As part of my afore-stated desire to get more exposure in the start-up community, I’ve been reading a lot of related news, following some movers and shakers, and of course watching Silicon Valley on HBO.
That clip is, to me, the best moment in the show (yes, even better than the whiteboard session that prompts the truly world-changing “middle-out” algorithm that ultimately saves the company).
I’ve read a lot of articles and done research on a lot of start-ups hoping they’ll hire me (hint — they will not), and I’ve seen a lot of people claiming they’re revolutionizing X or making the world a better place with Y. I think part of this is due to the fact that we are in a huge tech bubble (this is being debated by people much smarter than me, so, in the words of The Dude…)
Everyone wants to be the next Google, the next Facebook, the next Twitter, the next… WhatsApp? Remember when they sold for $19 Billion? These guys changed the world; they completely disrupted the way we used the Internet and… chat… services… (see what I mean about the bubble?) But the problem is that most companies that get started and succeed — and I don’t mean 51%, I mean 99.9999% — will do so by offering a useful product that is marginally better for some users than its competitors’ products, or by selling an inferior product to some people better than its competitors do. They won’t disrupt anything, which doesn’t mean they’re not successful. They’ll be perfectly successful and may grow to employ thousands and have six, seven, eight-figure profits, but won’t explode onto the scene and earn their founders billions in a few short years. But no one is going to get excited about investing in / using / working for a company that has a plan for long-term, modest success — they want to change the world! They want to disrupt! So you end up with scenes like the TechCrunch Disrupt scene above.
So what constitutes true disruption, then? Let’s look at some of the inarguably disruptive technologies of the past — I’ll focus on transportation here, because it’s easy to quantify and is something I think is poised for disruption now. Prior to 1800, the chief means of long-distance land travel was the horse and buggy — with a generous average speed of about 8 miles per hour, on modern roads in ideal conditions. By the 1840s, the steam locomotive had increased that speed by a factor of 10 to 75 mph. This invention was transformative to a degree most people don’t realize — it made or broke cities; it ushered in massive demographic shifts as foreign workers came to America to work on the railroads; it altered the way wars were conducted; it connected the two coasts so as to make a democratic republic the size of America even possible, and it literally changed the very concept of time.
At the turn of the next century, the automobile would derail that industry — literally. No longer were people subject to the schedules and routes of the railroads; they could drive themselves — at similar speeds — anywhere that roads would take them, wherever they wanted to go. Airplanes would increase the top speed a human could travel from tens to hundreds of miles per hour; jet engines would double the speed of airplanes. 200 years ago, it would take you more than 36 hours, nonstop, with a team of horses and ideal conditions, to travel from the bottom of Tennessee to the top of Florida. Now you can go literally anywhere in the world in that time.
Each of those technologies has in common an increase in the performance of key industry metrics by an order of magnitude — trains are ten times as fast as horses and buggies; cars cover tens to hundreds of times the ground that trains cover; planes go ten times faster than cars. The same is true of other truly disruptive technologies: telegraphs and telephones made instant what previously took days or weeks, depending on the distance; wireless subsequently increased reliability by orders of magnitude. Computational speed and storage space have increased by orders of magnitude over the last several decades, enabling everything from the home computer to the iPhone to the cloud and the Internet of Things. The printing press decreased the time it took to reproduce a page of text from hours to seconds and ushered in a world where it’s actually rare to be unable to read. Every technology you can look back on and say truly disrupted a market improved on a key metric within that market by an order of magnitude — at least a binary order of magnitude (most sane humans refer to this as “doubling”).
Compare that to some other so-called “disruptive” technologies. Unless WhatsApp can read my thoughts so I don’t have to type out messages, it’s not disrupting my chat experience. Unless eero can hold a full proxy-server’s worth of Netflix movies, I’m going to be happy with it, but it won’t disrupt my wireless internet experience.
The best example is Uber — people claim Uber disrupted the taxi market (actually, they claim it’s a ridesharing service, which I’ll get to in another post). Uber certainly changed the market for the better; I love Uber, I think its product is superior, I think its founders are undaunted, ruthless businessmen willing to do whatever it takes to overcome challenges to their idea, and I want it to be around forever. But it isn’t disruptive, at least not for the consumer — it’s just better. It brought an open, transparent, and mathematically sound market to a service that was run entirely by cartels. It marketed its app really well, to the point where I doubt most people know that there are similar, just-as-good apps for regular cabs. But it didn’t decrease the price of a cab ride by 50%, much less 90%. It didn’t decrease the time it takes to get from point A to point B. In fact, I still sometimes prefer to use cabs, because I need to know they’ll show up at a certain time — if I’m going to the airport in the morning, I’ll use Curb to book a cab at 5:30 AM rather than call an Uber, because I know my cab will be there and I can schedule it in advance.
Of course, this brings up another commonality for each of the disruptive inventions above: time. The first steam engine was created in England in 1804; it wasn’t until 1847 that it hit 75 mph (and at that, in very rare circumstances), and the first troop movement by train wasn’t until 1861 at the First Battle of Manassas. The Wright Brothers first flight traveled at six miles per hour, the fastest plane in WWI didn’t top 150. In a world of instant gratification, where Facebook had a million users after a year and over a billion after 10, we tend to ignore the fact that ideas and products take time to grow and mature; the railroad is useless until you have an extensive network of railroads, the jet engine is useless until airports have long enough runways for jets to land on.
With that in mind, Uber just did something that, as I’ve discussed before, could lead to something truly disruptive: they looted the ever-loving bajeezus out of Carnegie Mellon’s robotics lab to build their own self-driving cars. In so doing, Uber may become, sooner than expected, what proponents of the self-driving car have long foreseen: a fleet of vehicles for hire, completely eliminating the need to own automobiles.
This move is disruptive — it registers an order of magnitude higher in fundamental industry metrics — in a number of ways. Obviously, in the ride-for-hire industry, it decreases the cost by an order of magnitude, since they no longer need to pay the driver. On the other hand, it also increases the percentage of rides that are for hire from near zero to near 100, becuse it disrupts the automobile industry itself, shifting it from a consumer-focused industry to an enterprise-focused one, as the percentage of American families who owns a vehicle drops from 95% to near-zero (this may seem far-fetched, but the economics are sound — it will be cheaper to arrange a self-guided taxi ride than to own and maintain your own vehicle, even if it is also self-guided, pretty much everywhere; there would be no reason not to get rid of your car). The total number of cars would also plummet by an order of magnitude, since most cars are parked 95% of the time, meaning on average we have 20 times the number of cars we actually need. Now imagine a world where you don’t have to look for parking — ever — because parking doesn’t exist, and think about how much additional land that opens up in urban and suburban settings, creating walkable communities closer to their urban centers. This move has the power to completely change (er, disrupt) not only the ride-for-hire industry, but the personal transportation industry, and our very landscape, in the same way the automobile first did 75 years ago.
With that said, I want to leave you with a few industries that I think are prime for disruption (but, you know, without giving you any ideas on how to disrupt them). The short distance, personal transportation industry is about to change completely, but the long distance travel industry has been basically the same for 65 years; in 1952 a commercial jet could travel at 500 miles per hour, and the Boeing 737 has been able to hold 100 people since 1967. Everything since then has been incremental improvements; I want to see either of those numbers change by an order of magnitude. On a completely different note, software development has gotten incrementally easier and easier, but it still takes a team of experts (more on that in another post) months to create a real product; Fred Brooks argued in 1986 that there is no silver bullet to this problem, and that only incremental progress will be made in the field. He’s just as right today as he ever was. Finally, energy prices have been tied to commodities like oil, coal, and natural gas since the inception of the electrical grid; new technologies like solar and wind are not reliable enough to disrupt the market, and we are still tied to the same grid we’ve been tied to for over a hundred years. Finding a cheap, clean, renewable (or at least plentiful), and scalable source of energy, or being able to broadcast that energy without maintaining an aging network of unreliable power lines, has the power to disrupt the most critical industry in our society.
Those are my thoughts on disruption — if you care to disrupt them, leave a comment! And of course, if you care to solve any of these problems, please do. I look forward to the disrupted world of tomorrow.