Newest Technology ≠ Most Value

Newest Technology ≠ Greatest Value

Creating the latest technology is not the same as creating the greatest value. Don’t be caught up in the fervor when Facebook, Google, Apple, or Amazon all pile onto a particular technology. As market leaders, these companies are caught in a prisoner’s dilemma, encroaching on each other’s market shares. They each need to make sure they aren’t edged out.

Two technologies—artificial intelligence (AI) and the blockchain—have been both severely hyped and maligned in the past two years. Business leaders look to add AI to their platforms without knowing why. The blockchain, made famous in large part to cryptocurrency speculation, has gotten a bad rap in the public eye, which has pushed the underlying technology of the blockchain just a bit under the radar once more, aside from those in the technology and tech investment industries.

I think AI is incredibly valuable, and I believe its value will increase. Same with the blockchain. However, speculating on the unknown future value of a new technology can easily distract from the real value that older technology can give you now.

It’s completely understandable to want to stake your claim on the new land “out west” on the frontiers of technology. Who knows? There may be gold there. Might as well get in early.

Maybe there’s a massive oil reserve under these dunes. Or nothing at all.

It’s always good to learn and push our intellectual frontiers. But technology is not a panacea to solve every problem, and it’s not the source of all value.

Case in point: Instagram did not create a groundbreaking technology. They iterated on a previous technology and did a great job with their permutation. They certainly optimized several key elements, like user interactivity, and stumbled into a few lucky features, like the social importance of likes on a photo. One could say their greatest innovation was in their user-growth model (or a combination of any number of factors). But it wasn’t directly in their technology. And that was fine. They didn’t need to be a tech front-runner in order to create a billion-dollar company (which was probably undervalued at its sale price).

Virtual reality (VR) is an incredible technology. Having tried it out, I definitely know it can be loads of fun, and I’m sure it could be used in the deeply-undervalued edTech sector. But VR isn’t there yet. To my limited knowledge, no one has created a genuine real-world use case for this technology yet. But there are some neat concepts on the horizon.

The tree of knowledge is always growing. We’re always adding new branches. Just because you’re not sitting on the shiniest, newest branch doesn’t mean it can’t still bear tremendous fruit. And that’s true even if would-be investors don’t notice it immediately.


Newest Technology ≠ Most Value was originally published in Data Driven Investor on Medium, where people are continuing the conversation by highlighting and responding to this story.