An Operating System for the Real World

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I like to begin my talks with a quote, because, as Oscar Wilde once said, “Quotation is a serviceable substitute for wit.” Edwin Schlossberg once said... I want to give you some context for thinking about developing the applications of the future, and lessons from those who I think are already doing that.

Now, one of the big, context-setting ideas I ’ ve been working for the past dozen years or so is the idea that the internet is a platform.

More than that, I even put on a conference in 2002 called Building the Internet Operating System.

Later, when we introduced the Web 2.0 conference in 2004, we focused on the Internet as Platform. In his talk at that conference, Bram Cohen of Bittorrent gave me a bit of a roast about the Internet as operating system idea. He pointed out that the Internet was lacking many of the features that characterize operating systems.

Even now, when you look at definitions of an operating system, you can see how much of the framing still echoes the thinking of the PC era.

But as the mobile era accelerated, it became clear that we need to change our idea of an operating system. What is the operating system of an application on a smartphone? To be sure, there are local functions, managed locally by the device OS, but there is a more powerful service layer that resides on the internet. In this slide from a few years later (dated to 2010 by the Nexus One phone in it), I make the case that yes, there is an operating system for mobile devices that consists of software above the level of a single device. Applications like Google Maps make numerous calls to data services provided by this cloud “ operating system. ”

My key idea, going back to the days when I was evangelizing “ Web 2.0 ” , was that the internet operating system was all about “ Managing access... ”

You see this same kind of internet operating system thinking in Tripit, a company I invested in through O ’ Reilly AlphaTech Ventures, my early stage venture firm, and later was delighted to have acquired by Concur. What originally attracted me to tripit was its clever use of email as a data pipe, assembling data from transportation, hotels, car rentals, weather and maps into a truly useful integrated application. This is the internet OS at work.

There ’ s a great lesson for developers from Tripit: Be Creative in finding and integrating data. This “ internet operating system ” is in its infancy. There aren ’ t well developed APIs for a lot of things, but it ’ s possible to combine existing services and data sources in a way that creates huge and unexpected value. Tripit figured out how to take something designed for human consumption (email) and turn it into a programmable data source.

What we ’ re really seeing is not just an Internet operating system but a kind of operating system for the real world.

GPS is a great example of how idea of an operating system for the real world goes beyond just the “ internet ” as we know it. First off, GPS signals are not an internet service per se. Signals are read by a specialized radio receiver. And that signal is consumed not just by smartphone applications, but by autonomous vehicles. (Autonomous tractor image from http://www.agriculture.com/machinery/precision-agriculture/gps-guidance/remotecontrolled-farm_236-ar26197 )

There ’ s no more striking example of this “ operating system for the real world ” than Google ’ s autonomous vehicle. It ’ s easy to forget that the 2005 DARPA Grand Challenge winner went seven miles in seven hours. Yet only six years later, Google announced that they had a car that had driven hundreds of thousands of miles in ordinary traffic. Was this a triumph of AI? It was surely that. But there ’ s another important factor that is easy to overlook. Google ’ s chief scientist, Peter Norvig, says that the algorithms aren ’ t any better. Google just has more data. What kind of data?

It turns out that the autonomous vehicle is made possible by Google Streetview. Google had human drivers drive all those streets in cars that were taking pictures, and making very precise measurements of distances to everything. The autonomous vehicle is actually remembering the route that was driven by human drivers at some previous time. That “ memory ” , as recorded by the car ’ s electronic sensors, is stored in the cloud, and helps guide the car. As Peter pointed out to me, “ picking a traffic light out of the field of view of a video camera is a hard AI problem. Figuring out if it ’ s red or green when you already know it ’ s there is trivial. ” So this is a unique and unexpected application of the notion of human-machine symbiosis, which was originally called out as an important thread in computing by JCR Licklider in a paper all the way back in 1960.

If you want to build what Warren Buffett calls a defensible moat around your business, you can ’ t just rely on baseline data that is available to everyone else. You do need to layer on additional data that you gather yourself. This can come from network effects in data (like facebook - the more people belong, the more useful it is to belong), or to conscious efforts, like Google ’ s to enhance public data.

Next, let me talk about Square. There ’ s so much to learn from this business. How many of you have ever bought something from a store with Square ’ s iPad cash register? How many of you had the Square Wallet app running on your phone when you did that?

It automatically checks you in when you walk into a participating merchant. Your name and face appear on the register, and since your payment details are already on file, all the retail clerk has to do is confirm your identity, as shown in this screen shot. Frankly, hotel registration is a great application for this kind of technology.

This is so key. The phone already knows you ’ re there. Why make you “ check in ” manually? This makes sense for apps like Foursquare, but it ’ s so important to think through what the sensors in the phone let you take out of the UI. This is going to be one of the big voyages of discovery over the next few years, as we design interfaces for devices that have “ senses ” of their own.

Square started with this creative hardware hack, a little free dongle that uses the phone ’ s microphone jack to turn it into a credit card reader. Google got creative with streetview hardware. What are interesting hardware/sensor possibilities in the travel business? The Maker movement isn ’ t just about 3D printing and robots. It ’ s about the way that sensors are changing the landscape of applications.

But with the addition of the cash Register app, Square saw the possibilities of building a system that actually connected buyer and seller in a more profound way. The software system includes both an app on your phone, and an app on the merchant ’ s ipad, and a cloud database and services in between. This is of course also true of applications like Tripit. It ’ s also clearly software above the level of a single device, connecting passengers to the reservation systems of every travel-related company on the planet. But think hard about what services and devices you can integrate.

When I first talked to Jack Dorsey about Square, he talked about it as a data business - using social network data to make better credit scoring decisions. Long term, once square has millions of participating merchants and consumers, they have built a powerful data system that literally gets better the more people use it. But even apart from this banking angle, think how Square transforms the way a small merchant operates, bringing “ knowing your customer ” to a new level. Square has my face, my credit card info, and, potentially for a repeat buyer, my preferences, like what kind of coffee I normally order.

And finally, Square leads to a profound rethinking of the retail experience.

Now Concur has put a lot of these principles to work, bringing together travel booking, expense reporting, trip organization, into an integrated application that not only gets better the more people use it, but finds new utility in overlapping data sets, connecting multiple systems into an overarching workflow that simplifies everything for everyone from the traveler to the accounting back office. But there ’ s still further to go.

Consider how technology has transformed the Apple Store. Where most stores (at least in America) have used technology to eliminate salespeople, Apple has used it to augment them. Each store is flooded with smartphone-wielding salespeople who are able to help customers with everything from technical questions to purchase and checkout. Walgreens is experimenting with a similar approach in the pharmacy, and US CTO Todd Park foresees a future in which health workers will be part of a feedback loop including sensors to track patient data coupled with systems that alert them when a patient needs to be checked up on. The augmented home health worker will allow relatively unskilled workers to be empowered with the much deeper knowledge held in the cloud.

This may be the real opportunity for new information retrieval UIs like Google Glass - in specialized settings where access to a computer can be seen as a powerful kind of human augmentation. I expect it to be used in professional settings before it becomes popular as a consumer device. (In social settings, it will require even more profound resets of behavior than the “ always-on ” mobile phone.) One of those professional settings might well be hotel check-in. Being recognized on the street would be creepy, but being recognized when you walk up to the check-in desk might just be a moment of surprise and delight.

Now I want to move on to another of my favorite apps. Aaron Levie of Box said it perfectly in a tweet: “ Uber is a $3.5 billion lesson in building for how the world *should* work instead of optimizing for how the world *does* work. ”

Many of the notions that I highlighted about Square also show up in an app like Uber. A driver and a passenger both augmented with a smartphone changes our expectations about transit, and has the ability to change the way we organize public transit. Uber also shows us the principles of Software Above the Level of a Single Device, the use of sensors (both you and the driver have phones that know where you are), a data back end as part of the system, and “ doing less. ” Because your credit card is already on file, they ’ ve taken payment out of the workflow. And replaced it with reputation - they ask you to rate the driver, and the driver to rate the passenger. And like Square, they have a focus on building value for stakeholders - every driver I talk to loves the service because it increases their utilization and thus their income. It ’ s a win-win all around.

This is also true of Taxi Magic, one of the companies in Concur ’ s Perfect Trip Dev Fund.

Here are some of the Internet OS data subsystems that come into play in applications like Uber and Taxi Magic.

But there ’ s one other great lesson from Uber and Taxi Magic.

Investor Chris Sacca, who used to run special projects for Google, and who is an early investor in Uber, once remarked “ What I learned... ” This is what Google did with advertising, figuring out how to predict what ads people would click on. And in the case of Uber, it ’ s fundamental to the value proposition. With a taxi, you wait and hope to find one. With Uber, you know where the car is, when it ’ s going to arrive, and can even watch its progress towards you. Uber closes the loop and takes the uncertainty out of the experience.

My next lesson is that using both data that the user provides and that you can determine from sensors, it is increasingly possible to develop applications that anticipate user needs.

This is the idea at the heart of Google Now. Using location sensors and its deep set of data resources, as well as data from your calendar, Google Now suggests useful information without being asked. For example, if you ’ re at a bus stop or subway station, when the next bus or train will come.

This same “ just in time ” information model is at the heart of the Tripit app ’ s redesign.

This idea is also at the heart of Tripit features like Price Tracker and Seat Tracker. While these features are not on by default like Google Now, they allow you to register things that you care about, like better prices or better seats. This is the world of anticipatory agent-based programming that we ’ ve all read about in science fiction for years. Only now they are happening in the real world.

Steve Singh, Tripit CEO, articulated this same vision in one of his talks, articulating some aspects of “ The Perfect Trip ”

Back in about 2002/2003, when I was first evangelizing the idea of the internet as platform, one of my rallying cries was “ A platform beats... ” I pointed out that Microsoft had dominated the PC era, beating dominant applications like Lotus 1-2-3, WordPerfect, and DBase, by integrating them more closely into their operating system. Companies like Google, Amazon, and Salesforce have followed the same game plan in the internet era.

Concur clearly understands this lesson. Like a lot of other companies, it ’ s built APIs to allow developers to build on its platform and use its services.

As we saw with Tripit, the fundamental notion of concur is to bring together data services from many different sources. This is a model that I like. In the case of Google Maps, all of the Internet Platform services come from one vendor. This has a few uncomfortable echoes of the era where Microsoft ruled the roost, and its operating system displayed what devotees of Lord of the Rings might call the “ One ring to rule them all ” strategy. But there is another model, which has always been the model of operating systems like Linux, and also for the Internet itself. I call this “ small pieces loosely joined ” - a model where services from multiple sources are nonetheless woven into a seamless whole. I ’ ve long represented this model with a routing map of the Internet.

There ’ s one other great lesson about platforms. The most successful platforms create value for more than just the platform owner. Don ’ t just think about how much value you can create for yourself, your company, and your investors. Think about how much value you can create for your partners and your customers.

I ’m reminded of this wonderful quote from Les Miserables.

This is in sharp contrast to the dominant ideology of modern capitalism over the past few decades, which says that the only responsibility of a company is to make money for its shareholders. Leaving aside the fact of excessive executive compensation as prima facie evidence that no big company really believes that principle, this notion misses the point that an economy is an ecosystem.

This desire to build value for a community of stakeholders also shapes companies like Etsy, AirBnb, and Kickstarter.

And while it may not have the same obvious “ do good ” cachet as Etsy or Kickstarter, I do think that there ’ s an element of this “ create more value than you capture ” ethos with Concur as well. You ’ re creating value not just for customers - both end users and their companies - but also a much bigger ecosystem: airlines, hotels, local transportation. And with the Perfect Trip Fund, Concur is going beyond just reaching out to developers and trying to build a deeper ecosystem of companies.

Perhaps the more general lesson here is to work on stuff that matters.

There are also amazing entrepreneurial opportunities building companies that also solve interesting social problems. Jen Pahlka, who founded Code for America, wrote a blog post recently that summarized one of these opportunities, which we ’ ve been brainstorming recently. How do you reinvent the corner store so that it delivers what people really need, at affordable prices, in a walkable city?

People are hungry for meaning. When you really care about creating value for more than yourself, and work hard at it, people understand it. So don ’ t be afraid to talk about your values, and why what you do matters. Tell it to yourself, and then tell it to your customers.

But there ’ s one more lesson here. Let me point to some of the things that matter that I ’ ve worked on. In each of these cases, I did some good for my business, but I was mainly concerned with telling the story of an industry movement, and trying to create awareness and value that benefited many people besides myself and my own company.

One of my best experiences with doing this was when I gave a talk at my Emerging Technologies Conference in 2008 entitled, “ Why I love hackers. ” They work on what is hard. I recited a poem by Rilke, the Man Watching, which talks about Jacob wrestling with an angel. He knew he couldn ’ t win, but came away strengthened from the fight. The poem ends with something like this: “ What we fight with is so small, and when we win, it makes us small. What we want is to be defeated decisively by successively greater beings. ”

A great example of this is a company called Makani Power, which is building drone aircraft for high altitude wind farms. One of the early employees left a Wall Street hedge fund not because he thought he ’ d make more money, but because, as he said, “ the math is harder and more interesting. ”

Not to step on the toes of the Concur Perfect Trip Fund but ... These are the kinds of opportunities that we ’ re looking for at O ’ Reilly AlphaTech Ventures, our early stage venture firm. If you want to apply the principles I ’ ve outlined here to build a great business that also just happens to make the world a better place, we ’ d love to hear from you. [email_address]

There are lots of ways to work on stuff that matters. Code for America, a non-profit I ’ ve been working with, brings talent from the tech industry to work with local governments to build simple, beautiful and easy-to-use interfaces to government services and helping government to reinvent the way it engages with citizens.

The White House Presidential Innovation Fellows, inspired by Code for America, offers similar opportunities to bring technology expertise into the Federal Government. I encourage any of you to apply to either of these programs.

There are a number of Code for America applications. Here, side by side, are Textizen, which we built to let Philadelphians weigh in on city planning issues without having to go to planning meetings, and CityVoice, which we built for South Bend, to let people give feedback on abandoned properties.

Prompt.ly is an app in San Francisco that uses text messages to remind social service recipients of required reporting and other alerts, to make sure they don ’ t lose their services.

TextMyBus lets schoolkids in Detroit know when buses are coming. They don ’ t all have smartphones, and messaging lets anyone with an SMS-enabled phone get information about when the next bus is due. This photo was taken in summer, but our fellows noticed this as a real problem last winter. Sometimes kids were waiting in the dark, in freezing weather, for half an hour, to get to school. Knowing when the bus is coming really matters in a situation like that. Of course, the fact that the bus comes only every half an hour may be a problem of another sort.

With the government shutdown putting the dysfunctionality of Congress front and center, I ’ d like to give a shout out to the incredible value that all of us get from government services. Public transportation is one aspect of what I ’ ve called Government as a Platform. So are roads, sanitation, power and water and other regulated utilities. But there are also twentieth century examples of government as a platform, including the National Weather Service and the GPS satellite system.

That ’ s why I ’ ve been trying to shift the mindset from government as a vending machine for services paid by taxes, to the notion that government should be a platform. This doesn ’ t mean that the government doesn ’ t provide any “ applications ” - any more than the iPhone as a platform means that Apple outsources everything!-but it does mean that government should provide affordances for the private sector to build on.

One of the clearest expressions of this notion are national highway systems, not to mention the role of government in setting and enforcing rules of the road. But apart from aberrations like the Road to Nowhere, the crowdsourced destinations we call cities determine where the roads go, and we the people are free to use them to go where-ever we want. The US Interstate system, which provided a transformative economic foundation for our country, was championed by President Eisenhower in 1956.

Data is the 21 st century equivalent to the highway system. But Government has been in this business for a long time. Consider weather. Here ’ s Google ’ s forecast for San Francisco this morning when I was finalizing the slides for this talk. But where did that data come from? I ’ ve always found myself wondering why people aren ’ t more aware of how government data powers non-governmental services that citizens take for granted, many of them never taking the time to think how much government investment went into building the infrastructure that makes it possible for the private sector to offer services like weather predictions.

Last month, when President Obama talked about his second term management agenda, open data, and its role in enabling private sector to build on government as a platform, was a key part of the message.

When he said this, he was echoing the words of Abraham Lincoln, one of the founders of the Republican Party. His point, government is a form of collective action. One of the things that attracts me to work on government is the incredible power of all these ideas I ’ ve sharing with you,

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An Operating System for the Real World

Tim O'Reilly

An Operating System for the Real World