Never bring a knife to a gun fight: Understanding and staying ahead of technological trends
Creating new technology takes time. Whether you’re developing software or building hardware, the process of designing a product and taking it to market can take years — or several depending on the complexity of the technology you’re working with and industry you’re working in. Unfortunately, as startups are creating a solution that can disrupt the market, the market continues to evolve and change. If they’re not careful, startups can easily invest substantial amounts of time and money into developing technology that’s outmoded or passé by the time they’re ready to launch.
It’s the fintech startup that spends three years developing a digital ledger solution only to find that blockchain has already obsoleted their platform before it’s been finished. It’s the IoT startup working on smart home solutions that suddenly finds themselves competing against Google and Amazon. It’s the social media app for truckers that can’t raise money because everyone has their eye on driverless trucks. The feverish pace of change combined with the increasing scale and scope of incumbents is making it hard for startups in every industry to keep up with and leverage the newest technologies. You may have created a better knife, but you never want to bring a knife to a gun fight.
Although it’s impossible to predict the future with any amount of certainty, it is possible to visualize where your startup sits within the historical trajectory of modern technology. Understanding which trends are waning, growing and emerging can help startups ensure they stay ahead of the curve. One useful way of thinking about technological trends are as waves of innovation.
Below, we’ve outlined the major movements in digital technology that have arisen since the dawn of the Information Age. This is by no means a comprehensive accounting of the history of modern technology. There are many valid models out there, such as Kondrateiev’s Waves of Innovation (right). For a more theoretical perspective on innovation waves and cycles, the works of 20th century economists Nikolai Kondratiev and Joseph Schumpeter are a great point of departure.
First Wave: Connecting people to things
By the late 90s, increasingly sophisticated search engines like Google were making information more accessible than ever before At the same time, physical goods were also becoming more accessible through the efforts of e-commerce pioneers like Amazon and Netflix, which people forget were founded as online retailers in 1994 and 1997 respectively.
Second Wave: Connecting people to people
In the early 2000s, when AOL Instant Messenger was at the height of its popularity, social media platforms like MySpace and Facebook began to spring up to connect people to people in a more immersive way. The internet’s ability to connect people to things, while still valuable, was quickly overshadowed by its ability to connect people to people — the very premise behind file sharing platforms like Napster.
Third Wave: Connecting people and things on the go
The iPhone debuted in 2007, followed by the AppStore in 2008. The advent of the smartphone sparked a deluge of mobile applications which aimed to connect people to people and people to things wherever they were. You didn’t have to be at your computer to experience the fullness of digital connectivity. Although the app boom has had a long tail (mobile gaming for example is on the rise), the smart money has moved on, leaving many late-to-the-party entrepreneurs with fewer and fewer sources of funding.
Fourth Wave: Connecting people to services
In parallel with the mobile revolution, as-a-service and on-demand models were beginning to gain steam. 2006 saw the creation of Spotify, Netflix’s streaming video service and Amazon Web Services’ infrastructure-as-a-service model. While Software as a Service models were not new, it was during this period that they became ubiquitous. Such approaches have become the industry standard in many sectors and underpin today’s most successful digital business models.
Fifth Wave: Connecting the digital to the physical
The current wave of digital innovation, connecting the digital to the physical, is all about taking control of the physical world. It’s about connected devices (the Internet of Things), sensors and data, virtual and augmented reality and solutions that allow us to automate tasks. It’s about blurring the lines between a digital and tangible objects. Software engineers in the oil and gas industry, for example, call the digital representation of a physical asset its “digital twin.” These digital representations, however, do more than allow us to visualize the physical, they allow us to control it. Although this wave hasn’t yet crested, attention and investment are already flowing towards Sixth Wave technologies.
Sixth Wave: Connecting without people
The Sixth Wave is about removing people from the equation entirely. It’s autonomous vehicles and Artificial Intelligence. It’s the comprehensive automation of systems. It’s about machines managing and creating machines. It’s about replacing human talent and intelligence. It’s the wave of innovation that has luminaries like Stephen Hawking and Elon Musk worried about the future of the human race — and it’s the premise behind some of the hottest startups today.
Taking a step back and looking at the history of technological innovation — the bigger picture — in this way can help founders determine whether the technology they’re developing aligns with market trends and social concerns. Ultimately, all waves of innovation overlap. Some last longer than others. And every wave builds on those that came before and influences those that come after it. While technologies from each wave can still form the basis for viable, scalable and sustainable businesses, understanding where your tech fits in history can help make sure you stay ahead of the tides.
About the Author
Remington Tonar is a Partner at Brandsinger, where he specializes in strategic innovation, change management and technology strategy.