I’m excited to see the increased discussion around “full stack” startups—startups that take on the entire challenge of offering a service, rather than just offering a layer of technology that other service providers use.
Think Tesla, Uber, Warby Parker, Redfin, and increasingly, as it gets into original content, Netflix.
In Tesla’s case, rather than sell technology to incumbent automobile manufacturers, Elon Musk took on the thornier challenge of creating an automobile company built from the ground up on new technology. The challenges were far greater, but he didn’t have to deal with incredibly long sales cycles, revenue concentration, or customizing the technology to fit existing, and often outdated, technologies and practices, among other benefits.
By going full stack, he was also able to address many of the other inconveniences in the auto purchasing and ownership experience, namely the dealership-based purchasing and servicing process, which he detailed in a blog post related to New Jersey’s decision to ban Tesla sales in company-owned showrooms.
I first heard the idea of “full stack” startups from Glenn Kelman, CEO of the real estate company Redfin, and I wrote about it in an earlier post. His mental model for the idea was “change the game”. His idea was that, rather than walk into the existing game with proverbial hat in hand, offering to fit a disruptive idea into the confines of the existing industry, one should consider changing the game entirely. Abstract the discussion one level higher to ask: What is the fundamental service being provided by the industry and how might it be improved dramatically with new technology and by being re-thought completely?
Chris Dixon of Andreessen Horowitz wrote about the idea earlier this month, coining (I believe) the phrase “full stack startups”.
And then today I read this great series of tweets by Balaji Srinivasan, also at Andreessen Horowitz, which prompted me to write this post to collect my thoughts: