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November 30 2012

To eat or be eaten?

One of Marc Andreessen’s many accomplishments was the seminal essay “Why Software is Eating the World.” In it, the creator of Mosaic and Netscape argues for his investment thesis: everything is becoming software. Music and movies led the way, Skype makes the phone company obsolete, and even companies like Fedex and Walmart are all about software: their core competitive advantage isn’t driving trucks or hiring part-time employees, it’s the software they’ve developed for managing their logistics.

I’m not going to argue (much) with Marc, because he’s mostly right. But I’ve also been wondering why, when I look at the software world, I get bored fairly quickly. Yeah, yeah, another language that compiles to the JVM. Yeah, yeah, the Javascript framework of the day. Yeah, yeah, another new component in the Hadoop ecosystem. Seen it. Been there. Done that. In the past 20 years, haven’t we gained more than the ability to use sophisticated JavaScript to display ads based on a real-time prediction of the user’s next purchase?

When I look at what excites me, I see a much bigger world than just software. I’ve already argued that biology is in the process of exploding, and the biological revolution could be even bigger than the computer revolution. I’m increasingly interested in hardware and gadgetry, which I used to ignore almost completely. And we’re following the “Internet of Things” (and in particular, the “Internet of Very Big Things”) very closely. I’m not saying that software is irrelevant or uninteresting. I firmly believe that software will be a component of every (well, almost every) important new technology. But what grabs me these days isn’t software as a thing in itself, but software as a component of some larger system. The software may be what makes it work, but it’s not about the software.

A dozen or so years ago, people were talking about Internet-enabled refrigerators, a trend which (perhaps fortunately) never caught on. But it led to an interesting exercise: thinking of the dumbest device in your home, and imagine what could happen if it was intelligent and network-enabled. My furnace, for example: shortly after buying our house, we had the furnace repairman over 7 times during the month of November. And rather than waiting for me to notice that the house was getting cold at 2AM, it would have been nice for a “smart furnace” to notify the repairman, say “I’m broken, and here’s what’s probably wrong.” (The Nest doesn’t do that, but with a software update it probably could.)

The combination of low-cost, small-footprint computing (the BeagleBone, Raspberry Pi, and the Arduino), along with simple manufacturing (3D printing and CNC machines), and inexpensive sensors (for $150, the Kinect packages a set of sensors that until recently would easily have cost $10,000) means that it’s possible to build smart devices that are much smaller and more capable than anything we could have built back when we were talking about smart refrigerators. We’ve seen Internet-enabled scales, robotic vacuum cleaners, and more is on the way.

At the other end of the scale, GE’s “Unleashing the Industrial Internet” event had a fully instrumented network-capable jet engine on stage, with dozens of sensors delivering realtime data about the engine’s performance. That data can be used for everything from performance optimization to detecting problems. In a panel, Tim O’Reilly asked Matt Reilly of Accenture “do you want more Silicon Valley on your turf?” and his immediate reply was “absolutely.”

Even in biology: synthetic biology is basically nothing more than programming with DNA, using a programming language that we don’t yet understand and for which there is still no “definitive guide.” We’re only beginning to get to the point where we can reliably program and build “living software,” but we are certainly going to get there. And the consequences will be profound, as George Church has pointed out.

I’m not convinced that software is going to eat everything. I don’t see us living in a completely virtual world, mediated completely by browsers and dashboards. But I do see everything eating software: software will be a component of everything we do or buy, from our clothing to our food. Why is the FitBit a separate device? Why not integrate it into your shoes? Can we imagine cookies that incorporate proteins that have been engineered to become unappealing when we’ve eaten too much? Yes, we can, though we may not be happy about that. Seriously, I’ve had discussions about genetically engineered food that would diagnose diseases and turn different colors in your digestive track to indicate cancer and other conditions. (You can guess how you read the results).

Andreessen is certainly right in his fundamental argument that software has disrupted, and will continue to disrupt, just about every industry on the planet. He pointed to health care and education as the next industries to be disrupted; and we’re certainly seeing that, with Coursera and Udacity in education, and conferences like StrataRx in health care. We just need to push his conclusion farther. Is a robotic car a case of software eating the driver, or of the automobile eating software? You tell me. At the Industrial Internet event, Andreessen was quoted as saying “We only invest in hardware/software hybrids that would collapse if you pulled the software out.” Is an autonomous car something that would collapse if you pulled the software out? The car is still drivable. In any case, my “what’s the dumbest device in the house” exercise is way too limiting. When are we going to build something that we can’t now imagine, that isn’t simply an upgrade of what we already have? What would it mean for our walls and floors, or our plumbing, to be intelligent? At the other extreme, when will we build devices where we don’t even notice that they’ve “eaten” software? Again, Matt Reilly: “It will be about flights that are on time, luggage that doesn’t get lost.”

In the last few months, I’ve seen a number of articles on the future of venture investment. Some argue that it’s too easy and inexpensive to look for “the next Netscape,” and as a consequence, big ambitious projects are being starved. It’s hard for me to accept that. Yes, there’s a certain amount of herd thinking in venture capital, but investors also know that when everyone is doing the same thing, they aren’t going to make any money. Fred Wilson has argued that momentum is moving from consumer Internet to enterprise software, certainly a market that is ripe for disruption. But as much as I’d like to see Oracle disrupted, that still isn’t ambitious enough.

Innovation will find the funds that it needs (and it isn’t supposed to be easy). With both SpaceX and Tesla Motors, Elon Musk has proven that it’s possible for the right entrepreneur to take insane risks and make headway. Of course, neither has “succeeded,” in the sense of a lucrative IPO or buyout. That’s not the point either, since being an entrepreneur is all about risking failure. Neither SpaceX nor Tesla are Facebook-like “consumer web” startups, nor even enterprise software startups or education startups. They’re not “software” at all, though they’ve both certainly eaten a lot of software to get where they are. And that leads to the most important question:

What’s the next big thing that’s going to eat software?

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