Here is what 45 years of studying business cycles has taught me.
Now is the time to work on your next great startup.
Right now. When the whole world is collapsing around us. When old business models are failing. When everyone is worried about their job, or about to lose it.
Look at the opportunities. I detailed them three years ago. The end of oil. The machine Internet. DNA as a programming language.
These boil down to renewable energy, control systems, and medicine.
Nearly three years ago, after attending the Heidelberg Laureate Forum honoring great mathematicians and computer experts, I wrote a three part series on the big technologies of this decade:
This is a good time to revisit the trends. A recession is also the best time to start a new tech company. Incumbents are faltering and you get a clean sheet of paper to write the future on.
Continue reading "The Three Big Challenges Boiled Into One" »
Today is the calm before an economic storm.
The Federal Reserve is hiking interest rates to slow inflation. Many commodity prices are already coming down. But if it hikes too fast, economic activity will slow and that will be a recession.
To Nouriel Roubini (right), the economist known as “Dr. Doom,” a recession at this time could quickly become a depression, because public debt remains at historically high levels. If you owe $43 trillion at 1%, it costs $430 billion to carry it for a year. At 3%, it’s $1.3 trillion. Your budget just got broken. That’s his reasoning.
But debt owed to yourself isn’t real. We can print that $1.3 trillion. The risk then is that the dollar falls off a cliff. That’s not happening. If anything, the dollar is too strong. We’re importing deflation. Every western nation, and China, has massive debts.
It’s why the doomsayers were wrong in 2009, and again in 2020. It’s why we couldn’t fight the Trump tax cuts. They didn’t create inflation. They didn’t sink the dollar.
We have become accustomed, in the first decades of the 21st century, to thinking of technology as providing the highest value-add.
Software, made by hand but scaled instantly over cloud networks, is where the money is today.
But that will not be the case a decade from now.
The next revolution, in biotechnology, is already underway. I’ve described it as “DNA as a Programming Language.” While I made my life in computing, mostly as an observer, my son is now making his way into biotech, as a participant.
COVID-19 provided the “Visicalc moment” for this revolution, the giant “ah-ha” that created the mass market. Moderna, BionTech, and mRNA technology, gave the west vaccines against the disease long before older technologies. Moderna developed its vaccine within days of getting the DNA map of the COVID-19 genome.
There’s an enormous amount of capital going into what’s called the metaverse today. An awful lot is being written about it. The vast majority is being wasted.
I know this because Moore’s Law has been around for almost 60 years. Two generations. We know how a change like this occurs.
It occurs from the bottom up.
It was start-ups that forced IBM into mini-computers and, later, into PCs. Digital software natives Microsoft and Apple eventually pushed IBM aside entirely and let its own bureaucracy devour it. The same was true with networking. If we waited for AT&T to build the Internet, we’d still be waiting. It was the government’s insistence on open standards, driven largely by the needs of national defense, that drove the model in the 1990s.
Back in 2009, I covered Taiwan’s CompuText show, alongside my son, then 18.
We spent four days wandering the halls, on the hunt for “desktop Linux.” We eventually found Linux Foundation head Jim Zemlin addressing a small group in a corner of Taiwan 101, the city’s tallest building, miles from the show’s main hall. It’s become something of a joke between us since then.
The point is there was no desktop Linux. You can argue that Google Android is Linux, or that the Mac OS is based on a Linux, but these aren’t truly open systems. Linux is, and was, primarily a server technology.
This is important to note when thinking about Web 3.0, or the Metaverse, as the buzzword advocates call it. They say it’s the biggest thing since the Web was spun, nearly 3 decades ago. It’s certainly the biggest thing since the Cloud, which Amazon began selling 15 years ago.
Back in 2005 I was asked to take over a new “open source” beat for ZDNet.
It turns out to have been the most important story of my life. And yours.
Open source is software based on the radical idea that the more eyes you get on code, the better it will be. Without getting too deep into the weeds here, it works.
The benefits of open source, however, flow mainly to its users. In the old proprietary model, they flowed to developers. Microsoft and (especially) Oracle fought it so fiercely. They saw the “little guys” as ganging up to steal their competitive advantage. Microsoft finally surrendered, building a network of cloud data centers that has made it the second most-valuable company in the world. Oracle is worth barely one-tenth as much.
All of America’s biggest companies are now built on the open source idea. Apple built its cloud on open source. So did Google, and Amazon, and Facebook. Facebook extended this into hardware with its Open Compute Project. Netflix extended it into networking with Open Connect.
But open source relates to more than software, hardware, or technology.
Open source was born at a time of high tech unemployment.
In the wake of the dot-com bubble bursting, early this century, the ideas found in Eric Raymond’s The Cathedral and the Bazaar found salience. The more eyes you could get on the code, the higher you could build the stack. This created competition for proprietary software. Anyone could build off the common framework.
Open source built the cloud, and the 5 Cloud Czars came to dominate it. They all use open source, but in a proprietary way. They support only the projects they’re using or those they’re seeking access to. In the 2010s developers all found jobs, often at 6-figure salaries, often dripping with stock options and grants. The idea of sharing with others went out of fashion.
Open core was one way to get around the open source idea. The center of the stack was shared, but everything the sponsor built above it was theirs. While small companies that did this ran into criticism, the fact is that if a stack has a commercial sponsor, the software is open core. The sponsor is building proprietary tools on an open source stack and calling it support.
Today, most contributions to open source have financial motives. Companies are trying to get access to the full stack, connecting their own stuff to the stack, and the core of the stack is enhanced mainly by its commercial sponsors. Programmer time is expensive. No one works for free. Young programmers may start their careers contributing to an open source program, but they’re quickly snapped up and go to work making money.
Thus the decision by LiveCode to “abandon” open source, putting their old code in an archive and building proprietary above it, drew headlines but it’s not really a story.
Because everyone is doing it.
The University of Minnesota’s latest scandal illustrates a bigger problem with major universities.
As my friend Steven J. Vaughan-Nichols has been reporting, UMN’s Institutional Review Board let a computer science professor deliberately dump dodgy code into the Linux kernel, just to see what would happen.
Well, now we know what will happen. The paper has been pulled, the professor has been shamed, and the university has been banned from contributing to Linux. Everyone is being punished by that, down to the last undergraduate.
Yet the university thought an apology would suffice.
It doesn’t.
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