Software eats software development

Software is eating the world, and doing so using smaller and smaller teams. WhatsApp was able to disrupt the global SMS industry with only a few dozen engineers. Small teams can have a big impact because software development (and deployment) has improved dramatically over the past decade. Some improvements include:

  • Infrastructure. Deploying a commercial website ten years ago required significant upfront capital. Now you can spin up virtual servers in minutes. Upfront costs are close to zero and ongoing costs are orders of magnitude lower than before.
  • Services. Startups created simple APIs that abstract away complex back ends. Examples: Stripe (payments), Twilio (communications), Firebase (databases), Sift Science (fraud).
  • Open Source. Open source dominates every level of the software stack, including operating systems (Linux), databases (MySql), web servers (Apache), and programming languages (Python, Ruby). These are not only free but generally also far higher quality than their commercial counterparts.
  • Programming languages. Developers have steadily marched upwards from Assembly to C to Java to, today, scripting languages like Ruby and Python. Moore’s Law gave us excess computing resources. We spent it making developers more effective.
  • Special-purpose tools for non-programmers. These tools let non-programmers create software in certain pre-defined categories, thereby lowering costs and reducing the demand for developers. Examples: Shopify (e-commerce), WordPress (blogging), and Weebly (small business websites).
  • General-purpose tools for non-programmers. In the pre-Internet era, tools like Hypercard and Visual Basic allowed hundreds of millions of semi-technical people to become software developers. Since then, there hasn’t been much work in these areas, but from what I’ve seen that might change soon. By allowing more people to program, these tools act as a force multiplier for the software industry.

In all likelihood, the demand for software development will continue to dramatically outpace the supply. If so, “software eats software development” will be an exciting area going forward, with lots of valuable startups created in the process.

The decline of the mobile web

People are spending more time on mobile vs desktop:

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And more of their mobile time using apps, not the web:

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This is a worrisome trend for the web. Mobile is the future. What wins mobile, wins the Internet. Right now, apps are winning and the web is losing.

Moreover, there are signs that it will only get worse. Ask any web company and they will tell you that they value app users more than web users. This is why you see so many popups and banners on mobile websites that try to get you to download apps. It is also why so many mobile websites are broken. Resources are going to app development over web development. As the mobile web UX further deteriorates, the momentum toward apps will only increase.

The likely end state is the web becomes a niche product used for things like 1) trying a service before you download the app, 2) consuming long tail content (e.g. link to a niche blog from Twitter or Facebook feed).

This will hurt long-term innovation for a number of reasons:

1) Apps have a rich-get-richer dynamic that favors the status quo over new innovations. Popular apps get home screen placement, get used more, get ranked higher in app stores, make more money, can pay more for distribution, etc. The end state will probably be like cable TV – a few dominant channels/apps that sit on users’ home screens and everything else relegated to lower tiers or irrelevance.

2) Apps are heavily controlled by the dominant app stores owners, Apple and Google. Google and Apple control what apps are allowed to exist, how apps are built, what apps get promoted, and charge a 30% tax on revenues.

Most worrisome: they reject entire classes of apps without stated reasons or allowing for recourse (e.g. Apple has rejected all apps related to Bitcoin). The open architecture of the web led to an incredible era of experimentation. Many startups were controversial when they were first founded.  What if AOL or some other central gatekeeper had controlled the web, and developers had to ask permission to create Google, Youtube, eBay, Paypal, Wikipedia, Twitter, Facebook, etc. Sadly, this is where we’re headed on mobile.

Oculus

I’ve seen a handful of technology demos in my life that made me feel like I was glimpsing into the future. The best ones were: the Apple II, the Macintosh, Netscape, Google, the iPhone, and – most recently – the Oculus Rift.

Virtual reality has long been a staple of science fiction. In real life, however, attempts to create virtual reality have consistently disappointed. Oculus was founded on the contrarian belief that the right people at the right time could finally deliver on the science fiction promise. Hardware components had become sufficiently powerful and inexpensive, and the pioneering engineers who invented 3D gaming were eager to explore a new frontier.

Last year, my partner Gil Shafir and I spent time studying Oculus and virtual reality technology more generally. The more we learned, the more we became convinced that virtual reality would become central to the next great wave of computing. We were therefore thrilled when we got the chance to invest in Oculus later on.

Today, Facebook announced that they are acquiring Oculus. Facebook’s support will dramatically accelerate the development of the virtual reality ecosystem. While we are sad to no longer be working with Oculus, we are very happy to see virtual reality receive the support it deserves.

I can’t say enough about the Oculus team. Palmer, Brendan, John, Nate, and the rest of the team are true technology visionaries. They’ve assembled an incredible group of creative technologists from diverse fields. It was awesome tagging along for the ride, and I can’t wait to see what they do at Facebook.

“We leverage the billions of dollars spent on the consumer mobile phone business”

NYTimes has an excellent profile of Planet Labs, a startup that makes low-cost satellites:

These satellites are powered by batteries normally found in a laptop, with semiconductors similar to those in a smartphone. “Nothing here was prequalified to be in space,” Mr. Marshall said. “We bought most of our parts online.”

Planet Labs will not disclose its manufacturing costs, but potential customers who have seen the products think the satellites are approximately 95 percent cheaper than most satellites, a figure Mr. Marshall would neither confirm nor dispute. “We leverage the billions of dollars spent on the consumer mobile phone business” for most of the company’s parts, he said.

Chris Anderson calls this “the peace dividend of the smartphone war.” Across a wide range of sectors, startups are now tackling problems that previously required billions of dollars from governments or multinational corporations.

“There’s just a tremendous amount of craftsmanship in between a great idea and a great product”

Steve Jobs in 1995:

There’s just a tremendous amount of craftsmanship in between a great idea and a great product. And as you evolve that great idea, it changes and grows. It never comes out like it starts because you learn a lot more as you get into the subtleties of it. And you also find there are tremendous tradeoffs that you have to make. There are just certain things you can’t make electrons do. There are certain things you can’t make plastic do. Or glass do. Or factories do. Or robots do.

Designing a product is keeping five thousand things in your brain and fitting them all together in new and different ways to get what you want. And every day you discover something new that is a new problem or a new opportunity to fit these things together a little differently.

This is why almost all successful startups have founders who understand business, design, and technology. Product development is the process of navigating a maze - not three separate mazes, but a single maze that intersects all these functions. The people navigating the maze need the full authority of the company behind them.