Part of the reason why i’m such an a16z fan boy is their ability to explain the ever shifting field of technology. Their latest podcast tackles Google I|O conference and brilliantly breaks down the Apple – Google dynamic and their respective competitive advantages.
What exactly did Andreesson Horowitz lot say?
Ben Evans pointed out the contrast between two of Google’s announcements: their revived payments system and the Google photo app. (Full podcast embedded below).
The Android operating system is phenomenally fragmented and slow moving. Although the previous Lollypop version came out last year, it’s only made it to 11% of all Android devices. Google doesn’t control the whole Android “stack”, and as a result it’s always going to be difficult to integrate their software with third party hardware.
As is the case with their payments system. Unlike Apple, they can’t control the integration of this system with fingerprint scanners in devices, so they’re at the mercy of the device manufacturer. Apple can, and create seamless software+product=service integrations.
Where Google excel are software and cloud services. The Google photo app (shortly available across both Android and iOS) not only matches Apple’s photo service and cloud skills, but goes beyond this to make your whole photo library searchable using image and facial recognition tools. They’re using their core focus of cloud services and data learning to provide a superior app.
The “lightbulb moment”
Here’s the good bit:
Google’s strategy is the cloud; Android devices are just a tactic.
Apple’s strategy is the device; software and services are just their tactics.
To me, this perfectly encapsulates what the two tech giants do, are good at, and how they support these core offerings. It’s how Ben Evans frames the two companies’ approaches that’s so interesting.
And it got me thinking. In a sense, almost every company provides digital services in one form or another. Utility companies like British Gas now provide IoT-like services and hardware. Airlines are in the business of online services to support sales and customers’ experiences. The majority of businesses now provide at least some of their products / services in digital form.
Looking differently at what you do
Using the same strategy / tactic delineator, how does this change how we see these businesses, their core offering and the associated services they provide? And how might this develop in future?
The Healthcare and Pharmaceuticals industry has been slower to adopt technology and the opportunities of the Internet, but it has made a lot of progress. Nearly all pharma products are now accompanied by services for doctors and frequently for patients to help support the use of their products.
However, these are still just tactics. Their strategies largely remain product and molecule-focused, leaving considerable opportunities for commercial healthcare services open to health tech and startup companies. At some point, the two will overlap. The question is, will it be pharma moving into the service offering or health tech moving into the pharmaceutical space as a tactic to support their services?
Either way, I think the way we think about the current era is wrong. The information age is not really about making our lives and work easier or more efficient; it’s about changing them entirely.