Timing and Infrastructure

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Over the holiday I was catching up on the unread articles in my browser (time to switch to Pocket/Instapaper… there were almost 100) and I bumped into this one by Bloomberg collecting venture predictions for the most important trend of 2016.

I really liked Rebecca’s comment: “2016 was the year the internet quietly sped up″ and haven’t been able to get it out of my head. In the venture community, we often credit Amazon Web Services – and the rise of cloud computing more generally – as an inflection point in the startup industry, as a founder could build a technology company for the cost of a subscription to EC2, instead of having to buy and maintain their own servers and manually include CPU, memory, PCI components, et cetera. This is the difference between $100,000+ for your own hardware and $1000+ for access to a subscription. The floodgates burst open with startup activity, and the world was never the same. Crazy as it sounds now, perhaps it will have been Jeff Bezos’ most valuable contribution to the technology community during this period.

When the 200 millionth 3G handheld device shipped in 2007, days before Steve Jobs went on stage to announce the iPhone, another inflection point occurred: the birth of mobile as we know it today. Most people ascribe all the value to the iPhone 1, incorrectly. Yes, touch screens and the concept of the app were transformative, but it was actually the iPhone 2 that I find most interesting, and that actually represents the true inflection point: the iPhone 3G. In that moment, connection speeds were fast enough that ‘real-time’ was within reach for applications, GPS and turn-by-turn navigation arrived (at scale) on a handheld device. And it was only in this context that UberCab made sense. And only in the release, the next year, of the iPhone 3GS, where the camera finally was usable, where Instagram made sense.

LTE, whose adoption reached interesting scale some time in late 2009/early 2010, took the evolving speed characteristics to the next step, whereby a piece of media wouldn’t have to buffer for long periods to load, where the expectation was instantaneous and continuous media. It’s only in this environment – a matter of telecommunications standards having been adopted widely enough, where true shopping and banking on the phone were not unreasonable, where constant multimedia communication made unit economic sense – where Spotify and Snapchat were possible.

As 4G adoption takes hold, and live video streaming and realtime video chat explode on Facebook, Snapchat, and the new players Marco Polo, House Party, Tribe continue their blistering growth, we have our resilient and fast-improving infrastructure to thank for the rewiring of our user experiences with these devices.

5G (the G simply stands for generation, FYI) is around the corner, and upload and download speeds are north of 50 Mbps for many connections today, such that the “always-on” connection that we have come to expect from Wifi will be possible with standard mobile devices as well. In this sense, it may be that the Internet of Things was indeed a bit early, but not simply because the killer use cases hadn’t arrived, as many have speculated, but actually because the infrastructure wasn’t ready yet. I also believe the internet of Things is a massively correct trend, but we’re not thinking small enough or big enough – stay tuned for a post on the latter, but as a teaser, consider the notion of data centers that are themselves mobile (read: self-driving cars/trains, UAVs). I’m imagining a dynamically updating, fully mobile cloud that moves data packets between the physically closest points, across a mesh, or *incredibly* cheaply, as the servers themselves move humans and cargo. Imagine what kind of application layer that technology will enable. Distributed computing on crack!

I’m endlessly excited about companies that are accelerating users up the Internet access curve, and about companies that are steepening the internet access curve itself. While we quarrel over social psychology and culture as the driving forces of adoption, the infrastructure layer may be the most important precondition for timing an information technology movement.

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