New technologies enable activities that fall into one of two categories: 1) doing things you could already do but can now do better because they are faster, cheaper, easier, higher quality, etc. 2) doing brand new things that you simply couldn’t do before. Early in the development of new technologies, the first category tends to get more attention, but it’s the second that ends up having more impact on the world.
Doing old things better tends to get more attention early on because it’s easier to imagine what to build. Early films were shot like plays — they were effectively plays with a better distribution model — until filmmakers realized that movies had their own visual grammar. The early electrical grid delivered light better than gas and candles. It took decades before we got an electricity “app store” — a rich ecosystem of appliances that connected to the grid. The early web was mostly digital adaptations of pre-internet things like letter writing and mail-order commerce. It wasn’t until the 2000s that entrepreneurs started exploring “internet-native” ideas like social networking, crowdfunding, cryptocurrency, crowdsourced knowledge bases, and so on.
The most common mistake people make when evaluating new technologies is to focus too much on the “doing old things better” category. For example, when evaluating the potential of blockchains, people sometimes focus on things like cheaper and faster global payments, which are important and necessary but only the beginning. What’s even more exciting are the new things you simply couldn’t create before, like internet services that are owned and operated by their users instead of by companies. Another example is business productivity apps architected as web services. Early products like Salesforce were easier to access and cheaper to maintain than their on-premise counterparts. Modern productivity apps like Google Docs, Figma, and Slack focus on things you simply couldn’t do before, like real-time collaboration and deep integrations with other apps.
Entrepreneurs who create products in the “brand new things” category usually spend many years deeply immersed in the underlying technology before they have their key insights. The products they create often start out looking toy-like, strange, unserious, expensive, and sometimes even dangerous. Over time, the products steadily improve and the world gradually embraces them.
It can take decades for this process to play out. It’s clear that we are early in the development of emerging technologies like cryptocurrencies, machine learning, and virtual reality. It is also possible we are still early in the development of more established technologies like mobile devices, cloud hosting, social networks, and perhaps even the internet itself. If so, new categories of native products built on top of these technologies will continue to be invented in the coming years.