I’m not sure where I heard the adage that when the technology platforms change the players – meaning companies, will change with them, but it’s a good one for would-be entrepreneurs. Meaning those with a real bias towards doing a startup, as three MIT grads I met with recently, who really wanted to do a startup but didn’t know where to start. Watching for the next wave is one way to launch a business that will have the advantage of a megatrend behind it.
I went through two of the major instances of platform changes enabling new competitors which we missed not once, but twice. If you are running an established company rather than a startup you or a co-founder should spend a few percentage points of your time scanning for imminent platform changes in the technology environment and when you see a massive change coming get all hands-on deck to prepare for it.
The Apple 6502 Platform
Here’s the first example. In 1979 Dan Bricklin and Bob Frankston started a company called Software Arts, Inc. to commercialize Dan’s invention of the electronic spreadsheet to be named VisiCalc. There were lots of PCs around in the dawning of the personal computer in the late 1970s but no single company had yet developed a platform, meaning a framework or environment in which end-user applications can be developed and run. Back in those days there was a strict delineation between systems software, what we now call the operating system, and applications software, like word processors, now called apps. Dan and Bob wisely chose the Apple II from Apple Computer, Inc. and it’s 6502 processor as their delivery platform. If I recall correctly the Prime computer, a mini-computer played a key role in development, thought VisiCalc was coded in assembly language for the 6502 processor. Choosing the 6502 and Apple over the 8080 used by a number of other companies had a direct and highly beneficial effect on Apple’s skyrocketing rise to define the personal computer. As highly influential analyst Ben Rosen wrote of VisiCalc, It was he software that wagged the hardware dog. You can learn a lot more about the early history of Apple in a plethora of books and though no one has sought to write the history of Software Arts there’s plenty of information about VisiCalc onWikipedia. I’ll limit myself with providing you with a very insightful quote from Ted Nelson, a pioneer of hypertext and a hero of mine (deserving of a full post):
VISICALC represented a new idea of a way to use a computer and a new way of thinking about the world. Where conventional programming was thought of as a sequence of steps, this new thing was no longer sequential in effect: When you made a change in one place, all other things changed instantly and automatically.
— Ted Nelson
The Apple II became a platform through two breakthrough ideas by Apple co-founder and technical genius Steve Wozniak: building seven slots into the motherboard, which enabled scores of hardware developers to build compatible cards, and by providing an early version of the BASIC programming language, thus making the Apple II accessible to those of us not equipped to program in assembler.
Software Arts built a very nice business on the Apple II and the strategy was to go broad but not necessarily deep. In other words a lot of the company’s resources were developed in creating versions of VisiCalc for others computer the process called porting, from Atari, Commodore, Radio Shack, and probably a couple of others I’ve forgotten
The IBM PC PC-DOS Platform
But then along came the IBM Personal Computer developed in a skunkworks located from from IBM’s gravitational pull of its HQ. The IBM PC was the massive change in platform that unfortunately Software Arts missed. We were given a very early version of the machine, code named “Peanut” which came in on a plywood board, and sported an operating system that wasn’t yet to be called PC-DOS, as it was an OS purchased presciently by Microsoft from a small developer who had no idea that that the market dominating IBM was soon going to enter the PC business. Well I have to be careful or I’ll be regurgitating everything I know about the early days of the PC which isn’t my point. Others have done that quite well and it’s not my intent.
What happened with the PC was that Software Arts made a very large mistake. Instead of treating the IBM PC like the market and platform creator that was soon to dominate the business computing world, it was treated the IBM PC as yet another port, much like Atari or Radio Shack. So rather than coding a new version of VisiCalc from ground up to take advantage of it’s leading hardware features, such as function keys, larger memory address space, built in floppy drives, higher resolution screen and more, the decision was made to use a cross-assembler. It got VisiCalc onto the PC fairly quickly. But Mitch Kapor who had been the product manager for VisiCalc for Personal Software, the publisher and distributor of VisiCalc, had left that position to develop his own program for the Apple II, VisiTrend/VisiPlot. That graphing program, which used the same file format as VisiCalc so it was easy for users of VisiCalc to import their data into VisiTrend to analyze and plot their data. Mitch wisely sold the program to Personal Software. Many of us at Software Arts, like me, who knew Mitch expected him to retire to Hawaii given his penchant for Hawaiian shirts. But Mitch had developed several other programs, so he was deeply embedded into the personal computer industry and he presciently spotted the IBM PC for what it was – a ground breaking new platform that would enable programmers to take advantage of it’s more sophisticated OS, 8080 processor, larger memory, extended keyboard and other of its many advantages over the Apple II.
Although Steve Jobs brazenly took out full page ads welcoming IBM to the personal computer industry the Apple II soon became a speck in IBM’s review mirror. Mitch got as a partner Jonathan Sachs, whose programming wizardry rivaled Software Arts’ Bob Frankston’s, as I recall Dan telling Bob in exasperated tone. To cut to the chase, Mitch was the designer of the most popular program for the, PC and Jonathan Sachs, the programmer. By designing and developing Lotus 1-2-3 from the ground up for the IBM PC and incorporating the graphing and data analysis features of VisiTrend/VisiPlot, VisiCalc soon became a speck in Lotus’ review mirror. The platform changed: from the Apple II to the IBM PC (and its clones) and with it the players changed: from Software Arts, Inc. to Lotus Development Corporation.
The Microsoft Windows Platform
But sharp as Mitch was it was his turn to miss the next platform change. Bill Gates at MicroSoft had developed a competitor to VisiCalc; like all the other competitors I tracked as VisiCalc product manager, pre-IBM MultiPlan went no where very quickly. But it gave Microsoft valuable experience in developing a business spreadsheet, experience that was put to good use as Microsoft drove the next huge platform change, from the command line interface of PC and MS-DOS, to the GUI of the Windows operating system. I remember first seeing an early version of Windows and it looked very clunky. But Microsoft made up for in persistence what they may have lacked in visual design and by Windows version 3.1 Microsoft owned the next and virtually last platform for the PC and became a multi-billion dollar public company on the back of its graphical user interface and the Excel spreadsheet, written by Microsoft to take full advantage of its own operating system. There’s tons more inside baseball history to this platform change, Wikipedia and Google can fill in the many details. But the moral of the story is that Bill Gates, like Mitch Kapor, leveraged their early foray into PC applications programs to totally dominate the next OS of their times.
The Smartphone Platform and the Rise of Mobile Computing
But next came Microsoft’s turn to miss the platform change, and yet again the players changed with it. That platform change was driven by Apple and its development of the market-making iPhone and it’s brilliant accompanying iPhone driver, the App Store. I vividly recall Steve Ballmer, then CEO of Microsoft, replacing Bill Gates derision of the iPhone. Check out the YouTube video Ballmer Laughs at iPhone or read That Time Steve Ballmer Laughed at the iPhone. Ballmer and Microsoft had become fat, happy, and complacent. They totally missed the smartphone and app platform change and Apple did what no one ever believed possible, it became not only amore valuable company than Microsoft, but created a new platform that blew away Microsoft and the rest of the legacy PC world as well.
So you know the saying, Those who don’t learn from history are condemned to repeat it. Well platform change has happened yet again! I knew well before most anyone that AI would become the next platform change. But that knowledge did me no good, as I didn’t know when or why. But neural networks, which had been left dead and buried by influential MIT computer scientist Marvin Minsky rose from the dead, in the form of today’s machine learning. The infrastructure that enabled that resurrection, was the vastly more powerful computing power, the almost infinite storage capabilities, and most importantly, the reams upon reams of data to feed into the neural network to enable machine learning. Google spotted the AI trend early on and wisely scooped on many of the worlds’ AI experts to help it make use of the power of AI. Apple, which lead the iPhone platform change, was too busy taking selfies with celebrities to spot this platform change which unlike the others, was not an operating system change but an application driver – AI – change.
The Smart Assistant and the rise of the voice UI
And there’s yet are two more platform change to discuss, one being the move towards voice control of consumer devices, from iPhones to TVs to a wholly new platform pioneered by of all companies, Amazon with it’s Alexa smart assistance brilliantly wedded to its family of smart speakers, the Echo.
Again Apple had the early lead with smart assistants, just as it had with the Apple II, in the form of Siri, the virtual assistant purchased by Apple and delivered on Apple’s family of operating systems: iOS, watch OS and tvOS. But Apple made much the same mistake as did Software Arts. Instead of capitalizing on it’s early lead with Siri and investing the huge amount of resources at its fingertips, Apple applied the porting strategy, making Siri available on its family of operating systems: iOS, MacOS, watch OS, and tvOS and on it’s very late to the party, the overpriced HomePod smart speakers. Apple is now hellbent on catching up with Google, evident by it’s poaching Google’s head of AI to take the same position at Apple. And having this position report directly to CEO Tim Cook demonstrates the attention Apple is now putting on AI. But they are indeed playing catch up as their HomePod smart speakers were generally lauded for the sound quality but they we heavily criticized for the very weak version of Siri used with these speakers. Jeff Bezos, after failing mightily with Amazon’s attempt at manufacturing a smartphone, has mimicked Apple’s iPhone killer app: The App Store. Only Bezos calls smart speaker apps, Skills. But whatever you want to call them, he’s got thousands of programmers developing for the Alexa platform, and 10,000 plus skills available. In a move that mirrors Microsofts’ licensing of Windows and Google licensing of the Android operating system for smartphones, has licensed Alexa for use with other companies devices, including cars!
So there you have it. Multiple platform changes from about 1981 to the present. All missed by the incumbent king of the previous platform. The lesson here is the by now stale quote from hockey all-time great Wayne Gretsky, I skate to where the puck is going, not to where it’s been. Unlike my call on AI which, I’d become fascinated by reading many of my employer, publisher Addison-Wesley Publishing Company’s AI books, I have no idea what’s coming next. Certainly one could argue that crpytocurrencies are the platform du jour. And like the platforms before it in all probably one or two companies will rise to dominate the industry. Cryptocurrencies and it’s partner in crime, the blockchain, are about where personal computer was before the release of the IBM PC – just getting started, with no dominant player. So whether it’s robotics, quantum computing, biological computing, gene editing, virtual reality, or my personal bet, holograms, there many candidates to choose from. Entrepreneurs need to know some technology history and just as important, keep their antennae up for what’s the Next Big Thing by reading voraciously and attending industry events outside their domain of expertise. I’ll leave you with a well known quote from Alan Kay, The best way to predict the future is to create it. And here’s Alan on YouTube explaining what that quote means for developers today.