The Pebble and the Avalanche: How Taking Things Apart Creates Revolutions

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The Pebble and the Avalanche shows how the Internet, the auto industry, music downloading, and other rapidly evolving industries are all connected by the same dynamic -- disaggregation. Moshe Yudkowsky shows why this dynamic is crucial to survival in the 21st century marketplace, and how you can use it to bring about change in your industry. Disaggregation means taking things apart -- for example, the break-up of AT&T, which greatly improved phone service. But there are more subtle examples. Separating information from the storage medium -- digital music doesn't rely on records, tapes, or CDs; digital photographs don't require paper; and digital movies don't need film -- has enabled millions of people to create and share their work (and others') far more easily than ever before, with enormous implications. Think of this process as an avalanche: at the top of a mountain, rocks are jammed together in a solid mass. Pry some of these rocks loose and you will unleash a tremendous outpouring of energy that sweeps everything from its path. The same thing happens in technology: with the right innovation, you can pry the pieces of technology apart and unleash an outpouring of powerful ideas that shake apart whole industries. Yudkowsky details exactly how disaggregation works, describing five different ways of taking things apart, and the many ways it can be used to generate new innovations. The Pebble and the Avalanche provides strategies for successfully adapting to a disaggregation revolution, and points towards the future, identifying several industries that are about to be completely transformed by disaggregation.

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Chapter One Disaggregation: The Driving Force of Revolution

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One of the first safety rules I learned while hiking in the mountains was to never toss pebbles or stones down the side of a mountain. There’s the danger of hitting someone—a pebble that falls a thousand feet can do an impressive amount of damage. The other danger is starting an avalanche. It’s a tiny little pebble, true; a pebble that size can dislodge only another few pebbles, true; but if enough pebbles start to tumble, soon the large rocks start to move, and your one little pebble triggers a landslide.

An avalanche releases energy—a really impressive amount of energy. Shift a few pebbles, take apart the structure that’s holding the rock formations together, and suddenly you release an incredible, unstoppable force that transforms the landscape. Avalanches snap trees in half, shove boulders out of the way, and cut a huge swath out of forests. However, despite their massive power, when avalanches stop, you’ve still got the most of the pieces you started out with. All the pebbles that started off at the top of the mountain fall to the bottom—the pebbles aren’t gone, they’re just arranged differently—and now you have a nice collection of interesting pebbles, conveniently located here at the bottom of the mountain. They can be cut, polished, and made into jewelry; they can be used to build walls and pave garden paths. They’re still useful in many ways, and so is all the other debris that’s been brought down by the avalanche.4

 

Chapter Two Starting Revolutions: What to Take Apart

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Disaggregation goes beyond simply taking things apart, and this chapter explains the details—how disaggregation works, what it does, and how to decide whether a particular innovation is important.

This chapter follows the same general outline I’d use to write up an analysis of an innovation. It’s modified, of course—instead of discussing just one innovation, I’ve included some examples, and I’ve added all sorts of explanations. Still, if you want to analyze an innovation, write your own version of this chapter and you’ll cover all the important points. (You’ll need to read the next chapter, too.)

Here are the steps to analyze an innovation:

Step 1: Sort the Innovation

What is it, exactly, that the innovation disaggregates?

Step 2: Answer the Basic Questions

How does the innovation work?

Step 3: Assess the Revolutionary Potential

Based on the information from Steps 1 and 2, is this a revolutionary innovation?

In the next few sections, we’ll discuss the details of how to analyze an innovation.

Someone hands you an innovation, and you think it works by disaggregation. Here’s a question you need to answer: what is it—exactly—that’s being disaggregated?

 

Chapter 3 Benefits of Disaggregation: The Revolutionary’s Bill of Rights

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Chapter 2 explained how to analyze an innovation: how it disaggregates, what it disaggregates, how it works, and what basic human desires it fulfills. In this chapter, I’m going to discuss another important matter: what benefits to expect from an innovation. The universal benefits of disaggregation are:

I call them “universal” benefits because they show up, consistently, whenever an innovation works by disaggregation; every example and every case study in this book demonstrates at least some of these benefits. If you’re a revolutionary—if you’re working hard on innovations that disaggregate—then this list is your bill of rights. Your innovation should bring you at least some of these benefits, and possibly all of them.22

When disaggregation triggers an avalanche, it’s not gravity that pulls on the rocks and gets them moving. It’s creativity, pushing from behind, that sends the avalanche roaring down the side of the mountain. Creativity is the force behind the avalanche—creativity, as it finally escapes from behind the rocks that were holding it back.

 

Chapter Four Four Stages to Revolution: Devise, Interface, Accept, Evaluate

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Revolutions don’t just happen; they have to be planned and executed. In this chapter, I’m going to discuss strategies and tactics to help accomplish the four stages of disaggregation, which are:

In this first stage, you analyze your problem, generate a solution, and then carry it out. The trick is to construct those key ideas that lead to a solution, and here are a few methods to help that process along—ways to think about disaggregation that lead to insights into the problem and its solution.28

Simple Inspection

Sometimes it’s very easy to see how to achieve disaggregation. If my problem has to do with my company’s structure, then my company is probably already divided into neat departments, sections, and divisions, and they even have convenient names like Shipping Department and Widget Solutions Division. If my problem has to do with computer hardware, I will find conveniently discrete items when I open up the computer case: disk drives, memory cards, and cables. I have no trouble imagining how to take a computer apart into separate components.

 

Chapter Five From Horses and Buggies to Jet Planes: The Revolution in Manufacturing

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Where do all these machines come from? My house is full of machines, from little clever-but-simple ones like retractable ballpoint pens, to medium-size ones like paper shredders and microwave ovens, all the way to full-size ones like recliners and washing machines. My house is partly a machine: the walls are full of machinery (pipes, switches, cables, and ducts), and so is the roof, with its vents and fans. The furnace, water heater, and air conditioner are hidden in the basement.

I’ve visited reconstructed homes of the late 1700s, and there’s nothing remotely comparable to what we have today: the most intricate machine in the house is a technology that dates from the Middle Ages—a spinning wheel sitting in the corner. Furniture drawers open and close, and chest lids can be raised and lowered. The door has a metal hinge; that’s the most complicated bit of machinery built into the house itself. These houses were bare of almost anything we think of as a machine. The people of the time certainly could and did build complicated machines, but none of them were in ordinary people’s homes. How did our modern homes fill up with today’s wonderful machines?44

 

Chapter Six The Automobile Takes On the Railroads

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Some innovations focus on a single great idea, execute it well, and completely overturn an established industry. This case study is about one such innovation, the automobile.

At the beginning of the Industrial Age, it was difficult if not impossible to transport the output of a factory across any significant distance; horse-drawn carts couldn’t keep up with the tremendous output of a large factory. To help solve this problem, England and the United States built canals to move goods, but barges are relatively slow, and canals can’t reach everywhere.

The invention of the railroads made mass production useful—the output of a factory could travel quickly and economically to anywhere there was a railroad, and railroads can go just about anywhere. Besides moving goods, railroads offered another terrific benefit, the ability to move people safely and reliably. Before railroads, a journey between two cities wasn’t just a trip, it was an adventure—an adventure that not everyone survived. After railroads, a cross-country journey soon became as simple as buying a ticket and hopping aboard a train.52

 

Chapter Seven The Internet’s Permanent Revolution

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The Internet operates in a state of almost total anarchy. My computer defenses record upwards of a hundred attacks a day against my office network by viruses, crackers, and other malicious intruders, and that’s a drop in the bucket compared with some systems. Then there’s spam. Over 80% of the e-mail I receive is spam, and if it weren’t for my antispam filters I would have given up on e-mail long ago.

Security and privacy are your problems to solve when you go online. As for getting online in the first place, Internet service providers (ISPs) aren’t common carriers and they don’t have to carry your data if they don’t want to, and, even among themselves, the ISPs trade data under a series of ad-hoc agreements. Anyone can send any kind of data they please, anyone can connect to the Internet, and governments find it almost impossible to censor or restrict Internet access. For a surprisingly long time, the root name server for the Internet—the supreme worldwide authority that translates alphabetic names like “www.example.com” into the series of numbers that computers actually use—was an ordinary computer underneath someone’s office desk.62

 

Chapter Eight Interfaces and Standards: The Nuts and Bolts of Modern Civilization

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Somewhere in my basement I have my Ph.D. thesis in electronic format on a couple of disks—eight-inch floppy disks, to be exact. Floppy disks that size haven’t been made for years, and they’re about as useful with my present computer as a pair of stone tablets. Well, actually, stone tablets would be more useful; I could read stone tablets. I’ll never be able to read those old floppy disks.

My basement is full of old computer equipment that still works but isn’t useful anymore—the equipment is just not compatible with modern computers. I’ve got both dot-matrix and daisy-wheel printers, a brand-new six-pen plotter along with dried-out pens, a stack of Apple’s old Mac Plus computers, and a defective TRS-80 Model 100 laptop computer (16 kilobytes of RAM! Three-line LCD screen!). I’ve got old memory cards, a scanner without software, the guts of obsolete Palm Pilots, and a tangled nest of cables that won’t connect to anything. I often tell myself, or my wife, that I hold on to these old parts because they occasionally come in useful repairing old pieces of equipment. That does happen from time to time, but mostly it’s just the pack rat instinct common to members of the technical community.82

 

Chapter Nine Coping with Surprises

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I enjoy a surprise as much as the next person, but I have to admit that there are some surprises I can really do without, such as jury duty; dental work; late night adventures in plumbing repair; or an early morning round of hand-to-mouse combat in the kitchen. I suspect that most everyone will agree that the sudden realization that your company is in the path of an avalanche is something else that isn’t very popular. As I hope I’ve made clear, sweeping technological changes can’t be avoided—and because they will happen, you’d best be ready for them. In this chapter, I discuss strategies to cope with the inevitable reality that one day, despite your best intentions, you will be surprised by a technological revolution.

The primary example I use in this chapter is digital photography. Digital photography accomplishes a series of remarkable disaggregations.

Here is a list of the innovations that went into popularizing digital photography:

Digital photography is a classic case of synergy, a revolution built out of parts of other revolutionary technology. The revolution didn’t happen overnight; anyone who was paying attention had time to prepare for the consequences. And as the cost and size of each item on the link continues to shrink, the revolution is bound to continue.

 

Chapter Ten Marx, Lenin, and Gates: Failed Counterrevolutions

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Stopping an avalanche is a losing proposition, but that hasn’t stopped people, companies, and nations from trying. In this chapter, I’m going to discuss the strategy of resistance—the strategy of trying to stop or reverse disaggregation. There have been a few successes. Well… not really successes. I don’t think I’ve found any examples of permanent victories over disaggregation. What I’ve found is that suppressing disaggregation usually relies on force, and, although force is very effective in the short run, in the long run it’s almost impossible to permanently suppress a good idea. Let’s look at some of the examples, starting with an experiment in reaggregation that killed millions and millions of people.

One of the worst regimes of the twentieth century was that of the Soviet Union. The Soviet Union dominated an empire that stretched across Asia into Europe. The government deliberately murdered tens of millions of its own citizens and sent many others into a vast system of internal prison camps. Why? What drove the Soviet Union to such extreme behavior?

 

Chapter Eleven The Role of Government

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“All bad precedents began as justifiable measures.”

—Julius Caesar

If you’re worried about competitors with new ideas, I highly recommend legislation. Legislation is an absolutely terrific method to quash upstart innovators. State power applied against your competitor’s ideas can prevent disaggregation from taking hold, or reverse a trend in your competition’s favor. The automobile industry and the liquor industry have made both excellent use of legal maneuvers to forestall disaggregation.

The threats to the liquor industry and the automobile industry came from the avalanche of change unleashed by the World Wide Web. I live in Chicago, and one day I went looking for a bottle of Old Peculier beer. In the days before the Web, I didn’t have many options; I could call local liquor stores or look at ads in the local newspapers. Getting a price from a liquor store in New York or Montana was just about impossible. The Web changes all that—the Web disaggregates location from information. A liquor store in Wyoming is only a mouse click away.122

 

Chapter Twelve Predictions: Three Revolutions in Progress

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Question: I’ve got names and addresses stored in my PDA, in my cell phone, on two different computers, and on at least two different Web sites; none of them are synchronized with each other. Why not?

Answer: At least a half-dozen different industries are battling to control your address book.

Question: Why does the phone ring when I’m watching football games? Answer: Your phone isn’t smart enough to realize you’re watching the game. That’s about to change.

Question: How does The Wall Street Journal manage to publish a print edition, a Web edition, and a mobile edition? Because each edition is different, don’t they have to rewrite the story three times?128

Answer: At first they had to rewrite the stories, but today it’s a lot easier—now that they have started to use some pretty significant technology in their back offices.

Each of these questions and answers comes from a revolution in progress. One started when a quiet innovation triggered multiple avalanches and at the same time founded a new industry. Another avalanche is rapidly sweeping competitors from the marketplace but will likely cause its current round of investors to lose billions of dollars. One revolution is only just beginning—and might never get off the ground.

 

Chapter Thirteen Getting Started, Finishing Touches

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If you have a problem in hand and want a solution, here’s how to get started. Even if you don’t have a burning problem to solve, I recommend that you pick one anyway and apply disaggregation to solve it by following the steps in this chapter. (I’m a big believer in practical work to make certain that I understand what I’ve studied.) In the rest of this section, I’ll describe the steps to take to turn a problem into a solution.

Ask the Right Question

Chapter 4 presents the basic framework of how to use disaggregation to solve problems. We’ll start with the steps outlined in Chapter

4 (devise, interface, accept, and evaluate) and add material from other chapters as we go along.144

The first step is to see whether you find a solution to your problem immediately. A plain, uncomplicated solution may just leap out at you, especially after practice with the material in this book. If nothing is immediately obvious, here are three methods for generating an innovation:

Assess and Extend the Proposal

In Chapter 2, we saw how the most powerful avalanches start: when the innovation disaggregates in multiple categories, when it has many disaggregations even in a single category, or when the innovation fulfills a basic human desire in a particularly effective way. Can you improve your innovation to make it—potentially at least—more powerful?

 

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