Thanks to Ian Leslie for pointing at this post on the myth of the infrastructure phase in the development of technology (worth reading his ten useful concepts post which mentions it).
In the post Dani Grant and Nick Grossman argue that when new technologies emerge we tend to believe that we build out the infrastructure first that can enable us to create apps using the new technology, and yet ‘…the history of new technologies shows that apps beget infrastructure, not the other way around‘.
The authors posit that with a new technology we see a breakout app first which then inspires an infrastructure phase to support the building of similar apps and consumer adoption. So apps and infrastructure evolve in responsive cycles rather than distinct phases.
The examples given include the fact that light bulbs (the breakout app) were invented before the electrical grid (the infrastructure), and that planes came before airports, airlines and air traffic control (‘…you don’t need airports to have planes. But to have the broad consumer adoption of planes, you do need airports‘). The same, say the authors, is true of the internet with successive breakthrough apps (Email, portals like AOL, ecommerce platforms like Amazon, social media like Facebook and YouTube, and mobile apps like Uber and WeChat) were all preceded by advances in infrastructure which helped to support more instances. Apps first, then infrastructure, which then enables more apps, and so the the cycle continues.
I like the point that the authors make about what Steven Johnson has called ‘the adjacent possible’. We begin by inventing with the tools that we have available (we ‘open the door to the next room’) but it’s hard to invent new infrastructure which is significantly ahead of the apps market. And it’s difficult to scale the apps market without the infrastructure to support them (hence YouTube happened when it did because it was enabled by broadband). The two are interconnected. If we attempt to build the infrastructure phase disconnected from the apps phase we’re in danger of building too far ahead: ‘We need the cycle of apps=>infrastructure=>apps=>infrastructure to keep us honest.’
This is helpful in understanding when to invest. A breakthrough app may open up new possibilities but it’s not until the infrastructure phase enables more instances that adoption can really scale and we start to see the hockey-stick growth phase of the technology s-curve. The light bulb may have been invented before the electrical grid ‘…but looking at it from an investor perspective, no one sold a lot of lightbulbs until the grid was in place’. For a new technology, it may well require a service layer to enable application and utility, but the initial apps are still needed to identify the infrastructure or service challenges that need solving.
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