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One of the most interesting speeches at YCombinator’s Startup School was by the CEO/founder of AirBnB, Brian Chesky. You can watch that here.

In that speech Brian detailed how AirBnB kept failing until he did one thing: took a tour to get close to the customers and learn more about what they wanted. “Go to your users,” Paul Graham, head of YCombinator told him to see if he could get Brian to move AirBnB into a successful business. Brian took the advice and did a world-wide tour and just tried to meet users around the world. Every entrepreneur should listen to this speech. He made some slight changes and the company started taking off. If you want to hear about that part of the story, fast forward to about minute 16.

Anyway, last night I was at the Apple store. I needed a hard drive and I didn’t have time to wait for Amazon to ship me one. I didn’t even have time to go down to Fry’s to save $40.

One aside about Apple. Last night it took me 67 seconds to walk in, go up the set of stairs, find the hard drive I wanted, hand my credit card to an Apple employee (he took it right there on the spot), and walk out. Why does Apple sell more per square foot than any other retailer? Might have something to do with just how easy it is to buy something.

Anyway, when outside I was caught up in a crowd of people listening to some weird band playing on iPads. I got closer and thought it was most cool. Here was about 10 people playing violins on iPads. I get closer and one of the guys was Jeff Smith, CEO of Smule. I turned on my iPhone and interviewed him. Then I watched.

Smule is a company that builds apps for iPhone and iPad. The newest one is called “Magic Fiddle” which teaches you to play violin. In the interview Jeff Smith demos it for me and the crowd standing on the street in San Francisco.

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What was he doing? Going to his users. Celebrating with them. They just hit number one in the iTunes store. Handing out T-shirts. Listening to feature requests. In fact, he asked people “please tell me the songs you want to see in Magic Piano.”

I love that the nearly the entire Smule team was there. In the street. Working the crowd. Finding out what people want, thinking about their next app. Even taking some abuse for blocking the sidewalk.

You wanna know how to make your startup better? Take Paul Graham’s advice. Go to your users!

Got any examples of how companies you love went to their users? Let me know! scobleizer@gmail.com

You’ve probably heard that Google has these cool cars that can drive themselves. Above is a video of one of them driving down Freeway 280 that I shot almost a year ago (I had no idea I was driving next to a car that was capable of driving itself. I should have known something secret was going on because the driver braked hard to get away from my camera). Yes, there’s a driver behind the wheel, but the car is capable of driving itself.

But Google is very closed-lipped about what these cars are actually doing. I’ve asked several times, to several different people, to get a ride in one, and to be able to interview the team about what they are doing. I keep getting turned away.

I’ve learned a few things, though, in the last few weeks. For one, Mike Montemerlo is the brains behind many of the algorithms that run the car. I interviewed him back in 2007. When I talk with folks familiar with the Google program they all say he knows more about the code running the car than anyone else, so this interview is important to go back to and watch. You can see a real visionary at the beginning of his journey to invent the future.

Recently I went back to Stanford to visit the Center for Automotive Research at Stanford (which, funnily enough, spells “CARS”). This is the coolest place for a geek. You want to inspire your kids to learn computers? Show them what the cars of the future will need. Hint: computer scientists.

In Part One of the tour, you get to see the latest brilliant kids who are pushing cars to do things even race cars can’t do. But in Part Two, you get to see the technology that is inside the Google self-driving cars (the Google team came from Stanford, and the approaches are very similar and the two teams keep pretty close ties). In Part Three of the tour, coming next week, you’ll get a look at the solar car team.

So, what did I learn from Mike Sokolsky, who is a research engineer in the artificial intelligence lab at Stanford? Well, they are studying ways to process a massive amount of data (there’s a tiny datacenter inside the back of the car) and make real-time decisions. Was that a stoplight? Was that a cat? A ball? A child?

One thing he ends on, is the challenges ahead for getting this technology into production cars. He thinks it’ll be more than 10 years. Why?

Well, most humans don’t like the idea of a car that drives them around. They like control, and this car would take control away from them.

There’s a deep set of insurance issues, too. What happens if one of these cars causes a wreck? Who is responsible?

Of course there’s also the cost. The Stanford car has about $300,000 worth of gear inside of it. It’ll take 15 to 20 years to reduce the cost of the gear to $3,000 or less (I remember about 20 years ago Steve Wozniak proudly showed me his dye sublimation color printer. It cost him $40,000 in 1990 dollars. Today a better printer costs about $50).

Funny story, the LIDAR unit on top of the car? It was invented by David Hall. His Silicon Valley-based company, Velodyne, used to make subwoofers. I sold those in my consumer electronics store in Silicon Valley. A few weeks back his wife called me and told me a bit about him. I love that people don’t understand why I put my cell phone number on my blog — this is exactly why. It’s +1-425-205-1921 by the way. In the video we did at Stanford you can see that the LIDAR shows how it maps the world in 3D 10 times a second.

Can these technologies do even better than humans can? Absolutely. Check out this video of a sliding move into a parking spot by the car we visited. I can’t do that. Can a race car driver? Yes. But can a race car driver have sensors that know exactly how far to push adhesion to the road? Not always. The Stanford engineers I’ve talked to say they are already able to do things that would be difficult for a race-car driver to do over and over again.

This technology is the most mind-blowing stuff out there now. It’s like seeing the future. Enjoy!

More details are on Building43. Thanks to Rackspace for letting me chase around world-changing technology like this. Do you have world-changing technology? Let us know at scobleizer@gmail.com.

Here’s a report from ABC News, which gives you a look inside the Google car:

Tonight I was talking with an exec at Google and I brought up the success of Instagr.am (they’ve gotten more than 500,000 downloads in just a few weeks) and asked him “why can’t Google do that?”

I knew some of the answers. After all, I watched Microsoft get passed by by a whole group of startups (I was working at Microsoft as Flickr got bought by Yahoo, Skype got bought by eBay, etc etc).

I told him a few of my theories, and he told me back what they are seeing internally. Turns out he was talking to me about these items because Google, internally, knows it has an innovation problem (look at Google Wave or Buzz for examples of how it is messed up) and is looking to remake its culture internally to help entrepreneurial projects take hold.

1. Google can’t keep its teams small enough. Instagram was started by two guys who rented a table at DogPatchLabs in Pier 38 (the first time I met the Instagr.am team was when Rocky and I did this video on Dogpatch Labs). The exec I was talking with said Google Wave had more than 30 people on the team. He had done his own startup and knew the man-month myth. For every person you add to a team, he said, iteration speed goes down. He told me a story of how Larry Ellison actually got efficiencies from teams. If a team wasn’t productive, he’d come every couple of weeks and say “let me help you out.” What did he do? He took away another person until the team started shipping and stopped having unproductive meetings.

2. Google can’t reduce scope like Instagram did. Instagram started out as being a far different product than actually shipped (which actually got it in trouble with investor Andreesen Horowitz, according to Techcrunch). It actually started out as a service that did a lot more than just photographs. But, they learned they couldn’t complete such a grand vision and do it well. So they kept throwing out features. Instagram can do that. Google can’t. Imagine you come to Larry Page and say “you know that new social platform we’re building? Let’s throw 90% of it out.” Google has to compete with Facebook. Instagram had to compete with itself. As to Andreesen: this is why lots of my favorite companies like GoPro or SmugMug never took any VC. The pressure to “go for the home run” destroys quite a few companies.

3. At Google, if a product becomes successful, will get tons of resources and people thrown at it. Imagine you’re working at Google and you have 20% time. Will you keep spending that time on a boring project that isn’t very cool? No, you will want to join a cool project like Instagram that’s getting love around the world and getting tons of adoption. If the Instagram team were at Google they’d have to deal with tons of emails and folks hanging outside their cubes just to try to participate. I saw exactly this happen at Microsoft when a small team I was enamored of started getting tons of resources because it was having some success.

4. Google forces its developers to use its infrastructure, which wasn’t developed for small social projects. At Google you can’t use MySQL and Ruby on Rails. You’ve gotta build everything to deploy on its internal database “Big Table,” they call it. That wasn’t designed for small little dinky social projects. Engineers tell me it’s hard to develop for and not as productive as other tools that external developers get to use.

5. Google’s services need to support every platform. In this case, imagine a Google engineer saying “we’re only going to support iPhone with this.” (Instagr.am is only on iPhone right now. They’d get screamed out of the room) and they need to support every community that Google is in world-wide. I remember at Microsoft teams getting slowed down because they’d need to make sure their products tested well in every language around the world. Oh, some screens didn’t work because some languages are read right to left? Too bad, go back and fix it. Instagram doesn’t have those kinds of problems. They can say “we’re English only for now, and heck with everyone else.”

6. Google’s engineers can’t use any Facebook integration or dependencies like Instagram does. That makes it harder to onboard new customers. I’ve downloaded a few iPhone apps this week and signed into them, and added my friends, just by clicking once on my Facebook account. My friends are on Facebook, I don’t have a social graph even close to as good on Google. Instagram gets to use every system it wants. Google has to pay “strategy taxes.” (That’s what we called them at Microsoft).

7. Google can’t iterate in semi-public. Weeks ago Kevin showed me Instagram and loaded it on my phone. He asked me to keep it somewhat quiet, but didn’t ask me to sign an NDA. He also knew it would actually help him if I did leak something about Instagram (I didn’t). What he really needed at that point was passionate users who would try it out and give him feedback about what worked and what didn’t. Bug testing. Now Google will say “we eat our own dogfood” but the reality is that you need to get people outside of your company to invest some time in you. Google can’t do this, because it causes all sorts of political hell. Instagram has no political problems to worry about, so was free to show it to dozens of people (when I got on it there were already hundreds of people who were using Instagram and I had it weeks before its official launch). I saw tons of bugs get fixed because of this feedback and those early users were very vocal believers in the product.

8. Google can’t use Eric Ries-style tricks. Eric’s “lean startup” methodology advocates making sure that customers want something, before going on and building infrastructure that scales. Google, on the other hand, has to make sure that its services scale to hundreds of millions of people before it ships a single thing. Google Wave failed, in part, because it couldn’t keep up with the first wave of users and got horridly slow (and that was even with an invite system that kept growth down to a reasonable rate).

So, how does a big company innovate? Well, for one, Google can innovate by buying companies like Instagram. For two, Google can use its strength in places where small companies can’t dare to go. For instance, building autonomous cars (I have a video with Stanford’s Center for Automotive Research that shows how these cars work and you can see that building stuff like that takes teams bigger than two people. Although to demonstrate that Google gets the power of small teams, Google’s car’s algorithms were mostly approved by just one person, I’ve learned).

Another way? How about open source? Build a system so anyone can code and add value without sitting in meetings and things seem to take off. At Rackspace (the web hosting company I work for) we’re noticing that with OpenStack, which is already seeing some pretty cool new innovations (coming soon) added by people who aren’t even working at Rackspace. As I look around the coolest companies in the valley, like Cloudera, I see the same mentality in place: they know they’ll get slower as they get bigger, so they are trying to build systems that let innovative, entrepreneurial, developers add value without getting caught in the politics of a bigger company. Take it outside of tech, look at TEDx. There they’ve enabled thousands of conferences around the world to use the TED name, but in a way that doesn’t require a lot of approvals from the mother ship. That keeps them innovative, even if they stop innovating at their core (everyone outside continues the innovation).

Sachin Agarwal, one of the founders of Posterous, echoes these comments in a post about what he learned working at Apple (Small teams rule).

Some of these lessons sure seem counter intuitive. Remove people from a team if you want to make it more productive? But I have heard this over and over again in my journey through the world’s best tech companies.

So, how about you? Are you seeing the same problems at your work? When I do I point them out and we try to fix them.

By the way, you can see my Instagram photos done with my iPhone on Tumblr and I’m “Scobleizer” on that service, if you want to follow me.