Marc Andreessen on Startups Dealing with Big Companies
posted in Technology, Business |I’m joining the chorus of folks pointing to Marc Andreessen’s new blog. To be honest, if you had asked me a few months ago I would not have predicted to find great stuff coming from him, but I’m genuinely impressed by how insightful most of his posts are. Back in 1998 there was a book published by two business school professors called Competing on Internet Time that was based on lots of interviews with folks at Netscape about their wonderful business and technical innovations. Its unfortunate that this book was published more or less right away because from my perspective most of the insights in this book were complete crap. Many of their best strategies were (from my perspective being right in the middle of the whole Internet war of the late 90s) directly related to their downfall (not that going from $0 to $6B is a failure, but Netscape the company failed at most of their goals of that time frame).
Of course its unfair to judge someone by their perspectives from a decade ago. I’d certainly hope that people would give me a chance to show that I’ve learned a few things over time and Marc’s recent posts hit it out of the park. One of his most recent is on The Moby Dick theory of working with big companies. I can confirm many of his observations. Working inside Microsoft things were often internally much more chaotic than our smaller partners would think and as he observes, we were usually focused on our big competitors (incidentally this is one of the things Netscape did wrong, putting itself onto the big competitor radar sooner than it needed to). We would work with smaller companies attempting to be benign- I can’t think of a time that we ever really thought of a small company as a threat although it would be pretty easily to accidentally stomp on several of them (just through the availability of massive resource to tackle any problem that looked interesting to the big markets). Some times we were especially nice and would even explicitly discuss trying to watch out for the small companies. For example, when launching the technologies that become .NET 3.0 back in early 2003, we knew were were a ways off from shipping (although no one would have guessed it would take until the end of 2006 to ship) and wanted to be careful that we didn’t encourage some small company to jump on board too quickly and potentially be stuck without products they could take to market. Still in the end there is only so much you can do, since you don’t want to express doubt about the products you are launching and as I said no one internally would have thought it was going to take nearly that long to ship. Imagine the fate of the poor company that based their strategy around building on WinFS?
On the other side I can confirm the small-company side having observed how we dealt with our AOL relationship at Pure Networks. Pure cut a deal with AOL early on (before I joined) and that deal was pretty complicated waters for us to navigate, between trying to read the tea leaves of AOL reorgs, trying to understand their motivations, and of course the hurry up and wait phenomena where after months of ignoring us they would suddenly decide they needed something right away and then just as quickly go back into silent running. I do think management did a pretty good job of keeping people focused on not letting the AOL deal take over the direction of the company.