How Software is Infusing the World and What it Means — with Tim O’Reilly

Podcast Notes

If you’ve heard any of the terms “open source software”, “web 2.0”, or “government as a platform”, you’ll be familiar with today’s guest — Tim O’Reilly — who has helped popularise these big ideas.

Tim is the founder, CEO, and Chairman of O’Reilly Media, the company that has been providing the picks and shovels of learning to the Silicon Valley gold rush for the past 35 years. The company’s online learning and knowledge-on-demand platform at oreilly.com is used by thousands of enterprises and millions of individuals worldwide, and has a long history of convening conversations that reshape the computer industry. Tim is also a partner at early-stage venture firm O’Reilly AlphaTech Ventures and on the board of Code for America. He is the author of many technical books published by O’Reilly Media, and most recently ‘WTF?: What’s the Future and Why It’s Up to Us’.

He is a visiting professor of practice at the Institute for Innovation and Public Purpose at University College London, headed by Mariana Mazzucato — mentioned more than once in this conversation — and is working on a new book about why we need to rethink antitrust in the era of internet-scale platforms.

In today’s episode, which is the Grand Finale for this season, we explore the future of internet-enabled organizations, and how to think about value creation and regulation of these tech-companies. Listen on to find out what we can learn from the Golden Age of the internet, how platforms like Google and Amazon have lost their way over the years — and are now breeding their own competition — and what Tim thinks about Government-funded innovations. As the software industry is becoming more at the heart of everything in society, we need to create systems that enable more value than they capture.

After Tim’s final words, we bring a brief wrap-up of Season 2 and let you know the next plans for Boundaryless research activities. It’s been quite a ride this season too, and we are so grateful for both our loyal listeners and every guest who are pushing the boundaries of the future of organizing.

To find out more about Tim’s work:

• Website: https://www.oreilly.com/
• LinkedIn: https://www.linkedin.com/in/timo3
• Twitter: https://twitter.com/timoreilly

Other references and mentions:

• Brad Stone, Amazon Unbound, 2021: https://www.amazon.co.uk/Amazon-Unbound-Brad-Stone/dp/1398500968
• Tim O’Reilly, ‘The End of Silicon Valley as We Know It?’, 2021: https://www.oreilly.com/radar/the-end-of-silicon-valley-as-we-know-it/
• Tim O’Reilly, ‘Why Elon Musk Is So Rich?’, 2021: https://www.oreilly.com/radar/why-elon-musk-is-so-rich/
• Tim O’Reilly, WTF?: What’s the Future and Why It’s Up to Us, 2017, https://www.amazon.co.uk/WTF-Whats-Future-Why-Its/dp/0062565710/
• Adam Smith, Supermoney, 1972: https://www.amazon.co.uk/Supermoney-Wiley-Investment-Classics-Smith/dp/0471786314/r
• Time O’Reilly, ‘The End of Silicon Valley as We Know It?’, 2021: https://www.oreilly.com/radar/the-end-of-silicon-valley-as-we-know-it/

Find out more about the show and the research at Boundaryless at https://boundaryless.io/resources/podcast/

Thanks for the ad-hoc music to Liosound / Walter Mobilio. Find his portfolio here: www.platformdesigntoolkit.com/music

Recorded on 24 June 2021.

Key Insights

1. Tim says that some companies he used to admire, like Amazon and Google, are “losing their way” as they fail to recognize what made them succeed in the first place as aggregators of collective intelligence, supporting users to find the best organic search results based on their need (vs paid-for ads). With insufficient concern for the supply side on the platforms, they are effectively breeding their own competition, as supply goes somewhere else. Instead, you have a lot to win by focussing on suppliers as well as users: as Tim points out “if you got that double flywheel going, it’s a lot stronger than if you just have a user-centered flywheel”.

•  Around min 9:21 Tim O’Reilly describes how his own company is seeking to enable more value than they capture.

2. As tech giants are effectively becoming central planners of the Internet, a big difference from industrial planned economies is that they manage consumption rather than production. In this context, governments must seize the opportunity to shape demand and desirable outcomes, more than interfering in the details of how companies are run. In Tim’s own words: “what we don’t want is for the government to be writing Facebook’s algorithms. We want the government to say, we want to hold you to account for the outcomes of your algorithms”. This requires us to consider what a “good outcome” is and to rethink our traditional obsession with economic efficiency. We can already see this market-shaping by governments happening, for example with new “climate millionaires” like Elon Musk initially sponsored by the government, or in the development of new vaccines.

• Listen to the discussion around the role of regulation in the platform economy around min 27:47

3. As a final reflection, Tim shared his current points of attention around algorithms in economics. One key piece to that is to better understand rents, in terms of the ability of people to get an unearned income of various kinds, in the online economy. Rents create asymmetries of power and — albeit often poorly cited — when Adam Smith once talked about free markets, he was referring to markets free of rent rather than free of government intervention. So, for any player with enormous algorithmic power, the invitation is to “regulate themselves better” and use their power to make the market freer, not to make it subject to them, unlike the direction taken by many of the dominating players today.

• Capture Tim’s final reflections on his latest work on algorithms and rent around min 48:41.

? Boundaryless Conversations Podcast is about exploring the future of organizing at scale by leveraging on technology, network effects, and shaping narratives. We explore how platforms can help us play with a world in turmoil, change, and transformation: a world that is at the same time more interconnected and interdependent than ever but also more conflictual and rivalrous.