Lego

It's a phenomenal success story for the Danish firm, which almost went under less than 10 years ago amid dropping sales and dire predictions that digital-savvy kids would no longer want to play with plastic building bricks – even when they come in 51 colours.

But Lego is seeing a massive resurgence in popularity. There are now 86 Lego bricks for every person on earth, with around seven sets sold every second, while the 400 million tyres that are produced each year for them makes it the world's biggest tyre manufacturer. The Chinese are catching the bug in such numbers that a Lego factory is to be built there this year. Adults are returning to their childhood favourite in droves. They even have a name, "Afols" (adult fans of Lego).
 

More on Lego here. I saw The Lego Movie last weekend on the recommendation of many people who'd seen it, and it was more fun than I'd expect from ostensibly a kids movie. It both pokes fun at product placement (at times the real life part numbers of individual pieces flash on screen as they're being assembled into something) and yet revels in being a movie-length commercial for Lego toys. It may be the longest and most effective native advertising I've ever seen. The kids in the audience at the showing I attended were practically foaming at the mouth they were so ready to leave the theater right at that moment and snap up any and all of the Lego sets shown on screen. That contradiction at the heart of the movie is so brazen I was both uncomfortable and duly impressed.

Though I'm no expert on the subject, I believe that Lego is the most successful toy of all time. I know many children who have yet to see the Star Wars movies who are rabid fans of the mythology purely through their interaction with Star Wars Lego sets. Lego has become not just a toy but a conduit of mythologies, and that's just one reason it's survived to entertain several generations of kids.

Despite its patents having expired years ago, Lego still dominates in market share and commands a healthy price premium. If you ever wanted to understand the economics of intellectual capital, like the value of licensing franchises like Star Wars or Batman, look no further than the gross margin on your average Lego set:

Thirteen sets themed around the movie are in shops now. Lego is not cheap and prides itself on a reputation for quality, although Robertson points to the fact that the cost of the plastic used is under $1 a kilo, while, once it reaches a Lego set, it is worth around $75 a kilo.
 

75X value creation! That's before you start counting the boatloads of cash from the movie (and all the inevitable sequels to come).

The digitization of signaling

Another factor chipping away at teenage retailers may be the shifting priorities among young people. Where clothing was once the key to signaling a teenager’s identity, other items may have become more important and now compete for their dollars.

“Probably the most important thing a teenage boy has is his smartphone,” said Richard Jaffe, an analyst at Stifel Nicolaus. “Second, is probably his sneakers. Third, maybe, we get to his jeans.”
 

From the NYTimes on the struggles of clothing retailers focused on the teen market, like Abercrombie and Fitch.

It makes sense that if we spend more of our time immersed in the world of information that we'd shift some of our signaling efforts from the physical world to the digital one. From purely a leverage perspective, shooting, editing, and posting one photo of yourself to Instagram or Facebook or carefully crafting one tweet or Facebook status update might reach more of an audience than, say, the outfit you choose to wear that day.

It both amazes me and doesn't surprise me at all how many people choose a custom cover photo for their Facebook timeline. Think about how many otherwise modest people you know who retweet tweets that are complimentary of themselves. In the shift to digital signaling new norms have formed. 

Einstein's Camera

This is an old one, but it's still wonderful.

He remained fascinated, however, by the notion of capturing different parts of a person or of people at different times, constructing a still image out of “little pieces,” he says. This matched his growing interest in what he calls “the ever-changing nature of the present,” the constant flow of life that defied easy visual representation.

In 2006, during a months-long stay in Shanghai, he had an epiphany. “I had this feeling that I would, like, scan the flow of people. I began looking for the right kind of spaces where I could find a monotonous flow.” Magyar first studied escalators in Shanghai shopping malls. Then his gaze shifted to city streets—particularly major intersections or bus stops with a continuous procession of humanity. Once he had the concept in his head, he set about to develop the technology to realize it. “It was continuous research,” he says. “It took me a few weeks to figure it out.”

The answer, Magyar realized, was a modified version of the “slit scan” camera, the type used to determine photo finishes at racetracks and at Olympic sporting events by capturing a time sequence in one image. Such cameras were rare and cost many thousands of dollars, so Magyar set out to build one himself. He joined a medium-format camera lens to another sensor and wrote his own software for the new device. Total cost: $50. He inverted the traditional scanning method, where the sensor moves across a stationary object. This time, the sensor would remain still while the scanned objects were in motion, being photographed one consecutive pixel-wide strip at a time. (This is the basic principle of the photo-finish camera.) Magyar mounted the device on a tripod in a busy Shanghai neighborhood and scanned pedestrians as they passed in front of the sensor. He then digitally combined over 100,000 sequential strips into high-resolution photographs.
 

To more easily comprehend what Adam Magyar's modified camera enabled, watch one of the gorgeous videos he shot.

High speed video recording in NYC at Grand Central station. full video: 10min. 49sec. 720p 50fps www.magyaradam.com Note: There is no Creative Commons License applied to this work. Thus it is not legal to copy.

Some more of his videos here and also at his website. Stunning.

Localized crowdfunding

A new proposed method of distributing grants and funding to researchers in the science community:

The new approach is possible due to recent advances in mathematics and  computer technologies. The system involves giving all scientists an annual, unconditional fixed amount of funding to conduct their research. All funded scientists are, however, obliged to donate a fixed percentage of all of the funding that they previously received to other researchers. As a result, the funding circulates through the community, converging on researchers that are expected to make the best use of it. “Our alternative funding system is inspired by the mathematical models used to search the internet for relevant information,” said Bollen. “The decentralized funding model uses the wisdom of the entire scientific community to determine a fair distribution of funding.”

The authors believe that this system can lead to sophisticated behavior at a global level. It would certainly liberate researchers from the time-consuming process of submitting and reviewing project proposals, but could also reduce the uncertainty associated with funding cycles, give researchers much greater flexibility, and allow the community to fund risky but high-reward projects that existing funding systems may overlook.
 

Interesting. I love Kickstarter and Indiegogo and have backed a lot of projects, but they are very general in nature. I wonder if we'll see more vertical plays sprout up in the crowdfunding space, much like we have in the sharing economy sector (Airbnb, Uber, Dogvacay, etc.). This would be one alternative method of lowering the transaction cost of fund allocation within such verticals.