David Rosenthal: belief

Transcript context

…On top of all of this, the way that they executed it through subsidiaries was pretty genius. Redmond did not control international. They spun up country managers and subsidiaries in each of these countries in a ton of countries. While Redmond did the product development and then did the engineering work to do localization to all the strings files and everything for those countries, the actual marketing messaging, the sales strategy, and the sales structure, happened in country that was owned by a person who lived there so they actually could think through, what is the best way for people to receive this software here? Again, that's just going to yield way better results than if you're sitting there armchair quarterbacking at Redmond thinking about how a person in Chile is going to receive your marketing message. One other that I have is this one that we didn't really talk about, but Microsoft famously was not first to market with basically any of their applications. They aren't even really today in most cases. You think about the strategy that they had early on spreadsheets, word processing, all these were copycats at their outset. Sometimes they would do an acquisition, but most of the time they just look at a product and say, huh, our software should do the same thing, and they would copy it. They had no shame in doing that. They had their eyes everywhere looking for good ideas, they had reverence for the good ones, and then they would just incorporate them. On top of that, they wanted to make the software very easy to switch to. A lot of the keyboard shortcuts in Excel to this day are there because they were originally the Lotus 1-2-3 shortcuts. They wanted people to have the same muscle memory that just worked. Fundamentally, what this does for you as a business is it just leads to better risk adjusted returns. You already know what's going to work before you ship it. You don't really take market risk. You're not going to be the first to the market with early adopters, but most of the time, you actually don't need to be to win. I think Microsoft own that idea. Most of the time people are sheepish about it. Steve Jobs famously said, Microsoft has no taste. I think that's another way to put it that it's copycatting. I do agree with the premise, with all of this. I think doing this episode though has made me think there's a little more nuance to it. Yes. In broad strokes, you can say that's what Microsoft strategy was with applications over the years, but the Microsoft versions never actually won until there was a platform shift that they could take advantage of to beat the incumbent. Microsoft wasn't going to beat Lotus 1-2-3 until the graphical paradigm came along, and then Excel being graphical was just obviously so much better. They tried with Multiplan, they failed. Multiplan was fine, but 1-2-3 was the winner. The nuance to me is yes, but it's more like with the resources of Microsoft and the timeframe that Microsoft can afford to have, they can afford to start building the application, start building the product, getting into market, start learning, be positioned that then when the paradigm shift comes, leap ahead. That's a good point. It's also different. The Lotus 1-2-3–Multiplan thing, in that era, Microsoft just didn't have great distribution yet. Lotus 1-2-3 just got pretty far ahead of them, and Microsoft had no way to catch up. A few years after that, that would basically never be true again.…

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