Category Archives: Business Strategy

Failing Innovation

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Avoiding bad markets is half the battle. Annually I see multiple software vendors pitching products designed to improve the performance of computers, databases or networks. With few exceptions, these tools disappear within two years because the underlying commodity (computer server, network connection or DBMS) becomes faster and cheaper. One of the most common technology and marketing mistakes is to create a product for an industry that will inevitably correct the problem. Take home Internet connections (please, take mine and bring me FttP). Long, long ago — about 20 years back — having a 4,800 baud modem for connecting to the Internet was considered state of the art and painfully slow (recent college CS graduates may have to look-up archaic words like ‘baud’ and ‘modem’). Without fail, once every quarter, someone pitched a software solution for raising the data transfer rate across antiquated telephone technologies. The following quarter a faster modem … Continue reading →

Fast Enough

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It pays to be second In the wide and weird world of business plans (and having sat on VC panels during start-up pitch parties, I have seen some mightily weird business plans) being a fast follower is the sanest approach. A fast follower lets another company prove that a market exists, then lets the follower rapidly become a competitor by mimicking the core features in their competitor’s ground breaking product while adding those that they missed. Risk is lower, development costs are lower, and if well timed you join the party at the moment early majority buyers raise their sluggish heads and open their tightly clasped wallets. I maintain that Microsoft made its fortune by being a fast follower. MS-DOS was a practical clone of CP/M which had proven that the personal business computer concept was viable. Microsoft also mimicked Macs when creating Windows and Apple mimicked Xerox’s pioneering of … Continue reading →

HP Hip Plop

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I would not want to be an HP employee this week. Well, actually I have not wanted to be one since Bill and Dave went to the big database in the sky. Last week, in rapid fire, HP said they will likely get out of the PC/laptop business (either through an Agilent-like spinoff or outright sale), killed their newborn webOS phone and slab business, and bought a relatively obscure software company for a huge premium. Their stock dropped about 30% and HP aficionados are still staring, jaws agape, in disbelief. Change is the only thing of permanence, and that applies doubly in the high tech business. Tech companies are the most agile known, and many have completely reinvented themselves when faced with undeniable market shifts. Others change because better opportunities exist. HP’s newest CEO, Leo the Lively, knows that software companies make significant margins (Oracle has an overall margin of … Continue reading →