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First Principles: For Startups, and for the Next Economy

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My talk for StartupFest in Montreal on July 15, 2016, which had as its theme "Firsts." I start with some history about my business and the "first principles" that drove it, then pivot to the first principles of what I've been calling the Next Economy. Be sure to download the slides and take a look at the speaker notes!

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First Principles: For Startups, and for the Next Economy

  1. First Principles Tim O’Reilly StartupFest Montreal, July 15, 2016
  2. Text @timoreilly Great companies start with big visions
  3. Text @timoreilly And those visions can often be captured in only one line
  4. Text @timoreilly “A PC on every desk and in every home.”
  5. Text @timoreilly “Access to all the world’s information.”
  6. Text @timoreilly “Make the world more open and connected”
  7. Text @timoreilly “Interesting work for interesting people”
  8. Text @timoreilly Change the world by spreading the knowledge of innovators
  9. Text @timoreilly Watching the alpha geeks “Watching the Alpha Geeks”
  10. @timoreilly@timoreilly A lot of people think freedom is a matter of license 10
  11. @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
  12. (Control by API) Desktop Application Stack Proprietary Software Hardware Lock In By a Single-Source Supplier System Assembled from Standardized Commodity Components
  13. Free and Open Source Software Cheap Commodity PCs Intel Inside
  14. Proprietary Software As a Service Subsystem-Level Lock In Integration of Commodity Components Internet Application Stack Apache
  15. "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
  16. Text @timoreilly Thinking about the first principles that are driving the future of technology and business
  17. Text @timoreilly
  18. Text @timoreilly
  19. Text @timoreilly
  20. Text @timoreilly What are the first principles that are driving the future of technology and business today?
  21. Text @timoreilly It’s not just software that’s being commoditized now!
  22. Text @timoreilly
  23. Text @timoreilly
  24. Text @timoreilly The self-driving airplane has been with us for decades!
  25. Text @timoreilly
  26. @timoreilly #NextEconomy
  27. Text @timoreilly
  28. Text @timoreilly Augment people, so they can do things that were previously impossible
  29. Text @timoreilly Use technology to reimagine current processes and workflows
  30. @timoreilly@conference @timoreilly
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  33. Text @timoreilly
  34. 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.”
  35. Text @timoreilly
  36. @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?
  37. @timoreilly #NextEconomy “My grandfather wouldn’t recognize what I do as work.” -Hal Varian
  38. @timoreilly #NextEconomy The more things change, the more they stay the same
  39. @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
  40. @timoreilly #NextEconomy These are the workers
  41. @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
  42. @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
  43. @timoreilly #NextEconomy Those programmers are actually managers
  44. @timoreilly #NextEconomy
  45. @timoreilly #NextEconomy
  46. @timoreilly #NextEconomy
  47. @timoreilly #NextEconomy “God did not make being an auto worker a good job!” David Rolf, SEIU
  48. @timoreilly #NextEconomy It’s time to build technology, and companies, as if people matter!