Tech History is Being Made Not Repeated
I’m not going to try to convince you that, in the case of the tech industry, history does not repeat itself. In some cases, it does and it will. Rather, I’m going to tell you why any claim, or any conclusion, being made today that we are waiting for history to repeat itself is premature.
I speak with VCs, C-level executives, pundits, and any opinionated type about things related to the theory and philosophy of the technology industry. My most valued discussions come from those who have been in this industry since the beginning. Their observations are time and time again better than most and often more accurate. The theory of the cyclicality of the industry is often brought up in many contexts but most often I hear it brought up about Apple. I hear things like “the smaller ecosystem always loses.” Or, “closed always loses in the end.” Or, “vertically integrated companies always get phased out.” I know my industry history well enough to understand their logic, but I continually think these claims are premature.
Claiming history is ready to be repeated, rather than still being made, discounts the point that most of this industry’s history has been focused on commercial markets not consumer ones. Most of this history has been focused on developed “affluent markets” not developing markets. We can make some sound observations about the industry’s history up to this point as we have talked about millions of consumers but can we make the same observations once we start talking about billions of consumers? I’m not so sure.
I say history is being made rather than being repeated because I believe we are in uncharted territory. Those who like to make points about tech history repeating itself are primarily using the history of the mainframe, mini computer, and desktop/notebook PC form factor to make it. Points get made about these segments around open vs. closed, integrated vs. modular and so on. But using “PC” industry history as our sole basis has flaws. We are in the midst of one of the largest global rollouts of consumers getting their first smartphone, in many cases the first type of computer they have ever used. Billions and billions of people have leapfrogged the PC and jumped straight to a computer in their pocket. They have no concept of what it was like to grow up with a PC or even in a PC saturated region. They didn’t have PCs in their school to learn computer literacy, they haven’t had to deal with the Microsoft Windows monopoly, they never dealt with corporate IT bureaucracies. In the very near future, the number of people in the market who had nearly zero contribution to tech industry history will dwarf the number that did. So how can we, with any degree of intellectual honesty, claim so boldly we know how this will play out?
I feel a proverb I’ve heard time and time again from those who have been around from the beginning is appropriate.
The market is the ultimate arbiter.
We can debate theory and philosophies related to how much of a predictor industry history is of the future all we want but ultimately the market will decide. My hypothesis is that, unlike the PC era we know so much about, we have no idea how these next several billion consumers will dictate the winners and losers. For example, I like to use the analogy that Facebook and WhatsApp are serving as the emerging market equivalent of America Online — connecting these consumers to the internet and to others digitally for the first time. Yet in the PC era, consumers outgrew the walled garden approach of AOL. Do we know for sure these emerging market consumers will outgrow the walled garden? Or maybe walled gardens win in the end? We have no idea. These consumers are coming online with very different social, national, and economic backgrounds. We are observing usages of mobile devices in places like China, India, and other markets we have never seen before. If we see things that are new how can we apply industry history to it?
What will be a smartphone in the future? Will native apps or web apps win the future? What’s an app in the future? All of these and more are subjects where industry history is used to attempt to shed light. I have no problem with that. It is useful and in some cases I imagine history may repeat itself. The problem is we don’t know which part it will be.
If we were having this discussion 20 years from now I feel the “history will repeat itself” mantra would be more applicable. We simply don’t have enough industry past under our belt to claim what we do have is the part that will repeat. We are still in the middle of this journey from analog to digital. We are still bringing the masses online for the first time. They will still play a role in writing the history we are observing today. In all likelihood, the history which may “repeat” is still yet to happen.