Thank You for Being Late

by Thomas L. Friedman

  And that is why Wujec likes to say that “the twentieth century was all about getting you to love the things we make. And the twenty-first is all about how to make the things you love.”

  We are entering a maker’s paradise. You know what the next generation of kids’ toys will be? Make your own—make the toy you love. The system will also soon enable you to make the drug you need for your particular DNA. Or as Andrew Hessel, distinguished research scientist at Autodesk, put it to me: “The gap between science fiction and science is getting really narrow now, because as soon as someone has that idea and articulates it, it can be manifested in a very short period of time.”

  Autodesk’s business involves abstracting more and more of the complexity involved in different aspects of design into one-touches to amplify the power of one designer. Carl Bass, the CEO of Autodesk, showed me how their latest software for architects has evolved from a digital drawing tool to one in which the software works in partnership with the designer or the architect, through a concept called “building information modeling.”

  For starters, the design process moves from a set of drawings to an interactive database. When the designer draws on the computer screen, the system can compute the properties of the building and even suggest improvements for everything from energy efficiency to people flow while costing out every conceivable option. Every variable is built into the software, so as the designer changes the shape or floors or the building as a whole, the software immediately tells him or her how much that change will cost, how much energy it will save or add, and what the impact will be on the people using the building.

  “The architect is not just working with a set of drawings but with a data model that understands the whole building as a three-dimensional living system—its windows, air-conditioning, sunlight, lighting, elevators, and how they all interact,” explained Bass. The different teams working on the building can also interact and collaborate, as each change they make is dynamically integrated and optimized against the others.

  When technology enables such a huge leap in the prototyping process, it empowers the designer—who can immediately see all the implications of any idea he or she attempts. At the same time, the process removes so much guessing and therefore so many mistakes, and so much lost time and money. It also invites more experimentation and creativity.

  And the next stage is “jaw-dropping,” explains Bass. “We call it generative design.” The computer becomes a real design partner. “Say I want to design a chair, and I go to any furniture designer and say, ‘Please design me a chair.’ If I say that to any of us, ‘Please design me a chair,’ it’s going to look like something we understand as a chair.” But if instead you use Autodesk’s Project Dreamcatcher software and just say, “I need a platform at this height that can support this much weight, as lightweight as possible and using the least amount of materials but still be able to support weight at this height and with a platform this big,” the computer will come up with amazing variations on its own. Autodesk has some on display at its San Francisco offices, and they are otherworldly—but you can sit in them quite comfortably!

  As with Watson, when the power of machines gets amplified, the nature of the “power of one” shifts—creativity becomes, in part, about asking the best questions. “The world of the designer changes,” explains Bass, “from the form maker to the person that creates the goals and the constraints of the object to be designed—[and that person] then no longer creates the designs, but selects the design from a landscape of possibilities. We’re going from what was once a point solution to more of a collaboration [between man and machine], because with the computer’s help, the designer is now able to understand the whole range [of any system] beyond what any human mind can comprehend on its own.”

  The Trust Makers Who Also Rent Rooms

  As we said, the supernova is enabling radical changes in the cost, the speed, and the manner in which things are done, as well as the things that can be done—and enabling individuals or small groups to emerge from nowhere to do any of those things. Or how about all of them at once? There is no better example of super-empowered makers who have remade an entire long-standing industry in the space of a few years, with no money down, than the founders of Airbnb. It is a total child of the supernova—inconceivable without it and utterly logical and impossible to stop with it.

  And it all started so analog—with air mattresses.

  One of the cofounders, Brian Chesky, had parents who wanted just one thing for him when he graduated from the Rhode Island School of Design—that he get a job that came with health insurance. Chesky tried that for a while with a design firm in Los Angeles, but he got fed up and packed his stuff into his Honda Civic and drove to San Francisco to crash with his pal Joe Gebbia, who agreed to split the rental of his house with Chesky.

  “Unfortunately, my share came to eleven hundred fifty dollars, and I only had a thousand dollars in the bank, so I had a math problem—and I was unemployed,” Chesky told me when I first interviewed him for a column. But they did have an idea. The week Chesky got to town, in early October 2007, San Francisco was hosting the Industrial Designers Society of America, and all the hotel rooms on the conference website were sold out. So Chesky and Gebbia thought: Why not turn their house into a bed and breakfast for attendees?

  The problem was, they had no beds, but Gebbia did have three air mattresses. “So we inflated them and called ourselves ‘Airbed and Breakfast.’ Three people stayed with us, and we charged them eighty dollars a night. We also made breakfast for them and became their local guides,” Chesky, thirty-four, explained. In the process, they made enough money to cover the rent. More important, though, they discovered a bigger idea that has since blossomed into a multibillion-dollar company, a whole new way for people to make money and tour the world. The idea was to create a global network through which anyone anywhere could rent a spare room in their home to earn cash. In homage to its roots, they called the company Airbnb, which has grown so large that it is now bigger than all the major hotel chains combined—even though, unlike Hilton and Marriott, it doesn’t own a single bed. And the new trend it set off is the “sharing economy.”

  When I first heard Chesky describe his company, I confess to being a little dubious: I mean, how many people in Paris really want to rent out their kid’s bedroom down the hall to a perfect stranger—who comes to them via the Internet? And how many strangers want to be down the hall?

  Answer: a lot! By 2016, there were sixty-eight thousand commercial hotel rooms in Paris and more than eighty thousand Airbnb listings.

  Today, if you go to the Airbnb website you can choose to stay in one of hundreds of castles, dozens of yurts, caves, tepees with TVs in them, water towers, motor homes, private islands, glass houses, lighthouses, igloos with Wi-Fi, and tree houses—hundreds of tree houses—which are the most profitable listings on the Airbnb site per square foot.

  “The tree house in Lincoln, Vermont, is more valuable than the main house,” said Chesky. “We have tree houses in Vermont that have had six-month waiting lists. People plan their vacations around tree house availability!” Indeed, the top three all-time popular Airbnb listings are tree houses—two of which made the owners enough money to pay off their actual home mortgages. Prince Hans-Adam II offered his entire principality of Liechtenstein for rent on Airbnb (seventy thousand dollars a night), “complete with customized street signs and temporary currency,” The Guardian reported on April 15, 2011. You can sleep in the homes that Jim Morrison of the Doors once owned or take your pick of Frank Lloyd Wright houses or even squeeze into a one-square-meter house in Berlin that goes for thirteen dollars a night.

  In July 2014, when the World Cup soccer tournament was held in Brazil, it was only thanks to Airbnb that all the visitors had a place to stay, because Brazil had not built enough hotel rooms to house all those who wanted to come and watch the games. Said Chesky: “Roughly a hundred twenty thousand people—one in five international visitors—stayed
in Brazil in Airbnb-rented rooms for the World Cup; they came from over a hundred fifty different countries. Airbnb hosts in Brazil earned roughly thirty-eight million dollars from reservations during the World Cup. The average host in Rio earned roughly four thousand dollars during the monthlong tournament—about four times the average monthly salary in Rio. And one hundred eighty-nine German guests stayed with Brazilians on the night of the Brazil/Germany World Cup semifinal match.”

  It turns out there is an innkeeper residing in all of us! But while the insight of Chesky and his partners was profound, their timing was even better. Why? Because it coincided with 2007. Without the technologies born that year, Chesky said, there could have been no Airbnb. For starters, connectivity had to get fast, free, easy for you, and ubiquitous—from Hawaii to Hong Kong to Havana, which happened in the early 2000s, he explained. “Then people had to get comfortable giving their credit information and paying for things online and transacting online. People forget that when eBay started, people used to mail them checks and they would end each day with these huge bags of checks.” There had to be both a degree of experience for a wide swath of the global population with e-commerce and a peer-to-peer payment system, like PayPal, so people could pay on Airbnb without credit cards. The globalization of flows made that possible in the early 2000s. Then people needed to be connected online with real identity profiles, which is what Facebook helped make possible when it exploded out of high schools and colleges around 2007—so both people renting their homes and people looking to rent their homes would know who the other person was with a high degree of certainty. Because you weren’t just buying a book or selling a used golf club to a stranger on eBay—or even just looking to find a single roommate on Craigslist. You were going to stay in someone’s spare bedroom or rent them yours.

  You also needed a rating system, said Chesky, where both sides could rate each other and build reputations that became a kind of currency, which eBay and Airbnb helped to pioneer and popularize. You needed the mass diffusion of camera-enabled smartphones, so people could easily, and basically for free, photograph the room or home they offered for rent and upload the photos onto a Web-based profile—without having to hire a photographer (although many do). Steve Jobs solved that problem in 2007. And you needed a messaging system, like WhatsApp, founded in 2009, so people offering accommodations on Airbnb and those renting rooms could communicate for free about where and when to leave the key, and so many other details, and, as Chesky put it, “so they could take ‘the stranger’ out of the transaction and meet virtually beforehand.”

  And, finally, you needed to bring them “all together into a really well-designed interface—we were all design students—where you could do all of this with one touch,” said Chesky. Once those pieces were in place and scaled a few years after 2007, Airbnb just took off, not only because all that complexity—someone in Minnesota renting a yurt from someone in Mongolia—could be reduced to one touch, but also because it could be done in a way that parties totally trusted.

  In fact, the most interesting thing Chesky and his fellow Airbnb makers made was one of the most complex things to make at scale: trust.

  Airbnb’s founders understood that the world was becoming interdependent—meaning the technology was there to connect any renter to any tourist or traveling businessperson anywhere on the planet. And if someone created the trust platform to bring them together, huge value could be created for all parties. That was Airbnb’s real innovation—a platform of trust—where everyone could not only see everyone else’s identity but also rate them as good, bad, or indifferent hosts or guests. This meant everyone using the system would pretty quickly develop a relevant “reputation” visible to everyone else in the system. Take trusted identities and relevant reputations and put them together with the supernova and global flows and suddenly you have more than three million homes or rooms listed on Airbnb—that’s more than Hilton, Marriot, and Starwood combined. And Hilton started in 1919!

  “We used to only trust institutions and companies because they had a reputation and a brand,” concluded Chesky. “And we also only used to trust people in your community. You knew the people in your community and everyone else from the outside was a stranger. What we did was give those strangers identities and brands that you could trust. Do you want a stranger staying in your home? No. But would you like Michelle who went to Harvard, works in a bank, and has a five-star rating as a guest on Airbnb? Sure!”

  Chesky would love to apply what Airbnb has learned about the sharing economy to other realms and experiences, or, as he once put it to me: “There are eighty million power drills in America that are used an average of thirteen minutes. Does everyone really need their own drill?”

  The distance between imagining something, designing it, manufacturing it, and selling it everywhere has never been shorter, faster, cheaper, and easier—for engineers and non-engineers alike.

  Frankly, if it’s not happening, it’s because you’re not doing it.

  The Retailers

  If the supernova empowers innovators to establish radically disruptive new business models—models that can get to global scale overnight—it also allows established companies to compete with them more effectively than ever, if they are ready to disrupt themselves. If you are interested in that competition, you can’t do better than study how Walmart, the ultimate brick-and-mortar company, headquartered in a little town in Arkansas, has been trying to leverage the supernova to amplify its ability to compete with a giant retailer born entirely out of the age of accelerations—Amazon. Now, I pity any retailer that has to compete with Amazon, but Walmart is not just any retailer, so I thought it would be particularly revealing to see how it was rising to this challenge.

  In April 2015, Walmart’s CEO, Doug McMillon, invited me to address his company’s legendary Saturday-morning meeting at their headquarters in Bentonville, Arkansas—a combination variety show, corporate revival meeting, and general good fun, with an audience of some three thousand people. It’s quite a production. I told him that I would be happy to do it—I was the warm-up act for Kevin Costner—but that I wanted to be paid, and I wanted to be paid “a lot”—but The New York Times does not allow me to accept money from a company. He asked what I wanted. I said I wanted to be paid by having Walmart engineers show me what happens behind the scenes, in the supernova, when I try to make a purchase—we settled on a 32-inch television—on Walmart’s mobile app, using my iPhone. That is how they “paid” me, and it was worth the trip.

  Walmart.com launched in 2000, using off-the-shelf technology to establish an online e-commerce platform. It wasn’t a worthy competitor to Amazon. In 2011, Walmart got serious, and when the world’s biggest retailer gets serious it is really serious. It established a major software presence in Silicon Valley, hiring several thousand engineers. It wasn’t hard to recruit them, explained Neil Ashe, who was president and CEO of global e-commerce for Wal-Mart Stores, Inc., when I visited. “We told people: if you want hard problems, we got them—and if you are interested in scale we have that, too!” As a company “we have ‘conversations’ with between two hundred and three hundred million people a week.”

  What was especially striking to me was how fast and inexpensively Walmart was able to make its mobile app—thanks in large part to what had happened in 2007. Hadoop enabled them to get scale on big data. GitHub enabled them to benefit from all the retailing software invented by others, and APIs enabled them to partner with everyone. And the Moore’s law advances in storage, computing, and telecommunications deep into the second half of the chessboard enabled them to be competitive overnight.

  Jeremy King, chief technology officer for Walmart eCommerce, had previously been part of the tech team that built eBay’s e-commerce platform—before the supernova really existed and everything had to be built from scratch. “When I was at eBay ten years ago [in 2005], we built a very similar platform, and it took two hundred software engineers to do it—there was nothing else out there
like it at the time. It took several years.” Not anymore. Not after 2007. “In 2011,” King said, Walmart “built a similar platform thanks to the cloud, with twelve people, in under twenty-four months.” The thousands of software engineers it has hired since are to infuse IT into every aspect of its business.

  In the age of GitHub, said Ashe, “when we went to build our own search engine, it just relied on the best open-source option for creating an index of searchable data—called Solr—and then we wrote our own relevance engine on top of that.” In the old days, the code for that was kept internal to a company, but now they are all social on GitHub. When all of these toolboxes and components are in the cloud, available through open source, and infinitely mashable thanks to interoperable APIs, “it is all about how you put them together that creates the customer value,” said Ashe.

  Now, back to my search for that 32-inch television. As soon as I put the number “32” into the Walmart app on my phone, its algorithms and database knew from experience that I was probably looking for a “32-inch television,” even if I misspelled both “inch” and “television.” Then, within milliseconds, it displayed a variety of 32-inch televisions in stock.

  “The customer is looking for a frictionless experience,” explained Ashe. “People are so impatient now.” He said Walmart knows that every hundred milliseconds people lose patience. “They will give up [purchasing something] over a half-second [delay] … It takes seven milliseconds to move data from our data center in Colorado to our center in Bentonville—and that means a fourteen millisecond round-trip. So we can’t use that database in Colorado for certain transactions. We have to rely on the data in Bentonville.”

  Indeed, Walmart has discovered that the consumer can actually tell a difference in milliseconds—a thousandth of a single second—and when they hit a buy or send or search button they expect a response in ten milliseconds. Walmart research has found that every half second you add to the time it takes for a customer to get a response when purchasing online results in two or more percentage points in lost transactions over the millions it does every day. That’s real money.