Chris Anderson gave perhaps the only bloggable talk at the Microsoft Global CIO Summit. He gave a preview on his upcoming book before 200 Global 1000 CIOs. This is posted with permission.
"It is not too much to expect that our children will enjoy electrical energy in their homes is too cheap to meter." -- Admiral Lewis L. Strauss, then Chairman of the US Atomic Energy Commission, 1954
Imagine if he was right. What if we could desalinate water at a low cost. When an underlying resource that touches everything becomes free, then the transformative effect is amazing. Carver Mead in the 1970s was really the first one to understand the social and economic impact of Moore's Law. He taught his students that "Waste is Good." Waste transistors because they are becoming free. Alan Kay considered the interface, the command line at the time. IT's job used to be to protect the Mainframe as the resource, they judged what was worthy. Their priorities mean not wasting cycles on silly stuff like I/O. Kay said it was worth wasting transistors to make them easy to use, even fun, and available to a broader s Innovation happens when you take technology and put it in unexpected places. The democratization of technology is how innovation happens, not the technology itself. The Graphic UI changed the world.
"Waste Storage." We live in a world where we otherwise conserve storage, but on a MB basis it is asymptotically approaching free. If something is going to be zero soon, get ahead of it. Look at Webmail with Gmail and Yahoo. They made money from their use faster than the cost of their use. Free is a powerful word. If you tell someone you never have to delete your email, it changes their behavior. Remember "Your mailbox is full," what was that about? My new Cisco VoIP phone tells me my voicemail is full, corporate email too, why? How can deleting emails be part of my job. Somewhere someone got stuck in a scarcity mindset and now we are creating a productivity drain.
"Waste Bandwidth." The old model was that the only way to get content to people was broadcast, and singlecast was costly. YouTube looked at changing economics and revolutionized television by giving away storage, video and most importantly opening up to everybody. Long Tail video, if you will indulge me. Out of those niches can have surprise hits for the masses.
For the first time in history, complexity is free. 3D printers mean the fiddlyness of an object doesn't cost much any more. 3k gears costs the same as 1 gear, you can print a watch for the cost of printing a ball. Zero machining cost means a new kind of object will be created.
Scarcity economy only fits mass market goods. Online, with the Abundance economy, you have infinite choices. When we guess what people want, we often we get it wrong. When we give them choice, we are measuring, not guessing. Only so much shelf space at Blockbuster, infinite shelf space at Netflix with whole categories that have suddenly proven to be popular. A richening of the American culture that is more diverse. Tap into the latent demand for diversity.
What killed Tower Records wasn’t the decline of the CD or Napster, it was the iPod. You might think of design or ease of use, I think it is abundance embodied. Hitachi invented a better 5Gb micro drive, but not the use. Engineers told Steve Jobs that we have this gift from technology, and realized that we want our entire music library in my pocket. Given the opportunity to have infinite choice, people will take it.
Raymond as the embodiment of the broadcast model. Reaching everyone simultaneously means you have to satisfy common needs, the lowest denominator. But where are taste diverges is where we go deeper. Nobody loves Raymond, everybody likes Raymond, somebody loves LonleyGirl15. She had an audience just as large as Raymond, reinvents our concept of what TV is. She is a creature of abundance, he is in a world where you have to be mass to be broadcast.
In the enterprise, the corporation is about shared purpose and a logical and prudent allocation of resources. The ROI Memo is scarcity thinking, in Abundance, its fail fast. Of course we would like to succeed fast, but not possible to predict. We don’t bother with ROI models, we ensure the experiments are cheap. Great thing about innovating at the edge is you can minimize the cost of doing it. Don’t make people jump through a lot of hoops, the cost of experimentation is free. "Everything is forbidden unless it is permitted" vs. "Everything is permitted unless it is forbidden." In the magazine I live in the former, on the web I live in the latter. The social model is Paternalism in Scarcity -- "we know what's bet." Egalitarianism, "you know what's best," In the old world we decide the heirarchy of the page, on the web we have Reditt where they tell us what they want. The NYTimes front page and emailed page almost have no correlation. For the first time in history we can measure demand and not guess. The decision process is top down in Scarcity vs. bottoms-up. Let the interns run riot. They become a source if ideas an innovation at low cost, we identify talent beause we can empower the edge. Command and control -- the soviet system is the corporate system. Or with Abundance, we have Out of Control. A scary proposition, for brand centric companies like mine. I'm evangelizing that we experiment in our web properities, but it might take a generation to wrap our heads around two kinds of brands.
For the CIO perspective...from a MIT study of student needs:
• Mailing list management(google groups)
• Seeing whats coming up at events.mit.edu (upcoming)
• Access to the online library (university does this best)
• Command line acess to shared programs like mathematica and to general lunux account stuff (university does this well)
• File storage (university price is hard to beat)
When they come to the corporation, they are disappointed.
With Conde Nast, Skype and Second Life are blocked, the iPhone problem, email retention policies and spam whitelists. Probably happened for good reasons at the time. Every one of these annoys employees and creates a bad environment. We use Skype because it is easier and works. The White Wire and the Black Wire. A single DSL under white, internal bandwidth on the black. The only time I use the black wire is to print. If the IT department wants to packet sniff, all the more reason to use the white wire. A bank is functionally prohibited from experimenting with social networking because they blocked every single one. The old idea of IT determining what is appropriate prevents experimentation at the edges. There are some things that are bad about this, a virus that comes in from the white wire, but that’s like going to starbucks. I recommend trying the two wire.
Wrote a controversial blog post on who needs a CIO? The answer is they are necessary, but only if they can adapt to consumer technology and behavior.
The terrifying conclusion to all this is that we may have to trust our employees.
The Q&A was off the record.