Dave Gonigam

In 2011, PayPal co-founder Peter Thiel’s venture capital firm put out a white paper called We Wanted Flying Cars, Instead We Got 140 Characters. His thesis was that computers are getting faster, cheaper and better… but when it comes to transportation, energy, commodity production, food production — “real stuff” — human progress is at a standstill.

What you seem to be suggesting is that iPhones and Twitter might eventually deliver us a flying car.

I’m not really familiar with Peter’s thesis; I’m not really sure he really means what he says. One of his best friends is [Tesla Motors founder] Elon Musk, who has taken us to Mars, and is reinventing transportation and energy, etc., so he’s familiar with people who are still thinking big.

So I think there’s maybe an act of kind of slightly cheeky provocation on his part, but yeah, I think I’ve never seen innovation work faster than it’s working right now.

I agree… 140 characters don’t seem like a big deal. But 140 characters powered by a smartphone that’s a freaking supercomputer in your pocket, that is a big deal. So I think if you’re not seeing innovation accelerating, if you’re not seeing big stuff happening, you’re just not paying attention.

The smartphone revolution has created a set of technologies that are dancing at a pace faster than computers and the Internet have. They have amazing applications outside the smartphones… We call robotics, or our stuff, the peace dividend in the smartphone wars.

Those sensors and those processors and those cameras and those GPSs and the wireless and all of that stuff… thanks to the Apples and Googles, those are now available for pennies, and they’re only getting faster better than any other technology we know of, and that becomes the Internet of things, that becomes robotics, that becomes medical devices, that becomes big data.

Suddenly, we’ve created a new class of technology that can actually take us from the world of strange to the world around us, the real world, and extend the computer revolution and the Internet revolution into every aspect of our lives with technologies that would never have been produced by the aerospace industry, the medical industry or any other traditional industries. Nobody could operate in the economies of scale, the volumes of smartphones — the consumer electronics industry in particular.

So wherever Apple goes, wherever Google goes, if we just draft behind, it opens up this amazing kind of cone of new opportunities. We let them do the R&D, we let them get the tools, do the economic scaling, and then we just find new applications for the stuff they make.

Simple question: How can government screw up the vast potential of the Maker movement?

Every time government tries to regulate technology itself, rather than use the technology, they get tangled up in definitions. Look at the debate over what’s an [assault] weapon. How do you regulate the Internet? How do you regulate copyright?

Let’s just take drones. What is a drone? You tell me. At what point does the toy that your children can buy in a department store qualify as a drone? It’s very hard to buy a flying toy that doesn’t have a camera right now. We can regulate how they’re used. We can regulate where they’re used. But it’s very hard to regulate the technology itself, because, among other things, who are you going to stop?

Our drones are made in Mexico, and the technology was designed by the Internet on the Internet. How do you stop the Internet? It’s a global team who worked together to give away code for free online. How would you even find them? There are tens of thousands of them out there.

You can buy a Mac today and you can write a poem or you can write a computer virus. Apple doesn’t stop you from doing one or the other. They don’t stop you from doing bad things with your Mac. What we have is laws about bad things. You do a bad thing, we prosecute that, but don’t ask Apple to observe your use of the computer and restrict it.

Might the Maker movement be the downfall of Big Government and big corporations? You’ve drawn an analogy between the Maker movement and the cottage industries of days gone by. Do you see potential in the Maker movement for a gradual devolution of power from large institutions into something more widely dispersed?

We don’t have to guess at this point. My first book was called The Long Tail, and it was about the explosion of creativity and variety that happens when anybody can make digital stuff in particular. It was widely misunderstood as the end of the mass market, the end of the mainstream, the end of mass media.

What it really was was the end of monopoly of the mass market. YouTube didn’t kill Hollywood. You could argue that YouTube made Hollywood better and YouTube gave us an alternative to Hollywood. We consume professional and amateur content, and the world is a richer place as a result of it.

Even newspapers, the most classic of the mass media… although their business model is challenged by the Internet, their ability to report news is improved. The news business has been transformed by the access to information.

I think what we’re going to see is that there is definitely a place for mass production. There is definitely a place for big factories making millions of things. There are economies of scale in the world of atoms. With few exceptions, I don’t think big companies making lots of stuff are going to be challenged by this.

[What’s changing is that] right now we’re largely constrained to things that are made in the millions, but there is this opportunity for things that are made in tens of thousands. Ten thousand is this really interesting number — too small for mass production and too large for an individual. Yet in the world, there are lots of things out there that would exist if only markets of 10,000 existed. If we can make things in tens of thousands, if we could distribute in tens of thousands, we could find demand for 10,000.

The Internet showed us that is the long tail. That is the YouTube and the blogs. They are all markets of 10,000, and then some of those markets of 10,000 become markets of 10 million, and some never get past that. But the fact is that 10,000 is a viable unit of production.

Digital opened up an explosion of culture that defines the modern age, and to consider the possibility that the markets of 10,000s can now be opened in physical things and we can find those products that had been wanting to exist but couldn’t because the industrial model of the 20th century had no place for them? That’s what’s so exciting about this.

Regards,
Dave Gonigam

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Dave Gonigam has been managing editor of The 5 Min. Forecast since September 2010. Before joining the research and writing team at Agora Financial in 2007, he worked for 20 years as an Emmy award-winning television news producer.

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