If you were to open up my computer and look at the list of
bookmarked websites on Google Chrome. You'd see a bunch of
the usual suspects: Google Maps, I'm a sports nut so ESPN is
on there, I like Accuweather to get weather updates. But
you'd also see a much more offbeat link there, simply
titled; 'Film, how it all got started' and you might
conclude from that that 'I guess Joe is quite the film buff'
but that's actually not the case. I mean I like movies, I
like movies quite a bit but I didn't even take
cinematography or whatever back when I was in school and you
wouldn't quite call me a film buff.
Actually the reason why that website is on that list is that
the story absolutely fascinates me. And despite the fact
that it's over a hundred years old, I continue to find it
incredibly relevant to today.
How many of you have ever heard of the film 'The Great Train
Robbery?' it's quite a revolutionary film even though it's
really short. I think it might be twelve or fourteen
minutes, something like that. But it really completely
revolutionized and industry. Before the Great train robbery,
films were shot from a single Y-shot camera position. While
actors paraded in front of the camera, a stage play on film.
Now to many of us the fact that the producers and creators
of the Great train robbery, could see that there were other
possibilities that you could cut and edit, that you could
have one scene, you could have the passengers having a good
time on the train and you could cut to the bad guys as they
scheme what they're going to be doing and then you could do
a close up on the faces of the bad guy or close ups of the
normal people on the train. That all seems pretty self
evident to us but up until the point when the Great train
robbery was created, an entire industry didn't see that.
The creators of the Great train robbery saw that possibility
that an entire industry was blind to.
Now one of the most amazing parts of the story to me is this
next part; even after the Great train robbery came out, the
vast majority of the industry still could not let loose of
their previous paradigm. I love this quote "During the early
days of film, some producers resisted the use of close ups,
arguing that they had paid for the full actor" so they
wanted to see the full actor at all times. You can't make
this stuff up!
Now we find that incredibly funny but we find it funny
because we know how the story ended. But there are certain
people who really had a tremendous vision for what film
could be. We understand this kind of perspective; a motion
picture today is the greatest media expression the world has
ever known, capable of giving life and form to all ideas
practical and emotional, it's only limitation is human
ingenuity. Great quote; probably summarizes most of our view
about film today. It's really pretty amazing medium, it's
kind of fun to watch the Oscars on Sunday night and see
everything that's going on in the world of film lately.
The interesting thing about this guy John Sykes the
cinematographer quoted; is that he made that quote back in
1930. He saw these possibilities and even went so far to say
'hey there's possibilities here that I haven't even though
of yet'. He was one of those visionaries who could see
things while an entire industry was still blind to them and
as a consequence he went on to get seven Academy Award
nominations.
So what you might ask does this have to do with
entrepreneurship? What I contend very simply that
entrepreneurship at its center builds off tectonic shifts
and tectonic shifts that create opportunities for people to
see things that entire industries are blind to.
The film industry is just one example but I think we
continue to see example after example today and quite
honestly this relates very much to Pandora.
By the way before I talk about the Pandora piece, I also
contend that we live in world today of accelerating pace of
tectonic shifts. I think if one were to look at the pace of
history; the number of these tectonic shifts that came
along, the peridesmium was much greater in terms of the
number of years. We're being hit over and over again. We
look back on the roll-out of the internet as ancient
history, twenty years, I'm going to say since then we've had
even greater changes, global warming changes, the
development of the human genome, the development of mobile
broadband and wireless as I'll talk about creates even new
possibilities on top on the wire broadband.
So I think what that means that the opportunities for
entrepreneurship are greater today and will be greater in
the future than they have before because these tectonic
shifts are accelerating but the key is to see these
possibilities when others are blind to them.
So back to the Pandora part of this story. It was pretty
early in the process of Pandora when I read this quote. This
quote is from the CEO of one of the big radio conglomerates.
Radio in this country as we know is highly consolidated by
entities like Clear Channel and CBS. I won't name the
specific individual company but this is a quote that they
made I don't know probably six or seven years ago at this
point and the quote was "I like the internet; it's like
another broadcast tower for our stations." Or put another
way 'I love film, it's another way for me to distribute my
stage plays'. We very much disagreed with this view of the
internet. In fact let me walk through the foundation of our
thinking that underlay our look at the world that turned out
to be a little different from how the existing industry
looked at it.
Some pretty basic stuff. We grew up in world that was really
dominated by broadcast media. I'm old enough, I can remember
that there were three dominate television networks back in
the sixties and seventies and tens of millions of households
tuned in each evening and listened to Walter Cronkite and
his successors and Huntley and Brinkley and their
successors. And all of America experienced a very small set
of content delivered the same way at the same time to tens
of millions of people. That's the broadcast world and music;
people would listen to the top forty countdown on Sunday by
Casey Kasem or his ultimate successors. It was a broadcast
world, which is one to many and one way. In fact still as
far as we've come, the vast majority of media content in the
world today is still consumed of this model.
Along comes the internet which is fundamentally different
and again I realize this is really basic but I contend in
its tremendously powerful. This diagram on the left I kind
of like, I just found it doing a Google search. And it's
from some NYU course on the technology of the internet and
it just scribbles 'Unicast' and makes the point that on the
internet that there's one stream per client. A unique
characteristic of the internet is that every single one of
us when we connect, have a unique connection. There
literally is no advantage on the internet to sending the
same set of bits to multiple people. You would literally
have to send them multiple times, one for each user.
Anyway, it's a Unicast medium that is one to one and
importantly it's two way. So that's incredibly basic,
forgive me for that. But I contend that those
characteristics change everything and the one to one nature
of the internet enables personalization. I know there was a
panel earlier today on the personalized web. I don't think
personalization is just some one random thing that people
have happened to take advantage of in the internet. It is
one of the most fundamental things that the internet
revolution enables because the internet is one to one.
And second. The two way nature of the internet enables all
sorts of co something's and I think people are continuing to
find even more and more ideas in terms of co something's. Co
something; co-creation, community, conversation,
competition, commerce. In fact I might go so far as to say
if you look at the big winners, the really big winners from
the first wave of the internet, all of them in very basic
ways took something that pre-existed and updated it, had the
vision to see what others were blind to. Updated it using
these two capabilities of the internet.
Google in many ways is just a directory. In fact, if you
know the history of the web, the earlier dominant player in
something akin to search was Yahoo!, but Yahoo! Was this
great big directory, in computer terms it was just these
great big tree, you could drill deeper and deeper and maybe
you could actually find what you ultimately wanted.
Google came along and turned that whole idea on its head and
said 'forget this whole directory thing, that's a little bit
like the broadcast model, how about you tell us, the
website, what you're looking for and I'll create a
personalized directory for just what you're after'. This
happens to be a search for iPhone Bluetooth headset. I
happen to be searching for an iPhone Bluetooth headset and
in essence what I get is a personalized directory on just
the topic that I want.
Incredibly basic you would say but I think that's the
cornerstone of what Google did, is take this concept
directory, personalize it and then take advantage of the
fact that the community could rank using the page rank
rhythm of Google and make that directory as useful as
possible.
Facebook, which has become many things and is an
extraordinary piece but at its core
[inaudible] facebook and bringing to it personalization and
community.
Ebay is basically one of the most old fashioned concepts
there is; it's a flea market, but they took the concept of
flea market and added personalization. In this case I was
searching for a very specific disk by a late renaissance
early baroque composer called Heinrich Sch?tz. I was looking
for this for my brother's Christmas present of all things
who likes choral music. In essence what I got is a flea
market of purveyors of the music of Heinrich Sch?tz. And the
other interesting thing is that Ebay always used community
to solve one of the biggest problems in the flea market
world which is 'can I trust this seller?' gosh, it's just
kind of this fly by night booth that I'm up against, how do
I know if it's trustworthy or not? And Ebay very smartly
solved that with community rankings.
Amazon in many ways I find, one of the most amazing stories
in all of the first big generation internet in that it's
just a mail order catalog. At its core. And mail order
catalogs have been around for almost a century. I mean Sears
Roebuck started as a catalog. When Amazon started, there was
tons of mail order catalogs in this country run by
presumably smart, intelligent people. But none of them had
the vision that Jeff Bezos had and remarkably they're pretty
much dead and gone. There are still some niches in the mail
order catalog world. But he really took the concept of mail
order catalog, personalized it, again ratings are
tremendously important. I can just go 'right I didn't have
to page through' I can do a search and I actually found this
CD that I was looking for. It's a bit mind boggling if you
actually look at that, the price of that was $113. It's
really good choral music and I like my brother a lot! So I
did buy it for him.
And really took advantage of community and obviously
commerce and Amazon is a tremendous behemoth, obviously as a
result of this.
So if you tie this back to Pandora, what's the key central
insight that underlies in Pandora? Well there's this thing
called radio that's been around since 1920, still listening
to by hundreds of millions of people in this country,
billions of people around the world. But it operates in a
broadcast model. That's one way, one to many.
We brought the observation being people who are very
passionate about music, but the very interesting thing about
radio is yes it's this kind of broadcast model which drives
you to kind of vanilla, chocolate and strawberry offerings.
But music is intensely personal. It's incredibly diverse as
a category. It's intensely personal and so it's made for
this personalization potential that the internet enables.
And that we could actually, using the intellectual property
hat that we had, in essence enable our users to co-create
their experience. The experience would be unique to them and
because of the opportunity for feedback that they literally
could co-create their experience.
So you might say 'Joe, that's all great and fine and well
and good' I might mention by the way that it's not quite as
simple as having this set of ideas. Obviously people at
Google and Amazon had to execute very well but there is I
contend a foundation core insight, a vision, that's based on
seeing things that others are blind to. That is at the very
core of the success of all of those entities and we fall
somewhere in that same bucket.
You still might come back and say 'that's all fine and good,
wonderful explanation of the past in the rear view mirror
and heck we're trying to be entrepreneurs now, haven't all
the great opportunities been taken'? And to that I contend,
even in my film saga, which is basically a century old,
there are still people who have extraordinary vision and are
seeing possibility that others are blind to. The creators of
Avatar are just one incredible example. One might say '
Inception' in many ways, 'Inception' won a whole bunch of
cinematography awards on Sunday night because it brought new
concepts to film that really had never been quite done
before. So there's still plenty of opportunity even in these
categories for visionaries who see opportunities that others
are blind to.
In some cases for example the development of animation which
really as I understand the creators of Avatar waited for
years for the technology to catch up so they could put
together some of their concepts that they knew that the
technology would ultimately enable, that they could actually
bring them to live in film.
I want to talk a little bit about mobile, which is a little
bit closer to today. All of us in this room might be so
forward thinking leading edge that we think mobile is old
news. But I would say that we are very much still in the
early stages of feeling the impact of what mobile broadband
connectivity does for us. In many ways I think there's some
people who approach mobile and say it's just the internet
and so it's not really quite the breakthrough of broadband
wireless in its fixed form. But I do think and I'll talk
about some examples, the cornerstone element of mobile
broadband wireless that it is with you, as simple as that
sounds, has already been the basis of insights by visionary
entrepreneurs that have been able to create significant new
opportunities as a consequence of that.
So obviously the things that I talked about before are still
relevant but I think the with you part changes lots of
things and I don't pretend to know and I actually believe
that the list of possibilities that are simply a function of
the with you part is still exploding. Clearly a location
based opportunities are there, you can see all of those
developing.
One that I must admit I completely missed even as this was
developing, maybe I've just been too busy during this
period, is simply the opportunities for time killing that
are a function in the fact that the device is with you.
A few examples, I'm thinking of Google folks, doing
extraordinary number of things well they were among the very
first to modify their app. It's an interesting story, if you
o to the original I-phone when apps first came out. Google
had an application that was pre installed that was maps.
Yahoo! Had an application that was pre installed that was
weather. The Yahoo! Weather application was completely
unchanged from what Yahoo! Weather was on the web, it's just
Yahoo! Weather, which is useful in itself but the
interesting thing is right beside it from Google was the
Google maps application, who added this wonderful little
thing in the lower left that when you press on it, tells you
where you are. And I think many of us have experienced just
that simple little capability has dramatically changed the
utility of the device.
Open tables is a really interesting story.
I don't know if any of you have heard Jeff Jordan and the
CEO of Opentable talk about mobile and Opentable.
They actually did not move quickly on this one. They weren't
originally sure it would have much applicability but then
they focused on the fact that there's a new capability that
could be brought to open table that is to not simply make a
restaurant reservation but to make a reservation that's near
you and when they brought this, so find a table nearby based
on your location, they found an incredible adoption of their
mobile app and I think now represents twenty to twenty-five
percent of all the reservations made on Opentable and is the
most important growth element of their business.
And then there's bubble wrap. Put this in the category of
things I didn't have the vision to see. I'm clearly in the
blind to category here, but this application gets a lot of
use on my I-phone. And it has to do with the time killer
thing. In that time period between, you get to the
restaurant and you've ordered the food and you're waiting
for it to arrive, you have a major time killing element.
I have two daughters and one of their favorite things to do
in that time killing moment is to pummel dad once again at
Bubble wrap. I have never beaten them at Bubble wrap. I
guess I keep saying my fingers are too big. But it's
interesting again in the sense that the truth is that the I-
phone and other devices have become tremendously powerful in
gaming devices. In some cases those games today take
advantage of connectivity, in other cases they don't, I
think we will certainly see more and more of the other
devices taking connectivity in the context of games. But
again the people who got out in front of this are the people
who had the vision to see possibilities based on this new
tectonic shift and mobile wireless broadband enabled.
So what's wrong with this picture?
Audience Member: It gives the same one
It gives the same old book in the new format.
Or put another way, before I-books to be invented were
simply pictures of the original pages of a book displayed
statically on a screen. A digital copy of a paper book.
Imagine what a book actually could transform itself into and
some of you may know there are people who have been playing
around with this but I contend that even if you're aware of
those, which are ringing in some visual elements, imagine
what the possibilities really could be here in the context
of a book on something like an I-pad. Not only are there
opportunities for it to be non static for there to be live
video and interactive elements in it. Perhaps there are even
opportunities to have different endings for different
people. You might be part of a group that in some sense,
what's a book when it's combined with a massively multi
player online game in which the book itself changes and
morphs as you go through the experience. I'm not contending
that's the greatest idea on the planet but I think it's an
interesting on the planet but I think it's an interesting
illustration and particularly in the context of a little bit
of a contest between kindle, which is a phenomenal device
but in some senses deeply invested in the concept of the
electronic book is pretty much the static paper book. And
what a book might be in terms of the much more capable
devices that are out there in terms of I-pad and other forms
of tablet computing. I think it would be really interesting
to watch and see, what is a book. There's going to be for
decades, books in their conventional form delivered on
electronic devices but where might creative people go in
terms of what I-books and electronic books enable
so as this conference wraps up and I suspect we have a
roomful of entrepreneurs to be in here. The question I would
leave you: what do you see that all the rest of us are blind
to?
Thank you all very much it's really a pleasure being with
you, I hope you've enjoyed the conference a great deal.
[Informal Talk]
