Member-only story
“Victims of Our Own Success”
Why large software companies ossify, and why smaller ones are nimbler
Success
In the world of business, success means you have customers. People that are willing to pay you for a product. Pretty obvious, yeah?
The difference between a government entity and a business organization is that government entities are guaranteed monopolies. The only way to take your business elsewhere is to physically move outside the state/country.
Businesses can be monopolistic but hopefully the customers can go to more than one place to get a product.
In From Zero to One, Peter Thiel argues that most good software companies are monopolies. They are able to use some secrets (i.e. software that solves a problem that is not open source) and make serious money off of that secret, cornering a whole market.
- Google’s search engine and associated ads product is one example.
- Microsoft Windows Desktop is another. (75% of desktop devices)
- The iPhone and iOS is probably a good third example (currently 56% of the US market, so a slight majority more than a monopoly)
These monopolies or very strong market captures are great for companies. They give them a ton of revenue, a large customer base, and disposible capital to…
