A History of Silicon Valley

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These are excerpts from Piero Scaruffi's book
"A History of Silicon Valley"

(Copyright © 2016 Piero Scaruffi)

The Selfies (2011-16)

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The Sharing Economy

The "gift economy", about sharing content for free, rapidly evolved in something more lucrative and also based on the contribution of the masses: the "sharing economy", in which people make available to others under-utilized assets such as rooms and cars.

Airbnb, founded in 2008 in San Francisco by two alumni of the Rhode Island School of Design, Brian Chesky and Joe Gebbia, and by Nathan Blecharczyk, was the most famous of the bunch, offering rooms or houses for short stays in dozens of cities (600,000 rooms in 160 countries by mid 2014).

In 2007 Logan Green and John Zimmer debuted a computerized ridesharing service at Cornell University called Zimride. Relocating to San Francisco, in 2012 they launched a smartphone application called Lyft that allowed anybody to offer and order car rides. Sunil Paul launched SideCar, also in 2012, with the exact same business model (except that SideCar "matched driver and passenger rather than simply "dispatching" a driver to a passenger). In 2009 in the same city Travis Kalanick and Garrett Camp had launched a similar smartphone app, UberCab (later simply Uber), which initially was for limo drivers. Lyft democratized the concept and found a huge audience among ordinary people driving ordinary cars and among ordinary people going to ordinary places. In fact, the typical Lyft passenger was a social animal, ready to strike a conversation with the driver, whereas the typical Uber passenger was still viewing the driver the traditional chauffeur. By 2014 Lyft had spread to over 30 cities, and Uber had converted to Lyft's populist business plan, spreading to more than 230 cities in 50 countries and adding on average one city per week.

Startups like Airbnb and Uber turned a very physical business into a purely software business. For example, Uber combined Amazon's cloud service, Google's Maps service, Twilio's messaging service, SendGrip's email service and Braintrees' payment service and didn't own a single car, but by 2015 it became the biggest taxi company in the world. Similarly, Airbnb was the largest "hotel" chain in the world but didn't own a single hotel.

SnapGoods, founded in 2010 in New York by Ron Williams and John Goodwin, facilitated lending and borrowing household items from cameras to toasters.

The sharing economy was born during the Great Recession, when people were busy saving every penny they could, and the whole idea was ironically reminiscent of the way things worked in the old days in communist countries like the Soviet Union, when you simply flagged down cars going in your direction and offered money to be taken there.

A demonstration of how powerful the users could be in shaping a service came in 2013 when Google decided to acquire an Israeli company to replace its Google Maps service on smartphones. Freemap, founded in 2006 by Ehud Shabtai (renamed Linqmap in 2008 when Uri Levine joined and later renamed Waze), was a community-based traffic and navigator application for smartphones that was able to provide live information about road and traffic conditions thanks to feedback from its users. Waze was inferring traffic conditions from the speed of its users, and it allowed users to report accidents and even police cars. Google Maps, the most popular mapping software of all times, was a static service, that relied on hired hands to doublecheck the accuracy of its maps. Waze was a highly dynamic service, capable of adapting to continuously changing circumstances. The difference was that Waze was driven by the users, whereas Maps was driven by a Google team.

Jack Conte (a musician, disc-jockey and filmmaker) and Sam Yarn founded Patreon in 2013 in San Francisco, a crowd-funding platform for artists and musicians where people could support their favorite "content creator". By the end of 2014 patrons were contributing $1 million per month to Patreon's artists.

click here for the other sections of the chapter "The Selfies (2011-16)"
(Copyright © 2016 Piero Scaruffi)

Table of Contents | Timeline of Silicon Valley | A photographic tour | History pages | Editor | Correspondence