What Can The Last 30 Years Teach Us About The Next 10?
7 Insights From Studying How The Internet Happened (by Brian McCullough)
Good Morning from Birmingham, Alabama 🌞
I’ve been on the move the past few days! After a week in Miami, I spent time in Ocala, Florida with my grandparents. From there I went to Birmingham, AL, spent a day in Nashville, TN, and now I’m back in Birmingham for a few more days.
I did a lot of reading in transit! This week, I shared my big ideas from reading How The Internet Happened by Brian McCullough.
Enjoy!
7 Insights From Studying How The Internet Happened
Why Did I Read This Book?
First, Crypto Mania. Is it a bubble or truly a revolution? Have all the big opportunities been exploited or are we still early to the party?
To answer this question, I decided to study the history of the internet. It’s the closest situation we have for comparison’s sake.
Second, General Interest. I’m passionate about technology. Learning the history of any subject typically proves to be useful and enjoyable.
* all quotes are from How The Internet Happened by Brian McCullough
1) User Interface as a Barrier To Adoption
Widespread adoption of the internet did not occur until it was user-friendly.
The Internet, in short, needed its own GUI revolution, that application/user interface innovation that would make the Internet user-friendly just as the graphical user interface had done with computing itself.
Mosaic, an early web browser, was a good example of this.
Mosaic had become the most successful project in computer science by leaving the computer scientists behind and appealing to the mainstream.
Simplication, dumbing down, and layers of abstraction (enabling people to use crypto without needing to know anything) are some of the clearest opportunities in the space.
2) Mindboggling Paradigm Changes in Speed & Scale
The internet brought about multiple paradigm shifts that ultimately made the world orders of magnitude faster.
Companies could release products and updates faster.
They had discovered that you could dream up a product, code it, release it to the ether and change the world overnight…. The old era of two-year product cycles was over.
Services could grow faster.
By 1999, usage of the search engine was increasing by as much as 50% a month. From 100,000 searches a day at the beginning of that year, Google searches grew to an average of 7 million per day by the end of it.
Money could be made (and lost) faster.
It had taken twelve years before you could begin to talk about all the millionaires Microsoft had minted. Netscape had done it in fifteen months.
3) Infrastructure and Timing
YouTube wouldn’t have worked if it was launched in the 1990s.
Storage was too expensive, and internet speeds weren’t there yet.
All of the money poured into technology companies in the first half decade of the Internet Era created an infrastructure and economic foundation that would allow the Internet to mature.
It was only when high bandwidth, cheap storage, device ubiquity, and mindshare (cultural adoption) of technology matured that an idea like YouTube could succeed.
The hidden opportunity? Consider what good ideas failed in the past because of insufficient infrastructure or bad timing. Maybe you could revive them?
4) Have We Gone Backwards — The Old Way Seems Better
I was too young to use AOL’s AIM. Reading about their features excited me.
AOL’s chat had an extra feature called the “Buddy List” that alerted you as to which of your friends were online at the same time you were, so you could hit them up for a quick conversation.
The system also allowed you to leave an away message so that your friends could know when they might expect you to be online again.
Why is this not a feature on every messaging app? This would resolve an incredible amount of uncertainty in communications.
Just as Ryan Holiday has made a career off of rewriting ancient Roman texts, tech entrepreneurs would be wise to do some grave-digging.
Some great ideas live in the past!
* Conor White-Sullivan is doing this very well at RoamResearch
5) Overlapping Social Circles
The Paypal Mafia is not the only alumni network of serial winners. This book exposed a few additional examples of how the same groups of people seemingly popped up over and over again in big ways.
General Magic was an Apple spin-out that Pierre Omidyar of eBay; Tony Fadell, the father of the iPod; and Andy Rubin, the inventor of the Android operating system, all worked at before going on to fame and fortune elsewhere.
General Magic itself eventually failed and shut down, but the relationships and ideas that it nurtured lead to many eventual successes.
I take this as a reason to be optimistic. The people who commit themselves to the mission of finding beneficial uses of innovative technology seem to eventually do so.
6) Finding New Fundamentals
Speculation around internet companies created a new set of challenges for investors.
Plenty of commentators were shocked that a company that had yet to make any sustained profit could be valued so highly.
Before the internet, P/E ratios were a pretty durable method for appraising a stock.
A traditional old-economy stock like General Electric was trading at forty times earnings.
What do you do in the world where companies could go from not existing, to having millions of users overnight? Old models can’t keep up!
The internet’s paradigm shifts make it necessary to find new measures of projected future value. This problem is still largely unsolved for Web 2.0 tech firms (Facebook, Google, etc) and presents an even greater challenge for pricing Web 3.0 technologies such as cryptocurrencies (BTC, ETH, etc).
7) We Are Still Early
“I thought I had missed the whole thing,” Andreessen would later say of his arrival in California. “The overwhelming mood in the Valley when I arrived was that it was done. The PC was done, and by the way, the Valley was probably done because there was nothing else to do.” — Quote from Marc Andreessen in the 90s
It takes a long time to mix and match all of the new ideas that emerge from the new possibilities that emerge from new technologies.
It takes an even longer time to mix and match all of the new possibilities that emerge from the ideas that just emerged from the ideas that also just emerged from the other new possibilities and technologies.
That was purposely overwhelming. Computers and the internet shatter multiple paradigms all at once. Then, the subsequent inventions shatter even more paradigms. This positive feedback loop leads to exponential innovation.
We are still in the early innings of computers, software, the internet, e-commerce, cryptocurrencies, and blockchains.
To think it would only take 30-50 years to fully realize every potential beneficial implication of these technologies is extremely naive.
You haven’t missed the boat.
As Dickie Bush would say, “grab a shitty rod and start fishing.”
Thanks For Reading!
As always, I’d love to hear from you.
Reply directly to this email. Leave a comment online.
Stay curious,
Louis
Hyperlinks To Various Things
Podcast Updates 🎧
LK #71 with Colton Sakamoto: Helping People Get Jobs In Crypto
LK #70 with Polina Marinova Pompliano: Profiling the most interesting people in history
LK #69 with Joe and Scott: Business lessons from Australian tech and education entrepreneurs
LK Content Coming Soon 📅
Dr. Richard Schatz, co-inventor of the Heart Stent
Cole Schafer from Honey Copy
Joel Runyon from Impossible HQ
Quick Clicks
(1) 👨💻 Smart Contracts Using Bitcoin 👨💻: Stacks
Most people think ETH when they think smart contracts. Stacks is a compelling BTC-based alternative.
(2) 📚 Book 📚: How The Internet Happened by Brian McCullough
This is the book that this post was based on! You get a nice short biography of the major internet companies: eBay, Netflix, Google, Amazon, Napster, Facebook, MySpace, and many more.
(3) 🍿 In Theaters 🍿: Cruella by Disney
My first post-COVID trip to the theaters. I enjoyed it!
Photo of the week — Visiting My Grandparents!
One More Thing I Learned This Week
Something A LL Reader Helped Me See
Cunningham’s Law is a hilarious phenomenon.
“the best way to get the right answer on the Internet is not to ask a question, it’s to post the wrong answer.” — Brian McCullough
In last week’s post, I made the following statement:
I hope by now, we’ve learned to laugh at the mainstream media. Their credibility is below zero in my opinion. Their motivation is entertainment, not education. Please please ignore them.
I’m very grateful to one of the readers of this newsletter for challenging this position.
Here’s a glimpse of what he had to say (paraphrasing).
There are so many good writers who are doing awesome work that benefits the world. They hold rich, powerful people accountable and uncover conspiracies that we would have never found out about otherwise (Catholic Church pedophilia, Uighur internment camps, etc.).
So while I agree that media and news has become corrupted and that TV news and big daily news sites can be super clickbait-y and not great, there’s still so much good out there that I believe it’s dangerous to just dismiss all of the “mainstream media.”
…I don’t think that’s what you were going for, but it’s worth bringing up. Feel free to set up a call this week if you wanna talk about this more. Otherwise, thanks for engaging with this.
This excellent, respectful response deserves an A+ (💯).
This reader disagreed with my writing and thought it was important enough to set me straight. He then explained why by politely providing specific examples and offering to discuss further over the phone.
Ultimately, I agree with him. My blanket statement was flawed. Distrusting cable news and many online publications does not mean we should distrust all MSM.
Guess what? He changed my mind. Because of him, I will be more nuanced in future attacks on MSM!
If you find faults with my thinking, please speak up! This is how we all learn!
Thanks for this Louis - incredible to see this newsletter evolving, please keep up the good work. The humility from your post-script was almost the best part - great you have active readers like that, and are humble enough to take it onboard and incorporate.
"Strong ideas loosely held"