And it got me thinking. My argument is a little bit more subtle than I thought.
Without a shadow of a doubt – A (capital A – no typo) disruptive product is the combination of software and hardware. That almost seams silly to have to write … After all is hardware with no software anything but inert rare earths?
Let me add some refinement.
1. I was really talking about as an innovator where do you go looking to go create the next disruptive product
My point was not that software is irrelevant, my point was that disruptive products emerge where new hardware is not where old hardware was. And that the new hardware creates new kinds of software systems that are very different than the old ones, and the combination of the new hardware and the new software is what displaces old software.
If you are looking to CREATE new disruptive technologies, the most important thing to be looking at is hardware not software. The hardware will create the opportunity to create new products that may have been previously imagined but impractical to build or sell.
2. It’s about utilization
When I say utilization I mean how much of the true capabilities of the hardware are being wasted versus being fully utilized. For example, the smart phone in 2007 was underutilized compared to it’s true potential leaving 100’s of billions of dollars of unrealized value in innovation.
Innovation really happens when the existing software systems are unable to take advantage of the new hardware capabilities creating an opening for a new software system to leverage the hardware differently. Typically what happens is that the old software made certain assumptions about the hardware that changed and a different software system making different assumptions is able to create new experiences that are profoundly different than the old ones.
What has happened, typically, is that the hardware vendors ability to create new hardware has exceeded the pace of innovation in software of the incumbent players creating an opening for new vendors.
3. Physics begets hardware begets software that is not math.
A lot of the new hardware that we are seeing come into existence is the result of new deeper understandings of the materials we are using. Ultimately that science into materials is what is creating the opportunity for disruption. Hardware is the – in this vast oversimplified narrative of the world – first order derivative not software.
And yes I know some believe math begets physics, but I also know that software is not math.
Clearly any novel and new disruptive product is a combination of hardware and software … My personal bias’ when looking FOR disruptive products is that they must be hiding in places where new hardware is being underutilized and the product must have software that is making trade-offs that are inherently incorrect for the old hardware. And if the new product succeeds it will do what seems impossible – kill old software.
Because hardware comes first, software later in this tale – and that the triumph of the new system is to kill the old software then my original point of view remains – new hardware is the place to go looking for when you want to create disruptions and therefore hardware not software is eating the world because it is allowing the world to be radically changed.
And I know Mr. Andreesen meant something else.