marketing and sales executives from Silicon Valley

Thursday, July 2, 2009

Valley Arrogance and the Niche Market Blinders

What? Arrogance in Silicon Valley? Surely you jest.

It's true, and no matter how many times I've seen companies flail and fail, as engineers and marketers insist that they're "right", this phenomenon is alive and well in the SF Bay Area. This is both good and bad, depending on where you sit, and what you do on a day to day basis. At its worst, this phenomenon is typified by the "who uses that technology/service" remarks and the "I've moved on to X, which is much superior". At it's best, the press and investors-types call the technology or service "revolutionary" in hindsight, the 30+ also-rans fall by the wayside, and no one snickers because at least one worked.

While every market shifts, the true value of a technology or service is firmly established when the technology, company, or service makes serious money. The "moved on" comments become justified when the new technology, service, company overshadows the previous generation and a new way of business is established. Why does this matter? From a business perspective, respect typically comes from generating revenue, not just buzz and coolness. In my experience, many, many more people have been fired, reprimanded, and demoted for choosing cool technology that did not do the job at all, did not do the job better - to justify cost incursions, or generate enough added value than those who stuck with established, working products & services.

The saying used to be "nobody gets fired for buying IBM", and versions of that phrase still largely ring true. Here's a few examples the come to mind. Feel free to add better ones in the comments if you have them.
- Apple Newton & General Magic's Magiclink: I loved both of them, as did everyone here in Silicon Valley, but they died a tragic death as the love didn't spread very far
- Windows NT vs XP: While "everyone" was supposedly on XP in 2004, I ran into numerous businesses AND government agencies that still used NT. If you didn't know that your enterprise software may not have sold at all.
- Vadem Clio: Another valley love-fest for this "convertable tablet", very cool, and everyone adored it when they saw it, even years after the company went out of business
- Facebook vs. MySpace: Silicon Valley types seem to pan MySpace while trumpeting Facebook, even though MySpace still makes significant revenue today, and has made more for the past three years while people were cheering the superiority of Facebook
- Twitter vs. Google: Twitter gets a sureal amount of buzz about real-time search, while Google continues to dominate search, besting Cuil, Powerset, A9, and other Google killers over the years

Many will and should argue that "when the main stream gets it, it's too late." It's too late for what? Bragging? No, there are two different forces at work here. Building an innovative, valuable service/business that's disruptive is one thing, while establishing a sustainable trustable business is another. It often takes innovation and value creation to establish a sustainable trusted business, but what you often see is bragging and chest beating by startups who do something differently, because they can. Forget about the successful operating companies that have not been bested by the startup. The user bravado, which accompanies the early adopter myopia, when translated, is basically "I use a cooler service than you, but ignore that it makes less money and appeals to less people than what's out there".

The point here isn't that I favor any of the old or new companies/services/products, but that buzz, coolness, and Silicon Valley boasting can really mean little without the revenue, longevity, and trust of being an established business. Arrogance from believing you are the best is a weaker foundation than pride, accomplishment, and satisfaction of actually being the best and/or dominant market force.

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