So much tech So few winners.
We know that in the 15 years since the iPhone went on sale, technology has penetrated every crack in our lives. Tech has transformed politics, industry, leisure time, culture and the relationships people have with each other – for better and for worse.
The march of technology has also come with this puzzling reality: Hardly any technology from the iPhone era has been an unqualified success.
I would argue that just one smartphone-era consumer Internet company has emerged as an undoubted winner in popularity and financial vitality: Meta, with its Facebook and Instagram apps.
(The company was founded in 2004, but I’m categorizing this as the iPhone era because smartphones really took off Facebook.)
Every other consumer Internet company of the iPhone era gets an incomplete grade because of a relatively small number of users, questionable finances, uncertain growth prospects, risk of dying out, or all of the above. And even Meta is concerned that it may not stay healthy, as my colleague Mike Isaacs wrote on Tuesday. Plus, uh, meta has contributed to some serious problems in our world.
I know it sounds ridiculous. Tech has conquered everything in the last 15 years. How can there be so few tech companies that we can be relatively confident that they will last around middle age?
I’m going to spend the remainder of this newsletter defending myself. Feel free to agree with me or give a shout (respectfully!) to [email protected]
First, I’m taking a big leap to exclude from my evaluation Google Web Search, e-commerce sites like Amazon and Alibaba, and Netflix streaming video. They may be the tech winners of the long run, but they belong to the first generation of the Internet. I’m not even counting the technology used by most businesses. I’m only looking at consumer companies that were kids or weren’t even born when smartphones first hit our pockets and whose popularity was then supercharged by those tiny supercomputers.
Beyond Meta, the hottest apps of the past 15 years have huge stars.
Billions of people use YouTube but it is not a good business with respect to its size and influence. It is possible that YouTube would not exist today if Google had not purchased the video site in 2006, a year before the arrival of the iPhone.
Twitter is influential, but it is not widely used and is a chronic underachiever. Snapchat is a hotbed of creative online ideas and has been consistently copied by Meta and others. But it can’t last, and it hasn’t been proven to be a capable company. Uber and Spotify are two examples of good technologies that are bad business. They don’t make consistent profits, and some astute tech watchers believe those business models simply won’t work.
E-commerce crazes come and go. Ubiquitous apps like WeChat and Meituan in China will probably never go global. TikTok – We’ll see if its popularity continues, if it can continue to make money and if concerns about its Chinese ownership will haunt the app forever.
Will these iPhone-era stars also be there in about 10 years, or will they follow the path of Yahoo and Myspace? (For Gen Z readers, Yahoo and MySpace were popular websites not long ago.)
This leaves us with the meta. Again, the company has problems, but it has adapted to the rapidly changing online habits of people at times so far. The company is also very, very, very good at making money. So far.
You can’t be a winner without the ability to convert popularity into cash and keep people glued to an app as their tastes change. Very few companies have been able to do both continuously over the past decade.
How is it that we have so much technology and so few winning tech companies?
It is possible that the nature of innovation leaves behind a lot of roadkill. In prior eras of technology, perhaps only one or a few permanent companies emerged. Microsoft and Apple were the big winners as computers shifted to people’s homes. Google, Amazon and Netflix were the stars of the first generation of the web. There were many other technologies and tech companies that have been forgotten along the way.
And if you look beyond the technologies that people use for businesses, there have been more winners over the past 15 years. Cloud computing – a shorthand for digital work performed over the Internet rather than specialized computers owned by people or companies – is the reinvention of Internet services and corporate technology. Cloud computing made a lot of tech companies rich(er), including Amazon, Microsoft, and Salesforce.
It is possible that emerging inventions in artificial intelligence, driverless cars and technology that further blur the lines between the virtual and real worlds could produce many prosperous tech companies. But this has not happened in the technological reality that exists today.
The Internet and smartphones were the revolutions that changed the world. And the medium has been more permanent and powerful than any one part of it.
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Before we leave …
Tech is still thriving. There are lines of concern as well. Google and Microsoft reported slower revenue growth than the companies in 2021. But my colleagues pointed out that companies were mostly confident they could stay healthy because they were facing a weak economic outlook and other problems.
Counterpoint: Shopify, which helps businesses set up shops online, said it estimated how much people would stick to the e-commerce habits they learned during the pandemic. Its financial results revealed Wednesday were dire, and Shopify said it would lay off 10 percent of its workforce.
Reading More from Dealbook.
Tech is changing language for ASL even more rapidly: My colleague Amanda Morris has written about how video calling, smartphones and social media have helped accelerate change in American Sign Language. He wrote, the development – which includes tighter signs that fit into smaller smartphone screens – has sometimes created a rift between generations of deaf culture.
Goodbye “Oops”: It is the sound made when a character dies in the Roblox virtual world. But Roblox said Tuesday that its signature sound was removed due to a “licensing issue,” video game news site Kotaku reported. Roblox fans started an online campaign to bring back “Oops”.
A food festival in Halifax, Nova Scotia has a very strange oyster mascot named Pearl. The mascot oyster shell costume has at least 13 eyes and dark red lips. I like this.
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