Distributing the Future, Transcription Sample

The MP3 can be found here.

Distributing The Future, Beta Broadcast Number 6.

 

The future is going to be bigger than the past. There’s going to be more happening. Connected systems. Connected devices. Connected data.

What can we do in that world that will be interesting, powerful and useful?

 

Changing the world through capturing the knowledge of innovators…

 

The future is here; it’s just not evenly distributed yet.

 

Daniel Steinberg: Welcome to Distributing The Future from O’Reilly Media. I’m Daniel Steinberg and each week we bring you the technology and the people behind what you use now and what you’ll use next.

 

This is part three of a series that highlights the recent Web 2.0 conference in San Francisco. In the next half hour, VC Vinod Khosla from Kliener-Perkins on too much money, Intuit’s Scott Cook on learning from customers, Google’s Sergei Brin on how they got where they are, on where they are and on where their ideas come from. Dick Hardt talks a bit about identity, and Safa Rashtchy talks to five teens about technology.

 

Distributing The Future is brought to you by MAKE Magazine: Technology On Your Time. In volume 4, cool holiday kits, build a cigar box guitar, circuit bending, high speed flash photography, coffee hacks and lots of cool DIY music projects. Visit makezine.com

In last week’s show, 37 Signals’ Jason Fried talked about doing more with less. One of the things he recommended having less of was VC money.

 

This week we have venture capitalist perspective Vinod Khosla, partner at Kleiner-Perkins. He agrees that too much money may not be good for you. On the third day of the Web 2.0 conference, he said:

 

Vinod Khosla: The amount of money in the venture capital business is still there and I think it’s more than is needed. So that leads to a word of caution for this audience, which is just because you get funded doesn’t mean you’re successful. Just because you have money, remember not to spend it they way you did before.

 

My caution would be, the right way to build a company in a new area is to experiment and experiment in small ways. So you have lots of room to make mistakes, to change strategies, to change what you’re doing. And only when you are pretty certain, [when] you’re tracking, you have traction, and start to take off, [that] you start to really worry about scaling and other things. Just a word of caution, go back and read the lessons.

 

The funny thing is, one of my good friends Mark Leslie, who is the founder of Veritas, says the more money you give a company to start with, the less likely they are to be successful. Because the less [sic] [more money], the more confident they get about their business plan, the less they experiment and take critique and work hard to find out what are the flaws in your plan. Those things hold, independent on whether you have money or not.

 

So, and there’s plenty of venture capitalists [out there], more than there need to be. Trying to give you money and pretending to be value-add. Most of us don’t know the businesses half as well as you do, myself included, especially your business.

 

DS: Vinod Khosla of Kleiner-Perkins on distributing the money. Of course, we’re Distributing The Future.

 

…

 

In what seems by now like a past life, I used to teach mathematics. I remember having coffee with professors after they’d grade an exam and they’d be saying things like, “Well, I can’t believe they all missed this question!�

 

I know I taught this. Of course, you and I know that if the students didn’t learn it then the professor can’t really say that they taught it.

 

In this next segment, Scott Cook, co-founder and CEC of Intuit, talks about what Intuit has learned by watching folks actually use their software products. It’s helped them take their tax software, for example, and rewrite the prompts using words that their customers might use, instead of those that the IRS prefers. He says that their company goal is to make things simple. Actually, he phrases it a little bit more loftier than that.

 

Scott Cook: Our mission is to change lives so profoundly that people can’t imagine going back to the old way. And we do that by taking the complexities of life and making them simple. We thought we were pretty good in the tax business. We thought we’d taken the complex world of taxes and made them very simple. This one woman who donated to charity, who’s now reporting insurable tax, she’d written a $2500 check to the heart association. The software asks, well was that cash or non-cash? She said, “Hmm, it’s a check, so it wasn’t cash.�

And she checked non-cash. Well, the next screen then asks her questions like, “What was the description of the items you donated?� and “How did you determine their value?� Well, she got totally flunked. It was a check! And that’s because we’d fallen into the trap of using the words the IRS uses. And only the IRS defines cash to be a check. Any retailer will tell you that cash and a check are different.

So this uncorked a major effort of simplification across the company. We changed our processes, we changed our testing, we changed our design standards, [and] we changed our staffing. And even Intuit Tax hired an editor with a background at People magazine.

The result is the new Turbotax that was used this past tax season. Here is the identical screen that does the same job as the one before. And now it’s, “Did you give money to charity?� If that’s not enough, we have an explanation. If that’s not enough, there’s a hotlink and if that’s not enough, there’s a video on the topic.

(Laughter)

Well the difference has been immense. The leaps in customer ratings, which we measure, we got a 23-point gain in first time user, net promoter score. That led to big Turbotax volume gains, 27% last year. And our leading competitor shrunk.

 

DS: Intuit’s Scott Cook on the benefit of looking at your product from your customer’s perspective. Not a new idea, but part of Distributing The Future.

 

…

 

Sergei Brin, Google cofounder and president of technology, was an unexpected and unannounced guest at this year’s Web 2.0 conference. Friday after lunch, John Battelle had a half-hour conversation with Brin that covered everything from the success of Google, to what Google is now…

 

Sergei Brin: The number one factor that contributed to our success over the past seven years is luck. I think we followed our hearts, in terms of research areas and eventually found we had something pretty useful and wanted to be impactful about it.

 

And it was after a lot of consternation that we really decided to go to the business world. We actually talked about open sourcing the code for Google and trying to do it in universities. And it was just difficult to do that because of the computational resources that we require. We really needed to make money in order to pay for that.

 

So, eventually we did start the company and you know here we are a number of years later and obviously it’s been a very exciting and wild ride.

 

John Battelle: There’s been a dialogue throughout the conference. Google’s come up once or twice. One of the first that comes to mind is a conversation I had with Terry Semmel, where he…

I asked him about Google and he said, very respectfully, how much he thinks the technology is extraordinary and of course helped Yahoo! build their search technology and so on.

 

But then he pulled back and said “But let’s judge Google as what it is. Google is now a portal.â€? And by my estimation, and I may quote him – not exactly word for word, Google is number 4. How do you respond to that framing?

 

SB: Based on my reading on that, that also would make us the underdog.

(Laughter)

JB: Hahahaha. Very wise. You knew my next question was…

SB: And I think that’s where we are. Further I’d add to that, if you’ve had the pleasure of being at the Google café.

JB: Yeah.

SB: I think our food is pretty good; we continually try to improve it. But in terms of, you know, kind of the volume…

JB: Is that a non sequitur?

(Chuckles)

SB: Well the volume and the quantity we try to deliver if we were to rank among cafés and restaurant chains, I mean I don’t know, we’re not in the top hundred or thousand of them probably.

(Laughter and applause)

JB: Let me bring this one back. I like your underdog comment because it presages my next question. We asked Microsoft, you know, about Google and Yousef said, “well, we’re the underdog now because Google’s seen to be the leader. And so that gives us permission to do things that perhaps, because of our reputation, we couldn’t have done before.�

Do you see Microsoft as an underdog?

SB: I’d be excited to be viewed as a leader in terms of technology. I don’t think were the number one company out there, in terms of being able to do big business deals or… having some huge platform, you know many of the other kinds of things that Microsoft enjoys as an advantage. But from a point of view of technology development, I do think that we are a leader and spare at you of all the great people we have at Google, and the people who continue to join us.

JB: Will you become, I mean… let me bring up the portal issue again. I mean the reason you were so successful, there were many, but one of them was clean, blank page. One box. One logo. Then lots of results, very quickly. Is that going to continue?

SB: Well, I certainly hope though that it will continue to be clean. There are obviously other kinds of products in areas we’ve explored. And it has arisen, partly out of need, for example, Gmail.

 

I don’t know how many of you here have a Gmail account. All right, we have quite a few people. That’s great. But it arose out of frustration that I, myself and others, in the company had in terms of not being able to have a good solution to manage our own email. And I think we’ve done some pretty interesting things there. And, on top of the fact that I think there are all these Gmail users now who have great experience, I think its also helped people who used other email systems. I don’t know if any of you who don’t have the Gmail account and have some other web mail account… How many of you had your quota grow by a factor of a hundred or so in the past year?

 

There are areas that have been overlooked by the industry. Much as search in terms of sort of search quality, relevance was overlooked, actually, in the late 90’s by the major portals at the time. So, I think that we have a lot of technologies and distribution and infrastructure that really allows us to help in some of these areas and I think we’d be foolish not to make an impact in places like that where I think we can.

 

We have several kinds of projects, and ones which we believe are core and… We want to be strategic about and we as an executive team I look forward [to]. But a lot of the things you see are bottom-ups [sic] projects and they surprise us. Sometimes they’re really fantastic. If you take Google Maps, for example, or in Google News, in fact or probably most of our successes have nothing to do with anything any executive thought was a good idea.

JB: Maps. Mail. You know, these are things that seem to be directed even if they’re not. Again, it might create the illusion that there is a plan.

(Laughter)

SB: Well, I swear, I feel like a lot of the portals have just sort of taken everything and anything that they see. I think there is still a lot that’s missing. But sometimes, I imagine that our teams are dissatisfied with existing services on portals and see an opportunity to create something new.

 

The reason that we put up so many things on [Google] Labs and try so many things out and even try things that never even reach [Google] Labs is because its really hard to predict exactly what will stick and what won’t.

And if I’d propose to you something like Wikipedia, many years ago, and say “Well, we’ll just have these encyclopedia where anybody can edit whenever they want.� I don’t think many of us including myself would have believed that that would have worked.

So, these are the things that you really do have to experiment with and try.

 

DS: Google cofounder Sergei Brin on Distributing The Future.

 

We’re getting ready to end our beta designation for Distributing The Future but there’s some more changes we need to make. If you have thoughts on how we should change or stories we should cover, email us at future@oreilly.com or phone our new listener line and leave a message that we might air in the future. The phone is a Seattle area phone line we got by signing up with K7. the number is 206-350-0383. This information is, of course, in our show notes at oreillynet.com/future.

 

For the most part, audio is a great medium. It can do things that video or text alone can’t. For most PowerPoint presentations, the audio track alone is more than sufficient. That’s tough when someone uses the lessons style of PowerPoint, where the images punctuate the presentation.

 

Dick Hardt, founder and CEO of Sxip’s identity, delivers a fast paced multimedia presentation. Here’s an audio-only snippet of his discussion of how you might verify your identity.

 

Dick Hardt: Identity is what I say about me. It’s what others say about me. Of course what others say about me is more trusted. If you meet somebody you say you’re name, you say where you work, you say where you are from. So, all this information is unverified. It requires you trust a person that you are interacting with.

But where do we have things like verified identity? Well, a familiar example is you go on a place like this [a liquor store] where in the US you actually have to be over 21 to do it. You walk up to the cashier, they ask for ID and you have a choice whether you want to present the ID, and which ID you want to present.

So, I’ll present my driver’s license and they’ll look at the photo on there and compare it to the person in front of them. They see that they’re the same so the subject matches credential. And an interesting feature of this is only I can use this credential.

And then they see who issued this and it’s valid. And they see, “Okay, yeah, that’s a valid credential.� Assuming they trust the province of BC. And then they look at the attributes on there and they could go and see that I am authorized to buy my bottle of Vanilla Stoley.

So, photo ID has significantly reduced the friction in identity transactions and photo ID is asymmetrical around trust because there is no relationship between the province of BC and the cashier, which provides huge scalability. And the province of BC is not a participant in [the] identity transaction, which provides a lot of privacy whenever I’m using that credential. And that credential is reusable by any recipient who trusts the issuer, in this case the province of BC.

So to summarize, identity is what I say about me, what others say about me, and modern identity provides a separation between the acquisition and the presentation of that identity, an identification process and the authorization process. It also provides that scale and privacy that I control, at least most of the time.

 

DS: Dick Hardt on traditional identity mechanisms. His company, SXIP Identity, and others are looking at the implications for what he calls Identity 2.0.

 

We’re Distributing The Future.

 

For many, the high point of the conference was unexpected. It was Safa Rashtchy’s conversation with five seventeen and eighteen year olds. He talked to them about the way they used technology, what they bought, what they liked, and what they didn’t like. The results may surprise you.

 

Safa Rashtchy: The age group of 12 to 24 year olds is about 25 percent of Internet consumption. In fact, they spend about 30% more time than the next age group. There are about 37 million of people that are represented by this group here.

DL: My name is Daniel Labeaux. I usually stay on the phone, actually all day. And I think throughout the month, I spend probably a couple of hundred dollars on ringtones and games and downloads on my phone alone.

SS: Hi, my name is Shawn Spidiacci. When I get home from crew, all I do is talk on line, and I wait for people to leave me comments and messages and friend requests. That’s sort of like the highlight of my evening. And when I go to sleep, and then when I wake up in the morning, I take my shower and I go to the computer and I check my Gmail Notifier and see if I got any messages. And if I did, then I check my Myspace and see what happened on my Myspace.

SP: My name is Stephie Hyatt. I spend most of my time on the computer on Myspace or Livejournal. Basically, just to keep updated with my friends lives and my life.

SV: My name is Sasha Volkov and I spend maybe an hour to, say, 4 hours depending on homework load, or whatever, online. So, I do like
Facebook and Myspace and all that stuff but I try not to spend too much time on it. Mostly I use it for research if I have a paper due or something of that sort.

JG: My name is Jake Rumblock. Most of my time spent online is for research with Google or something like that. I spend sometime on Myspace but try to limit that. And I play some Playstation 2.

SR: Where do you go to search?

DL: I usually go to Google for reports, science or history or stuff like that.

SS: Like I just recently did a project. I use Google and especially Google images cause their image search is just incredible when you want to do, like, a PowerPoint presentation. When I do music, I look at iTunes to find out albums that I want and then I’ll go to a Bittorrent website.

(Laughter)

So, iTunes is a great database. Look at albums you want.

(Laughter, applause)

SP: I use Google for images as well but besides that I usually use WebCrawler or Ask Jeeves because I can type in an actual question and it’ll give me a response as best as it can.

SV: I tend to go to Google first. And then if that doesn’t work, I’ll go to AltaVista or Yahoo! I’ll search around a lot. And in terms of file sharing, I’ve gotten maybe fifty songs in a day easily. I don’t pay for music anymore.

JG: I also use Google for searching for projects and things like that. Also that little language tools thing that translates in different languages if your doing a language project if you need to figure out a word. That’s a lot more helpful than a lot of the inter-language dictionaries on the Internet, also I think. And then I also use torrents to get those new daily shows, things like that.

Torrents, like you got to have every Chapelle show, all that kind of stuff. Cause its really easy to get from torrents. For music, I use IRC usually. And just, you can just leave things on overnight and get, like, amazing amounts of media off the Internet for free, which is pretty sweet.

JR: How do you get music into your iPod? How much of it have you downloaded? How much of it have you actually bought from iTunes?

SS: When I first got iTunes, I actually liked the whole idea of downloading music for money. Just to pay for it, cause I thought it would be nice, you know, [to] pay the artist. But it’s just that, Bittorrent; it’s just so easy. You can download whole albums. And I mean, like the whole album! I can get a whole album in like thirty minutes. It’s ridiculous. I’d rather wait 30 minutes than wait 5 minutes to download it [one song]

SV: I used iTunes in terms of downloading, maybe ten times.

SR: How many songs do you have in your iPod?

SV: Oh, 1500 maybe?

SR: And how many of them have you paid for?

SV: 10, maybe?

(Laughter)

SR: Okay

SV: It’s been a while.

SP: I actually have never paid for downloading a song. And my iPod’s broke right now but that’s okay. When I do download stuff for my iPod, I go to my friend’s house and do it because either they pay for it or their Internet connection is faster. Or I just go to their house and take all their songs off their iTunes and put it into mine, so I just kind of get like, all the different music from my friends.

SR: What would you like to be able to do with the web that you can’t do now? Is there something that you really feel you should be able to use the web for? That you wish somebody would come up with a service, which you can’t do now?

JG: I want to be able to get rid of all that spyware, please. I have AdAware and it doesn’t get rid of it all so get on that please.

SV: You’ve probably noticed by now, we don’t like paying for things. So the more free stuff you can come up with…

Audience: So, there are probably a lot of people in this audience that are actually building the next generation of portable devices. And my question to you is: what do you want to see on those devices? Do want Bittorrent television or movies and video? Do you want an all in one device that you can text people [with], and have instant messaging, plus mobile phone plus video plus music? What are you guys into?

SS: Dude, do it.

Audience: So, do you want to see a video iPod?

SS: Video iPod? Actually that would be awesome.

SV: That would be a really good idea, actually.

(Laughter)

You should do that. You should put TV shows or something that you can put onto your iPod just like the movie. The music, sorry.

SR: Would you pay $3 per video to download it there?

SV: Depends on the quality of the video and how long it is, etc. Cause, you’re paying, what, for a ringtone it’s like $2.50? And a lot of people pay for that cause they can’t avoid not paying for it.

Audience: In the spirit of all of you using instant messenger, what more would you like to get out of your instant messenger?

SS: That’s it, just instant messaging. I mean, now you’re just putting ads on it. I’m getting sort of ticked off.

Audience: Would you want to see a TV there? So you can play what you want?

SS: No, I’m trying to talk to my friends not [watch TV.]

[Cheers, applause]

 

DS: We’ve featured the third day of this year’s Web 2.0 conference in this edition of Distributing The Future.

 

 

 

Distributing The Future is brought to you by MAKE magazine: Technology On Your Time. You’ll find more information in our show notes, at oreillynet.com/future.

 

Thanks to Vinod Khosla, Scott Cook, Sergei Brin, Dick Hardt, John Battelle, and Safa Rashtchy. We’re beta-ing this new show in public so that we can benefit from your comments, criticisms and suggestions. If you have ideas to share with us, send email to future@oreilly.com or phone our listener line at 206-350-0383.

 

I’m Daniel Steinberg. Distributing The Future is a production of O’Reilly media. Special thanks to David Battino for composing and performing this theme. This is David’s website, at www.batmosphere.com

 

This program was produced on Mac OS 10 Tiger using Soundtrack Pro.

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