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.