Thread from CDixon (philosopher, programmer, rich man)
Recently, many have been talking about the possibility of a prolonged financial crisis reminiscent of 2008. It was a difficult time for many people.
But from a startup perspective, 2008 and the next 3 years proved to be a golden age. Apple launched the iPhone in 2007, and the app store in 2008. By 2009, the company was flooded with talented founders. Most of today’s mobile apps were created by companies founded between 2009 and 2011, including Uber, Venmo, Snap, and Instagram.
In retrospect, the era was fueled by a combination of three powerful trends: social media, cloud computing, and the rise of smartphones. Independent areas of product design are multiplicative: even if social, cloud, and mobile technologies improve linearly, the combination can improve exponentially.
The basic idea is that the product and financial cycles develop largely independently of each other. Product cycles follow their own internal logic and tend to be more predictable than financial cycles. They start with an incubation phase where enthusiasts explore ideas and create products that are mostly used by other enthusiasts.
For example, as early as 1990, there were credible attempts to create smartphones. Smartphones continued to evolve over the next 15 years, but it wasn’t until the launch of the iPhone that they moved from an incubation phase to a growth phase. The growth phase begins when the right mix of technology, talent, and community knowledge emerges. It is driven by a reinforcing feedback loop between infrastructure and applications.
For example, with the improvement of the iPhone, better applications have become possible. Improved apps have helped boost iPhone sales by giving Apple more money to invest, making apps even better, and so on.
The technology industry today is very different from what it was in 2008. A handful of tech companies dominate the internet, with enormous economic and cultural impact. Established interests react aggressively to new movements that may someday threaten them.
I believe crypto and web3 will be at the center of the next cycle. We have reached a critical mass of technology, talent and community knowledge. In almost 10 years that I have been working in space, the energy and creativity has never been higher. If we’re heading into an economic downturn, there are a few tactical lessons from the 2008 era, namely saving capital and focusing on your long-term vision. But the main lesson is to ignore the noise and focus entirely on the production cycle