regarding platforms

@augustpublic aug.co @clayparkerjones

Regarding

Platforms1

Platforms. Important, hard to define, even harder to build.

Let’s at least start in a common place.

Bill Gates knows what he’s talking about. Platforms are rare, and they’re very rarely designed on purpose. They are things that happen – they’re active – because they rely on people, not designers, to be effective.

Bill Gates, via Semil Shah


Platforms Are For People

2

A platform is when the

economic value of

everybody that uses it

exceeds the value of the

company that creates it

http://blog.semilshah.com/2015/09/17/transcript-chamath-at-strictlyvcs-insider-series/

The San Francisco waterfront was – and is today – a beautiful part of an already great city. But from 1968 to 1991 it was shaded by the Embarcadero Freeway, cutting it off from the rest of the city. This seemed like a good idea to those designing the city from afar, but it ended up taking the life out of a precious asset for downtown.


The Embarcadero Freeway

3

Seriously. Look how sad this is.


The Embarcadero Freeway

4

For a long time, this was just how things worked. City design happened as an expressly intentional, utopian act, far from the actual users of the city.

Generally: bad stuff.

But don’t those designs look neat!?


Thanks, Ebenezer!

5

But in 1989, the Loma Prieta earthquake damaged the freeway, and it had to be torn down. Folks thought there would be bad traffic as a result, but it turned out there wasn’t – and now SF’s waterfront was ready to be restored to its current state.

Tourist destination or not, the Ferry Building is a magnet for activity day and night, and is connected to multiple modes of pedestrian-friendly transit.

Downtown is for people, not for cars.


Force Majeure

6

All of this big, central planning stuff came to a head in the 1960s, when Robert Moses intended to run a freeway through Greenwich Village. Citizens, led by Jane Jacobs, resisted these efforts. In 1958 and 1961, respectively, Jacobs wrote “Downtown is for People” and Death and Life in Great American Cities, bringing attention and life to the new Urbanist movement. The result was the end of the Lower Manhattan Expressway and a growing resistance to Big Development Projects in American cities.

Jacobs summarized keys to vibrant cities (through their economic utility) in four key criteria:


Along Came Jane

7

Each block should have mixed primary uses, so that at any given time of day, there’s a reason for people to be there. Dense commercial zones without bars and restaurants will feel dead and scary at night. Same goes for exclusively residential streets.


Mixed Uses

8

Short blocks promote vibrant cities by making it easy to discover different parts of a neighborhood. A long block – represented by a development, freeway, or other impasse – will create dead zones.


Short Blocks

9

Diversity of use (and tenants) can be promoted by encouraging blocks to host both old and new buildings. Old buildings allow lower rents, enabling lower-income businesses and families to live alongside richer ones.


Buildings Of Various Ages

10

And finally, density! Density promotes vibrancy and diversity by putting more people next to more people, pushing connections where there may currently be none, creating new relationships, and helping people create new and better ideas.


Density

11

Jacobs talks about these four criteria as Generators of Diversity and critical to building Economic Pools of Use in the city. I like that interchange – it’s not so often that diversity and economic utility share equal billing. But it’s appropriate if you’ve ever experienced a great city; the wholesome diversity of cities make them easy platforms for commerce and growth.

Suburbs? Not so much. Too much driving.


Generators Of Diversity

12Jane jacobs

Mixed uses

Short blocks

Buildings of various ages Density

@augustpublic aug.co @clayparkerjones 13

Cities » Ease

Jacobs also had this to say about cities. And I’m sure you’ll note that this sentiment, about self-organization, is the obverse of the Howard-Moses school of thought. The traditional methods of city planning prioritize top-down “expert” driven design. The best cities come to life through active participatory design by their inhabitants.

Jane Jacobs, Death and Life in Great American Cities


Cities, As It Happens, Are About Self-Organization

14

Cities have the capability of providing something for

everybody, only because,

and only when, they are created by everybody

It’s no coincidence that Amazon affords its teams an extraordinary amount of autonomy.

The everything store, supplied by everyone.

(Also worth pointing out here – cities are a thing that happens, not a thing that is.)

Jane Jacobs, Death and Life in Great American Cities


Cities, As It Happens, Are About Self-Organization

15

Cities have the capability of providing something for

everybody, only because, and only when, they are created by everybody

You know the Airbus A380, right? Biggest passenger airplane ever built? And one of the biggest, most complex industrial achievements of the modern world? Unsurprisingly it was more than two years late and six billion over budget.

Turns out, when they started to put together the first prototype (which was no small piece of work) the wiring for all the components were all about two centimeters too short.

Two centimeters cost two years, and six billion.

Why? The designers of the fuselage and the wiring were using two different versions of the same software.


You’ll Never Believe This

16


Companies » Not Easy

No joke.

I’ve paraphrased the following narrative from his work. Hopefully it translates here!


Geoffrey West Changed My Life

18

In searching for an explanation of how cities work – why they’re growing, what we can understand about their future – Dr. West and his team looked at networks.

The idea is pretty simple. Biological networks are well-understood, and if we can compare the way biological systems work to the way cities work, we might then be able to understand all human systems, including companies.


Let’s Talk About Nets, Baby

19

Input Rate~ Maintenance + Growth


~~

All systems seem to follow this rule: that the input rate will always be equal to the amount of maintenance necessary to keep the system running, and the amount of growth that it can sustain.(In corporate speak: Growth = Input – Maintenance.)

True Of All Systems

GEOFFREY WEST, ET AL .


How Do These Work?


It turns out that when you look at all kinds of inputs and outputs of living systems, there’s this incredible uniformity to how they scale. Metabolic rate slows as an organism gets larger. Cancer rates decline – rats have lots of cancer, while Blue Whales have almost none. Sleep requirements get shorter. (See also: “Why is my cat so lazy?”)

But it’s not just that input and output rates slow as organisms scale – when you double the size of a thing, you don’t need double the inputs, you need about 75% more. Universally.

Less is needed as organisms get larger.


“Systematic Uniformity”

22

0.01

0.1

1

10

100

1,000

10,000

0.01 0.1 1 10 100 1000 10000

Elephant

Human

Giant Rat

CondorChicken

Mouse

Body Mass

Met

abol

ic R

ate

22GEOFFREY WEST, ET AL .

P A R I S

S H A N G H A I


How Do These Work?

Turns out, when West and team looked at cities through the same lens, they found a “systematic uniformity” to cities and how they scale. And when looking at the inputs to a city, from the length of electrical lines to the number of gas stations for a given population, it follows the same exact pattern as biological systems – as you double, you need about 75% of the input. Amazing!

And, oddly enough, this is true across cultures. No matter what nation, region, or culture, all cities follow this same pattern.


Holy Crap! Cities, Too?


Netherlands

Spain

Germany

France

1 0 2

1 0 3

1 0 1

1 0 5 1 0 6

Population

Gas

Sta

tion

s

The amazing thing that they discovered about cities is that they're not just more efficient as they scale – like biological systems – they're also more effective at creating outputs. So when you double the size of a city, no matter what, you get more than double the outputs. And with the same amazing uniformity!

A word of caution, however – for the researchers, outputs covered productive and harmful outputs. So cities produce more wages, supercreatives, patents, universities (the list goes on), but they also produce more crime, HIV cases, and the like.


Exponents At Work


20

21

22

23

24

25

26

27

10 11 12 13 14 15 16 17 18

Population

Wag

es

Note that the previous charts follow one of two patterns:

A sub-linear pattern, representing economies of scale (you need less as you grow);

A super-linear pattern, representing returns to scale (you get more as you grow).


Looking For Patterns

26

Economies Returns


What can we learn from this? Sublinear and Superlinear scaling patterns have an impact on how a thing grows – whether it can sustain exponential growth or whether it will eventually stop growing, and die.

Biology follows the latter pattern: all living things start by growing quickly; eventually their growth slows, and they all perish.

Cities, on the other hand, almost never die.


Sublinear Scaling = Eventual Death

27

Economies Returns


So. Are companies more like cities, which are hard to kill and create accelerating outcomes for their inhabitants? You’d think that would be the case – after all, they’re social networks, just like cities, filled of people, not cells. Right?

Nope. They’re more like biological systems, which are eventually overcome by their maintenance cost.

WTF?


All Companies Will Die

28

Population

Pro

fits

10

100

1,000

10,000

100,000

1,000,000

10 100 1,000 10,000 100,000 1,000,000


Input Rate~ Maintenance + Growth


~~

R E S O U R C E S P R O D U C T S

E N E R G Y D O L L A R S

→

R E P A I R R E P L A C E M E N T M A N A G E M E N T B U R E A U C R A C Y S U S T E N A N C E

→

So let’s return to this for a second. Is it possible that companies could function like cities? Is it possible that maintenance costs at companies could go down as they get bigger, instead of going up? So that we could achieve superlinear growth? I’ve seen this happen. It’s called self-organization, and it’s about making it easy to do hard work.


Growth » Ease

This is where I grew up! And that road over there is the one we drove on, for four hours, to buy my first computer.


Arcata, California

31

This was my first computer.

Its most important role in my life – at age 12-ish – was connecting me to my friends through a bulletin-board system called SMUGglers BBS. It was a crap version of Facebook, but for the time it did a lot: messaging, group and private chat, the works.

All for $15 dollars per month.

For 45 minutes of usage per day. 45 minutes!


The Compaq Presario

32

I worked out that my parents were paying around five cents per megabyte of data when I was using SMUGglers BBS.

(Of course I wasn’t transmitting constantly, so in practice it was much more expensive than that. Anyway.)

Today I spend about one cent per megabyte for data.

But that’s on my phone. At home, the price drops to practically to zero cents per megabyte, because I can transmit and receive unlimited amounts of data.

Moore’s Law! Hooray!


Let’s Get Free Y’all

33

¢5 ¢1 ¢0

(Dear reader, I know you know about this, but the visual is helpful for a particular point about decision-making.)

This is how Moore’s Law works. The number of transistors on a chip doubles at a predictable rate. It’s easy to lose sight of how these chips work, though: each transistor is a switch that can either be on or off, representing a one or a zero. Everything your computer or phone does breaks down to these tiny decisions. The more “decisions” that a chip can process, the faster it works, and the more your device can do.

Density. Rapid decision-making. Exponential (super-linear) results.

Sound familiar?


Visualizing Moore’s Law

34

1 1 1

1 0 0

0

1

1 0 1 0

0 1 0 1

1 1 1 0 1 1 1 0

1 0 0 1 1 0 0 1

1 0 1 0 1 0 1 0

0 1 0 1 0 1 0 1

1 1 1 0 1 1 1 0

1 0 0 1 1 0 0 1

1 0 1 0 1 0 1 0

0 1 0 1 0 1 0 1

Doubling Transistors = More Individual “Decisions” Halving Size = Faster “Decision Making”

18Months

If you wanted to buy the computing power of a single iPhone 6 in the 1960s, it would have cost you ~500 trillion dollars.

And we’re still using matrix and command-control systems in our organizations.

Got it.


Fun Fact!

35

$1,000,000,000,000

$0.22

20131961


72,057,594,037,927,900 144,115,188,075,856,000 288,230,376,151,712,000 576,460,752,303,423,000 1,152,921,504,606,850,000 2,305,843,009,213,690,000 4,611,686,018,427,390,000 9,223,372,036,854,780,000

281,474,976,710,656 562,949,953,421,312 1,125,899,906,842,624 2,251,799,813,685,248 4,503,599,627,370,496 9,007,199,254,740,990 18,014,398,509,482,000 36,028,797,018,964,000

1,099,511,627,776 2,199,023,255,552 4,398,046,511,104 8,796,093,022,208 17,592,186,044,416 35,184,372,088,832 70,368,744,177,664 140,737,488,355,328

4,294,967,296 8,589,934,592 17,179,869,184 34,359,738,368 68,719,476,736 137,438,953,472 274,877,906,944 549,755,813,888

16,777,216 33,554,432 67,108,864 134,217,728 268,435,456 536,870,912 1,073,741,824 2,147,483,648

65,536 131,072 262,144 524,288 1,048,576 2,097,152 4,194,304 8,388,608

256 512 1,024 2,048 4,096 8,192 16,384 32,768

1 2 4 8 16 32 64 128

You know this story, right? Supposedly, the wise inventor of chess presented the new game to their master, who offered any prize in return for the amazing invention. The request was to put one grain of wheat on the first square, two on the second, four on the third, and so on. The master laughed off the meager prize, but as they started to fulfill the prize, they realized the magnitude of the request.

In particular, the numbers get really big in the second half of the chessboard, illustrating the power of doubling.

♛♚♜♝♞♟


72,057,594,037,927,900 144,115,188,075,856,000 288,230,376,151,712,000 576,460,752,303,423,000 1,152,921,504,606,850,000 2,305,843,009,213,690,000 4,611,686,018,427,390,000 9,223,372,036,854,780,000

281,474,976,710,656 562,949,953,421,312 1,125,899,906,842,624 2,251,799,813,685,248 4,503,599,627,370,496 9,007,199,254,740,990 18,014,398,509,482,000 36,028,797,018,964,000

1,099,511,627,776 2,199,023,255,552 4,398,046,511,104 8,796,093,022,208 17,592,186,044,416 35,184,372,088,832 70,368,744,177,664 140,737,488,355,328

4,294,967,296 8,589,934,592 17,179,869,184 34,359,738,368 68,719,476,736 137,438,953,472 274,877,906,944 549,755,813,888

16,777,216 33,554,432 67,108,864 134,217,728 268,435,456 536,870,912 1,073,741,824 2,147,483,648

65,536 131,072 262,144 524,288 1,048,576 2,097,152 4,194,304 8,388,608

256 512 1,024 2,048 4,096 8,192 16,384 32,768

1 2 4 8 16 32 64 128

Nine Quintillion→


2015 2017

1999 2001 2003 2005 2007 2009 2011 2013

1983 1985 1987 1989 1991 1993 1995 1997

1967 1969 1971 1973 1975 1977 1979 1981

1951 1953 1955 1957 1959 1961 1963 1965

Things did just get weird, right?

→

My Compaq→

The cost of these robots has dropped 23x in five years.

This is a GIF in the regular presentation, and you’re supposed to go, “WHOA those are fast.”


Robots Building Cars

39MALONE

The cost of these drones has dropped 143x in six years.

This is a GIF in the regular presentation, and you’re supposed to be amazed that drones are building a bridge out of rope.

#terminator


Drones Building A Bridge

40MALONE

The cost of PV panels has dropped 200x in thirty years.

This is a GIF too but it’s not that impressive.


Solar Panels Tracking Sun

41MALONE

The cost of the sensors needed to run a self-driving car has dropped 300x in six years.

This GIF is crazy. It’s a rendering of what a Google Car sees, showing obstructions, paths, etc. Google it (ha).

The point of all of these GIFs is to show how the price for technological performance is dropping rapidly, making previously impossible things darn near free, if not easy to implement.


Cars Driving Themselves

42MALONE

I love, love, love this quote.

My experience with SMUGglers BBS wasn’t socially interesting. Perhaps a thousand people in NorCal were on the system. It fulfilled nearly all of the user stories that Facebook fulfills, but it was still technologically novel to connect with friends over the internet.

Contrast this to everything happening around us today – the tools have become boring, allowing everyone to use them, which has profound social impacts.

Quote from Clay Shirky


Boring Is Good Powerful

43

Communications tools don't

get socially interesting until

they get technologically boring

This is pretty simplistic, but I think Shirky’s statement is applicable beyond communications tools. It’s applicable to all technologies, including the generic ones that underpin organizations.

That’s the thing about our management systems – they’re all still technologically interesting. They’re enthusiast-grade technologies, only useful if you really give a shit about them. (Again, think about my 1990s social networking experience.)

This will change.


A Broader Truth

44

Things don't get socially

interesting until they get

technologically boring.


Boring » Easy

I’m sure you’re well familiar with this chart, showing disengagement at work (in white) contrasted with engagement (in grey). Most people are some form of disengaged at work. My experience is that this is because the hard, engaging work is made difficult by our methods and values.

Engagement dies because work is too hard, because the management tasks overcome the growth tasks.


Disengagement Everywhere

46GALLUP

Again, a familiar chart, showing the “life expectancy” of companies on the S&P 500, dropping systematically, and uniformly, over time.

Companies die because work is too hard, because the management tasks overcome the growth tasks.


Chart Your Firm’s Death

47

0

18

35

53

70

1958 1982 2006 2030

FOSTER & KAPLAN

Let’s return to where we started – thinking about platforms. Why adopt a platform mindset? Why consider them in the context of your business at all?

Consider the city around you. It is a platform for economic utility, vibrancy, growth, and change. We know why it works this way – it’s self-organizing, with simple rules that push the right kind of development. And like a platform, it’s not a planned development – it’s something that happens through the power of networks.

Companies should behave the same way, but too few of their leaders insist on leaving the platform advantage – the self-organizing advantage – to others.

Bill Gates, via Semil Shah


Platforms Are For People

48

A platform is when the

economic value of

everybody that uses it

exceeds the value of the

company that creates it

http://blog.semilshah.com/2015/09/17/transcript-chamath-at-strictlyvcs-insider-series/


Platforms » Ease

regarding platforms

Business