Ask yourself what buying anything was before the website. Without Amazon, I get out with my child, I drive to Walmart, I sit in traffic, I park. I walk the store asking an employee where the section is, the product is sold out or it is not, I stand in the line, I pay, I drive back. Sometimes it takes four hours for the entire transaction. The website did not make the product. It took the four hours out.
Instacart is a good one. I used to go to Costco, and now I don't have to go. If your hourly rate is $50, a Saturday in Costco is four hours, $200 of your time, and you pay the guy who brings it $20 or $30. The gap is the value, and the company creates it for a hundred million people at once, at almost no extra cost. Uber did the same thing to the yellow cab. Software is process automation: faster, cheaper, better, at scale. If it does not do that, it is not good software.
That gap, times everybody, is the whole software business. In 2011 Marc Andreessen wrote in the Wall Street Journal that software was eating the world, and it did. Public software companies still keep about 71 cents of every dollar they take in, because once the app is written, the next customer costs almost nothing. And software was sold to the people who did the work. The work itself, the salaries and the outsourced services, is worth $4.6 trillion by one venture firm's 2024 count, and they named what the agents are pointed at: service as software.
The same business reprices the old job. A license to drive a yellow cab in New York, a medallion, a metal plate on the hood that says you may pick up passengers, sold for $1.3 million in 2014.
The task those drivers did was automated by an app. What is that license worth now?
$70,000 to $80,000 by 2021, from more than $1 million. Nothing happened to the driving. The task was automated, and the license was priced on the task, so the price went with it. Hold on to that, because it is exactly what the new software does, one level up.