Wednesday, June 20, 2007

Is Microsoft going to go bankrupt?

Not any time soon.  There is some writing on the wall that may affect its future though.  The graffiti wall, that is.

Wang word processors -- the application, in this case -- were highly evolved, fantastically successful dedicated word processing systems that owned their market, until the general-purpose PC came along. While the PC at first was inferior at word processing, within a few years of its launch the fact that outside developers had built thousands of applications for it -- like spreadsheets -- that closed Wang word processors could not match, coupled with steadily improving PC-based word processing software like Wordstar, had all but killed the Wang word processor. Wang -- one of the most succcessful technology companies of the 1970's -- went bankrupt not long after.

Source: blog.pmarca.com: Analyzing the Facebook Platform, three weeks in

When I saw Stephen King two weeks ago, his comment was that he was most productive when he had his word processor.   He said his productivity actually dropped when he started using his computer to write stories.  It must be something to do with his line-based style of writing vs. the block-based style. 

With his line-based style, every sentence counts. Going back and changing it was a tedious and time-consuming task for editors or something you did late at night.  The green display did not leave much to the imagination, or perhaps it left everything.  There weren't many distractions.  Ever seen a game of Solitaire on your old Wang word processor?

Then the computer comes along.  Games. The first Social software comes along with bulletin board systems (BBS) discussion boards and user to user contact.  Email. Newsgroups. Compuserve. The Well. Prodigy.  Realtime Chat. Then the real internet opens the floodgates to the masses.  MUDs. IRC. Frontpage web sites.  Fly-by-night ISPs.  Fly-by-day dot com companies.  A stock market bubble. Dave Gorman.  After a while, the internet and a slightly eccentric college student produced Facebook.

When Facebook opened its platform for developer apps a few weeks ago, the adoption rate on some of them were staggering.  In 3 weeks iLike has over 2 million new users. (5% of Facebook population).  Facebook supposedly adds a million users a day.  There are over 1 billion people who may be using the internet in some way. 

This pond is really deep.

I have met one person who is basing their entire business model on social applications and developing around this platform.  For a venture capitalist, it probably cries out for funding.  Taking the top down approach (as I scribble some figures on a napkin) it has the potential for.... $2,000,000 per day! That's if you can get 5% of their users to buy something for a dollar a day.  Heck, I would sell "it" for $0.50 and settle for my million bucks a day.

How about the bottom-up approach?  If I have 150 "friends" and promote my application to them, perhaps 7 1/2 may try it, and maybe 5 more from their network.  Even if I'm Robert Scoble, my friends list is only 489.  Guy Kawasaki even has 464.

That might explain the low turnout on my Bring Richard Cheese to Toronto group. (12 members at last count... no wait, 11 members now.)  Or maybe it's because Richard, you SUCK for not adding me as a friend on Facebook. :)  (Just kidding, get the band to Toronto.) 

So how did iLike get so many users in so little time?  The answer was being the first, and being able to promote the application virally within the Facebook community.  You are more likely to adopt something if your best friend sends it to you rather than some guy from Nigeria, though the 5% rule works for them too. 

When I first joined Facebook a few months ago, I was surprised at how empty it looked.  There was not a whole lot of room for customization.  This was not my little sister's MySpace.  When a little 'edit application' sidebar appeared, it seemed like it opened up a portal to another world.  Okay, so that's a bit melodramatic...

Stephen King wrote a short story called Word Processor of the Gods.  In it, a man changes reality with a few sentences on the green screen of a device his recently deceased genius teenage nephew cobbled out of a Wang word processor.   In the story the result happens immediately, with comical and horrifying repercussions. 

"I will build the most successful Facebook application ever."

1 comment:

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