Tim O’Reilly’s Key to Creating the Next Big Thing

Tech mogul Tim O’Reilly
Photo: Jason Madara

One of the marquee attractions at the MIT Media Lab is a camera that can take photographs of objects sitting out of sight, around a corner. It’s the result of years of sophisticated science. But the MIT researchers might have figured it out faster had they simply studied Tim O’Reilly. He’s been seeing around corners for decades now.

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O’Reilly’s day job is heading O’Reilly Media, created in 1978, which began as a purveyor of distinctively friendly computer manuals and later stretched to include conferences, epublishing, and a spin-off venture capital firm. (It has done seed rounds with the likes of Foursquare, Bitly, and Chumby.) But the 58-year-old CEO is better known as a free-range proselytizer of the tech revolution. His ability to quickly identify nascent trends is unparalleled. It was O’Reilly who first figured out that programming was becoming a mass skill. O’Reilly who realized in 1993 that the Internet browser would broadly transform civilization, spurring him to form what was arguably the first web portal, the Global Network Navigator. O’Reilly who recognized that open source would be a liberating engine of innovation and so created books and conferences around that theme. O’Reilly who saw the rebirth of the web as a participatory medium and launched the influential Web 2.0 conference dedicated to promoting and plumbing that notion. O’Reilly who identified hackers as canaries in the coal mine of emerging technology, and O’Reilly who made a point of tapping the minds of such people—allowing his company to grasp and share the import of advances like Wi-Fi, big data, and the maker movement earlier than almost anyone else.

Wired caught up with the peripatetic CEO via Skype. He was in London, preparing for a conference presentation called “Open Societies, Open Economies.” Vintage O’Reilly.

Wired: Your new credo these days is “Create more value than you capture.” What does that mean?

Tim O’Reilly: Everybody wants to foster entrepreneurship, but we have to think about the preconditions for entrepreneurship. You grow great crops in great soil. And the soil is the commons. Increasingly, we have monopolistic companies that try to take as much as they can for themselves. And we have a patent and copyright regime that makes sure that nothing goes back into the commons unless by an extraordinary act of generosity. This is not fertile soil for innovation.

So many technologies start out with a burst of idealism, democratization, and opportunity, and over time they close down and become less friendly to entrepreneurship, to innovation, to new ideas. Over time the companies that become dominant take more out of the ecosystem than they put back in. We saw this happen with Microsoft. It started out with a big vision: How do we get a PC on every desk and in every home? It was profoundly democratizing. But when Microsoft got on top, it slowly started choking off the pathways to success for everybody else. It stopped creating more value than it captured.

Wired: So how do you turn that around?

O’Reilly: At our company, we do it by marketing big ideas instead of our own products. To promote change elsewhere, you start by talking. I once had a conversation with Eric Schmidt where I was urging him to consider the notion that “Create more value than you capture” might be a better metric for Google to use in judging its actions than “Don’t be evil.” One is measurable, the other more subjective. And Google does seem to think about this a lot. But generally there’s just not enough awareness of it. Pursuing this path is not only altruistic. If companies don’t think systemically enough—if they try to capture too much of the value—eventually innovation moves somewhere else.

Wired: If you could pick a company that needs to hear this, which would it be?

O’Reilly: Apple. They’re clearly on the wrong path. They file patent suits that claim that nobody else can make a device with multitouch. But they didn’t invent multitouch. They just pushed the ball forward and applied it to the phone. Now they want to say, “OK, we got value from someone else, but it stops now.” That attitude creates lockup in the industry. And I think Apple is going to lose its mojo precisely because they try to own too much.

Wired: How about Amazon? Is it a killer or an enabler?

O’Reilly: It’s both. Amazon is clearly trying to own the entire stack. They ate most of the retail part of the stack, and now they’re trying to eat the publisher part of the stack. On the other hand, Amazon is doing so many good things—their cloud-computing initiatives have been earthshaking, and I give Jeff Bezos great kudos for getting the publishing industry to move seriously toward ebooks. I am so impressed with them. I just wish they were a little less ruthless.

Wired: In the early days of the Obama administration, you predicted that Internet values would change government. But a lot of technology people got disenchanted by how hard it was to change things.

O’Reilly: I wouldn’t say they’re disenchanted but that they’re burned out. Everybody who goes into government gets somewhat chewed up in the process. Being a senior appointee is like being at a startup, only more so: You run into opposition from the entrenched oligopoly of contractors whose business model is to extract as much money from government as possible for doing as little as possible. At O’Reilly, when we first found out about the World Wide Web and recognized its potential, we went around to all the phone companies to get them to provide Internet access with the Global Network Navigator as a front end. They didn’t listen. And when we went to publishers to talk about pushing books online, they had zero interest. It’s very similar when you’re trying to bring new ideas to government. People are comfortable with what they’re doing, and they don’t see the future coming at them. There’s that great story in the book of Jeremiah where he’s been preaching and nobody’s paying attention, and he feels that he might as well be preaching to the ground. Well, I was out there being Jeremiah.

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