The Wall Street Journal: “Anshu Sharma, a venture capitalist at Storm Ventures, thinks he knows why so many companies that should have all the resources and brainpower required to build the next big thing so often fail to do so. He calls his thesis the ‘stack theory’ … the mistaken belief that” building something new is a simple matter of “moving up the stack.”
The “stack” is a “layer cake of technology, one level of abstraction sitting atop the next that ultimately delivers a product or service to the user.” IBM, for example, “moved up the stack from making things that compute to selling the services that computation enables … Google tried to move up the stack from search to social networking.” Apple apparently hopes to move up the stack to make electric cars.
According to Mr. Sharma, failure to move up the stack happen when the company lacks empathy for its customers and doesn’t understand its customers’ wants or needs. It’s generally easier to move down the stack (e.g., Tesla builds its own batteries because it knows its own requirements). Uber would be more likely to succeed at building its own cars than General Motors would be at creating a ride-sharing service. That’s because “Uber has the advantage of knowing exactly what it needs in a vehicle for such a service.”