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1-Page Summary of The Third Wave

Overview

The Third Wave is a reflection of the author’s experiences and insights into the technology industry. It also serves as a warning to future entrepreneurs about how important it is for them to be aware of their surroundings and not get caught up in trends. The book takes its title from Alvin Toffler’s 1980 text, The Third Wave, which describes all of human history in terms of three waves: past (Agriculture), present (Industrial), and future (Information).

Case’s Third Wave breaks down the history of the Internet into three distinct waves. The First Wave was when entrepreneurs had to build the infrastructure for consumers to use it, and government agencies had to approve its usage. They partnered with other companies in different industries so that they could make sure everyone would benefit from a widespread Internet. The Second Wave was when startups began building products on top of existing infrastructures, such as Google and Facebook.

The third wave will be different from the second. It will look like the first because it will connect everything to the Internet in a way that was not possible before.

Key Takeaways

The first wave of the internet was about building the technology from scratch. The second wave was about developing and creating products that we use online, such as Google, Amazon, eBay, social networking sites, and mobile devices. We are now in the third wave where it becomes essential to society like electricity. Third-wave entrepreneurs can’t just be mavericks or solo artists; they must partner with people across industries and regulatory entities to make a difference in today’s world. This will not occur in Silicon Valley but distributed throughout the entire country. Impact investing will become a signature trend of this new era because businesses need to focus on making an impact while still delivering on their bottom line.

The government must be prepared for the Third Wave of the Internet, or they will suffer a similar fate as AOL. The downfall of AOL resulted from a culture clash that sank their thriving business model.

Key Takeaway 1: The First Wave of the Internet was about building the technology from the ground up and getting people connected

In the 1980s and 1990s, companies were creating new infrastructure for consumers to connect. They were building the Internet from scratch.

In 1983, only 1.4 percent of Americans had Internet access. By 1984, 8.2 percent of American households had personal computers with Internet access. A decade later in 1995, 14 percent of the country was using the Internet from their home computer and by 2000 half of all Americans were online at home.

Today, most people in the US use the Internet. In order to achieve that widespread adoption, entrepreneurs had to work with the government and create civilian access for military and research institutions. Also, companies like AOL had to make sure that people could get online through a modem or telephone connection. Third Wave entrepreneurs will need to learn from these lessons because both eras will be characterized by major investment in infrastructure and overcoming barriers to entry into industries not typically penetrated by the Internet.

Key Takeaway 2: The Second Wave of the Internet was about developing and creating the products we use online. Google, Amazon, eBay, social networking, and mobile devices all emerged in this period.

The first wave of the internet was a foundation for future generations to build upon. New businesses arose and innovated on top of that foundation, creating new products and services. The analogy I’m using is that the first wave of the internet would be like building roads in America. It took 20 years from President Roosevelt’s initial idea to get Congress behind it, but then it took another 30-40 years before people started driving down those roads en masse because there weren’t any other options yet (i.e., fast food restaurants). The second wave would be characterized by companies such as McDonalds or suburban developers who built off what had already been established, which were not necessarily original ideas themselves, but they became successful nonetheless because they capitalized on a new opportunity created by this infrastructure (i.e., highways made getting food easier so more people wanted to eat out instead of cooking at home; suburbs are cheaper than cities so you can afford more space).