Watching TED Global 2012 Streamed Live From Edinburgh

TED Global 2012

TED Global 2012

Today I attended a virtual TED session at Kennisnet in Zoetermeer. Kennisnet has a TED Live membership and hosted a few guests on their verdieping. I watched two sessions of about six talks each streamed straight from Edinburgh. Below my semi-live blog with the things that triggered me.

Shades of Openness

Chris Anderson kicked of this session on radical transparency (one of my favourite topics) by saying that transparency is a great driver of moral progress, but that it is also easy to get carried away by it. This session thus also presented some of the darker sides of openness.

Malte Spitz has a lot of courage: he has a significant stutter, but was still on stage talking about the power of mobile phones. He talked about the EU data detention directive which tells providers that they have to store the data of their customers for months on end. There have been a lot of protests against this. Spitz asked his telecome provider Deutsche Telecom multiple times to give him all the data that they stored about him. They wouldn’t send him the information, so he took them to court. The court case was settled and Deutsche Telecom gave him 35830 lines of information (basically six months of his life) on a CD. He decided to make this information public to show people what data retention truly means. He visualised it in a scary way:

Malte Spitz' data

Malte Spitz’ data

This shows that if you have access to this information you can control your society. He considers it a blueprint for countries like Iran and the future of a surveillance society. States love this type of information. Privacy is not an outdated concept and should continue to be a value in this 21s century. Spitz says we have to contineously remind ourselves and our friends to fight for our self-determination in this digital age.

Spitze’s talk reminded me that I still have not published the results of my Privacy Inzage Machine exercise that did a few months back. I should really make an effort to get this online.

Ivan Krastev is a political theorist from Bulgaria talking about the crisis of democracy. He wants to question the popular belief that transparency and openness will fix our democratic problems. He questioned the optimism of the “Church of TED” and contrasted it with “the most pessimistic country in the world”: Bulgaria. He wants to know how come we live in societies that are much free-er than before while at the same time having lost our faith in the democratic institutions and trust in politics. One issue he sees is the huge increase of unequality in our societies.

With a transparent government we might get into a situation where we have a “reverse 1984”: all of us monitoring the politicians. What would that mean? When we put all our politicians under the microscope will consistency become more important than common sense? Politics is about people changing their views. Will that become harder? We should also remember that any unveilling is also a veilling: there will always be things that people will hold back. Maybe the best way to shut people up is to publish everything they say on the Internet.

Gerard Senehi is an experimental mentalist. He performed a few relatively lame illusions around telekinesis and mind-reading. I guess this was the entertainment part of this session.

Gabriella Coleman is a digital anthropologist. She has been studying Anonymous for the last three years doing “ethnographic diplomacy”. According to her it is very hard to answer the simple question: Who/what is anonymous? One of their more famous campaigns was Operation Payback, but they also consist of smaller groups like LulzSec and Antisec. In general she would describe anonymous as irreverent. Slowly the movement has become more politicised which probably started with their “ultra-coordinated motherfuckery” around Scientology.

Anonymous scales and is participatory; it is not simply hackers. To become anonymous you only have to self-identify as being anonymous. Anonymous may seem chaotic, but most targets are not random. They put on a good performance, obvious even to their detractors. They are a formidable PR machine that becomes a PR nightmare for others. Their political art is that of the spectacle. They dramatize the importance of anonimity and pricavy in an era when both are rapidly eroding. There visible and invisible.

What is their future? They’ve been plagued with government crackdowns and brand fatigue, but she believes that there will continue to be a group of people who care to protect the Internet and who might fight back when some forces and institutions are trying to erode the power of the net. As an aside: Wired has just published a good article on Anonymous too.

Walid al-Saqaf a journalist and TED fellow has developed a program called Alkasir that is designed to map and circumvent censorship in countries that censor the Internet. He shared some stats from the usage of his program: around 90% is Facebook usage.

Leslie T. Chang is a journalist who has spend a great deal of time talking to the people who make the things we use everyday: the factory workers making our running shoes or our phones. She says that our usual narrative equating Western greed to Chinese suffering is way too simple. Chinese workers are not forced into factories because of our insatiable demand for iPads, they migrate away from the countryside towards the big cities looking for a larger life. We shouldn’t think that we can know what the individuals making up what we see as the labouring masses are really thinking. Very few of them want to go back to the way things used to be.

I thought Chang’s talk itself mainly showed her prejudices going into this assignment: of course each of these factory workers has their individual life consisting of dreams and ambitions. Why wouldn’t they have? And yes, of course there is upwards mobility. But is that really the most interesting thing you can say about globalisation after spending two years talking to these people?

Neil Harbisson cannot see color (he is totally color blind, everything he sees is grey). He wears a device he calls the eyeborg allowing him to hear color. He created an electronic eye in 2003 that transforms light frequencies into tones allowing him to hear those tones using bone conduction. After wearing it for a while it became a true extension of his brain. Life has changed a lot for him now that he sees color. Visiting a supermarket is like going to a nightclub. He now dresses in a way that “sounds good”. During the talk he was dressed in “C-major” and he goes to funerals dressed in “B-minor”. He can use food to create melodies so that he can “eat songs”. When he meets people he likes to create sound portraits of them, finding for example eyes that sound similar. An interesting secondary effect is that normal sounds started to sound like colors. So he has created paintings from songs or from speeches. He can differentiate 360 colors (all degrees from the colour wheel), but he can also hear infrared and ultraviolet which are frequencies that normal people can’t see. He has started the cyborg foundation trying to encourage people to extend their senses through devices like eyeborgs, noseborgs, earborgs and fingerborgs.

Wonderful talk! I would love to make “extending your sensory perception” an informal research theme going forward. It reminded me of the Wired story about the haptic compass. Is there anybody who is willing to lend me some extra-sensory perception gear? Maybe something to be made in the Amsterdam Hackerspace Technologia Incognita? Here is an interesting blog belonging to the Extra Senses, Extra Interference research group at the Interfaculty ArtScience in The Hague.

Misbehaving Beautifully

Sarah Caddick introduced the topic of the talks in this session: they all relate to the brain in some way.

Read Montague is a reformed computational neuroscientist. He talked about what we can now do with fMRI technology. It has allowed us to study human beings to isolate mental functions. His research uses economic games (like the ultimatum game) and measures the cognitive apparatus that people use when they play these games. He has created technology to synchronize multiple fMRI machines and link them together on the net. For the first time we can now measure interacting brains simultaneously.

Elyn Saks is an academic with chronic schizophrenia. She described a psychotic episode she had years ago. She had delusions, hallucinations and weird/loose associations and was hospitalized in a psychiatric institution where she was restrained for many hours on end on many days. She wrote a paper about physical restraints and now is pro-psychiatry and anti-force. She also described how she tried to get off medication and what negative effects this had. Why is she able to address us like this today:

  1. She has had excellent treatment
  2. She has many friends that know her and know her illnesses and support her
  3. She works at an accomodating and even supportive workplace

But even though she has these three things, the stigma against mental illness is still so strong that it took her a long time before she was willing to talk about her schizophrenia in public. She asks us to stop criminalizing mental ilness (with the LA County Jail being the US’ largest mental institution) and to know that there aren’t schizophrenics, instead there are people with schizophrenia.

Ruby Wax started by thanking the creators of the chemicals that allow her to function. Without them she doubts she would have been able to conquer her depression. She had a terrible bout of depression and was institutionalized with the “other inmates”. She got very little support from the outside world, just a few calls telling her to “perk up”. How come we don’t get sympathy when our brains aren’t working properly? According to her there is a mismatch between how we are hardwired biologically and what modern life is throwing at us. This is why our pets are happier than us. She started a project/website titled Black Dog Tribe with the motto: Mental illness does not discriminate, it does stigmatise.

Vikram Patel talked about a life expectancy gap between people with a mental ilness and people without one: in developed countries this is 20 years, in developing countries this is worse. Many people all over the world don’t get the treatment they need. There isn’t enough mental health professionals in the developing world. He found books on task-shifting in health (like this one) and on the basis of that created the concept of SUNDAR:

Simplify the message
UNpack the treatment
Deliver it where people are
Affordable and available human resources
Reallocation of specialists to train and supervise

With SUNDAR ordinary people are taught how to deliver health and psychiatric services. To help this end forward he started a movement for global mental health.

Wayne McGregor talked a bit about the body as a very literate entity and proprioception. He then live-choreographed a piece of dance inspired by the T from the TED logo and had two dancer interpret his movement into movement themselves. Fascinating to see a choreochrapher in action, I can’t remember seeing that before.

Reflecting on South by Southwest (SxSW) 2012

SxSW: The Place to Be (photo CC-licensed by Debbs)

SxSW: The Place to Be (photo CC-licensed by Debbs)

It has been a few months since I attended SxSW in Austin. Time to do a bit of reflection and see which things have stuck with me as major takeaways and trends to remember.

Let me start by saying that going there has changed the way I think about learning and technology in many tacit ways that are hard to describe. That must have something to do with the techno-optimism, the incredible scale/breadth and the inclusive atmosphere. I will definitely make it a priority to go there again. The following things made me think:

Teaching at scale

One thing that we are now slowly starting to understand is how to do things at scale. Virtualized technology allows us to cooperate and collaborate in groups that are orders of magnitude larger than groups coming together in a physical space. The ways of working inside these massive groups are different too.

Wikipedia was probably one of the first sites that showed the power of doing things at this new scale (or was it Craigslist?). Now we have semi-commercial platforms like WordPress.com or hyper-commercial platforms like Facebook that are leveraging the same type of affordances.

The teaching profession is now catching on too. From non-commercial efforts like MOOCs and the Peer 2 Peer university to initiatives springing from major universities: Stanford’s AI course, Udacity, Coursera, MITx to the now heavily endowed Khan Academy: all have found ways to scale a pedagogical process from a classroom full of students to audiences of tens of thousands if not hundreds of thousands. They have now even become mainstream news with Thom Friedman writing about them in the New York Times (conveniently forgetting to mention the truly free alternatives).

I don’t see any of this in Corporate Learning Functions yet. The only way we currently help thousands of staff learn is through non-facilitated e-learning modules. That paradigm is now 15-20 years old and has not taken on board any of the lessons that the net has taught us. Soon we will all agree that this type of e-learning is mostly ineffectual and thus ultimately also non-efficient. The imperative for change is there. Events like the Jams that IBM organize are just the beginning of new ways of learning at the scale of the web.

Small companies creating new/innovative practices

The future of how we will soon all work is already on view in many small companies around the world. Automattic blew my mind with their global fully distributed workforce of slightly over a hundred people. This allows them to truly only hire the best people for the job (rather than the people who live conveniently close to an office location). All these people need to start being productive is a laptop with an Internet connection.

Automattic has also found a way to make sure that people feel connected to the company and stay productive: they ask people to share as much as possible what it is they are doing (they called it “oversharing”, I would call it narrating your work). There are some great lessons there for small global virtual teams in large companies.

The smallest company possible is a company of one. A few sessions at SxSW focused on “free radicals”. These are people who work in ever-shifting small project groups and often aren’t very bounded to a particular location. These people live what Charles Handy, in The Elephant and The Flea, called a portfolio lifestyle. They are obviously not on a career track with promotions, instead they get their feedback, discipline and refinement from the meritocratic communities and co-working spaces they work in.

Personally I am wondering whether it is possible to become a free radical in a large multinational. Would that be the first step towards a flatter, less hierarchical and more expertise-based organization? I for one wouldn’t mind stepping outside of my line (and out of my silo) and finding my own work on the basis of where I can add the most value for the company. I know this is already possible in smaller companies (see the Valve handbook for an example). It will be hard for big enterprises to start doing this, but I am quite sure we will all end up there eventually.

Hyperspecialization

One trend that is very recognizable for me is hyperspecialization. When I made my first website around 2000, I was able to quickly learn everything there was to know about building websites. There were a few technologies and their scope was limited. Now the level of specialization in the creation of websites is incredible. There is absolutely no way anybody can be an expert in a substantial part of the total field. The modern-day renaissance man just can’t exist.

Transaction costs are going down everywhere. This means that integrated solutions and companies/people who can deliver things end-to-end are losing their competitive edge. As a client I prefer to buy each element of what I need from a niche specialist, rather then get it in one go from somebody who does an average job. Topcoder has made this a core part of their business model: each project that they get is split up into as many pieces as possible and individuals (free radicals again) bid on the work.

Let’s assume that this trends towards specialization will continue. What would that mean for the Learning Function? One thing that would become critical is your ability to quickly assess expertise. How do you know that somebody who calls themselves and expert really is one? What does this mean for competency management? How will this affect the way you build up teams for projects?

Evolution of the interface

Everybody was completely focused on mobile technology at SxSW. I couldn’t keep track of the number of new apps I’ve seen presented. Smartphones and tablets have created a completely new paradigm for interacting with our computers. We have all become enamoured with touch-interfaces right now and have bought into the idea that a mobile operating system contains apps and an appstore (with what I like to call the matching “update hell”).

Some visionaries were already talking about what lies beyond the touch-based interface and apps (e.g. Scott Jenson and Amber Case. More than one person talked about how location and other context creating attributes of the world will allow our computers to be much smarter in what they present to us. Rather than us starting an app to get something done, it will be the world that will push its apps on to us. You don’t have to start the app with the public transport schedule anymore, instead you will be shown the schedule as soon as you arrive at the bus stop. You don’t start Shazam to capture a piece of music, but your phone will just notify you of what music is playing around you (and probably what you could be listening to if you were willing to switch channel). Social cues will become even stronger and this means that cities become the places for what someone called “coindensity” (a place with more serendipity than other places).

This is likely to have profound consequences for the way we deliver learning. Physical objects and location will have learning attached to them and this will get pushed to people’s devices (especially when the systems knows that your certification is expired or that you haven’t dealt with this object before). You can see vendors of Electronic Performance Support Systems slowly moving into this direction. They are waiting for the mobile infrastructure to be there. The one thing we can start doing from today is to make sure we geotag absolutely everything.

One step further are brain-computer interfaces (commanding computers with pure thought). Many prototypes already exist and the first real products are now coming to market. There are many open questions, but it is fascinating to start playing with the conceptual design of how these tools would work.

Storytelling

Every time I go to any learning-related conference I come back with the same thought: I should really focus more on storytelling. At SxSW there was a psychologist making this point again. She talked about our tripartite brain and how the only way to engage with the “older” (I guess she meant Limbic) parts of our brain is through stories. Her memorable quote for me was: “You design for people. So the psychology matters.”

Just before SxSW I had the opportunity to spend two days at the amazing Applied Minds. They solve tough engineering problems, bringing ideas from concept to working prototype (focusing on the really tough things that other companies are not capable of doing). What was surprising is that about half of their staff has an artistic background. They realise the value of story. I’m convinced there is a lot to be gained if large engineering companies would start to take their diversity statements seriously and started hiring writers, architects, sculptors and cineasts.

Open wins again

Call it confirmation bias (my regular readers know I always prefer “open”), but I kept seeing examples at SxSW where open technology beats closed solutions. My favourite example was around OpenStreetMap: companies have been relying on Google Maps to help them out with their mapping needs. Many of them are now starting to realise how limiting Google’s functionality is and what kind of dependence it creates for them. Many companies are switching to Open Street Map. Examples include Yahoo (Flickr), Apple and Foursquare.

Maybe it is because Google is straddling the line between creating more value than they capture and not doing that: I heartily agree with Tim O’Reilly and Doc Searl‘s statements at SxSW that free customers will always create more value than captured ones.

There is one place where open doesn’t seem to be winning currently and that is in the enterprise SaaS market. I’ve been quite amazed with the mafia like way in which Yammer has managed to acquire its customers: it gives away free accounts and puts people in a single network with other people in their domain. Yammer maximizes the virality and tells people they will get more value out of Yammer if they invite their colleagues. Once a few thousand users are in the network large companies have three options:

  1. Don’t engage with Yammer and let people just keep using it without paying for it. This creates unacceptable information risks and liability. Not an option.
  2. Tell people that they are not allowed to use Yammer. This is possible in theory, but would most likely enrage users, plus any network blocks would need to be very advanced (blocking Yammer emails so that people can’t use their own technology to access Yammer). Not a feasible option.
  3. Bite the bullet and pay for the network. Companies are doing this in droves. Yammer is acquiring customers straight into a locked-in position.

SaaS-based solutions are outperforming traditional IT solutions. Rather than four releases a year (if you are lucky), these SaaS based offerings release multiple times a day. They keep adding new functionality based on their customers demands. I have an example of where a SaaS based solution was a factor 2000 faster in implementation (2 hours instead of 6 months) and a factor 5000 cheaper ($100 instead of $500,000) than the enterprise IT way of doing things. The solution was likely better too. Companies like Salesforce are trying very hard to obsolete the traditional IT department. I am not sure how companies could leverage SaaS without falling in another lock-in trap though.

Resource constraints as an innovation catalyst

One lesson that I learned during my trip through the US is that affluence is not a good situation to innovate from. Creativity comes from constraints (this is why Arjen Vrielink and I kept constraining ourselves in different ways for our Parallax series). The African Maker “Safari” at SxSW showed what can become possible when you combine severe resource constraints with regulatory whitespace. Make sure to subscribe to Makeshift Magazine if you are interested to see more of these type of inventions and innovations.

I believe that many large corporations have too much budget in their teams to be really innovative. What would it mean if you wouldn’t cut the budget with 10% every year, but cut it with 90% instead? Wouldn’t you save a lot of money and force people to be more creative? In a world of abundance we will need to limit ourselves artificially to be able to deliver to our best potential.

Education ≠ Content

There is precious few people in the world who have a deep understanding of education. My encounter with Venture Capitalists at SxSW talking about how to fix education did not end well. George Siemens was much more eloquent in the way that he described his unease with the VCs. Reflecting back I see one thing that is most probably at the root of the problem: most people still equate education/learning to content. I see this fallacy all around me: It is the layperson’s view on learning. It is what drives people to buy Learning Content Management Systems that can deliver to mobile. It is why we think that different Virtual Learning Environments are interchangeable. This is why we think that creating a full curriculum of great teachers explaining things on video will solve our educational woes. Wrong!

My recommendation would be to stop focusing on content all together (as an exercise in constraining yourself). Who will create the first contentless course? Maybe Dean Kamen is already doing this. He wanted more children with engineering mindsets. Rather than creating lesson plans for teacher he decided to organise a sport- and entertainment based competition (I don’t how successful he is in creating more engineers with this method by the way).

That’s all

So far for my reflections. A blow-by-blow description of all the sessions I attended at SxSW is available here.

Learning from the Outside, How External Focus Can Help Learning and Development

This presentation delivered on April 19 for the Irish Centre for Business Excellence Network tries to address why things are not changing fast enough in the (corporate) learning world by pointing out that we often fail to look to the outside. We rely on benchmarking without realising that this will never get us ahead of the game. We try to implement best practices rather than focus on emergent practice. Changing this requires finding our edge and trying to see what you can learn from there. For corporations and organisations the edge can be found in things like the consumerisation of IT, open source, experimental academia and the startup world.

You can download the presentation as a PDF or watch in on SlideShare:

I’ve used many sources to create the presentation. Here are all the relevant links in context.

In the past I have thought a bit about seredendipity and have written a few blogposts about the topic.

Bert De Coutere describes how Learning and Development is stuck in his blog post Learning got stuck in itself…. Steve Wheeler writes about the differences between upstairs (where the Learning Technologies conference was held) and downstairs (where the learning vendors could tout their wares) in his post titled Upstairs downstairs.

If you are interested to learn more about Omphaloskepsis, check out this Wikipedia article.

The following three companies (among many others) offer benchmarking in the learning space: Corporate University Exchange, BrandonHall and Bersin (their benchmarking data for 2011 is available here).

Youngme Moon has written a book titled Different in which she explains why products in a category all become alike. Harold Jarche reviews the book in a blog post titled Different – Review. In that review he refers to Tim Kastelle who lifts stwo diagrams out of Moon’s book in Be Great at One Thing. I remade the diagrams using the excellent Inkscape.

The Wikipedia page about the Cynefin Framework isn’t bad. Dave Snowden’s Harvard Business Review article about his framework and how it can help with leadership is titled Leader’s Framework for Decision Making (and maybe I should credit Mary E. Boone for once).

Automattic is an amazing company. They create and host the wordpress.com platform (more information). The Automattic creed is available on Matt Mullenweg’s website. Matt gets interviewed here. This map shows where all the “Automatticians” are located. Check out this page if you want to know more about Automattic or are interested in working for them.

If you want to know more about Massive Open Online Courses (MOOCs) you should start here and then quickly move on to what Stephen Downes writes in his piece What a MOOC Does. The MOOC example I decided to reference in the presentation is Digital Storytelling also known as DS106.

The term Edupunk was coined in Jim Groom’s post The Glass Bees and quickly got its own Wikipedia article. Stephen Downes tied together a few good posts about the topic here and this article on BlogHer could also be a good start.

The big open online courses that are now fashionable and are starting to get a commercial face (Coursera and Udacity) owe their debts to MOOCs and the Peer 2 Peer University (P2PU).

If you want to be kept up to date about learning technology “on the edge” then your best bet is likely to pay close attention to Audrey Watters’ blog Hack Education (not mentioned in my presentation).

Mozilla‘s mission page is here and it is worthwile reading their whole manifesto. Their Open Badges program is getting a lot of deserved attention and could always use more participants. You can read about all their learning plans on their Learning Wiki, this is also the place to go to if you want to get involved.

If you are interested in becoming more entrepreneurial and innovative, regardless of whether you have your own business or are working in a company/organisation, you can’t do better than read The Lean Startup.

Are Free Customers Better Than Captive Ones?

Doc Searls talked about two wrong things and one right thing.

Wrong Thing #1

A random startup founder: “Sales are great! We just closed our second round of financing for 25 million dollars”

Every business has two markets:

  1. For goods and services (to your customers)
  2. For itself (to investors)

During the tech boom number 2 was more important than 1. According to Searls we are in a tech boom now. The conceit of big data today is that the system understands better what you want than you do yourself. Searls deconstructed the concept of the loyalty card which started as a concept in the early nineties:

Google NGram on Loyalty Card (1950 - now)

Google NGram on Loyalty Card (1950 - now)

His main point: they don’t work are a bad idea and are just a retail fad. Read more here

Wrong Thing #2

Avoiding customers and treating them like cattle or worse. It is now standard practice to talk about “acquiring,” “capturing,” “locking in,” “owning” and “managing” customers. On the net we use the client/server metaphor a lot (that was chosen because slave/master didn’t sound good). The cookie is the main tool for the server to keep track what is happening with the client. Searls tells us how Phil Windley writes up the history of ecommerce:

1995: Invention of the Cookie.

The End.

The one right thing

Loving your customers and letting them leave. He uses Trader Joes as a an example:

  • No gimmicks
  • No advertising
  • No loyalty cards
  • No discounts
  • Don’t do retail trade shows
  • Never say “consumer” (always say “customer”)
  • Marketing = talking to customers

Vendor Relationship Management (VRM) Movement

Project VRM started in 1996. Its goal is to provide tools that make customers independent of vendors and better able to engage with vendors. Basically to create instruments of personal intentions. With VRM the customer drives. A couple of examples:

  • Run your own personal cloud. Examples include Mydex, Azigo and Trustfabric
  • Program the way your cloud interacts on the live web. An example is kynetx.
  • Set your own terms of service. It should be possible to say things like: “don’t track me outside your site or service”, “give me my data in a usable form that I specify”, “wipe my data when I say so”, “here is my fourth party who represents me” or “here is my trust network”.
  • Get full value from your digital assets. See pde.cc.
  • Personal Request for Proposals (RFP): “I have 200 dollars and need x and y”

Summary

Free customers will always create more value than captive ones. His new book The Intention Economy will be out in May 2012 and more information will soon be available on the Customer Commons website.

Create More Value Than You Capture

 

Tim O'Reilly (CC licensed by Pelle Sten)

Tim O'Reilly (CC licensed by Pelle Sten)

Tim O’Reilly was interviewed by Andrew McAfee (writer of Rage against the Machine). It is worthwile to fully quote the introduction to the session:

One of the great failures of any company – for that matter of a capitalist economy – is ecosystem failure. Great companies build great ecosystems, one in which value is created not just for a single company or group of industry players, but for partners who didn’t even exist when the product or service was introduced. Many companies start out creating huge value. Consider Microsoft, whose vision of a computer on every desk and in every home changed the world of computing forever, and created a rich ecosystem for developers. But as Microsoft’s growth stalled, they gradually consumed more and more of the opportunity for themselves, and innovators moved elsewhere, to the Internet. Internet innovators like Google, Amazon, Facebook, and Twitter have also created a rich ecosystem of opportunity, but like Microsoft before them, they are leaving less and less on the table for others. This is a bad trend. Wall Street firms, which got their start trading on behalf of clients, then began trading against them, then created vast Ponzi economies to drain the value from entire segments of the economy are even more dire examples of this trend. But this crisis of capitalism goes beyond individual industry segments. For example, the race by companies to eliminate labor costs has been a short term profit win but a long term loss. Since the cycle of capitalism depends on consumers as well as producers, and consumers are less and less able to find employment, at some point, we’re going to have to start thinking about how to put people to work, rather than how to put them out of work. At O’Reilly, we’ve always tried to live by the slogan “Create more value than you capture.” It’s a great way to build a sustainable business and a sustainable economy.

O’Reilly started off by talking about the banking industry which went from a value-creating industry to a value-destroying industry by wanting to keep more from themselves. He next switched to Microsoft which in its startup days managed to create a true platform on which others could create a massive amount of value. When Microsoft started to try and capture that value for themselves the value creators moved out and onto the web (O’Reilly’s was the first commercial site on the web). The definition of ultimate ecosystem failure is if you take more value out than you create. He says that we are effectively stealing from our grand children.

He observes that very often value creation starts by people having fun and then only later do entrepreneurs come along and start monetizing that value. An example is the make movement. We are only now (seven years into the maker fair) have people turning this movement into serious businesses. He really dislikes the current culture of startups raising money and then going for an exit (“despicable” is the word he used). A lot of these startups see money as gas and see what it is that they do as a journey from gas station to gas station, rather than as creating something that brings value to people. Finding your passion, getting people to believe in it and then try and make a difference is a more sustainable model. Great companies should have big and audacious goals.

The open source movement has had an immense positive impact on the technology ecosystem. These people very often did not make buckets of money, but they did create the infrastructure that all of us are building on top of now. He described to the clothes line paradox: when somebody decides to hang their clothes on the clothes line instead of using the dryer, we don’t just shift some energy use from hydrocarbons to renewables: it just disappears. This is a great metaphor for what is happening on the Internet with open source. MySQL for example “shrunk” the database market, but when you really look at it, it actually grew the market and created a lot of value.

How do you actually measure this type of value and the size of this (free unmeasurable) economy? That is hard. Investors don’t create jobs, customers create jobs. The only reason you need investors is because you cannot keep up with the demand of the customer. Tim O’Reilly is now looking for ways to put labour back into the economy. His first example is the Apple store. Most other retailers have laid off as much staff as possible. Apple has found a new model that works. Walgreens is now trying to do the same with healthcare. Other examples are Kickstarter and Etsy which both are putting labour back into the economy. He thinks we will be doing more of this “added value for eachother”. There is also a whole peer to peer thing happening. If you see a sharing economy it eventually does get monetized, so policy makers can start protecting the future from the past, rather than the past from the future.