Disruptive innovation, education and open data: Tim O’Reilly, CEO O’Reilly Media

In this CXO Talk interview, Tim O’Reilly, founder and CEO of O’Reilly Media, discusses disruptive innovation, education, open data and changing the world by spreading the knowledge of innovators.

In this CXO Talk interview, Tim O’Reilly, founder and CEO of O’Reilly Media, discusses disruptive innovation, education and open data. In this episode O’Reilly describes his mission to change the world by spreading the knowledge of innovators and what disruption means to him.

Watch the video and read the complete transcript of the broadcast.

Michael:         (00:02) The world of geeks and data and innovation and disruption all come together. Today, on episode number 111 of CXO-Talk, we’re thrilled to welcome Tim O’Reilly.

                        I’m Michael Krigsman, I’m here with my fabulously glorious co-host Vala Afshar. Hey Vala how are you?

Vala:               (00:31) Michael, thank you very much for that enthusiastic introduction and I’m just honored and thrilled to have Tim on the show today. Welcome Tim.

Tim:                 (00:41) I’m very glad to be on the show too. I’ve always wanted to be in the office of Louis and Hal it’s like a classic episode.

Michael:         (00:5) Vala I’m not sure whether we were just complimented or insulted.

Vala:               (00:54) I don’t know but it doesn’t matter.

Michael:         (00:56) It sounded good.

Vala:               I’m still delighted.

Tim:                 (00:58) And you say you’re from Boston?

Michael:         (01:02) We’re from Boston.

Tim:                 (01:03) Alright, so end with the in jokes okay, let’s get to the show.

Michael:         (01:04) You know for us this is it.

Vala:               (01:11) Tim could you please briefly share with our audience a little bit about your background. Although I think most people know, we would love to hear it from you.

Tim:                 (01:18) Yeah, I’m the founder and CEO of O’Reilly Media. Started my company many many years ago as a tech writing consulting firm. Became a publisher and realized that most of my books were about topics that were coming from the fringes, originally we kind of made it big, we wrote early books about the Internet, UNIX and then open source software. Then I realized that nobody was promoting this, so I started a conference business to help promote open source software.

(01:48) Somewhere along the line I realized that a big part of our most effective marketing was a kind of activism. Getting Brian Erwin, who had been the Director of Activism for The Sierra Club, to come work for me and at that time published The Whole Internet Users Guide, was important. We just went out there and he said ‘nobody cares about your products, you know pitch the ideas.’ So we went out there and promoted the Internet and then of course people said, well how do I learn more.

(02:19) And as part of that we also discovered the World Wide Web early on and we created a product called GNN (Global Network Navigator), which we originally thought of as a demo of the World Wide Web that we would host in bookstores. And then we said, no this isn’t a demo, it’s a product. So it became the first Web portal and we eventually sold it to AOL and they screwed it up so that was the end of that.

 (02:43) I’ve basically been around technology as somebody who has helped move the story forward. Our mission as we kind of retrospectively defined it back around 2000 was, ‘changing the world by spreading the knowledge of innovators.’ So that was something that tied altogether all the things we do. We were publishing and had events, now we have much more of an integrated media model, where we’ve launched Safari as an online subscription service to our learning content, books and video.

(03:19) Back in 2000, we launched a small early stage venture fund, but all these things are tied together by this notion of changing the world by spreading the knowledge of innovators. We find interesting people who are doing stuff that other people want to do and then we try to figure out the best way to spread that knowledge for the future to make it faster and better.

Michael:         (03:39) You know, reading about your early stage venture fund, I was really struck by the fact that two things: You say that you do not seek the typical charismatic entrepreneur and you say that the best way to get funded isn’t necessarily the usual way to get funded -- to have some type of personal contact with you or the other people running the fund.

Tim:                 (04:13) I don’t know when or where I said that. I have nothing against charismatic entrepreneurs, but what I will say is what we’re most attracted to are people with ambitious ideas that have some sort of kernel of value to them.

(04:33) Like if you look at one of our investments, Planet Labs, they have this big vision that we’re going to beat this game, changing the way we’re going to make data available. They’re a microsatellite company. They’re imaging the surface of the earth every 24 hours as opposed to you getting an image once a year. This enables all kinds of new things. Super cool, geeks out of NASA who just love the fact that they’re just so into the technology. But we also loved it when they had a game changing vision.

(05:07) So it’s really just the combination of many factors and being charismatic, but what we’re not interested in are the people from the get-go gunning for the exits. I started my company with no venture capital, just with the idea that we would find customers and we funded the business ever since by finding people who are willing to pay us for what we do.

(05:39) And I find that, there are certainly times when venture capital is the right way to grow a business, but there’s also a whole class of entrepreneur who is often overlooked.

(05:53) We’ve recently launched something called (inde.bc?) which is really how do we bring some of the skills and the perspective that a venture capitalist brings but through a small company without this kind of model that says we’re going to put money in and we’re going to expect to get it out within the 10 year horizon with our fund because you know we need to have an exit and that’s what this is all about.

(06:16) Instead of saying we may be interested in building a company for the long term. I’ve been building O’Reilly media for 35 years it’s a very successful company and a really good thing to own. We had a lot of opportunities when people wanted to buy it and we have not been interested. It doesn’t mean that it would never happen but we were obsessed with our mission and we weren’t obsessed with well, what’s our next round of financing and when does that lead to an exit. And I have to say this, there are far too many companies like that.

(06:55) The really big successful ones have a mission, and you see companies with a mission and you see entrepreneurs with a mission, and I guess I would say that sense of mission is what we work for.

Vala:               (07:08) So in terms of your confidence and your investments it’s fair to say you are focused on, as Michael said, geeks and disruptive innovation and certainly core values and that missions matter. But can you talk a little bit about the word disruption. What does that mean to you? Is that a fair assessment of what your confidence tracks?

Tim:                 (07:28) I have to say I find that the religion of disruption to be somewhat offensive quite frankly. You know I am about creating things and yes, disruption – creative disruption is part of a process. You have a vision of what you’re building, and thinking we’re going to disrupt this, we’re going to disrupt that is cheap thinking.

(08:00) When Logan Green started what became Lyft he wasn’t sitting there inspired by a part of Uber that everybody is you know so excited about.

(08:13) He wasn’t into disrupting transformation, he was into creating a better transportation system. He was a transportation geek, he’d been on the transportation board in LA and the he went to Zimbabwe and said wow, we have a system here in the U.S. that serves 5% of the people and had massive losses. Over there they’ve got this jitney system that for 95% of the people really works and could we use technology to create something like that and then Uber came in with that really wonderful one point vision and then these two companies are playing leapfrog in terms with innovation.

(08:53) They are reinventing and then when you look back, Henry Ford wasn’t saying I want to disrupt the horse and buggy market. He had a forward looking vision of a kind of society that he wanted to create. And I think that positive way of framing it is so much more powerful and important because we’re just going to go and break up this old market and won’t that be great. It doesn’t really tell us what we’re going to replace it with.

Michael:         (09:24) Well when people talk about disruption in this way there is this notion of financial engineering in a sense in order to accumulate great wealth for the people who are undertaking that manipulation or disruption, which I think are synonyms in that sense. So there really doesn’t have to be from that point of view a sense of vision and I think sometimes people graft the sense of vision on top of it as a kind of a dressing up or cosmetic for the desire.

Tim:                 (10:02) You could say oh yeah, the guys who did all the CEO’s who disrupted the mortgage market, you know and they created this enormous wealth for themselves but they managed to screw the rest of us pretty badly. And so I think it’s so important for us all in Silicon Valley to have a sense of value.

(10:21) And the thing that I have found in my career, that’s how an awful lot of the most interesting movements actually start – not even with entrepreneurs but with people who are having fun. If you look at the defining technology waves of my career that I’ve been part of such as the Internet, in the early days nobody thought there was money to be made.

(10:51) Think about open source software, in the beginning nobody thought there was money to be made. After the dot com bust, the Web 2.0 we talked about, nobody thought there was money to be made. Half the people who did part of the previous were out of work and they were doing the things that they just felt were cool again.

(11:07) I’m deeply involved in some of the open government movements where people who have been in big tech companies going to work for the government or with the government, because they wanted to fix the services in our society. So it’s this combination of, hey, I don’t care about making money. I just want to make something really cool.

(11:32) There was this actually wonderful talk – I was just down in Puerto Rico and it was a hackathon a Code for American Puerto Rico chapter hackathon. They call them the Code of American brigades. And this woman gave a talk and it was really about you know, being an entrepreneur and she said, ‘being an entrepreneur means that we are not waiting for somebody else to deliver what we want. You know, we’re creating our own future.’

(12:06) I think the way that we and technology need to think is we are creators, not just of our own future but for the future for a lot of other people, and I think we have a great deal of responsibility as the creators of the future, to say is this going to be a better future.

(12:27) And that doesn’t mean that we don’t disrupt, and there is no question that currently there are disruptive darlings, Uber, and AirBnB. They are disruptive to the taxi industry in the same way that Amazon was disruptive to retailers, or Google was disruptive to all kinds of content providers.

(12:47) But they’re grim and fundamentally by a positive vision of wouldn’t this be great for people if the world worked this way. And I think the way we talk about it, we need to celebrate – not the disruption but the creation.

Michael:         (13:06) So is this notion of creation and creating in a positive sense, being interwoven with some sense of responsible mission. Does that underlie the various activities in which you’re engaged …

Tim:                 (13:26) Absolutely.

Vala:               (13:31) Can you give us some examples of companies that are having fun with the right core values and market makers and doing it for the right reason, right mission I mean we mentioned disruption with Uber and AirBnB. You know, Tesla, Google, the Internet of Things, the autonomous cars, it seems like it doesn’t matter the size of the company if organizations have the right core values and mission, they can be having fun creating value.

Tim:                 (14:04) I think that’s absolutely true, and the thing that I would say is in a lot of ways that seemed to be almost a stage of companies. You know I think Google of you know, 10 or 15 years ago was having a lot more fun than the Google of today. Even although, Larry and Serge really are deeply committed and value driven.

(14:33) I think you get to a certain size and the logic of the machine takes over. But I think there are a lot of people there who are – and all of these tech companies who are super excited about what they do. And that’s what I’m drawn to, it’s that excitement. And you talk to some tech person and they are wrestling deeply with a problem and they are excited about solving that problem.

(15:12) I had a meeting this morning, I’m working on a new event which I haven’t announced yet and it’s really about the future of work and how everything from the on-demand economy to new forms of training. Augmented reality is going to change the nature of work.

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