5 ms·

You're on the right track, but missing an important aspect. In most cases the company making the inferior product didn't spend less. But they did spend differe

You're on the right track, but missing an important aspect. In most cases the company making the inferior product didn't spend less. But they did spend differently. As in, they spent a lot on marketing. You were focused on quality, and hoped for viral word of mouth marketing. Your competitors spent the same as you, but half their budget went to marketing. Since people buy what they know, they won. Back in the day MS made Windows 95. IBM made OS/2. MS spend a billion $ on marketing Windows 95. That's a billion back when a billion was a lot. Just for the launch. Techies think that Quality leads to sales. If does not. Marketing leads to sales. There literally is no secret to business success other than internalizing that fact.

nostrademons 1y ago
Quality can lead to sales - this was the premise behind the original Google (they never spent a dime on advertising their own product until the Parisian Love commercial [1] came out in 2009, a decade after founding), and a few other tech-heavy startups like Netscape or Stripe. Microsoft certainly didn't spend a billion $ marketing Altair Basic. The key point to understand is the only effort that matters is that which makes the sale. Business is a series of transactions, and each individual transaction is binary: it either happens or it doesn't. Sometimes, you can make the sale by having a product which is so much better than alternatives that it's a complete no-brainer to use it, and then makes people so excited that they tell all their friends. Sometimes you make the sale by reaching out seven times to a prospect that's initially cold but warms up in the face of your persistence. Sometimes, you make the sale by associating your product with other experiences that your customers want to have, like showing a pretty woman drinking your beer on a beach. Sometimes, you make the sale by offering your product 80% off to people who will switch from competitors and then jacking up the price once they've become dependent on it. You should know which category your product fits into, and how and why customers will buy it, because that's the only way you can make smart decisions about how to allocate your resources. Investing in engineering quality is pointless if there is no headroom to deliver experiences that will make a customer say "Wow, I need to have that." But if you are sitting on one of those gold mines, capitalizing on it effectively is orders of magnitude more efficient than trying to market a product that doesn't really work. [1] https://www.youtube.com/watch?v=nnsSUqgkDwU https://www.youtube.com/watch?v=nnsSUqgkDwU
- cheema33 1y ago
  > Investing in engineering quality is pointless if there is no headroom to deliver experiences that will make a customer say "Wow, I need to have that." This. Per your example, this is exactly what it was like when most of us first used Google after having used AltaVista for a few years. Or Google Maps after having used MapQuest for a few years. Google invested their resources correctly in building a product that was head and shoulders above the competition. And yes, if you are planning to sell beer, you are going to need the help of scantily clad women on the beach much more than anything else.
  - andrehacker 1y ago
    >> Or Google Maps after having used MapQuest for a few years. Google invested their resources correctly in building a product that was head and shoulders above the competition. Except that they didn't: they bought a company that had been building a product that was head and shoulders above the competition (Where 2 Technologies), then they also bought Keyhole which became Google Earth. Incidentally they also bought, not built, Youtube .. and Android. So, yes, they had a good nose for "experiences that will make a customer say "Wow, I need to have that."" They arguably did do a good job investing their resources but it was mostly in buying, not building. .. and they are good at marketing :)
    - vasvir 1y ago
      After all they sell to marketing people...
    - Grazester 1y ago
      Android was nothing like the Android today when it was bought. The real purchase was the talent that came with Android and not the product at the time. YouTube now, well only someone with deep pockets could have made it what it is today(unlimited video uploads and the engineering to support it). It was nothing special.
    - Jensson 1y ago
      > They arguably did do a good job investing their resources but it was mostly in buying, not building. They did build a large part of those products, Keyhole is just a part of Google earth google maps in general has many more features than that. For example driving around cars in every country that allowed it to take street photos is really awesome and nobody else does that even today. Google did that, not some company they aquired, they built it.
jcadam 1y ago
It's not just software -- My wife owns a restaurant. Operating a restaurant you quickly learn the sad fact that quality is just not that important to your success. We're still trying to figure out the marketing. I'm convinced the high failure rate of restaurants is due largely to founders who know how to make good food and think their culinary skills plus word-of-mouth will get them sales.
- mmooss 1y ago
  > you quickly learn the sad fact that quality is just not that important to your success. Doesn't that depend on your audience? Also, what do you mean by quality? Where I live, the best food can lead to big success. New tiny restaurants open, they have great food, eventually they open their big successor (or their second restaurant, third restaurant, etc.).
  - lotsofpulp 1y ago
    In my experience, the landlord catches onto the restaurant’s success and starts increasing rents and usually that means cuts in quality.
    - mmooss 1y ago
      Interesting; thanks.
    - PaulRobinson 1y ago
      Might well be why McDonald’s is more of a real estate company than it is a food company: https://www.wallstreetsurvivor.com/mcdonalds-beyond-the-burger/ https://www.wallstreetsurvivor.com/mcdonalds-beyond-the-burg...
    - anitil 1y ago
      I believe this is called something like the 'Michelin Curse' but my google is not returning hits for that phrase, though the sentiment seems roughly correct [0] [0] https://www.wsj.com/style/michelin-star-removal-giglio-restaurant-af776b3a https://www.wsj.com/style/michelin-star-removal-giglio-resta...
jolt42 1y ago
IIRC, Microsoft was also charging Dell for a copy of Windows even if they didn't install it on the PC! And yeah OS/2 was ahead by miles.
- cylemons 1y ago
  How was that legal? They were charging dell for something they weren't using?
  - Ratfor 1y ago
    It wasn't; see U.S. vs Microsoft.
Lio 1y ago
Pure marketing doesn’t always win. There are counter examples. Famously Toyota beat many companies that were basing their strategy on marketing rather than quality. They were able to use quality as part of their marketing. My father in law worked in a car showroom and talks about when they first installed carpet there. No one did that previously. The subtle point to customers being that Toyotas didn’t leak oil.
panick21_ 1y ago
This is a massive oversimplification of the Windows and OS/2 story. Anybody that has studied this understands that it wasn't just marketing. I can't actually believe that anybody who has read deeply about this believes it was just marketing. And its also a cherry picked example. There are so many counter-examples, how Sun out-competed HP, IBM, Appollo and DEC. Or how AMD in the last 10 years out-competed Intel, sure its all marketing. I could go on with 100s of examples just in computer history. Marketing is clearly an important aspect in business, nobody denies that. But there are many other things that are important as well. You can have the best marketing in the world, if you fuck up your production and your supply chain, your company is toast. You can have the best marketing in the world, if your product sucks, people will reject it (see the Blackbarry Strom as an nice example). You can have the best marketing in the world, if your finance people fuck up, the company might go to shit anyway. Anybody that reaches for simple explanations like 'marketing always wins' is just talking nonsense.

nostrademons 1y ago

Quality can lead to sales - this was the premise behind the original Google (they never spent a dime on advertising their own product until the Parisian Love commercial [1] came out in 2009, a decade after founding), and a few other tech-heavy startups like Netscape or Stripe. Microsoft certainly didn't spend a billion $ marketing Altair Basic. The key point to understand is the only effort that matters is that which makes the sale. Business is a series of transactions, and each individual transaction is binary: it either happens or it doesn't. Sometimes, you can make the sale by having a product which is so much better than alternatives that it's a complete no-brainer to use it, and then makes people so excited that they tell all their friends. Sometimes you make the sale by reaching out seven times to a prospect that's initially cold but warms up in the face of your persistence. Sometimes, you make the sale by associating your product with other experiences that your customers want to have, like showing a pretty woman drinking your beer on a beach. Sometimes, you make the sale by offering your product 80% off to people who will switch from competitors and then jacking up the price once they've become dependent on it. You should know which category your product fits into, and how and why customers will buy it, because that's the only way you can make smart decisions about how to allocate your resources. Investing in engineering quality is pointless if there is no headroom to deliver experiences that will make a customer say "Wow, I need to have that." But if you are sitting on one of those gold mines, capitalizing on it effectively is orders of magnitude more efficient than trying to market a product that doesn't really work. [1] https://www.youtube.com/watch?v=nnsSUqgkDwU https://www.youtube.com/watch?v=nnsSUqgkDwU

cheema33 1y ago
> Investing in engineering quality is pointless if there is no headroom to deliver experiences that will make a customer say "Wow, I need to have that." This. Per your example, this is exactly what it was like when most of us first used Google after having used AltaVista for a few years. Or Google Maps after having used MapQuest for a few years. Google invested their resources correctly in building a product that was head and shoulders above the competition. And yes, if you are planning to sell beer, you are going to need the help of scantily clad women on the beach much more than anything else.
- andrehacker 1y ago
  >> Or Google Maps after having used MapQuest for a few years. Google invested their resources correctly in building a product that was head and shoulders above the competition. Except that they didn't: they bought a company that had been building a product that was head and shoulders above the competition (Where 2 Technologies), then they also bought Keyhole which became Google Earth. Incidentally they also bought, not built, Youtube .. and Android. So, yes, they had a good nose for "experiences that will make a customer say "Wow, I need to have that."" They arguably did do a good job investing their resources but it was mostly in buying, not building. .. and they are good at marketing :)
  - vasvir 1y ago
    After all they sell to marketing people...
  - Grazester 1y ago
    Android was nothing like the Android today when it was bought. The real purchase was the talent that came with Android and not the product at the time. YouTube now, well only someone with deep pockets could have made it what it is today(unlimited video uploads and the engineering to support it). It was nothing special.
  - Jensson 1y ago
    > They arguably did do a good job investing their resources but it was mostly in buying, not building. They did build a large part of those products, Keyhole is just a part of Google earth google maps in general has many more features than that. For example driving around cars in every country that allowed it to take street photos is really awesome and nobody else does that even today. Google did that, not some company they aquired, they built it.

jcadam 1y ago

It's not just software -- My wife owns a restaurant. Operating a restaurant you quickly learn the sad fact that quality is just not that important to your success. We're still trying to figure out the marketing. I'm convinced the high failure rate of restaurants is due largely to founders who know how to make good food and think their culinary skills plus word-of-mouth will get them sales.

mmooss 1y ago
> you quickly learn the sad fact that quality is just not that important to your success. Doesn't that depend on your audience? Also, what do you mean by quality? Where I live, the best food can lead to big success. New tiny restaurants open, they have great food, eventually they open their big successor (or their second restaurant, third restaurant, etc.).
- lotsofpulp 1y ago
  In my experience, the landlord catches onto the restaurant’s success and starts increasing rents and usually that means cuts in quality.
  - mmooss 1y ago
    Interesting; thanks.
  - PaulRobinson 1y ago
    Might well be why McDonald’s is more of a real estate company than it is a food company: https://www.wallstreetsurvivor.com/mcdonalds-beyond-the-burger/ https://www.wallstreetsurvivor.com/mcdonalds-beyond-the-burg...
  - anitil 1y ago
    I believe this is called something like the 'Michelin Curse' but my google is not returning hits for that phrase, though the sentiment seems roughly correct [0] [0] https://www.wsj.com/style/michelin-star-removal-giglio-restaurant-af776b3a https://www.wsj.com/style/michelin-star-removal-giglio-resta...

jolt42 1y ago

IIRC, Microsoft was also charging Dell for a copy of Windows even if they didn't install it on the PC! And yeah OS/2 was ahead by miles.

cylemons 1y ago
How was that legal? They were charging dell for something they weren't using?
- Ratfor 1y ago
  It wasn't; see U.S. vs Microsoft.

Lio 1y ago

Pure marketing doesn’t always win. There are counter examples. Famously Toyota beat many companies that were basing their strategy on marketing rather than quality. They were able to use quality as part of their marketing. My father in law worked in a car showroom and talks about when they first installed carpet there. No one did that previously. The subtle point to customers being that Toyotas didn’t leak oil.

panick21_ 1y ago

This is a massive oversimplification of the Windows and OS/2 story. Anybody that has studied this understands that it wasn't just marketing. I can't actually believe that anybody who has read deeply about this believes it was just marketing. And its also a cherry picked example. There are so many counter-examples, how Sun out-competed HP, IBM, Appollo and DEC. Or how AMD in the last 10 years out-competed Intel, sure its all marketing. I could go on with 100s of examples just in computer history. Marketing is clearly an important aspect in business, nobody denies that. But there are many other things that are important as well. You can have the best marketing in the world, if you fuck up your production and your supply chain, your company is toast. You can have the best marketing in the world, if your product sucks, people will reject it (see the Blackbarry Strom as an nice example). You can have the best marketing in the world, if your finance people fuck up, the company might go to shit anyway. Anybody that reaches for simple explanations like 'marketing always wins' is just talking nonsense.