PenLUG Talk: Fast, Cheap, and Out of Control

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.

PenLUG Talk: Fast, Cheap, and Out of Control

by David Weekly on Apr 14, 2009

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