Bill Gross is into Atoms
I was interested to get my latest copy of Business 2.0 magazine (apparently the final) and see an article about long-time internet entrepreneur Bill Gross's new focus: "moneymaking opportunities in the physical world." Erick Schonfeld, who did the interview with Bill, did a brief summary on TechCrunch a couple of weeks ago, entitled Bill Gross is Into Atoms.
This is an interesting validation of the idea I laid out years ago in my talk Watching the Alpha Geeks. (I still open virtually every talk I do with a compressed version of this thesis.) My premise is that many new industries begin with people having fun with technology. After a while, entrepreneurs figure out where the action is, and move in. Some hackers turn into entrepreneurs. Others just move on to a new frontier.
In the early 80s, the personal computer was the domain of people having fun at "the homebrew computer club." In the late 80s, hackers were having fun with the internet, and it was starting to burst the seams of its academic and research straitjacket. By the early 90's, it was the focus of intense entrepreneurial activity. In the early 90s, free and open source software was the rage among hackers. By the late 90's, there was a rich commercial ecology. And so on. (Ditto skateboarding, snowboarding, kitesurfing...)
If you follow Make at all, you know that one of the hacker frontiers we've been following for the past four years is a new focus on the physical world, making things, infusing things with computing, bits not atoms. And we've been watching the evolution of the commercial marketplace that inevitably follows. That's everything from how-to sites like Make and instructables.com, "retailers" like Etsy and threadless to actual "make tanks" (think "think tank" but for making things) like Applied Minds and Squid Labs, to actual product startups like Chumby, Potenco, and Bug Labs. Bill Gross is right: this is the next big thing (or at least one of them.)
(Disclosure: O'Reilly AlphaTech Ventures is an investor in Chumby and Instructables.)
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I first heard about Bill Gross back in 1981. He started out building hardware, e.g. stereo speakers that were quite good.
His going back to businesses based on "atoms" makes me wonder if it's true that there are "hardware" people and "software" people.
I don't know if it's a real divide, but I've been around hardware people - folks who could take an idea, build & modify it quickly - enough to know I'm not one of them. Actually, it was a difficult realization to make about myself.
On the other hand, I can't help but wonder if a lot of folks who don't understand software that well are overly pessimistic about Web 2.0 type stuff. This is still a very new and immature medium.
Gordon,
I'm amazed you knew about me back in the loudspeaker days! Wow!
I think you might be right, there could be hardware people and software people. I have now experienced both, and I actually think now that it's irrelevant. A good business is hard to define, but a good business is a good business, and it's a complicated set of fundamentals and timing that make it so. Does that make sense to you? Do you agree?
Bill
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Simon Wardley [10.08.07 08:50 AM]
Yep he's right it's probably the next big thing.
However ...
"But you can make things with atoms and still have a huge amount of intellectual property in them, where you can earn good margins and protectable margins."
Even worse than protectable margins (as opposed to focusing on good service), you can have patents like “A method for forming an integrated circuit including at least two interconnected electronic switching devices, the method comprising forming at least part of the electronic switching devices by ink-jet printing”.
It'll be the old patent vs accelerating rate of innovation problem caused by the spread of the "open" meme (beyond source, content, data, news etc), the reduction of barriers to entry and the increase in participation in this field.
Roll on open hardware and the arguments and FUD that will follow.
I hope we don't have manufacturing 2.0 and "what's in 3.0?" debates. It's just the same underlying processes in web 2.0 applied to a different technology sector.
Consumers as producers? Yep, it'll happen.
The thing I like most about Threadless is that rather than being based upon "push" / "pull" mechanisms of engagement, it uses "draw" with the consumers saying what they want, and the manufacturer responding - "crowd sourced manufacturing" as you called it.