What World Is Software Eating?

In a well known Wall Street Journal editorial, Marc Andreessen coined the phrase “Software is Eating the World.” We all know of the businesses that have been eaten, or at least have had large chunks of their business devoured. Newspaper advertising, book selling, traditional brick and mortar commerce, the recording industry and taxis are just a few industries that have had a large bite taken. And perhaps the biggest disrupter, the blockchain, has yet to really come to the table to eat.  And Andreessen thinks that will be “bigger than the Internet.”   

Virtually every industry has to worry about Silicon Valley and its equivalents.  We tell our clients they should analyze their “Amazon Risk” (Look who’s next). Even the super-smart and super-creative need to think this way.  For example, how will academics work in a theory-less world?  Coursera may have the answer for the teaching side of the college business.  See Clayton Christensen’s book on the subject.  What about the research side?

But the thorny question remains: When one industry gets eaten, does that mean only a relative few Silicon Valley (or Seattle) companies benefit?  What does the Gain minus Suffering equation come out to?

Of course its complicated.  It’s not a zero sum game for sure.  Andreessen says Netflix “eviscerated” Blockbuster which implies zero sum.  Is AWS terrible for IBM? Probably, but so many small tech companies and startups could not live without it.  Amazon Web Services(AWS) allows our business to exist.  I don’t think IBM would have ever made AWS on its own.  Uber might be driverless some day, but can we hope the cars will be owned by the same drivers who used to actually drive their own cars?  Maybe one person could have two of their cars on the road at the same time.  Andreessen’s phrase might be too ominous; some are being eaten but others are also eternally grateful for the ingenuity of the ominivores.

It’s not clear at all what kind of meal software and automation is having as a general proposition.  At least not to us.  Its intuitive to think that technology will make people less relevant.  After all, can it be that all this technology and robots will not somehow make us obsolete?   Erik Brynjolfsson puts it like this:

“…will there be enough demand, especially over the long term, for those two types of human labor: that which must be done by people and that which can’t yet be done by machines? There is a real possibility that the answer is no—that human labor will, in aggregate, decline in relevance because of technological progress, just as horse labor did earlier.”

On the other hand, there are those who say that technical innovation always helps people.

We are a firm that looks to insert the human into the automated.  Our strategy is to scale what people know instead of it being automated away.  We want to help people express knowledge “as an API” and become “deployable.”  It’s not that simple, some bodies of knowledge or domain expertise just don’t lend themselves to “deployability”; for a host of reasons.  We’ve learned this the hard way – even with hugely smart people.  But at the same time we see many ways to scale and automate what people know in a world increasingly dominated by software looking to make their job titles extinct.  It’s possible, that you automated might be better than the Machine.  But we are not going to tell anyone that the Machine is necessarily bad.  There are issues with Big Data that we will explore in future posts.  But some Big Data software applications have created absolutely amazing results.  Others have been spectacular failures.  Its more accurate to say that You plus the Machine is what we are trying to build.  We think that’s part of Andreesen’s point – businesses, and by implication people, need to find their software value.

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