The Paradox of standardization and innovation

Standardization is certainly very friendly to both developers and users, both in terms of development costs and adoption costs. This is true of the Web2 world, and it is true of the Web3 world.

EVM, a virtual machine with strong first-mover advantage and the strongest consensus, has become the "standard" for decentralized application development in the Web3 industry.

In the 7 years since the launch of the Ethereum main network, increasing Solidity developers have accumulated countless applications for the Ethereum ecology and accumulated a large number of users. Now, for developers, deploying your application in the EVM ecosystem can not only reach the largest user base, but also make perfect use of the perfect infrastructure, and most importantly, can be combined with thousands of EVM applications. For users, a single wallet is all that is needed to seamlessly switch RPC to use all applications within the EVM "standard".

However, EVM has limited innovation in the Web3 industry to some extent. For example, EVM contract can only define 16 local variables, which greatly limits the implementation of complex application logic. Implementing complex application logic on EVM requires cross-contract invocation, which is both costly and insecure. Of course, we also see that DeFi applications are perfectly implemented on EVM, because the logic in DeFi applications is simple, and the synchronous execution of EVM is very friendly to financial applications (eg. Flash loan). For other Web3 applications, perhaps they need to think about this paradox between "standardization" and "innovation." The good news is that Alt L1, with other virtual machines like WASM, is slowly emerging, giving Web3 innovators other options.

This article comes from Michael Mignano, co-founder of podcast platform Anchor, in which he defines "standardization" and elaborates the advantages and disadvantages brought by standardization as well as the challenges to innovation. The Rhythm Research Institute translated the full text:

Technical standards, such as RSS for podcasts, are essential for emerging technologies to become widespread in the information age, because only standardized technologies can be better integrated into the existing ecosystem. But there are two sides to every coin, and the spread of standardisation has limited innovation to some extent -- which is why the format of podcasting has changed little in its 20 years of development.

The advantage of technical standards is that they help teams save time and money by providing a common language for products in the marketplace so developers don't have to build every component in the marketplace or redefine how systems communicate with each other. For example, a team building a new E-mail client wouldn't need to redesign the way E-mail is transmitted between senders and recipients; Instead, they can just adopt SMTP (simple mail transfer protocol) and focus on improving user experience. In other words, people can directly use the standards established by predecessors, thereby accelerating the process of product development; At the same time, products built on standards tend to be more marketable than products built exclusively.

While standardised products can reach audiences faster, the price is that lower barriers to entry can lead to a proliferation of products in the same category, leading to market fragmentation and limiting the pace of innovation. I refer to this phenomenon as "the contradiction between standards and innovation," which I will explain in more detail below.

Definition of standard

Simply put, a standard is a specification of how a technology (hardware or software) interacts with other technologies. Standards are typically developed by communities and approved and maintained by committees that are usually open to anyone who wants to participate. Some examples of technical standards include: HTTP (for web browsing), SMTP (for E-mail transfer), RSS (for content syndication, such as blogs or podcasts), or SMS (for sending and receiving text messages).

Advantages of Standardization

Let's take a look at Really Simple Syndication (RSS) to see how standards benefit product teams: RSS has long been the underlying technical standard for podcasting, providing a powerful distribution mechanism for creators to distribute their audio from a single terminal and quickly syndicate that content to other platforms. Over the past two decades, RSS's common language for podcasts and their applications has facilitated their communication with each other, enabling podcasts to flourish on the Internet. To publish audio via RSS, the creator (or podcast platform on behalf of the creator) must publish the podcast in a specific format and include only parameters defined in the standard, such as a URL link for the podcast cover, a list of episodes, and so on.

I've spent a lot of time with RSS, having co-founded Anchor, a podcast authoring platform that was acquired by Spotify in 2019. Anchor makes it easy for anyone anywhere to post podcasts from iOS, Android, or their web browser without having to have professional experience or knowledge. For creators, the magic of Anchor is that they can publish podcasts to all podcasting listening platforms through RSS only by clicking a button. Therefore, Anchor develops rapidly and eventually becomes the largest podcasting platform in the world.

RSS not only provides great help to Anchor's development in podcast creation, but also promotes people's consumption on podcasts. Almost every podcasting app in the world (such as Apple Podcasts, Spotify, Overcast, and many others) supports podcasting under the RSS standard. The benefit is that if a podcast application adopts this standard, it can automatically show its users all the podcasts in the world. Similar to the email example I mentioned above, this means that these applications can focus on the user experience without worrying about their platform content. That's because the content already exists on the open Internet and can be easily accessed for users to enjoy.

Adverse effects of standardization

Since the use of RSS can save podcasting software a lot of time and money, they don't have to redesign the way their content flows through the podcasting ecosystem, which means that these apps can easily find their audience. As a result, numerous podcasting apps have emerged within the podcasting ecosystem since the market was founded about 20 years ago. If you've ever searched for a podcast App in the App Store or Google Play, you've probably gotten a ton of results. In some ways, this phenomenon is good for users because it means they have more flexibility in choosing what products to use to listen to podcasts. But at the same time, the user only gets a single experience. The reason for this is that, as mentioned above, standards are created by consensus, so the underlying language is hard to change. Next, let's use a real-life example to better understand the logic.

The relationship between standards and innovation

Imagine you and your partner are on vacation for two weeks in a country you've never been to before. Since it's just the two of you, you can do whatever you want on this trip without too much scruples. For example, you can cancel your dinner reservation and go to a concert instead, or you can cancel your visit to a museum the next day and rent a car for a trip to another city.

Now, imagine that it's not just the two of you on this trip, but your children, your parents, your in-laws, your friends, and your brother's family. Then it will be a whole different kind of trip, and everything will have to be carefully planned. If you want to tweak a few of these details, you need everyone to agree -- which is almost impossible. In the end, you will have a memorable experience with your long-lost family, but it will also feel a little flat and boring.

So, as with blogs, any design team that wants to stand out must convince every stakeholder involved in the standard to adopt the idea as well, otherwise their idea will be ineffective. In addition, if you insist, then you will not even experience the benefits of the standard. Going on vacation with friends and family is already nerve-wracking, but it only gets harder when you're dealing with competing companies of all sizes -- and that's the paradox of building with standards.

The Paradox of standardization and innovation

The contradiction between standards and innovation is a problem that teams inevitably face when building new products based on standards: on the one hand, wider audience and higher product-market compatibility, while on the other hand, innovative design that deviates from market inertia and consensus standards. If a team decides to break the standard for the sake of innovation and doesn't get buy-in from other stakeholders, then they have to suffer the consequences. The more stakeholders there are in the ecosystem, the more people need to agree, and the harder it is to make changes.

Imagine if the team wanted to build a proprietary system that was closed loop and not based on standards, so they could build everything from scratch and freely implement and adapt the technology without having to get approval from others. The downside, of course, is that development costs are higher, and market niche acquisition can be more challenging. However, once the product finds its niche, it can accelerate the innovation process without being constrained by standards.

The contradiction between standards and innovation

The existence of contradiction between standards and innovation will force the team to make a choice: with a standard to gain as well as other existing products in the vast ecosystem interoperability/distribution advantages (at the cost of long-term innovation), or build everything from scratch to seek higher flexibility and innovation potential (at the expense of the existing audience)?

Podcast platform and RSS standard

We faced this issue in the early stages of building Anchor before it was acquired by Spotify. We can hardly make any innovative changes to the podcast format because it is completely based on the RSS standard.

For example, let's say we want to open the comments section for a podcast and have those comments appear in the show's RSS feed. So, unless we get hundreds of podcasting apps to adopt this change, listeners won't be able to comment. Not only would the creator not get any feedback, but we wouldn't get any chance to install the feature.

Or let's say we want to build a richer, more flexible podcast analytics system so creators can better understand the effectiveness of their shows, and thus increase their revenue through advertising. Again, unless we get other applications to adopt the system, we won't be able to transfer data back to the platform, and we'll have to give it up.

For the past 20 years, RSS has kept any podcasting software to a completely rigid standard, and any team trying to build a differentiated product has failed.

Communication software and SMS standard

This limitation also exists in communication software. SMS, a short message standard, was invented in the 1980s. After nearly a decade of development and support from all the important people, it finally became the first standard adopted by mobile phones and mobile operators in 1992, and finally gained popularity in 1999. After that, anyone anywhere in the world will be able to send SMS messages to other mobile phones that adopt the SMS standard, regardless of which vendor or device they are using.

Then someone came up with the brilliant idea of adding pictures to messaging software. It would be great if you could send pictures to people. However, because SMS is an open standard, images can't just be incorporated into the latest software update. The standard itself needs to be tweaked, and every device manufacturer and carrier must agree to the change. Eventually, SMS morphed into MMS, and then it took another decade or so for MMS to finally reach scale.

IMessage is Apple's proprietary messaging software, but it doesn't use the original standard. It's the iPhone that makes iMessage so widely available -- to use iMessage, you have to own an Apple device, like an iPhone, which is definitely a downside. But if you choose an Apple device, you can enjoy Apple's excellent service. Thanks to its proprietary ecosystem, Apple is able to continuously improve the user experience beyond the reach of any communication software that uses the SMS standard.

Development of communication software

IMessage has changed considerably over the years: in the early days, it was indistinguishable from SMS; But now it has a lot of features -- read tags, photo galleries, filters, custom emoticons, app stores, voice memos, and more. The same is true of Snapchat, Messenger, WhatsApp, and many other such messaging apps, all of which have abandoned the SMS standard for the opportunity to innovate and grow quickly. The trade-off is that they also can't interact with other software, depriving them of potential users.

Subscription platform and SMTP standard

Lately, you've probably heard about Substack, a popular email subscription platform that allows creators to build, store, and extend their own content services.

The clever thing about Substack is that it uses an open standard, called SMTP, to easily send news messages to anyone with an email address.

In contrast to the podcast example above, where any platform that uses RSS can immediately address the supply side, Substack does the opposite: it focuses on the demand side, ensuring that every user can read the content. It was a clever strategy that not only accelerated its growth, but also attracted a large number of established writers and paying users.

But while this method of using SMTP to deliver content to readers in real time is surprisingly effective, it comes at a cost: as long as E-mail complies with the SMTP standard, it is static. This means that Substack cannot use email to deploy any dynamic features, such as optimizing the reader's search experience in real time in the email client, opening up comment sections to real-time updates, or implementing any other type of dynamic features that would improve the user experience. Again, if Substack is to actually implement these innovations, it will need to get the approval of most of the major email client development teams on the Web.

So Substack recently made a clever innovation: it launched an app designed to optimize the user experience in Substack. The point is that if Substack is successful with the app, it will be able to continuously improve the user experience on its platform, regardless of SMTP standards. But in doing so, they also give up the advantages of the open standard with which they developed in the first place.

In my opinion, Substack faces a contradiction between continuing to use SMTP and reaching a wider audience; Or build a proprietary solution to accelerate the pace of innovation. The launch of its app now illustrates Substack's ambivalence about this, and it's clear that it has chosen to step away from the standard.

Break the spell and have it both ways

While the tension between standards and innovation may hold most companies that want to change, there are ways to resolve it. In fact, there are ways for teams to both reap the benefits of standards and innovate beyond their limits.

Take advantage of existing systems

Given enough time, all standard products will end up being much the same. This is because standards are entrenched and hard to change, and product development quickly reaches a ceiling. At the same time, the more products adopt the standard, the greater the market inertia and the less likely it is that the standard will change. The market will be very competitive for individual products, and it will be difficult for them to differentiate themselves successfully. So in order to break through, these products have to find life in markets that are not constrained by standards.

Spotify's podcasting business is one example. The streaming audio giant, which was just a music platform a few years ago, now encompasses many other categories of audio content. Given the difference in content and experience between music and podcasts, many are hoping the company will come up with an app dedicated to listening to podcasts to differentiate between the two types of audio content. However, if Spotify were to do so, it would have to enter the market for podcasting platforms, which are limited by the RSS standard and all offer roughly the same functionality. So once Spotify moves into this market, it will be just as difficult to bridge the standard gap as any other podcast platform. So Spotify took full advantage of its existing music user base, sending podcasts to hundreds of millions of users within the existing Spotify app. In doing so, Spotify has managed to break the spell.

Provides backward compatibility

In fact, users are more likely to use standards-based products because of their variety of options and flexibility in data migration. So for products that want to innovate, they must retain the advantages that the old standard offers to users, or risk losing users and markets. To do this, products can be built with backward compatibility with standards. If we look at what Apple does with iMessage, if you've ever used iMessage, you've probably sent a message to an Android user. When you send a message, the message box changes back to its original green color. This is because iMessage reverts to the SMS standard so that you can interact with the recipient over text messages. That way, Apple users will be able to experience all the innovative features of iMessage while still being able to send messages to friends on their Android devices.

conclusion

Although standards may restrict the pace of innovation to some extent, we can't deny that standards have brought many benefits to the development of technology. Therefore, when building new products based on standards, development teams need to make many trade-offs and carefully think about how to handle the relationship between standards and innovation when future products go to market.

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