Yesterday, the news broke that some secure Internet transactions are actually easy to crack. This type of revelation can have a devastating effect on our confidence in Internet commerce, although I doubt this one will much impact.

The authors of the revealing study found a flaw in the random number generation that is used to encrypt much Internet data. This is not the first time that we’ve discovered that the numbers our computers generate aren’t really random. Why?

A very good random number generator is a physical one, for example, rolling a die. Unfortunately, rolling a die takes a long time, and that makes it a bit impractical for the billions of random numbers we need every day for everything from online gaming to Internet commerce.

Instead, we use so-called pseudo-random number generators. These are computer programs that generate random numbers based on complex mathematical formulas that can be “seeded” by physical events (the weather patterns, the number of letters in the New York Times each day, etc.). The problem is that we sometimes find flaws in these mathematical formulas or seeding that make these  random numbers deterministic.

So, how do we find something that is truly random? The truth is, nobody knows the answer. Debates on randomness can devolve (or evolve, depending on how you look at it) into discussions about determinism, quantum theory, and the way the universe works.

Whether or not you believe we’ll ever find true randomness, Our day-to-day needs only require something complex enough so that our current computing power can’t find the flaws. At least for long enough to let me buy my shoes on Zappos safely!

PS: For a cool discussion on randomness, check out random.org.

As a small business owner, I despise the credit card industry. As I’ve written in the past, the charges are ridiculously high for the value of the service (around 2-3% per transaction).

Start-ups have been trying for years to disrupt the credit card industry. Paypal created its own money network that can be tied into your credit card accounts. More recently, Square introduced a merchant service with a flat fee of 2.75%. Other services such as Google Wallet simply store all consumer accounts in one place. None of these really attack the core of the credit card industry because on many transactions, they still pay the credit card company’s interchange fees, which they must pass on to the merchant (me).

Dwolla,  is taking it’s swipe (yuk, yuk) at the heart of the credit card industry. Actually, it’s going after the debit card industry, but I’ll get to that in a minute. To use Dwolla, a consumer must create an account attached to her bank account. The consumer can then make instant payments to merchants that accept Dwolla. The consumer can either manually transfer funds to her Dwolla account (free), or can have it done automatically after each purchase ($3/month) or “borrow” the amount from Dwolla – to be repaid at the end of the billing cycle.

So, who wants Dwolla? For merchants, it’s a slam dunk. Let’s see, should I pay 3% or $0.25 for a transaction?  But for consumers, the picture quickly becomes murky.

• Anyone that wants to borrow and repay over time can’t use Dwolla. It’s the equivalent of a debit card, not a credit card. This fact shrinks Dwolla’s user base considerably.

• Why should consumers pay $3/month for something (a debit card) they can get for free? On the contrary, many banks offer reward for using your debit card.

•  The “we’re safer” argument in Dwolla’s consumer marketing material is misplaced. Consumers are not liable for fraudulent charges on credit cards anyway. Only the Merchant “pays” for these through increased interchange fees. This leads to the next point…

• Are consumers liable for fraudulent charges on Dwolla? What protection do they get? I couldn’t find any answer to this on Dwolla’s site, but these are important points for consumers.

So, can Dwolla really disrupt the industry? As a merchant, I sure hope so. But I know that they have to convince consumers first, and that’s a much harder group to figure out. Dwolla just raised another $5M from Union Square Ventures and others. While that’s encouraging, it seems to me like a very small amount for a company targeting the credit card industry. Maybe not everyone is buying into its model. Stay tuned.

Like many busy people, I keep a running to-do list (I’ve been using Evernote). I have one list for my personal task, and one for my work tasks. The lists never really shrink. It seems that for every “buy new pillows”, there is at least one “give $50 to super for fixing toilet”.

However, I can’t seem to live without it. To me, it serves as a part of the brain that us humans (at least me) have been born without. An area in which we can keep lists of things for months without forgetting them. I need some kind of Faceral Lobe (Facere is latin for “to do”). Maybe in the future we’ll have a chip to add this functionality to our brain, but for right now I need my to-do lists.

So you can imagine my disheartened surprise when I learned from the Harvard Business Review that keeping a to-do list is an exercise in futility. Instead, researchers recommend “Living the Calendar”, which essentially means transferring everything from your to-do list into your calendar to give it a specific deadline and time length.

Personally, I refuse. My to-do lists keep me going, and gives me a sense of control over my life. For most every attack on the to-do list, I’ve got a parry:

To-do lists give us too many choices: True, but isn’t choice one of the things that keeps us happy? If I felt like my days were predetermined by my calendar for months out, I’d blow my brains out.

Items languish on the to-do list: So what? I let them. I’m constantly reading through the list to make sure I’m doing the things that need to get done. What’s the point of paying my taxes three months early when I need to get the car fixed today?

We tend to do the easiest things first: OK, we’re all guilty of this. But I have a mantra which goes “Do The Hardest Things First”. It helps me tackle the most unpleasant tasks before the easy ones.

Lack of commitment devices: But is Google Calendar, or whatever you chose, really a better commitment device? You can just move tasks you don’t want to do to a different day.

So go ahead Mr. HBS, “Live the Calendar”. I’m holding on to my to-do list, and to freewill.

First, a disclaimer. We support the blackout, and are against the SOPA and PIPA bills. Second, we don’t believe that posting out an easy way to see Wikipedia entries somehow circumvents their message. Third, we know that if they didn’t want you to look at all, they could have blacked out the entire site.

1. Open Wikipedia and search for something.

2. Right click on the “Imagine a World..” page and select “view page source”  or “view source” (this works in both IE and Firefox)

3. When viewing the source, click File -> Save, and save the page to your desktop

4. Open the file on your desktop. Bingo, you’ll see the content of your search.

NOTE: You can also deactivate Javascript, which is actually easier

On an afternoon break, I went up to the Starbucks on 21st street to get a fix of a ridiculously expensive “Misto”, otherwise known as coffee with steamed milk.

Across the street, a relatively new place called Greensquare Tavern was giving away free coffee outside. Yes, free.

I took these pictures at the same time. The whole time I was at Starbucks, about 50 people bought coffee. Not one single person took the free coffee across the street. Is that brand power or what?

Yes, you read that correctly.  It’s been recently discovered that a hacker with free tools can get your WPA2 within a few hours. Millions of wireless routers may be vulnerable, including those from Belkin, Buffalo, D-Link, Cisco’s Linksys and Netgear.

How it works: Many routers come with a feature called WPS – Wifi Protected Setup – which is enabled by default. Most people simply ignore the feature. It uses a pin number to make it easy for devices to join a network. Instead of typing in a WPA key, you type in 8 numbers that are on the back of the router.

A flaw in the design of some routers is that after a number of attempts, the router starts transmitting a message indicating whether the first four digits are correct. Also, unlike some devices, the router doesn’t “lock down” after a number of attempts.

For example, say your WPA2 password is “1likemym@c” and your encryption is WPA2 Enterprise. The strength of your password doesn’t matter. When the pin  is guessed correctly though brute force, the router GIVES YOU THE WPA PASSWORD.

Here’s a video of the attack (only 1 minute long): wpscrack vs. TP-Link TL-WR1043ND – Demo

What we’d do about it: The truth is, most people don’t have to worry. The odds that someone will spend hours trying to crack your WPA2 code so they can watch you surf the web is pretty small. If you have a router with WPA2 and are concerned, you can disable the WPS feature through your router’s administrator interface.

I spent the last few days with the Kindle Fire, which my father-in-law generously gave my wife for Christmas.

I was interested in the Fire since it came out. The price is super- aggressive, and at $200 Amazon reportedly takes a loss on each device it sells. Since it’s Android-based, I was also excited to get access to many apps.

So after putting the Fire to the test, I can confidently say that it’s a dud – at least by my standards. Here’s are five reasons why:

1. No 3G – OK, this isn’t a deal breaker, especially with the abundance of WiFi networks. But please remember, open WiFi networks are extremely insecure, and somehow, they’re never there when you really need them.

2. No free NY Times App – Come on. You get one on the iPhone, on the iPad, and on other Android devices. Why the heck do you have to pay $20 a month to read the Times on the Kindle?

3. The OS – I’m no Apple fanboy, but compared to the iPad, the Fire is just clunky, even with the new firmware update. Although Amazon obviously ripped off a lot of features, the Fire’s interface is  not nearly as intuitive as the iPad’s.

4. The carousel – Everytime you run an app, it pops to the front of the “carousel” on the front page. Maybe I’m insecure, but I find this lacking in privacy. For example, if I play Fruit Ninja, the next time I go to the home page there’s a HUGE Fruit Ninja logo there for all to see.

5.No Spotify – This is one of my favorite apps, a real beauty. It’s available on almost every Android device except the Kindle Fire. Amazon is obviously pushing its own music store, but to block competitors at this point is just silly.

So what is the Amazon Fire? Well, considering the price is essentially the same as the original Kindles just a couple of years ago, I would call it a good Kindle. But considering you can run a Kindle app on any other device, the only reason to get a Kindle Fire is the price.

Amazon’s now infamous $5 price-check promotion, in which they offered shoppers on one of the busiest days of the year a $5 coupon if they went into a brick and mortar store and scanned an item, was clearly a marketing blunder.

Mom and Pop shops around the country angrily tweeted that Amazon’s attack against them was above and beyond anything they’ve already suffered from the price-cutting behemoth. A toy store owner friend put it best: “How dare they use my store as a showroom?”  The public, for the most part, found the campaign too aggressive, and Amazon quickly buried the evidence (try to find it now).

This battle, however, was merely a sideshow in a much greater, two-front war that small brick and mortar shops have been fighting, and losing, for years. To be sure, one of those fronts is the online superstores like Amazon. The other front is the big-box stores and massive chains like Walmart and CVS that have permeated city, suburb and town alike. To see the aftermath, all you have to do is stroll through the upper west side of Manhattan. The mind-numbing lineup of banks, shoe stores, clothing stores, and restaurants is indistinguishable from what you’d find in a mall in the Cleveland suburbs.

In trying to encourage local shopping, small shops have been appealing to their communities with dire warnings of losing personal service, convenience, local jobs, and sales tax revenues. Even Small Business Saturday (run by American Express, who charges small vendors usury-like discount rates) reeks of desperation. The problem with these messages is that most of them simply aren’t true.

Companies like Zappos have long proven you can have great service online, and the truth is that in most cases, it’s a lot more convenient to shop online. In terms of local jobs, the big box stores will absorb many of those jobs when they absorb the small shop customers, and the online sales tax issue is getting ironed out – Amazon finally admitted they need to collect sales tax.

Even if those arguments were accurate, small brick and mortars cannot survive alone on the goodwill or community-building instincts of customers. For almost all consumers, shopping boils down to four elements. price,  service, loyalty, and convenience. Let’s look at these individually.

Price: Many think that price cutting by online giants and local chains is killing the brick and small mortar stores. I think this is actually the LEAST important element. When shopping online, I often order from the place that seems most professional, has a great return policy, and has a good reputation. I rarely go for the cheapest price.  For example, Zappos’ prices are similar to brick and mortar shops and are often undercut by others online; but they offer service and convenience many people (including me) love. Most small local stores would do well to forget about price competition.

Service: Some small local stores offer great service, but many don’t. We’ve all been to stores with crabby or uninterested sales people and walked out.  It’s the same with online stores. The ones with great services (think Zappos) often get the sales regardless of price. Brick and mortar stores may think that they focus on service, but they usually don’t. They could learn a lot from online stores. If you haven’t already – run out and read “Delivering Happiness” by Tony Hsieh, CEO of Zappos.

Loyalty: People can become loyal to both brick and mortar and online store.  People become loyal to sites like Amazon and Zappos not just because of the selection, but because they do a great job getting you to come back.  Loyalty points, special clubs, personal attention, amazing return policies are powerful, and always will be.

Convinence: While getting something right away at a local store may be convenient, many find it even more convenient to wait until you get home, show your spouse or your kids the item, think about it, and then pull the trigger. Customers want both options – and brick and mortar stores have to find a way to give them both. For example, use technology to let customers look at items, add them to a virtual shopping cart, and buy them later at home. Will some price shop? Sure, but they would have anyway. Most, however, will appreciate the great customer service and become more loyal.

None of these elements are new, or groundbreaking. But the fact that local small shops are spending energy fighting Amazon over price checking just shows that many still don’t understand what they really need to do to survive.

No formal reviews? A flat organization without a big management team? Stop the presses!

There’s an amusing article in Crain’s about HopSpot, the mobile directions provider. Since when did skipping formal reviews and keeping a relatively flat organization become innovative? Seriously, I think most nimble twenty person companies don’t have much of a management layer.

If you’re a small business of that size with long, boring, formal reviews, and half your business is your management team, you probably haven’t changed your business in about 20 years.

I spent a little time with Sliderocket to see if it’s a good substitute to Microsoft’s Powerpoint or Apple’s Keynote. We’re always in search of Microsoft Office replacements, and we’re not huge fan of Google Docs’ Presentation, which I find clunky.

What is it: Sliderocket is an online presentation creation app, meaning you don’t need to buy any software.

Why we like it:  For our business, great presentation software must be:

• Easy to use -  create presentations, templates, etc.
• Easy to customize (fonts, layouts, etc.)
• Feature rich (special effects)
• Able to present online
• mobile device friendly

Sliderocket scored big on almost all of these. It’s slick, intuitive, has a ton of features, and of course allows you to play your presentations online. It also allows you to easily export your presentation as a pdf.

What we don’t like: First, a biggie. In our tests, the web slide show that you can share with your audience did not work. Basically, when you forwarded from one slide to the next, the new slide did not come up. This was an inconsistent bug, but a bug nonetheless.

Should you get it?: Unfortunately, we can’t completely recommend Slidetocket yet. While we wante to love it as much as we love Gliffy, the fact that the slideshow feature breaks is a bit of a, well, deal breaker. We’ll check in on them again in a few months.