penlug talk: fast, cheap, and out of control
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Fast, Cheap, and Out of Control, How Silicon Valley Got Its Groove Back. A completely uncalled-for talk by David Weekly for PenLUG on 11/9/06TRANSCRIPT
Fast, Cheap, and Out of Control
How Silicon Valley Got
Its Groove Back
A completely uncalled-for talk by David Weekly for PenLUG on 11/9/06
Given on a Windows laptop with PowerPoint because I am tactless.
Why Are We Here?
• Great Weather
• Lots of Geeks
• Full of Possibility (& Hard Work)
Why Did Silicon Valley Happen?
• Brain concentration: Stanford & Berkeley
• Love-fest of Ideas– 70’s Hippy Children of 50’s Nerds– Homebrew Computer Club (75-77)– West Coast Computer Faire (77-83)– The beginning of computer affordability
Money?
• Wasn’t the big thought, was about sharing
• Software hadn’t made it big
• Hardware was either huge (IBM) or hobbyist (Altair)
Just make the damn thing, it’ll be cool.
dotCom Era
• Widescale computer deployment seeded by the First Wave meets access (AOL).
• Starts With 3DO IPO (1993)– First IPO of a zero-product company
• Public ownership drive => liquidity– Big payouts with hype drove rapid VC dev.
dotCom Era
• Both beginning and end marked by public market involvement.
• Investment was required for innovation– Hardware, software, hosting = expensive!
• No capital, no product.
dotCom Era
• Proprietary Thinking– NDA proliferation– Closed source
• Why?– Crazy availability of capital plus– Large, quick liquidity events
• makes people idea hoarders• …and these were MBAs, not hippy geeks
IPOs
• Allow for public ownership = good
• De facto pyramid scheme = bad
• Enron => Sarbanes-Oxley = dead– Post 2002, no easy IPOs– $2m/year, personal liability
post dotCom
• No more quick money => flakes gone– ...but geeks stayed!
• Hardware continues commoditization
• Open Source™ software steps up
• Huge ’99 telco investments => cheap bandwidth
What’s Amazing Now?
• Execution is cheap– Nearly free storage, CPU, bandwidth– Free, Open Source LAMP stack
• Execution is easy– Mature development tools & libraries
• There was no good answer before
– Browser JS = new platform for innovation
• Monetization is possible– AdSense, PayPal, CC processing
What’s Different?
• Homebrew Computer Club (1975) =New Ideas Every Two Weeks
• SuperHappyFunHouse (2005) =New Implementations In Six Hours
What’s Different?
• West Coast Computer Faire (1977) =Huge Annual Commercial Showcase located in California.
• BarCamp (2005) =Huge Continuous Showcase, global.
(Unimplemented) Talk Is Cheap
• Low friction launches mean lots of experimentation & iteration.
• Lots of terrible ideas, but...– Cheap, fast failures.– Very cost-effective exploration
• No VC required.
What If…
• You can’t IPO and make $100m?
• You’re not going to get bought for $100m?
• You can make $2m/year with two friends?– “Lifestyle Company” (derogatory)
Talent Black Hole = You Win
• No free talent– Giant Holes = Google, Intel, Yahoo, NVidia– The Failure of Outsourcing
• A+ coders are not trawling for jobs.– They’re probably hired and happy.
• Money != de facto ability to compete– …so don’t freak out about funded competition
Why Was VC Great?
• Invest in 20 companies– 16 will flop badly– 3 will do alright and make a few bucks– 1 will make you a huge profit
• Sucked for an entrepreneur!– Try it starting two companies, spending five years
each, and you’ll probably still fail. – …but now you can launch 20 companies.
• Launch one this weekend! (Not kidding!)
Where This Is Going
• Huge ecosystems around everything– Calendars– GIS / Maps– Text Collaboration: Email, Blogs, Wikis– Realtime: IM, SMS– Social & business networking– Media: Pictures / Music / Movies
• A million niches, a million companies
No Opportunity Too Small
• A $800,000 / year global market is just fine
– If no operating costs
– And almost no employees.
Enabling The Constellation
• Structured data interchange– APIs w/XML, JSON– RSS, Atom, webcal
• Embeddability– Google Gadgets, Bitty Browser
• Cheap Hosted Services– GMail, Amazon S3, PBwiki, Wordpress
Still Missing!
• Common Data Repositories– Easy joins of GIS/calendar/DB data
• Obvious Multisite Authentication– OpenID?– MS / Yahoo / Google / AOL logins?– Kerberos?
• Automated API discovery & documentation
• Seamless idea => cluster tools
Long Term Challenges
• Everything To Zero– Operations so cheap, can be charity-
supported (CCCP) or done for market (Google)
– May prove hard to compete with Open Source + free hosting.
• Scalability– Not all problems parallelize well– CPU bottleneck
Things For Geeks To Avoid
• Intellectual Masturbation– Writing your own DB / OS / language
• Overfeaturificationising Things– Not as simple as it could possibly be.
• Perfectionism & Elegance– Waiting to launch until the seventh rewrite
Lessons• Leverage Others’ Work
– Use Open Source– Use knowledge from others
• see Brad Fitzpatrick’s amazing LiveJournal slides!– Don’t build it yourself.
• Make it sustainable– Do fun things; find out how to make one of them pay.– Be cheap. Use commodity everything.
• I know OCAML rocks, but damn it, use PHP.• Release Early & Often
– Get over that perfectionist streak.– Your users know their needs better than you do.
• Make Structured I/O Easy w/standards & APIs
Just do it.