Collateral Progress

Competition is good.

Competition is good. In the long-term it usually results in a net positive for everybody. If there is a perfect example of this it’s likely the Annual Tech Startup Gold Rush™. For example:

2007: The Year of Microblogging — Twitter, Pownce.

2008: The Year of the Check-in — Foursquare, Gowalla.

2011: The Year of Group Messaging — GroupMe, Beluga.

Pownce. Gowalla. Beluga. All companies chasing the dream in their respective spaces that either shut down or otherwise ceased operating due to competition. And yet all completely necessary for their respective novel paradigms to survive. Even though they no longer exist, each added to our overall awareness of, and comfort with, a new paradigm.

Here’s how the Annual Tech Startup Gold Rush™ works: a company introduces a new paradigm. Others see opportunity and rush in. The paradigm catches on slowly, then faster, and new players bring in their own new consumers. The pool of overall consumers familiar with the paradigm grows larger. Most companies fail/pivot/shut down. Maybe the company that introduced the paradigm is still around, maybe not. It doesn’t matter. The paradigm itself persists on now self-sustaining momentum.

The paradigm reached this point only by all the companies contributing to its growth. Before this point the consumer pool was too small and thus too brittle; any one company failing could mean such a significant loss of consumers from the pool that the paradigm itself is at risk of fading. Now, however, the pool is big enough that when a company leaves the pool its customers don’t. Instead they migrate to another paradigm provider.

Often at this point another notable trend starts: major services adopt the paradigm into their products. Facebook is one of the best at this. Possibly the greatest example of this is when Twitter first introduced the paradigm of the short-burst status update. At the time Facebook had no similar feature. Yet eventually Twitter and others cemented the paradigm of status updating so dominantly that it was recognized as being as necessary as social networking itself. This is when Facebook adopted it.

Sometimes the paradigm author stays the predominant player, sometimes they don’t. Twitter is still around and doing quite well, despite Facebook adopting their core feature, but Pownce certainly isn’t. Yet Pownce necessarily validated microblogging as a thing worthy of more attention. It got more people to ask their friends what they thought of “this whole microblogging thing”. It was collateral progress.

Originally published back in 2013 on my blog, Noble Pioneer.

Spoils of the Privileged

“Spoils of the privileged.” A phrase thrown around not uncommonly about services like Uber and Airbnb. I find this phrase an incomplete assessment, one driven mostly be emotion. There are two problems with this criticism I want to address:

  1. It doesn’t account for economic pressures to optimize process efficiency
  2. It implies these things need to justify their cost vs. more “worthwhile” efforts

New things start out expensive because they’re new and get cheaper as they optimize

Uber and Airbnb aren’t spoils for the privileged. They’re infant services experiencing a perfectly normal economic process: new things start out expensive and get cheaper as their components and processes become cheaper. It happened with electricity, cars, computers, and it will continue to happen with new industries and products.

It’s of course no coincidence these specific services are picked on. After all, just look at the people who get into an Uber cab: on an iPhone, paying a premium rate, and getting into a black towncar. Talk about deluxe.

Or at least that’s how it worked for a while.

Let’s look at Uber as it exists now in 2013. Uber offers not just towncar service but also regular cab service and even “uberX”-certified independent drivers driving their own Prius or Corolla.

And even the price argument is no longer valid: uberX prices are now 10% lower than taxi prices. The transition from infant service to grown-up, cheaper-than-the-incumbent service has occurred. This same transition will occur with all “spoils of the privileged” services in time.

The cost justification argument

Let’s extract this argument out of being ad hominem: really what people are upset with is big money spent on (relatively) lavish things when there’s also so much economic disparity in the world.

Again, would the same people who make this complaint be upset with the advent of electricity and how it began as an expensive utility for a few wealthy people and gradually grew? How about cars? Or computers? Each experienced the exact same growth from infantile project used by a few people for a high cost to a permanent utility produced as cheaply as possible.

Ever heard the question “When there are so many problems on Earth, why should we spend money on going into space?” NASA hears this every day. Peter Marquez points out a great answer from the NSC’s space policy during Eisenhower’s presidency:

“More than by any other imaginative concept, the mind of man is aroused by the thought of exploring the mysteries of outer space. Through such exploration, man hopes to broaden his horizons, add to his knowledge, improve his way of living on earth.”

In other words it’s not a trade-off. In fact it’s the opposite: only by being bold and innovating across the board do we discover better solutions that can cross-polinate. Building Uber doesn’t preclude us from solving other problems at the same time; building Uber gives us new insights into solving large-scale problems in new, more efficient ways.

One final thought: everything is on a spectrum. So if, for example, you have a problem with Dave Morin saying San Francisco is a city of the future because we spend more money on things that make our lives better, keep in mind at least one thing you use is nicer than something somebody else uses. Was that nicer, more expensive product worth producing? Of course. Why? Because progress.

I originally wrote this in 2013 on my blog, Noble Pioneer. Don’t miss the conversation there too.


Header photo credit: The Great Leap Forward via photopin(license)