Chris Dixon

During a media tour in 2007 in which Steve Jobs showed the device to reporters, there was one instance in which a journalist criticized the iPhone’s touch-screen keyboard. Smartphones are a good example of a broader historical pattern: technologies usually arrive in pairs, a strong form and a weak form. The mainstream technology world notices the excitement and wants to join in, but isn’t willing to go all the way and embrace the strong technology. Strong technologies often develop according to the Perez/Gartner hype cycle: During the trough of disillusionment, entrepreneurs and others who invested in strong technologies sometimes lose faith and switch their focus to weak technologies, because the weak technologies appear nearer to mainstream adoption.

“How to hit home runs: I swing as hard as I can, and I try to swing right through the ball… Home runs: As expected, successful funds have more “home run” investments (defined as investments that return >10x): ” Strikeouts: The Y-axis on the this chart is the percentage of investments that lose money:This is the same chart with the Y-axis weighted by dollars invested per investment: As expected, lots of investments lose money. The best VCs funds truly do exemplify the Babe Ruth effect: they swing hard, and either hit big or miss big.

The core growth process in the technology business is a mutually reinforcing, multi-step, positive feedback loop between platforms and applications. This leads to exponential growth curves (Peter Thiel calls them power law curves), which in idealized form look like: The most prominent recent example of this was the positive feedback loop between smartphones (iOS and Android phones) and smartphone apps (FB, WhatsApp, etc): Singularity University calls this the “deception of linear vs exponential growth”: Today, smartphone growth seems obviously exponential. In 2011 or so, he realized what we were experiencing was actually an exponential curve, and consequently dramatically increased Facebook’s investment in mobile: Exponential growth curves in the “feels gradual” phase are deceptive.

Using cloud-scale development platforms like Amazon Web Services, developers can write software that runs on hundreds or even thousands of servers, and do so relatively cheaply. Developers who use Improbable can write code as if it will run on only one machine (using whatever simulation software they prefer, including popular gaming/physics engines like Unity and Unreal), without having to think about parallelization. Getting the system to work at scale under real-world conditions is a very hard problem that took the Improbable team years of R&D. Game developers have been trying to build virtual worlds for decades, but until now those worlds have been relatively small, usually running on only a handful of servers and relying on hacks to create the illusion of scale.