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Good afternoon!
After a week of meetings and interviews and online controversy, it's early Saturday afternoon and I've had a chance to reflect on some of what happened and something occurred to me that can be stated briefly (I think!) and I wanted to share, and ask for comments.
***The Web Happened
Oh it's an oft-told story -- but it's worth repeating -- for the lessons we can learn from the perspective of late 1996.
Three years ago, proprietary online services were the norm. America Online, CompuServe, Prodigy, AppleLink. Microsoft was getting ready to launch Marvel, which became MSN. Apple was doing eWorld. These services didn't build on the open protocols of the Internet, some of them offered TCP connections (notably AOL) but beyond that, they were totally separate worlds.
The vendors had maximum power. Users had to take what they offered. They were closed systems, software entreprenurs couldn't write server software, content tools, or try out new ideas for clients.
Then the web happened. At first Microsoft barely noticed. Why? I believe it was because they were totally focused on Windows 95. Heads down, focused inward, not looking for new stuff, convinced that the world was theirs. The rest of the online industry was focused there too. Everybody was asleep while Netscape got on its feet, gained a sizable following, became a financial juggernaut.
Things that people were sure couldn't happen... were happening! Netscape officials were making public statements about being the next OS. If Microsoft was listening they must not have given it much credence. Windows 95 remained the focus. The web was smaller than Microsoft, many people seemed to think. This thinking is still out there. It's still wrong thinking.
Now, in late 1996, the proprietary systems are gone or going fast. AOL has come down to earth. CompuServe has lost its content flow. Novell is undermined. MSN is becoming a web-based service, ready to lose huge money. Standards apply. Services are interchangeable. Proprietary advantages are irrelevent.
Now many people are looking for a new Netscape. At the same time, all of Microsoft's attention is focused there. Could another Windows 95 be happening? Is Microsoft the broad complex creature everyone assumes they are, or do they have limited focus? Why wasn't the web invented, or at least discovered in their R&D labs? And is the web just the first of a series of new computer-related activities that will happen outside their reach? If so, why is it outside their reach?
Simple answer: they can't see it. Just as when Windows 95 was happening, if something like the web were happening now, they wouldn't understand. And what about all the Microsoft watchers and wannabes, would they see it? No. What about me? Hmmm. I wonder.
Things were much quieter, the world was much smaller, the last time something like the web happened. Microsoft took a leading position. It worked. They tried to do it over and over, and stagnation resulted. The web happened. A surprise! Will it happen again? I hope so.
***Shhhh
Where will the new ideas come from?
You can't look to the obvious choices. If a new idea has everyone talking, you can be sure it *isn't* going to happen. The power of this industry is largely negative. It's capable of stopping things, not creating new things.
Any widely talked about possible standard, even if it has real merit, couldn't possibly be the next wave. Business plans that say "We are Netscape" won't work. Business plans that say "We are quietly developing enabling stuff that others can build on," have a much better chance. The key word is "quietly."
It's a twisty bit of logic, but if you're investing, I think you have to get comfortable with this kind of thinking. In a sense, the less attractive an idea is, the more attractive it is! If a technology projects out into the future, solves a problem that people are likely to have in a couple of years, and if Microsoft and Netscape et al aren't talking about it, it's a good bet. Not a sure thing, just a good bet.
Further, if the business plan says "we will be small," if it sets limits on where the company will go, the kinds of products it will create, the size it will attain, it has an even better chance.
I know this is counter to the thinking of the industry, but I believe it's the only way to zig when larger entities such as Microsoft zag. They inevitably want to own all the standards. A small entity can partner, can link up safely with lots of other small entities. This is the only way to create lasting value in this industry, to bet on the chaos of the market, rather than invest in a plan to control the growth of technology.
Have a great weekend!
Dave Winer