In our recent tech history, there have been countless examples of emergent technologies being introduced to the marketplace before their time with a resounding flop, only to be resurrected a few short years later. A few worth mentioning:
* In 1996, CompuServe launched its WOW! initiative as the first major consumer Internet service that reached critical mass. It had a clear first-mover advantage in a space on the verge of exploding. However, technology issues and questionable marketing moves led to Compuserve’s demise at the hands of AOL, who later purchased the Compuserve business. AOL would go on to create a company that was worth nearly $15 Billion by the time it was purchased by Time Warner in 2001.
* In 1997, a web service was launched called SixDegrees.com which I regard as the first social networking site ever created. It was based around the premise of six degrees of separation (insert Kevin Bacon jokes here). At its peak, SixDegrees maintained a user base of over one million people. It was purchased by YouthStream Media in 2000 for $125 Million (the same year YouthStream also purchased The Magma Group, the first company I founded, for infinitely less!). Ultimately, SixDegrees failed because the web had yet to be fully integrated into social lifestyles of the Gen Y audience they were targeting. It took an additional failure of Friendster (and, in some ways, MySpace) before Facebook was introduced, a business now valued by some at over $10 Billion.
* In 2000 DodgeBall was founded as a way of making social networking physical by connecting people based on their actual geographic locations. In 2005, Dodgeball was acquired by Google, where it floundered in irrelevance juxtaposed against their behemoth search business. Ultimately, it was shut down. In 2009, Dodgeball founder Dennis Crowley created FourSquare which was seen by many as the breakout technology application at the SXSW conference and now looks like a candidate for the next big thing in the social media landscape.
Many blockbuster tech-based products services have been borne at the expense of the original brave pioneers whom broke new ground with the dreams of a first-mover advantage. The lesson here? Sometimes it’s good to take a step back, see what happens to others and wait for the right time to enter a marketplace. Sometimes the early bird gets the stale worm.
What failing business model now in the marketplace has the making of success in 3 to 5 years?