Thinking “It’s Just A Toy” Is A Trap
Mental Model #5 - Disruptive technologies often arrive with flaws: toy-like, expensive, janky, lacking clear applications · 4 min read
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Thinking “It’s Just A Toy” Is A Trap
Web3 and new technologies in general often face these interlinked complaints:
It’s too expensive
Its janky (the user experience i.e. UX sucks)
Its just a toy
It doesn’t solve any real problems
This type of thinking is a trap.
A common pattern for truly new tech is to feel overpriced without enough value proposition. We are usually failing to imagine what happens with time. Let’s address these complaints in reverse, for tech broadly not just Web3. And look at some examples.
Its Too Expensive
Costs reduce with time.
Cost curves trend downwards. Additionally, market forces, efficiency innovations and economies of scale kick in. Markets such as hardware tend towards efficiency which is why Larry Page said that hardware prices eventually approach the cost of the commodity material inputs.
Better question to ask — How fast till the price come down?
Its Janky
Jankyness reduces with time.
We have likely all observed this in Web2 apps we use.
Web3 is a new paradigm. Things need to be built from scratch. It took a while for Web2 experiences to become the slick efficient one-click-buy processes we are used to.
Better question to ask — Are people using it anyway?
For instance, Metamask, the most popular Ethereum online wallet, is complicated to use right now and certainly not a smooth product compared to a Web2 wallet. The fact that it still has 20M MAUs in November 2021 is a great signal.
Its Just A Toy
The next big thing starts out looking like a toy. Or a fad.
Clayton Christensen first delved in to this in his popular book The Innovator’s Dilemma which coined the phrase “disruptive technologies”.
For instance, Facebook was a technology for creating global media networks, that arrived disguised as a way to share what you had for lunch.
Better question to ask — How fast will it improve?
Its Not Useful
Usefulness goes up with time.
New technologies often arrive with flaws and undershoot user needs. This is temporary.
Importantly, disruptive technologies tend to get better at a faster rate than users’ needs increase. (That comes from Clayton Christensen again)
The new technology also creates uses cases native to it. We are still very much in the skeumorphic era as opposed to the native era of Web3. In the skeuomorphic era, the design thinking is largely adapted from older domains — offline ticketing, supply chain management, record-keeping for offline asset, etc.
But we are starting to see a new wave of native applications that have no prior analogue to the physical world and simply couldn’t have existed without the ownership and portability that Web3 enables.
Better question to ask — Does it provide new capabilities?
Not all innovative products arrive ready to solve problems. Instead, innovation can lie in creating a design canvas, a way for communities to build things on top, such that the product becomes a dynamic process not a static solution.
Additionally, this can be assisted by powerful external forces. Eg. costs of components getting cheaper, bandwidth becoming ubiquitous, mobile devices getting smarter, etc. For a product to be disruptive it needs to be designed to ride these changes up the utility curve.
Going From Toys to Technology — Some Popular Examples
The PC
Initially cost $5000 in today dollars, had to be assembled, appealed only to geeks who had a lot of tech know-how, and offered barely any apps or games.
It was janky. It didn’t particularly solve any big problems in its initial avatars. After all, businesses thought they were running perfectly fine before digital spreadsheets. It was very much a toy for geeks.
But this changed very quickly. External forces like Moore’s law1 were ensuring the hardware became faster and cheaper. The other exponential growth curve was builders - app developers and game developers. They exploded the potential uses and value proposition by creating attractive software and games.
The Telephone
Initially could only carry voice at low quality over a very short distance. As a result, didn’t appeal to the railroads which were the biggest customer of the incumbent technology, the telegraph.
The dominant telegraph company Western Union passed on acquiring the telephone patents for very cheap. What they failed to anticipate was how rapidly telephone technology and infrastructure would improve, which also opened up the consumer market and led to network effects.
Wikipedia
In 2001, Wikipedia would have very much looked like a toy. Its centralized competitor Encarta was a far better product, with better topic coverage and higher accuracy. But Wikipedia was decentralized. It was social software.
It was a process more than a product.
Thus, Wikipedia improved at a much faster rate. Its design features utilized user edits to yield a net improvement over time such that it got steadily better. Encarta, which was skeumorphic to begin with (putting encyclopedias online), shut down in 2009.
The typical path of how people respond to life-changing inventions:
Never heard of it……I don’t see how its useful….It’s only for rich people….I use it all the time….How did people live without it?!2
Congratulations on making it this far.
Let’s keep up the journey down the rabbit hole.
You can either build on a concept Chris introduced with the summary of the excellent a16z podcast episode on NFTs.
Or switch gears a bit and learn more about Bitcoin from its most high profile early evangelists - the Winklevoss twins. Through the summary of their interview with global macro investor, Raoul Paul.
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Appendix
My Two Cents
// I disagree with the premise of Web3 not solving a problem yet. Global payments through crypto already have huge ramifications for areas such as remittances and the creator economy.
// The Wikipedia example is a particularly interesting one. It is a loose analogy for Web3 because Wikipedia content is also decentralized (albeit with centralized oversight).
The open protocol of Web3 and its composability makes it closer to social software. Web2 is like Encarta, it can’t compete. After all, Twitter can only become better at the speed its hired developers work, while Web3 is a design playground for developers all around the world.
Source
The Bankless Podcast Featuring Chris Dixon Interviewers - Ryan Sean Adams and David Hoffman, The Bankless Podcast Guest - Chris Dixon, General Partner at a16z
Additional Sources and Readings
Blog by Chris Dixon - The next big thing will start out looking like a toy Video by a16z - Why the next big thing will look like a toy Twitter Thread by Chris Dixon -
Footnotes
Moore's law is a term used to refer to the observation made by Gordon Moore in 1965 that the number of transistors in a dense integrated circuit (IC) doubles about every two years. Learn more about Moore’s Law here
Paraphrased from Chris Dixon (see tweet above), who himself paraphrased Morgan Housel