Silicon Valley investors have long championed the idea that software is displacing legacy industries at an inexorable pace. Or more famously said by Marc Andreessen, “software is eating the world.”

Why did this play out? Because software reduced overhead, made systems more efficient, and absolutely obliterated the cost structure of incumbents leading to huge margin expansion.

The pattern has repeated across generations:

• Calculators did math
• Computers did functions
• The Internet housed busi