I keep hearing people brag about how their startups aren’t going to need any humans to run them. Why are people bragging about this? If you truly have an idea that doesn’t require people (everything can be done with machines), then you have no sustainable advantage. Other people can buy the same machines you have and you won’t have anything unique to offer, anymore. If you have an idea that does require people, and not just any people, but smart people who are going to keep innovating for you, then you can create a business that can sustain itself in the face of competition.
Let’s take a more concrete example. Admittedly, this is a gross over-simplification, but it’s still a good example. Which is a better way to grow a startup?
1) Pursue an idea that takes 10 racks of servers and 1 sysadmin to run them?
2) Pursue an idea that takes 8 racks of servers and 3 sysadmins to run them?
I would argue that it’s a no-brainer. If you’re starting a business, and for simplicity, you’re buying the servers, then a 48U rack of servers probably has the same price tag ($100K-$200K) as a sysadmin for a year. If you have a business that takes 3 sysadmins, and you get good ones, they will be developing technologies, systems, and experience that are worth something in year 2 of the business. If you start a business that has 2 extra racks of servers, how much better will that make your company look in year 2, as those assets depreciate? You may have been able to serve a few more customers, but are you really safe from someone else coming along and blowing you away? I doubt it.