From: acquiredfm
Moore’s Law describes the observation that the number of transistors on a microchip doubles approximately every 18 to 24 months [00:12:08]. This exponential growth in computing power has profound implications for technological advancement and market expansion [00:12:19].
The Nature of Exponential Growth
When observing Moore’s Law on a logarithmic scale, a steady 10x improvement in processing power is visible roughly every seven years [00:12:30]. This trend has been consistent across various generations of processors, from Intel’s 386, 486, Pentium 4, and Core 2 Duo, to Apple’s A7 chip in the iPhone and the more recent M1 [00:12:32].
However, viewing this growth on a linear scale makes it appear as if little progress occurred for a long time, followed by a sudden burst of activity [00:12:47]. This is the inherent nature of exponential scales; the graph always looks like nothing happened, and then everything happened at once [00:12:57]. For example, in ten years, the M1 chip will seem insignificant compared to future advancements, just as the Pentium 4 chip from 2000 now seems small [00:13:02]. This phenomenon creates a perception that progress is always at a “crazy top,” despite continuous exponential growth [00:13:14].
The Mike Moritz Corollary to Moore’s Law
The same exponential pattern observed in processor power can be seen in the total market capitalization of global technology companies [00:14:18]. This observation led to what is dubbed the “Mike Moritz Corollary to Moore’s Law” [00:14:27].
Mike Moritz, upon taking over Sequoia Capital, realized that as long as Moore’s Law continued to hold, and computing power became exponentially cheaper, the markets that technology could address would continue to grow [00:15:10].
In 1990, a PC with a 486 processor cost 200 (one-tenth the price) and is owned by over six billion people [00:15:38]. This reduction in the cost of compute has enabled technology to access larger and larger markets [00:16:08].
While there may be market fluctuations, the underlying principle suggests that technology will always be able to penetrate larger markets as long as Moore’s Law (or an adjusted version of it, accounting for advancements in GPUs like Nvidia’s) continues to deliver 10x improvements in computing every five to seven years [00:16:10].
Broader Implications
The continuous waves of technological advancement driven by Moore’s Law mean that it’s “never too late” to innovate or invest in technology [00:37:07]. Each significant increase in computing power creates new markets and paradigms [00:37:08]. This ongoing progression suggests that one is always on the cusp of the next generation of technology [00:37:30].
The internet, a key enabler of this trend, has both vastly concentrated returns to scale for underlying platforms (e.g., Amazon, Shopify) and enabled the viability of long-tail, niche markets [00:57:30]. This “barbell effect” means companies must either scale up massively or niche down effectively, avoiding the vulnerable “middle” [00:54:56]. This dynamic, initially observed in media, is likely to ripple through other industries like venture capital and education [00:55:58].