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First Principles
Tim O’Reilly StartupFest
Montreal, July 15, 2016
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Great companies start with big visions
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And those visions can often be captured in only one line
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“A PC on every desk and in every home.”
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“Access to all the world’s information.”
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“Make the world more open and connected”
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“Interesting work for interesting people”
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Change the world by spreading the knowledge of innovators
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Watching the alpha geeks
“Watching the Alpha Geeks”
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A lot of people think freedom is a matter of license
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I think it has more to do with architecture“The book is perhaps most valuable for its exposition of the Unix philosophy of small cooperating tools with standardized inputs and outputs, a philosophy that also shaped the end-to-end philosophy of the Internet. It is this philosophy, and the architecture based on it, that has allowed open source projects to be assembled into larger systems such as Linux, without explicit coordination between developers.”
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(Control by API)
Desktop Application Stack
Proprietary Software
Hardware Lock In By a Single-Source Supplier
System Assembled from Standardized
Commodity Components
Free and Open Source Software
Cheap Commodity PCs
Intel Inside
Proprietary Software As a Service
Subsystem-Level Lock In
Integration of Commodity Components
Internet Application Stack
Apache
"The Law of Conservation of Attractive Profits"
"When attractive profits disappear at one stage in the value chain because a product becomes modular and commoditized, the opportunity to earn attractive profits with proprietary products will usually emerge at an adjacent stage."
-- Clayton Christensen Author of The Innovator's Solution
In Harvard Business Review, February 2004
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Thinking about the first principles that are driving the future of technology and business
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What are the first principles that are driving the future of technology and business today?
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It’s not just software that’s being commoditized now!
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The self-driving airplane has been with us for decades!
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@timoreilly #NextEconomy
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Augment people, so they can do things that were previously impossible
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Use technology to reimagine current processes and workflows
@timoreilly@conference @timoreilly
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“Back in the 1930s, when there were homeless encampments in Washington, D.C., very much like the homeless encampments that are now under the I-280 in San Francisco, the federal government invested capital in new industries to create jobs for millions of people. They created tax codes that redistributed from the rich to the poor….
One obvious step, Hyman says, would be to put to work the "great sloshing pool of money" that investment banks and companies have been keeping on the sidelines since the financial crisis. Pay workers more so they have more to spend, and invest in creative risk-taking and innovative ideas, as happened during the New Deal.
The New Deal’s Reconstruction Finance Corporation not only helped light up America — moving it from 10 percent of homes having electricity in 1930 to more than 60 percent a decade later — it also funded research in the Defense Plant Corporation.
“It was fundamentally about investment in edgy technology, so things like aerospace, aluminum extraction, synthetic rubber were all brought to scale,” Hyman says. “Aerospace before 1939 had fewer people working in it than worked in candy manufacturing. And after World War II, the aerospace industry was four times the size of the pre-war car industry. This is incredible scale and scope of an endeavor, to utterly transform the economy in about five years, by using idle capital.”
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@timoreilly #NextEconomy
Some of the grand challenges we face • Climate change. • Rebuilding and rethinking the infrastructure by which we deliver
water, power, goods, and services like healthcare. • Dealing with the “demographic inversion” — the lengthening
lifespans of the old and the smaller number of young workers to pay into the social systems that support them.
• Income inequality. “The people will rise up before the robots do.” • Displaced people. How could we use technology to create the
infrastructure for whole new cities, factories, and farms, where they could be settlers, not refugees?
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“My grandfather wouldn’t recognize what I do as work.”
-Hal Varian
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The more things change, the more they stay the same
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Low wage employers like McDonalds and Walmart are the new sweatshop, but something different is happening in tech
McDonalds 440,000 employees, 68 million monthly users
Snapchat ~300 employees, 100 million monthly users
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These are the workers
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Programmers are actually managers
Every day, you are inspecting the performance of your workers and giving them instruction (in the form of code) about how to do a better job
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There are other companies where programs are managers, while many of the workers are human
At companies like Uber and Lyft, algorithms tell people what to do
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Those programmers are actually managers
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“God did not make being an auto worker a good job!”
David Rolf, SEIU
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It’s time to build technology, and companies, as if people matter!
