Packy this is a really excellent series. I love how you frame it with electricity as the example. It took decades for inventors and entrepreneurs to realize the potential for reorganizing and building the systems around electricity. I think the same could be said for software. Peter Thiels quote "we wanted flying cars, but got 140 characters" rings true. We were never going to get flying cars until we moved through the social media wave because application layer and infrastructure layer feed each other in staggered innovation cycles; each feeding off the needs, capabilities and limitations of the other. Software and the infrastructure that undergirds it may have finally arrived at the point where new organizing principals around our systems and the businesses that can be built around them will be discovered an enabled. It's the idea of exponential change - the next couple of doublings of software and infrastructure impact and potential could be massive. The next 10-20 years could be very interesting.
Glad that you mentioned Thomas Edison, who I believe is greatly underestimated. So many people today think that Edison invented the lightbulb, which does not sound very impressive. More knowledgeable people know that Edison only perfected the light bulb and made it econonomically viable, which seems even less impressive. Because of this misunderstanding, many people today underestimate his accomplishments.
Thomas Edison (and his team) conceived of, designed, tested, constructed and then scaled across the nation the ELECTRICAL GRID, one the most important technological innovations in world history.
I love this series - thanks for helping the world to get our heads around this group.
Your mispricing point is very interesting. I've seen a few investors try to price a vertical integrator as a software company (because it does have software as a critical component) - and then get scared off by a balance sheet that is very capital intensive.
Wow, so many questions to ponder after reading this. Does the software come first? Or maybe someone comes along and figures out how to buy out and assemble several companies into a vertical using software to tie them together? If I'm building something that could be an engine in a vertical, do I look for someone building a vertical to sell my engine to as an exit strategy, or do I opportunistically buy companies in the ecosystem I'm trying to verticalize. Or both. Then there's the question of life timeline and passing the torch when it's your time to get recycled into the great unknown. I came to this blog by TLDR Founders, and I'm glad I did. Time to go read parts I, II, and III.
This series rocks! It pull together so many strands. It provides an evolving framework which we can use to look at the emerging businesses around us. Well done Packy! First class.
I’ve kept this series in my reading list since it came out, as we have been nose down building a new startup since summer.
It started as a small feature — helping companies launch their on-chain loyalty programs — when around 30 companies around us asked for a solution I couldn’t find in the market. But then we realised that to make it work better, we needed to build e-commerce and marketplace platforms as well.
Since January, the path has been broadening tho. First, we made a soft pivot from loyalty with e-commerce to cloud commerce platform. But as of this weeks top enterprise client meetings, we have take a more serious path to become an European answer to Amazon that’s built with AI & blockchain as core.
Everything Store for High-Quality New & Used Products with built-in Agents that know You, Your past purchases and future needs, while giving Merchants and Resellers relevant data to make their product offerings better and more businesses more profitable.
And now reading this series, I understood we are actually building a vertically integrated e-commerce.
We’re still early, bootstrapped but my experience in building logistics digitalisation startups for a decade and my cofounder having built tech solutions for close to 25 years, we feel very well about our chances and will make it.
Anyway, the tl;dr — great series and looking forward to this vertical future becoming true.
Loved this series Packy — it's giving Ben Thompson vibes.
Curious what you think about Exowatt, the "concentrated solar + themal battery in a shipping container" startup that raised recently. Does it fit into your vertical integrators framework and would you invest despite the risks?
Packy, this series on Vertical Integrators was a fantastic read! I've spent the last four years in global agricultural trade, and I recently realized I've been building a vertical integrator this whole time. We tried for a while to go after the SaaS or service model but realized that no one would use these tools as prescribed.
I'm trying to determine if this new era of agriculture has begun. There are signs it's starting, with significant investments pouring into ag-tech. We're seeing more work being done in precision agriculture, UAV/drones, robotics & machinery (especially at the harvesting stage typically plagued by labor shortage), among others.
However, these technologies seem to be in their early stages of development. What are your thoughts on the current state of ag-tech and its potential to revolutionize agriculture?
holding the whole system in your head AND being able to get world class people to *want* to work for you. Love this synthesis. I suspect there are parallel examples in other disciplines (thinking leaps in healthcare, social good, etc.) - thanks for giving me a mental model to think about this as a systems problem.
BTW if you ever want an example of how transformational electricity was - there's a road in London called 'Electric Avenue' - named as the first electrically lit market street in Britain.
Packy this is a really excellent series. I love how you frame it with electricity as the example. It took decades for inventors and entrepreneurs to realize the potential for reorganizing and building the systems around electricity. I think the same could be said for software. Peter Thiels quote "we wanted flying cars, but got 140 characters" rings true. We were never going to get flying cars until we moved through the social media wave because application layer and infrastructure layer feed each other in staggered innovation cycles; each feeding off the needs, capabilities and limitations of the other. Software and the infrastructure that undergirds it may have finally arrived at the point where new organizing principals around our systems and the businesses that can be built around them will be discovered an enabled. It's the idea of exponential change - the next couple of doublings of software and infrastructure impact and potential could be massive. The next 10-20 years could be very interesting.
Yes! Very well said -- I'm strongly in the camp that the 140 character era will be very important for this next phase.
Glad that you mentioned Thomas Edison, who I believe is greatly underestimated. So many people today think that Edison invented the lightbulb, which does not sound very impressive. More knowledgeable people know that Edison only perfected the light bulb and made it econonomically viable, which seems even less impressive. Because of this misunderstanding, many people today underestimate his accomplishments.
Thomas Edison (and his team) conceived of, designed, tested, constructed and then scaled across the nation the ELECTRICAL GRID, one the most important technological innovations in world history.
Incredibly impressive stuff -- I underappreciated it as well!
I love this series - thanks for helping the world to get our heads around this group.
Your mispricing point is very interesting. I've seen a few investors try to price a vertical integrator as a software company (because it does have software as a critical component) - and then get scared off by a balance sheet that is very capital intensive.
Wow, so many questions to ponder after reading this. Does the software come first? Or maybe someone comes along and figures out how to buy out and assemble several companies into a vertical using software to tie them together? If I'm building something that could be an engine in a vertical, do I look for someone building a vertical to sell my engine to as an exit strategy, or do I opportunistically buy companies in the ecosystem I'm trying to verticalize. Or both. Then there's the question of life timeline and passing the torch when it's your time to get recycled into the great unknown. I came to this blog by TLDR Founders, and I'm glad I did. Time to go read parts I, II, and III.
This series rocks! It pull together so many strands. It provides an evolving framework which we can use to look at the emerging businesses around us. Well done Packy! First class.
Really glad you enjoyed it, Colin!
Loved this. I have appreciated this whole series on vertical integrators. Great insights
Thanks Nick! Happy to hear it
I’ve kept this series in my reading list since it came out, as we have been nose down building a new startup since summer.
It started as a small feature — helping companies launch their on-chain loyalty programs — when around 30 companies around us asked for a solution I couldn’t find in the market. But then we realised that to make it work better, we needed to build e-commerce and marketplace platforms as well.
Since January, the path has been broadening tho. First, we made a soft pivot from loyalty with e-commerce to cloud commerce platform. But as of this weeks top enterprise client meetings, we have take a more serious path to become an European answer to Amazon that’s built with AI & blockchain as core.
Everything Store for High-Quality New & Used Products with built-in Agents that know You, Your past purchases and future needs, while giving Merchants and Resellers relevant data to make their product offerings better and more businesses more profitable.
And now reading this series, I understood we are actually building a vertically integrated e-commerce.
We’re still early, bootstrapped but my experience in building logistics digitalisation startups for a decade and my cofounder having built tech solutions for close to 25 years, we feel very well about our chances and will make it.
Anyway, the tl;dr — great series and looking forward to this vertical future becoming true.
Loved this series Packy — it's giving Ben Thompson vibes.
Curious what you think about Exowatt, the "concentrated solar + themal battery in a shipping container" startup that raised recently. Does it fit into your vertical integrators framework and would you invest despite the risks?
Packy, this series on Vertical Integrators was a fantastic read! I've spent the last four years in global agricultural trade, and I recently realized I've been building a vertical integrator this whole time. We tried for a while to go after the SaaS or service model but realized that no one would use these tools as prescribed.
I'm trying to determine if this new era of agriculture has begun. There are signs it's starting, with significant investments pouring into ag-tech. We're seeing more work being done in precision agriculture, UAV/drones, robotics & machinery (especially at the harvesting stage typically plagued by labor shortage), among others.
However, these technologies seem to be in their early stages of development. What are your thoughts on the current state of ag-tech and its potential to revolutionize agriculture?
holding the whole system in your head AND being able to get world class people to *want* to work for you. Love this synthesis. I suspect there are parallel examples in other disciplines (thinking leaps in healthcare, social good, etc.) - thanks for giving me a mental model to think about this as a systems problem.
BTW if you ever want an example of how transformational electricity was - there's a road in London called 'Electric Avenue' - named as the first electrically lit market street in Britain.
https://en.wikipedia.org/wiki/Electric_Avenue
Also this... https://youtu.be/azuSxl9sHmc?si=rtJt3XZirhbmm-io