Personal recommendations have always been a part of ecommerce, but there has been little innovation since Amazon introduced retail and product personalization 10 years ago. But with the increasing mountains of data at digital retailers’ fingertips, ecommerce is about to get even more personal.

The fact is that right now there is little iteration from personalized ecommerce beyond what is taking place on Amazon. So you’ll see suggestions of what other shoppers who bought a certain item also purchased, or recommendations to similar items to what you have purchased, but there is a whole world of social data, and even more-in-depth purchase data that can be mined by retailers to help increase sales.

Kleiner Perkins partner Aileen Lee agrees with me, “In the future, the best  retail sites will know you much better and show you things that are much more relevant.” Lee has helped lead investments in a number of e-commerce companies including Offermatic, One Kings Lane, Plum District, Rent the Runway, and Trendyol and held operating roles at The Gap and North Face.

“We are just at the beginning of a revolution of e-commerce, and existing retailers are going to have to get better at personalizing the experience for consumers,” Lee says.

“Personalization was really important in enabling Amazon to differentiate itself and grow in past ten years,” David Selinger, CEO and co-founder of RichRelevance. Selinger also was Amazon’s Manager, Consumer Behavior Research and helped build some of the site’s personalization features a number of years ago. “Personalization will be the differentiating factor in e-commerce and digital commerce going forward, especially for multichannel retailers and new entrants online.”

Amazon and Netflix represent the first wave of personalization. I believe that we are going to enter into the next wave of a more personalized e-commerce experience as retailers and e-commerce sites move towards mining data to improve sales and conversions.

It's highly likely that you have helped boost Amazon and Netflix’s conversion rates on movies, books, or other products thanks to personalized suggestions of items that you may like based on your previous purchase data, other consumers' purchase history and more. In fact, it's so seamlessly baked into the user experience for both companies, that I tend to not even notice how impactful personalization is on what I purchase.

That’s not to say that Amazon is the only retailer experimenting with personalization. eBay has also been personalizing the marketplace experience with recommendations of similarly viewed or bought items for some time, and is looking to expand personalization efforts with PayPal. And with the recent acquisition of Hunch, we know eBay is going to ramp up data mining.

Recently, I started to receive emails from Gilt Groupe that suggested similar earring to like those those I had added to my wait-list on the e-commerce site. The company also sends personalized email notifications on sales that are tailored to each customer. Gilt, who declined to comment for this piece, seems to realize that personalization is going to be a key product driver for the site in the future. And brick and mortar retailers like Saks Fifth Avenue, and many others are also starting to jump on the personalized email bandwagon.

The Challenges

The best way begin understanding the opportunity of personalization in the future is to realize the immense challenge that retailers face when approaching personalization. As DJ Patil, Data Scientist in Residence at Greylock Partners, explains, “When you go to Nordstrom you have a shopping assistant helps direct you, basically says ‘I’m here to help, what do you need and here’s where to find this.’ No online retailer has quite nailed that,” he explains.

For most retailers, the toughest hurdle is to have enough data on an individual to actually help personalize the experience. For the majority of buyers who purchase from a specific site once every few months, or even less frequently, a retailer may have no real sense of direction on how to present similar products.

Getting these data points is the biggest challenge that retailers face. But retailers do have significant data for the small amount of regular, routine customers for an e-commerce site, including clicks, purchase history, shopping cart information, shares and Likes, and more. Retailers face challenges on how to store and organize this data, and then turn this into personal recommendations

And data comes in various forms. There’s implicit data (which is gained from your everyday actions on a retailer’s site) and explicit data (which you offer to sites via surveys or quizzes). While retailers are doing more with the implicit data (i.e. reminding you when you left items in your shopping cart); no one has yet mastered the art of capturing that precious explicit data.

Google’s Boutiques.com tried its hand at this, as a search engine and fashion site which allowed users to receive personalized clothes and accessory recommendations based on preferences and actions. But Google subsequently shut the portal down last September.

Asking for users to fill out surveys of what they love or like perhaps isn’t the ticket to drawing explicit data, such as brands you love, colors, styles and more. As Patil explains, retailers who ask for this information need to present this as more of a conversation as opposed to replicating the feel of a doctor’s appointment where you are filling out your life history via forms.

Getting these signals from consumers is very difficult from a UI and user experience stand point, he says. His advice to retailers is to find a way to replicate how a store owner or shop keeper would engage you in a conversation when walking into a store and looking for something open-ended, such as a birthday gift. One way to do this is to present a personalized item suggestion but ask the consumer (in a Pandora-like fashion) if the recommendation sucks and how they can make the shopper’s life better “People want to help the system and love to correct things,” Patil says.

And similar to Pandora, people become more invested in a platform that knows their preferences and will be more likely to return.

There’s also the issue of finding the balance between providing serendipity in terms of discovery and personalization. Retailers still want their sites to be this Pandora’s box of discovering items, literally, but personalization can cut down on this discovery process. So retailers need to both anticipate what consumers may want to purchase on the site but also provide items that consumers will be able to feel like they ‘discovered’ on the site.

Patil draws an interesting comparison with how grocery stores have been able to structure their layouts to provide serendipity and useful discovery. “When you go to the supermarket, the stores know you are definitely going to milk aisle, so they often put it in the back of the store, so you can find serendipitous stuff on the way. Online retailers need to replicate that on e-commerce sites.” In the end, the goal is to be able to deliver personalization without being predictable.

At a macro level, retailers also face challenges in finding talent to sort this big data. The difference between doing data personalization well are radical shifts financially for retailers, Selinger explains. The engineers who are able to parse these massive amounts of data are hard to come by, and expensive.

Social

Social data (i.e. the Facebook Likes of products, what products people are recommending on Facebook or Twitter) is going to be a big part of personalization for retailers in the future. Already plenty of retailers are using Facebook social plugins and Connect integrations to leverage Facebook data to show visitors what friends bought or shared, what products relate to their Likes, and which friends they might want to invite.

The problem with this data is that much of it is unstructured, and there is really no one who has effectively nailed social personalization in the commerce arena the way Amazon was able to do with data from purchase behavior. Blippy attempted to socialize purchases, but it failed. Amazon also allows you to connect to Facebook to access your friends’ Likes and recommendations but I find this UI to be clunky, and not very useful.

Selinger thinks that mining social data for ecommerce may lose steam before it takes off, drawing the comparison to email. “In 2007, if you were to walk into VC’s office with an idea about ecommerce and email, you would have been sent out the door,” Selinger says. But he explains that while there is an inherent enterprise value in this social data, it will take a long time to take off, similar to the way it took awhile for personalized email and commerce models to enter the market. “When someone figures out how to do it and do it well, it will grow really quickly,” he maintains.

The challenge for retailers is making sense of the Facebook news feed — i.e. streamlining recommendations, attaching brands and tags to this data and then serving this to shoppers in a useful, personalized format. Basically, your social network can become your Consumer Reports.

The challenge for the data mining community, explains Patil, is actually figuring out the intent in much of the unstructured data that is posted about retail products and brands on Facebook. And it’s important to keep in mind that some of this data from Facebook users is private.

This past week, Facebook partnered up with sixty different startups to add their "stories" to Facebook Timeline, through apps that span different verticals from Food, Fashion to Travel. Part of this involved adding new actions (in addition to ‘like’) to Timeline story options. That includes the verbs ‘bought’ and ‘want.’

There is tremendous potential in developers and retailers being able to mine this data from ‘boughts’ and wants’ as opposed to the open-ended ‘like.’ You can see details on what social shopping mall Payvment is doing with the new protocols here, but basically, the ability to add these targeted buttons could be game-changing for social discovery in e-commerce.

Privacy

Echoing Lee’s thoughts, Patil is confident that there will be a new wave of personalization and e-commerce. But without data, there is no personalization. So consumers both on Facebook as well as on retail sites will have to be more willing to give up key data like purchase history, Likes and other social actions, and even location in order to get a more personalized shopping experience on retail sites.

The key will be getting consumers to understand that more data will improve their shopping experience, and making the choice of opting-in a no brainer.

Selinger agrees that privacy is going to be an important issue in the next tranche of personalization innovation. “Now more than ever, consumers are more cognizant of what’s happening with their data,” he says. But what retailers have in the favor is a strong foundation of privacy practices, because these companies have had to protect consumer financial and credit card data for time. Selinger believes that retailers will be very thoughtful about privacy and data sharing going forward.

Perhaps sites like Blippy and Boutiques.com were ahead of their time when it came to consumers willingly handing over the keys to their shopping and payment preferences. I envision a day when there will be an app that reads all of your purchase history via your email account and then serves you recommendations based on this data. There are some companies who are already parsing through receipts in your inbox to organize purchases, so why not take this a step further.

And these personalization strategies that are being adopted by retailers are already trickling down to other kinds of sites beyond e-commerce as well. In the same way that ecommerce sites are trying to maximize sales and profits with this data, content sites are also using social and other data to add relevance to their platforms.

So shoppers, be prepared to give up your data. In the coming year, we’re going to see many more retail sites ramping up data-driven discovery. And e-commerce sites who aren’t thinking about how to mine social and other forms of data are probably going to be left in the dust by the Amazons and Netflix’s of the next wave of personalization.

Editor's note: Guest author Keith Teare is General Partner at his incubator Archimedes Labs and CEO of newly funded just.me. He was a co-founder of TechCrunch.

Like millions of other people, I got an email from Google this morning. It was entitled "Changes to Google Privacy Policy and Terms of Service". The first sentence describes the intent of the changes as shortening 60 policies into one, and improving their readability.

Then there is a longer explanation captured in the graphic above.

The email goes on to assert that Google has not changed its privacy policy and will not sell our personal information to third parties – "Our privacy policies remain unchanged". So what is going on here?

Facebook is the shiny object that Larry is focused on.

This is a week where Sheryl Sandberg – Chief Operating Officer at Facebook – spoke at Hubert Burda's DLD conference in Munich and stated that we were in the middle of 3 trends. First, a trend "from anonymity to real identity". Secondly, a trend from "wisdom of crowds to wisdom of friends" and third, a trend "from being receivers of information to broadcasters of information". See the video below for the actual points she made. It was a thoughtful and at the same time a polemical speech, a speech with a strong point of view. In thinking about Google's privacy policy changes it helps to listen to Sheryl's remarks and reflect on the context.

Facebook is saying that the Internet as a pure information retrieval mechanism is dead. That the "readwrite" web that began as long ago as cheap web site hosting in 1998, has entirely replaced the read-only web. That the identifiable author has replaced the anonymous one. We are broadcasting and we are identifiable. That reading what friends say is now dominant in that world. Facebook envisages a future in which we all broadcast almost everything to almost everybody.

Google's problem.

In that world, Google's PageRank algorithm is seriously out of date. It promotes pages based on the number of links to it. Today, pages are no longer the unit of publishing. Far smaller items than a page dominate our senses. And those smaller messages are produced in huge quantity and in real time. So the signals that make something relevant have now changed. Facebook (and Twitter) have oodles of such signals. Google, until recently, had none.

Google's solution.

The changes in Google's terms and conditions are primarily focused on providing the company with an integrated set of data capable of feeding it signals about what is and is not relevant to each of us as we search the vast amount of data produced by the second. In that sense it is not only the right strategic move, it is a question of life and death. Google is doing a pivot, in order to remain relevant. It’s hard to disagree that this is necessary. It also seems clear that neither company is being intentionally "evil". However, there is a dilemma for both Google and Facebook as we go down the "we are all broadcasters now" path. How can they gather the signals that feed insight without making decisions for the user about what is private, selectively shared or public?

We, the people!

There is a discernible and growing reaction against both Facebook's new sharing paradigm and Google's policy changes. As implicit sharing, or as Sheryl Sandberg calls it, broadcasting, replaces conscious sharing, many are growing disillusioned with Facebook taking liberties with their behavior. The same instinct is making many people focus on the assumed bad intent behind Google's modifications. Broadcasting our "real identity" is not something anybody wants as a default, and many don't want under any circumstances.

Privacy is becoming a product issue, not only a policy issue.

In the past privacy advocates on the Internet were primarily focused on privacy as a policy issue, and the privacy lobby was mainly made up of policy professionals. In the period since Facebook's 2011 F8 conference, we have seen consumers begin to have strong opinions about the use of their data. The past week has accelerated this trend. Product managers now need to think long and hard about the assumptions built into their products and ensure they are serving consumers not just in words but in fact. Consumers are at a tipping pointy in not tolerating all-inclusive policy decisions by service providers that impact who sees their stuff.

Google and Facebook are between a rock and a hard place.

There is a big structural problem for both Google and Facebook as they contemplate the product consequences of consumer reactions to their product roadmap. In a centralized platform it is incredibly hard to create easy-to-understand controls that give each user the ability to control, at a granular level, what they share and who with. Grand policy shifts, like that which came out of F8 and which we are now seeing from Google, tend to assume all users are the same and will want the same thing.

In reality, users are more complex. I might want to save a private video to a personal storage space one moment, share something with a select group of friends another moment, and broadcast something to the world five minutes later. The web services infrastructure that both Facebook and Google are based on does not easily permit such fine grained control for users without also imposing serious effort. As we all know, that leads users to stick with the default settings most of the time.

So, despite good intent by the teams at both companies, one-size-fits-all decisions are the norm.

Mobile to the rescue?

Structural problems usually require structural solutions. What it seems consumers are asking for is a world in which we all know what we are sharing and who with — but where we don’t have to do a huge amount of work to achieve that. Google Circles seems to be a nod in this direction as are Facebook's groups. But neither is really easy enough or sufficiently integrated into the flow of the products to really solve the problem. Both require a huge management overhead.

As I argued earlier this week in "Google, Look Out Behind You!“, the spread of smartphones may be part of the solution here. Hundreds of millions of consumers are now carrying around connected still and video cameras with lists of contacts in the address book, often already organized into meaningful groups. Decentralized decision-making is very easy when there are decentralized software clients under the unique control of each user. The ability to be private one moment, selectively share the next and then publicly broadcast a few minutes later is easy to achieve in this decentralized software architecture. And service providers can never become bad actors — simply because they do not own our information or the full social graph. The cloud becomes a means of delivering messages to the phones and the place where we store our media. But it’s not the place we need to trust to make decisions about what gets shared and who with.

Software can truly reflect the wishes of each human being in each moment in this world. It couldn't be structurally more different from the past 10 years of centralized web services.

What's Next?

Products will need to become increasingly more human as they become more mobile. Privacy can go away as an issue if that happens. All decisions about where data can travel will be able to be made by the individual, each time they produce data. We will all be able to be private, share selectively or choose to broadcast with relative ease.

We are moving to a period where it will be considered intrusive and unwelcome if our service providers have any point of view about our sharing behavior. "Just trust us" will not be necessary and certainly won't cut it. Capturing moments in one’s life, with the choice of whether to share, and as importantly, who to share it with, will be in the hands of each individual. The service provider will merely execute the user’s wishes. If you think about it, it’s kind of like what email service providers do today. I can't wait.

That’s awkward: Just as it was announcing a $1.2 million round of funding, online referral startup Curebit was caught lifting designs and code from 37Signals, the company behind popular collaboration tools Basecamp, Highrise, and others.

The copying was called out on Twitter by 37Signals partner David Heinemeier Hansson, who, after an exchange with Curebit co-founder Allan Grant, called the Curebit team “fucking scumbags.” It probably didn’t help that Grant’s initial responses didn’t seem particularly contrite — he defended the copying as a “quick test” and at one point told Heinemeier Hansson, “Chill dude ” (VentureBeat has a good blow-by-blow account of the initial controversy.)

Now, however, Grant has posted an apology on the company blog — in fact, it attracted so much attention that the blog is crashing. He also published the text on Hacker News:

Recently we launched a site with several pages copied from 37signals’ Highrise. We did more than take inspiration from their design – we actually used html & css code, and hotlinked to images on their site. We apologize to David and 37signals for ripping off their work. It was stupid, lazy, and disrespectful of their creative efforts. It’s particularly painful for us to have done this to 37signals because they are big heroes of ours. We just hope they will accept our apologies.

Grant sent me an email emphasizing his admiration for 37Signals, admitting that he “crossed the line,” and concluding, “I would caution other startups from making such mistakes in an effort to ‘be lean.’”

The controversy attracted particular attention because Curebit was incubated by Y Combinator and raised money from 500 Startups (among others), something that Heinemeier Hansson didn’t hesitate to point out.

It looks like a reader at Hacker News (which is run by Y Combinator) created a post asking for YC co-founder Paul Graham’s opinion. Graham killed the thread, saying that it violated the site’s guideline to “not use posts to ask us questions,” but he also wrote, “I think they shouldn’t have done it, and that they compounded the problem by not taking the initial complaints seriously enough.”

Meanwhile, back on Twitter, 500 Startups founder Dave McClure said he spoke to the Curebit team and “strongly asked them 2 re-evaluate thr policy on design & content; hope they take that 2 heart” and later added, “new founders aren’t children, just inexperienced. furthermore investors aren’t parents, just uncles & aunts. and we all make mistakes.”

Editor’s note: Jordan Kurzweil ran AOL’s original programming and video group from 2004-2007, and before that built and Fox Entertainment’s first digital studio (1999-2002). He now runs Independent Content, an agency that helps media companies launch new digital products and businesses.

Apple should not use its $100 billion in cash to buy, or buy into Hollywood. While it would most assuredly (ahem, cough) disrupt the system, it would not spur the kind of creative chaos and innovation that would lead to the Emerald City of any show, on demand, for free, to rent, or buy, or subscribe, and organized by taste or popularity, or you! In fact, Apple buying into Hollywood, would actually kill Hollywood. Here's why:

Time and again, tech companies have proven a keen disability when it comes to marketing and promotion. It is an amazing blind spot, likely born out of tech culture's macro focus on "the platform" and its abundant disregard for the bits that fill it (the content).

From iTunes, to Netflix, to YouTube, and to Yahoo!, AOL and MSN before them, not a single tech company has been able to build and launch a single media brand that connects in any real way with an audience. They have failed time and again to build awareness and excitement for original shows, live events, new content verticals and new apps with audiences remotely approaching mass. The proverbial timeline is littered with a never ending list of momentary memes, flashes in the pan and never cut-throughs: wacky one of a kind animated web shorts, Red vs. Blue, Lonely Girl, Prom Queen, In the Motherhood, The 9, Gold Rush, The Failure Club. And building excitement — at scale — is what unlocks the value of content.

In contrast to the Hollywood marketing machine, tech companies devalue content. Some would say they do this by making movies, TV shows, music and apps ubiquitously available for low cost, or, for OMG free! But really, tech companies devalue media by jamming it into impenetrable noisy troves, stacks and databases filled with other content of equal, better or worse quality making it completely undiscoverable. Look at iTunes, NetFlix, Amazon and YouTube – tell me, where's the good stuff at?

If I were Steven Spielberg, J.J. Abrams, or Matt and Trey Parker, I would not want you to take my creative baby and drop it willy-nilly into one of the behemoth digital grist mills left to fight against light saber wielding kitties and direct to DVD softcore. The Apple App Store with its hundreds of thousands of apps does not build value for individual apps, or create real revenue for but a select few top players. It builds value for Apple, by achieving scale, so Apple can make bunk loads of cash by taking pennies off of each transaction, and selling more hardware.

What is missing from all digital entertainment services are efficient, effective promotional platforms — and throwing algorithms, ratings and popularity and trending data at the problem, or gobs of display ad inventory are not solutions. Yes, these tactics help sift and sort the databases of content, or game audiences into clicking and trial, but they do not bolster new brands, help them find audiences and build hits. Can the homepage of the iTunes store build mass hysteria for the next Avatar? On a smaller seemingly more achievable scale, can the homepage of YouTube create demand for the next season of Mad Men? No. But if the next season of Mad Men was only available on YouTube, it would certainly make a large group of people go to YouTube to watch (that is if they could find it), because Mad Men already has value.

Netflix, Amazon, iTunes and YouTube need to develop marketing chops, and ways to communicate with audiences on a deep visceral level. They all have a huge and powerful opportunity to move audiences — an intimate, activated, one-to-one relationship with a person sitting just an arms length away from their computer screen; or on their couch with a brand-new jury rigged gadget, invested, motivated and ready to get their socks knocked-off. Instead, users are greeted with a miasma of cover art, lists of titles in all shapes and sizes and a search box — no communication, no connection.

How can digital entertainment services connect with audiences? Three easy steps, and a bonus feature:

1. People. Tech companies need to hire people to shine a light on the best stuff, and craft the stories that sell it to audiences (at least for now, until computers catch-up and develop wit, emotion, creativity the ability to write with heart). Some people call this curation. Others packaging and promotion.
2. Design. They need to create interfaces to capture audiences and connect to users. Living, breathing beautiful displays that make you watch, and want to click.
3. Tools. Tech companies should leverage what their platforms do best — target, track and account — to deliver those stories to interested audiences en masse.

Bonus feature: Marketing money. If companies like Apple plan to get into the first-run business, they need to deploy some of their treasure chest on good old marketing, online and off — TV commercials, movie trailers, billboards, print, PR campaigns, online display, SEM, social, events and so on. And not to market their platforms, to market programming.

Hollywood is right to resist licensing first-run content to the Valley. The platforms aren't there, and there's no discernable path to building value or profit. But once tech companies begin to crack the code of their own networks, develop their promotional muscles, and commit to spending real marketing money to build new media brands, then they will truly be on the path to fuel growth and effect positive change on an industry in search of a future. And they will have the latitude to make advances in how we consume our entertainment.

A single entrepreneur alone is vulnerable to shortsightedness, to fatigue. But with a team comes diverse perspective, encouragement, and the wherewithal to push through problems. That’s why a group of Stanford computer science and business students started the Andreessen Horowitz-backed FounderSoup program. It’s designed to give entrepreneurs with an idea or a fledgling company a chance to pitch — not to raise funding, but to recruit co-founders.

At its first full-scale event on Thursday night, I watched as 20 ideas were pitched, and 170 PhD, MBA, and undergraduate students mingled. What I saw was an effective model for fostering startups, and several brilliant ideas in healthtech and energy (reviewed below) that could turn into successful companies.

FounderSoup’s President Mike Dorsey tells me “As a CS student and an MBA, I would constantly get questions from entrepreneurs to connect them to people with coding skills. I’d also get all these coders with great products who needed business co-founders.” Dorsey and some friends started the program to help founders meet, thanks to financial backing from Andreessen Horowitz via partner Ronny Conway (son of Ron).

At the Founder Soup pilot event, 4 teams discovered co-founders and 2 went on to receive funding. Clearly there was potential. For Thursday, 50 founders submitted ideas and 20 were given the chance to pitch for 90 seconds each. Afterwards, each team was stationed around the Stanford d.school and approached by those interested in joining their team. To ease networking, FounderSoup made temporary business cards for all attendees with their contact info and specialties.

Some startup-spawning universities are beginning to set up their own VC funds, accelerators, and incubators, like Harvard’s new Experiment Fund and Stanford’s StartX. Before young companies can take funding or stipends, they need a great team, though. More universities and cities should look to copy the FounderSoup model. It’s simple, cheap, and in a school’s interest. After all, nothing brings in top applicants and alumni donations like producing the next Larry Page, Vinod Khosla, or Jerry Yang.

Here’s a quick look at the most exciting companies from FounderSoup, you can also watch their pitches here

Wello – An online marketplace where fitness professionals can deliver training sessions via live streaming video. Trainers pay to set up a profile, sell one-on-one or group training sessions, and Wello processes the transactions and takes a cut. There’s big potential because many who want to get fit don’t have time to go to a gym, but can easily slot in video sessions while at the home or office. Customers say the webcam-based workouts are effective.

Wello could grab a share of the $21 billion a year onsite fitness services market, in which millions of people already pay for gym memberships and expensive in-person physical trainers. Oxford, Stanford, and Johns Hopkins-educated Co-founder Leslie Silverglide previously co-founded and sold Mixt Greens, a quick-service restaurant group, to Nestle’s investment arm.

D.C. Revolutions - Helix-shaped, 3 foot tall plastic wind turbines that fit on light poles and can produce half the energy the lights need. D.C. Revolutions could sell the turbines to cities or property owners. Eye-catching when they spin, the turbines could change the face of the urban landscape and as founder Durrell Coleman says, “make sustainability sexy”.

CS LabTech’s MuSE - A healthtech company that has developed MuSE, a cell-stretching petri dish medical research device for labs. Currently when labs test cells they’re taken out of the body and are therefore in a static state, different from their dynamic state inside a live body where they stretch while in use. CS LabTech’s vacuum-powered Multi-dimensional Strain Experiment petri dish allows biologists to mimic the dynamic state of heart, lung, muscle, and other cells within the lab. Founded by dynamic cell structure PhD Chelsey Simmons, CS LabTech’s device will be ready for commercial sale next month, and could power advancements in the lucrative fields of drug screening and pharmaceutical development.

Crowd Jewel- A crowdsourced jewelry design and sales company. Designers submit their work through a Facebook app where potential customers then vote and pre-order, and the winners’ designs are commissioned and delivered with CrowdJewel taking 30% cut. Since designers want the exposure and sales that come with winning a contest, they source sales leads for CrowdJewel by encouraging their friends to vote. With a big market and lots of struggling designers, CrowdJewel could attain some of the success of similar businesses like Threadless and BeachMint.

Veebot- A vein puncture medical robot that automatically finds a patient’s vein, inserts the needle, and performs a procedure. Co-founder Richard Harris tells me there are 1.4 billion venipuncture procedures per year in the US alone, and 33% fail to find a vein on their first attempt. This forces doctors to make multiple manual needle pricks that can up the risk of infection and complication, as well is increase costs and delay medical treatment.

Veebot solves the problem using infrared to initially locate a vein, then ultrasound to pinpoint it. Veebot can then draw blood, insert an IV, or administer medicine. Venipuncture is a $30 billion per year global market, and this is a massively disruptive device every hospital in the world could use. While some might be scared of a needle-wielding robot, I’d be happy to submit if it saved me from multiple pricks.

Barnes & Noble may be challenging Amazon’s dominance of the e-book world, but Kindle sales are still growing faster than the Nook’s — at least if you connect the dots between some of the numbers included in a recently-published article by The New York Times.

The article doesn’t hide the fact that Amazon has the vast majority of marketshare, with Barnes & Noble saying it has 27 percent of the market, compared to Amazon’s share of “at least 60 percent.” At the same time, the article writes that “to the delight of publishers” (who see Amazon as a competitor), Barnes & Noble has “grabbed a lot of market share from Amazon.” In response, Amazon told The Times that Kindle sales (a number that includes both the Kindle Fire tablet and Kindle e-readers) grew 177 percent during the nine-week holiday period, compared to the same period in 2010.

How does that stack up against the Nook? The article doesn’t say, but earlier this month, Barnes & Noble actually reported its own holiday growth numbers. During the same period of time, the company’s device sales grew 70 percent — not bad, perhaps, but a sign that Amazon still has greater momentum.

The Times also reports that Barnes & Noble engineers are “putting the finishing touches” on the next version of the company’s e-reader, due for release sometime in the spring.

Sometimes you have to see things to truly appreciate their magnitude. Apple’s latest quarter was so massive that MG had to write two posts about it: $46 billion in revenues, 37 million iPhones sold, 15 million iPads. The chart above, which comes from Asymco (see a fully interactive version here), shows how unusual this quarter was for Apple.

The quarter was driven by iPhone and iPad sales. And you can see that by looking at the blue and red lines, which show unit sales of each. iPhone sales went from 17 million the quarter before to 37 million. They more than doubled in a single quarter.

But look closely at the iPad line. What I just noticed for the first time is that Apple sold almost as many iPads last quarter as it sold iPhones in the previous quarter. And now it is selling as many iPads as iPods. That red line is going to keep on going up. Will it ever catch up to iPhone sales?

 

 

 

 

 

 

Editor’s note: Hank Nothhaft is the co-founder and chief product officer of Trapit, a personalized content discovery platform currently in beta. Trapit was incubated at SRI and the CALO project.

eBay's recent acquisition of the recommendation service Hunch was an important score for the online retailer, giving it a way to mine the ever-mounting mounds of structured and unstructured data for more relevant and accurate consumer recommendations.

Such recommendation engines are already (and have long been) a necessity, not only for retailers, but for the entire Web. Every major internet company, from media outlets to social networks to software applications, is having to meet an expectation of better understanding their customers as individuals, to provide them with information and suggestions that they themselves may not even have realized they want or need.

Integrating better recommendation algorithms and services was really just the first part of a larger, necessary movement to make the Web more personalized. As we watch the ongoing struggles of search engines to provide relevant yet deep-diving results, or Facebook's fruitless attempts to better identify which content shared by your friends is most important for you to see, it's clear that we need something smarter, something more sophisticated than mere recommendations and customization. Personalizing the Web is one of the most important and difficult engineering tasks we now face in the evolution of the Internet.

Recommendations Have Hit the Ceiling

Amazon and Netflix once stood as exemplars of recommendation, providing suggestions based on what other users with similar habits and product histories selected, with a touch of genetic genre data thrown in. Yet both have faltered in recommendation relevance as the crowd-sourced approach has become more of an echo chamber than a personalized filter. (And Amazon certainly does itself no favors with its barrage of "recommendations" for its own Kindle Fire).

These recommendation engines were once ground-breaking, but they have failed to evolve. And more importantly, our expectations as Web consumers have evolved beyond the simple concepts of "users who purchased item X also purchased item Y." At best, services that claim personalization based upon these aggregate metrics attempt to triangulate an identity for us as individuals based upon the galaxy of other individuals. They try to pin us down into an archetype, into a box of likes and interests, without recognizing that as humans, what we desire, want and need is in constant flux and ever-evolving.

In all fairness, that's an incredibly difficult awareness to achieve. But its disingenuous to attribute "personalization" to services that are really just crowd sourced general interest mapping. And those results are just insultingly banal!

Getting Closer, All the Time

The acquisition of Hunch will hopefully signal a shift from recommendations to actual personalization. This is not because Hunch is such a precise personalization tool, but rather because it is an excellent recommendation engine. As more relevant recommendations become ubiquitous as the standard across the Web, we can finally begin to aim to shoot beyond that baseline to realizing a personalized Web.

Over the next few years, technology that truly understands and recognizes us as dynamic and unique individuals rather than types will be the predominate trend. Siri's adaptability and cognizance is the first major step in this direction, and we will begin to see that type of finely-tuned, perpetually trained artificial intelligence helping turn the Web and our technology more and more towards us as individuals.

It's a movement from the Web mentality of searching, to one of delivery. It's a shift from pull to push technology–and it's happening because there is enormous upside for the first movers in the era of personalization.

The shift to a more personalized Web is all about revenue and customer/user experience.

Consider the shift that is still occurring with our televisions. Whereas we have long considered our television sets to be mere boxes for broadcasting pre determined content to us as passive consumers, we are increasingly taking control of that content. This extends beyond mere DVR capabilities, as Web-enabled televisions begin to offer a new layer of personalization.

Our televisions will eventually become truly our own, unique televisions. Better yet, we will have accounts that we can log into that will personalize any television set with programming specifically selected by and for us.

Groupon, no doubt, is itching to find ways to personalize each and every offer they have for each individual it is sent to. Groupon knows that targeting by regions increases conversion and sales, but imagine how much they could amplify that effect if they were targeting based on a rich and sophisticated understanding of the individual person that receives each offer?

We can imagine this type of personalization applied to all of our current technologies, but it first requires a fundamental, philosophical shift in how we think about and understand the notion of personalization. A big part of that means that recommendation technology needs to be properly understood as the tip of the iceberg — it's table stakes and nothing more. The real game is played with true personalization and a sophisticated understanding of individuals and all of their unique, ever-shifting personas.

The Endless March of Personalization Progress

At this stage, personalization is best achieved as a mashup of our interest graph, social graph, individual input, and Pandora-eque qualifications of structured data. When maximized, this can work quite well, but we can't stop there.

As the Web becomes our own personal web, the technology needs to register and understand our flux in personality. This means incorporating both more direct and more ambient information, such as awareness of time, location, my schedule, my habits and engagement with content. Furthermore, it means realizing that human identity is a constantly shifting target. The work of personalization is never done, even if it is done with less direct input and feedback from me personally.

Content creators, marketers, sales professionals and publishers crave that myth of stability in defining their users and audience. Yet as the Web has shifted to become dominated by the stream metaphor, that myth has been easily eroded.

This is not a bad thing, even if it makes understanding that customer baseline upon which we build businesses that much more difficult to determine. It was always a myth to begin with — we simply did not have the data or the tools to operate otherwise and recognize users as individuals, as the amalgam of ever-shifting interests and personalities that they truly are.

What replaces that baseline of stability, however, is the flux of new opportunities, of understanding our customers and audience in increasingly focused and nuanced terms. Likewise, we as Web consumers are starting to expect this understanding from the websites and businesses with which we choose to interact.

For companies, recommendation is the gateway into recognizing the value of a much more attuned personalization. And as recommendation layers become ubiquitous, we can now finally begin moving beyond it, to achieve personalization as the next great triumph of the Web.

The Gillmor Gang — Doc Searls, Danny Sullivan, John Taschek, Kevin Marks, and Steve Gillmor — debut the latest Google catchphrase to replace Do No Evil: We Really Don’t Care!

@stevegillmor, @dsearls, @dannysullivan, @jtaschek, @kevinmarks

Produced and directed by Tina Chase Gillmor @tinagillmor

This is a guest post by Ryan Spoon (@ryanspoon), a principal at Polaris Ventures. Read more about Ryan on his blog at ryanspoon.com.

Having already covered how startups can use search and Twitter to find customers, here’s 10 steps for finding people on another key marketing platform: Facebook

Facebook has evolved from a social network into the fabric with which much of the web is constructed: identity, product, data, experience and so on. Even if you chose to no longer use it as a social destination, you would still find immense value in it through your every-day web usage: registration, personalization, sharing, interaction, etc.

This is of course a huge opportunity for consumer-focused startups. Facebook plays a core role in touching each step along the standard product / user funnel:

- Acquisition: virality, referrals, paid traffic
- Activation: conversion paths from new to active users
- Activity: user engagement and retention

Below is a slide presentation with five ways to think about leveraging Facebook to affect those three steps on your web experience. Tomorrow I will share five ways to find success on Facebook.com.

Short Version

The Droid Razr Maxx by Motorola is a very special phone. You see, I had a bit of a thing for the Droid Razr when it first came out, but it wasn’t quite perfect. It felt a bit light, and I had trouble holding it in my hand since it was so big and so thin at the same time. Plus, battery life was a bust. It wasn’t awful, but it only lasted about nine hours, meaning most people would need to bring a charger along every day.

The Droid Razr Maxx throws all those problems into the trash can, and only gains about 18g and 1.89mm in return.

Features:

• 4.3-inch Super AMOLED Advanced qHD 960×450 display
• Dual-core 1.2GHz processor
• 8-megapixel rear camera with autofocus, flash, and 1080p video capture
• 1.3-megapixel front-facing shooter
• Android 2.3.5 Gingerbread
• Verizon 4G LTE
• MSRP: $299.99 on-contract

Pros:

• Big battery life improvements (more on that later)
• Bump in storage from 16GB to 32GB
• Feels a bit more like a premium product with the added heft

Cons:

• If you liked the size of the RAZR, the thickness might bother you
• Poorly placed microUSB charging port
• No removable back cover (which has its rough consequences, I recently learned)

Long Version:

If I had to choose between the Droid Razr and the Droid Razr Maxx, I’d go Maxx all the way. Battery life may not be the star spec when you’re reading your reviews, but we all sooner or later realize that it’s probably the most important spec of all. 4G LTE is amazing. If you haven’t tried it, you should (seriously) run down to a Verizon and do a Google search or load an app on to one of the store units. You won’t just notice the difference; you’ll pine for it. But don’t get ahead of yourself. Before the Razr Maxx, every phone with 4G LTE support couldn’t keep up after a few hours of use.

The Razr Maxx crushes that pretty huge problem and finally makes 4G LTE a viable option for the power user.

Battery Life:

I usually save this section for closer to the end, but I figured you guys are just going to scroll to this section anyway, so I might as well get it out of the way.

Yes, the Razr Maxx’s battery life is far better than that of the Razr. I actually still have my Razr from when I reviewed it, and was able to test both phones alongside each other. But before I get into the results, let me tell you about how we tested it. We have a battery test program here that continuously searches Google for images. Once one page loads, another pops up. I can close out of the browser at any time to load apps (which I did), make calls (did that, too), browse the web (yep, that too), and watch some videos.

But the most important thing to remember when I give you these numbers is that both phones, the Maxx and the original Razr, were in constant use from the beginning of the test until they died. No locked screen. No minute to catch their breath.

The Razr lasted for four and a half hours with constant (and varied) use. The Maxx, on the other hand, stuck with me for eight hours and fifteen minutes. For those of you following along at home, that’s almost double the battery life. If I use the phone like a normal human being (read: not Google Image searching random names constantly), it lasted a full day and on into the next day before it needed a charge around 11 am. This is with Wifi and 4G LTE in use.

Hardware:

The phone itself is beautiful. Many of you may be bothered by the fact that its 8.99mm thick compared to the Razr’s 7.1mm waist line, but I actually found the extra bulk to both feel more premium and look… well, better. Because the Razr is so very thin, the classic “Moto hump” on the back is much, much more pronounced than it is on any other Droid. On the Razr Maxx, the hump is actually quite subtle.

The phone is a tad heavier than its predecessor, which I think lends itself to that premium feel, as well. Though, size may still be an issue for me. As I said with the Razr, my hands are pretty big for a girl and I still have trouble performing one-handed actions on the Razr Maxx.

One thing I failed to mention in my Razr review that I’ve since realized annoys me quite a bit is the placement of the microUSB port. Both the microUSB port and HDMI out are placed square on the top of the phone. I’ve said it before and I’ll say it again: this makes it impossible to play a game or work in landscape while the phone is plugged in. Motorola (and others), please start putting your charging ports on the top side, if possible.

As far as the display goes, of course it’s beautiful. There’s very little differentiation between pixels and the size really lends itself to TV/movie viewing. Screens vary from phone to phone (even if they’re technically the “same screen”), and I did notice that the Razr Maxx has a more of a yellowy tint to it, whereas the Razr has more of a bluish tint. These are just my units, though, and if they weren’t side by side I might not have noticed at all.

I’m still a huge fan of the design, and think those boxy corners and that Kevlar fiber casing are a great direction for Moto to be headed in.

Performance::

Alright guys, after two whole sections of (mostly) praise I need to get out a big gripe. While I was testing the Razr Maxx, it froze twice. This isn’t that big of a deal. I’ve spent a good deal of time with the phone and really pushed it to the maxx (heh), and pretty much all phones freeze at some point or another. The problem, however, is that every time the Maxx froze, it stopped responding to touch.

You don’t necessarily need a removable back cover to help with battery life on this thing, but without it there’s no way to manually shut down the device. Each time I held the lock button to turn it off, I couldn’t tap the icon to shut it down. Plugging it in to a PC didn’t jolt it out of its freeze either. This left me waiting for the phone to either cool down and snap out of it, or run out of battery (which can be a helluva long wait with the Razr Maxx, especially when it’s basically sleeping). The Maxx overheats to an extent, just like the Razr, and I assume this was the culprit in my freeze issue.

Basic performance, on the other hand, was just fine. Switching between apps, surfing the web, and watching mobile video was all pleasant. I didn’t experience any serious hiccups (other than those freezes), but the usual Android lag still remains. Luckily, Moto chose to leave Blur out of the equation and laid a rather light, useful overlay onto both the Razr and the Maxx. I say keep ‘em coming like that, Moto.

As far as software goes, everything is the same on the Maxx as it is on the Razr, so I’m going to refer you to the Razr review.

Camera:

I kind of brushed over the camera performance in my Razr review, so I figured I’d show you guys what I’m talking about this time around. Still image quality is very good, especially in bright environments (see below). Even zoomed in, the camera still takes quality shots though it still won’t replace a nice point-and-shoot if you take pictures more than the average bear (that Yogi reference is weak, but I’ll still leave it.)

Low-light pictures aren’t as great, but it still gets the job done as far as stills are concerned (see below). Video capture in low-light environments doesn’t really cut it though. I tried to take a little video at my friend’s birthday party last night in a bar and had no luck. Just a lot of squiggly, blurry darkness.

If you know how to use the camera and focus before you hit the shutter button, the lag between tapping shutter and taking the picture isn’t that bad at all. If you try to focus and hit the shutter to early, you’ll be waiting a while.

Motorola packed all kinds of fun goodies into the camera application, which can be accessed by a rather slick drop down bar that sits right on top of the view finder. It offers up basic settings (like where to save the pic, geo-tagging, etc.), effects (like B&W, negative, and sepia), scenes (some of which help a bit with low-light shooting), modes (including panorama), exposure and flash.

All of this is majorly helpful, but I did have one small complaint with panorama. Unless you’re really steady, the shot can look a bit awkward. If you tilt a bit, for example, while moving from frame to frame, the shot can have bendy lines that should be straight and other strange qualities (in the image below, the train tracks dip a bit toward the right even though they are completely straight and level in real life).

Light:

Dark:

Panorama:

Conclusion:

At the end of the day, I’d say this is probably my favorite new 4G LTE phone, mostly because it actually makes LTE a viable option. Past that, it’s quite beautiful, reliable, and well-built. You won’t scratch the screen by dropping it a few feet (thanks to that Corning Gorilla glass) and the Kevlar fiber casing is not only durable but it adds a nice touch in the design department.

I’m a bit concerned about the overheating issue, but I’m also aware that I was using the phone in a way that most users won’t since I was testing. Still, if you’re a power user, I’d think twice about this and maybe see how others are faring as far as freezing is concerned.

Last, but certainly not least, I want to apologize on behalf of Motorola for screwing over Droid Razr owners. If you’re happy with your Razr and love how thin it is, than just ignore me. But for most of you, I assume that battery life is really bugging you on the original. It’s only been a couple of months since the Razr debuted, and that’s probably the biggest problem I have with this phone. I applaud Motorola for seeing an issue and nipping it in the bud, but you have to be careful that you don’t screw over your original customers in the process.

Editor’s note: Scott Weiss is a general partner at Andreessen Horowitz and the former co-founder and CEO of IronPort Systems, which was acquired by Cisco in 2007.

When I was a kid, I read tons of superhero comic books. I fantasized about superpowers, but the storylines about heroes with massive Achilles' heels really held my attention the most. They saved the world but had screwed up personal lives, made lots of mistakes, and often acted like complete assholes. In retrospect, I related to their flaws. And, probably not coincidentally, my favorite characters exhibited core weaknesses I had experienced: Spider-Man (immaturity), Iron Man (overconfidence/hubris), and Wolverine (rage). Ironically, when the character's weakness comingled with the superpower, it would often spur them to succeed against impossible odds.

It was in this context that I was riveted reading Steve Jobs' biography by Walter Isaacson. Given the number of different interviews and unfettered access granted to Isaacson, it felt like an incredibly authentic account of Jobs' life. His greatest accomplishments, mistakes, superpowers, and flaws were laid out about as raw as I've ever read. Steve's superpowers were many: He was wickedly brilliant, could see around corners, and had unparalleled understanding of how people interact with technology, to name just a few.

Did Steve have an Achilles' heel? From the book, one could conclude that he was an extremely demanding boss. Like a beacon, superstars from every function (e.g. engineering, design, marketing, etc.) were drawn to work for Steve. They described his aura as absolutely overwhelming. And Steve pushed these A+ players to extraordinary, impossible achievements. Steve's drive for speed and perfection often resulted in harsh, public criticism — usually directed at his very best people. Steve would constantly look over their work and declare, "This is shit!" or "This really sucks!" On my Kindle, I searched the words "shit" and "sucks" and counted 24 instances where he used one of those phrases referring to someone's work/product.

I've had a number of entrepreneurs suggest that this persona isn't unique to Steve Jobs but a common trait among some of the most successful founder/CEOs in the world. Larry Ellison, Bill Gates, Larry Page, and Jeff Bezos have all been reported as similarly caustic at times. Is this something to be emulated?

As I was reading the book, something struck me like a hammer: Despite Steve Jobs' choice of words, lack of empathy, and sometimes prickly demeanor, he spent a huge amount of time giving his most talented employees constant, hard, critical feedback.

Thinking about how most companies dole out feedback — if they do at all — it's usually directed at the bottom quartile of performers versus the top. A typical manager at review time spends 80% of their time preparing detailed reviews on the bottom 25%. The top quartile gets lame, short reviews — the equivalent of "You're doing great, keep up the good work!" So, a manager takes all that time and effort to get someone doing the work of half of a full-time employee (FTE) to do the work of .75 or 1 FTE. In contrast, Steve Jobs — with his feedback energy directed at the top — manages to motivate people already doing the work of 2 or 3 FTEs to do the work of 10, maybe 20 FTEs. Now that's serious leverage! Could this be a superpower comingling with a weakness?

I've found that the A players are comparably lazy with regards to their potential. Without serious motivation, they will never reach it—or even try. Despite his delivery, I believe Steve's critical energy was directionally correct.

Here are a few other suggestions for motivating top talent:

• Flip the feedback equation to 80% of your energy spent on the top quartile. This is really hard in practice as the feedback is usually more nuanced. And the top performers are usually defensive.
• Infuse some damn passion. The best people don't just want money, they want to go on a crusade and make a difference. An entrepreneur needs to constantly re-enroll the troops with a compelling, authentic story of how and why we will do the impossible.
• Set stretch goals and push like hell to meet them. It's great if these goals have meaning as well — e.g. we need the software release out before a
  major industry conference.
• Find a bogeyman competitor to hate. (Preferably a company bigger than yours — Microsoft!) At IronPort, we called out our competitors to the entire company and rallied the team to play catch-up. We also gave bonuses to the sales teams for rip-outs of a competitor's appliance and then mounted them like trophies on the wall.
• Work your ass off by example. A leader who is always present, ridiculously responsive and contributes real, hard work sets the right pace and tone.

A constant challenge for leaders is to find effective AND positive ways to motivate. The very best companies have inspirational founders who have found a way to coax the superpowers out of their top employees. When the top quartile contributes at 5x to 10x, it makes a serious difference.

At the top of this Founder Stories episode featuring SoftTech VC’s Jeff Clavier, Chris Dixon mentions much has been written about the “Series A Crunch.” It’s the occurrence of seed stage companies hitting the end of their initial funding cycle at roughly the same time and having to compete for big checks from a limited supply of VC. There’s just not enough money or VC interest to keep all entrepreneurs afloat for another round.

In an effort to prevent future founders from colliding into the Series A Crunch, Dixon advises startups set out to initially raise 18 months of funding, adding, “18 months effectively gives you let’s say 12 months of real operating, which gives you three iterations instead of one.” The more time to perfect the product the better.

Clavier agrees that the Crunch “is absolutely happening” and backs Dixon’s longer runway strategy.

Clavier also says consumer internet companies need to demonstrate more than ”just pure user traction” to whet a VC’s appetite. He tells Dixon SoftTech VC is moving towards backing “businesses” and trots out Fab as an example. “We’ve made money from Fab the day we launched the service, Why? Because it is transaction based.”

Make sure to watch the full interview for additional insights and make sure to watch episode I and episode II of this interview.

All Founder Stories videos including interviews with David Karp, Lauren Leto, Stephen Kaufer, Christopher Poole, Dennis Crowley and many other founders are here.

To paraphrase Otto von Bismarck, “iPads are like sausages, it is better not to see them being made.” It’s an ugly story. Over a hundred employees “injured by n-hexane, a toxic chemical that can cause nerve damage and paralysis” because its use “meant workers could clean more screens each minute.” Other workers killed or injured by explosions. All so that iPads can be built as cheaply as possible, so that Apple can maintain its 44.7% gross margins. Isn’t that awful?

Yes, of course — but let’s try to maintain a nuanced perspective here. This is hardly a new story, and it’s hardly unique to the tech industry. Think of the exploitation of child labor to harvest Egyptian cotton and Cote d’Ivoire cocoa. Plus ça change; a decade ago it was Indonesian sweatshops and Indian fireworks exciting outrage. Think of the exploitation of Congolese workers to mine coltan, used in electronics everywhere. Show me a country with a large population of desperately poor people, and I’ll show you horrific exploitation of impoverished workers.

Please note, though, that the latter is an inevitable symptom of the former; and again, let’s please try to maintain a sense of perspective. It’s awful that a dozen Chinese workers were killed and hundreds injured building iPads–but at the same time, coal mining kills more than two thousand Chinese workers a year (down from almost 7000 ten years ago) and nobody’s suddenly outraged about them. We in the West don’t really seem to care that Chinese employees work under awful conditions and die in appalling numbers — unless they make shiny things that we use. We claim we don’t want people to suffer, but in fact we just don’t want our iProducts tainted by that suffering. Isn’t that more than a little hypocritical?

So what? you might say. It’s all horrible! Stop them all, or any of it that we can stop, right now! Right?

No. Not necessarily. This is a really complex and difficult issue, and there’s no obvious right answer. Over the last thirty years, trade and export-driven growth have been insanely great for China, and made life enormously better for the overwhelming majority of its billion-plus people. (My personal experience bears out all the data, for what it’s worth: in 1997 I spent a month roaming solo through central China, then came back nine years later. China 1997 and China 2006 were like two entirely different nations, and the latter was vastly better off.)

If Apple and other Western manufacturers were to pull production from China to other, better-paid, union-friendlier jurisdictions with stronger protections for worker rights, that would be disastrous for Apple’s profit margins and innovation speed — but it would also be disastrous for China’s people. On the whole, overall, despite the gruesome and heartrending disasters in the spotlight right now, both sides benefit greatly. That’s how and why free trade works.

At the same time, we can all agree that no businesses anywhere should be poisoning their workers and/or generally treating human lives like disposable Kleenex. This is especially true in a nation whose government only accepts trade unions which are powerless government puppets. But I would argue that it’s China’s steadily growing wealth — which comes from trade, and especially, manufacturing — that will ultimately transform it into a nation where real unions and real worker rights can and do exist.

It’s worth noting that Foxconn’s problems are China’s national problems writ small. Hexane pollution and aluminum dust are scale-model versions of the nationwide poisoned milk scandal, or the ongoing catastrophe of Beijing’s hyper-polluted air, or the major lakes entirely conquered by toxic cyanobacteria. Again, employee exploitation is a symptom, not a problem. The problem is ubiquitous grinding poverty – something that trade, investment, and economic growth slowly, over decades, alleviates, albeit at a terrifying cost to the environment.

Think of the West’s Industrial Revolution. That’s more or less the same revolution transforming China right now. Is it possible to have such a revolution without some concomitant Dickensian horrors? The available evidence sadly indicates “probably not.”

In the interim, what Apple (and the countless less-sexy enterprises whose products are manufactured in China under similar conditions) can do to improve the lot of those who craft its wares is this: increase their leverage over their suppliers, by making the threat of moving production elsewhere credible. Foxconn wants to keep Apple happy, obviously – but they’d be a lot more proactive about doing so if they genuinely thought they might lose massive amounts of Apple’s business to someone else.

A concrete example: Apple shouldn’t get Foxconn to manufacture iPads in Brazil: they should have another company entirely build iPads in Brazil. Right now Apple needs Foxconn almost as much as Foxconn needs Apple. Real competition among suppliers would mean that each of them will jump a lot higher and faster when Apple says “worker rights.”

But let’s not get myopic about Apple and iPads, when the landscape of globalization and its excesses is so much vaster and more diverse. Let’s not pretend that the dynamic is purely “rich Western tech companies exploiting poor nations.” And let’s remember that technology, and China’s growing wealth, will probably ultimately solve this problem. Remember that decade-old outrage about child labor in India’s fireworks industry? Well, it’s much diminished these days, thanks to automation and India’s much wealthier society. Similarly, China’s burgeoning online population has pressured its government to pay attention to air pollution… and Foxconn is already roboticizing its assembly lines.

Most of all, let’s not lose sight of the fact that the technology pioneered in large part by the very same cohort of Western companies who outsource production to China is, slowly but steadily, lifting China, India and sub-Saharan Africa out of poverty. That, not where your iPad came from, is the most important story in the world today.

Image: Smog over Tiananmen Square in 2006, by yours truly. By all accounts it’s gotten much worse since.