Comments on: It’s All About Barriers to Entry

By: James Governor's MonkChips

James Governor's MonkChips — Fri, 16 Dec 2005 13:37:17 +0000

What is Intel’s Problem? Towards a pledge for IT and Economic Freedom

—warning: There may be a teeny bit of politics in this blog about economic development ”People with a $100 notebook computer will get the computer they deserve,” he smiles. Compare and contrast. I can’t vouch for a laptop I h…

By: James Governor's MonkChips

James Governor's MonkChips — Thu, 15 Dec 2005 18:07:37 +0000

Kathy’s Idea meet Bill’s, Bill’s meet Kathy’s: On Idea Splicing and Attention Economics

-warning: this blog has little if anything to do with enterprise systems This interweb thing is pretty cool. There are, like, all these people out there talking about stuff. They don’t know each other but sometimes their ideas…

By: James Governor's MonkChips

James Governor's MonkChips — Tue, 15 Nov 2005 16:01:55 +0000

MS, Google, and Yahoo? Nah - eBay, that’s a web 2.0 player

If Web 2.0 is about the “web site as platform” then eBay is in particularly good shape. Like Amazon, its used as a trading platform by an army of small vendors. I can still remember my surprise the first time…

By: sogrady

sogrady — Thu, 15 Sep 2005 02:41:36 +0000

len: excellent, excellent point. complexity in some ways is the ultimate barrier to entry - the proof point? WS-*. web services should be HUGE, and the complexity is just a massive throttle for many potential efforts.

By: len

len — Fri, 09 Sep 2005 13:46:37 +0000

Complexity as a barrier to entry: it fails for more than one reason

1. If it is complex for your competitor, it is also complex for you. Time is money. Tools are money. Maintenance is money. Features are money.

2. You drag forward not only your complex product, but the complex data it produces. That bind you to the customer just as surely as it binds them to you like a marriage with two SUVs, four kids and an expensive home with a half-paid off mortgage. He who travels fast travels light.

3. Every time a new platform is released or your old platform is revised, you get to rebuild. If you don’t ‘cross the chasm’ just behind your competitor, (Be The Middle Gazelle), you will be unable to bid without committing yourself to big, expensive changes to the product that you were just about to obsolete. Now you have two organizations to manage instead of one and you have to scavenge the best brains from both to get the OLD work done. Particularly true in RFP-driven business models.

4. Don’t be afraid of the little guys carving you up if they make crappy software. Some of the mashups are terrible and legally dicey to apply. The juries and lawyers have yet to get involved here. Don’t chase the trend to be trendy. Chase the customer requirements and make sure you are meeting them. Happy customers are the sure path to the top. Technology for its own sake is a crabwalk down a path being paved by your tools supplier. Caveat emptor.

By: sogrady

sogrady — Thu, 08 Sep 2005 17:55:58 +0000

Fraxas: absolutely agreed. i think the barriers to exit are just as critical, as Jon Udell has alluded to previously.

Gary: great analogy. i think there are actually a great many businesses that have been built over time on top of barriers to entry; indeed, it’s one of the first thing that VCs typically ask about. to be candid, it’s necessary - whatever your business you typically need to do something better and/or different than your competitors. the question is how to find a happy compromise between protecting your interesting and serving customers. not always easy to do.

By: Gary Potter

Gary Potter — Thu, 08 Sep 2005 14:27:48 +0000

It used to be about barriers - that’s how the GDS’ in the travel industry held their positions for so long. Then began what a former boss called death by a thousand cuts - start-ups chiseling away at the GDS advantage by developing new systems that did basically the same thing for a lot less money. Today, the GDS’ are having to re-invent themselves because of the new entrants. The verdict’s still out on whether or not they will be successful but the GDS’ are in no position to gamble they won’t be.

By: Fraxsa

Fraxsa — Wed, 07 Sep 2005 22:48:36 +0000

Don’t forget the barriers to exit. It’s about those too, if I can’t get my data out of your application, or my code out of your framework, when you go under or stop being maintained or when someone else comes along whose New Hot Thing is mandated from on high in *my* organization.