Jacques Mattheij

Technology, Coding and Business

All targets are moving targets

When one business sues another to protect their income stream for the most part this is an admission of failure.

Failure to realize that the market never stops moving and that as a consequence there is no such thing as a guaranteed income stream is a mistake that can cost you dearly. Savvy business owners realize this early on and plan for the future, even when it looks as if their product lines will have indefinite life and that the competition is asleep at the switch. It’s only a matter of time.

The only areas where you can be sure that you will have 0 competition are those where there is no money to be made (and possibly where there is lots to be lost). The feeding frenzy around mobile phone apps is a nice example of this. Let me remind those that are making a good living off building those that once upon a time you could make fantastic money by making web pages by hand. That cottage industry was somewhat disrupted by the arrival of ‘frontpage’ and its cousins. The same happened to the static websites of only 15 years ago or so, and the same will happen again in the mobile space at some point in the future.

It’s a bit like mining for gold. You find a vein and start to pull nuggets out of the ground. Sooner or later someone will notice that you are banking rather a large amount of money and then the gold rush sets in. A while after that the only way to make money will be by selling shovels, and yet another while after that someone will find a richer vein in another part of the search space and the action moves there, leaving the former goldmines and the boomtowns that sprung up around it to fall apart.

Of course, if you are the owner of a profitable gold mine it sucks if someone finds out about it and starts mining right along with you. And you are fully within your rights to sue anybody and everybody these day, even if it is obviously just to protect your income stream. But admit it, you failed to see ahead. If you saw ahead you’d be out there discovering new areas to mine before the inevitable happens to the old one. It really is only a matter of time before your business will move to another phase of the life cycle.

Ask the buggy whip makers, ask any one of tens of thousands of workers from Kodak. Ask record company executives and others that found a gravy train to ride. If you’re lucky it will last your lifetime, but more likely than not your targets will move at least several times during your lifetime and you - and your company with it - will have to adapt. Or you die. No matter how much money you have in the bank to waste on the legal system. Once you go that route even if you succeed in the short term to protect your interests and you manage to stave off the immediate revenue drop in the long term I think your money is better spent on surveyors than on lawyers.

This rule holds for very large companies all the way down to self employed people, aka ‘freelancer’. From my own career to date, a list of re-alignments, not all of them voluntarily:

  • employee

  • art installations

  • games platform programmer (Atari)

  • PC platform programmer (consulting, mostly CAD stuff but also a bunch of utilities)

  • telecommunications (large volume message switches)

  • licensed software developer

  • ad supported website

  • Freemium model website

  • m&a consultant (just one example of selling shovels)

  • ?

Whatever the ‘?’ stands for, for sure it will grow out of the previous items on the list in some way or other, and I will likely have limited control over where and when the opportunity arrives. And right along with me there will be an army of other people making roughly the same decisions for roughly the same reasons. So if you feel that your god-given right to an income stream is about to be infringed upon, instead of seeing this as a threat that you need to ward off, think of it as a sign that the times are changing again, like they always do.

Non-moving targets are for suckers, they’re unsatisfying when you hit them and are likely a sub-optimal use of your skills and resources. Keep moving, just like your targets and you will be able to generate income in any market no matter what the future will bring. I’ve yet to see any slowdown in the technology world that allowed me to ‘take it easy’ for more than a year or two at the time. And as soon as I do then there is some alarm clock going off in my head that I probably missed a connection somewhere.

In some ways this reminds me of locusts swarming from field to field. But locusts just destroy. In the technology world there are always new frontiers opening up, markets that are not yet mature, where the cards have not been dealt yet. As soon as that happens whoever moves in fast will be able to stake a claim on a sizeable chunk of that market. It will be hard work and you’ll be sorry if you bet wrong and the segment isn’t as large or profitable as you thought it was going to be.

Industrially speaking there has been a series of phases which started somewhere around the 1400’s:

  • colonization

  • maritime developments (clocks!, better boats)

  • mechanization (first prime movers)

  • transportation (I) railroads

  • gasoline engines, diesel engines

  • transportation (II) trucks/cars/tractors

  • advances in medicine

  • telecommunications (telegraph, postal services)

  • transportation (III) air travel

  • electrification

  • electronics (I) the vacuum tube era

  • telecommunications (radio)

  • electronics (II) the solid state era

  • access to space

  • electronic media (large scale TV adoption, color TV)

  • electronics (III) miniaturization (which continues to this day)

  • mobile communications

  • software development (stand alone)

  • software development (networked)

  • bio technology

  • software development (mobile)

  • ? (one possibility: synthetic biology, another: wetware interfaces, maybe implants)

And so on, of course, with quite a few of those overlapping and with a large number of smaller steps in between, as well as tons of spin-offs and supporting industries. Sometimes it is hard to tell the difference between cause and effect, for instance the development of powered flight was driven by the availability of lighter, more powerful engines (and of course by demands from the military, which seems to be an excellent way to get your pet project funded. If there is one way to make a ton of money then it is probably by inventing more efficient ways to exterminate other people). And then, once powered flight was possible it didn’t take long for powered flight becoming a driver behind the research to develop even more powerful engines.

In the 60’s, there was a huge boom in electronics companies, suddenly a flood of electronic gadgets was unleashed on the masses. Portable radios, battery powered (because semi-conductors used much less power than tubes battery powered devices became viable), tape recorders (compact cassette, reel-to-reel and in the United States 8-track (mostly read-only)). The big electronics names that we are familiar with today established their foothold back then. Sony, Philips, and many others already existed in other (possibly related markets) or were created especially for the purpose of jumping on the semi-conductor bandwagon and started shipping products by the metric ton. From being luxuries that few could afford suddenly everybody had a (color?) TV (and sometimes even more than one). In the 80’s a typical living room had more room in it reserved for audio and other electronic equipment than for the kids ;), whereas in the 70’s you were lucky if you had a small black-and-white television. Going over to the neighbours to watch TV was definitely not a rarity before that time, even if that is hard to imagine nowadays. And those companies made a ton of money. And later on, those that saw the next change coming diversified into media and other fields. Those that didn’t ended up dying or being severely diminished in influence.

So here we are at the beginning of the mobile internet era. Maybe you have an app out there that makes you a ton of money, maybe you’re engaged in mobile internet development in some way or other and your skills are in high demand. Good for you:) But if this is your first round in the technology boxing ring beware: there are many more rounds to follow and you will at some point have to learn new skills and move on to a field that has not yet completely stratified. The sooner you identify the shift and the better you time your adoption the bigger your take will be. Nothing lasts for ever, and in the technology world 5 years is an eternity.

Better be prepared for that shift and embrace it when it comes.

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