Operational Scalability Is Insane
Srinivasan: "It's now feasible for you in your room to trade with someone across the globe at any time of day without special hardware. An internet store can operate 24/7. There's no zoning regulations, no limitations in terms of how many stores you can have. You don't need clerks, you just need databases."
Srinivasan: "Think about the fact that Amazon's website gets a lot of traffic. Just imagine how much their backend gets. If the website gets a lot of traffic and can process transactions within microseconds, then at some point those transactions are handed off to a physical operation which is definitely not processing them in microseconds."
You don't need clerks, you just need databases and the ability to handle the transactions.
Global Market, No Geography
Srinivasan: "With an internet startup, in theory you can go after the entire world. You can more easily attack a market in Indonesia or South America than you ever could before. Friendster famously became very popular in Indonesia, more so than in the US."
Srinivasan: "A business in North Dakota can market its wares to the entire country. It's no longer constrained by geography or protected by it. There's not just more opportunity, there's more competitors. Everybody is in some sense adjacent to you now."
It's no longer constrained by geography or protected by it. There's not just more opportunity, there's more competitors. Everybody is adjacent to you now.
Software Eats Everything
Srinivasan: "Software is in many ways the most general product imaginable. Whether that's news, entertainment, material goods, communications, transportation, energy, medicine -- anything you can think of, software is upstream of it."
Srinivasan: "Anything that has an informational component, which is pretty much every industry, is going to be hollowed out with a database and an API at the center of it. The company that does that is going to have operational efficiencies far greater than any of the existing incumbents. That's what's happening with Uber doing that for taxis and Airbnb doing it for hotels."
Anything that has an informational component is going to be hollowed out with a database and an API at the center of it.
You Can Crash Without Dying
Srinivasan: "When Google or Facebook crashes, people yawn and wait for the site to come back up. But when there's a physical car that crashes or a drug is contaminated, people die and there's new regulations that are passed. This is a colossal difference in the penalty for failure and it's one of the big reasons why internet startups are allowed to move fast."
Srinivasan: "You can move fast and break things in a way that you just can't in the physical world. But crucially, because we can simulate more and more of the world on the computer -- virtual wind tunnels, Monte Carlo risk models, stress tests -- dying can be done on the computer many times before we actually die in real life."
When Google crashes, people yawn. When a car crashes, people die and there's new regulations. That's a colossal difference in the penalty for failure.
Build Your Own Tools for Free
Srinivasan: "For a few hundred dollars you can purchase this super powerful general-purpose computer that you can use to develop arbitrary software and communicate with any other computer in the world."
Srinivasan: "If you're a mechanic and you need a special wrench, you need to go to the store and order that wrench. If you're a software engineer and you need a special tool, all you need to do is think it up and then type furiously into your keyboard, and suddenly this wrench of pure electrons is basically there."
If you're a software engineer and you need a special tool, all you need to do is think it up and type furiously into your keyboard. This wrench of pure electrons is basically there.