First Principles

Tim O’ReillyStartupFest

Montreal, July 15, 2016

Text

@timoreilly

Great companies start with big visions

Text

@timoreilly

And those visions can often be captured in only one line

Text

@timoreilly

“A PC on every desk and in every home.”

Text

@timoreilly

“Access to all the world’s information.”

Text

@timoreilly

“Make the world more open and connected”

Text

@timoreilly

“Interesting work for interesting people”

Text

@timoreilly

Change the world by spreading the knowledge of innovators

Text

@timoreilly

Watching the alpha geeks

“Watching the Alpha Geeks”

@timoreilly@timoreilly

A lot of people think freedom is a matter of license

10

@timoreilly@timoreilly

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.”

11

(Control by API)

Desktop ApplicationStack

Proprietary Software

Hardware Lock InBy a Single-Source Supplier

System Assembled fromStandardized

Commodity Components

Free and Open Source Software

Cheap Commodity PCs

Intel Inside

ProprietarySoftware As a Service

Subsystem-Level Lock In

Integration of CommodityComponents

Internet ApplicationStack

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 ChristensenAuthor of The Innovator's Solution

In Harvard Business Review, February 2004

Text

@timoreilly

Thinking about the first principles that are driving the future of technology and business

Text

@timoreilly

Text

@timoreilly

Text

@timoreilly

Text

@timoreilly

What are the first principles that are driving the future of technology and business today?

Text

@timoreilly

It’s not just software that’s being commoditized now!

Text

@timoreilly

Text

@timoreilly

Text

@timoreilly

The self-driving airplane has been with us for decades!

Text

@timoreilly

@timoreilly #NextEconomy

Text

@timoreilly

Text

@timoreilly

Augment people, so they can do things that were previously impossible

Text

@timoreilly

Use technology to reimagine current processes and workflows

@timoreilly@conference @timoreilly

Text

@timoreilly

Text

@timoreilly

Text

@timoreilly

Text

@timoreilly

“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.”

Text

@timoreilly

@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?

@timoreilly #NextEconomy

“My grandfather wouldn’t recognize what I do as work.”

-Hal Varian

@timoreilly #NextEconomy

The more things change, the more they stay the same

@timoreilly #NextEconomy

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

@timoreilly #NextEconomy

These are the workers

@timoreilly #NextEconomy

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

@timoreilly #NextEconomy

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

@timoreilly #NextEconomy

Those programmers are actually managers

@timoreilly #NextEconomy

@timoreilly #NextEconomy

@timoreilly #NextEconomy

@timoreilly #NextEconomy

“God did not make being an auto worker a good job!”

David Rolf, SEIU

@timoreilly #NextEconomy

It’s time to build technology, and companies, as if people matter!