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Comment by tomasz_wro | Hacker News Reader

Stack Fallacy - it seems it's easier to innovate up the stack, because you know the building blocks, because you own them (e.g. Apple doing apps). But it's actually easier to innovate down the stack, because you know the customer needs, because you are the customer (e.g. Apple doing chips).

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Hm interesting... so if you consider Google's original products search and ads, then Android, Chrome, ChromeBooks and other hardware are down the stack. Google Cloud is down the stack.

YouTube is lateral, but it was an acquisition. Minor business, but being a DNS registrar is down the stack. So it seems that Google did go down mostly.

I would say Apple went "up" in at least one phenomenal way. They started out with computers, and then 20 years later their big success was iPod + iTunes. iTunes is probably 2 levels up the stack, being mostly a media business, not really software even.

Apple also wrote a lot of apps like Keynote, and acquired apps like Logic, etc.

From it's inception Apple made technology useable.

The Apple ][ was an appliance, the Mac even more so. That was happening during an era where a lot of computers still shipped in kits.

The iPod was a better UX on top of existing mp3 players Asians OEM were making (5 buttons and a tiny liquid crystal screen).

The iTunes store was Jobs spending an afternoon downloading music on the internet and figuring out he was saving less than minimum wage doing so.

Like Amazon going from selling books to selling compute and network and warehouses and shipping.

Amazon is different,as all they sell is what they learned throughout the years: infrastructure.then they learn more things and start selling solutions to those problems.

and whenever they get into a new space like tablets, grocery delivery, or game dev it mostly doesn't go well... Alexa is probably the exception

Are there examples of company who have successfully gone up the stack?

As part of the commoditization of the pc, in the eighties and nineties, Asian pc hardware vendors went from basic manufacturing to simple assembly to motherboard layout to full system design.

They basically went from subcontractors for Dell and the like, to almost completely replacing Dell and the line by moving up in the chain until Dell had very little value left to add.

On reflection I think the BEST possible example must be Pixar. They are a shining example of going up the stack in a phenomenal way. They started with graphics rendering hardware:

https://en.wikipedia.org/wiki/Pixar_Image_Computer

And then they wanted to sell software:

https://en.wikipedia.org/wiki/Pixar_RenderMan

And then they ended up making movies! This is described in Ed Catmull's book and I think there's a documentary on Netflix too.

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I also think it's interesting that George Lucas started out as a special effects guy and then he made Star Wars. So the effects really do help the storytelling.

Microsoft?

They started with the OS, branched to languages, added Office (against much better competitors), started to control the browser and then antitrust happened.

Also, their gaming industry story. They used to be just an OS that games ran on, then released one of the leading consoles and now are one of the major publishers and studio owners.

Also some of their hardware. For example lots of people love their mouse. On the other hand I know people who hate the Surface Pro.

Actually, they started with languages, specifically BASIC, and then FORTRAN.

Red Hat? From a mass market Linux to enterprise Linux maintenance to middleware (jboss) And from hardware enablement to virtualization to lightweight virtualization, cloud management and container orchestration?

Microsoft?

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