Why Reading a Trend is More Important than Having a Great Product
Meet Dr. Stoll
In 1995 – the year Amazon started selling books online – a legendary scientist, hacker-hunter and early computer enthusiast wrote an epic article dismissing the internet as a big noisy gimmick.
Posing in front of his computer whilst holding a crystal ball (I kid you not, see above) Dr. Stoll prophesied that “the web” will never have any significant impact on media, publishing or commerce. “You can’t take your computer to the beach”, he said about e-books. And he went on:
“We’re promised instant catalog shopping—just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. […]. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet—which there isn’t—the network is missing a most essential ingredient of capitalism: salespeople”
Ever since I discovered this article years ago, rarely has a fortnight passed without me sharing it with someone. I can’t recommend it enough.
Dr. Stoll was not some random punter. He was really smart. He knew the computers and the web better than most other people in his generation. He caught a KGB hacker, on the early web. Of all people, how could this guy get everything so wrong?
“Don’t surf your board, surf the wave”
Above is a time-honored advice among surfers, that entrepreneurs would do well to heed. You focus too much on your board, you’ll miss the wave and you will get drilled.
This was the doctor’s principal mistake. The internet (“the web”) was the board that he took issue with – he studied it with an expert eye and found it wanting. Too slow. Too expensive. Too much of this, not enough of that.
And even as he was applying his enormous intellect to the internet’s many flaws, he became oblivious to this enormous wave that was forming. Eventually it crashed hard and Dr. Stoll missed it in an epic fashion.
Don’t be like Dr. Stoll
As entrepreneurs, we can learn a few things from the good doctor’s misfortune:
- The truly important business opportunities are not products. The best business opportunities are shifts in collective consciousness that unlock product opportunities. Successful entrepreneurs see the early tell-tale signs of these cultural shifts. They see the wave forming, as it were and head for it. If you are ahead of the trend, your product doesn’t matter as much as you think, as long as it serves a basic, specific need;
- The size of the current market is irrelevant – the only thing that matters is the potential growth of a market that is emerging. In 1995 Dr. Stoll’s local mall had a bigger turnaround on a Tuesday afternoon than all e-commerce combined in a month. Yet, that local mall had nowhere to grow. Amazon? Different story.
- While you can see the wave forming, you will never be able to predict its actual shape and form. Therefore, don’t over-design your product. Understand that as the wave grows and as people adopt the new norms, their expectations and behaviors are shifting as well. The wider infrastructure will also evolve. Indeed, the good doctor was right: it is hard to take a mainframe computer to the beach. But a kindle works just fine. There are thousands of small steps between the mainframe and the kindle. Compound effect. The good doctor didn’t see that coming.
What waves are forming now?
The most important question: What are the shifts that are happening right now that today’s really smart people are missing? The small, incremental changes in the collective psyche that seem silly and marginal now but that will define the businesses of the coming generation?
I’ll go first:
My fundamental thesis as an entrepreneur is that the most important shift in collective consciousness right now is a well placed concern with our bigger impact on the world. People are turning their backs to growth-driven models just like the generation before turned their backs to salespeople and airline agents. They are instead looking for models that have a net positive impact on the world. If you are an entrepreneur looking for an angle, this is the angle. If you are an investor looking to surf the next big wave, this is it. Don’t be like Dr. Stoll:
It is tempting to nitpick at the current attempts of early entrepreneurs to put product into this market. “Trust me, people only want profits”. “The market is too small”. “It’s complicated”. “ it’s expensive”. “The experience is horrible”. “Naive kids”. This may all be true, but it won’t matter in the long term. The wave is forming with or without your opinion. As entrepreneurs are creating, iterating and optimizing, the infrastructure is improving, shareholder and voters and regulators will establish new standards and a new economic reality will emerge.
Your choice? Surf the wave or miss it.
- How will Coronavirus affect the Economy and Local Businesses? June 8, 2020
- Thoughts About a Revolution June 2, 2020
- Will Coronavirus accelerate Innovation in Air Travel? May 30, 2020
- Trust Economics – How Smart Businesses are Using Trust to Gain an Edge over Competition May 8, 2020
- Remember When the Future was Bright? April 21, 2020