The Crumbling Infrastructure of the Web
As I look out around, I think about the crumbling infrastructure all over. Joe Biden has talked about it frequently as part of his $2 trillion plan to reshape the economy by rebuilding America. Roads are littered with potholes, water infrastructure is outdated, bridges are at risk of topping over. The fabric of our physical world is falling apart, creating risk — both economic and physical — for future generations.
But, that isn’t the infrastructure that I’m thinking about today. I’m focused on the infrastructure that powers the web. Google search results are littered with ads, SEO-spammy content, and shockingly irrelevant search results. LinkedIn is flooded with bloated content from people I barely remember meeting. Uber drivers routinely cancel on me if they don’t like the destination, or take increasingly long to arrive while charging increasingly steep rates. Pinterest boards have become chaotic. Facebook used to be a place where I went to see what is going on with my friends; now I can see Zuck in VR hawking Sweet Baby Ray’s Barbecue Sauce. And, Twitter, well, I’m guessing you’ve heard about what is going on over there.
The pages on the web have been over-optimized for maximum revenue at the expense of the user experience, and the ecosystem players have squeezed every last drop of juice out of the system. As a consumer, I find this infuriating. It isn’t just the poor experiences, but the fact that I remember when times were different and their products felt magically effective. Prime used to be a two-day delivery promise, not a smattering of identical knockoff products that may or may not show up at my house.
But, as an investor, this invigorates me. For so much of my career, we’ve been best served investing around the fringes of these massive platforms, because it felt near-pointless to encroach on their turf. Their distribution and underlying brands were just too powerful and well-serviced.
But, now things have changed. These incumbent brands are on their third or fourth generation of teams. They’ve gone through multiple rounds of layoffs. Even the CEOs that used to be on the covers of magazines are more likely to be found testifying in front of congress.
The stalwarts of the web just don’t have the same shine and their products don’t have the same allure. It still is unwise to come directly for them, but for builders who find the right initial audience or right initial foothold, there is a meaningful opportunity to build a new generation of consumer platform companies. Put another way, the companies that disrupted Yahoo and are now starting to look a lot more like Yahoo. The prevailing business model of the web — where the user is the product — has hit max capacity for industry behemoths, who find themselves scrambling for where to turn next. It’s a classic innovator’s dilemma — they were born into a specific point in time, and consumers are now ready to move on with or without them.
There are new massive businesses to be built, where success is measured not by being worth a billion dollars, but by serving a billion people. This opportunity laid out in front of today’s boldest entrepreneurs inspires us here at Forerunner. I’ve accepted the fact that my drive to work will likely be littered with potholes indefinitely, but I’m eager to meet with entrepreneurs who won’t accept the current state of online infrastructure and have plans to usurp it.