The Next Microsoft
Apparently, a popular question asked of hopeful software start-ups is:
One imagines a young, optimistic entrepreneur, slightly flustered, starting to talk about how he will eventually one day own a dominant technology platform. Ahh, the dreams of youth.
It is a very natural question to ask—Microsoft is without doubt the most successful software company of all time. It owns the core platform for PCs with Windows and Office, dominates access to the Internet with Internet Explorer, has a large presence online with MSN, and commands a vast following in the developer community with Visual Basic, C#, and Visual Studio tools. Why wouldn't someone want to be the next Microsoft?
Imagine, though, if someone had asked the young Bill Gates and Paul Allen:
Did two flustered youngsters describe a strategy to build a world-dominating hardware business and bundle software and services along with it?
Strange as it may seem today, this question was just as natural back in those days. IBM had dominated all of computing, with its mainframe computers and hardware, OS/360, business applications, and services. It was so dominant that it too was the subject of lengthy anti-trust litigation. And even in the late 1980's, people spoke of "starting the next IBM."
Indeed, someone must have been asking this question back in the mid-1970's, because most successful startups of that era, including DEC, Wang, Data General, followed the IBM model and offered bundled hardware, operating systems, applications, and services. Microsoft was actually an oddity: not only did it specialize in the then non-existent personal computer sector, it only produced software. The rest, as they say, is history.
In fact, both IBM and Microsoft are products of their times. The IBM model was a product of the 1950's, when computing itself was in its infancy. It bet big on the very concept that businesses would want computers and produced such great hits as the System/360 mainframes, OS/360, JCL, MVS, COBOL, etc.
The Microsoft model was also a product of its time, this time the late 1970's. Microsoft realized that, unlike IBM's big corporate computing customers, the PC user will care a lot more about ease of use and features. It bet big and won big with DOS and then Windows, standardized the nascent personal computer industry, and used that standard to its fullest advantage.
Similarly, today's startup must be a product of our time. So, maybe a better question to ask is: “if Bill Gates and Paul Allen were starting over today, what kind of a business would they start?”
My guess? They would sit around a dinner table and ask themselves:
What do you think?