INCREASING RETURNS

Protect long incubations.

Because the network economy favors the nimble and quick, anything requiring patience and slowness is handicapped. Yet many projects, companies, and technologies grow best gradually, slowly accumulating complexity and richness. During their gestation period they will not be able to compete with the early birds, and later, because of the law of increasing returns, they may find it difficult to compete as well. Latecomers have to follow Drucker’s Rule–they must be ten times better than what they hope to displace. Delayed participation often makes sense when the new offering can increase the ways to participate. A late entry into the digital camera field, for instance, which offered compatibility with cable TV as well as PCs, could make the wait worthwhile.

 

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This is a blog version of a book of mine first published in 1998. I am re-issuing it (two posts per week) unaltered on its 10th anniversary. Comments welcomed. More details here.
-- KK