Having set forth the backgrounds of the panelists and the concept behind MIT's Media Lab in yesterday's article, Reid Hoffman, co-founder and executive chairman of LinkedIn, and Joi Ito, director of the MIT Media Lab, proceeded to talk about specific projects that might be of interest to the audience at the Churchill Club in San Jose, Calif.

The following are observations Ito made about the way entrepreneurship has evolved do to a drop in the cost of inputs:

1. The startup model is migrating from software to hardware, and Kickstarter has enabled entrepreneurs to raise their seed capital early in the startup process, even before they fully design the product. He suggested that the East Coast has a lead in hardware and biotech, and it will be interesting to see whether Silicon Valley tries to collaborate or to compete.

2. Engineers and biologists collaborate on problems like how to use biological organisms to store data, but the collaboration is not bounded by the disciplines of the participants, so Ito calls the process "anti-disciplinary" rather than multidisciplinary.

3. Ito has picked Shenzhen, China, as one of the first places to establish a solid presence, sending students to work with Bunny Huang, who hacked the Xbox and was sued by Microsoft but protected by MIT, "so he owes us."

Ito said that the owners of the factories in Shenzhen are all networked by family and business ties, so it's a place to buy anything and get anything done. Kids design cell phones as part of their culture the way kids in Silicon Valley design games, so they are designing and producing hardware as readily as Americans do with software. He quoted Nicholas Negroponte, the founder of the Media Lab as saying that "while the rest of academia is 'publish or perish,' we are 'demo or die,'" but "your demo only has to work once." Ito has changed the maxim to "deploy or die," because it has to perform in the real world.

Costs have dropped to the point where prototypes can easily be scaled up to 100,000. He said he wants to work with some Chinese kids at the lab, but a lot of them are being jailed due to Apple's piracy crackdown.

4. Hoffman noted he has spotted a trend toward wearables and other hardware-specific designs enabled by the drop in cost. He predicted that the principles of open sourcing that have applied to software will be applied to hardware, and this will shorten the innovation cycle so drastically as to change its character.

Hoffman said that his enterprises would do anything where software comes into play, because that is where Moore's Law and the innovation cycle apply. (This writer would suggest that in the financial services industry, Moore's Law works in reverse, as so-called regulators and policymakers double down on obsolete, broken business models that leverage political capital rather than actual capital, which they despise.)

(Archived video can be found here.)