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When you think about resilience and technology it's actually much easier.
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You're going to see some other speakers today, I already know,
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who are going to talk about breaking-bones stuff,
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and, of course, with technology it never is.
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So it's very easy, comparatively speaking, to be resilient.
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I think that, if we look at what happened on the Internet,
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with such an incredible last half a dozen years,
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that it's hard to even get the right analogy for it.
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A lot of how we decide, how we're supposed to react to things
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and what we're supposed to expect about the future
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depends on how we bucket things
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and how we categorize them.
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And so I think the tempting analogy for the boom-bust
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that we just went through with the Internet is a gold rush.
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It's easy to think of this analogy as very different
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from some of the other things you might pick.
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For one thing, both were very real.
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In 1849, in that Gold Rush, they took over $700 million
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worth of gold out of California. It was very real.
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The Internet was also very real. This is a real way for humans to
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communicate with each other. It's a big deal.
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Huge boom. Huge boom. Huge bust. Huge bust.
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You keep going, and both things are lots of hype.
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I don't have to remind you of all the hype
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that was involved with the Internet -- like GetRich.com.
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But you had the same thing with the Gold Rush. "Gold. Gold. Gold."
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Sixty-eight rich men on the Steamer Portland. Stacks of yellow metal.
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Some have 5,000. Many have more.
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A few bring out 100,000 dollars each.
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People would get very excited about this when they read these articles.
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"The Eldorado of the United States of America:
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the discovery of inexhaustible gold mines in California."
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And the parallels between the Gold Rush and the Internet Rush continue very strongly.
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So many people left what they were doing.
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And what would happen is -- and the Gold Rush went on for years.
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People on the East Coast in 1849, when they first started to get the news,
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they thought, "Ah, this isn't real."
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But they keep hearing about people getting rich,
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and then in 1850 they still hear that. And they think it's not real.
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By about 1852, they're thinking, "Am I the stupidest person on Earth
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by not rushing to California?" And they start to decide they are.
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These are community affairs, by the way.
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Local communities on the East Coast would get together and whole teams
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of 10, 20 people would caravan across the United States,
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and they would form companies.
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These were typically not solitary efforts. But no matter what,
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if you were a lawyer or a banker, people dropped what they were doing,
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no matter what skill set they had, to go pan for gold.
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This guy on the left, Dr. Richard Beverley Cole,
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he lived in Philadelphia and he took the Panama route.
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They would take a ship down to Panama, across the isthmus,
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and then take another ship north.
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This guy, Dr. Toland, went by covered wagon to California.
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This has its parallels, too. Doctors leaving their practices.
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These are both very successful -- a physician in one case,
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a surgeon in the other.
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Same thing happened on the Internet. You get DrKoop.com.
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(Laughter)
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In the Gold Rush, people literally jumped ship.
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The San Francisco harbor was clogged with 600 ships at the peak
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because the ships would get there and the crews would abandon
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to go search for gold.
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So there were literally 600 captains and 600 ships.
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They turned the ships into hotels, because they couldn't sail them anywhere.
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You had dotcom fever. And you had gold fever.
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And you saw some of the excesses
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that the dotcom fever created and the same thing happened.
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The fort in San Francisco at the time had about 1,300 soldiers.
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Half of them deserted to go look for gold.
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And they wouldn't let the other half out to go look for the first half
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because they were afraid they wouldn't come back.
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(Laughter)
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And one of the soldiers wrote home, and this is the sentence that he put:
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"The struggle between right and six dollars a month
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and wrong and 75 dollars a day is a rather severe one."
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They had bad burn rate in the Gold Rush. A very bad burn rate.
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This is actually from the Klondike Gold Rush. This is the White Pass Trail.
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They loaded up their mules and their horses.
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And they didn't plan right.
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And they didn't know how far they would really have to go,
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and they overloaded the horses with hundreds and hundreds of pounds of stuff.
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In fact it was so bad that most of the horses died
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before they could get where they were going.
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It got renamed the "Dead Horse Trail."
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And the Canadian Minister of the Interior wrote this at the time:
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"Thousands of pack horses lie dead along the way,
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sometimes in bunches under the cliffs,
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with pack saddles and packs where they've fallen from the rock above,
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sometimes in tangled masses, filling the mud holes
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and furnishing the only footing for our poor pack animals on the march,
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often, I regret to say, exhausted, but still alive,
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a fact we were unaware of, until after the miserable wretches
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turned beneath the hooves of our cavalcade.
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The eyeless sockets of the pack animals everywhere
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account for the myriads of ravens along the road.
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The inhumanity which this trail has been witness to,
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the heartbreak and suffering which so many have undergone,
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cannot be imagined. They certainly cannot be described."
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And you know, without the smell that would have accompanied that,
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we had the same thing on the Internet: very bad burn rate calculations.
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I'll just play one of these and you'll remember it.
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This is a commercial that was played on the Super Bowl in the year 2000.
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(Video): Bride #1: You said you had a large selection of invitations. Clerk: But we do.
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Bride #2: Then why does she have my invitation?
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Announcer: What may be a little thing to some ... Bride #3: You are mine, little man.
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Announcer: Could be a really big deal to you. Husband #1: Is that your wife?
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Husband #2: Not for another 15 minutes. Announcer: After all, it's your special day.
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OurBeginning.com. Life's an event. Announce it to the world.
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Jeff Bezos: It's very difficult to figure out what that ad is for.
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(Laughter)
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But they spent three and a half million dollars
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in the 2000 Super Bowl to air that ad,
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even though, at the time, they only had a million dollars in annual revenue.
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Now, here's where our analogy with the Gold Rush starts to diverge,
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and I think rather severely.
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And that is, in a gold rush, when it's over, it's over.
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Here's this guy: "There are many men in Dawson
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at the present time who feel keenly disappointed.
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They've come thousands of miles on a perilous trip, risked life, health and property,
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spent months of the most arduous labor a man can perform
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and at length with expectations raised to the highest pitch
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have reached the coveted goal only to discover
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the fact that there is nothing here for them."
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And that was, of course, the very common story.
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Because when you take out that last piece of gold --
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and they did incredibly quickly. I mean, if you look at the 1849 Gold Rush --
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the entire American river region, within two years --
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every stone had been turned. And after that, only big companies
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who used more sophisticated mining technologies
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started to take gold out of there.
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So there's a much better analogy that allows you to be incredibly optimistic
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and that analogy is the electric industry.
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And there are a lot of similarities between the Internet and the electric industry.
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With the electric industry you actually have to --
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one of them is that they're both sort of thin,
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horizontal, enabling layers that go across lots of different industries.
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It's not a specific thing.
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But electricity is also very, very broad, so you have to sort of narrow it down.
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You know, it can be used as an incredible means of transmitting power.
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It's an incredible means of coordinating,
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in a very fine-grained way, information flows.
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There's a bunch of things that are interesting about electricity.
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And the part of the electric revolution that I want to focus on
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is sort of the golden age of appliances.
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The killer app that got the world ready for appliances was the light bulb.
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So the light bulb is what wired the world.
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And they weren't thinking about appliances when they wired the world.
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They were really thinking about --
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they weren't putting electricity into the home;
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they were putting lighting into the home.
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And, but it really -- it got the electricity. It took a long time.
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This was a huge -- as you would expect -- a huge capital build out.
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All the streets had to be torn up.
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This is work going on down in lower Manhattan
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where they built some of the first electric power generating stations.
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And they're tearing up all the streets.
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The Edison Electric Company, which became Edison General Electric,
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which became General Electric,
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paid for all of this digging up of the streets. It was incredibly expensive.
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But that is not the -- and that's not the part that's really most similar to the Web.
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Because, remember, the Web got to stand
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on top of all this heavy infrastructure
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that had been put in place because of the long-distance phone network.
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So all of the cabling and all of the heavy infrastructure --
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I'm going back now to, sort of, the explosive part of the Web in 1994,
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when it was growing 2,300 percent a year.
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How could it grow at 2,300 percent a year in 1994
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when people weren't really investing in the Web?
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Well, it was because that heavy infrastructure had already been laid down.
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So the light bulb laid down the heavy infrastructure,
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and then home appliances started coming into being.
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And this was huge. The first one was the electric fan --
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this was the 1890 electric fan.
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And the appliances, the golden age of appliances really lasted --
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it depends how you want to measure it --
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but it's anywhere from 40 to 60 years. It goes on a long time.
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It starts about 1890. And the electric fan was a big success.
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The electric iron, also very big.
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By the way, this is the beginning of the asbestos lawsuit.
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(Laughter)
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There's asbestos under that handle there.
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This is the first vacuum cleaner, the 1905 Skinner Vacuum,
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from the Hoover Company. And this one weighed 92 pounds
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and took two people to operate and cost a quarter of a car.
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So it wasn't a big seller.
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This was truly, truly an early-adopter product --
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(Laughter)
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the 1905 Skinner Vacuum.
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But three years later, by 1908, it weighed 40 pounds.
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Now, not all these things were highly successful.
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(Laughter)
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This is the electric tie press, which never really did catch on.
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People, I guess, decided that they would not wrinkle their ties.
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These never really caught on either:
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the electric shoe warmer and drier. Never a big seller.
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This came in, like, six different colors.
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(Laughter)
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I don't know why. But I thought, you know,
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sometimes it's just not the right time for an invention;
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maybe it's time to give this one another shot.
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So I thought we could build a Super Bowl ad for this.
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We'd need the right partner. And I thought that really --
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(Laughter)
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I thought that would really work, to give that another shot.
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Now, the toaster was huge
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because they used to make toast on open fires,
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and it took a lot of time and attention.
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I want to point out one thing. This is -- you guys know what this is.
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They hadn't invented the electric socket yet.
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So this was -- remember, they didn't wire the houses for electricity.
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They wired them for lighting. So your -- your appliances would plug in.
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They would -- each room typically had a light bulb socket at the top.
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And you'd plug it in there.
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In fact, if you've seen the Carousel of Progress at Disney World,
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you've seen this. Here are the cables coming up into this light fixture.
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All the appliances plug in there. And you would just unscrew your light bulb
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if you wanted to plug in an appliance.
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The next thing that really was a big, big deal was the washing machine.
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Now, this was an object of much envy and lust.
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Everybody wanted one of these electric washing machines.
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On the left-hand side, this was the soapy water.
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And there's a rotor there -- that this motor is spinning.
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And it would clean your clothes.
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This is the clean rinse-water. So you'd take the clothes out of here,
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put them in here, and then you'd run the clothes through this electric wringer.
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And this was a big deal.
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You'd keep this on your porch. It was a little bit messy and kind of a pain.
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And you'd run a long cord into the house
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where you could screw it into your light socket.
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(Laughter)
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And that's actually kind of an important point in my presentation,
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because they hadn't invented the off switch.
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That was to come much later -- the off switch on appliances --
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because it didn't make any sense.
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I mean, you didn't want this thing clogging up a light socket.
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So you know, when you were done with it, you unscrewed it.
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That's what you did. You didn't turn it off.
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And as I said before, they hadn't invented the electric outlet either,
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so the washing machine was a particularly dangerous device.
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And there are --
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when you research this, there are gruesome descriptions
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of people getting their hair and clothes caught in these devices.
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And they couldn't yank the cord out
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because it was screwed into a light socket inside the house.