Fermat's Last Theorem and the Power of Platform Applications

Fermat's Last Theorem and the Power of Platform Applications

In 1637, a mathematician named Fermat made a bold claim in the margin of a book - he stated that the equation an + bn = cn had no solutions in positive integers if n is an integer greater than 2. This claim, later known as Fermat's Last Theorem, remained unsolved for over three centuries after his death.

Fast forward to the present day, where we see the power of platform applications in the world of technology and innovation. While hardware platforms kick off waves of value creation, it is the applications built on top of them that capture the majority of the value. In fact, a specific type of application called Platform Applications is responsible for capturing the most valuable needs first and creating their own ecosystem of value creation.

Historically, early application companies on each new hardware platform seize the opportunity to capture the most valuable needs. However, in every hardware cycle, there is a unique type of Main Application that is ten times more valuable than a standard Main Application - these are the Platform Applications. They behave like platforms themselves, attracting other companies to build on top of them and creating a network effect that amplifies their value.

Network effects play a crucial role in the success of Platform Applications. They allow these applications to grow rapidly and become dominant players in their respective industries. As a result, they capture most of the value from every new hardware platform that emerges. This insight tells us a lot about the future of innovation and investment opportunities.

Firstly, it is important to look for remaining Platform Applications or Main Applications on mobile or the Internet. These platforms have already proven to be fertile ground for value creation, and there may still be untapped opportunities waiting to be discovered.

Secondly, pursuing core innovation in laggard verticals can lead to significant rewards. There are still many vertical markets, such as enterprise, financial services, healthcare, and government, where innovation has not yet caught up due to regulatory constraints or structural challenges. By identifying and addressing these challenges, there is potential for immense value creation.

Lastly, keeping an eye on emerging hardware platforms is crucial. With multiple new hardware platforms emerging simultaneously, there is a chance to find the next big Platform Application that will revolutionize an industry.

Looking at the current landscape, we can see that Facebook and Google, the dominant Platform Applications on the Internet platform, have also become the dominant players on the smartphone platform. What sets them apart from the giants of the past is their ability to stay ahead of the curve and maintain a sense of paranoia. They understand that complacency is the enemy of innovation and are constantly pushing the boundaries of what is possible.

In conclusion, the story of Fermat's Last Theorem and the power of Platform Applications teach us valuable lessons about the future of innovation. By identifying and investing in the right opportunities, we can capture the majority of the value created by new technologies and platforms. To stay ahead of the curve, it is crucial to embrace network effects, pursue core innovation in untapped markets, and keep an eye on emerging hardware platforms. The future is full of possibilities, and it is up to us to seize them.