This answer is unsurprising in retrospect, as it reflects a common yet fundamental misunderstanding of disruptive companies: many people believe startups win by directly competing against their industry incumbents. For example, they think Uber wins by providing better taxis than Yellow Cab, Airbnb wins by providing better hotels than Hilton, and Wealthfront wins by providing better financial advisors than Charles Schwab. This belief is wrong.
A common corollary of misunderstanding disruptive companies is fearing that joining them will limit future job opportunities. Again, disruptive companies repeatedly disprove this corollary. For example, Uber and Airbnb engineers do not worry their only future job prospects are in transportation or hospitality companies.
Disruptive companies often hold the greatest promise for generalist software engineers to build their career, because Internet-based disruptive companies are most successful when they are driven by technology.
Ingredients of Disruptive Innovation
Nearly all successful Internet-based businesses use convenience, simplicity, and cost to disrupt and reinvent their markets—the three common ingredients of disruptive companies identified by Disruption Theory, popularized by Clay Christensen. They disrupt their markets through the unparalleled benefits of software and the Internet, rather than trying to beat incumbents at their own game.
Uber and Airbnb are two recent successful startups that exemplify this principle:
- While they provide route selection and accommodation scheduling, nobody thinks Uber owns taxis or Airbnb owns rental properties
- While they implement specialized mathematics and algorithms for pathfinding and scheduling, the vast majority of Uber and Airbnb engineers are generalists with no prior background in transportation or hospitality industries
Common Disruptive Technical Challenges
Disruptive companies face remarkably similar technical challenges, despite delivering value across completely different industries. These technical challenges are far different than those faced by their legacy competitors. Here are some examples of the most difficult of these challenges:
- Automating complex human workflows into horizontally scalable software platforms
- Building data-driven features derived from complex real-world models
- Scaling analytics and machine learning as data volume grows exponentially
- Applying devops to scale operations and infrastructure entirely via code
- Scaling test automation and infrastructure to ensure high-quality code across the stack
- Ensuring security and preventing fraud despite rapidly increasing public visibility
- Acquiring clients online via experimentation, funnel optimization, and quantitative marketing
Why Generalist Teams Win
Disruptive companies prefer to hire talented generalist engineers, while deliberately not hiring specialists from their legacy competitors. This preference is motivated by four factors:
- Industry veterans are burdened by obsolescence bias, assuming constraints outdated by mobile and the Internet
- Legacy technology experience is not required, and instead often gets in the way
- Specialized expertise rapidly becomes obsolete and thus has a short shelf life
- Generalists understand how to leverage new platforms and open source technology
Your Market Value & Disruptive Companies
The single most important determinant of your future market value as an engineer is the culture and caliber of engineering teams in which you work. For example, Google and Facebook engineers are in high demand by many companies because their great engineering cultures have attracted many highly talented engineers.
Great engineers want to build software that impacts the lives of many, not focus on a narrow niche. They are best able to do so at disruptive companies, independent of the industry in which they participate. The market value of everyone at a disruptive company grows as a critical mass of great engineers come together.
The next time you consider joining a company, ask yourself whether it is disruptive, has a great engineering culture, and has attracted high caliber engineers. If the answer to all three is yes, then joining that company is likely the fastest path to maximizing both your current and future market value.