Shane Greenstein writes,
Gates misinterpreted the value of the Internet’s commercial prospects. This error would take three interrelated forms in its conventional assessment:
1. Underestimating the Internet’s value to users;
2. Underestimating the myriad and clever ways entrepreneurs and established firms would employ Internet and web technologies to provide that value for users;
3. Underestimating the ability of Internet firms to support applications that substituted for Microsoft’s in ther marketplace.
This is from How the Internet Became Commercial, Greenstein’s new book. I started my business on the Internet in April of 1994. Gates did not become a believer in the Internet until a year later.
Greenstein offers a well-judged analysis of the business strategy and Internet governance issues during the first decade of the Internet’s commercialization, starting in 1994. However, I think that there is still plenty of room for someone to write another book on this historical episode. I would like to see a book that makes the dynamics more vivid.
In the introduction, Greenstein sketches a few timelines on which he lists events. I am not clear whether he chooses the events for their significance or to try and help the reader understand the order in which certain developments occurred. In any case, his choices are mostly very different from what mine would have been.
I actually would include several timelines:
–the release date and processing speed of Intel’s chips. Another would show
–the amount of hard disk storage on a top-selling personal computer each year.
–the speed of the most commonly used Internet connection each year. I remember when 28.8 Kilobytes per second was an upgrade.
–the number of people with Web access each year. When I started my business, unbeknownst to me that figure was less than a million. I had read, correctly, that there were 20 million Internet users in the U.S., and I very naively figured that this was approximately the number of people with Web access. The Web did not become a mass-market phenomenon until the fall of 1995, when AOL began offering Web access and Microsoft released Windows 95.
–the total number of web sites and the top five web sites in terms of traffic each year.
–well-hyped businesses that failed, such as MecklerWeb, Web TV, and PointCast Network.
–buzzwords that no longer have meaning, such as portal and push technology.
–appearance of iconic web sites, such as Yahoo, Amazon and Google
–fading of once-iconic web sites, such as AltaVista, the NCSA home page, and the Netscape home page.
–Internet IPOs, by year
My point is that the environment evolved very rapidly. Your business strategy could not be based on what was there at the time. It had to be based on a guess about what was coming.
I describe my business experience in those days as a sequence of miscalculations, because I got so many things wrong. But I made some fundamentally good guesses about what was coming, and that was sufficient.