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O’Reilly: When something is commoditized, an adjacent thing becomes valuable

Published: Mar 14, 2011 2:44 pm

Summary of the video:
1. In this video Tim talks about what “Web 2.0” means. (How he views the internet as an operating system).

2. Tim realized that software was becoming a commodity. He saw the same thing play out earlier with hardware in the IBM era. When something is commoditized, an adjacent thing becomes valuable. In the IBM era when hardware was commoditized, software became very valuable (and Microsoft won).

3. The web is a platform. The example Tim gave was Napster. Napster worked by indexing the songs you already had on your computer, not from a pre-determined master list. This was a huge shift in thinking about what the web could be about.

4. Tim encourages entrepreneurs to not “paint by numbers” when it comes to solving problems. Just because one company was successful doesn’t mean you should clone their product.

Be sure to checkout part 1 of this interview where Tim talks about how he Bootstrapped O’Reilly Media with “happy accidents”

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Hi, I'm Paul Hontz.

I'm a YC alumn and I love startups. I created TSF to highlight companies I find interesting. You can learn more about me here.

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