I recently read the book ‘Innovator’s dilemma’ by Clayton M. Christensen.  To be honest, it was really great.  When I first started reading the book, my expectations were not that high.  Going through it, I changed my mind.  If you’re into this business, I strongly recommed it if you’re into the web industry or any other IT related stuff.

The book adresses the question as to why big companies with so much ressources fail in developping and entering new markets.  As he explains, it’s not always a question of bad management, it’s not always bad employees, it’s not the change resistance as so many people imply.  Most of the time, companies are just being rational, they are just following classic microeconomic theory.

In order to survive, companies who build a value chain with their customers must respect it by satisfying their needs.  The problem is that value chains change in time.  Smaller markets may not appear to be interesting for big companies right away.  The big question is, when and how should you invest into emerging markets?  Too quickly and you might make a big mistake of falling into a lemon.  Too late and you might miss the boat.

Think of Microsoft and Google, this is the best web example I could think of.  Google started its business when the web wasn’t so huge and search was, well, not so impressive.  Not to mention advertising who was still at an early stage.  Back then, Microsoft was into its glory years with Windows 95 still important (I know, I know, I was still using it in 1998) and the Office suite was more popular than ever.  Little did they know that a decade later they would be interested in buying Yahoo for over 47G$.

Was Microsoft being stupid?  Looking back yes, but that was in 1998 and the company was busy doing other things.  Online search wasn’t worth billlions back then; the cost of developping the proper infrastructures wasn’t really worth it back then.

One thing Microsoft did right was acquiring Hotmail in 1997; MSN hotmail is still incredibly popular.  Google took some time to catch up, but thanks to its incredible power over the web, it was actually the first one to offer over a gigabyte of space (remember when 1.5 MB was big?).  Despite that, MSN hotmail is still very popular today.

There are many things going on the web right now and technology in general.  I wonder who will be king in 20 years?  If you know, please tell me!