How A 500-Year Old Fossil Field Helps Us Understand Today’s Technology Revolution

We are in the midst of a new technology discontinuity driven by exploding global adoption of increasingly powerful smartphones and other mobile devices. The combination of one billion interconnected users and rapidly expanding broadband wireless networks is driving a new innovation revolution that is impacting cultures and markets worldwide. A dizzying array of new mobile applications, devices and technologies are being introduced every day to feed the insatiable appetites of an expanding market of app-hungry consumers.

To understand how this technology revolution may unfold, one can learn from the Cambrian explosion and lessons preserved within fossils from more than 500 million years ago.

In 1909, Director of the Smithsonian Institute and paleontologist Charles Doolittle Walcott discovered in the Canadian Rockies what has become one of the world’s most celebrated fossil fields, the Burgess Shale. This fossil bed dates to the Cambrian era, some 505 million years ago, and is most famous for its exceptional, and exceedingly rare, preservation of the soft body parts of fossils. The discovery of the Burgess Shale and the importance of the fossil discovery are beautifully told in Stephen Jay Gould’s 1989 book, Wonderful Life 1 .

The Burgess Shale is remarkable also because from it over 65,000 unique species were identified and more than 20 phyla groups were classified. This early-Cambrian period is generally referred to as the Cambrian Explosion because of the spectacular proliferation of new species during a relatively short geological period. This rapid speciation is known as punctuated equilibrium, a concept Dr. Gould first articulated in 1977 in an article 2 with Niles Eldridge. The two paleontologists argued that species are generally stable/static for long periods until an event causes a dramatic shift in the ecological environment, resulting in a rapid proliferation of new species seeking to exploit the new environment. The period of rapid expansion is again followed by an extended period of relative stability during which the species count is generally winnowed  down with only a few long-term survivors.

What may be the most interesting observation from the Cambrian Explosion is the fact that only five of the original 20+ phylum survived (there may have been more – despite its unparalleled richness, the fossil record is still incomplete) and roughly 90% of the individual species went extinct. The surviving species in those five phyla are the ancestors of virtually all living creatures on the planet today, including humans.

Interestingly, it appears that the process was fairly random. The Cambrian explosion was effectively an evolutionary experiment. Many different anatomic designs were tried, but few survived. As Stephen Jay Gould persuasively argues, if nature were to rewind to before the Cambrian era and play the tape again, it is highly probable that only a handful of phyla would again survive, but it is also highly likely it would not be the same five.

Over the past 30 years, in my career as a technology analyst, I have closely observed several technology “revolutions” and a three-decade “evolution.” I witnessed first-hand the PC explosion in the early 1980s with Microsoft and Intel emerging as the dominant companies, followed by enterprise networking in the early 1990s and Cisco’s dominant market position, and then the rise of the Internet in the 2000s and Google’s explosive growth. The pattern in each of these technology cycles was almost identical. New technology created a discontinuity (punctuated equilibrium), which was quickly followed by a proliferation of new companies (a Cambrian Explosion, if you will), followed by a period of technology stability and the emergence of a few dominant companies, and then concluding with an inevitable winnowing of companies serving the new market. Many years ago I researched two pre-PC technology cycles – IBM’s emergence during the mainframe era in the 1960s and Digital Equipment’s (DEC) dominance in minicomputers in the 1970s – and, not surprisingly, the evolutionary pattern was the same.

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It is important to note that those technology discontinuities also generated new business models. IBM was a fully integrated computer manufacturer, whereas DEC had a more distributed corporate structure. Microsoft and Intel focused solely on their respective market segments, while Cisco’s business model looked like a modern-version of DEC’s. The Internet produced an entirely new set of business models as demonstrated by Google and business models will once again evolve in mobile. Perhaps the most critical insight in the full 50-year evolution of technology is the importance of software in creating the scale economics and network effects necessary to dominate a technology cycle. With the exception of Intel, all of the market leaders were essentially software companies, even if they produced hardware to deliver that software to users. These powerful economic forces will continue to be true in the future.

The widespread, global adoption of mobile devices represents a new Cambrian Explosion. The period of rapid speciation is well underway with literally hundreds of new companies formed to exploit the new ecological environment that mobile provides. However, if history holds, the technology will begin to stabilize, a few dominant companies will emerge and a rapid period of mass extinction will follow. When the music stops, there will not be enough chairs (money – the fuel for all companies) for all to find a seat and only the fastest, most adaptable and best executing companies will survive.

1. Wonderful Life: The Burgess Shale and the Nature of History, W. W. Norton & Company, 1990

2. Punctuated equilibria: the tempo and mode of evolution reconsidered. View PDF