News sources, social media, business periodicals, technology magazines, entrepreneurship periodicals, and the internet are filled with discussions of all of the people who get rich via building of some new app. Typically, such nouveau rich arrive at a worth of hundreds of millions, or billions of dollars practically almost overnight.
A business that still is being run by it’s innovators that becomes worth US$ 2 billion within 2 years qualifies as an overnight success.
Consider, however, innovation in manufacturing. First a minimally viable product (MVP) has to be developed. This MVP then has to be transformed into a prototype. Once the prototype works at a commercially viable level of effectiveness and efficiency, it has to be transformed into commercial equivalents. Typically, all of this takes at least 2 years, meaning unless the manufacturing innovation is bought by an existing incumbent firm, with sales still in the future at timing of commencement of production of commercial equivalents, there is not as yet any valuation that can be celebrated.
The difference in relation to the app innovation?
App innovation that generates a quick ramp up of valuation typically is developed in context of a Business-to-Business model. Once the app is adopted by an incumbent business, absent any sale of the app innovation itself (the asset) to the incumbent, a viable business valuation is achieved. The incumbent typically does not want to be saddled with servicing of the app, prefers to leave that to the new innovators, with outcome the innovators in essence get to eat their cake (keep an app that already is leased to another company), yet continue to own the asset and have it available for additional leases to other companies.
In traditional leasing, an asset that already is leased cannot again be leased simultaneously to another firm. App innovation busts this age old truth, as such, is a game changer.
App building is the quintessential ‘eat your cake and have it' sort of business.
Consider, however, manufacturing innovation. The only way a viable, meaningful valuation is arrived at, at timing of commencement of production, but prior to realizations of sales, is if the innovators give up the asset to an incumbent, or if they produce and make sales.
If the innovation is sold, the production facility passes into hands of new owners, with outcome the cake (the production facility) is eaten, does not remain until another day. If the product is sold to consumers, the valuation is a function of sales, and sales projections. In order to maintain the revenue stream, the production facility cannot be sold (the cake cannot be eaten). So then, it either is the case that the cake is eaten, and does not remain, or the cake remains and cannot be eaten.
Manufacturing innovation is not easy. Either you keep the innovation, live off the revenue stream, or you sell the innovation, live off the monies acquired.
Relative to manufacturing innovation, App development, it would seem, is the new get-rich-quick scheme.
Suppose then that ease of app development, and potential for arrival at riches in context of app development induces America’s young people to only care about acquisition of capacity for coding.
So then young Americans learn to code.
Coding involves solving an algorithm that enables an app perform some function. Consider, however, mathematical modelling. Modelling attempts to mathematically arrive at algorithmic — systemic — solutions to real life problems. Juxtaposed, it is clear that coding capacity does not translate into modelling capacity. A modeler learns how to solve problems analytically, with outcome the actual platform for implementation of the model is in entirety a totally different matter. Whenever a coder solves a problem, all that transpires is a figuring out of ‘the how' of coaxing a specific programming language to implement a task effectively and efficiently. In presence of highlighted difference, capacity for coding does not imply generic capacity for problem solving and rigorous analytical thought.
A solution that is formulated generically and mathematically can be implemented in any app or programming language.
A solution to a specific coding problem in context of an app may turn out to be totally ridiculous in context of a neighboring program or app. Solving a within-app problem does not necessarily induce generic capacity for problem solving.
In order to produce a new manufacturing innovation, laws of physics, mathematics, and chemistry typically are combined effectively, efficiently, and in consonance with mathematical laws. This requires a lot of rigorous analytical thought for arrival at a product that hitherto did not exist.
Transformation of an MVP into a prototype requires a lot of analytical, mathematical work for arrival at estimates of new standards (benchmarks) for interactions that ought to subsist between materials with which we already were familiar, but which we never had attempted to combine in the manner that then is contemplated to be feasible.
The problem tackled that leads to a new innovation is a real life problem. Antecedent problem solving skills that are acquired in context of applications of normative principles— laws of mathematics, physics, chemistry, and perhaps biology — apply generically and normatively to life on earth.
Suppose myopia of a ‘chasing after easily attained business valuations’ induces America to focus monolithically on development of coding skills. As more and more Americans become comfortable only with coding (digital) skills, as opposed to real world analytical problem solving skills, there may come a day when living in a digital world becomes more attractive than living in the real world. At such a point in time, all of those movies within which the proletariat are paid to stay home, are paid to ‘sleep walk’ or ‘live walk’ through virtual reality video games would have become closer to reality than anyone could imagine.
Who benefits from a proletariat who sleep or live walk through virtual reality video games in comfort of their homes?
Firms who seek to replace humans with machines without inducing any noticeable disruptions in society would love to see Americans living primarily in a digital world. It just might be possible in such a scenario that humans are willing to exchange dignity of real life work for US$2,000.00 a month as incentive for living in a virtual digital world.
How exactly do driverless cars fit into this picture?
Well, imagine a world within which no one remembers how to drive. A world within which, with all driving automated, with outcome there does not exist any incentive for learning how to drive, people stopped learning how to drive. In such a world, either of corporations or governments can turn homes into comfortable dungeons housing people who have lost capacity for revolution because all machines are controlled by governments or corporations.
Who knows, the government just might have the digital wherewithal to code lock the microwave oven in your home because you bought outlawed non-GMO food.
The day during which guns will require a code from governments or corporations before they can be fired might not be far away. All it will take is a couple of ghastly school shootings to convince Americans of the necessity. Enter then Russian hackers, and Russia need not worry about exerting efforts on subversion of American elections.
After all, Americans continue to insist that school or mass shootings are a gun problem, not outgrowths of problems inherent in societal interactions.
By this argument, so long as guns are not available for purchase, it is okay for a kid who loses his parents, and loses his guardians, to be taunted at school by his classmates.
There is a lot of paternalism involved in success of coders who secure business from incumbent firms. Those guys typically did not just walk into those incumbent firms off the streets.
Typically they knew someone, who knew someone, who knew someone. Typically, there is some other person out in the world with a better code who did not know someone, who knew someone.
And herein lies the scam, which is, all of those stories about ‘how they did it’ typically do not tell the whole truth, do not emphasize that who the coders knew was more important than their coding skills. But that exactly is the intent, the scam, which is, a luring in of more people so coders who succeed look like geniuses, so building of a coding business sounds like a mark of brilliance.
What then happens? Left behind will be loads of young Americans who feel broken, who feel like failures, who wonder why exactly they were not good enough. They would not know one important fact, which is:
It does not take any genius for a coder’s uncle to have a relationship with Warren Buffett whose handwritten note of introduction secured access to a venture capitalist.
Coding that produces apps makes our lives easier, as such is valuable. So also, however, are problem solving skills that produce new products such as carpet cleaners and substitutes for microwave ovens. If America becomes a society of coders, as opposed to a society of problem solvers and coders, a US$2,000.00 stay-at-home-and-play-video-games economy may reside in the not-too-distant future.
Is there any evidence that America is losing ground on problem solving skills?
Well, consider that some Democrats are borrowing solutions — free college education — for America’s educational challenges from countries whose educational systems are in no better shape than current state of America’s educational system.
It objectively is true that educational systems of countries such as Britain, France, Spain, or Italy are not better than those of America. By the way, it was not too long ago that, with failures of their system in full view, that the British introduced tuition into their college system.
So then, is free college education a uniquely realized approach to solving of problems that hound America’s educational system, or is it just politics (borrowing of ideas) as usual?