Saturday, May 17, 2008

Tim O’Reilly, in want of a new business model, and a chaser

In the world of computer publications, open source, and conferences, Tim O’Reilly is Mr. Big. If you want to know about some computer language or product, especially open source, you’ll probably learn it from an O’Reilly publication. If you’re going to conferences to meet your geeky comrades, it’s likely an O’Reilly conference. The guy’s a celebrity in geek land, and I got to meet him. He was drunk.

There’s a relatively cheap little bar near the Caltrain terminal in San Francisco. The bar is conveniently located for people, like me, who have missed their train and have a little time to wait for the next one. I sat at the bar, ordered my favorite brand (“whatever you have on tap”) and looked through the pile of JavaOne literature I’d picked up that afternoon, until I noticed him.

There he was! Tim O’Reilly himself. I watched him for a few minutes, getting up my nerve to go talk. He was just a few stools from me, with a pile of 8-12 x 11 papers on one side, a loose pyramid of balled-up papers on the other, and a line of four shot glasses in front. He would look at one of the flat pages for a few seconds, shake his head, crumple the page, and add it to the balled-up pile, which soon starting spilling onto the floor. I heard him order “another whiskey and a chaser” and saw the bartender pour him a shot of Jameson’s and a shot of Jack Daniel’s, which he drank in quick succession.

“Aren’t you Tim O’Reilly,” I said as I took the stool next to him.

“Hmmm? Uh? Oh, yeah, that’s me. Pleased to meet you.” He barely glanced my way.

“Jameson’s and a Jack Daniel’s chaser,” I told the Bartender. The butterflies were going crazy in my stomach and I wanted something to mellow them out. The bartender looked at me like I was a nut, but poured my shots, which I drank in a quick one-two, just like Tim O’Reilly had done. Whoah! The butterflies started a revolt up my throat, but it didn’t last long and I managed to keep it all down.

“Mr. O’Reilly, sir?”

“Huh? Oh. Call me Tim.”

“Tim, do you mind if I tell you about an article I’d like to write for your Make magazine, and an accompanying book for O’Reilly Media?”

“Want to talk shop, huh? OK. I’ll hear your idea, but there better be lots of pictures. Ha ha ha!” He laughed real hard at his own joke, so I laughed too, without knowing why.

“Well, Tim, the idea is for a video-conferencing system created with just a standard cell-phone, a half-reflective mirror, a white sheet, some simple cabling, and a bundling of open-source software. In your Make magazine we could publish instruction for putting the whole thing together. The software part is kind of complicated (software being what it is) and so that’s the reason we’d want to also publish an O’Reilly book describing how to use and tweak the system. I’ve got it all figured out except for which animal should appear on the book cover.”

“Video conferencing. Humph.” I clearly had not impressed him.

“Yeah, it would be great. For the first time there would be a cheap video conferencing system that just about anyone could use. Teams could use it. Families could use it. Your keynote speeches could be filmed in your living room and shown simultaneously to anyone anywhere in the world.”

“Holy shit, man, you want to make it cheap and easy to do conferencing?”

“Yes! Think how much money people and companies will save from flying around just to talk. If done right, I think remote conferencing could even replace things like the JavaOne conference down the street.”

As he looked at me his eyes were not steady in their sockets. I didn’t know if it was the six or eight shots he’d had, or the excitement of my proposal. After ten seconds he spoke. “I need conferences. O’Reilly Media, and all its employees, need conferences. That’s how we make our money, support our families, feed our kids, with conferences.”

“Oh, this wouldn’t replace all conferences. There’s still room for the well-done, large, professional shows, like the ones you put on.”

“Ah, fuck it! Who am I kidding? We can’t make money on shows any more. Everyone is cutting expenses, which means they don’t send their people to our conferences. Even if they wanted to come, the price of travel is far too high. I’m not even sure it’s ethical to expect people to fly anymore. So, fuck it! I’m ready to give up on shows.”

“Give up on shows?! Tim, I was at your Maker Faire this month and it was huge! HUGE!”

“Yep, about 80,000 people, by my estimation.”

“Right. Huge. We bought tickets for something like $25, so you must have pulled in… uh… 25 times 80,000 is, um… huge! How can you give up on shows?”

“80,000 people came, that’s true. But do you know how many tickets we sold? Legitimate tickets? For every legitimate ticket we sold, four people came in with counterfeits. Some group named TickeShare Bay has been making machines that let people duplicate concert tickets. I even let TicketShare Bay have a booth at the Maker Faire last year. I had no idea their machines weren’t just for concert tickets, but would also work on tickets for O’Reilly events. All our shows are like that now, overrun by counterfeiters. The legitimate tickets weren’t even enough to cover insurance—you have any idea how much it costs to insure a show full of do-it-yourselfers creating machines to shoot, blow up, laze, and breath fire?”

“Oh, man. I had no idea. I feel terrible.”

“Don’t worry, buddy,” he told me. “It’s not your fault.”

“Uh… Well… um… yeah… not my fault.” I suddenly felt really bad for the guy. “Cheer up, Tim. Conferences may not be going so well, but you still have your book empire. I buy lots of your books; all the programmers do. If you want to use linux, or ruby, or java, or apache, or any of the open source software, you have to buy an O’Reilly book to really understand it. You know what they say: The only one getting rich from open source is Tim O’Reilly. Ha ha ha.”

He wasn’t laughing. “It used to be that way. Back in the day we could have some guy hack out a buggy piece of code, give it away free, write a book on how to use it, and we’d both make a bundle from selling the book. But that’s all changed. Soon after we published our book on ‘Open Source Publishing’ our own book sales plummeted. Now each time we publish a book, our first sale usually goes to someone in India or Honduras, and the next day the market is flooded with an identical book cheaper or online and free (with embedded advertising).”

“Dude, that’s terrible. I saw lots of O’Reilly books at the JavaOne conference. Were they…”

“Counterfeit. All of them. Hell, Scribd will do it for free right here in San Francisco.”

“Oh man! That sucks. If you can’t make money from conferences or books anymore, what are you going to do?”

“We’ll keep innovating, of course! If the old business model doesn’t work, we’ll try a new one, that’s what I’ve always said!” He said this with bravado, but I don’t think his heart was in it. “We have a couple of plans. We’ve tried lawsuits.”

“Good idea. Sue the bastards who copy your books.”

“No, not them. They don’t have any money. We’re going to sue Google, that’s where the money is. We caught Google using the term ‘Web 2.0’. That term is ours, we own it. See, I’ve always said that software should be open and shared, but not trite, meaningless terms like ‘Web 2.0’. Pretty soon, if the lawsuit works well, we’ll own Google.”

“And if the lawsuit doesn’t work?”

“Then on to plan B: Advertising! Instead of publishing we’ll get into the advertising business.”

“Oh,” I said. “The books will be free but will contain ads?”

“No. The books themselves will be ads, and the books’ writers (a.k.a. ‘advertisers’) will pay us to publish them. So it won’t matter that our books are duplicated, because the advertising will still get out there. We recently tested this out with a book called ‘Subject to Change’. The whole book is an advertisement for Adaptive Path. So far it’s working out great.”

“Congratulations, Mr. O’Reilly. You’ve innovated yourself out of a problem. Another round?”

We had our next round. And Tim O’Reilly really started to look more upbeat, but only for a little while. When he returned to looking at his pile of papers, a sick feeling overcame his face.

He said, “Books-as-advertising is only a short-term solution. People are starting to catch on and I miss publishing real content. So I put my best tech guys into finding a solution to our book duplication problem. Here," he slammed his hand on the pile of papers he’d been reading and crumpling, "is the solution!"

I looked at the top page. I squinted. I tilted my head and looked from different angles. “I don’t understand.” I said. “What is it?”

“It’s brilliant, is what it is. At least that’s what my tech guys tell me. Our problem has been that it’s too easy for the ‘open publishers’ to scan our books and to use the OCR algorithms to copy them (algorithms we published, by the way, in our best-selling ‘Open OCR’). But this problem has been solved on web pages, right? Right? Have you ever tried to create an account on a web page but first you need to type in the weird-looking text in the box.”

“Right,” I said. “CAPTCHAS. People can figure out the distorted text, but computer algorithms cannot.”

“Exactly!” he shouted, pounding his hand again on the pile of pages. He was trying to sound convinced, but he sure didn’t look it. Really, he was looking a little sick about the whole matter. “Look at this book here? This book will be our next O’Reilly publication. No OCR machine will ever copy that,” he said as he handed me the page on top.

I honestly could not figure out what the hell he was showing me. “Maybe it’s too dark in here for me to read it,” I said. “Let me take it somewhere where there’s more light.”

So I took the page into the restroom, where there was more light, and there I figured it out. It was a copyedit page for a book, much like any other book, but every word was in a different CAPTCHA form. I labored through a few sentences, barely making out something about “enterprises” and “open source movement” and “linux” and “venture capitalists” but it was damn hard. Here’s a picture I took with my iPhone. You might thing the picture just came out bad, but no, it really looked like this:

Just then Tim O’Reilly came rushing into the restroom in time to spew vomit against the urinal. He grabbed the CAPTCHA page out of my hand and used it to wipe his face. (Not a pleasant site.) As he crumpled the page and threw it into the trashcan, he said “at least that book will be good for something.” And he laughed. And then I laughed too.

I left Tim O’Reilly behind in the restroom to wash up. I paid the bartender for all the drinks, both mine and O’Reilly’s, and left just in time to catch my train.

I’m really thankful to have met Mr. Tim O’Reilly in person. Not only is he is a great and brilliant man who is fun to drink with, but also our encounter gave me an idea for something new and challenging to work on—I’m always on the lookout for new software business ideas.

On the train ride home I worked up an algorithm for decrypting obfuscated text.


  1. Of course you don't remember. You were shitface trashed.