I hear the train a comin’

Many years ago, when I worked at Microsoft, I took a trip with a person several rungs up my management chain to talk to a software vendor. The purpose of our trip was to figure out what could be achieved if we worked more closely together with them, as they were filling a gap for our customers that we did not (and couldn’t for at least the foreseeable future).

I still recall at lunch that day, when  one of their two executives we were talking to, said – point blank, “Listen. We know the Microsoft train is coming. We just want to know when to step off the tracks and which way to step.

It’s an incredibly accurate way to put it. Microsoft, like Apple, IBM, Oracle… so many other companies, has a chronic gap in it’s products. There’s an adage about Microsoft products that v3 is always the one that finally fills the critical gaps. Some have also said that every Microsoft release fills 70% of the gap remaining, which leads to a never-ending “gap of opportunity” for partner ISVs who are willing to dance with the elephant, and accept the risk of getting stepped on in exchange for short to mid-term opportunity.

We saw this with Apple when they added notifications and reminders, when they (sort of) improved the camera app, taking out some third-party camera applications, or the Reader functionality that others like Instapaper did before them.

The delicate dance with that elephant – whether Microsoft, Apple, or any other tech giant (Twitter is a great example too – they’ve constantly moved the goal lines on their partners), is so incredibly precarious. Not only do you need to know the gaps in their technology – to identify whether there is enough value for you there or not –  but you also need to be cogent of what you can charge without customers just skipping your product and living with the flaws, and what your time to live is until your product is no longer relevant. With Microsoft, there are rough milestones that you can use as your high-water mark. If your product is either:

  1. Pointing out a glaring deficiency in a Microsoft product to the point that it becomes a verb that customers all use (Ghost is a great example), or
  2. Selling to customers in such large volume that Microsoft can’t turn a blind eye to it (Visio is a great example)

If those define your product, you may be in that awkward post-pubescent phase where you are either ripe for acquisition (Great! You get money!) or worse, cloning and crushing (Not so great. Some unhappy endings here).

I believe that living in the shadow of a giant is fine – and taking advantage of the gaps in their technology is even better. But to do so, partners need to always know:

  1. That big companies move slowly, but you’re rarely going to get a courtesy call to let you know your product’s time is running out.
  2. You must not only know where the company you’re gap-filling is at, but where they are headed, and what kind of timeframe they’re headed there. Know their shipping schedules, intervals, and product release update cycles. Know how their product is licensed, too.
  3. That as old gaps close, new ones open. Don’t be stubborn and try to fight the giant longer than it makes sense. If their product now does 80% of what yours did, and it’s included in their product, you’re out of luck. Find a new niche, and build it out. Move faster. You always can move faster than the bigger company.
  4. Always be willing to share with that company – but never share everything. They’re planning their roadmap just as you’re planning yours.

As I said, it’s perfectly fine to stand in the shadow of larger companies and fill in the gaps in their products. But learn what the train sounds like when it’s coming down the tracks – and don’t just stand there.