Nearly a decade ago Chris Beard, then Chief Innovation Officer at Mozilla – today’s Mozilla’s CEO, talked me through an observation of his, which I knew about but somehow failed to fully internalize and grok its implications: the tech stack.

The technology stack describes the set of software your computer runs on. From the BIOS to the operating system, runtime environments, databases, application servers, libraries and frameworks to the apps you develop and/or run. Chris’ point was that for a very long time we had seen a movement “up the stack” – you don’t develop your own operating system anymore (which was still the case for most computer makers in the 60s and 70s), you don’t create your own runtime environment or database and most of us don’t even bother thinking about building our own application servers, libraries or frameworks.

Our efforts (and most of the value creation these days) is on the outmost layers of the tech stack – meanwhile most of the stack gets commoditized (e.g., Linux powers the operating system; Phyton, Java, PHP, etc. drive our runtimes and we use thousands of open source libraries and frameworks to push our work ever higher up in the stack).

This has some pretty fundamental implications: If you are on the lower levels of the stack (and successful there), you can control vast amounts of our technology futures (that’s why Google open sourced their machine learning framework Tensorflow). It’s hard to make money in the lower layers though – thus you need to either subsidize your work (a la Google) or find other income streams (Red Hat sells you services for the open-source Linux operating system).

For everyone else it means that your value-add is typically in the highest level of the stack – you usually can’t win by investing time, money and effort into marginally improving the middle layers of your stack.

Figure out where you are and want to play along the stack. Think hard about what you would gain by going deeper into the stack and how you could either turn this into a competitive advantage or a revenue generator itself (often this requires you to think outside of the box when it comes to business models).

Build What Matters.
Pascal ツ