 Being able to look at technology combined with the culture and the social scene, what's going on in the world, what the current state is in history, be able to understand and integrate all of that, understand and be able to articulate clearly what's important about it. And so I have no idea what he's going to talk about, but I'm betting it's going to be extraordinarily interesting. So I'd like you to join me in welcoming Jerry Michalski. Thank you very much. You guys are a hearty, hearty group, that's what I can tell you. It's late, you've been through a lot. I sat through the biology session earlier, which was really interesting, and I thank you for being here. And I thank Dick for inviting me. It's a real honor to be able to sit here and try to express something that I hope will be useful to you. During the bio, sort of the influence of bio session, there was a question of, are we trying to get rid of UPSLA or the OO, and has OO kind of been dated, and I thought, well, you could sort of morph it a little bit. It could be, OO could just send for, uh-oh, like what's really going on when you have biological evolving systems, it could just be the uh-oh conference. Let me make a brief introduction of myself so that you know who's talking to you. Um, 1992 to 1998, I was a, an industry analyst, wrote the newsletter Release 1.0, which is owned by Esther Dyson, and with her co-hosted the annual conference called the PC Forum. Then, in fact, we did some migrating of the name PC Forum over time. It started out being the personal computer forum, back when it started about 22 years ago, and then it became the platforms for computing forum, and then it became the platforms for communication forum. Not always in the logo type, but that was sort of how we evolved the idea of what was going on at the conference, which was pretty interesting. Before that, I was an industry analyst for five years with a little startup, an unfriendly startup from Gartner Group called New Science Associates, which was then eaten by Gartner Group shortly after I left to join Esther. I've, I've been, since 98, a free agent. I've been writing, consulting, advising, basically in the middle of writing my first book, and you'll see in the speech that I'm about to give some evidence of what the book is about. This gave me some very nice leeway. He, we talked for a while about what's interesting and what's going on. And he asked me to sort of run broad and talk about social trends, technology trends, business trends, and see where they might be going, and see how those, where in the long run those might be going, and how it might be useful to you. A few, this is sort of this disclaimer page. I'm not a programmer, and I'm sort of in awe of the things that you can do. I, I have a facility for speaking with both technological people and business people, but I've never learned Emacs. I've never written a compiler, I haven't programmed for a living, although I can do Hello World in about 20 different languages on, you know, on very tiny systems in system 390s, even writing the JCL. So I know a tiny bit about, about that stuff. And while writing the newsletter, I think I was pretty decent at being early and pointing to the internet as a, as a really hot thing. I remember one day Esther coming up to me and saying, you know, Jerry, you've, you've been writing about this internet thing a whole lot, and maybe you should sort of go to other topics. There's a whole lot of things going on. And I told her, I said, well, you know, okay, I'll, I'll try, but it seems that the internet kind of touches everything. So it's going to be a little hard to do. And of course I would go cover some other issue, and half the issue would be about how the internet's going to change it, and so forth, very exciting times. And then I remember months later, she came up to me, she said, remember that time I told you to not write about the internet so much? And I said, mm-hmm. And she goes, thanks for ignoring me. So that was pretty fun. And I was sort of at the 50-yard line during the dot-com explosion, the, the Jurassic explosion, and then sort of the subsequent asteroid hit. I was kind of off doing consulting and, and saw it more from the sidelines. But let me then start, I think, at the end of my presentation, just for fun. It's always more fun to start at the beginning and work your way. I'm just going to give you the end and then work my way through it. And the end is that I think there are plenty of reasons for great optimism. And I don't mean just about programming, programming technologies, and what programming does in the world, but even just about where the world is going. There is lots to do. We are far, and I mean far from finished, with the infrastructure, with how technology influences people. I think you may have noticed on the cover page, my little company I named Sociate, which I came up with in a little IM session with a buddy of mine who just kind of brainstorming names. And I took the first two letters off the word associate, because I like to associate people and ideas, but also because I believe in the social nature of the change we're going through. There's an article I'm working on right now called People Are the Killer App. And I think it's really interesting what's happening. We're sort of rediscovering human beings, for which I am eternally grateful. But the next couple of years are going to be unbelievably messy. And I will try to build in this presentation sort of the kind of pressures and forces that are at work and suggest where they might be going. So there's been a bit of a credibility crisis lately. I may be very optimistic, but there's serious reason for pessimism sort of in the world in general. You can't really trust Enron, Adelfia, Worldcom, the executives who run them, and the people who were sort of getting sweet deals from their bankers. The auditors who were supposed to be keeping an eye on the ship weren't really doing that. The consultants who were busy kind of hyping everything or like Enron was one of McKinsey's biggest clients and sort of what happens to the McKinsey of the world who advised the executives of the world on what to do. And by the way, all of these corporate strategies and the influences they have on other businesses and business executives really matter to the world of software development because it's all about what gets funded, what doesn't get funded, what gets built and so forth. So industry analysts who are totting the internet, the government hasn't been especially trustworthy lately. Anybody know about the discovery of Element 118 and I think 116? They claim that they had found them in the laboratory and synthesized them and guess what? They faked the lab results. So no, no, no Element 118 and 116 yet. Priests aren't doing very well in the press these days and you can't even trust Martha Stewart. You know, I mean, what has the world come to when you can't even trust Martha Stewart? So let me, I like to do a little bit of vocabulary building. So let me distinguish between trust and trustworthiness. I find this is very, very useful in looking at the world, especially these days. And I'm gonna exaggerate the difference a little bit just to make the point. Trust in some sense is something that companies seem to believe you can buy with an ad campaign. It's like the brand nine out of 10 doctors trust when Intel and I don't mean to pick on Intel specifically here but when they spend hundreds of millions of dollars on the Intel inside campaign, you know, bum, bum, bum, bum, they are trying to tell you not to trust any machine that doesn't have Intel inside. It's part of their business strategy. Trustworthiness on the other hand seems to be something about your actions, not your words. It's about your reputation, your good name. It's about your credibility, not just kind of the mind share or market share that you can build through consumer mass marketing strategies. You kind of have to earn trustworthiness. It's not an instantaneous thing. You have to build it up over time. It's very easy to lose. Interestingly enough, you can make mistakes, lots of them and still be highly trustworthy. It's about how you respond to the mistakes. It's about being transparent. It's about being responsive. It's about being honest and open and trustworthy in your relationship with whoever the stakeholders are you're trying to communicate with. So what I find a lot and part of what started me writing this book was my dislike of the word consumer. In fact, the working title of my book for the longest time was gullets with wallets and eyeballs. You can sense I was a little bit frustrated with sort of consumerism, consumer marketing, the consumer business model. And part of what I see is sort of this epidemic of consumer mass marketing to try to build trust in our heads, to build brand images and very little either, it must be concerned, but little understanding of what it means to actually communicate with people, to be authentic, to build real relationships. So let me sort of roll back and talk about how we got here. And I'm gonna sort of play fast and loose with history a little bit. And you might have another candidate for who was the last know-it-all, bacon or other sorts of people. But I read some place that Gottfried Wilhelm von Leibniz may have been the last guy who sort of knew pretty much everything of all the disciplines of his day. From sort of biology, botany, mathematics, he was co-inventor of the calculus, geography, literature, theology, philosophy. He was a master of many trades. He was a real polymath. He corresponded during his career with over 600 other bright people across Europe. He was very, very connected, very networked. And I think if he knew roughly everything that was going on and after that we have sort of doubling rates or growth rates for the amount of mass knowledge in the world, you can kind of see each of the disciplines going away from Leibniz, running off into the field. And in fact, everybody has to specialize. So you wind up having kind of the mathematicians and then the philosophers and the biologists. And it's a little bit like Camp Granada. You know, the mathematicians don't really like the biologists and so on and so forth. There's a lot of rivalry, interdisciplinary rivalry. The disciplines get set up in the original universities. You sort of move along and the way people gain cred, street cred or job satisfaction or permanence is they pick a little piece of that fractal frontier. They pick a facet of that fractal frontier of the ever expanding base of knowledge and that is their specialty. And they make their PhD on this little facet of that fractal outward facing envelope and they go crazy on that and they defend it and that's sort of their career at some point. I'm exaggerating a little bit, but I've seen this way too often to not describe this to you. So these fields are all sort of going out and we have general chaos and fragmentation out of the tendrils of this ever expanding envelope. And then one day it dawns on me, what if Leibniz is actually standing on a sphere? And what if he's standing on a globe and all these disciplines have actually gone out beyond their point of maximum separation? And they're beginning to come together at the other side of the sphere. What if these disciplines have progressed far enough in some sense that they're sounding sort of alike? And if you have the luxury to go talk to people at the leading edge of some of these different disciplines, I think you'll see that they're saying roughly the same things, except they're saying it in their own jargon, with their own history, with their own preconceptions of how the world looks, their own disciplines, stars, models. If you're in anthropology, I think it was Frank Boaz or somebody who sort of early on said, well, you have to just report the results that you observe. You can't put any of your instincts or intuitions into your analysis, your anthropological analysis of this particular culture. And it took many, many, many years to break that taboo and to let humans get back into the loop. So if you go to the leading edge and start seeing these sorts of things, I think you'll see that computer scientists and theologians and biologists and what you hear a lot now are people with crazy sounding specialties, the bio and neuro techno computer scientists and the name your buzzword generator specialty and there's somebody who's probably doing that and in fact there's probably many people who are interested in that facet and they understand that it's the multidisciplinary nature of tackling these problems that is getting them somewhere. The thing that attracted me into the technology field back in 91 or so was neural networks. Actually, sorry, back in 87, 87 was neural networks. This was sort of the second coming of neural networks after the perceptron's work that sort of died 15 years before that. And neural networks what impressed me there was that we had mathematicians and biologists doing wetware experiments, which you of course don't wanna see but are very interesting with computer scientists doing simulations at the same time and trying to compare and figure out how this all worked. So what's on the other side of that globe? What's over here? What happens when we come together? And there's a couple hypotheses. Number one is sort of not much there. We're really kind of stupid people. We're never gonna figure this thing out. There's just not much there and I don't think that's the answer. I'm a little more optimistic than that. The other answer is and I think a lot of people believe this and I see it in scientific papers and I think that we're sort of living through this period of the dominance of scientific method where we figure if we analyze and deconstruct and if we work hard enough and long enough we will figure out how everything works and damn it, we'll be able to explain it and there'll be a couple equations and we'll be very satisfied and for years and years there have been people who've thought they've gotten to that point. I think it was John Stuart Mill, the political philosopher who writes in one of his books, one of his famous books. I feel bad for people after me because pretty much everything that needs to be known about political philosophy is known now back in the 1800s or 1700s I think and of course the patent and trademark office head and many famous predictions that we have sort of reached the end of knowledge and I will, it just dawned on me the other day that people's careers have a much shorter life cycle than the period in which we actually accumulate and digest and internalize good knowledge and those people's careers need to do something. So we invent behavioral psychology and we decide that everything looks like a behavioral psychology experiment and we turn the world upside down in many cases. So Sigmund Freud and his daughter Anna Freud do a lot of sort of experiments on people and the rest of the world goes, that looks great, we're gonna do it too and it turns out 25 years, 30 years later that the kids that Anna was kind of practicing on were really screwed up and those experiments were a bitter failure and whatever anybody thought they had learned from what she was saying, they should have ignored but by then you're sort of too far along and you've got PhDs upon PhDs and that fractal edge of the discipline is moving on forward. So I think the thing that's at the other end is sort of to be a little dramatic about it is a bit like yin and yang. It's the confluence, the swirling together of a lot of influences and when I say yin and yang, I mean to contrast two different sets of energy, two different sets of things that I think are flying together and will remain in constant tension. And we've kind of been dominated by, I'll choose one, the yin, sort of this masculine control scientific method facts and truth finding method and it turns out that there's this other energy that's kind of emerging more and more that's I think to over generalize more feminine, more emergent, a bit more about spirit, about emotions and about paradox, about the ability for us to entertain paradox and to believe that a paradoxical situation is actually kind of okay. And my belief is that the yin, the yin section, we will continue to analyze and pick apart and we'll continue to learn more and more and I'm very impressed with the pace with which science is picking apart the code of DNA and so on and so forth. But I'm continually impressed with how little we actually know about how things work. The second thing that impresses me is how much we ignore human beings, their role in decisions, their role in society, their role in business, their everything. And the reason I got mad about the word consumer and followed it for a long time is that when we treat people as consumers as sort of the end points of a long food chain to sort of eat and crap or something, we're not really respecting their potential, their ability to connect with other people to do different sorts of things. So I think this is sort of what happens at the other side and we'll more and more be evolving how much we know about the world. But on the other hand, if you can get to a place where you understand that there's just stuff we're not gonna know, I don't particularly by that we're gonna be able to upload our personality into some computer later on, I do believe we're gonna get to the point where lots of machines pass the cheering test and seem intelligent and seem creative and so on and so forth. But there's a point at which I think we'll just sort of be comfortable with the fact that there's this balance and that there's something about human beings and spirituality that doesn't translate that well into analysis and decomposition. That said, I believe there's whole frontiers of things, subtle knowledge of different kinds that we haven't gotten to and we'll unravel and discover and benefit from. So one of the things I like about this concept of the yin and yang coming together and becoming sort of tighter and staying in tension is that we're also in the middle of an epidemic of separation. There's somehow or other, we used to be kind of in tribal units sort of self-sufficient. We used to try to take care of ourselves and take care of one another and through the professionalization of disciplines through sort of rigorous application of structure and control, we wound up having sort of the doctor-patient relationship, this great imbalance of power, the teacher-student, governor, president and citizen, creator and audience. There's a few people who create media and put it through the major media channels and then there's all of us sort of sitting there consuming media. I don't consume a movie. You consume a movie? If anything, you go on a date, you go with your friends, you talk about the movie the next day over the water cooler or something like that. And consuming is sort of a bad metaphor for all that. But we still were sort of saddled with this idea that there are producers and there are consumers. So what I think is happening right now and what I think the internet catalyzed is a collapse of these separations. But it's opportunistic. It's occasional. It's the patient who has a chronic disease or some desperately terrible symptom and shows up at the doctor's office knowing more about that particular condition than the doctor does. Like, I know that Pfizer has an experimental trial going on in Philadelphia. I wanna join that group. But they don't know about medicine and they don't know whether the trial is good or not. They may not know a lot of other things. But that's very, very different from the 1950s when you go to the doctor. The doctor says what you're gonna do. You never get a second opinion. You just do what the doctor said. So really there's this, that we're sort of collapsing this whole capability to keep people apart. And I don't wanna make it sound like there was sort of a conspiracy to keep people apart, but we really were. We were very separated from, in some sense, our responsibility to do things. So why should I keep myself healthy if insurance will pay for me when I'm done? And by the way, science is gonna figure out how to roto root my arteries and repair my heart tissue and whatever else. Hell, bring on that extra piece of pie. Or whatever. In some sense, this separation of authority and power from just sort of being weakens our desire to be more integrated and be more in control. And I think what we're seeing right now is a reintegration of human beings, a reintegration of society. I say this in the face of a whole lot of evidence that things are really bad in society right now. And I'll get back to that again in a little bit. So there's a few words that I think are really worth watching for. The word consumer I just talked about, the consumer business model. Think about what the consumer business model does to us. The word relationship is really interesting. Companies want to be in relationship. There's a whole branch of the business software world, the enterprise software world called customer relationship management. And I've gotta tell you, when I hear that some company is sort of customer centric and I go look at what they've done and listen to them, mostly what I see is a company that has the consumer squarely in the crosshairs of a system designed to sort of stun them into losing some of their cash. These are highly mechanized operations to throw messages at you. And the language of advertising, the language of consumer marketing is the language of the strategic air command. They send flights of messages to target demographics. They get paid by the impression. They do market penetration. They do campaigns. They do, you go talk to an ad agency. They're talking just like the military speaks. And there's a good reason for it. Okay, it is a military campaign. Businesses war in that sense. But how do you have a relationship with somebody you're busy hurling messages at? I think that's kind of hard to do. So we have a little unlearning to do. I remember, I went to this yoga ashram for one weekend a long time ago in Western Mass and I remember sitting at a meal across from this woman who had been there for quite a while, she was sort of a local. And her sister was there visiting and she said, oh, this is so exciting. So many things to learn. This is great. And her sister just kind of gnaws and goes, so many things to unlearn. That's pretty good. So another word which I talked about some already is trust. Beware of being told you should trust somebody and pay a lot of attention to whom you do trust. And finally, stickiness. In a world of kind of coercive marketing, stickiness is more like gum on your shoe and less like voluntary loyalty. And that's a pretty important difference. So let me focus a little bit on technology because as all of these threads sort of go around the globe, let me pick one. Actually, technology influences all of them because if you're in biology, you're measuring, you're dissecting, you're analyzing, you've got a spectrograph or whatever other kinds of tools. Technology influences every single one of these things and technology is not neutral, far from neutral. First of all, it's the product of happenstance, the circumstances of its invention, the sequence of its invention, what happened before what happened after. But more than that, it includes in it the belief systems and the metaphoric frameworks and the business intent of the people who developed the technology. So some technology, let's say the telescope we kind of get to and sort of happen. But a technology like CRM, like customer relationship management, is way different. And the way CRM systems are built has a whole lot of implications for who did the initial design, what they thought they were building, how they thought people were going to run it, what they thought somebody was going to want to measure to see if the system was being successful, et cetera, et cetera, et cetera. And this, I think, is generally true of broad business systems. I think it's Telia, the Swedish phone company or one of the Swedish cellular carriers recently boasted that they bought the world's biggest supercomputer as part of their billing system. Billing system, supercomputer. The probably the reason they need that is that they intend to track your every place you go with the E911 capabilities that are in the next generation of cell phones, then they're going to analyze the hell out of your data and sell you for pop-up ads on your mobile PDA. That's not especially a world I want to inhabit, but that's why they bought that supercomputer. So think about the difference between voluntary relationships, business relationships, and those involuntary ones, sort of the coercive ones based on some kind of control, some kind of lack of options or training you to want something over something else. Software has been developed from a variety of different sources. There are, and there was some very interesting discussion about this in the biology session earlier, there's sort of the usual suspects. Software comes out of engineering, it comes out of behavioral psychology, we figure out how people respond to what they can see. It comes out of the design disciplines and it comes also sometimes, and usually I don't think that, happily out of standards bodies. I was very, very glad when I first learned about how the IETF made decisions because I was so accustomed to the international standards organizations and the ITU and a variety of other standards bodies who were busy sort of ironing into the standards things that benefited the largest players who were at the table to make sure that the software they had built survived and was the most popular software in the next generation. And then there's a lot of curious sources of software. I heard also in that biology session people mentioned Leikoff and metaphors, Santa Fe Institute and complexity, certainly biology because it was the topic of that panel. And here I put a couple others, for example, architecture. In fact, Christopher Alexander was mentioned. You can trace a path from Christopher Alexander and the timeless way of building and his pattern languages to Dick Gabriel and patterns in software and to other people who've been applying the general concept of pattern languages to the development of software. And about this, most of you know a lot more than I do. But I'm really impressed at sort of the generalization of this discipline, which I, you know, from the architecture and urban design perspective highly admire because from my perspective it means the people who are going to inhabit the places that architects like that are designing participate in the design. And what's great about Christopher Alexander's ideas is that he's attempting to crystallize knowledge, not best practices, not rigid rules, but guidelines about how you design and build good things. What makes them good? What gives them goodness? My favorite one of his patterns is that a room to feel livable and warm, and I'm gonna paraphrase it poorly, but should have natural light from at least two walls. Okay, that doesn't mean that every room you ever build is gonna have to have, you know, windows on three walls or two walls or whatever else, but it means that you will always remember this. And when you walk into a room and you go, God, why does this feel weird? You realize it's a long, narrow room and there's a window over there and everything else is artificial light, for instance. So this is now being applied to the world of software. Now, I believe the world is kind of holographic. And what we do in the software discipline is try to map that hologram to whatever tools we have to program. We're trying to describe and then make useful certain paths. So if in the world I would give somebody money and they would pay, you know, they would give me a service, then you have a transaction system and an interface to explain the service and what we're doing together. And then behind the scenes, you have a billing system and a provisioning system and a bunch of other stuff. This is all in some sense, almost like a 3D x-ray of the holographic nature of that transaction. So what we are doing, I think, as we get better and better at this is we're improving the tools and the resolution and the nature of the way we map to these things in the world. And I'm really thankful that we're using more and more interesting disciplines to do this. So let me give you poetry and sociology, for example. There's a very interesting book by Lewis Hyde called The Gift, Intellectual Property and the Erotic, no, what's the title? The Erotic Life of Property. And Hyde does a really interesting thing. He proposes that there isn't sort of just a commercial economy, there's also a gift economy and it sort of lives next to and occasionally intersects with the commercial economy as when the gifted artist decides he needs to sell something to make a living but that the two things are different and need to be treated differently. He in fact has a really interesting riff on Indian giver and the idea that in our culture an Indian giver is somebody who gives you something and then probably takes it back. I think it's a pejorative term but in fact he describes that originally a lot of cultures believe that gifts are meant to circulate, that the gift increases in value as it makes its way through groups in the culture and then back to the original giver. And when it's given back to the giver often there's a ceremony that says this is what happened during our holding of this totem or token or whatever it was. And I think some of the early Native American tribes were pretty shocked when the peace pipe didn't come back to them, instead it got shipped over and put in Queen Elizabeth's museum someplace or something like that. So what we're seeing having a tremendous effect in the world right now is gift economies for the creation of software and for the creation of many other things. So we have people like Richard Stallman who I highly recommend if you haven't read it on his site there is an explanation of why he came up with the GNU project sort of the beginnings of it, why he was motivated to begin doing this. It's really compelling. If you put yourself in his shoes you'll go makes total sense I might have tried that myself but I sort of had that sense of wanting to collaborate with other people. We have the cathedral and the bazaar and a variety of other things that have turned into free and open source software and then we have a variety of just open things that have come out of gift economies and I'll come back and enumerate a few more of them in a second because I find them to be really, really encouraging. And then finally let me do family systems therapy where there's a person, a therapist named Virginia Satir. In fact I'll bring up another piece of software that I use a lot called The Brain. So I have family systems therapy. There's a therapist named Virginia Satir who is now deceased and she, one of her many theories was this idea of congruent action which was taken by one of her, not so much disciples for protégés but students, a guy named Jerry Weinberg who wrote one chapter of his book on quality software management and the chapter in that book is called congruent action. And Jerry Weinberg, I find to be a really intriguing person who's trying to structure or trying to bring value to the process of running software projects out of ideas coming from family systems therapy. That's really useful in my eyes. So the more we mine these different disciplines the more hopeful I become because again I think what we're trying to build is a hologram of what's out there and the more perspectives you can get on it the more dimensions and the more richness you get to it. I don't know yet very much about what's happening with evolutionary software and sort of guided evolution so that you can create functions and things like that but I think it's really fascinating. So I have two big reasons for optimism, okay? One of them is people are in, people are back. Sort of science and scientific methods sort of aced us out for a while. The need to understand and control and be factual sort of sidelined people for a while and people are back, they're back as I was describing earlier in medicine and psychology. I mean, I think you'll find less and less that the therapist sits across the room with a clipboard and says, so when did your mother lock you in the closet? And more and more there's some kind of relationship built or people counseling one another. In anthropology we have human observations and intuition back. There's a wonderful discipline that's getting a lot of attention right now called behavioral economics which is a mixture of behavioral psychology and economics. Danny Kahneman just won the Nobel Prize for Economics for it. He is one of the preeminent behavioral economists and a young MIT professor named Sendhil Malanathan won a MacArthur Fellowship for very similar sorts of work. Behavioral economics undermines the very premises of neoclassical economics. There's this thing called rational expectations theory that most economists kind of assume to work that also leads to perfect markets, sort of why markets clear and regular market theory. And the idea here is that we are all well informed and make rational decisions. And guess what? We make irrational decisions for a variety of good and bad reasons constantly, constantly. So how do you build an analytic system when you don't really have the fundamentals of the analytics together? So there's reason to critique what we think we know about economics for example. And then in areas like such as management theory and software design, people are coming back also. There's a tremendous amount of interest now in social software. There was a boom in group where I'd say probably five years ago and there's been constant sort of interest in it since then. But now there's this acknowledgement that maybe the social software stuff is just simple. Maybe it's simple tools used well by a variety of people. And it probably has to evolve a little bit more. But maybe the stuff doesn't need to be this sort of closed highly designed system. And I see this beginning to dawn in the knowledge management field where originally there was kind of this mechanistic idea that what you do is you sit people down in front of basically database entry forms and you have them type in what they did and what they learned from a case or an event and they feed that into a database and somebody else comes back and searches on it and hopefully brings it back up and can then execute something miraculously. What I'm hearing more and more is knowledge management may be about getting the right four people or three people on the phone or on instant messaging at the same time so they can describe and tackle and solve a problem. That's not necessarily about who put what in the database. It may even just be about who knows who did what about social networks and social dynamics. Social dynamics are hot and there's some parts of it where I think they're being taken sort of with lip service where viral marketing is the new hot thing in marketing. People want word of mouth or word of mouse online and they all want the kind of growth curves that hotmail had and point cast and so on and so forth. This has sort of good and bad sides. The bad side is that you see a lot of campaigns where you have people shilling for products or you have people doing astroturf campaigns. They're called fake grassroots campaigns called astroturf in the business. What it means is you have marketers who go stand in line at the movies and say, hey man I really like my new sneakers or this new website or whatever else and build buzz that way. And also there's a lot of lip service around virtual community. Back in 96, 97 it got hot and a lot of people tried it and I think there's a lot of flaws with virtual community as it's been implemented in many places even though people's ability to connect is just miraculous. Prodigy when it was very first launched, they added email as an afterthought. The original service didn't really have email. It was basically a shop on demand kind of thing where they expected people would browse around and buy stuff and they added email. And then six or eight months later they were furious because the people were using this email thing to organize up and bitch at management for not having this, not having that. It was basically a revolt using the very tools of conversation. AOL understood this in large part I think and started building great social software into the interface. Their instant messaging is pretty darn good. The email is not bad. The forum software is really quite good and as far as I understand it, the people spending time on AOL spend 70% of their time in those particular, using those particular tools. Then they happened to go transact or go see a movie or go do whatever else. Then there's other kinds of social software that I really like. For example, Google. Google is really about what humans think of other sites. Google works by rating pointers to websites. Google assumes that if 10 people pointed to Dick's website and then nine people pointed to another website then Dick should be ranked higher than that other website. Given a particular search term, that's really interesting. That is an entire business that values human opinion and bases its business model on human opinion. Now sometimes of course some of those links are made automatically or through editorial judgment but a lot of these links are very much about what was valuable and did I link to it? Web logs and wikis are really pretty simple software that people are using in extraordinary ways to express themselves. Now, there's gonna be a weed and chaff in any sort of situation where you have anybody with very low barriers of entry right now basically access to the internet and the ability to master some technology to put their opinion out there. The good news is that the dynamics in this community help the good stuff bubble up because the normal stuff, I had a tuna salad sandwich for lunch today and my girlfriend hates me and stuff like that, it kind of goes away because nobody sends an email that says, gosh, that was a great post because nobody links to them and says this is really interesting stuff and when you do get that kind of behavior and there are now meta tools that search and see which web logs are being frequented by whoever else, very, very interesting to supplement this social dynamic you get enormous vortexes of attention and information which we're only beginning to understand and even to see. I believe that this is one of those great opportunities to sort of reconnect things like our electoral process. Back when Ronald Reagan was running for president he did a great job of using the media to bypass the media. He was such a good actor that he could talk directly to the American people and the media people were just kind of like, wow, he's good at that, you know, and what they said didn't matter as much as his appearance. There's an opportunity now for politicians to speak directly to us and I think what we just saw in the elections last night is evidence that they don't know that yet, that everybody's playing by old rules of consumer marketing which is how you win elections. You spend a lot of money doing ads and appearances and all that. I would read, forgive me, I would read Yasser Arafat's web log. If I knew that he was writing it, I would read Al Gore's web log, I would read George W. Bush's web log, okay, and I would rely on friends and other people in their opinions about those things. There's an opportunity here to connect directly, directly, from the people making these decisions to the people outside who care about them and wanna vote about them. And we have to think carefully about what's the dynamic then, does that mean everybody's gonna send a note to, you know, Yasser and say you had a typo on your second paragraph, that's probably not a good idea. But it also means that the PR person and the lawyers and everybody else kind of need to get out of the way here. We need to figure out a different way to have civil discourse. Again, unbelievably simple software, software is not the hard part of this particular equation. It's very much all the other stuff. So let me do another bit of vocabulary building. I distinguish between personal service and personalized service. Personalized service is sort of database marketing, you know, I get a call and they go, oh, actually I call in for an order and they go, hello Mr. Mikulski, did you like that a pair of blue denims we sent you? We've got a nice tie that would go with it. They're basically cross-referencing their database, doing all kinds of customization, they know what my name is, but I can tell that it's a script. You know, it's even if there's a human there, sometimes it sounds a little bit inhuman, especially if they're at the end of their shift and they're kind of cranky. You can hear a lot of things in the human voice. The telephone is this magical, you know, with the telephone you're standing much closer than you could ever get standing face to face. You're inside their zone of privacy. It's a magical tool. So what if at some point during that transaction, your kid coughs in the background and then the operator on the other end says, your kid got a cold? My kid had a cold last week. And all of a sudden, magically, we've made a little thready connection between these two people that's about the person. That's personalized service. So, I mean, sorry, that's the personal service. Personalized service, even when delivered by a person, doesn't often feel very personal. Personal service is about, you know, having some kind of gut connection with whatever whoever is saying things. The problem is that we have this huge historic misconception that doing this connection is very highly labor intensive. That it requires sort of one-to-one participation. You know, Procter & Gamble is not going to have its call center call everybody whoever bought a bar of ivory soap and ask them and try to build the personal connection and do that whole dance. And that's not what I'm saying. I'm saying things like Dave Weiner, with whom I disagree with half the time, has a very popular web blog. He's a programmer, user land software. He builds one of the weblog software, one of the kinds of weblog software you can buy. He sends notes, at least every day, to probably 10,000 people. They're very personal. He wears his heart on his sleeve. He talks directly from his heart. Even if you disagree with him, they're incredibly personal. And occasionally, people do reply to him. And then he replies back, basically outside the channel of that particular distribution of his ideas. He's communicating with a whole bunch of people. At companies that have many employees, why limit the communication to the outside to the call center that's doing telemarketing or to the customer service center that's answering the inbound calls? Why not figure out how to poke more holes through the company and connect external constituencies with internal people who care? And I think there's a real capability to do this. So my second reason for optimism is what I think of as the DIY world, do it yourself. DIY used to mean you go to Home Depot and you come home with some lumber and some nails and you make a treehouse or something like that. These days, DIY has been turbocharged. And I believe the thing that helps us turbocharge DIY is the internet because prior to 1995, 6, 7, 8, it was impossible for an average, ordinary human being to leave something in the world for other people to bump into and use and see and read and respond to even if they walked away. Now, programmers were sending files back and forth since the beginning of programming. I get it, but that's a very specialized audience. Also, publishers, if you owned a magazine or the New York Times, you could reach a whole bunch of people more than I can with my little website. I get that. But the average ordinary human being could not publish through the New York Times. Even if you sent in a letter to the editor, it wasn't going to show up until three weeks later if it made it through the filters and then nobody was gonna connect it to whatever the original story was. Way too difficult. So all of a sudden we have this ability to do all sorts of stuff including share bits of code. So you have open source. Share, spare, bandwidth on our internet connection. So you have wifi sharing and a variety of networks that are being built. A friend of mine recently described the future as being a raisin muffin network where the raisins are basically dedicated hotspots that you might pay for or that are high capacity. And then sort of the muffin is 3G wireless or sort of regular networks of lower capacity that are available with broader footprints, kind of interesting. And then there are really interesting projects such as grassroots encyclopedias. If you haven't gone to the Wikipedia, go, take a look. I use it as an example all the time. I was demonstrating it to somebody a couple of weeks ago and at the top it has a current events section and one of the current events items said, Irish travelers. And I sat and I said, where have I heard about Irish travelers recently? So I clicked on it and went to the page and there's about 65,000 Irish travelers in England, Canada and the US. They speak a dialect of Gaelic called something or other and blah, blah, blah, blah, blah. And it dawns on me that Evelyn too good, the woman who was videotaped beating her daughter in the parking lot is an Irish traveler. Then it further dawns on me that wow, this entry was probably not in the Wikipedia 10 days ago when that event actually happened in the media. Do this Britannica, you know? Bring real time collaborative knowledge to bear on interesting issues of everyday importance and do it in an elegant, simple way with practically no technology. A Wiki is not a lot of technology, it's just a very nice design. And I've grown very fond of Wikis and I'm beginning to sort of think Wiki. I'm beginning to think, I remember a long time ago somebody asked a Disney Imagineer, these rocks are so lifelike, they really look like rocks and yet they're all artificial, how do you do it? And the guy says, to make a good rock, you have to think like a rock. So I'm beginning to think like a Wiki and I'm realizing that all the stuff I care about is deeply intertwined and the Wiki allows me to sort of skip and weave and match and allows other people to come in and play that same game with me. I'm not good at it yet but I'm really, really intrigued by this as a means of expression. Web logs are interesting but what you write on a web log sort of drops off the bottom into an archive somewhere and unless somebody linked to one of those old articles or somebody Googles the term that brings up one of those articles, they might as well be sort of stored in a refrigerator someplace. And also we have things like university curriculum which is available as open content. MIT's open courseware initiative. September 30th they put up the first 30 courses, they have 2,000 courses they plan on putting the syllabus, the course notes, simulations if they have them, all sorts of materials related to all of their courses on the web for free. A few years ago the president of MIT, Charles Vest created a committee and he gave them two questions to answer. He said number one, what is the internet going to do to MIT? Number two, what should MIT do about this? They hired McKinsey, they did a whole bunch of studies, they had a stack of reports and papers this big, they were going to suggest an e-learning initiative. They were gonna say we're gonna go start this e-learning thing and charge people but the numbers didn't really tie. They couldn't figure out how to charge enough given their studies about demand and so forth. And then some smart person in the study group realized that all the professors they had talked to pretty much to a person had said let's just put our stuff out in the world for free. It fits the MIT mission of broadening knowledge in the world, doesn't harm us, these people are not getting an MIT education, they're just getting access to materials they might never otherwise get to go see. Go to ocw.mit.edu, really, really interesting. Even though what's there right now is very low key. So I'm really sort of pretty excited about this and about the way the medium lets people collaborate and an analogy I draw very often is with leaf cutter ants. Do you know that leaf cutter ants don't eat leaves? They go like crazy up trees, they crunch pieces of leaves off, they fall to the ground, other ants carry them into the nest where they munch up, they sort of mulch the leaves, they then put the mulch on this fungus that lives inside the hive. The fungus metabolizes the leaves and then after which the ants do feed off of. It's a total beautiful symbiotic relationship. Something interesting is going on in the world where you can leave things out in the world for other people to use and then improve and then bring back and continue this sort of enhancement loop. There's this beautiful dynamic going on where people are nourishing their own little fungal cultures. And they're doing this in a way that's really productive because software, it turns out, can do lots of things. I mean, I could write articles till the cows come home and it's still gonna be an article and other people are gonna read it and have opinions and maybe make commentary. Software can do things, can make things, can illustrate things, can map things. It's enormously powerful. So whenever I can, I sort of point to this as something really impressive. Now, why would anybody do this? Is there an epidemic of stupidity going on? There's all this free stuff. And when I talk to some people across the table or to groups, I can see their brows just furrow and they go, what do you mean there's free wireless bandwidth and there's free encyclopedias and free stuff? This is just stupid. Or is this some kind of a strange epidemic of altruism that at some point people will rise up and there'll be a tragedy of the commons and they'll sort of all go away. And I don't think so. I think it's about value, all kinds of value, personal value, social value and so forth. And for instance, why does any individual creator create something? And I'm over-generalizing here, but they might create because they wanna make money, a lot of money maybe. They might create because they wanna change the world. They might just wanna entertain themselves or entertain their friends. They might create because there's something inside that's just gotta get out, okay? Now, what are their options? The old way of creating, and this is just a subset of all creation of course, but the old way of creating was, invent something, lock up the IP, get a patent to copyright a trademark, whatever it might be, and either start a company or join a big company and get funding or find a project funding and so forth. And your possible outcomes, once you start seeing a lot of companies and thinking about it are actually kind of bleak. Lots and lots and lots of these companies fail or the products fail. It takes 10 or 12 different things to happen properly for a product idea to make it into the market and succeed. You can have the right idea, the right marketing team, a lot of money and terrible management and you're done. Any one of these things falls out and you have product failure and you as a creator have sat here dedicated your five years or whatever to this thing which is now going no place. Another idea is that the company fails. Product is doing great, but the company just went bankrupt and you have suddenly no vehicle, no vessel to get in any place or the company is knocked out of business by some competitor. Or let's say in the best of cases, the company that feels the product, the product is a success, but some people are using that product and other people are not and they don't get to because this company owns the IP. So you have kind of limited success. The worst idea is that the company loves your particular invention, patents it and then locks away the patent and uses it only offensively to stop other companies from producing this thing which never sees the light of day. And believe me, this happens. So you're a creator. I mean, anybody recognize the guy in the picture? Inventor of TV? Philo Farnsworth? We don't know him, we know Sarnoff because this guy got aced out. So there's a new way of inventing stuff and I think it makes a lot of sense. If you read, for example, Stallman's essay about the GNU project or go read Linus Torvald's book Just for Fun, why did he do this? Because he wanted to because it was interesting and a thorny problem and it got him worldwide attention. So I'll come back to this in just a second. But let me sort of start winding up by trying to describe why this next period will be so messy. There's a really big battle brewing. There's a really big battle of foot already. It's not just kind of brewing, it's actively underway and it's maybe not the big battle you think it is. It isn't between AOL Time Warner and Microsoft. It isn't between AT&T, British Telecom, Deutsche Telecom and Dokomo in Japan or Disney Viacom, Vivendi and Time Warner or Coke or Pepsi. The battle I think is between open and closed. And I'm not trying to be a proponent that everything should be open and everything should be free. So hear me out. I just think that there's a titanic battle going on right now between open and closed. This battle is far from resolved. But what's happened is the people who want closed, who want proprietary have really gotten very far in locking the barn door. The people who want open would argue that whatever you want to do to the barn door opens going to get out anyway. Open is sort of like air. So a lot of interesting things have been happening. Let me focus down on one thing, just on innovation. Some people say that there's an innovation crisis going on. Some people think that corporations have been spending an enormous amount of time on innovation laboratories, innovation markets. I saw during the boom, the internet boom, probably 10 different businesses or business plans that were gonna create idea markets. Places where everybody was gonna show up, type in their idea, type in somehow, enough of the idea to tempt people but not so much that they gave away the idea, put this into some market environment where other people would bid on them and get them and they would complete the transaction. Pretty much none of those made it. Clay Christensen does a very nice job of describing two kinds of innovation in his book, The Innovator's Dilemma. He describes sustaining innovations and disruptive innovations. The sustaining innovations are the disk drive that's smaller and spins a little faster and stores denser data. The sustaining innovations are a more economical way of coding a particular algorithm. Disruptive innovations are, whoa, we have object-oriented programming here and all this other stuff is suddenly not interesting anymore and it's gonna have to be replaced, it's gonna be obsolete, whatever else. Or name your other sort of trend that really disrupts a market. And at the beginning, generally looks inoffensive, clunky, burdensome and incapable of performing the functions that the real technology is doing today. He uses, was one example, the disk drive industry and Christensen also talks about steam shovels. And there was a company called Bucyrus Erie that made steam shovels out of steam with steam engines and they were enormous machines and they could move very large masses and then along came hydraulic shovels. And the very first hydraulic shovels could barely pick up anything, cost quite a bit of money and didn't do that much. And the rest is history. Over time, the hydraulics got better and by the time Bucyrus Erie sort of figured out they needed to have one in the market, they were dust. I looked at this and I really liked the model and then after looking at what was happening in the copyright business and in a lot of other businesses, I realized that there's two kinds of sustaining innovations. There's enhancing sustaining innovations and there's defensive sustaining innovations. The defensive ones are basically ways to fend off the disruptive innovations, okay? The question here is, what is the effect on society? My belief is the enhancing innovations generally are net positive for society and the disruptive ones are net negative. And let me give you a couple examples. There's a lot of industries threatened by openness and by what is happening. There's a lot of people that don't like the naturalization of media, for example. There's a lot of people who don't like open source software or open collaborative project because their businesses are threatened. So they've taken steps already to prolong the ownership of copyright. There's the Copyright Term Extension Act passed in 1998, also known as the Sunny Bono Act because he was its lead proponent, which is currently in front of the Supreme Court as the Eldred versus Ashcroft case which has not been decided yet. Will copyright go to 95 years if it's owned by a corporation or will it be rolled back to 75 or even something less? That's really an incredibly important decision in the works right now. They've also taken steps to limit the rights of authorship. The Hollings bill basically would make all devices have to conform to digital rights management. There are five different technologies being built into the next generation of PCs that are already in the plans for the next generation of PCs which, for example, encrypt the signal that goes from the motherboard to the screen because you might clip in there and then digitize or store whatever it is they're trying to project onto the screen. You're sort of left with put a camera in front of the monitor and re-record. That's the only thing that sort of still works because all these things which add cost and processing time and overhead are being baked into the next generation of hardware. That's all done, Microsoft and Intel are on board. There's lots of efforts to sort of own all ideas. It's particularly egregious in the genetic, that sort of the gene world where there are not just sort of gene sequences being patented but processes, entire processes for how to come up with genes, how to identify them, what to do with them, how to recombine them. The Tausendingle bill, which has been in Congress for a while which has not passed yet, would effectively allow the local, the ILX, the incumbent local exchange carriers to stop offering access to ISPs. And then, hey, then it's just the cable companies and just the ILX remaining to offer internet access. The Digital Millennium Copyright Act criminalizes circumvention of any of these digital rights management technologies and then the World Trade Organization and the World Intellectual Property Organization limit your recourse. The treaties that all the countries that want to sort of play by what Tom Friedman, the columnist, describes as the golden straight jacket, the treaties that everybody has to sign up for basically say, you have no recourse to go back against the corporations that feel that you violated their rights in these cases. This is all done deal, it's all been done. To me, the magnitude of these efforts, the magnitude of the stress that this and other things are creating is evidence of the magnitude of the change that we're going through. It's evidence of the friction or the pressure between open and closed. Companies that realize their business models are in deep jeopardy who have done a lot of innovation. Look at this list. This is legislative innovation. This is technological innovation. This is business pressure. This is all sorts of things that culminate in trying to protect their business models. I would submit that most of these things are net negatives to society. When individuals lose some of the ability to author materials themselves and put them in the world because other companies are the producers and we are the audience. When we are not allowed to enhance and share and in other ways modify all this raw information when pictures are basically taken away and then resold and resold afterward, that are pictures that are our legacy. I mean, that famous picture of the steel workers sitting on the girder over New York City, taken, I don't know, in 1920s or 30s, that's in the Bettman archives and Bill Gates will gladly sell you a copy of it. But it feels to me like part of our cultural patrimony. It feels to me like something that just kind of ought to be in the world, like all of Martin Luther King's speeches, let's say, things of that nature. This is just stuff that happened in the world that somebody recorded. So what's sort of coming on the horizon? And let me build on my pessimism a little bit because I'm not really a fan of smart cars or smart highways. I'm not a big fan of tablet PCs. I sort of started in the technology business around the time that the first round of pen computers came out and I won't dismiss the new tablet PCs for the same reasons but I don't think they're transformative. Full speech and gesture user interfaces, if you saw Minority Report, what Minority Report convinced me of was, this was a well simulated, how do you sort through information interface? You and I aren't going to be doing that anytime soon and probably not our kids. It convinced me that even a very good simulation of how that might work, probably won't replace the damn QWERTY keyboard. Speech recognition has a series of its own problems. It'll probably be used a little bit more but I don't think it's going to take over. My asset test for any speech recognition system is, put a microphone on the table where six people are talking and give me at the end of that a transcript of who said what to whom. And you can do that, let's talk about speech recognition. Nano sensors and bridges as a whole variety of nanotechnology efforts going on, some of which have merit, biotech sort of genetic tweaking of DNA, all interesting but all of which open these enormous Pandora's boxes of potential ills of unforeseen consequences, a variety of things that sometimes in my eyes outweigh the benefits they might even bring and we don't have any real understanding of how to stop these things. We haven't figured out how to put brakes on the great new roller skates we're building. And I'm a big fan of what I call power tools for ordinary people, things like Wikis' weblogs, email, personal expression, personal publishing. I'm a big fan of this rising water level of shared best efforts do-it-yourself stuff from wireless networks to software. There's an article I want to write which is titled something like, Microsoft is 007 and he's trapped in a room where the water is just coming up like this. And he's got to figure out how to get out of the room because when people like Linus Torvalds and Richard Stallman and others begin sort of pouring water in this room by offering up components of software that are interesting, that work, that may work better or worse than any of those other pieces but are just sort of available, something's got to change about that other business model. So I'm a big fan of these sorts of things and I see enormous opportunities. I think our work is far from done. There's enormous opportunities to sit down and rethink the software that we use every day. I was at a dinner with eight geek friends the other day and toward the end of the dinner I sort of took a poll. We went through the office suite, email clients, graphics applications, databases and a variety of other things and we were all unsatisfied with every single category. Nobody was happy. One guy was smart enough, he was running his own email service with all kinds of spam filters and stuff but we were all basically unhappy with it. So there's enormous opportunity and just don't let a venture capitalist tell you that they won't fund you to go build something that'll go up straight against Microsoft Office, for example. So I don't have enough time to go in enough detail here but what all of these things have made me do is question some of my basic assumptions about what is capitalism? How does it work? And I believe that we're stuck in what I think of as consumer capitalism which is kind of a dysfunctional off shooter or a dead end track of capitalism where companies treat us badly but they don't want to but they don't know any different. We get treated badly and we're not crazy about it but we wind up having to buy stuff and do stuff so we live in that world. I think there's another world available. Intellectual property where I think the idea of property and the metaphor of property is really screwing things up these days. Intellectual property is more like an idea on loan and whoever came up with it gets a short period to benefit from it ahead of other people and then it just goes in the world but just try to convince certain people of that. And then the general idea of what are your assets? If you're a Time Warner or Vivendi or Sony movies or whoever else you think your assets are this huge digital archive of movies for example. I'm not so sure. I do think those companies have assets but I think those assets have moved elsewhere. And finally the idea of scarcity. What is scarce? And so many things, you know, this podium is really scarce and if you wanted to bid right now on this podium and it had to be this podium, it's clearly scarce. But software to run a weblog is not scarce. In fact it's not that hard to write. So the internet and its capabilities and this idea that you can replicate endlessly suddenly call into question basic business values that scarcity creates value. We now have to find value in other places and that's going to be some pretty fun stuff to look into. To summarize, I think in the old world we sort of tried to build barriers and get lock-in. We created friction that made it hard for people to leave our offers. We sold people access to be able to do something and then had increasing returns from that lock-in. Sort of when once Microsoft Office got bundled other Office suites sort of went by the wayside because they got the virtuous cycle, the virtuous circle which in fact turned into a vicious cycle for the other market players. And we get leverage from ownership of the thing and it could be that in some businesses, not everywhere transparency will be key, not barriers because transparency will increase trustworthiness and credibility. It will build long-term solid relationships that will be voluntary. Flow will be friction. Yeah, go away. Here's Google. Google sends you to a million websites but it knows you're going to come back to prove capabilities rather than the bare capability at all and then the flow builds and builds and builds. Flow is sort of beneficial in itself. And finally, leverage comes not from owning the asset but from being part of a network of relationships and collaborations. So, and this is my conclusion after which I'm very happy to take some questions, whatever time permits. I think, and this may not apply to all of you but most of you face a really big choice these days and I don't know that before thinking about this talk I don't think I crystallized it quite this way. It's an economic, ethical and ideological decision. You're not going to face it all the time but you're going to hit it every now and then. And this decision really is not binary. You don't have to choose open or closed. There are systems that can be built with combinations of both. There's all sorts of elegant ways you can use both to complement one another, build business models that use both. However, the kind of battle and the kind of pressure that is built is making the choice more and more binary. The forces that work in the marketplace are making this an either or kind of decision. So where do you want to put your energy? Your time? Your ideas? You know, what will allow your idea to be used by many, many people while you still make a living rather than sort of run that gamut of maybe making it to market, maybe not. And I think we're seeing recently great evidence that there are new ways to do this and that's why I'm extremely optimistic in the longer run and a little bit terrified in the near term. A little bit terrified because what's in the air, the forces and the battles and the things already at work are pretty large and pretty important and there's a lot of interests who feel they're being harmed. With that, this is actually the real end of my presentation and I'd be happy to turn up the house lights and take some questions. I think there are three floor mics, one in each aisle. If you have a question, come up to the mics and when I stop being blinded, I will actually call on you with a question. I know I covered a lot of things, so thank you. Thank you. Somebody's getting up. He's really got to go to the bathroom or he's got a question. I really have a question. Thank you. At the beginning of the talk, you put a reputation under trustworthiness rather than trust and it seems to me that it would go better on the other side. I was wondering why you did that. I put reputation under trustworthiness because I meant the reputation you build over time of your good name and your good name being earned through your actions over time, where I would maybe put in contrast branding, sort of a, and I think of branding as a fake reputation. I think of a brand as an effort to create a reputation or an image or a picture of a company in some cases in the positive light, a shorthand for the company and what it does and what it stands for, but that isn't necessarily connected to the reputation it earns over time. It may just be my usage of the term. Does that help? Please. Yeah, I'm not quite sure how you got from pessimism to optimism. It's my basic optimistic nature. I mean, you had made a statement that companies do want to do better. And, I mean, for instance, branding works fine for them. Why would they want to change? Branding doesn't work that well for them. It's remarkable. Advertising is failing. It really is. People figure out that there's a facade and they understand the artifice of it. They still have to live in this world and buy and do things. But they're reaching for authentic services and real connections with service providers, all the companies or whatever. But I think branding is failing. George Bush is president. Okay, branding is working really well in the near term. But it's got holes. Don't take all my hope away. Anybody on the right? No? Please. Thanks for interesting talk. So a lot of these ideas sounds very familiar when you read like Karl Marx like 120 years ago. So workers earning the production means and stuff like that. Now it's been implemented very badly in Soviet Union and China. But the original ideas, then Karl Marx is very similar to what you described. So do you have any differences or similarities to that? I haven't done sort of a critical disassembly of these ideas and then compared them directly to Marx's doctrine. And I agree with you that there's a big difference between ideology and implementation. I think there's sort of some fundamental differences about, you know, from each according to his capability to each according to his need and a variety of other doctrines that don't necessarily fit in the world I'm describing. I think there's a different attitude toward production and asset, which are critical terms in Marx's doctrine and labor and participation. But I don't think I'm walking down Marx's path and describing these sorts of things. And I realize also that to well trained business people, and I have a Wharton graduate degree, luckily I ended up in sort of this discipline inside of Wharton called social system science under a guy named Russell Aikoff who sort of taught me to see the world as systems, not as mechanisms. And from there I sort of came here through this very strange and checkered path. But if you have a really good business training, this is really hard, it does sound like communism. And people who are saying these sorts of things they're getting that a lot. You're just a communist or an anarchist and you just don't want business. You don't like business, you don't want business to live. I really like business. I think business has ended up in a dead end that's bad for it and bad for us. And I think there's a way out. I call the way out congruence or congruent capitalism because congruence to me is the alignment of values and actions. And I think that people can actually make money. IBM is making a billion dollars in service revenues selling open source software on its different projects. Somebody at IBM is very happy about this. Somebody at Microsoft is less happy about this. But people are making a living installing, customizing, maintaining, hosting, perfecting, customizing, coming back and so on and so forth. Things like open source code. It's not anti-capitalist, it's not non-capitalist, it's not communist at all. It's just that the people have figured out that they benefit enormously from using a shared resource instead of hogging the resource to themselves and preventing anybody else from using it. In fact, the costs of prohibiting other people from using that resource add to the cost of the product. I would love to see an analysis of the Microsoft Office Suite and how much of the development is about us not leaving it or not being able to do things to it or in other sorts of defensive measures and how much of it is just sort of about productive software. Hi, you brought up some areas to be concerned about and I read slash dot enough to have seen a few of these things go by. Do you know of any online areas or places where there's activity going on to address these sort of things? Yes, lots of places depending on what you're interested in. Yale has a really nice blog called Law Meme. It's a multi-party blog, so lots of very smart people post to it. They've been posting about the Eldred versus Ashcroft case. They've been posting about a variety of different things. If you're interested in sort of productive efforts to build a new infrastructure, there are projects galore out there. I've been doing a lot of traveling in the last couple months. I went down the East Coast. I spent a week in Boston. I spent a week in New York, a week in Washington, D.C. and then I've been in San Francisco for a while. And this sort of after seeing what I would describe as a VC winter. I think when I first entered the tech business, it was the AI winter, sort of kind of ironic. But there's this VC winter which is just getting worse and worse and worse. Venture funded companies are suffering. There's IPOs have gone down the chutes. Venture companies, many of them are struggling even to stay afloat, so on and so forth. And in the middle of that, in the middle of what sounds like really depressing, terrible economic times, I have visited with some of the most enthralling, interesting, powerful projects. I have found and started falling in love with things like Wikipedia, which is damn simple, but it's not damn simple. Go look on the Wikipedia for a page called NPOV, Neutral Point of View. It's kind of an essay form and it describes how the Wikipedia community, which has created over 60,000 articles or entries in this encyclopedia, how they agreed on how to write controversial subjects. Because talk about abortion. Talk about the Israeli-Palestinian dilemma. Talk about any difficult issue. Neutral Point of View is what they try to do so that they don't take sides, but they describe what each side believes, and that both sides can agree. Because on a Wiki, I don't know if you know this, on a Wiki, anybody who comes in can hit the edit button and change the contents of the page and save it back up. Anybody. The way Wikis avoid graffiti is, it's very easy to roll back a version. And the people who really care about each section of the Wiki or each page are watching to see who added and what they added and what they did, and when something gets screwed up or when somebody comes in with malicious intent, they just roll it back a version. Graffiti becomes boring because the counter measure is so easy. So Wikipedia may be simple technology, and I'm probably over-simplifying what it has and what it does also, but it's not NASA's launch control center in Houston, but it has really interesting social dynamics. The Wikipedia used to be called the Newpedia. It was started by Bombas, which is, I think, a web ring company, and it used to be called the Newpedia, and it didn't get very much traction. They were just kind of using webpages, and I think you had to submit either through a web form or an email for new articles, and it didn't go very far. When they changed the Wiki platform, the social dynamics changed and it caught fire. So I see stuff like that, and I'm going to nonprofits and for-profits, and I'm saying, I've heard of Wikis, and they go, no, no idea. And I show them this stuff and they go, great Scott, please. Oh, I'm sorry, on the right then. Okay, just comment briefly about the international education consequences of Open. For instance, you can have a computer lab in a school in India and not pay a zillion dollars to have hardware and software. There was an experiment, I forgot its name, called, it's called Hole in the Wall, and I think it was run by MIT or somebody. They put a computer in some very impoverished rural area in India. They just basically punched a hole in the wall and put a computer connected to the internet, just left it there where lots of kids ran by, and it turned out that the kids quickly, very quickly, taught themselves how to use it and started doing really interesting things. I think a lot of this is just about access and about understanding how to play in this world. The tools, unfortunately, the hardware itself is still relatively expensive, although this Christmas season you can buy a sparkling PC for $300 from a variety of vendors. There was an article about that in today's Wall Street Journal and so forth. The tools are still relatively expensive because that's more than the average person in some poor part of India makes in a year, but it's also a lot about politics and access. So I'm a big fan, not just of water level rising, but of very distributed, very grassroots, real grassroots, bottom-up operations. The second something gets big, the second you have a very big funded project to go put computers in all the schools, then what happens is somebody says, oh, well good, we have to redesign the curriculum and now we're going to bring in the curriculum experts. And now you're hosed, you know, now you're hosed because I don't think we're very good at developing curriculum with a capital C. And what this is all about is the kids in, you know, Mrs. Nelson's third grade class building their own Wikipedia and trying to figure out what they think about biology or whatever else. And I think that's thrilling. So the component parts are out there. They're easy to use. They're not fully developed yet, okay? I have on my website, I have a blog in the middle which is Blogger Pro-powered. Then I have two mailing lists attached to it. And every time I post to the blog, I copy the entry and I put it on both mailing lists because Blogger's automatic send to email doesn't really work. And why do I have that? Well, if you don't care so much about what I'm writing but you're curious, you'll show up every now and then and read my blog. If you'd like to see every entry when I post it, why don't you subscribe to list one, which is distribution only. If you'd like to discuss those things with other people who might be interested as well, sign up for list two, which is discussion. Why is that three different tools? I'm using a website development tool, a blog tool, and a mailing list service called Freelists. And why did I have to learn so many funny things to make all that work? So we have a long way to go still to make these simple tools better and more unified. And I'm extraordinarily interested in helping people do that. I think I can sort of see where some of this stuff fits. But I think that if more and more... It doesn't take a lot of people who are willing to put things out in the open to outweigh, and in some sense neutralize, people who are not willing to put things out in the open. Because once they're out in the open, people can go use them. Now, it costs money to produce high quality materials, very high quality. But quality is relative. Sometimes high quality educational materials involve dogma, involve politics, involve a variety of things. Sometimes they involve really beautiful simulations and excellent software. I think the most productive things lie somewhere in between. So I'm really interested in what that world looks like. Please. A while ago, John McPhee wrote a book about the Mississippi River running by New Orleans. But how it really wants to run down the Acha Calaya, which would leave New Orleans high and dry. And so the Army Corps of Engineers has built this tremendous levee system to prevent the Mississippi from going down the Acha Calaya. But over time, the gradient gets greater and greater, and so there's greater and greater pressure for the Mississippi to actually change its course. And it seems to me that things like Bono, Hollings, and the rest, you described it as a sort of friction, but I describe it as a sort of gradient. I mean the kind of force you're saying right now. The pressure, not friction, as it's said. These kinds of things are actually supporting, you said a business model, but I would call it an obsolete business model, a technologically obsolete business model. And the more that they have to do to support that, the more and more the tension to do some other kinds of things. So my suggestion is to you that you're wasting your time, and you should really be writing for magazines like Spin and GQ and things like that to give them 16-year-olds that they shouldn't give their money to Disney and those kinds of people who are engaging in these kinds of practices, but they ought to really find these really cool little bands who are getting screwed by Disney and everybody else. The artists are being screwed worse than the consumers, and they ought to find these really cool bands like I've heard of one called something like Not Dead Yet or something like that, and use Napster and things like that to get the things and get money back directly to the audience. I concur a thousand percent, and I'm actually trying to get involved in something to build a new platform for all kinds of creative people that would allow them to do that kind of thing exactly. And I think my particular talents do not lie in writing articles for Spin and GQ. I'm not that kind of writer, but I appreciate your feedback. Who was first? Over here, please. I appreciate and sympathize with much of what you said and enjoy the talk, but... But it's all impossible. No, but I do feel compelled to ask the question. Given that many of the reasons for pessimism that you cited, the evils of advertising and so on and so forth, have been around and observed for quite some time now, and the reasons for optimism seem to be fairly recent, whether it's the birth of the internet or other new technologies, are you nervous at all or to what extent do you think you need to consider that any observations about the more recent are merely the myopia of the immediate and not a true change in culture or people's modes of interacting with each other, but just something that seems real because it's today? Yeah. My belief, strictly my belief, is that these are just inherent forces in our nature, in what society is about, in what people like and want to do. Some people, not all people. And that they just need to get out. They need to be in the world. They don't necessarily replace all commercial activity. They don't sort of... They don't wipe everything else out in some cataclysmic way, but they're just sort of natural. And the real question I think is, does this happen over the next five years to the point where we take it for granted and we just sort of move on from there? Or does it take 50 years? Well, I mean, I'm sorry, I'm sorry, I'm sorry, if they keep the Copyright Term Extension Act as it is currently in state, there is not an opportunity to try to overturn it again for 20 years until the extended copyrights begin to fall out again. There's just no opportunity to go back to the courts and do stuff like that. So the real question is, is this stuff going to happen sooner or later? I think it's inevitable because I think these are just natural energies, and the Soviet Union tried to prevent people from having faxes and listening to outside radio and figuring out what the rest of the world was doing, and at some point they kind of fail. At some point, they lose control over that sort of access. And I think that's not an unreasonable parallel. So what I'm trying to do, and I'm listening very carefully right now, that's part of what my tour sort of talking to a lot of people has been about, I'm trying to listen very hard about where should I be putting my energy? What is the thing that I can help do to help this thing happen in 5, not 50? And on the right? So who do you think is really making contributions to the open source movement? I've always suspected that there were computer professionals that worked with companies who, if you read their employment agreements, that intellectual property probably belonged to the company, and they don't have the rights to give away that intellectual property. There are many, many potential legal problems with open source. In fact, I made that list of ways that threatened industries have already tried to clamp down in one of my sort of manuscript drafts. There's a second list, which is what they might do next. And one of the things they might easily do next is take a full-on offensive, a legal offensive against open source. For instance, there's an open source codec called Agborbis. Well, there's another one called AAC, Advanced Audio Coding that was developed by the Fraunhofer Institute with AT&T and Sony and somebody else. I don't remember who else. And when they developed the AAC, they got this incredible ream of patents, a huge panel of patents, and an expert I talked with said basically whatever Agborbis comes up with can probably be destroyed by the patent portfolio behind AAC. Okay, Microsoft might decide that it's going to, you know, take on somebody else. Who knows? Could happen. And I think if things get really bad, it may even be in the works. I just don't think that at that point it's going to be successful. I think at that point it's gone too far. I think at that point people are going to say, they're going to vote with their wallets. They're going to vote with their feet. They're going to vote by, you know, putting up more public opinion and doing stuff that matters, I think. The horror scenario here is that, you know, the barn door gets shut and locked tight. To me, that's a horror scenario. To me, the idea that sort of we can't go build stuff and share stuff, which is what they would have to do, is really bad. I hope I'm not, I don't sound like I'm overstating that. That to me is really a bad, a bad sort of fate. Please. And then over there. I don't want to minimize the importance of including the humans in the equations about technology decisions, but one of my concerns that's getting more and more on my mind is the equation of your Yang column with the Yin column, which yields results like teaching creationism on a par with evolution and, you know, loony things like UFOs. And what I'm afraid of is we're going to develop future generations of people who simply cannot think critically. And when you combine that with what you're talking about with all these media companies, I get this image of these people sitting with their mouth open, drooling, watching force-fed media because they don't think critically. What do you think of that? As a bleak future. No, I, in some sense, I think you almost answered your own question in an optimistic way. You have to teach creationism next to evolution. And that's what creates a critical thinker. If you only, if you, oh look, I think every student ought to learn what's there about Islam, about Buddhism, about Jainism, about Taoism, about Christianity. We should all know that crap. Sorry, that good stuff. But my concern is they're not teaching them next to each other. They're teaching in one instead of the other. And the reason we have fundamentalists who are saying we need prayer in schools and we should abolish evolution and we need to say we shouldn't be teaching any of the religion stuff and the religion has no rule, no place in the curriculum. I think they're both part of our reality. And if you look at the neutral point of view page on the Wikipedia for a little bit of psychic guidance, it would tell you that let these people make their case next to each other and let's figure out how to make critical thinkers out of the kids. And I think that's great. Now, you may not have time to go check out every religion or whatever else. That's fine. Maybe that's an imbalance. There's lots of different ways that you enter this discussion and sort of move it forward. But I don't see a problem with that because far as I can tell, the vast majority of this Earth's population believes in one of those things. The number of people that are not signed up for a religion, I think, is the minority. And it's a relatively small minority. Go around the world. So that stuff seems to matter to somebody. Now, I'm very entertained that each of them thinks that everybody else is going to hell. That seems like a little inconsistency somewhere. So we could work on that. Over there, please. Just another challenge to your optimism. I'm going to go home crying. A lot of the forces you describe are also the forces that seem to lead or that authors seem to think might lead to the Los Angeles the Blade Runner, the Chief of City of Cyberpunk, a very dystopian kind of future. Same forces. So clearly there's going to be a change and the old is going to go away. But why expect the more positive future you're thinking of? And then how do we tip the balance so that it goes the way you want it to go instead of to...? That is a fantastic question. Has anybody read Bruce Sterling's book, Distraction? It's a pretty good book, but he has a precedent that he just doesn't use it all on the plot, which is that China being really up against the wall as an active rebellion decides to release all the intellectual property in the world. And as a result of that, the U.S. economy goes to hell in a handbasket and what you have in Texas is the local highway police basically sets up a roadblock and collects tolls to fund their families and stuff like that. So you have this incredibly dystopian vision of what happens. I have an undergrad degree in economics, but it's mostly econometrics and I've forgotten all of that. So take what I'm about to say with a grain of salt. But I think if you go look at our GNP and you figure out what proportion of that GNP was created by artificial barriers, anti-competitive or competitive barriers legitimately arrived at through passing laws, through locking up distribution agreements, through whatever they teach people in business schools to do because that's a lot of what business is about, how to create an unassailable, sustainable competitive advantage. I think that's a very big piece of the GNP. And in some sense saying that there's other ways of doing business that might deflate that artificial margin could substantially hurt the GNP and guess what, people in Congress are going to hate that. They're just going to hate hearing that the GNP is going to go down because we're addicted to growth and anything that says, you know, GNP doesn't keep going up at this steady pace for the economy. But guess what, there are a zillion things we're not doing today because of these laws because of these constraints. A zillion of them. A zillion opportunities for humans to provide service to humans. A zillion opportunities to do hosting, outsourcing, quality control, you name it, all of which are services that are valuable that should be paid for. There are ways that our culture could be done differently so that people who invent music, movies, whatever else share them relatively openly and use digital rights management software and yet make a good living doing so. And that's a different discussion, you know, we can go down that path if you want, but it's doable, it just takes some doing and it could create a very different world. Imagine, I mean, I used this software called The Brain, I showed it to you a little while ago just briefly. I have realized in using The Brain that I had amnesia that, you know, you come out of college and what do you have? Whatever stuck here. I've never looked at my binders from, you know, undergrad or graduate school, never. They do me no good whatsoever. I have a network of friends who I almost never consult about serious issues and I've got whatever stuck here and God willing this is good. What if we collaborated to build interesting stuff together? I have on my baby wiki, which is on my site, I have a proposal for an idea for grassroots industry briefing books and the idea runs roughly like this. If you're at McKinsey or Bain or BCG and you're a specialist in banking and you suddenly get a retail gig, they have a book they can give you that says, here's how the retail industry works. Here's who the big players are. Here's a waterfall chart of where the profits and the margins are. Here's who's doing what to whom today. Here's the history of some of the players. You can be really, really smart on retail in a very short period of time. Well, I think there's a whole lot of MBA students and industry experts and people out there in the world who might want to chip in and build or these industry briefing books. Why not? Okay, now you leave college. It's like, you're loaded for bear. You know, you've got stuff. You've got networks of people you want to connect with. What if educational institutions were built around the relationships you build in school, your favorite relationships? Why don't you have a mailing list hosted by your university that you have for the rest of your life, for free? What are they thinking? You know, why aren't you having relationships really important to them? They're not. You leave. They say, thank you very much. Goodbye. The advice you gave them while you were there, they discount because you're only there for maybe four years or two years, so they only have to listen to you for a short while. I've been on advisory committees to deans and stuff like that. It's not necessarily a pretty picture. Anyway, please. In the first part of your talk, you mentioned the idea that the fractal boundary of knowledge was suddenly starting to converge with the mind-boggling. Not that it's not growing. But starting to grow together and have a lot more to say to each other. That still strikes me as mind-boggling. I just wanted to say a little bit more about what it is you're hearing people say that sounds convergent there. It'll be hard for me right now to sort of take off many different examples, but what I'm seeing is, I tried to describe it in the Yin and Yang capsule, where there's a balancing of forces in the very leading people in leading disciplines. The people who kind of get it the most or are the furthest out there have achieved some part of that balance. They're seeing that there's this piece, but then there's construction and emergence. There's the interplay between those things, and that's where the leading edge is. So many of them have understood and are trying to work on those tensions in particular. And then if you hop from discipline to discipline, I think you'll see people saying, relatively similar things. And I'm at a loss for a really good example for you right now. What I saw, for example, was when I was interested in neural networks, I saw the computer scientists were doing computer simulations, and the wet-wear guys were slicing up rats' brains, and somebody else was sort of feeding in there, and they were all arriving at some very interesting new conclusion that they probably wouldn't have gotten to. I'll give you the one that really sticks with me. This guy named Gary Snyder was working with some other researchers on the olfactory cortex in rats, how they smell. And it turns out that rats sniff at something like five times a second, so every 200 milliseconds. And it turns out that on the first sniff, a whole set of neurons fires. Boom. But then the refractory period for those neurons, the time it takes for them to refresh and get rid of the fire again, is longer than the sniff period. Maybe it's 300 milliseconds or 400. So after the first sniff, those guys are gone. Second sniff, a whole new set of neurons fires. And it turns out that this is a wonderful temporal memory. It's a wonderful way to quickly, gross classify and then fine classify thousands of novel scents. That has stayed with me forever. There's no disk drive I know of that uses anything like this technique. And then go into holography and start thinking, I wanted to write an issue of release one years ago about holograms because I'm really sort of a fan. And what I found was, you know, IBM has holographic storage by which they mean they've taken a piece of 3D crystal and they're flipping bits at different locations, 3D coordinates. They're doing Cartesian mapping using holograms to burn memory into a 3D surface instead of 2D surface. What about the hologram? Holograms are analog. They have nonlocality. They have fuzzy memory. They have this enormous amount of stuff that we haven't mined at all that by the way is back in the analog realm. Okay? And to butcher history, at some point there were lots of longbow archers and it took a lot of work and energy to be a good longbow archer and then agriculture comes along and also crossbows and other sorts of weapons and suddenly you have no longbow archers. They're just kind of gone. Well, we're soon not going to have any analog engineers because everything's going digital and all the media companies are going digital even though it means they're damnation in the sense that the bits are now easy to replicate and very hard to protect. But everything's going digital. Maybe not. So I still think we have an awful lot to learn and I know I've gotten way off topic. I think over there and then back in the middle. Joseph, about the open source model would you extend that, say, to pharmaceutical companies and ask like Pfizer to publish their code for Viagra in the open domain? There was an article recently. I don't have the citation at all. I'm not sure I could find it. Probably if I looked for it I could. They did a study of all the drugs that were created and marketed by pharmaceutical companies and it turned out that they are grossly exaggerating how much they innovate. That a lot of the results had already come from government research. That a lot of them were Me Too drugs. A lot of them were small variants of old drugs. That this sort of general concept that we have to create a very special economic environment for pharmaceutical companies because they have to spend incredible amounts of money to develop, test and sell a drug is I think a wee bit of exaggerated. Now that doesn't mean that I think they have to turn over every formula for every thing but I think there's a more comfortable middle ground than giving them sort of free rain or lots of rain as they currently have. I'm probably sounding more radical than I should about that but I, when presented with a barrier in the environment I question whether that barrier needs to exist and whether there could possibly still be progress without that barrier. And nine times out of ten, there is. You can envision easily progress and people making money. By the way, if there were three or four companies selling an open source office suite they would all be making money, selling it, supporting it, maybe hosting it for small businesses, whatever else and none of those companies would be getting into trouble with a DOJ. There'd be a competitive market for services that people need and those guys would not be, you know, would not have the DOJ down their throats and I think this might be the last question. I want to come back to people. For example, there's like Tim Berners-Lee who's pretty open and populist. If he control or he help stimulate one of the leading technology and it's not captive yet then there's the Bank of Grenin and India. Okay, that's a little way and it's not threatening anyone. So maybe you could identify some more of those maybe good people are the ones who are spawning what is interesting. Spawning what? Spawning what is interesting or exciting or useful but in this optimistic view that you take. Go ahead. Maybe that's a basis for optimism. You need to point them out as well. For example, there's a cooperation. For example, I work for a big aerospace company that's somewhere around here and they got sued, them and many others by one of these patent trolers and they paid their three million just to get rid of the lawsuit. Client server, right? Somebody else sued them about oxygen and they paid but they also paid their dues to the World Wide Web Consortium in hopes that the next time they're attacked that they will find prior art in the World Wide Web Consortium. People like me and I don't know how many people like me there are but I imagine there's a whole bunch and I know I'm a couple of sigmas off the big hump in the chart but I'm interested in getting ideas in the world and I know I'm going to survive somehow. I'm happy about that but I want to see everybody benefit from the ideas. I also realize that sometimes money creates the perception of value. That's a whole different conversation you can go down but I'm really interested in putting ideas in the world so that they constitute prior art so that other people cannot patent them. You can also do defensive patenting. You can actually go through the patent process in the world for no fee, for no licensing fee. There's a variety of ways of doing this and I talked to the patent lawyer a long time ago and he said if I write a prose description of a program clearly enough that somebody could go write an instance of that program that constitutes prior art. I do not have to code the program. Great. Now it doesn't take a lot of people who have this attitude to fill the world with a bunch of ideas that will hopefully reduce the amount of patent trolling that's going on and I don't like the patent trollers. There's a bunch of companies that try to make a living from just doing that and I think in some sense society suffers for it. Now the people who benefit from it are the people who in the short term invested in the stock while it was hot and while it got higher evaluations because of things that it controlled. I'm really, it's freaky but I'm trying to figure out how to have a society and a business environment where companies don't control very much but they do really well business-wise. Thank you very much for the opportunity to come and talk to you. I appreciate it. Thank you. Thanks for coming and see you tomorrow.