Software is eating software

When in 2011 Marc Andreessen said that software was eating the world, it surely sparked some controversy. Various people (especially non-tech) went like “ oh, those nerds,” while others (us nerds) were nodding all along.

Fast forward to 2016. The bubble is not happening and the software Pacman is marching on, consuming our homes, cars and bodies. At this point any business of certain size becomes a technology company since it has to integrate sophisticated technical solutions into its products, services and workflow. Increasingly, effectiveness of doing that becomes serious competitive advantage.

But there’s also another trend: software just keeps eating. Now that an old manual process is replaced with a software solution, it’s still not enough. We find out that systems that were new just yesterday are bloated, complex, inflexible, and are bound to be replaced by newer, smaller, better connected successors. Silos are no longer tolerated, while new solutions as a rule are API-driven, peer-aware, standard compliant.

It’s obvious with the launch of platforms like Stripe and Slack. Every time it happens, we see the appearance of so many innovative products that often begin like toys, what-if’s and scratch-your-own-seemingly-small-itch’es (just check listings at ProductHunt).

Often the focus of such small products is being the lubricant to remove friction. So many stories start with “I was fed up with X and so I built Y”. Thus the software keeps eating other software. The single biggest problem of most products on the market is not that they don’t do their job, rather that they just don’t do it good enough. Hell, my own company, Inbill, was created to remove absurd friction in managing customer payments.

Technology is about technique, i.e. process. We solve old problems, creating new needs and higher level problems, which in turn get solved by newer technology. We receive better, faster processes of doing anything, and it’s awesome. Until it’s old news in a moment because now something does the job better.

Ten years ago we didn’t even have computers in our pockets, yet now we’ve got Zero UI, AI, VR, and tons more other sci-fi acronyms in mass production. We are on a stairway to heaven of solving global problems and sophisticated individual needs at increasing speeds and ever falling prices. Exciting times to be a consumer!

But what about companies that buy and sell tech?

We find ourselves in a puzzling whirlpool of variables that are too many for traditional planning. Ouch.

Suddenly nobody has “10 year experience” in anything, all while the speed of paradigm shifts increases. Whatever area you work in, chances are you’ll once find the market moving faster than you do. You have a product of a certain size? A material customer base? These are good signs that you are already obsolete.

If you are plotting to be the next Facebook, you likely already realised this article is not for you. But if you are small, trying to be useful, and want to be around after the next wave, consider the following principles of resilience:

1. Stay small. Thinking of the next feature? What about building a bridge to something that already does this job on a scale? At least, burning bridges is fun.
2. Let go of “us vs them” mentality. Forget marketshare, we are not in the zero sum game. In fact, progress creates more opportunities than it kills. Try to find ways to collaborate with somebody to do what wasn’t possible/feasible/needed before.
3. Invest in customers. Trends and technology change but people and their insecurities do not.
4. Keep open. Review all your fundamental principles and functions; ask yourself the same questions you thought you already answered.

As technology companies we can’t jump on every new crazy idea or a shiny toy out there. Somehow we need to be productive in between. However, our long-term relevance rests on shaking up, reinventing, betting everything on one thing again.