Tech Invariants

Oct 24, 2023

It seems like none of the old rules apply in the age of AI developments. Traditional software businesses are being flipped over with advancements across text, image, video, and audio.

What are the rules that haven’t changed?

  1. Software gets faster. Whether it’s hardware improvement, algorithmic improvements, or simply implemented better, software gets faster. Usually by an order of magnitude (more than we can visualize).
  2. Hardware advancements are consumed by new software. Sometimes, the software does more. Sometimes, it’s less efficient but is written faster. Sometimes both. Refer to Jevons Paradox.
  3. The biggest companies seem impenetrable. IBM, Microsoft, Google, Amazon. These companies seem like they can’t be beat. They never get beat like we think (IBM is still around, and Microsoft is better than ever), but things always change.
  4. Network effects matter. A product or service gains value as more people use it. This leads to winner-takes-all markets where one or two companies dominate.
  5. Software moves faster than hardware. The world of atoms is just as important as the world of bits, but bits can be manipulated faster than atoms.
  6. Moore’s Law is not dead. The rate of improvement might have slowed, but we continue to see exponential improvements in computing power.
  7. Network speeds will increase.
  8. Distribution is just as important as the product. Getting your software or hardware into the hands of users is key. Without it, you could have the best product in the world, and no one would use it.
  9. Venture capital is a lagging indicator. It’s hard to pick the winners. The model of venture is that most investments don’t work out.
  10. There will be more programmers. Even in a world where end-users can customize their software more (maybe with AI), there will continue to be more and more programmers. The implications of more developers.
  11. More code will be written (or at least generated).
  12. More data will be produced.