Interview with Tim O’Reilly
By Donald T. Hawkins
I caught up with Tim O’Reilly after his keynote address at the SSP Conference in San Francisco, CA, on June 14, 2013. (A full report of O’Reilly’s keynote is on my Out and About blog posting) O’Reilly is Founder and CEO of O’Reilly Media, a leading publisher of books for system developers, including a highly regarded series of books on software systems, many featuring engravings of animals on their covers (for the story behind them, see here and the subsidiary sites.) In addition, O’Reilly Media organizes a series of technology-oriented conferences such as Strata on big data, OSCON on open source, and Velocity on website performance and operations – the complete list. And as O’Reilly mentions in the interview, the maker movement (“makers” are those who bring a creative do-it-yourself mindset to technology) has been a significant interest of his company. O’Reilly is also the creator of a widely read blog, O’Reilly Radar, and continues to be a leading contributor to it.
DTH: I thought it would be interesting to start with a little history. When was your company founded?
TO’R: There are several answers to that question. The initial incarnation of the company was a consulting firm called Brajer, O’Reilly & Associates that was started with a friend in 1978. We broke up that partnership in 1983, and I incorporated O’Reilly and Associates. The real beginning of our business as it is known today was in 1985, though, when I got into publishing.
DTH: Were you in the publishing industry before you started O’Reilly Media?
TO’R: No. My original background was in Greek and Latin classics, and I got involved in the business because I had a friend who was a programmer and who was asked to write a manual. I thought of myself as a writer and said I would help him. I helped him write the manual that he had been hired to do, and we went into business together as a technical writing team. We had the thesis that a programmer and writer together would get better results than either alone.
DTH: Do you think that is still true today?
TO’R: It worked pretty well for us!
DTH: You gave us a lot of information about your product line in your keynote talk. What are your main target markets?
TO’R: I think that probably the biggest target market is software developers, but there are various sub-categories in that. One of our fastest growing business areas is something we have called “Strata”, which is about the new field of data science. It obviously overlaps with development, but it has a lot more math and statistics in it. Another very big area for us is web performance and operations. At the end of the day, all web applications have people who are keeping them running, which is a new profession.
DTH: And that leads into the whole maker business, which seems to be where you are going in a big way.
TO’R: We actually just spun Maker Media out as a separate company. The whole maker rediscovery of hardware and so on is certainly part of our business. We have also been doing explorations in healthcare and have launched a data in healthcare conference called “StrataRx”.
DTH: I guess many people, if not most, are familiar with the books with the animals, etc. on their covers.
TO’R: That’s right.
DTH: I remember walking into your offices several years ago and found myself not in a typical company reception area but in a library. I was very envious and said, “I want one of everything!” I thought that was very interesting: you walked into what was basically the company’s product display room. Do you have plans for expansion of the company into other areas?
TO’R: Yes, all the time! But we tend to find areas that overlap with what we already do. So for example, we recently began working with GE on something that they call “the industrial internet” which overlaps with the maker movement because it is about sensors and with Strata because it is also about data. We have an enterprise focus and are looking at the impact of open on the enterprise in general. Another new area that we are exploring is what kind of businesses we could get into in healthcare.
DTH: Is the company totally privately held?
TO’R: Yes, mostly by my family.
DTH: Is it profitable?
DTH: How many employees are there in the company?
TO’R: We have 220 U.S.-based employees, and about 300 worldwide. There are another 150 or so in affiliated companies like Safari Books Online, Maker Media, and O’Reilly AlphaTech Ventures.
DTH: How much of the company’s future energy will be focused on publishing? Do you think that in five years or so, your core business will be more focused on data production, curation, etc.?
TO’R: Only about 50% of our business is in publishing today. While we think that publishing will be an important part of the mix for a long time, we have never defined ourselves as a publisher. We tell ourselves that we’re in the business of changing the world by spreading the knowledge of innovators. That’s how we branched out from publishing into conferences, online subscription services, online training, digital distribution, and venture capital.
DTH: I asked you in the conference about discontinuing the Tools of Change (TOC) for Publishing conference, which is a very interesting development. [In answer to my question, O’Reilly said that New York is a very expensive city in which to hold a conference, and they never made any money on TOC. Although they did not think they needed to continue TOC, O’Reilly did not rule out the possibility of organizing another event focused on publishing in the future.] Do you think it would still be alive if you had kept it where it started, in San Jose? It certainly would not have been as expensive to produce there as it was in New York.
TO’R: It’s possible, but it is hard to know. I think that 7 years for a conference is a good long run, although we do have some conferences that have run longer, such as the Perl conference that is in conjunction with the Open Source Convention that is now 20 years old. But that is rare. I think the TOC community was a little petulant about us closing down the event. But we close down events all the time. We closed half a dozen last year. You can say “Mission accomplished” in some cases, or “We’re not making as much money on this, so let’s try something else.” Publishers let books go out of print, and conference producers close conferences.
DTH: Speaking personally and having been to several TOC conferences, I really enjoyed them and found them immensely useful.
TO’R: I totally agree. It was a conference that I had a lot of personal affection for, and all other things being equal, I would have continued it. But I think my team would have cancelled it a lot sooner. We were originally trying to establish the e-book business, and now the e-book business has really taken off, so we felt that we did not need to have TOC any more.
DTH: It’s true—e-books have become standard in the industry. I remember when they were something that was somewhat unusual, but now, they are quite standard.
TO’R: That’s right.
DTH: Do you think that a virtual conference is better or worse than an in-person conference? You have had experience with both.
TO’R: Yes, we do a lot with webcasts, and we can get anywhere from 600 to 1,000 people to one, but it’s not the same as going to an event because you don’t have the community: the face-to-face interaction, and the ability to meet people that you didn’t know. A lot of what a conference is about is old fashioned social networking.
DTH: I thoroughly agree. I attended the last two TOCs virtually, and I missed a lot, especially the hallway interactions. What is going on right now next door [the SSP opening reception] is an example. For example, you meet a lot of people and you see a lot of vendors you were not aware of and would like to get to know more about. I think that makes an in-person conference a lot better than a virtual one.
TO’R: I would definitely agree with that, and that is why I think conferences will be with us for a long time.
DTH: In the same way, do you think printed books will be with us for a long time?
TO’R: I am not as sure about that. The reason is not because people will not want them. I think that there are some step functions in the cost structure of printed books that really change the picture. We have done a very good job with books at O’Reilly (and I must credit my COO Laura Baldwin for moving us very aggressively into print on demand so that we have consistent costs regardless of how many we print). In traditional book printing, the cost to print a short run is very much higher than the cost to print a big run, so as print volumes decline, costs go up. Let’s imagine that you have no loss of sales, and you might even have increased the number of copies that you sell with e-books. But if you went from selling 10,000 print books to selling 10,000 e-books and 3,000 print books, you might end up deciding that it is not worth printing the 3,000 books because at the end of the day, they cost you so much more than they used to when you printed 10,000 copies. I think publishers can do a lot to insulate themselves against that with print on demand. But also the visibility starts to break down when you don’t have lots of bookstores. While Amazon provides social media and Goodreads provides certain kinds of visibility, there is a lot about the book in a marketing and distribution system that may break before people’s appetite for printed books does.
DTH: And I think that it depends on the kind of book.
TO’R: Absolutely. Everything depends on that.
DTH: I still like browsing the shelves of a bookstore.
TO’R: Many people do, but there are not nearly as many bookstores to do that now as there used to be. It is a very expensive model, and quite frankly, I wrote a blog post back in 2002 called “Buy Where You Shop” telling people that if they go into a bookstore, shop around, and leaf through the books, and then decide to go and buy the book at Amazon because they can get it cheaper, they are crazy because that bookstore will go away and they will not be able to browse in it any more.
DTH: They are cutting the bookstore’s throat.
TO’R: Yes, realize that what you are getting in the price difference between the local bookstore and Amazon is the service of being able to look at the books. If you value it, pay for it! And if you don’t value it and pay for it, it will go away. Of course, that has turned out to be the case. Many bookstore owners laminated that article and hung it up in their stores, but it was really like a finger in the dike. I do think that, overall, there are many advantages to e-books, and people are selling a lot of e-books. There are a lot of new mechanisms for discovery, and publishers should be much more optimistic.
DTH: I think that is a very valid and important point.
TO’R: I think people are still not thinking about that in other kinds of retail either.
DTH: It’s true of a lot more than the book business. I am guilty of this myself, and I suppose we all are.
TO’R: Yes. I buy an awful lot of stuff from Amazon, but I buy things at Amazon when I shop at Amazon. If I shop in the local store, I buy in the local store. But if I shop on Amazon, then I feel quite entitled to buy there. I don’t think it’s a wise thing to shop at one store, take the service of pawing their inventory, and then go and get a better price somewhere else. You are basically taking a service and not paying for it.
DTH: What do you think about the future growth of e-books?
TO’R: I think they will continue to grow meaningfully. There have been some recent articles about whether e-book sales are leveling off and people are returning to print, and so on. It is very hard for me to say, but it is very different for different categories of books and for different demographics. Books sold in supermarkets will probably be around for a long time, but high-end technical books are migrating quite heavily to e-books.
DTH: The move to massive open online courses (MOOCs) is spurring the move to e-books.
TO’R: I am not sure about that. MOOCs are really interesting, but I’m not sure that they are not somewhat overhyped.
DTH: Why do you think that is?
TO’R: I have talked to people who have taken online courses, and they say that the ability to ask questions is very limited, as is the ability to get help when you are stuck. What I find most interesting in online education is the kind of inversion that you see in the Khan Academy model (which is not a MOOC), in which you create a short lecture and then teachers use it in a classroom. Currently, we have this terrible model where the teacher uses his or her time standing up in front of the classroom. In an effective classroom, there is a good deal of back and forth interaction, but in most classrooms, the students don’t really have the ability to ask questions because they are afraid to or for whatever reason. In the Khan Academy model, you get the lecture, and then you come to the classroom and do some work. I think that reversal of lecture and hands-on time is something I would love to see in grade school: send the children home with a bunch of videos to watch and then have them do their homework in school where the teacher can help them with it. That would be awesome! It would be so much better than having the teacher lecture in the class and then send them home to have the parents do the helping. There is lots of experimentation going on at present.
DTH: That is very interesting because all of this impacts the publishing business because publishers must be very attuned to the education market.
TO’R: When people say that it impacts the publishing business, yes, it impacts some companies that have made money from publishing. I think that if you take the bigger perspective that I try to take of looking at what job are we really doing for customers, there are lots of suitable goods, and just because people are not buying high-priced textbooks does not mean that there are not other opportunities to sell learning products to people. It is the creative destruction of capitalism, and we see so many times when a particular business model is threatened or a particular type of product is threatened by a new business model, people say that the world is ending. No, your world is ending.
DTH: And another door is opening.
TO’R: That’s right, and that’s how we must think about publishing.
DTH: Thank you very much for taking the time to speak with me.
Donald T. Hawkins is an information industry freelance writer based in Pennsylvania. In addition to blogging and writing about conferences for Against the Grain, he blogs the Computers in Libraries and Internet Librarian conferences for Information Today, Inc. (ITI) and maintains the Conference Calendar on the ITI website. He recently contributed a chapter to the book “Special Libraries: A Survival Guide” (ABC-CLIO, 2013). He holds a Ph.D. degree from the University of California, Berkeley and has worked in the online information industry for over 40 years.