Wired business conference paper Disruptive by design

BUSINESS CONFERENCE JUNE 15, 2009 / NEW YORK CITY WIREd dIgITal WhITE PaPER / JUNE 25, 2009 Presented by

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / TaBlE OF CONTENTS 2 / INTRODUCTION 3 / FRee: The FUTURe OF a RaDICal PRICe CHRIS ANDERSON editor in Chief, WIReD Magazine 4 / COllabORaTION as a bUsINess MODel TIM CADOGAN CeO, OpenX MARK SHUTTLEWORTH Founder, Ubuntu Project 5 / bReakINg The PRICe baRRIeR ELON MUSK Founder, Tesla Motors; spaceX 6 / IT’s NOT abOUT The CaR SHAI AGASSI Founder & CeO, better Place 7 / aND DaTa FOR all VIVEK KUNDRA Federal CIO, Usa 8 / The leasT lIkely FINaNCIal gIaNT SCOTT THOMPSON President, PayPal 9 / havINg CONFIDeNCe ON The eDge JEFF BEZOS Founder & CeO, amazon.com 10 / DIsRUPT beFORe yOU’Re DIsRUPTeD JEFF IMMELT Chairman & CeO, ge 11 / WhO NeeDs MOODy’s? JESPER ANDERSEN & TOBY SEGARAN Co-Founders, Freerisk 12 / The gaMe has JUsT ChaNgeD NEIL YOUNG Founder & CeO, ngmoco 13 / ReCaP: a Day OF DIsRUPTIve DIsCUssION 18 / sPONsORs 1/

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / We live in an era of relentless change. New technologies and business models emerge almost overnight. advertising, retail, manufacturing, media, financial services, travel—no matter what business you’re in, you’ve felt, or are about to feel, the shockwave that disruption brings. at WIREd we believe this flood of innovation represents a huge opportunity —a once-in-a-lifetime chance to transform a company and a career. disruptive By design was our effort to capture this concept for a select like-minded audience. In the pages that follow you’ll find summaries of all the conference events. Each of our panelists told a different story of how to deal with change. Jeff Immelt discussed shutting down gE’s incandescent bulb business because it was good for his bottom line—and good for the planet. Federal CIO Vivek Kundra laid out his ideas for government transparency via the new website data.gov. and Neil Young of mobile game maker ngmoko shared how he discovered a path to growth in the iTunes app Store. There were more insights from Jeff Bezos, Shai agassi, Elon Musk, WIREd editor Chris anderson and others. The clear message: If change is good, more change is better. Whether you were at the Morgan library for the conference or you’re just catching up now, we hope the ideas from disruptive By design will leave you feeling better prepared to adapt, respond, and thrive—no matter what comes at you next. 2/

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / FREE: The Future of a Radical Price ChRIS aNdERSON Editor in Chief, WIREd Magazine W ant an idea that will shake things up? What about free as the ultimate price point? WIREd Editor a full subscription, which gives them access to deep business news and specialized financial tools. in Chief Chris anderson has spent the last two years thinking about Microsoft is another example of the idea of free. he says that zero is smart use of the free model, says rapidly becoming the going rate for anderson. The company protested new competitors entering markets quietly but took little legal action and even for established companies while its Windows operating system hoping to extend themselves. was widely pirated in China. Microsoft executives were betting that each “We have never had an industrial pirated copy of the operating system economy where things got 50 percent would help build a base of customers cheaper every year,” says anderson. who would pay for the convenience Nowhere is this more true than on the of Windows support when they could Internet, where nonexistent barriers afford to. “looking the other way,” Photo / JosePh Moran to entry and infinitesimal marginal says anderson, “Microsoft let pirates “In some ways, the comPetItIon Is to get to free before yoUr / ChRIS aNdERSON is editor in chief of WIREd magazine, a position he took in 2001, and has led oPPonent does.” the magazine to nine National Magazine award nominations, winning the prestigious top prize costs make free the new real price. be their best marketers, so that some for general excellence in 2005, 2007 and 2009. “It’s the law of gravity, but online,” says day that piracy would come back as he is the author of the New York Times best-seller anderson. “Everything digital will have revenues.” anderson says that the The Long Tail, and runs a blog on the subject at a free counterpart. In some ways, the Microsoft example perfectly illustrates www.longtail.com. anderson will publish his next competition is to get to free before two major types of customers in book, FREE: The Future of a Radical Price, in July your opponent does.” the world of free. One group is price 2009. he is also founder of Booktour.com, a free sensitive, and looks for the lowest online service that connects authors on tour how to decide if a business could cost no matter what. The other is risk with potential audiences. Previously he was at benefit from free? anderson says that sensitive, willing to pay—sometimes The Economist, where he served as U.S. business companies may want to make their a lot—for support, reliability, and editor, asia business editor and technology editor. most popular product available for timeliness. anderson’s media career began at the two premier free, and then charge for specialized science journals, Nature and Science. anderson services, products or content. an and how does anderson incorporate holds a Bachelor of Science degree in Physics example: wsj.com, the online services free into his own life? his new book, from george Washington University and studied of the Wall Street Journal. The FREE: The Future of a Radical Price, Quantum Mechanics and Science Journalism company offers dozens of news stories out in July, will be available in at the University of California at Berkeley. and blogs for free every day. Readers audiobook and e-book versions who want more pay $100 a year for for—you guessed it—free. / ClICk heRe FOR COMPleTe vIDeO COveRage wired.com/wiredbizprogram/videolibrary.html 3/

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / Collaboration as a Business Model Photo / JosePh Moran TIM CadOgaN CEO, OpenX / TIM CadOgaN is the chief executive officer of OpenX. I OpenX’s purpose is to help businesses worldwide grow t’s the ultimate business challenge: software becomes more attractive to by providing compelling, open online advertising prod- Can you make money going up manufacturers like dell and hP, who ucts and services that drive revenues. Today, OpenX’s against Microsoft and apple, google license proprietary versions of Ubuntu. primary product is the world’s leading independent ad and Yahoo, armed only with software Even at cut-rate prices, other operating server, which is used by more than 35,000 publishers and services that are free and open systems can’t compete. Shuttleworth on more than 150,000 websites across the Internet. for anyone to adapt? “When you start estimates that Ubuntu now has From 2003 to 2008 Tim was at Yahoo!, most recently with zero revenues,” says Tim Cadogan, between 10 and 15 million users, just as Senior Vice President of global advertising Market- CEO of ad publisher OpenX, “you have behind the Mac OS. places overseeing the primary advertising product lines nothing to lose.” at the company—including display, Search and Video. Cadogan’s company works on a Previously at Yahoo!, Tim was Vice President of Search That’s the basic story of open source “freemium” model: OpenX provides where he was responsible for both the consumer search software. Companies like OpenX and ad publishers with free, flexible core and paid search businesses. Prior to Yahoo!, Tim was Vice Ubuntu have repeatedly found ways software applications that users President of Search at Overture (formerly goTo.com). to turn the weaknesses of their larger can build and tweak to reach their at Overture, Tim played several roles, including driving competitors into opportunities. Says company’s target audience. Websites product development and evangelizing the paid search Ubuntu founder Mark Shuttleworth, “It’s can use the free version of OpenX to model to the global search and portal industry. no surprise that smaller organizations serve up to 100 million ads per month. “PeoPLe are InVentIng thIngs MaRK daILy, yoU encoUrage them to ShUTTlEWORTh eXPLore, and yoU Founder, Ubuntu Project can cherry PIcK what worKs.” / MaRK ShUTTlEWORTh is founder of the Ubuntu Project, an enterprise linux distribution that is freely available are willing to break the rules. The More than that, and they pay. OpenX worldwide and has both cutting-edge desktop and disadvantage to being the incumbent, sees as many as 300 billion ads a enterprise server editions. Mark studied finance and to being the 800-pound gorilla, is that month flow through its servers. information technology at the University of Cape Town, you’ve come to depend on things being and went on to found Thawte, a company specializing true. They may have been true when Both Cadogan and Shuttleworth say their in digital certificates and cryptography. he sold Thawte you were founded, but might not be true mix of business is changing, with some new to U.S. company VeriSign in 1999, and founded hBd today. Someone can come along and clients asking for services as well as Venture Capital and The Shuttleworth Foundation. he operate without those constraints.” software. That’s where the constant moved to london in 2001, and began preparing for the innovation of open source really starts First african in Space mission, training in Star City, Russia, as an example, Shuttleworth cites the to pay dividends: Their collaborators come and Kazakhstan. In april 2002 Mark flew in space, as a rise of netbooks, small, inexpensive up with more good ideas than any one cosmonaut member of the crew of Soyuz mission TM34 computers designed primarily individual or company ever could. to the International Space Station. In early 2004 he for running Internet applications. “People are inventing things daily,” says founded the Ubuntu Project, which aims to produce a as competition drives down prices Shuttleworth. “You encourage them to free, high-quality desktop OS for everybody. for the machines, open-source explore, and you can cherry pick what works.” / ClICk heRe FOR COMPleTe vIDeO COveRage wired.com/wiredbizprogram/videolibrary.html 4/

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / Breaking the Price Barrier ElON MUSK Founder, Tesla Motors; SpaceX E lon Musk is a triple-threat disruptor. as a founder of PayPal, he took on the banking industry. electric cars, running on an array of batteries not so different from those in laptop computers. Musk wanted his SpaceX Falcon 1, launched by his Space cars to disrupt the hybrid market, and Exploration Technologies, was the first as a hands-on executive supervising privately developed liquid fuel rocket to product development and design, he reach earth orbit. and his Tesla Roadster got his way. he says that detroit’s is the world’s first lithium-ion supercar. Big Three automakers have ended up What does a guy like that worry about in such a mess in part because they at night? The price of gas. It isn’t high skimped on innovation in engineering. enough. “You really need the product guys running a product company,” argued Photo / JosePh Moran Musk would like to see US pump Musk. “The path to the CEO’s office prices more than triple. That would shouldn’t be through the CFO’s “the Path to the ceo’s offIce ... / ElON MUSK is the chairman, CEO and Product needs to be throUgh architect of Tesla Motors, where he has overseen engIneerIng and desIgn.” product development and design from the beginning, including the all-electric Tesla Roadster and Model S sedan. Electric vehicles have been one help hasten the death of the internal office, nor should it be the marketing of his central interests for almost two decades, combustion engine and usher in department. It needs to be through stemming from his time as a physics student the electric car era. “The economic engineering and design.” working on energy storage technologies. Elon’s forcing function that should be at the other primary activity is serving as CEO and CTO pump—which should probably be $10 Even though he sees himself as a of Space Exploration Technologies (SpaceX), gasoline—isn’t there,” says the Tesla competitor, Musk says he wishes which develops rockets and spacecraft for CEO. “You have to try to bridge that gap detroit no ill will. “”I hope they get very, missions to Earth orbit and beyond. In 2006, with innovation. I’m putting so much very focused on making great cars,” he SpaceX won the NaSa contract to design, build time and effort into helping create says.” and there’s at least one thing he and demonstrate operation of a commercial Tesla because I hope we can accelerate envies about the Big Three: their acres replacement for the Space Shuttle, which retires that transformation.” and acres of factory space. “When the in 2010. The SpaceX Falcon 1 was the first privately mess gets sorted out,” says Musk, “I’d developed liquid fuel rocket to reach orbit. Prior to The Tesla Roadster and the new Model S like to say ‘I’d like some of those plants, SpaceX, Elon co-founded PayPal, the world’s leading sedan aren’t hybrids—they’re pure if you don’t mind.’” Internet payment system, and served as the company’s chairman and CEO. / ClICk heRe FOR COMPleTe vIDeO COveRage wired.com/wiredbizprogram/videolibrary.html 5/

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / It’s Not about the Car ShaI agaSSI Founder & CEO, Better Place a s CEO of Better Place, Shai agassi has turned the auto industry business model on its head. Instead stations and battery swap locations. and, says agassi, as China goes, so goes the world. “Once China does it, you don’t of focusing on the vehicle and letting have a choice,” he says. someone else sell the fuel, his company will provide the infrastructure to power a agassi describes the american auto new generation of electric cars. drivers industry as “a man-made Katrina,” but will stop for a charge or a new battery, he also says the survivors will need the which will take about the same time infrastructure and support of companies as filling up the tank does today. Once willing to lead the transition to electric there’s a distributed system to reliably vehicles. “You have to enable the six “we’Ve done the crazy thIng of raIsIng a ton of caPItaL to PUt Photo / JosePh Moran the networK In PLace before the ProdUct eXIsts.” power electric cars, agassi is confident car makers that will survive this wave,” somebody else will step forward make he says, “because Car 2.0 has to come / ShaI agaSSI is the founder and chief executive the vehicles. “We’ve done the crazy from them.” of Better Place, a company focused on one of this thing of raising a ton of capital to put century’s biggest challenges—building a scalable the network in place before the product Even if a market for electric cars does and sustainable personal transportation system exists,” he says. develop in China, the global transition that ends oil dependence. he works directly with from gas to battery power will still take government leaders, auto manufacturers, energy The governments of Israel, denmark, years and massive investments. “We’re companies and others to make his vision of zero- and China apparently think agassi is not in this game in order to make a quick emission electric vehicles powered by renewable anything but crazy. Better Place has buck,” agassi says. “Our goal is to end energy a reality in countries around the world. inked deals with all of them to start oil, and you can’t do it with a thousand This vision was inspired by a profound question building the company’s charging cars. To end oil you’ll need a billion cars.” posed at the World Economic Forum in 2005, “how do you make the world a better place by 2020?” With a passion for tackling large-scale challenges, agassi sought to answer this question by creating a pragmatic plan to free cars from oil, reduce harmful emissions, and usher in an era of sustainable mobility. / ClICk heRe FOR COMPleTe vIDeO COveRage wired.com/wiredbizprogram/videolibrary.html 6/

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / and data for all VIVEK KUNdRa Federal CIO, USa “O pen, transparent and accountable” may seem antithetical to what americans have ‘We the people’ rather just a few folks making all the decisions.” come to expect from the federal “The default setting of the United government, but Vivek Kundra, the new States government should not Federal Chief Information Officer, says be that everything be secret and he can change that. he has plans to closed,” Kundra says. “The default improve the way the government works setting should be open—making sure and drive innovation in the public and that we are not releasing information private sectors by putting government that may be classified, or sensitive.” information online where it will be available to anyone with a computer. More than just a one-way feed, the data.gov dashboard will allow users to The front door for this effort will be manipulate information, create new data.gov, a site with feeds to all kinds applications, and tackle problems. For of federal data. data.gov started with instance, Washington spends more Photo / JosePh Moran “the defaULt settIng of the UnIted states goVernment shoULd not be / VIVEK KUNdRa was appointed as the first Federal CIO of the United States by President Obama secret and cLosed. in March 2009. In this capacity, he directs the the defaULt settIng policy and strategic planning of federal information technology investments and is responsible for shoULd be oPen.” oversight of federal technology spending. The Federal CIO establishes and oversees enterprise 47 feeds three months ago, and now than $76 billion a year on information architecture to ensure system interoperability has more 100,000. Eventually it will technology. Kundra expects that and information sharing and ensure information aggregate information from every NgOs and private businesses will security and privacy across the federal government. agency in Washington. analyze the data on procurement and deployment costs and create new Kundra has been recognized among the top 25 “data.gov will move us in a direction of applications and software that could CTOs in the country and as the 2008 IT Executive participatory democracy by allowing lead to huge savings. “We’re giving up of the Year for his pioneering work to drive the american people to see how power and authority, but there’s an transparency, engage citizens, and lower the government works and by recognizing economic argument for it, because cost of government operations. Prior to joining that the government does not have it allows innovators to tap into the the Obama administration, Kundra served in a monopoly on the best ideas,” says power of the country,” he says. Mayor Fenty’s cabinet as the CTO for the district Kundra. “We will have returned the of Columbia and governor Kaine’s cabinet as government to its rightful place, to assistant Secretary of Commerce and Technology for the Commonwealth of Virginia. his diverse record also includes technology and public policy experience in private industry and academia. / ClICk heRe FOR COMPleTe vIDeO COveRage wired.com/wiredbizprogram/videolibrary.html 7/

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / The least likely Financial giant SCOTT ThOMPSON President, PayPal P ayPal does one thing really well: It moves money from one person to another, instantly, with auction and sales site is still PayPal’s main opportunity for growth. But Thompson says he is constantly a few keystrokes and the click of a surprised by the novel ways that mouse. Which makes the company an people all over the world use PayPal, especially ingenious kind of disruptor. not just for transfers, but to do fairly sophisticated things like run “What we do is special,” says PayPal businesses and meet payrolls. Says president Scott Thompson. “We’re Thompson: “Make it simple, make it not aligned with any one brand. We’re convenient, and people will take you “maKe It sImPLe, maKe It conVenIent, and PeoPLe wILL taKe yoU Into theIr LIVes In Photo / JosePh Moran UnPredIctabLe ways.” brand agnostic…. It’s hard for other into their lives in unpredictable ways.” organizations to imagine that they will build something, put it out there, Thompson thinks a lot about / SCOTT ThOMPSON is president of PayPal, with and then let their competitors benefit competition from a newer, hungrier overall responsibility for growing the business and from having that infrastructure in company. “I worry about the next establishing PayPal as the leading global online place. The most frequent question we group of engineers, [people who] payment service. Scott previously served as get is, ‘What are you guys? a bank? are completely disruptive and totally PayPal’s senior vice president and chief technology an electronic transfer service?’ The determined. Could it happen? I wouldn’t officer, where he oversaw information technology, answer is that the world hasn’t seen bet against it.” Still, he says, “payments product development, and architecture. Prior to a company like ours before.” is not a business for the faint of heart. PayPal, Scott worked for Inovant, a subsidiary Customers have zero tolerance for of Visa formed to oversee global technology for PayPal is ubiquitous on eBay, which problems. You have to be good 100 the organization. as executive vice president of purchased the company from its percent of the time.” technology solutions at Inovant, he was responsible founders in 2002, and the online for all development, support and maintenance of Visa’s global payment system. Scott was also chief information officer of Barclays global Investors, where he implemented a new strategic technology platform and global infrastructure. In addition, he has worked with Coopers and lybrand, delivering services to clients such as Wells Fargo. / ClICk heRe FOR COMPleTe vIDeO COveRage wired.com/wiredbizprogram/videolibrary.html 8/

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / having Confidence on the Edge JEFF BEzOS Founder & CEO, amazon.com F ifteen years ago Jeff Bezos changed the way we shop online— now he wants to change the way we he sees electronic books as a net gain for traditional publishers, even if they don’t realize it yet. “If you look at the read. With the Kindle, the amazon digital efficiencies by not having to do all that e-reader, his goal is to end the era of the printing and the incremental gains printed book. “The book has had a great on selling more copies, authors are 500 year run, but it’s time for a change,” going to be read more. They’re going to he says, adding that a lot of customers make more money. Return on invested agree with him. “We launched [the first] capital is going to be higher, capital Kindle just over 18 months ago. There expenditures are going to be lower.” are now 300,000 books available. If as for the publishers’ seeming inability you look at the universe where we have to deal with the advent of the e-book, “It’s a myth that mULtI-PUrPose deVIces Photo / JosePh Moran are aLways better.” both the physical title and the Kindle “If you’re an incumbent and things are title, Kindle sales are 35 percent of the changing, it’s very anxiety producing.” / JEFF BEzOS has always been interested in physical book sales.” anything that can be revolutionized by computers. Bezos says the Kindle is a tool that makes Intrigued by the amazing growth in use of the Bezos discussed the decision to restrict reading easier. Which means people will Internet, Jeff created a business model that the new Kindle dX to the same basic read more, and buy more books. “Now leveraged the Internet’s unique ability to deliver tasks as the original: delivering books you can think of a book and have it 60 huge amounts of information rapidly and efficiently. and other text-heavy material. There’s seconds later. That will drive sales.” In 1994 he founded amazon.com, Inc., now no camera, no keyboard—why not? the leading online retailer that offers services “Reading is an important enough activity Who is the biggest fan of the Kindle? which traditional retailers cannot: lower prices, that it deserves a purpose-built device,” It may be Bezos. “I get grumpy now authoritative selection, and a wealth of product said Bezos. “It’s a myth that multi- when I’m forced to read a physical information. Before heading west to start amazon. purpose devices are always better.” book,” he says. com, Jeff worked at the intersection of computer science and finance, helping build one of the most technically sophisticated quantitative hedge funds on Wall Street for d. E. Shaw & Co. he also led the development of computer systems that helped manage more than $250 billion in assets for Bankers Trust Company. / ClICk heRe FOR COMPleTe vIDeO COveRage wired.com/wiredbizprogram/videolibrary.html 9/

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / disrupt Before You’re disrupted JEFF IMMElT Chairman & CEO, gE J eff Immelt is proof that you don’t have to be a small, scrappy inno- vator to create massive change. during Now Immelt and gE are applying this same thinking to health care. One example: a new magnetic resonance the past decade Immelt has led creative device that sells for a fraction of the disruption within gE, first on the cost of the company’s current MRI environment, and now in health care. machines. gE can introduce new products at lower prices in the United during the Bush administration, States and the U.S. “business will be Immelt decided to embark aggressively just fine,” he says. “and we unleash on green initiatives—even though incredible opportunities in Russia, it meant taking an axe to a prime China, India, Saudi arabia, africa… This source of revenue. “It’s obvious that is what’s going to power our healthcare this is now the right choice, but it business over the next decade.” “one of the reasons Photo / JosePh Moran It’s so hard to InnoVate or be dIsrUPtIVe Is that yoU rUn the rIsK of gIVIng somethIng UP.” / JEFF IMMElT is the ninth chairman of gE, a post he has held since September 7, 2001. Immelt has held several global leadership positions since was not part of the political climate,” Immelt also says that the United coming to gE in 1982, including roles in gE’s he says. By focusing on a program States needs to reinvent itself as Plastics, appliance, and Medical businesses. In called ecoimagination, Immelt and a manufacturing nation, to disrupt 1989, he became an officer of gE and joined the gE reduced the company’s costs by its own service economy. “We are gE Capital Board in 1997. In 2000, Immelt was more than $100 million. at an all-time low in research appointed president and chief executive officer. spending. Nothing happens unless Immelt has been named one of the “World’s Best But the changes meant killing gE’s we rejuvenate technology. We’ve CEOs” three times by Barron’s, and since he began incandescent light bulb business in got to like manufacturing. To be serving as chief executive officer, gE has been favor of compact fluorescent bulbs. a service-oriented importer is named “america’s Most admired Company” in a “In your gut, you know 100-year-old just wrong.” poll conducted by Fortune magazine and one of technologies might not last forever,” he “The World’s Most Respected Companies” in polls says. “One of the reasons it’s so hard “let’s get on with the process by Barron’s and the Financial Times. Immelt is also to innovate or be disruptive is that you of innovation,” says Immelt. “The a member of The Business Council, and he is on run the risk of giving something up.” rest of the world moves without us. the board of the New York Federal Reserve. You have to be willing to attack your People aren’t going to wait for us.” installed base. / ClICk heRe FOR COMPleTe vIDeO COveRage wired.com/wiredbizprogram/videolibrary.html 10 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / Who Needs Moody’s? JESPER aNdERSEN S ometimes disruption means picking up the pieces of a ravaged those products. The result: top ratings for risky products. “These days it & TOBY SEgaRaN operation and rebuilding it in a more useful, more robust way. That’s what really shouldn’t take too much to think through why we might want to Co-Founders, Freerisk freerisk.org is trying to do with the debt- revisit how we evaluate our debt,” says rating ratings system that helped cause andersen. the global credit crisis. Segaran and andersen are designing a let’s look at an example: how did transparent, crowd-sourced platform insurance giant aIg hold onto its aaa that anyone can use to modify, rank and Photo / JosePh Moran “we want to comPLeteLy change the way we thInK aboUt corPorate credIt ratIngs. / TOBY SEgaRaN is the co-founder of Freerisk and we want to decentraLIze the author of Programming Collective Intelligence, amazon’s top-selling aI book. his upcoming titles rIsK management.” Programming the Semantic Web and Beautiful Data will be released in July. he speaks on the credit rating almost to the moment sort financial data about a company. subjects of machine learning, collective intelligence that the federal government stepped Users can also collaborate to develop and freedom of data at conferences worldwide. in to save the company with a billion and test algorithms that turn that data he currently holds the title of data Magnate at dollar bailout? Jesper andersen and into useful ratings. Metaweb Technologies, where he works on Toby Segaran, partners in freerisk, large-scale data reconciliation problems. Prior say the answer is easy. The big “This is primarily a story about open to Metaweb he founded Incellico, a biotechnology agencies, Moody’s, S&P, and Fitch, data,” says andersen. “We want to software company acquired in 2003. he holds a rated complicated derivatives not on completely change the way we think B.Sc. in Computer Science from MIT and USCIS quality and transparency, but in order about corporate credit ratings. We want deemed him a “Person of Exceptional ability.” to please the customers who created to decentralize risk measurement.” / JESPER aNdERSEN is the co-founder of Freerisk and is a statistician, computer scientist and entrepreneur. he is currently a consultant with the Open data group, focusing on machine learning, risk assessment and artificial intelligence systems. he’s spoken on finance and statistical systems, and is the founder of Certainty labs, a start-up focusing on making complex statistical modeling simpler. Previously he was the lead architect at Visible Path, which was sold in 2008. Jesper holds a B.Sc. in Physics from haverford College and an M.B.a. from University of Chicago’s Booth School of Business, where he received the Vijay Vashee Most Promising Entrepreneur award in 2008. / ClICk heRe FOR COMPleTe vIDeO COveRage wired.com/wiredbizprogram/videolibrary.html 11 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / The game has Just Changed NEIl YOUNg Founder & CEO, ngmoco a s CEO of mobile games publisher ngmoco—that’s pronounced N-g-moko—Neil Young believes in time on the iPhone. “I noticed that I wasn’t just using it to make telephone calls. “ he says. like millions of iPhone the disruptive force of the iPhone. owners, Young also started to spend But even coming from a gaming time trawling the app Store. Many of background with Ea, Young says he the new applications are so good, and was caught off guard by the rapid so inexpensive, “users are starting changes that smart phones created to buy software like songs,” says in the mobile games industry. “If Young. Plus, iPhone customers always somebody had told me two years have their handsets with them. “We ago that I was going to be the CEO observed that entertainment and of a mobile phone game company, interactivity was not moving closer to I would’ve said ‘What the fuck the desktop, it was moving closer to happened?!’ did I get fired?” the person.” Photo / JosePh Moran “we obserVed that entertaInment and InteractIVIty was not moVIng cLoser to the desKtoP, / NEIl YOUNg is the founder and CEO of ngmoco, It was moVIng cLoser to creator and publisher of games exclusively for iPhone and iPod touch. the Person.” Prior to founding ngmoco, Neil held various Now that ngmoco has a clutch of Ultimately, the iPhone presents positions at Electronic arts, most recently as the games sitting comfortably in the ngmoco with a huge chance to disrupt. group general Manager of the Ea Blueprint Studio iTunes app Store Top 25, Young is no It’s a widely supported, web-enabled, group that included Maxis (creators of Spore™ longer stunned. But he still marvels at developer-friendly weapon in the and The Sims™) and Ea’s collaborative partnership how quickly the iPhone transformed his mobile battle against devices like with Steven Spielberg. Neil joined Ea in 1997 as business and his own phone habits. It’s Nintendo’s dS and Sony’s PSP. “The general Manager of Ea’s Origin Systems subsidiary, a reminder that disruption can come opportunity for us was not just to beat where he supervised the launch of the world’s first from any direction, at any time. the mobile games business,” says massively multiplayer online role-playing game, Young, “but to take the old handheld Ultima Online™. Young says he found himself spending business and crush it—to destroy it off less time on his computer and more the back of the iPhone.” Prior to Ea Blueprint, Neil served as Vice President and general Manager of Ea los angeles and Ea Maxis, where he oversaw the studios responsible for the blockbuster franchises Medal of honor™, Command & Conquer™, The lord of the Rings™ and The Sims. / ClICk heRe FOR COMPleTe vIDeO COveRage wired.com/wiredbizprogram/videolibrary.html 12 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / ReCaP: a Day OF DIsRUPTIve DIsCUssION 13 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / a Day OF DIsRUPTIve DIsCUssION “terrIfIc LIne UP of sPeaKers, and the aUdIence was jUst as ImPressIVe. aLLtoLd, a fascInatIng day. If yoU eVer get an InVIte to any eVent they host, It Is a mUst attend. they PUt on qUIte the show.” – author, Trader & CNbC analyst barry Ritholtz, The big Picture, June 15, 2009 1/ 2/ 3/ 4/ 5/ 6/ Photos / JosePh Moran CLOCKWISE FROM TOP LEFT 1 / ge Chairman & CeO Jeff Immelt, 2 / WIReD senior editor Nicholas Thompson with Federal CIO vivek kundra, 3 / WIReD Contributing editor spencer Reiss with Founder of Ubuntu Project Mark shuttleworth and OpenX CeO Tim Cadogan, 4 / editor in Chief of WIReD Chris anderson with Founder of Tesla Motors and spaceX elon Musk 5 / WIReD senior Writer Daniel Roth with Founder & CeO of better Place shai agassi, 6 / WIReD senior Writer steven levy with Founder & CeO of amazon.com Jeff bezos 14 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / TOP DIsRUPTORs gRab The sPOTlIghT A-LIST ATTENDEES / ATTENDEES 350 C-level executives and business leaders MARTHA STEWART, Founder, MslO BEN FRIED, CIO, google NICHOLAS NEGROPONTE, Chairman, One laptop per Child MICHAEL MENDENHALL, CMO & svP, hewlett Packard Photos / bob krasIn JEFF HAYZLETT, CMO, kodak GRAZIANO DE BONI, President & CeO, Prada Usa CHRIS BEARD, CIO, Mozilla JONATHAN MARCHBANK, COO, virgin Mobile Usa / OTHER PRESS INCLUDES / PRESS HIGHLIGHTS Press ImPressIons: 40 million+* The country and companies like his have “outsourced too many things,” said Mr. Immelt at a WIReD magazine conference about disruptive technology in New york on Monday, where he was / THE TALK ON interviewed on stage by WIReD editor In Chief Chris anderson. @WIREDBiz #WIREDLive 381 followers as of June 15, 2009 MarthaStewart “at the WIReD business Conference listening to “lions” of new technology disruptive by design. Jeff bezos, Jeff In the future, amazon.com’s kindle e-book reader will display more Immelt, Mark shuttleworth, etc.” book formats beyond its own. and you should expect to see kindle books on a lot more devices. That was the clear implication of Tim O’Reilly “Immelt: Tim O’Reilly vivek kundra at WIReD Disruptive comments that Jeff bezos, amazon’s chief executive, made at the by Design Conference: govt agencies now competing to be top conference, which was sponsored by WIReD magazine. data.gov contributor! #wiredlive #gov20” Jeffrey Hayzlett “Told Martha stewart at break she should have brought cookies. she told me to bring cameras! ;) #wiredlive” CNN aired footage from the WIReD business Conference of WIReD jkrohrs effective display of Panasonic Toughbooks at #wiredlive. senior editor Nick Thompson discussing transparency in the Two of them under a melting ice sculpture. http://pk.gd/bQd Obama administration with Federal CIO vivek kundra. shelly_palmer listening to vivek kundra, 1st CIO of the Usa discuss data.gov at the WIReD biz Conf #wiredlive, the CeO of the Usa has chosen well. “I’m anti-tax, but I’m pro-carbon tax,” Tesla Motors founder elon Musk said onstage at the WIReD business Conference here / WaTCh COMPleTe vIDeOs OF all Monday—a remark that prompted interviewer and WIReD editor WIReD bUsINess CONFeReNCe PaNels aT: in Chief Chris anderson to quip that he was a “true silicon valley wired.com/wiredbizprogram libertarian.” 15 / *Press IMPressIons as of 6/24/09

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / 1/ 4/ 2/ 3/ CLOCKWISE FROM TOP LEFT 1 / vivek kundra, Federal CIO of Usa meets Nicholas Negroponte, Chairman of One laptop per Child, 2 / author Richard bookstaber was among our distinguished group of attendees, 3 / The atrium of the Morgan served as a networking hub throughout the Conference, 4 / Chris anderson, editor in Chief of WIReD and barry Ritholtz, CeO of FusionIQ 17 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / / We saLUTe The InforMeD, oPTIMIsTIC, anD InnoVaTIVe sPonsors of The WIreD bUsIness ConferenCe: DIsrUPTIVe bY DesIGn. sPONsORs / Presented In PartnershIP wIth 18 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / We’re ally, an online bank focused on doing right by you and your money. We offer rates among the most competitive in the country, we never hide behind fine print, and we give you 24/7 access to a real human being. Isn’t it time for some straightforward banking? For more information, please visit allybank.com 19 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / american airlines is one of the largest airlines in the world, contributing more than $150 billion per year to the U.S. economy. american and its regional airline affiliates, american Eagle and americanConnection, serve 250 cities in over 40 countries with more than 3,400 daily flights. The network covers points throughout North america, the Caribbean, latin america, Europe and the Pacific with major connecting hubs at dallas/Fort Worth, Chicago O’hare, Miami, and St. louis, and a large concentration of Caribbean service at San Juan, Puerto Rico. american also has a large presence in other large U.S. metropolitan areas, including New York (four airports), los angeles (four airports) and Boston. The combined fleet numbers more than 900 aircraft. american has nearly 82,000 employees worldwide and american Eagle 13,000. american airlines is also a founding member of the global oneworld® alliance, which enables member airlines to offer its customers a broader route network, opportunities to earn and redeem frequent flyer miles across the combined network and more airport lounges. Together, oneworld members serve nearly 700 destinations in over 150 countries, with 8,500 daily departures. american is also one of the largest scheduled air freight carriers in the world, providing a wide range of freight and mail services to shippers throughout its system onboard american’s passenger fleet. For more information, please visit aa.com 20 /

EYE CONTACT. YOUR MOST UNDERRATED Sometimes, SKILL the more business you do face-to-face, the SET. more business actually gets done. 3,400 flights. 250 cities. 40 countries. One airline. Service totals include American Eagle. AmericanAirlines, American Eagle, AA.com and We know why you ﬂy are marks of American Airlines, Inc. ® oneworld is a mark of the oneworld Alliance, LLC.

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / Risk Management for an online world. dataPipe provides custom solutions for businesses with complex Internet-facing infrastructures. We proactively manage security, monitoring, storage, data center operations, servers, and applications including database administration and the full software stack. For more information, please visit datapipe.com 22 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / Fujitsu Computer Products of america, Inc. is an established leader in the document imaging market, featuring state-of- the-art scanning solutions. Organizations of all sizes can benefit from the various document-imaging solutions available in the award-winning Fujitsu scanner product line. delivering an unbeatable combination of affordability, reliability and performance, Fujitsu scanners range in speeds from 8-120 pages per minute (ppm). at the touch of a button, the Fujitsu ScanSnap scanner turns paper documents into instant PdFs. The ScanSnap provides convenience, simple connectivity, automatic color, page size and blank-page detection. The ScanSnap features an automatic document feeder (adF) that digitizes both sides of a document in a single pass in color, making it ideal for an office or home office environment. For more information, please visit us.fujitsu.com/scansnap or call 1.888.425.8228 24 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / NYSE Technologies is the world’s leading provider of end-to-end electronic trading solutions. Our flexible and scalable products and services deliver robust and integrated solutions, from single trading positions to complete exchange platforms. Through our innovative market-leading software, market data and low-latency secure connectivity, we engage the global trading community with innovative tools, access to liquidity and worldwide markets and third-party, value-added applications. We empower all tiers of the market by offering our solutions as fully deployed, managed or hosted services. From a single company, we deliver best-of-breed products using world-class technology connected to all the world’s major markets. For more information, please visit nyse.com/technologies 26 /

BUSINESS CONFERENCE dIsrUPtIVe BY dESIgN / For over 15 years Panasonic Computer Solutions Company has designed and manufactured the industry’s most durable and reliable mobile PCs. legendary Panasonic Toughbook® computers are the ultimate rugged and wireless total computing solution, giving mobile users constant productivity without risking important data. Engineered with a magnesium alloy case, shock-mounted hard drive and spill-resistant design, our computers allow professionals across a multitude of industries to trump conventional business practices and work wherever their job takes them. No matter how extreme the demands of your job, award-winning Toughbook computers are built to withstand the harshest conditions, ensuring maximum uptime in the field, on the road or in the boardroom. In a world where you’re only as tough as the tools you carry, it’s nice to know Toughbook computers can handle virtually anything. For more information on our full line of rugged, reliable and wireless computers, please call 1.888.223.1184 or visit panasonic.com/toughbook 27 /

Panasonic recommends Windows Vista® Business. IN YOUR WORLD, YOUR COMPUTER SHOULD BE YOUR FORTRESS. IF IT’S NOT, EXPERIENCE LEGENDARY TOUGHBOOK RELIABILITY. When it comes to rugged and reliable performance, Panasonic Toughbook® computers deliver. Every Toughbook computer is a triumph of engineering – from the ground up and inside out. With their durable magnesium alloy cases, spill-resistant keyboards and shock-mounted hard drives, Toughbook computers perform no matter how extreme the demands of your job. Add to that dependable wireless built-in and you have a computer that’s ready and waiting. It’s no surprise that Toughbook computers, powered by Intel® Centrino® 2 with vPro™ technology, continue Panasonic’s 15-year-plus tradition as the leader in rugged mobile computing. 1.888.223.1184 / panasonic.com/toughbook TOUGHBOOK FOR A TOUGHWORLD TM Intel, the Intel logo, Centrino, Centrino Inside, Intel vPro and vPro Inside are trademarks of Intel Corporation in the U.S. and other countries. Toughbook notebook PCs are covered by a 3-year limited warranty, parts and labor. To view the full text of the warranty, log on to panasonic.com/business/ toughbook/support.asp.Please consult your Panasonic representative prior to purchase. Panasonic is constantly enhancing product speciﬁcations and accessories. Speciﬁcations subject to change without notice. (*CF-52EV, CF-52GF and CF-52GU, **CF-30K, ***CF-F8EW) ©2009 Panasonic Corporation of North America. All rights reserved. Fortress_H_Bizco_FY09-1 Toughbook 52* Toughbook 30** Toughbook H1 Toughbook F8*** Toughbook U1 BUY NOW: $50 OFF THE PURCHASE PRICE OF YOUR FIRST TOUGHBOOK COMPUTER AVAILABLE FROM BIZCO TECHNOLOGIES AT 1.877.TOUGH.61 / TOUGHONLINE.COM. OFFER APPLIES TO ALL TOUGHBOOK MODELS. LIMITED TIME OFFER. COUPON CODE WIRED

NOW ONLINE WE LIVE IN AN ERA OF RELENTLESS CHANGE. For insights that will help you and your company adapt, respond, and thrive—no matter what comes at you next, visit: wired.com/wiredbizprogram Thank you for joining us at the WIReD bUsINess CONFeReNCe DISRUPTIVE by DesIgN Tell us what makes you feel INFORMeD & OPTIMIsTIC send your thoughts to informedoptimism@wired.com

Wired business conference paper Disruptive by design

by Fred Zimny on Oct 25, 2009

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Wired business conference paper Disruptive by design — Document Transcript