Embedded - 231: Single Origin Coffee

Episode Date: January 25, 2018

Tim O’Reilly (@timoreilly) talks about economics, books, and the future. Check out Tim’s new book, WTF: What’s the Future and Why It’s Up to Us. And yes, this is Tim O’Reilly of  O’Reilly books. Elecia’s Making Embedded Systems has a great-eared nightjar, but she’s finally adjusted to a modern dinosaur on her cover.

This is Embedded. I am Alicia White alongside Christopher White. Our guest this week is Tim O'Reilly, author, publisher, CEO, lobbyist, historian, and futurist. Hi, Tim. It's a pleasure to speak with you today. Good to speak with you, too. I'll argue a little bit with you about the futurist, and we can talk about that in the podcast. Could you tell us about yourself in your own words, then? I'm the founder and CEO of O'Reilly Media and also a number of other companies over the years. But we're fundamentally a technology transfer company or a knowledge transfer company. We look at things that are happening on the cutting edge of technology

and figure out how to tell other people how to follow in the footsteps of the early people who I call the alpha geeks. We started out as a computer book publisher. We added technology conferences, an online learning platform, a venture capital firm. But we've also spent a huge amount of time on advocacy, trying to help people think differently about the future and notice things in the present that they should be paying more attention to that have implications for the future. And of course, in the course of that, we have both shaped public opinion, but we've also started a lot of things. In the early 90s, my company created the first ever commercial website, the first website to have advertising. In the late 90s, I organized the meeting where the term open source software was agreed on and promulgated by a group of free software developers. In 2004, I started an event called the Web 2.0 Summit, which was really explaining that the web wasn't dead after the dot-com bust. In fact, there was this new era of big data and collective intelligence that was coming on.

And more recently, my company and particularly my colleague Dale Doherty gave a name to the maker movement and sort of spun that up, a big event called Maker Faire. But I've been focused in the last few years very much on understanding the implications of technology for the economy, the future of work, the future of business. And that's the subject of my new book. Excellent. the future of business and that's the subject of my new book excellent uh before we talk about that i want to ask you to do lightning round which are short questions and we want short answers and if we're behaving ourselves we won't ask why and how and all the other questions we want to know are you ready sure uh Robot overlords or servants? Partners.

In what year will the singularity occur? Probably never. Author, publisher, CEO, lobbyist, historian, or futurist? We already crossed out that last one. Yeah, I like to think I'm all of them. Okay. A tip everyone should know. If you don't have access to a washing machine, talcum powder will take out a grease stain out of your clothing. That's a good one.

Okay, what science fiction concept do you think will become real in our lifetimes? I think we are getting very close to, you know, effective neural interfaces, and they're going to come in a surprising way. We're going to see announcements, I think, this year that will surprise people. And I think in general, the other one that I think is totally going to happen, the human species is going to differentiate. I think with CRISPR and what's happening in genetic engineering, I think it's very unlikely that we won't be hacking on ourselves as well as bringing extinct species back to life. That's a lot of stuff. That's a lot of big changes. Yeah. So we don't need a singularity for it to be amazing. Yeah. Of course not. There are many changes that are coming. How can we as consumers prepare for that

change, for these changes? Well, I think probably the biggest thing that anyone can do to prepare for change is to hold the present very lightly. You know, we get very attached to the way things are. We get very attached to what we have. We get very attached to what we believe. And if you study history, you realize that, first of all, even the best of times, things change. And over time, there's a wonderful passage in Kim Stanley Robinson, the science fiction author. I think it's in the second book of his Mars trilogy, Green Mars, where a character says he realized then that history is a wave that moves through time slightly faster than we do.

And that feeling that almost everybody gets as they get older, that somehow they feel a little bit out of step. The history is, in fact, a wave that moves through time slightly faster than we do. And sometimes there are tidal waves of enormous change. And so, you've got to be willing to ride that change. If you can, surf it. The tidal waves keep getting bigger and bigger and closer together. I don't actually think that's true. Oh, okay. Yeah, a lot of people will say that, and it's a way of patting ourselves on the back and telling us that we're special. And I look at the changes around the turn of the 20th century, and imagine before that, horse drawn.

Even as late as World War I, this was a war with the horses. And think about the transformation into a world where we're no longer reliant on animal power. And think about the rise of air travel. Think about the ubiquity of electricity and light. And these things, just manufactured goods. These are astonishing changes that happened in the past. And, you know, yes, the internet's big, but it's not, you know, genetic engineering big, you know. And I'm not saying that there won't be enormous impacts, but I think it's sad whenever I hear that story.

I go, boy, you really have not read much history. Well, I was really starting with the Industrial Revolution as the time when the tides got big. Well, that's fair, yes. starting with the Industrial Revolution as the time when the tides got big. Well, that's fair, yes, certainly with the Industrial Revolution. If that's the start of the measuring stick, sure. I would say he got a couple hundred years that have gone – but even then, it's 300 years. That's not that fast. And, you know, if you look at the changes from, you know, say, look at Roman history and you realize that you basically had a bunch of warring villages and over a few hundred years you had this empire, you know.

This idea of surfing this wave, I like that. But it is difficult because there are lots of things happening. I don't feel like I can stay up to date in genetics and artificial intelligence and robotics and, gosh, all of the things that i i want to do i can't even keep perfectly up to date and embedded systems and it's a tiny niche thing how how can we do this how do we we make this possible so that we don't feel like we're being left behind you rely on other people you know i think that the um you, one of the things that's so wonderful about the advance of civilization is specialization. You know, we don't have to know it all. You know, and for me, I just have built a network where I say, oh, wow.

You know, I know a lot of people who know things about synthetic biology that I don't, and they're going to keep me in the loop. I know a lot of people who, you know, know things about cryptocurrencies, and they're going to keep me in the loop. I know a lot of people who know things about cryptocurrencies and they're going to keep me in the loop. I can ask them questions. So building a network of people in different fields is in some ways the way that knowledge is always advanced. You think about the scientific societies and you can be curious. I put together events.

We run an event called FooCamp, which stands for Friends of O'Reilly. And we do a series of them on different topics. And it's a great way we convene people who know a whole lot of things that we don't. And we don't have to know those things in depth. We just have to know who knows them. Yeah, I think that's a more useful approach than being in technology for a while. You run across a lot of people, especially founders occasionally, who move from one industry to another, but their success in a prior field convinces them that they know how to do everything in every field and it leads to failure or to frustration um and i think that's kind of a something that happens to smart people often uh and to engineers and i think like what you're saying being able to accept other people's expertise is kind of a challenge sometimes it is um but it really is a great skill. Reid Hoffman said something really smart in his 2012 TED Talk where he said, in the information age, as a venture capitalist, I would be building a database of all the smart people and trying to keep track of what they were up to.

He said, in the network age, I simply inject myself into a network in such a way that they come to me. And I think that's a really powerful insight and a way of thinking about knowledge. And it's a big part of things like blogging. The best definition I ever saw of blogging, which extends to other forms of social media, it's narrating your work in public. And when you narrate your work in public, people who are interested in it find you. And that's one of the really the gifts of the internet is if we talk about the things that we're interested in, we talk about the things we're working on. We talk about the things where we're stuck. And people who have the answers show up.

Actually, one of the nicest things anyone ever wrote about me was Quinn Norton once wrote a piece in which she described me as kind of the ultimate lazy web guy. She's like, I finally understood Tim O'Reilly. If he wanted us to build flying cars, he'd talk about how cool flying cars are. And all the people who are working on flying cars would come to him. And I'm not particularly interested in flying cars, but that is what I do. As I've been, for example, building this practice around understanding technology and the impact on the economy, I start talking about it. as I've been, for example, building this practice around understanding technology and the impact on the economy, I start talking about it, I start sharing my thinking, and now I'm networked with a whole bunch of very smart, forward-leaning economists, technologists who are thinking

about the social impact of technology. There's all kinds of new convenings happening, and new ideas emerge every time we talk. I like what you're saying, but even as someone who does this, who tries to show what I'm doing live in the world, and as someone who has gotten a wonderful network because of that, I don't feel like what you're saying is actionable. I mean, there aren't... Only a few people get to be the CEO of O'Reilly Media. That's a huge position of power, and of course you're going to get networks from that. Only a few people get to have podcasts

that people listen to and interact with. And I'm privileged for that. I recognize it. But I also recognize I couldn't read the blogs of everybody who listens to our show. I hear you, but it's more democratic than it's ever been. And people find audiences, people find each other. And I feel pretty positive about that. And there's also a lot of generosity. You know, I was once talking with Hank Green, who's a YouTube star and does a whole lot to use YouTube to spread knowledge and insight into the world. And he talked about how, you know, YouTube stars give each other a leg up by giving them visibility.

And, of course, that's a lot of what my career has been. It's finding interesting people and then putting them on stage at an event, helping them to write a book, helping them to spread their ideas. So there are people who are doing deep original work, and there's other people whose job is to find them and evangelize for them and as a whole uh it's it's not you know incredibly efficient but it's a heck of a lot more efficient than it was for example in the days of you know uh uh scientific journals you know where now we have open access, preprints, all these kind of scientific approaches to open scientific publishing, you know, which are increasing access to knowledge worldwide. I think we're in a golden age of knowledge. whether it's the promise of the way Watson was positioned or whether it's the reality of how Google today is serving billions of people with access to virtually anything you want to know. And we are, in fact, in an algorithmic knowledge economy that's profoundly different you know i you know you

search you think about you know you have a problem on your computer you can search for the error message and you'll find people talking about it you have a problem uh with uh you know i was just doing this i was applying for an indian visa and uh this a very strange request on the form. I just basically put the entry into Google with the words Indian visa application. Bang, there's a discussion of other people having the same problem. And somebody's saying, no, actually, just put N.A. That's the right answer. It was basically looking for a national identity number.

It was like the debate is, are we supposed to put our social security number there or what is it? And sure enough, there's this knowledge out there and it's easy to access. And, of course, the critical thing, of course, is for people to get better at using the current tools and the current state of the art in access to knowledge. Because if you don't have those skills, it's hard. But the next generation comes along. And I find it astonishing watching my 14 year old stepdaughter, how much she teaches herself via YouTube and Instagram and finds things that she wants to do and learns how to do them. And so there's a whole generation that's becoming adapted to this information ocean we're swimming in

and that thinks naturally that that's the first place that you go. Yes, the communities that we find and the information that is out there is amazing. Do you worry about the echo chamber effect that people end up more in tribes than they might otherwise? You know, I do worry about that, but I worry more about manipulation. Yeah, wow. You know, one of the reasons that we have echo chambers is that, for example, publishers Yeah. Wow. uh designed to uh you know get people thinking uh communicating connecting that would be happening so i i actually blame our our media environment more than i blame the platforms i also would would say that uh you know there's a lot of very deliberate manipulation i was just talking to

philip howard who runs uh Computational Propaganda Initiative at Oxford. And he asked me this question. He said, so who are the biggest users of bots? He said, it's not actually Russia on social media. It's pharma companies. 50,000 fake personas saying, oh, my God, I've got a migraine. I've got the worst migraine in my life. And 50,000 other, you know, bot personas saying, oh, you should try this new drug from so-and-so.

It's like, you know, we are being scammed pretty seriously. And I think that's one of the things we need to wake up to is the pervasiveness by which our companies are actually manipulating their customers. There's a wonderful little book that I read recently called Fishing for Fools, PH, both in fishing and fools, the Nobel Prize winning economists, George Akerlof and Robert Schiller. And it really makes, it kind of is a tour of manipulation, fraud and abuse throughout our economy. And it makes the point that these are not market failures. They're actually proof that there is an efficient market for everything, including manipulation, fraud, and abuse. And we need regulation not because markets don't work but because they do. There is a market for this stuff. There are people out there building bot farms, and there are companies out there who think it's perfectly legitimate uh to manipulate their customers by using them and and we have to it's sort of interesting the

other book i read recently that i love that really um uh gave me a whole new tool chest i had never read adam smith's uh book the theory ofiments, which he considered more important than The Wealth of Nations, or at least by some accounts. And it's basically about how our desire to appear good in the eyes of our friends and neighbors is a check on, you know, the unfettered free market. And we've lost that. We've lost that. That makes a lot of sense for a small community, but for the enormity that is the internet,

I don't even know who my neighbors are, except for my very close ones. Well, yes and no, though. We still want to, I mean, again there there's a battle going on right now for whether or not it matters what other people think of each other here you know here in this country you know for the first time in politics uh you know we have basically got somebody who's flouting virtually every convention and we are accepting it and i think that's that's a very frightening thing in our society because it's the breakdown of that hey we have some collective mores and of course that's been breaking down you know uh commercially and economically where you know i think you know and

i write about this some in my book uh the with the whole shareholder value thinking, this idea that making money justifies, you know, the end justifies the means. And I'm sorry, it doesn't. Yes. In your book, you talk about how businesses are more focused on making business profit and we are no longer focused on people. And that means that the corporations make a lot more money while the people retain a median income that really hasn't changed in decades. And it's that focus, that change in what the goals are, the objective function, I think I heard in one of your TED Talks, has changed. And I can totally understand how, and I see how that trickles down to life, and I have no idea how to change it. And I feel like your book wanted me to change shareholder value idea into play in the past. of people. There's a wonderful book that Zach Exley, who was Bernie Sanders, the digital organizer, pointed me to called Invisible Hands. And it's really, the subtitle is, I think, something like The Business Crusade, you know, for free market economics or something like that. And it's really

about people starting in the 30s who were worried about communism, were worried about socialism, were worried about that this was a slippery slope, you know, in the whole era of the 30s, where they were out there trying to articulate a set of ideas that would be counter to these things that they were afraid of. And they, for example, found Hayek over in Vienna and brought him, or wherever he was in Austria, and brought him to the United States, you know, as somebody who talked about different economic ideas, got him a position at the University of Chicago, and over a period of decades, kind of laid the groundwork for a set of ideas that eventually took over. And I think we're in that same broad set of discussions today where there are people saying, you know, are we thinking about the economy the right way?

You know, I'm working a lot with a group called the Institute for New Economic Thinking. And, you know, you see this economic movement where gradually, you know, convictions are changing among, you know, the consensus among economists. Larry Fink, who runs BlackRock, the world's largest asset manager, has been writing in his annual letter to his customers. He's got something like $8 trillion under management. He's saying, we're not buying shareholder value anymore. We want to see you investing in communities. We want to see you investing in communities. We want to see you investing in workers. We want to see you investing in creating jobs. And if you don't do that, we're not going to give you our money. And I go, that's, you know, there is a change. And this idea of collective belief, you know, that's really kind of where I end the book. It's just like what we collectively believe changes how we act.

And each of us contributes to that collective belief by what we say, by how we act. And, you know, one of the things that I've had a very powerful experience of in my life, you know, and again, a much smaller realm of technology is the ability to change people's minds. I still remember when I first did my open source activism in 1998. And the dominant story about free software up to that time was, it's this rebel movement. It's, you know, Linux is going to replace Microsoft or, you know, GNU Linux, I should say, you linux is going to replace microsoft or or you know gnu linux i should say you know it's going to replace you know microsoft windows and my contribution that whole discussion was to say wait a minute there's this whole other group of free software authors

who are building the internet and that's also free software why are you not talking about that and i still remember you know i did this meeting the open what became we called the open source summit and i did a press conference at the end of the day with all these you know top reporters and i put these free software leaders up and i said you know the internet is runs on on what we're now calling open source software and i kind of went down here's you know, the Berkeley Internet Name Demon, which runs the domain name system. And if you have newyorktimes.com, it's this long haired, you know, you know, programmer software that's making that happen. If you send emails, this guy's software, if you have a website, you're probably using this guy's software.

And over the course of about, you know, the first response was what the Internet is based on free software. Nobody knew that. Nobody understood it. And within about a week, it became, oh, and that was the accepted wisdom. And it was a powerful experience for me of being able to see something, say something and have other people accept it. And it became the new map of the world. And in some sense, I think that's the way that we're going to get to some new set of conceptions of the economy. Now, again, there are a lot of economists who are thinking about this. The contribution that I tried to make in my book was to tell the story as seen from the perspective of technology platforms.

What do they teach us about the way that economies rise and fall? that Microsoft came to dominate the personal computer industry and eventually wrung the life out of it by taking too much of the value. When we see how Google and Facebook came to dominate the web and take more and more of the value for themselves and what that's done to its entrepreneurial ecosystem, can we actually then say, oh, that's a pattern that we also see in our broader economy. You know, when we, you know, I, that's, that's the part two of the book, which is about platforms. Part three, which is about algorithms. You know, okay, here's what it means to manage an algorithm. They have an objective function. Google's managing for relevance and they kind of teach about how search quality works. And then, okay, look at how an objective function can go wrong. Look at

Facebook and fake news and how they're having to try to figure out what to do in response to the fact that their objective function didn't do quite what they expected. And now can you see the parallels to our economy and the way that financial markets have an objective function. And that objective function isn't doing quite what we expected. I feel like going back to the economy for a minute, my own personal thoughts on this, which are probably completely bogus, but there's a few things looming in the future that seem like they would have outsized impacts, like the equivalent of industrial revolution style changes. Just to pick a very specific example, self-driving trucking. If you take all of the shipping industry and replace drivers with computers,

that doesn't seem like something that economists are necessarily planning for or that I've read a lot about the impact that that would have. And there's other things like that where we kind of, by fits and starts, move towards not exactly a post-scarcity economy, but something where labor means something very different. I will agree with that up to a point in in that there are big dislocations in technology but i think there's a lot that's overblown about that you know for example you know e-commerce versus retail sure it turns out that there are more jobs being created in e-commerce than are being lost in retail uh you know so the the shape of the world is different but the net impact is

more is happening and uh you know not only that those jobs pay better than the jobs in retail uh when you think about uh you know we've seen this before you know when when we people weren't working in in farms you know we found new ways for people to work in the food industry. The, I think that, you know, and, you know, think about trucking, for example. We, you know, long haul trucks may happen, you know, sooner, but think about actual delivery. You know, okay, so you've actually, you know, In order for that to really happen, you have a lot of automation that has to really be in play before you can have not just replacing the long haul truck, but the unpacking of the truck, the breaking it down into smaller trucks, the bringing it over to the various stores on the route. There's going to be a lot.

Simply reinventing the infrastructure of the 20th century into the 21st century is a huge source of work. But it's different work. Yeah, absolutely. Different work. Just like people in the past adapted. people moved from the farm to the factory, you know, and people move from the factory to the office. People move from the office to something else. I guess I would just sort of say the my fundamental belief is that there's plenty of work to go around. I talk about this in the book that there's a couple of reasons why I think we'll never run out plenty of work to go around. I talk about this in the book, that there's a couple of reasons

why I think we'll never run out of work. And the first one is incredibly obvious. There's so much to do that we're not getting to. Just look around. The big question is not will we run out of jobs, but why aren't we doing the work that needs doing? Why is our infrastructure? You know, I mean, they built the American highway system in a period of about 10 years.

And we've been letting it rot away ever since. You know, and it's super expensive for us to rebuild. We can't really do that. You know, we went to the moon in 10 years. And then, man, you know, we just let it rot away. You know, there's some things that are that are screwed up in our society but lack of things to do isn't uh you know the problem we have aging population that's going to need taking care of so that that whole you know there's lots of work to

be done the energy transition from fossil fuels climate change is going to produce enormous amounts of work you know migration you know and we're either going to produce enormous amounts of work, you know, migration, you know, and we're either going to be, you know, turning, you know, Houston into something like the Netherlands, or we're going to be moving it somewhere else. You know, you think about stuff like that, and you go, oh, yeah, you know, there's a lot to do. And the question is, how are we going to pay for it? And what's wrong with our economy that we're not paying for it? And then the second thing is this thing that Clay Christensen said and that I've made much of throughout my career, which is something he called the law of conservation of attractive profits, which is when one thing becomes a commodity, something else becomes valuable. And I talk about how that happened with the transition from hardware to software to the web to the internet big data you know and it keeps happening uh we always make

things valuable and it's not just in technology uh you know there's this great uh account in alexis madrigal's containers podcast of how the longshoremen went away and then they came back and they didn't come back at the docks. They came back in inland warehouses where, you know, he is the example of coffee. You know, coffee became a commodity and then it became valuable again because you needed, it was single origin coffee roasted by a specialty roaster. And so, you know, you used to have these big, you know, coffee came into the docks in sacks and got loaded onto trucks. And then it came in and container loads went to big commodity producers. And then suddenly it goes to this warehouse where those big containers get broken down because the small specialty roaster needs a certain amount from

Costa Rica, a certain amount from Sri Lanka, a certain amount from wherever else coffee is grown. And it's single origin coffee. And people pay a lot more for that. And so you actually put work back into the process. You think about we commoditized the shipment of goods where you'd put it into a big box store and there'd be big piles of stuff there and now we're getting down into you know i you know yes there are lots of big warehouses but now the stuff is being delivered to us and you think about the enormous amount of work uh that's going on there i will predict you know they think there's something like two million long-haul truckers in the u.s i will predict that you know, they think there's something like 2 million long haul truckers in the US, I will predict that long before there are self driving trucks replacing those 2 million truckers, there will be more than 2 million people doing deliveries to homes and offices.

And I also predict I also, you know, you just look at demographics. It turns out that being a trucker is a lousy job and they don't, they can't even hire enough people. They need more people. They don't need more, more, more trucking jobs. To me, one of the really interesting questions that's implicit in self-driving cars is not does the work go away, but who owns the trucks? Because it seems to me one of the really big questions in our future economy is, are we talking about centralized networks that take all the value for themselves or platform-style networks that are enablers for other smaller businesses? Does Uber become,

you know, say, well, we're going to have self-driving cars and we're going to get rid of all the drivers, or are we going to be a platform for ride-hailing that will be more like Airbnb except people are supplying their own vehicles, in which case we're a platform? Because if people own the means of livelihood, it doesn't matter whether they're driving or their car is driving. But do you really think that's going to happen? I mean, right now, we talk about Uber and Google, and they aren't creating self-driving cars to sell.

They're creating self-driving cars to get wealthy themselves. And so it's not just that we're losing the job. We're losing the livelihood, just as you say, because we're concentrating the wealth further into the corporations. Oh, my God, I can't believe I'm saying this. I think it's, you know, it's we really have to understand that better. I don't think that we – first of all, I agree. One of the things I'm trying to get across in the book is that there are – that all of these platforms need to be thinking of themselves as creating and enabling work and supporting the suppliers as well as the consumers. But a lot of that is happening. You look at Amazon as a marketplace,

and it's enabling a lot of small businesses who sell through the platform, just as ebay did before you know there are people who are making a living uh because they have access to a global market now uh you know certainly a national market i say the same thing with alibaba over in china you know this is a a pretty major job creating platform that goes way beyond the jobs that are at amazon and you know i don't think that i don't see enough economists and econometricians studying the net impact and understanding the relationship between the small businesses that that rely on these platforms and the platform itself and how that changes over

time. Like I've been looking at Google's financials lately and kind of it's one of the things that alarms me is the fact that, you know, five years ago, 30% of Google's ad revenue came from advertising on third party websites. It's down to 18% because growth of revenue on Google's own sites is so far outpaced what they're doing for people who used to be their suppliers. I need to do similar analysis for Amazon because it seems to me that in a healthy platform, they're going to want to be continuing the contribution of all the players into their marketplace. Because if it continues to decline, eventually the marketplace goes away. Well, that seems like a side effect of the kinds of consolidation you've been talking about. And do you see any mechanisms by which we redistribute, re-decentralize things?

Or are we looking at just more big platforms becoming, accreting to be larger and larger over time until something falls apart? I think that, first of all, I do think that platforms can have self-interest. A great example of this is what Google did with Android. You know, they basically, you know, Apple was basically saying, wow, new market, we're going to own this thing, we're going to have all the value. And, you know, it was a fairly strategically unique and brilliant move where Google said, we're going to give away, you know, via open source, Android, you know, we're going to play this different game, we understand that open source is this is this is a weapon of the

underdog uh we're going to enable this other you know marketplace we're going to give it to samsung we're going to give it to huawei we're going to give it you know we give you know to all these other people uh to build phones and you know enormous value got created in that ecosystem for other people than google and but it preserved google's sources of profit and growth as well and the companies that tried to do the same thing as apple you know like microsoft you know we're like well we're going to have the vertically integrated phone that we own all uncontrolled you know it didn't work you know google's generous strategy was a stronger strategy than than the well we're gonna we're gonna play that same uh let's own it all strategy that we used

before so i guess my point is that that companies uh again part of what i'm trying to do in the book is to teach people that generosity can often be a robust strategy. And I agree with that. It is hard to get over the general fear of change. Yes. And helping people understand that change has happened before and change will happen again. And try not to, as you said, hold too tightly onto the present. Specifically, do you have ideas for what people are afraid of that they necessarily shouldn't be? I mean, we mentioned losing jobs and displacing them instead. Are there other things like that where people hold a deep fear and they maybe

shouldn't? Well, I think the fear that we should all have is that we should all be afraid of the breakdown of our institutions. The thing that I believe is really essential for us as a species is actually to build newer, stronger institutions that we can trust. And it's one reason I'm skeptical of a lot of the narrative around cryptocurrencies. Now, first of all, I think that there's some really interesting technology there and something, one day we're going to wake up and go, oh, somebody got it right. In the same way that hypertext was really interesting, but it didn't take off until Tim Berners-Lee did it a little bit differently. And then all of a sudden they had this immense scalability and utility that was missing when

Ted Nelson had his idealized hypertext system. But I think that there's a narrative, a kind of a libertarian narrative around cryptocurrencies that I find disturbing. Because it feels a little bit like, well, we're going to control our own destiny. This is a way of making sure that the man doesn't have access. And of course, it's not really true cryptocurrencies ended up being quite centralized you know um as almost every technology that starts out with the promise of democratization but you know the question of how do we trust collective institutions is a central question of our time uh and you know i think you know we, we've done pretty well in the first wave of the Internet. You know, we think Google worked very hard to become a trusted source of information.

You know, there's been this battle for the soul of Google, which they may be losing. Your mileage may vary around, you know, do their commercial interests trump their desire to do right by their users? You see Mark Zuckerberg at Facebook going through that same question. But we also see this immense, there's been an attack on our trust in institutions like government and media. And it's in some ways deserved because it's been doing a crappy job but the answer isn't to say we're all going to go to idaho and be survivalists whether you know in in the physical world or digitally it's like no we have to renew those institutions we have to take them into the 21st century we have to understand what it means uh to, you know, giant systems of human capability that we can believe in.

And I think it will be, you know, when I look at the future and if I were to imagine, you know, looking back from 100 years from now, you know, one of two things is going to happen. Either our civilization will have broken down or we will, in fact, have developed new kinds of companies, first off, that recognize that they're really ecosystems and everybody has to win. Not just the company can't just trade against its customers. They recognize that you can't just give all the value to the customers, you have to give it to the suppliers too, so they stick around, you know, all the things that I talk about in this book, but also that we figured out governance, we figured out how do we, you know, come to consensus about the things that we want to do. And I think that there's been a lot of great work on the Internet about how consensus emerges naturally. And I think we're actually, in a way,

we are redefining what it means to be a market without quite knowing it. There's this great phrase in one of Ernest Hemingway's books, I think it's The Sun Also Rises, where this character, Mike, is asked, how did you go bankrupt? And he says, two ways, gradually, then suddenly. And I feel like the future comes at us like that. It happens gradually, then suddenly. offered by a buyer and taken by, you know, a seller, you know, willing buyer, willing seller has been the coordinating function of the invisible hand. But just take a company like Google, and you realize that, oh, actually, you know, here's this immense system of value, which is exchanged, you know, by the people creating content. We create web content.

Other people consume it. And Google does monetize it through an old-style market economy around advertising. But the fundamental coordinating function of what's valuable isn't through money at all. It's through all these other big data signals that tell somebody to say, oh, you should listen to the Embedded podcast. Same thing with social media. There's different kinds of signal than price. And we have this new economy growing under our noses. And we just haven't recognized as an economy because we think an economy is money an economy is exchange and we're exchanging all the time and we do have to figure out how that converts into you know the means by which we

you know we eat the means by which we um you know put a roof over our heads, stay warm. But it's actually, I think we're further along on the path to a next economy than we realize. And one day, gradually, then suddenly, it will occur to us. Clearly, it's just a combination of Patreon and Kickstarter. Well, it's not just that. I'm kidding. It is. Patreon and Kickstarter. Well, it's not just that. I'm kidding. Patreon and Kickstarter are one of the interfaces. I actually talk in the book a little bit about a company called 4Card, which is a social media agency.

And the founder had this great line he told me. He said, look, if you're a social media star and you're doing work for a low-status brand, they pay you money. If you're a social media star and it's a high-status brand who has something you want, you do barter. It's like he gives this example of he whips out his phone and he shows me, this is my last vacation in Italy with my family and you know they were driving around in two Porsches you know in exchange for him posting pictures of his vacation you know uh and uh you know he said you know he mentioned something of you know some social media star taking a bunch of her friends to the opening of some new hotel in Macau you, because it was a cool trip. But if you're Old Navy, you pay cash. Yeah, I've seen that. In your book, you tell several stories about seeing possibilities, such as Amazon, as you mentioned here, about it being a bookseller, then a retailer,

and then as a platform. But have you been wrong? I mean, your book has a lot of these stories where you were in the right place in the right time, and you got to be part of something making history. But were you ever blindsided by the capabilities of something that came out? And before you thought, ah, that's not going to amount to anything? Oh, absolutely. I still probably the most famous time was Clay Shirky organized a little summit on what he called social software. It was before social media. He just called it social software. And at least the way he was framing it, I was very skeptical.

And then, of course, Facebook kind of took over the world a year or so later. So that's probably a quite notable example but probably the thing i would say that mostly i don't think i don't think of myself as being wrong a lot because i don't think of myself as being right a lot you know i i think of myself as i'm noticing a bunch of stuff and I have a hypothesis about it. And if the hypothesis is wrong, I change it. You know, so it's not like I don't have some, you know, big, you know, like there's things that I believe about the direction of the world. But it's not like this is a hard and fast. This will happen.

You know, and that's what I backed with the beginning of the conversation and this idea of, you know, that the world, you've got to hold your view of the world lightly. You know, I, you know, like right now I'm sitting here going, you know, I'm just not convinced about cryptocurrencies. But I'm totally prepared to be wrong. In fact, I expect at some point, I think this is super interesting. And I just don't think that it's entirely cooked yet. In the beginning, I introduced you as a futurist and you disagreed. I, of course, stole that from other things. So I was a little surprised you disagreed. I, of course, stole that from other things. So, I was a little surprised you disagreed. Why don't you take that title? Well, because, again, I think it has to do

with this idea that being a futurist implies predicting the future. And I don't think, as I said in the beginning, I don't think that I predict the future. I simply notice things about the present. And I say, this is already happening. You know, and that's why I quote so much of William Gibson, quote, the future is here, already here. It's just not evenly distributed yet. You know, so I say, oh, this is really interesting. This is happening um you know and i i don't go out there and say well this

means that you know i mean there's an implication i suppose you know like when i you know back in uh you know uh you know 1998 and i'm starting i'm saying to all these people that uh you know open source is a happening thing. But I'm also saying open source is a happening thing. And one of the things that I'm really fascinated by is that it's changing the nature of software. It's not just the old, the implications that I could already see. And I started teasing out over the next few years that increasingly separated me from other people talking about open source software. As I started talking about, you know, the fact that it was software as a service. I didn't use that term, but, you know, basically it's performed.

It's not an artifact. It's got, you know, Amazon has people inside it, you know, which was sort of leading down this concept of DevOps. You know, this was, you know, the role of collective intelligence. You know, these were all, you know, they were still, you know, Amazon was interesting. Google was interesting, but it wasn't clear yet that they were going to become, you know, as world changing as they were but but i could already see in you know these early examples things about how they were different from the old map that people had of what it meant to be uh you know a technology company that i could call these things out and say this is interesting keep looking for more of that i mean a lot of what I do is

I kind of have a hypothesis about something that's interesting in the present. And then I just look for more like it and to see if it's developing. And over time, you kind of get a trend line. And then you start to believe, oh, yeah, more and more of this is going to happen. So like right now, I'm sitting here going yeah you know all these things that we took for granted about um you know the digital world that there's these sort of platforms that are uh doing delivering new kinds of coordination between supply and demand are affecting the real world look we see that with uber and lyft you know, and, you know, and I try to tease that apart as I do in the book saying, well, what's really going on here? And I try to look at a bunch of the factors that, you know, Uber and Lyft teach us about the present

and what's possible. And then are people thinking about it in the right way? You know, so I look at this and I go, well, we're the Uber of uber of dry cleaning and i go actually that doesn't make sense you know why because you know again i have this chapter in the book where i talk about business models where a business model is uh the way that all the parts of your business work together to create you know customer uh value and marketplace advantage and uh uh and i i i look at that and i say okay well there's this magical user experience of you know i i asked for this thing and it just happens okay check uber of dry cleaning but it's also a marketplace that actually where you grow the capacity of the market to deliver the service, i.e. creating more supply, more demand creates more supply. Actually, that doesn't fit with the Uber of dry cleaning. We're not going to get more dry cleaners because it gets easier.

You know, or, you know, if somebody wants to be the Uber dry cleaning, they better be prepared to take that job on. And it's a lot harder than the job of, you know, getting people who already own a car to just start using this app. Oh, wait, there's this whole thing. Why is it easy for this? Because the fundamental thing, the capability that makes it possible for somebody to be an uber driver isn't just that they own a car it's that the app teaches them the skill of how to pick somebody up and how to get them to their destination oh cognitive augmentation you know and uh the the you know the fundamental you know uh of how does cognitive augmentation play you know so i go it doesn't really play for being the u of dry cleaning.

But on the other hand, you look at all the things that I could decompose Uber and Lyft into, and I go, oh, I was talking with the CEO of Autodesk the other day, and he's talking about how construction management software is changing. I go, oh, that does look a lot like the thing of Uber and Lyft, because one of the challenges in you've got this big marketplace of people who do the work, all the subcontractors in construction, those people are currently badly coordinated, just like the suppliers of, you know, taxi cabs were badly coordinated you can you know like a tightly integrated construction firm can literally do a job in a fraction of the time of uh you know these general contractors with a big host of subs because the scheduling is so awkward you go so there's this huge algorithmic efficiency

to be found just like there was a huge algorithmic efficiency to be found in matching up drivers and passengers relative to the taxis and And so you can kind of see the pattern. You go these five or six things about Uber and Lyft that make those such an attractive business. And you go, oh, yeah, actually, a good number of those things apply to construction management software. They don't apply to dry cleaning. And you go, oh, okay, I've got a map of the world that makes sense of the possibilities of the future. Yes, I liked in your book how you talked about the rhyme and rhythm of history to help you look forward. And you've been talking about this book quite a bit in the various press podcasts and i believe you had an article in the wall street journal recently uh what questions do you wish somebody would ask you

about i guess the thing i'm i'm um i'm not sure i i have questions that i wish they would ask me about i have questions that I wish people would be asking of themselves. Let me tell you a few of those, because they're the questions that I'm asking and that I don't yet have answers to. So a good piece of this is, for example, thinking about what should antitrust look like in a world of platforms? And right now, our theory of antitrust really hinges a lot on benefit to the consumer. Is the consumer getting cheaper prices? And I think that that's actually had fairly deleterious effects in our society. The fact that we have this increasing concentration of power uh extractive rents from big centralized companies uh you know and we used

to you know there was actually a point in antitrust law where they were really considering you know sort of harm to merchants uh and so on it was actually one of the signature cases was around uh the first supermarket chain the a Great Atlantic and Pacific Tea Company, the A&P. And, you know, we need to actually think about the relationship between platforms and their ecosystems. I mentioned this thing about Google and, you know, and how much of their revenue is now coming from their own services, which are increasingly eating the ecosystem. And you go, okay, well, measuring those kinds of things for companies would be something as a question I wish that people would be asking. They should be asking that about what is the health of Apple's App Store? I mean,

how concentrated has it become? What is the health of Amazon's's app store i mean how concentrated has it become what is the health of amazon supplier ecosystem to what extent is amazon competing with them uh but there's also a set of questions that i'm really uh intrigued by around you know sort of shareholder capitalism and uh how much capital uh is actually needed by today's companies? And where is it going? You know, because take a look at a company like Apple, which has, you know, wealthiest company in history. And yet they don't need any money from someone like Carl Icahn. Yet when he buys Apple stock, we call him an investor.

Apple didn't get anything from it. Maybe indirectly because it's people like Carl who are driving up the value of the stock. And to the extent that insiders benefit from that stock, the value of that stock, and Apple pays its employees to some extent in that stock, it matters. But we have this huge betting market. I'd love to see people disambiguating it from the real economy. Apple makes its money not from its investors. It makes its money from selling stuff to customers. And the investors bet on how much money they're going to make. And we're totally confused about that. And I'd love to see people asking more hard questions, particularly about when you look at tech.

There's a few exceptions like Tesla and SpaceX and in a different way, where they have used a lot of capital. But Google didn't use much capital. Facebook didn't use much capital. Microsoft didn't use much capital. You know, the industries of the 21st century are generally not that capital intensive. And yet we believe that somehow we should be giving all the returns to capital why is that that's an excellent question and i have one more excellent question okay not related to your book but to my book okay uh o'reilly's making embedded systems and that is

why couldn't i have a dinosaur on my O'Reilly cover? That's a really good question. Finally, I went to the top to ask this question. Yes, it's a very, very good question. Now, I will say that it's a secret of our designers, going back to Edie Friedman, who originally came up with the animal book cover idea, that the designers never tell anybody why they chose a particular animal. And I actually think, you know, if you had a good story about the dinosaurs, maybe you should have gotten it. Tell me, why did you want a dinosaur? As part of the book, I go over how to read a data sheet. And since I needed a data sheet that I wanted people to actually read, but I could make technologically interesting, I created a digital analog dinosaur. And in order to make it run, you have to charge up its feet, and then it charges.

It was very pun filled and some people enjoyed this but also because embedded systems are kind of the dinosaur of software engineering we tend to be way behind and yet it's still really interesting kids love it wait no that wasn't one of my reasons but it was mostly because i kind of already had dinosaurs in the the book i have to say i i i if i had been involved not that i ever have been really i i made an uncovered decision in in uh the company's history uh well actually no i made two really important ones uh oh two one one unimportant one i'll tell you the both of them but the one author who ever got the animal he requested was Larry Wall, and his reasoning was actually a lot like yours. Edie gave him his request.

This was for programming Pearl. Everybody was like, oh, Pearl should be an oyster. She's like, no, we don't do obvious things. Larry said, no, I want a camel. She said, why a camel? He said, because Pearl is ugly, but it can go long distances without water. And she said, camel. So she was always looking for some interesting, you know, backstory that, you know, people

would be wondering about. And if, you know, they might speculate and get something right, it would be interesting and it would become sticky as a result. And I think over time we just sort of lost, you know, as she got less involved. I think your dinosaur would have been great. And I'm sorry you didn't get it. Could you call Andy Orem, my editor, and let him know? The book's been out for a while, hasn't it? Oh, yeah. It's been out for a few years. it oh yeah it's been out for a few yeah yeah so it's

not like we're not changing we're not changing it so the um uh but i i i think the idea was that some kind of of leap there but back to the the cover decisions that i made uh the the one that i did uh edie the original animal book covers were a gift to the company by this woman edie friedman who at the time was a designer actually she did video i think at digital equipment corporation and she was a housemate of a um uh one of our employees and and she heard about our desire i basically we'd had some covers designed and they were geometric and high tech and i said that's not us and that was probably that was the first cover decision that i made that was consequential and uh linda lamb uh our our

writer happened to tell edie about it on the weekend and edie went oh these unix program names sound like weird animals she came up with the color cover concept did seven comps and sent them into us and uh we were totally taken aback by them but eventually we said yes and the one change that i made this is the inconsequential cover intervention that i made was that uh the guy who's on the cover of learning the vi editor the tarsier with the big eyes and the and the big fingers and pads. I think he was originally on learning Unix. And I said, no, I like him better on learning VI because it looks like somebody who's been, you know, at a keyboard too long.

And Edie reluctantly switched it for me. Well, I ended up with the Great Eared night jar which was fairly fitting it's a very serious looking bird with giant ear floofs that are silly and that works for the book mostly serious with the occasional bits of dinosaur silliness chris do you have any other questions you'd like to ask so we've been talking a lot about heavy concepts and deep things in platforms and technology, but I was wondering if there's anything frivolous and fun that you look forward to with technological developments that maybe isn't all that important. Oh, that's interesting. Frivolous and fun and fun yeah I think that

you know well let me put it this way I would like to be able to teleoperate a drone and see through its eyes and I think we're a ways off from that but it'll happen eventually it's kind of like the scene

in the once in future king where where wart you know who later grew up to be king arthur uh can see through the eyes of a hawk i think we i think we're going to get there i already do that you do that yeah yeah i've seen you do that you look ridiculous in the park well i mean you can do it with virtual reality you know with a heads-up display and a drone with goggles. But I mean, literally, with a brain interface, I think we'll be eventually.

But yeah, I mean, it's pretty cool to do even with today's technology. But it's very sick-making. I think that covers it. And I think we're about out of time. Tim, do you have any thoughts you'd like to leave us with? You know, I guess the main thought I would have is that we should all celebrate how many good things have happened, as well as worry about all the things that have gone wrong.

And just try to make more of the good stuff and less of the bad stuff. I like it. Our guest has been Tim O'Reilly, founder and CEO of O'Reilly Media and author of the book WTF, What's the Future and Why It's Up to Us. Thank you for being with us, Tim. Oh, thank you for having me. It's been fun. Thank you to Christopher for producing and co-hosting. Thank you to Chris Zweck for again, helping me with my outline.

Many of the best questions were his. Thank you to our Patreon supporters for letting me send mics to guests. I really appreciate it. And of course, thank you for listening. A quote to leave you with. I was going to go for that William Gibson one that Tim already said. So how about Isaac Asimov, the first of the three laws of

robotics laid out in iRobot. One, a robot may not injure a human being or through inaction, allow a human being to come to harm. Embedded is an independently produced radio show that focuses on the many aspects of engineering. It is a production of Logical Elegance, an embedded software consulting company in California. If there are advertisements in the show, we did not put them there and do not receive money from them. At this time, our sponsors are Logical Elegance and

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