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How long does it take to build a success like the smartphone market?

If one were to judge based on the 2010 CES alone, it seems that smart phones have arrived overnight in the market.  With the introduction of a bevy of new Android models like the Nexus One, apps launching like crazy, and a media jiggy for everything smart phone, it’s as if suddenly everyone is jumping on the bandwagon. In fact, according to news reports, nearly half the handsets that will be purchased in the next six months in Canada will be smart phones.

Like many technology instant success stories, this one has been a long time in the making.  The first smart phones were conceived in the late 1990’s by Microsoft, Intel and Palm. Those phones came to market in 2001 (does anyone remember the HTC Orange SPV?).  BlackBerry phones hadn’t launched, nor any of the host of other competitors. 

The smart phone story is about like every other new technology introduction story that involves a consumer platform.  The proliferation of USB devices took about 8 years, from start to finish;  Universal Plug and Play became mostly universal in about 7 years;  Microsoft Windows, launched in 1983, didn’t really become ubiquitous until 1992 with the launch of Windows 3.1; the first OFDM Wireless LAN products were sold in the early 1990’s and finally branded WiFi in 1999.

These were all “big science” product launches.  They involved the creation of new technologies, the establishment of standards and ecosystems to support those new technologies, and the education of markets.  No mean feat, and not the stuff that start-ups typically focus on. Today’s start-up and start-up investors are far more likely to build an internet property, where momentum can be established quickly, investment levels are lower, and returns are faster. Dave McClure suggests in Startups & VCs: Learn How to Design, Market, & Eat Your Own Consumer Internet Dogfood, engineering is actually a secondary requirement for internet startups.  McClure says the key factor is user experience and product management – micro-launch, measure, repeat.

If you’re a founder, McClure’s words ought to make you pause.  McClure, and nearly all investors that I know of, favour businesses where early momentum is the game.  They’re cheap and quick to build, and the potential for success or failure can be gauged quickly without risking a lot of capital.

And if you’re building a platform based business, consider it a decade long project.  Also be aware that even if you’re first to market (as Microsoft and Palm were), that is no guarantee of success. Nimbler competitors may build upon your success while you are wedded to your first generation product and eco-system.

Food for thought. 

{ 2 comments… add one }

  • Mitch Brisebois January 12, 2010, 6:31 am

    Good perspective, Alec. I still have VHS videos of Nortel's Orbitor (circa 1992) – the smartphone concept that was 15 years ahead of the network required to support it. Again, in 1998, we developed concept smartphones to prove the value of a prototype 3G network… too much, too soon!

    • Alec January 12, 2010, 7:55 am

      Love to see those videos some time Mitch. They must be very interesting!

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