Supply Push versus Demand Pull Technologies

There was an article on the front page of the Washington Post yesterday about entreprenuers in Second Life. It was an upbeat article even though the facts did not support the upbeat tone. There was an entreprenuer cited who makes several hundred dollars a year on virtual products. Of course, you cannot live on several hundred dollars a year. It also mentioned the number (a few dozen, if I recall correctly) of people who actually make a living in Second Life. A few dozen out of millions is not good either. So, why was the article and others like it so upbeat? That got me to thinking.

Most technologies are supply push technologies. That is, the technology is developed and marketed, THEN people buy it and find uses for it. Computers, laptops, cell phones, web sites, etc. etc. all follow this model. In fact, as I have written many times, when I first introduced the idea of cell phones to a class of mine back in the very early 1990's they did not think it sounded like a very good idea. And, yet, when cell phones became available, and affordable, everyone wanted one.

Other technologies are demand pull. That is, there is a demand for the technology before it is actually available. Two rather stunning examples come to mind: robots and intelligent machines. People envisioned uses for these technologies before the technologies were availabe. In fact, in these two cases, the technologies actually failed to meet the demand. A simpler example that did succeed was digital recording and play back of videos. People were ready for this technology before the technology was ready for the people. This is a great example of demand pull.

I think virtual worlds are a demand pull technology not unlike robotics and machine intelligence. They have captured the imaginations of visionaries who cannot wait for them to become a reality. However, virtual worlds, unlike robotic and machine intelligence probably will deliver on the technology. This give me an idea for a workable business model for Linden Labs which I will turn to next time.