Big Tech: Choosing the right problems to solve
Big Tech companies have the tendency to swarm the same problems. iOS versus Android; Google Workspace versus Office versus iWork; Apple Music versus Spotify versus YouTube Music versus Prime Music; Netflix versus Apple TV + versus YouTube versus Prime Video; Instagram versus YouTube. On one hand, Big Tech going head-to-head in the same categories can lead to better consumer outcomes as competition drives innovation. On the other hand, Big Tech does tend to employ the exact same strategy when attacking upstarts.
I talk a lot about regulation. But, let’s put this aside for a minute. Let’s talk about what Big Tech should do. Not just for shareholders (though their needs should obviously be a priority), but for the broader technology ecosystem.
Some problems require a tonne of resources to solve. Some don’t.
Though it may be an inconvenient truth to those positioned stubbornly against the mere existence of Big Tech, some problems are so big and complex that only extremely well-funded organisations can tackle them with any credibility. Moonshot projects, like advanced robotics, alternate worlds, self-driving cars, solving ageing, satellite internet, interplanetary colonisation and next-generation silicon, require billions of dollars of investment that may never pay off. There are very few organisations, outside of governments, able to make that kind of investment.
On the other hand, there are major problems faced by society that are seemingly being ignored by our richest companies. Additionally, they do seem to be spending a lot of time on things that other, much smaller companies could solve.
Sometimes, Big Tech will enter and revolutionise a stagnant product category (i.e., iPad revolutionised tablet computing; AWS revolutionised cloud computing). Other times, they blatantly enter existing categories where they can add very little additional value and flex their muscles to try and squeeze out truly innovative upstarts. Recently, Facebook did the latter by launching Facebook Bulletin.
Substack launched at an opportune time — mainstream media is reorganising itself massively and many individual writers are wondering why they should work and be compensated any differently to other content creators. Substack brought journalists and writers the modern content creator business model, allowing them to self-publish to their 1,000 true fans and make a lot more money along the way. Substack makes this business model extremely accessible to all writers and allows them to own their relationship with their customers.
While I welcome competition in this category, Facebook Bulletin is a heavy-handed attempt to squash an innovative startup tackling an interesting problem, previously neglected by Big Tech, by bringing their massive audience to a narrow group of A-list written-word influencers. Later, they’ll use these success stories to position themselves as the best option for Substack’s existing and future customers.
While playing chicken with regulators, product launches like this may not be good for Big Tech shareholders.
7 July, 2021
Subscribe for updates
Subscribe for weekly advice covering product strategy, development operations, building teams and more.
Privacy and terms
I care about privacy as much as you do. I will only use your email address to send you this newsletter or to reach out to you directly, and you can unsubscribe at any time. I will not share, sell, or rent your email address to any third party, though I do store it the software I use to dispatch emails.
The information provided on this blog is for informational purposes only and should not be considered investment advice. The content on this blog is not a substitute for professional financial advice. The views and opinions expressed on this blog are solely those of the author and do not necessarily reflect the views of other organizations. The author makes no representations as to the accuracy, completeness, currentness, suitability, or validity of any information on this blog and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its use. The author may hold positions in the companies or products discussed on this blog. Always conduct your own research and consult a financial advisor before making any investment decisions.