In Robert X Cringely's excellent history of the personal computer prior to the internet, he made the claim that without visicalc we would never have had the private equity boom of the 1980s.
Did the tool shape us?
Visicalc is the first computer spreadsheet. It was an early killer app for the Apple II computer and quickly ported to other microcomputers of the time. There are stories of early computer meet-ups where it would be demoed and accountants and MBA types would show up with checks in their hands saying "give me three of them!" People really clamored for it.
Prior to spreadsheets, people did calculations by hand. They amassed teams of recent MBA students to do arithmetic longhand. You'd work through a problem many steps at a time, and see where it came out. If you needed to recalculate, you had to re-compute all these steps. Visicalc simplified this by letting you modify cells in a table and see how they affected formulas elsewhere.
The innovation here was the Cash Flow Statement.
Private equity used these tools to slice and dice balance sheets and income statements. These sheets enabled them to see how cash was coming in and going out the door, getting to a "base level of value" for the company. It became a secret weapon in the PE aresenal. These sheets weren't required disclosure until 1988 so they had to be computed manually by tearing apart SEC reports.
This would've been impossible without spreadsheets. PE groups like KKR or Blackstone were small, usually numbering less than 50 people. Computerized spreadsheets meant a few guys in a room could dissect a company.
Not even talking about the economic value of the spreadsheet, this invention has an enormous outsized impact on humanity writ large. It's harge to even think about what woudld've happened without it.
Tools vs People
The whole affair brings to mind a debate: do tools shape us or do we shape tools?
Computerized spreadsheets affected private equity. The 1980s stock market was, to a large degree, driven by rampant speculation via private equity firms. It was the era of Gordon Gecko and the corporate raider, the era of Paul Bilzarian buying a papermill company solely for cash flow.
But the spreadsheet was just a tool in the arsenal, yet one that would've never allowed any of this -- so far as I can tell -- to have happened. The mind numbing amounts of arithmetic would've been too much to handle.
Software as a extension of thought
Software is unique over other tools in that it serves as a framework of thought.
We can use Trello as an example.
Trello is a virtual kanban board. One moves virtual sticky notes from column to column, attaching files as s/he goes.
Trello is also a tool that warps your thinking -- this isn't necesarily a bad thing.
There's something called the Tetris effect whereby somebody playing a lot of Tetris will start to "dream" in tetris, seeing blocks and patterns that aren't actually there.
All software has this effect in some way. Constant use of Trello will start to make one think in trello cards: moving, sorting, categorizing, and attaching ideas into little stick notes.
Tools like Basecamp or Asana have a similar effect. They graft a way of thinking or organizing onto you. This shifts how you view things, especially since you know you can rely on it.
We've seen this before with books. Prior to the printing press, amazing feats of memorization were common. Homer memorized the Illiad and Odyssey, mayn memorized the Bible in part or full. Printed books alleviated a lot of this, further compouned by widespread literacy. Why memorize when you could write?
Social Media as exception
A note about social media.
This is a bit different from other software because it has feedback. Spreadsheets don't get changed to maximize engagement but Twitter's timeline does. Hence they aren't included in my examples.
Software Creates the Box you Think In
"Thinking outside the box" is a cliche that, like many, proves true.
It's hard to remove ourselves from the problem. Software can be a gateway out of this by creating a "virtual" framework of thinking, broadening how we can approach a problem.
The spreadsheet broadened how people thought about value: "why not recompute a completely different financial statement on things important to us?"
But software can also entrap us because it forces us to think a specific way: can one do math problems in a trello board?
Do we shape tools or vice-versa?
Human beings' ability to create complex tools is unique and doesn't exist anywhere else.
But these tools also shape us. Therefore, its important to be aware of them because they will shape decisions you make and how you broadly think about the world.
They create the box you think in.