26: When you think about resilience and technology it's actually much easier.
29: You're going to see some other speakers today, I already know,
32: who are going to talk about breaking-bones stuff,
35: and, of course, with technology it never is.
37: So it's very easy, comparatively speaking, to be resilient.
41: I think that, if we look at what happened on the Internet,
43: with such an incredible last half a dozen years,
47: that it's hard to even get the right analogy for it.
50: A lot of how we decide, how we're supposed to react to things
54: and what we're supposed to expect about the future
56: depends on how we bucket things
58: and how we categorize them.
59: And so I think the tempting analogy for the boom-bust
63: that we just went through with the Internet is a gold rush.
67: It's easy to think of this analogy as very different
70: from some of the other things you might pick.
72: For one thing, both were very real.
74: In 1849, in that Gold Rush, they took over $700 million
78: worth of gold out of California. It was very real.
80: The Internet was also very real. This is a real way for humans to
84: communicate with each other. It's a big deal.
87: Huge boom. Huge boom. Huge bust. Huge bust.
91: You keep going, and both things are lots of hype.
94: I don't have to remind you of all the hype
97: that was involved with the Internet -- like GetRich.com.
100: But you had the same thing with the Gold Rush. "Gold. Gold. Gold."
103: Sixty-eight rich men on the Steamer Portland. Stacks of yellow metal.
107: Some have 5,000. Many have more.
110: A few bring out 100,000 dollars each.
114: People would get very excited about this when they read these articles.
117: "The Eldorado of the United States of America:
120: the discovery of inexhaustible gold mines in California."
126: And the parallels between the Gold Rush and the Internet Rush continue very strongly.
130: So many people left what they were doing.
133: And what would happen is -- and the Gold Rush went on for years.
136: People on the East Coast in 1849, when they first started to get the news,
140: they thought, "Ah, this isn't real."
142: But they keep hearing about people getting rich,
145: and then in 1850 they still hear that. And they think it's not real.
148: By about 1852, they're thinking, "Am I the stupidest person on Earth
153: by not rushing to California?" And they start to decide they are.
157: These are community affairs, by the way.
159: Local communities on the East Coast would get together and whole teams
162: of 10, 20 people would caravan across the United States,
165: and they would form companies.
167: These were typically not solitary efforts. But no matter what,
170: if you were a lawyer or a banker, people dropped what they were doing,
173: no matter what skill set they had, to go pan for gold.
177: This guy on the left, Dr. Richard Beverley Cole,
180: he lived in Philadelphia and he took the Panama route.
183: They would take a ship down to Panama, across the isthmus,
186: and then take another ship north.
188: This guy, Dr. Toland, went by covered wagon to California.
193: This has its parallels, too. Doctors leaving their practices.
197: These are both very successful -- a physician in one case,
199: a surgeon in the other.
200: Same thing happened on the Internet. You get DrKoop.com.
204: (Laughter)
205: In the Gold Rush, people literally jumped ship.
208: The San Francisco harbor was clogged with 600 ships at the peak
215: because the ships would get there and the crews would abandon
217: to go search for gold.
219: So there were literally 600 captains and 600 ships.
223: They turned the ships into hotels, because they couldn't sail them anywhere.
226: You had dotcom fever. And you had gold fever.
231: And you saw some of the excesses
233: that the dotcom fever created and the same thing happened.
237: The fort in San Francisco at the time had about 1,300 soldiers.
241: Half of them deserted to go look for gold.
245: And they wouldn't let the other half out to go look for the first half
248: because they were afraid they wouldn't come back.
250: (Laughter)
252: And one of the soldiers wrote home, and this is the sentence that he put:
255: "The struggle between right and six dollars a month
259: and wrong and 75 dollars a day is a rather severe one."
267: They had bad burn rate in the Gold Rush. A very bad burn rate.
271: This is actually from the Klondike Gold Rush. This is the White Pass Trail.
275: They loaded up their mules and their horses.
279: And they didn't plan right.
283: And they didn't know how far they would really have to go,
286: and they overloaded the horses with hundreds and hundreds of pounds of stuff.
290: In fact it was so bad that most of the horses died
294: before they could get where they were going.
296: It got renamed the "Dead Horse Trail."
298: And the Canadian Minister of the Interior wrote this at the time:
302: "Thousands of pack horses lie dead along the way,
305: sometimes in bunches under the cliffs,
307: with pack saddles and packs where they've fallen from the rock above,
311: sometimes in tangled masses, filling the mud holes
314: and furnishing the only footing for our poor pack animals on the march,
317: often, I regret to say, exhausted, but still alive,
321: a fact we were unaware of, until after the miserable wretches
324: turned beneath the hooves of our cavalcade.
327: The eyeless sockets of the pack animals everywhere
329: account for the myriads of ravens along the road.
332: The inhumanity which this trail has been witness to,
334: the heartbreak and suffering which so many have undergone,
337: cannot be imagined. They certainly cannot be described."
342: And you know, without the smell that would have accompanied that,
347: we had the same thing on the Internet: very bad burn rate calculations.
352: I'll just play one of these and you'll remember it.
355: This is a commercial that was played on the Super Bowl in the year 2000.
359: (Video): Bride #1: You said you had a large selection of invitations. Clerk: But we do.
363: Bride #2: Then why does she have my invitation?
366: Announcer: What may be a little thing to some ... Bride #3: You are mine, little man.
371: Announcer: Could be a really big deal to you. Husband #1: Is that your wife?
375: Husband #2: Not for another 15 minutes. Announcer: After all, it's your special day.
383: OurBeginning.com. Life's an event. Announce it to the world.
386: Jeff Bezos: It's very difficult to figure out what that ad is for.
390: (Laughter)
393: But they spent three and a half million dollars
395: in the 2000 Super Bowl to air that ad,
398: even though, at the time, they only had a million dollars in annual revenue.
404: Now, here's where our analogy with the Gold Rush starts to diverge,
408: and I think rather severely.
410: And that is, in a gold rush, when it's over, it's over.
414: Here's this guy: "There are many men in Dawson
417: at the present time who feel keenly disappointed.
419: They've come thousands of miles on a perilous trip, risked life, health and property,
424: spent months of the most arduous labor a man can perform
427: and at length with expectations raised to the highest pitch
430: have reached the coveted goal only to discover
432: the fact that there is nothing here for them."
436: And that was, of course, the very common story.
439: Because when you take out that last piece of gold --
441: and they did incredibly quickly. I mean, if you look at the 1849 Gold Rush --
446: the entire American river region, within two years --
449: every stone had been turned. And after that, only big companies
453: who used more sophisticated mining technologies
455: started to take gold out of there.
458: So there's a much better analogy that allows you to be incredibly optimistic
464: and that analogy is the electric industry.
469: And there are a lot of similarities between the Internet and the electric industry.
473: With the electric industry you actually have to --
476: one of them is that they're both sort of thin,
478: horizontal, enabling layers that go across lots of different industries.
481: It's not a specific thing.
485: But electricity is also very, very broad, so you have to sort of narrow it down.
490: You know, it can be used as an incredible means of transmitting power.
494: It's an incredible means of coordinating,
496: in a very fine-grained way, information flows.
498: There's a bunch of things that are interesting about electricity.
501: And the part of the electric revolution that I want to focus on
506: is sort of the golden age of appliances.
509: The killer app that got the world ready for appliances was the light bulb.
514: So the light bulb is what wired the world.
516: And they weren't thinking about appliances when they wired the world.
520: They were really thinking about --
522: they weren't putting electricity into the home;
524: they were putting lighting into the home.
527: And, but it really -- it got the electricity. It took a long time.
531: This was a huge -- as you would expect -- a huge capital build out.
535: All the streets had to be torn up.
538: This is work going on down in lower Manhattan
542: where they built some of the first electric power generating stations.
546: And they're tearing up all the streets.
548: The Edison Electric Company, which became Edison General Electric,
551: which became General Electric,
553: paid for all of this digging up of the streets. It was incredibly expensive.
559: But that is not the -- and that's not the part that's really most similar to the Web.
566: Because, remember, the Web got to stand
568: on top of all this heavy infrastructure
570: that had been put in place because of the long-distance phone network.
573: So all of the cabling and all of the heavy infrastructure --
576: I'm going back now to, sort of, the explosive part of the Web in 1994,
580: when it was growing 2,300 percent a year.
582: How could it grow at 2,300 percent a year in 1994
585: when people weren't really investing in the Web?
588: Well, it was because that heavy infrastructure had already been laid down.
592: So the light bulb laid down the heavy infrastructure,
595: and then home appliances started coming into being.
598: And this was huge. The first one was the electric fan --
601: this was the 1890 electric fan.
604: And the appliances, the golden age of appliances really lasted --
608: it depends how you want to measure it --
610: but it's anywhere from 40 to 60 years. It goes on a long time.
613: It starts about 1890. And the electric fan was a big success.
619: The electric iron, also very big.
622: By the way, this is the beginning of the asbestos lawsuit.
626: (Laughter)
627: There's asbestos under that handle there.
632: This is the first vacuum cleaner, the 1905 Skinner Vacuum,
635: from the Hoover Company. And this one weighed 92 pounds
640: and took two people to operate and cost a quarter of a car.
645: So it wasn't a big seller.
647: This was truly, truly an early-adopter product --
651: (Laughter)
652: the 1905 Skinner Vacuum.
654: But three years later, by 1908, it weighed 40 pounds.
659: Now, not all these things were highly successful.
663: (Laughter)
665: This is the electric tie press, which never really did catch on.
668: People, I guess, decided that they would not wrinkle their ties.
675: These never really caught on either:
677: the electric shoe warmer and drier. Never a big seller.
681: This came in, like, six different colors.
683: (Laughter)
685: I don't know why. But I thought, you know,
688: sometimes it's just not the right time for an invention;
692: maybe it's time to give this one another shot.
695: So I thought we could build a Super Bowl ad for this.
699: We'd need the right partner. And I thought that really --
703: (Laughter)
705: I thought that would really work, to give that another shot.
709: Now, the toaster was huge
711: because they used to make toast on open fires,
714: and it took a lot of time and attention.
716: I want to point out one thing. This is -- you guys know what this is.
722: They hadn't invented the electric socket yet.
725: So this was -- remember, they didn't wire the houses for electricity.
728: They wired them for lighting. So your -- your appliances would plug in.
732: They would -- each room typically had a light bulb socket at the top.
735: And you'd plug it in there.
737: In fact, if you've seen the Carousel of Progress at Disney World,
740: you've seen this. Here are the cables coming up into this light fixture.
744: All the appliances plug in there. And you would just unscrew your light bulb
748: if you wanted to plug in an appliance.
750: The next thing that really was a big, big deal was the washing machine.
755: Now, this was an object of much envy and lust.
758: Everybody wanted one of these electric washing machines.
761: On the left-hand side, this was the soapy water.
763: And there's a rotor there -- that this motor is spinning.
765: And it would clean your clothes.
767: This is the clean rinse-water. So you'd take the clothes out of here,
770: put them in here, and then you'd run the clothes through this electric wringer.
774: And this was a big deal.
776: You'd keep this on your porch. It was a little bit messy and kind of a pain.
780: And you'd run a long cord into the house
783: where you could screw it into your light socket.
786: (Laughter)
787: And that's actually kind of an important point in my presentation,
790: because they hadn't invented the off switch.
794: That was to come much later -- the off switch on appliances --
797: because it didn't make any sense.
799: I mean, you didn't want this thing clogging up a light socket.
802: So you know, when you were done with it, you unscrewed it.
805: That's what you did. You didn't turn it off.
807: And as I said before, they hadn't invented the electric outlet either,
811: so the washing machine was a particularly dangerous device.
814: And there are --
816: when you research this, there are gruesome descriptions
819: of people getting their hair and clothes caught in these devices.
824: And they couldn't yank the cord out
826: because it was screwed into a light socket inside the house.
830: (Laughter)
831: And there was no off switch, so it wasn't very good.
836: And you might think that that was incredibly stupid of our ancestors
840: to be plugging things into a light socket like this.
843: But, you know, before I get too far into condemning our ancestors,
847: I thought I'd show you: this is my conference room.
850: This is a total kludge, if you ask me.
853: First of all, this got installed upside down. This light socket --
856: (Laughter)
857: and so the cord keeps falling out, so I taped it in.
859: (Laughter)
861: This is supposed -- don't even get me started. But that's not the worst one.
865: This is what it looks like under my desk.
867: I took this picture just two days ago.
870: So we really haven't progressed that much since 1908.
873: (Laughter)
875: It's a total, total mess.
877: And, you know, we think it's getting better,
880: but have you tried to install 802.11 yourself?
884: (Laughter)
885: I challenge you to try. It's very hard.
887: I know Ph.D.s in Computer Science --
890: this process has brought them to tears, absolute tears. (Laughter)
894: And that's assuming you already have DSL in your house.
900: Try to get DSL installed in your house.
903: The engineers who do it everyday can't do it.
905: They have to -- typically, they come three times.
908: And one friend of mine was telling me a story:
910: not only did they get there and have to wait,
913: but then the engineers, when they finally did get there,
916: for the third time, they had to call somebody.
918: And they were really happy that the guy had a speakerphone
921: because then they had to wait on hold for an hour
923: to talk to somebody to give them an access code
925: after they got there.
927: So we're not -- we're pretty kludge-y ourselves.
931: By the way, DSL is a kludge.
933: I mean, this is a twisted pair of copper that was never designed
935: for the purpose it's being put to --
937: you know it's the whole thing --
939: we're very, very primitive. And that's kind of the point.
943: Because, you know, resilience -- if you think of it in terms of the Gold Rush,
947: then you'd be pretty depressed right now
949: because the last nugget of gold would be gone.
952: But the good thing is, with innovation, there isn't a last nugget.
955: Every new thing creates two new questions and two new opportunities.
960: And if you believe that, then you believe that where we are --
964: this is what I think -- I believe that where we are with the incredible kludge --
968: and I haven't even talked about user interfaces on the Web --
972: but there's so much kludge, so much terrible stuff --
975: we are at the 1908 Hurley washing machine stage with the Internet.
979: That's where we are. We don't get our hair caught in it,
982: but that's the level of primitiveness of where we are.
985: We're in 1908.
987: And if you believe that, then stuff like this doesn't bother you. This is 1996:
991: "All the negatives add up to making the online experience not worth the trouble."
995: 1998: "Amazon.toast." In 1999: "Amazon.bomb."
1001: My mom hates this picture.
1003: (Laughter)
1007: She -- but you know, if you really do believe that it's the very,
1010: very beginning, if you believe it's the 1908 Hurley washing machine,
1014: then you're incredibly optimistic. And I do think that that's where we are.
1017: And I do think there's more innovation ahead of us
1020: than there is behind us.
1022: And in 1917, Sears -- I want to get this exactly right.
1027: This was the advertisement that they ran in 1917.
1031: It says: "Use your electricity for more than light."
1034: And I think that's where we are.
1036: We're very, very early. Thank you very much.
Jeff Bezos speaks at TED
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