen is not infested with cockroaches
• zoning enforcement that stops your neighbor from running a chicken farm
• labor laws that stop child labor and insist that your employer actually has to *pay* you
• SEC laws that require that companies follow GAAP
• laws that allow lawsuits and action against companies when they pollute the water you drink

Next time you think that the government does nothing for you. Spend some time finding out how badly mainland China, Dubai, or Yemen allows the powerful to abuse everyone else.

I can go on and on.

But seriously, grow up. You want to live in a civilized society? expect to pay for it — it does not come for free.

Oh sure, it isn’t perfect — fine make it better.

As for me, I am happy to pay taxes and enjoy the best state (California) in the US. There is no way I would move to another state that has worse laws.

Update 1:

A few other “unnecessary services” from the government:

• Center for Disease Control ( you know those useless people that actually worry about swine flu pandemics )
• FCC (Federal Communications Commission) / FTC (Federal Trade Commission ): you would know these people as the useless bureaucrats that would actually enforce something useless called “net neutrality”. Come on you can trust Time Warner and Comcast!
• CDF (California Department of Forestry ) : those useless bureaucrats that put their lives on the line to put out wildfires. I am sure those fires last year in San Diego would have eventually burned out.
• Nevada Gaming Commission– makes sure those roulette wheels are not rigged — completely useless!
• California Secretary of State — silly bureaucrats that stop Diebold from rigging elections. Completely unnecessary because we all know electronic voting machines have no flaws! Look at Iran – they don’t have anyone worrying about rigged elections and everything is just peachy there!

Move to Somalia. Avoid these annoying bureaucrats!

Meanwhile think about this:

1. In the 70’s corporations paid 2/3 of the taxes, today after a full generation of the rich whining about taxes corporations pay 1/3 of the taxes.
2. 30 years after Prop 13, the biggest beneficiaries of Prop 13 are corporations because they never, never sell property ( 99-year leases anyone? ).

All this anti-tax rhetoric has allowed corporations to shift the tax purden to the individuals.

Maybe it is time to wake-up about this scam and stop buying into the anti-tax rhetoric so blindly.

Update 2:
More from TechCrunch:

State governments assess “emergency” tax measures to get quick money because they can’t bear the thought of making the tough choices necessary to cut spending

Hmmm… so in hard economic times, when a social safety net is that much more important you want states to cut funding.

So from your perspective:

• Unemployment insurance
• Job retraining programs
• Community Colleges
• 4-year public universities
• subsidized day care
• subsidized elder care
• Section 8 housing assistance
• School lunch programs
• morning/afternoon pre-/post- school day programs
• community grants for starting a new business

Should all be cut.

Someone who has just been laid off can try to job hunt and compete with 500 applicants hoping they can keep their head above water economically;

Or

they can return to school and complete their AA degree or the BS, or get their MBA using the above listed services to make it economically possible.

By providing these services, a state enables their citizens to be more valuable and more productive when the economy turns around.

The single mom ( or dad ) may start the downturn with no college education. Through the services listed above, this single parent could end up with a degree that will enable them to double their income. Or give them the skills to start their own business.

Yet you make the interesting choice that states should remove this opportunity to turn economic lemons into lemonade.

Interesting. I am curious why you think that a less-educated workforce is a good choice?

I should add that Herbert Hoover was wildly successful at cutting government spending in the Great Depression. I am curious do you think this was successful for him? If not how is the same approach going to be successful today?

Errata Note: Original post referred to Ethiopia. The correct country should have been Somalia. I usually know my geography much better. However, since Somalia now has a government (as of December 2008), the last John Galt paradise is gone. Thanks to Peter for pointing this error out.