Starting in 1804, Lewis and Clark traveled from St. Louis to Portland by boat and on foot. The twenty month trip was physically demanding, dangerous, and expensive (over $500k in today’s dollars). Now, it’s a two-day drive.

Second Generation Software

You hear a lot of the first mover advantage. Pioneering a new technology often means that you are able to define a new market and operate without competition. If you’re successful, it can be a license to print money.

At least for a while.

The resulting hype leads to a flurry of investment activity and inevitable (and often cutthroat) competition.

Gartner’s framework does an excellent job of breaking down how the pendulum swings for technology adoption, initially wildly (to a Peak of Inflated Expectations”) and then similarly over-correcting (as it bottoms out in the “Trough of Disillusionment.”)

Source: Gartner (July 2011)

In line with the trajectory of technology adoption, there are vastly different underlying business and operational realities for the companies involved at different stages. For example, when cloud computing started its hype cycle in earnest less than a decade ago, its pioneers in the enterprise software market faced uncertainty and roadblocks with questions such as:

• Will there be customers for this product? Will companies entrust their processes and data to third-party, public cloud software?
• What programming languages should we use? What toolkits can we leverage? What will we have to build ourselves from scratch?
• What are best practices around code management and release, customer engagement, sales and support models, etc?

The answers to these questions are both easier and different in 2016 from a decade ago.

• Yes, customers will absolutely entrust sensitive data to the cloud.
• Pioneering companies had far fewer technology options to build their products, and significant resources were spent to build each component in-house. Now, a robust open-source community in conjunction with a developed market for services greatly speeds development for second-generation cloud software companies.
• A clear consensus on best practices has emerged on how to build and scale both product and company.

The first cloud companies were essentially operating in an untamed environment without a map. Decisions were made based upon often-compounding assumptions. The resulting mistakes were often expensive, and occasionally fatal.

The data generated by a decade of expensive trial-and-error efforts has created patterns for the next generation of companies to emulate. There a multitude of tools to assist with development. And, the market has validated the cloud as a technology alternative.

In short, building a Second Generation Cloud software company is a far cheaper, faster, and less risky proposition than it was a decade ago.

Life is far easier when you have not just a map to follow, but roads on which to travel.

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