
Full Stack Startups - kloncks
http://www.cdixon.org/2014/03/15/full-stack-startups/
======
tptacek
Full stack = vertically integrated. No need for new terminology. This is one
of the older stories in business.

~~~
CyrusL
Chris said this in the comments:

I don't think it's vertically integrated in the classic sense. This isn't oil
company buying supplier. It's a tech company building the complete experience
including non tech parts. The end result looks more like a company that we
wouldn't call vertically integrated. E.g. Uber competes with taxi companies
but I don't think we'd call taxi companies vertically integrated.

~~~
mindcrime
It may be closer to what is sometimes called the "Whole Product"[1]. In either
case, what he's talking about isn't really anything new. And it's not
necessarily good for anybody involved either. There are a lot of people, for
example, who _don 't_ want "Apple style end to end integration" if it means
being tied to Apple for everything.

A customer who truly wants "best in class" up and down the stack still wants
suppliers to adhere to something somewhat akin to the "Unix philosophy" or the
idea of "small pieces, loosely joined".

This "whole product", "full stack", "vertical integration" stuff has a role to
play for sure, but let's not pretend like it's some earth shatteringly new
strategic idea, or the be all end all.

[1]:
[https://en.wikipedia.org/wiki/Whole_product](https://en.wikipedia.org/wiki/Whole_product)

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nnq
...so instead of small and lean businesses (and why not employee-owned too if
we're at it), that integrate well with both existing technology and economic
landscape, that provide nice integration points both at the business level
(partnerships etc.) and technical (APIs made for more than just consumption
etc.), let's build startups that fueled by VC money evolve into monolithic
monsters that ferociously guard their walled gardens and do their best to
entrap customers in them, because ..."nice, polished and integrated and user-
friendly experiences"?

Let's at least be frank about it: _it 's because... PROFIT! ...and OWN the
(l)users! ...and to rule the world!_

Am I the only one that instead of this, dreams of an utopical business
landscape created in the image of the "UNIX philosophy": swarms of small,
targeted, few-persons businesses that each solve specific problems and
integrate well with one another? And of _teaching the customers_ about the
benefits of integrating the best solutions from a large number of boutique
providers, all able to provide bespoke solutions for _their_ needs, and all
highly motivated to provided the best services because each small customer is
_really important_ for them?

Please, _stop trying to be "full stack"_, do what you're best at and learn to
_integrate with others_ (yes, integration is _really really hard_ , sometimes
even harder than delivering a great product/service, but it's better than
forcing the customer to accept a crappy service/product at one level of the
stack just because he needs to use the "star product/service" at some other
level of your stack). We don't need more Apple-like companies! A few of them
are great for setting some quality and "quality of integration" and "polish"
standards, but more of them are bad for all!

------
nostrademons
Unpacking this a bit, I think that the reason full-stack startups are becoming
popular is because many of the new technologies are disruptive innovations
that honestly aren't that useful to _existing customers_ of industries. That's
the definition of a disruptive innovation, right?

Take Uber for example. Their core strength is logistics; they connect
instantaneous demand for transportation with surplus supply. They could try to
sell this as a service to the existing taxicab/limo industry, but their
incentives are seriously misaligned. Taxis and limos have an industry
structure that remains profitable because they own a supply-restricted
monopoly on transportation (through medallions & branding) that lets each
driver charge premium prices. Adopting Uber's technology doesn't let them
serve more customers (they're limited by driving time), nor does it let them
charge more (it would probably _drop_ the price through higher availability),
and so there's no incentive for them to buy it. However, if Uber targets a
_different_ population of drivers - say, those who are unemployed or
underemployed and have free time on their hands - then _those_ folks all have
an incentive to adopt the technology so they could get customers where none
were before. And because the supply of Uber drivers is greater than the supply
of taxicabs, this lowers prices for customers, creating wealth and a fair
amount of Teamster opposition.

Or consider Tesla. Their core strength is branding - they appeal to the eco-
friendly, style-conscious customer who wants everyone to know they care about
the environment. If Tesla just sold batteries and a powertrain to Detroit, it
wouldn't fix the public perception of American cars as gas-guzzling clunkers
at all. This is why the public is nowhere near as excited about the Chevy Volt
as about the Tesla Roadster or S.

I think that companies that pursue these strategies are effectively attacking
longstanding structural efficiencies in the way the U.S. economy works, things
that have been institutionalized because that's the way it's always been. And
we're going to see more of them in the near future, because this reliance on
branding, oligopolies, and regulatory barriers to entry has been in place
since the 50s, and technology has changed significantly in that time period.
There will also likely be a lot of social upheaval as well, as people get used
to the emergence of new institutions.

~~~
alaskamiller
Definition of disruption.

I wager "disruption" is also underpinning resentment towards gentrification in
places like San Francisco.

The negative side of changing how industries and businesses work is that a lot
of times those left behind has no more place to go.

Like the auto workers in Detroit or the steel workers in Pittsburgh. They
committed to traditional hard work, their organization required hundreds of
thousand of them for labor, to protect their interest and to maintain a fair
and equitable trade of time/labor they established unions.

In turn the orgs provided care for them all their lives.

We don't have that anymore.

Instead the disruptions coming are just that. Disrupting normalcy and how the
establishment are living.

Where do they go? Who is going to carry that burden? The government or the
private industry that's capable of leveraging more with less, that's literally
killing ways of life for many?

How do you maintain your moral compass in all this? Is this just the march of
progress? Does it not bother you because that paycheck will make it better?

~~~
dnautics
Oddly your aurgument Sounds like a traditionalist argument for keeping slavery
around in the 19th century.

Is "being protected from change" a fundamental human right?

~~~
alaskamiller
Horses went to pasture after cars. Who are you in the future?

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Dale1
Ughh, all these buzz words and everyone seems to have a different view on what
they mean!

I thought 'full stack' was a developer who could turn their hand to any
aspects of the project?

Another term I hate is 'growth hacking' \- why does everything need a fancy
new name?

~~~
runawaybottle
Lol (really I lol'd in real life).

------
vorg
> My guess is we are still at the very beginning of the full stack movement

It's all been tried before. In the 1940's, the US courts even had to stop
movie studios from owning the cinema chains, see
[http://en.wikipedia.org/wiki/United_States_v._Paramount_Pict...](http://en.wikipedia.org/wiki/United_States_v._Paramount_Pictures,_Inc).

When some technology further _up_ the stack tries to strong-arm control of
technology lower _down_ the stack and unilaterally change it for their own
sole benefit, it can cause great dissatifaction with other users of the more
fundamental technology.

------
pshin45
Here's my take - Hackers have simply become more business-savvy. Let me
explain...

"Full Stack Startup" is clearly not a new idea, as tptacek mentioned in his
comment; just a modern application of an age-old business concept. Rather, I
think hackers as a whole have simply become much more business-savvy since the
Dot-com bubble, which was obviously a low point in collective business wisdom.
As a result, they are increasingly choosing smarter, more sophisticated
business models (i.e. vertical integration) and distribution strategies when
building their companies.

It also shows that the "disruption" of the MBA is now more or less complete.
Business principles and fundamentals will never change (just like human nature
doesn't change), but the practice and application of those principles has
changed drastically as a result of the Internet, and I doubt MBA curriculums
have been able to catch up, simply because most of the people involved don't
understand the core technologies driving these changes as well as hackers do.

On the other hand, we've seen the rapid growth in the number, size, and
influence of hacker-friendly institutions like Y Combinator, which for all
intents and purposes is basically "Business School for Hackers" (let's be
honest). YC brings together people who already have a deep knowledge of
technology, and helps them make better business decisions while building a
strong professional network in the process (the latter of which is cited as
the main/only benefit of an MBA). The same goes for hacker-friendly business
methodologies like The Lean Startup.

The reason terms like "Growth Hacking" and "Full Stack Startups" become a
thing in the first place is probably because they started off as "hacker
dialect" for traditional business terms and concepts (Marketing and Vertical
Integration, respectively). "Marketing" has for a long time been considered
the exclusive realm of MBAs, but obviously that's not the case anymore, and
using a term like "growth hacking" was probably a way for hackers to "take
back" the concept and make it their own so to speak, though obviously that
term has since become severely overused and bastardized.

~~~
supersystem
Um, no. What happened was that "hacker culture" lost. If it was hackers that
had "expanded" the old concepts would still be alive.

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akbar501
Interesting view. Essentially a vertically integrated firm from the days of
yore plus a new integrated customer experience.

I like how he's thinking not about supply chain integration and customer
experience in isolation. Plus, I totally agree with his comment about how this
is difficult, but if mastered, provides a hard to replicate competitive
advantage.

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Pitarou
In other words, these are NOT technology companies. They are regular product /
service companies whose founders use their technology know-how to disrupt the
marketplace.

------
iamwil
Doesn't this type of vertical integration lead to user lock-in after they've
displaced the incumbents? And as the companies rise and fall, the broad range
of things they had to get good at ends up being reinvented and stove-piped by
other companies.

Is this an issue for the industry at large?

~~~
mwfunk
I can't think of any examples of vertically-integrated anything achieving a
monopoly in our industry, at least not without going back to IBM in the '50s
and '60s.

It seems like vertically-integrated products have the capacity to become
strong competitors, since the reason for making such a thing is to deliver a
very specific experience. However, by definition such products aren't going to
cater to everyone, and thus are unable to take over the market completely, at
least not for any length of time.

The iPod is a good counterexample, but it's a not a general-purpose type of
product and had a short-lived reign as being the way most people listened to
digital audio.

~~~
mwfunk
Put another way:

Vertical is a great way to realize a very specific vision for something, but
it's a huge impediment to getting majority market share. Done properly though,
you can do things your more horizontal competitors simply can't. It can be
quite profitable but it won't be for everyone (Mac). The danger is that
there's a higher bar that needs to be reached in order to pull it off. You
can't assume that third party hardware or software vendors are going to jump
on board to add value to your platform.

Horizontal is a great way to insert yourself into a preexisting market, help
create a new market, and maybe even get a monopoly on your layer of the stack
(Windows). This can also be very profitable. You still can't be everything to
everyone, but you can get much closer to that goal. The downside is that being
everything to everyone is not always a desirable goal, but now you're stuck
with it, because otherwise what's the point of going horizontal? You need your
layer to be as general-purpose as possible in order to maximize third-party
involvement in the layers above and below you.

------
skybrian
You might think of this as the opposite of outsourcing, except these companies
_do_ outsource. However, they choose partners with relatively less negotiating
power. Uber is an obvious example, but large companies like Apple, Amazon, and
Walmart do the same at much larger scale; they can partner with large
suppliers as long as they're relatively smaller.

This lets them control the user experience better and, not coincidentally,
their own profit margins as well.

(I'm reminded of Gailbraith's theory of countervailing power, that large
retailers arose because they had more buying power than consumers when
negotiating with suppliers.)

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coreymgilmore
Full stack means better integration between hardware and software and hence a
better final product. Apple has been showing us this for years. Their product
set has always felt very polished and cohesive.

Plus, technology and programming languages have become very cross-stack
friendly. For example: if you know JS you can (with some work) program a
server in Node, your Db with Mongo, and client side with straight JS. Yes,
there are some complexities but the basics are all the same. Furthermore,
development costs for this are way lower than legacy systems that have never
heard of aajax or a MVC.

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chezbut
This is the worst abuse of the term 'full stack' that i've seen in a long
time, especially by someone other than a recruiter.

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jasonwatkinspdx
Partly this is driven by the full stack (if you want to call it that) being
cheap and easy now. It's becoming commoditized by Amazon, FedEx, etc. Whatever
your product is, you can make it globally available (to the developed world at
least) with minimal staff and infrastructure.

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auston
I hope cdixon is on HN, how is buzzfeed a full stack startup?

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kylered
Did you smoke peyote?

