How to Miss the Boat – Five Times
Despite Microsoft’s remarkable financial performance, as Microsoft CEO Ballmer failed to understand and execute on the five most important technology trends of the 21st century: in search – losing to Google; in smartphones – losing to Apple; in mobile operating systems – losing to Google/Apple; in media – losing to Apple/Netflix; and in the cloud – losing to Amazon. Microsoft left the 20th century owning over 95% of the operating systems that ran on computers (almost all on desktops). Fifteen years and 2 billion smartphones shipped in the 21st century and Microsoft’s mobile OS share is 1%. These misses weren’t in some tangential markets – missing search, mobile and the cloud were directly where Microsoft users were heading. Yet a very smart CEO missed all of these. Why?
Quotes
By the time he turned twenty-two, Daniel Ek had achieved his life’s ambition: he was rich. A gifted programmer, he had been making money by working on Internet-based tech products since he was fourteen. After selling an Internet advertising company called Advertigo, in 2006, he retired. He rented a big place in Stockholm. He bought a red Ferrari and drove it to night clubs, where he arranged for good tables for friends and attractive female companions, whom he plied with expensive champagne. He lived like this for a year or so, until one morning he awoke to a startling realization. “I was completely depressed,” he said.
“I realized the girls I was with weren’t very nice people,” Ek went on, “that they were just using me, and that my friends weren’t real friends. They were people who were there for the good times, but if it ever turned ugly they’d leave me in a heartbeat. I had always wanted to belong and I had been thinking that this was going to get solved when I had money, and instead I had no idea how I wanted to live my life. And no one teaches you what to do after you achieve financial independence. So I had to confront that.”
The Munchery Model
Munchery is a full stack, end-to-end meal provider that specializes in delivery. It isn’t a restaurant and it isn’t a delivery service. It’s a whole new type of business that provides the quality of restaurant food with the convenience of ordering in. Using Munchery’s app or website, customers order from a daily changing menu. An average day might feature 50 unique items including entrees like spicy clam and chorizo pasta and chimichurri flank steak.
Before Munchery, a restaurant that offered this level of variety and culinary quality would have been very, very difficult to scale. Munchery addresses this by centralizing cooking into a single kitchen optimized for large quantities and investing in the latest cooking technology, such as programmable, WiFi-enabled, high-capacity ovens that use a combination of dry and moist heat. Technology like this automates the predictable, rote parts of cooking, which in turn allows Munchery chefs — drawn from top local talent — to focus on creating the best dishes possible.
When you’re a large company with significant market share, it’s tempting to view market disruptions as a threat, but we view them as an opportunity. When a market isn’t in transition, gaining market share is hard—you’re fighting to take one or two points of share from competitors. …
The most important thing I learned during my time at IBM and Wang is that even great companies are imperiled if they miss a market transition—and I saw both of them miss important ones. …
For Cisco, each transition required a decision about when to jump from selling a profitable product to a new technology—often one that would cannibalize our existing product line. …
Adapting to new markets means constantly bringing in new expertise and sustaining a resilient culture with an appetite for change.
Traction is basically quantitative evidence of customer demand. So if you’re in enterprise software, [initial traction] may be two or three early customers who are paying a bit; if you’re in consumer software the bar might be as high as hundreds of thousands of users. … It’s the Supreme Court definition of porn. You’ll know it when you see it.
Naval Ravikant, founder of AngelList
strategy is an integrated set of choices that uniquely positions the firm in its industry, so as to create sustainable advantage and superior value relative to the competition.
Playing to Win: How Strategy Really Works Hardcover – by A.G. Lafley (Author), Roger L. Martin (Author)