Benedict Evans: Moving the subversion from top to bottom

Note: Often the idea of subversion is based on the definition of subversive innovation by the author Clayton Christensen, the innovator's dilemma, disruptive innovation refers to a process whereby a product or service can be rooted in a simple application of the underlying market, and then ruthlessly penetrate from the bottom up and eventually replace the existing competitor. That means subversion is bottom-up. But a16z partner Benedict Evans, by looking at developments in the mobile market, says the reversal is reversed. Does he have any reason to say so?

A classic description of the subversion of business (especially technology) is that a new product (method, business model, etc.) does not appear to be as good as it is now, but much cheaper. The existing industry treats it as a joke and naturally does not see it as a threat. But as time shifts, the product gets better, but the price is still cheaper, and sooner or later jokes will be laughed at.

Such stories cycle through the history of technology. The future always appears as a toy. But now the technology industry is being moved to reset, and in moving here, subversion tends to do it in a different way, that is, as an expensive luxury for the rich, it can do far beyond the needs of normal people. But as time shifts, the price becomes cheaper, and the new and unnecessary features become necessary, and the old, cheaper and less capable models are phased out of the home.

That is, often cheaper, less-functional technology products tend to get better faster than expensive products. But in the mobile field, the situation is reversed, and expensive and good products tend to lower prices faster than cheaper but less functional products. Moore's law works on both sides, but the effect is different.

There are exceptions and loopholes in any theory, but those are worth seeing.

In fact, moving itself is an obvious example. 20 years ago, the mobile phone (cellular) was once a millionaire and a drug dealer can afford expensive luxury, is a status symbol, not the general public needs-you already have a phone, who still need a cell phone? But once the device and network develop to the point where mobility is more attractive than the minimum threshold for fixed-line prices (besides, the price of this thing is also very subtle, the perspective is not the same as prepaid mobile phones can be considered cheaper than fixed), the situation is different.

At the same time, there is a lot of debate about which mobile network is best. In the early 2000, there had been "WiFi enough", and the industry had tried to provide "limited mobility (mobility only in a particular place)". But it turns out that mobile phones need to be mobile.

Of course, there are also counter examples, the Iridium system is. This thing is too expensive, "too good", and its global coverage has exceeded customer demand for mobile phones. However, although Iridium still has a signal in the vast sea or in the hermit desert, it is funny that it is not in the car or in the office-unless the phone is directed at the satellite, so it can be said that iridium is actually more expensive but worse than the mobile phone, not better.

The same thing happens when the idea that WiFi threatens a mobile phone -3g has grown to a certain extent and is cheap enough to make "free" WiFi data irrelevant, not to mention that WiFi coverage never achieved "good enough" goals.

The same goes for projects like the Firefox OS. Entry-level Android phones are now priced at less than 50 dollars-the price window between "functional phones only" and "I can't afford Android but want more" is falling fast. It is difficult to compete with the scale effect of the entire Shenzhen ecosystem. Again, expensive, better products are getting cheaper.

Of course, the iphone is going the other way. When the iphone was first launched in 2007, its price was very high relative to the handset market (even if Apple realised that it needed subsidies). Of course, you can say that it is from the bottom up to subvert the PC, but it actually also overturned the phone-do not believe you can ask Nokia what is left. The new mobile phone features a large screen, multi-touch, "PC-level" operating system, not too concerned about bandwidth efficiency, battery life target is a day rather than a week, durability goal is "don't fall." It is also the MVP (minimum feasible product, no 3G, configuration basic camera, etc.). The industry derided it for a variety of reasons, but Apple's demand for 600 of billions of dollars of handsets was unprecedented, and then its cousin, Android, pushed the pattern down again at a much lower price. and Symbian models and feature phones are not responding to this new high price challenge-the expensive challenger models occupy the high-end market at a higher price point, and then continue to slash prices and eventually occupy the rest of the market.

Of course, it takes two of each table, and one more persuasive than Iridium is the mobile operator market. Every country tends to have a strong network of operators (covering good, fast, high capacity), and then there are some weak network operators-the network of good operators usually more expensive, some consumers will choose the more expensive but the network better operators, others feel that the cheaper network is good enough. This is what iliad/free in France and Deutsche Telekom T in the United States recently. But I'm not sure it's a "subversion", maybe "low-cost competition" is more appropriate, and I have the same positioning as Android: [with Apple] similar products, lower prices, rather than different products that serve the same needs at different prices.

It is not a perfect unified theory to explain why movement seems to work this way often, but it is less important than observation. The tech community tends to be accustomed to the idea that incumbents always scoff at subversion, because even though the subversive is cheap but rubbish, it doesn't realize that history tells us it's going to be better. But we also have to remember not to laugh at things that are stunning but too expensive, because history tells us that they may get cheaper and better sooner.