I will also be writing my master dissertation on this subject, so I was glad to find a bibliography at the end of your paper. It’s quite hard to find good reference material on the topic. Thanks again!
3. Exploit irregular network topologies. In the last 90s, most people assumed that dating websites was a "winner take all market" and Match.com had won it, until a swath of niche competitors arose (e.g. Jdate) that succeeded because certain groups of people tend to date others from that same group. Real-life networks are often very different from the idealized, uniformly distributed networks pictured in economics textbooks. Facebook exploited the fact that social connections are highly clustered at colleges as a "beachhead" to challenge much bigger incumbents (Friendster). By finding clusters in the network smaller companies can reach critical mass within those sub-clusters and then expand beyond.
5 is something that Joshua Porter strongly emphasizes in his "Psychology of social design" talk. REALLY IMPORTANT for my startup. Give a read: http://bit.ly/1J00n
"...Providing a stand-alone use is the strategy that VCR producers used to achieve a successful launch and avoid fighting the difficult chicken and egg startup problem. Unlike the VDP, the VCR offered the ability to time-shift television programming. In fact, when the VCR was launched this was the only application available because the market for pre-recorded videocassettes had not yet developed. The standalone value for the VCR “time-shifting television programming” was sufficiently strong to get over a million people to purchase the product in the first 3-4 years after its launch. "
When Philips invented the cassette tape - they opened it up completely. If you called Philips they would give you designs, tell you what manufacturing equipment was required - even where to source the equipment and materials.
Philips ended up with a decent percentage of a massive market - as opposed to 100% of a niche (perhaps non-existent) market.
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[ 3.1 ms ] story [ 26.6 ms ] threadI will also be writing my master dissertation on this subject, so I was glad to find a bibliography at the end of your paper. It’s quite hard to find good reference material on the topic. Thanks again!
3. Exploit irregular network topologies. In the last 90s, most people assumed that dating websites was a "winner take all market" and Match.com had won it, until a swath of niche competitors arose (e.g. Jdate) that succeeded because certain groups of people tend to date others from that same group. Real-life networks are often very different from the idealized, uniformly distributed networks pictured in economics textbooks. Facebook exploited the fact that social connections are highly clustered at colleges as a "beachhead" to challenge much bigger incumbents (Friendster). By finding clusters in the network smaller companies can reach critical mass within those sub-clusters and then expand beyond.
"...Providing a stand-alone use is the strategy that VCR producers used to achieve a successful launch and avoid fighting the difficult chicken and egg startup problem. Unlike the VDP, the VCR offered the ability to time-shift television programming. In fact, when the VCR was launched this was the only application available because the market for pre-recorded videocassettes had not yet developed. The standalone value for the VCR “time-shifting television programming” was sufficiently strong to get over a million people to purchase the product in the first 3-4 years after its launch. "
Philips ended up with a decent percentage of a massive market - as opposed to 100% of a niche (perhaps non-existent) market.
They took a similar strategy with the CD.
This Sony history implies that royalty free was more of a negotiated outcome than a strategy: http://www.sony.net/Fun/SH/1-17/h1.html