I’ve been involved in computer software for decades. Lots has changed over that time. One thing that hasn’t changed is the question people most like to ask me. It’s this: “What do you see that’s new and interesting?” It’s a perfectly reasonable question, though one for which I rarely have a ready-made answer.
A question I never hear goes something like this: “What do you see that’s touted as the newest new thing, but is mostly old stuff, and was completely predictable?” Now that’s an interesting question. And the un-helpful but honest answer is “Practically everything that’s touted as a new thing is mostly old stuff, with a little bit of ‘obvious next step’ thrown in for variety.”
Still, there are some unpredictable aspects of the fancy new things: it’s really hard to know WHEN the new thing will happen and WHO will make it happen.
A case in point is … [I’m not sorry about the pun] … the new smart card terminal company Poynt. (Disclosure: my VC fund, Oak HC/FT, is an investor.) I can see eager marketing people at Poynt are raising their hands in the back at this … ahem … point, all anxious to point (groan…) out that Poynt is a pioneer in the market, arguably the inventor of the smart terminal, an amazing device that not only takes card payments, but also rings up items just like a POS terminal and hosts endless numbers of third-party apps. True! I happily concede the point. But I hasten to point out that there are robust competitors in the market, notably including Square and Clover.
The smart terminal is a new thing, and the market is glad to have it, but it’s hardly a NEW new thing, or something where you’d knock your head and say “now who’d-a thought-a that!?”
It’s natural for consumers of technology to look at the new devices and appreciate them for what they are. That’s like being a tourist, driving on a road through the country-side, appreciating the nice new views. That’s nice for the tourist, but are there patterns here, patterns that would enable an educated person to expect something like a smart terminal to appear, and womdering when it would happen?
Yes there are. The main pattern at work here is the rate of change of the underlying hardware. Today’s hardware is something like 1,000 times faster than much larger, more expensive hardware at the turn of the last century, less than 20 years ago. That number may not seem like much, but think of this: the average human walking speed is about 3 mph. The speed of a commercial jet while flying is less than 600 mph, about 200 times faster. Now imagine a human evolving so quickly that the human could walk at the speed of a jet -- and increase in computer speed is 5 times greater than that, in less than 20 years!
What’s the point? Or Poynt? Here it is: there are underlying geology-like forces in the world of computing that make it highly likely that something very much like Poynt would be invented – though as I said, predicting who will do it and when they’ll do it is a whole other thing.
The first step in creating a technology solution to a problem is often building problem-specific hardware. Then the technology evolves, getting faster, cheaper and more capable. Then there’s a tipping point, at which the purpose-specific hardware is replaced by general-purpose hardware, and most of the specific features of the device are implemented in sofware that runs on the general-purpose hardware. Then a new era begins. The general pattern is that special-purpose devices are supplanted by general-purpose ones.
In the case of card processing technology, first we see imprints of cards made on paper, with the physical paper being sent to a central place for processing. Then the big jump to computer technology and networking: a series of increasingly-better charge terminals, specifically made for processing card charges. The terminals evolved from dial-up networking to the internet, and from stand-alone to connected to a point-of-sale system. Wonderful devices!
Now think about cell phones. If you’ve been around for a little while, you remember big phones getting better and smaller and finally evolving into flip phones. Great phones, … but they’re phones. Then came the big shift, to a next generation of phones that were really small, portable, general-purpose cmputers that can run a myriad of applications … with cell phone hardware and software built in. Yes, it’s a phone. But it runs Facebook, email, and any of thousands of applications avialable in the app store. It’s a “smart phone!”
You know this. The reason I’m reminding you of that history is that it’s exactly the transition that card-charging “terminals” are going through right now – as they become “smart terminals,” i.e., small, portable, general-purpose computers that can run a myriad of applications … with card charging hardware and software built in. Yes, it’s a terminal, but a smart one.
How often do you see “I’m just a phone” devices? Flip phones? Yup! The old card-charge terminal will become just as rare a sight in the next couple of years.
So are the new “smart terminals” new? Yes! But hardly unexpected, at least to those who see the clearly repeating patterns of the underlying technology.
A less Poynted version of this post was previously published at Forbes.
Excellent analysis. Realistic and insightful.
Posted by: Arthur Petrou | 02/13/2019 at 01:03 PM