- Opinions
- 20 June 2023
- 8 min read
- Words: Sarah, Northzone
Perspectives: The Rise of Multiplayer Software
Collaboration in the digital age
Historically, software was designed for individual users. Today, modern collaboration software has changed everything. The concept is not new, collaboration has been important since the early days of networks and the Internet. Modern collaboration software has its roots in the early days of computer networks, video games, and the Internet. Connecting, collaborating, working together – it’s all fundamental to the development of computer networks. As the 80s began, the term ‘Groupware’ gained traction—essentially software that helped facilitate workflows, meetings, and processes. Google Docs in 2006 led the shift from files to cloud-based collaboration; startups like Github, Notion, and Figma challenged Microsoft’s dominance in the 2010s; and so on.
In this perspective, we tap into what the challenges have been so far in the development of multiplayer software, the current shift, and what the next iteration could look like.
Software that better suits our lifestyles
Multiplayer functionality eliminates the complexities of sharing files and allows individuals to collaborate in real-time on the same data. This has led to the emergence of companies building infrastructure and application layers that leverage multiplayer capabilities, resulting in a significantly improved user experience and a competitive edge over legacy players.
The key elements of multiplayer products include dynamic interfaces and shared spaces that enable real-time communication and collaboration. Cross-platform interaction ensures seamless engagement across devices. Live features such as location tracking, cursor updates, comments, typing indicators, and field locking enhance real-time collaboration. Offline capability and scalable data synchronisation between clients are vital, along with high-level abstractions like user presence and connection management. Effective authentication is crucial for tracking individual users and managing permissions while supporting a large number of concurrent users without compromising the experience, which poses an engineering challenge that successful multiplayer collaboration tools must address.
There are great examples of companies today that have become category-defining, offering software with real-time multiplayer features at their core, and differentiating them from incumbents such as Figma in design, Notion in wiki, Airtable in spreadsheet, Monday in project management, Miro in whiteboarding, Gitlab in DevOps, Github in coding and more…
A platform shift – why now?
The development of multiplayer software has traditionally been technically challenging, infrastructure-heavy, and costly. However, with the maturation of libraries, low-latency edge computing, and more affordable cloud computing, a platform change is underway.
Every Knowledge Worker spends the majority of working hours collaborating in-real time compared to ~50-60% pre-pandemic. Companies that hadn’t traditionally thought of themselves as collaboration-first are now deciding to adopt multiplayer features on the application layer to improve their product’s UX and build virality into their business.
We are increasingly seeing a number of companies building the infrastructure layer or leveraging multiplayer capabilities at the application layer, leading to a 10 times better experience. There’s an opportunity for more companies to leverage multiplayer architectural designs to better foster developer experiences, to bring together the accessibility of the web and the technical sophistication of native applications.
Finding the right fit
There are various challenges associated with developing successful collaborative multi-user applications on both the technical and adoption side. From a technical perspective, implementing features like concurrency, managing costs, and optimising performance can be resource-intensive and complex.
The transition from file-based systems to URL-based ones also poses compatibility issues, necessitating the development of versioning logic and server-based architecture for real-time synchronisation and seamless editing by multiple users. With this, debugging, security, and permissions become more intricate as the number of users increases. This has already become a lot easier thanks to companies like Liveblocks, Parytkit and Ably.
And on the adoption side, the absence of a compelling single-player use case can hinder the initial value proposition for end users. It is crucial to provide an engaging experience for individuals while showcasing the benefits of collaboration. Persona and pricing challenges arise, particularly in the context of product-led growth (PLG) strategies, which require integration with existing systems and data streams. Determining when potential buyers transition into user personas and devising effective sales overlay models become key considerations.
A new era of collaboration
The bar to compete against incumbent applications is higher than it ever was, largely due to the increasing strength and dominance of these incumbent players. It is simply not enough to just “make it SaaS” as we’ve seen during the first wave to cloud. One could argue the minimum bar to unseat incumbents is an equivalent feature set, but also better UX, pricing disruption due to cloud improvements, and a very targeted market wedge.
Our thesis is that multiplayer, real-time collaboration will increasingly be more universally embedded into products and that there are enough use cases in the span of potential products that you would want to make APIs and abstractions for multi-user collaboration to create a 10x better software experience.
Developers are pushing the boundaries when it comes to integrating collaborative capabilities into their software offerings to maintain a relevant and competitive edge. While a focus on solo work will always hold value, introducing collaborative elements is a must. Successful collaboration features should enhance the user experience rather than be gimmicky. However, it is still crucial to maintain a compelling single-player use case for the product, ensuring it offers standalone value and significant impact in its core function. The true differentiator and competitive advantage lie in the amount of data flowing through the system, creating a single source of truth. Companies are reimagining their canvas around data, integrating conversation and workflow management where the data resides. This innovative approach sets them apart from traditional SaaS solutions.
The ease of adoption, cross-organizational expansion, and bottom-up sales motions are key factors in driving success. To increase stickiness, key integrations, an API ecosystem, and interoperability with existing tools also play a crucial role. By seamlessly connecting with established software, products can enhance their value proposition and user loyalty.
With these in mind, the path is paved for transformative multiplayer collaboration, creating a new era of innovative and connected digital experiences that we’re excited about. If you’re building in this space, reach out to Sarah or Michiel from our investment team.
