For people who build products

Patterns

The same lessons keep returning across very different technologies. These are drawn from 212 decisions in 25 essays, 17 annotated memos and 10 technologies that lost, each linked to the case it comes from.

35 cases

Incumbents absorb the challenger’s best idea

A new product proves an idea; the dominant product copies or buys it, and the challenger loses its reason to exist. Features are easy to copy; distribution, data and switching costs are not.

Ask of your own product

  • If the largest player copied our best feature tomorrow, why would anyone still choose us?
  • Are we building on a platform whose owner can absorb what we do?
  1. Music and Video Streaming · 2000–2001 Pursue Napster in court until it closed, rather than license it as a paid service, even after Bertelsmann broke ranks to back a membership version Backfired
  2. Music and Video Streaming · 2011–2013 Commission original series without pilots and release whole seasons at once Paid off
  3. Music and Video Streaming · 2017–2019 End its Netflix distribution deal, keep its films for its own service and launch Disney+ at a low price Mixed
  4. GPS and Digital Maps · 2008–2009 Build its own base map with Street View cars and human editors, and offer free voice-guided navigation on Android Paid off
  5. Web Search · 2000 Use Google’s results to power Yahoo!’s web search, with Google credited on the page Backfired
  6. Web Search · 2008–2017 Show its own shopping comparison service prominently in results while rival comparison sites appeared as ordinary links lower down Backfired
  7. Web Search · 2024 Put AI-generated answers at the top of the results page, above the links Too early
  8. App Stores and Platforms · 2011 Require apps selling digital goods and subscriptions to use Apple’s in-app purchase system, at its commission, and bar them from telling users about cheaper options elsewhere Backfired
  9. Subscription Software (SaaS) · 2004–2006 Consolidate the market for installed enterprise applications by acquiring PeopleSoft and Siebel Mixed
  10. Subscription Software (SaaS) · 2011–2017 Sell Office as a subscription while continuing to offer perpetual versions Paid off
  11. Subscription Software (SaaS) · 2024 Price AI agents by the conversation or action they handle, rather than by human user Too early
  12. Enterprise Software (ERP) · 2015–2027 Replace its older ERP with S/4HANA and set a date for ending mainstream support of the old system, pushing customers to migrate, increasingly to SAP’s cloud Too early
  13. Online Marketplaces · 2000 Open Amazon’s product pages to independent sellers, letting them compete directly with Amazon’s own retail offers Paid off
  14. Online Marketplaces · 2010s Sell its own products in competition with marketplace sellers while holding their sales data and controlling which offer wins the Buy Box Backfired
  15. Recommendation Feeds · 2016 Build a video app around a feed chosen entirely by algorithm from all content, rather than from accounts the user follows Paid off
  16. Recommendation Feeds · 2022 Fill the main feed with full-screen recommended videos from accounts users did not follow, following TikTok Mixed
  17. Open Source Software · 1998 Release the source code of its web browser, Communicator, under an open licence Mixed
  18. Open Source Software · 2018 Buy GitHub, the main home of open-source development, for $7.5 billion Paid off
  19. Open Source Software · 2023 Release the weights of its large language models for broad use under a custom licence, rather than offering them only through an API Too early
  20. Spreadsheets · 1985–1987 Launch Excel on the Macintosh first, designed around the mouse and a graphical interface, before bringing it to Windows Paid off
  21. Spreadsheets · 1991 Release a spreadsheet that separated formulas from data and organised numbers by named categories, first on NeXT Too early
  22. Spreadsheets · 2023–2026 Add Python and an AI assistant inside the spreadsheet Too early
  23. Large Language Models · 2017 Publish the Transformer architecture openly, in keeping with academic norms Mixed
  24. Large Language Models · 2023 Announce a public chatbot quickly in response to ChatGPT, with a promotional demonstration Mixed
  25. Databases · 2009–2021 Drop SQL, joins and schemas for scale and flexibility Mixed
  26. Communication Tools · 2013 Sell “a reduction in information overload” through open, searchable channels Mixed
  27. Email · 2013–2016 Buy a hit email app built on top of Gmail, then close it Backfired
  28. Email · 2014–2019 Launch a separate experimental email app, then close it and move its best ideas into Gmail Mixed
  29. Social Media · 2012–2014 Buy Instagram and WhatsApp while they were young Paid off
  30. Social Media · 2016 Copy Snapchat’s Stories format openly Paid off
  31. Memo: Bill Gates · 1995 Reorient the whole of Microsoft around the internet, and treat a browser company as the main threat to Windows. Mixed
  32. Memo: Mark Zuckerberg · 2012 Buy young social apps, Instagram above all, before they could grow into threats to Facebook. Paid off
  33. Road not taken: Lisp Machines · Mid-1980s Continue investing primarily in proprietary Lisp hardware as general-purpose workstations improved rapidly. Backfired
  34. Road not taken: Minitel · Mid-1990s Continue to rely on and protect Minitel as the national online system while the internet spread elsewhere. Backfired
  35. Road not taken: OS/2 · 1992–1994 Position OS/2 2.0 and Warp as "a better DOS than DOS and a better Windows than Windows", emphasising their ability to run DOS and Windows programs. Backfired

35 cases

Who pays shapes what gets built

A product’s business model decides what it optimises for: advertising rewards attention, subscriptions reward retention, unpaid creators eventually leave. The design follows the money, whether or not anyone intends it.

Ask of your own product

  • What behaviour does our revenue model reward, and is that what users want from us?
  • Are the people who create value in our product getting a share of it?
  1. Music and Video Streaming · 2003 Sell songs one at a time for 99 cents, with the copy protection the labels required, through its own software and player Paid off
  2. Music and Video Streaming · 2008 License the major labels' catalogues for a free, advertising-supported tier as well as a paid one, granting the labels equity and advance payments in return Paid off
  3. Music and Video Streaming · 2022–2023 Add a cheaper plan with advertising and charge for accounts shared outside the household Paid off
  4. Chip Foundries · 2012 Invest €838 million for a 5 percent stake in ASML and commit €276 million to its research on extreme ultraviolet lithography Paid off
  5. GPS and Digital Maps · 2005 Launch a free web map that users could drag, zoom and search in the browser, funded by advertising, and let outside developers build on it Paid off
  6. GPS and Digital Maps · 2007–2008 Buy the digital map maker Navteq for about $8.1 billion Backfired
  7. GPS and Digital Maps · 2008–2009 Build its own base map with Street View cars and human editors, and offer free voice-guided navigation on Android Paid off
  8. GPS and Digital Maps · 2010s Collect precise location from phones through apps and advertising code, and sell or share it Backfired
  9. Digital Payments · 1970s–2010s Fund card systems through interchange fees paid by merchants’ banks to cardholders’ banks, with rules that kept merchants from charging card users more Mixed
  10. Digital Payments · 2020 Set the merchant discount rate on UPI and RuPay debit payments to zero by law Mixed
  11. Web Search · 1998 Sell the order of search results by open auction, with advertisers paying only when a user clicks Mixed
  12. Web Search · 2002 Sell text ads by cost-per-click auction, rank them by bid multiplied by expected click-through rate, charge just above the next bidder, and keep them labelled and separate from the organic results Paid off
  13. Web Search · 2003 Extend the ad auction to other people’s websites, sharing revenue with publishers Paid off
  14. Web Search · 2024 Put AI-generated answers at the top of the results page, above the links Too early
  15. App Stores and Platforms · 2011 Require apps selling digital goods and subscriptions to use Apple’s in-app purchase system, at its commission, and bar them from telling users about cheaper options elsewhere Backfired
  16. App Stores and Platforms · 2020 Deliberately break Apple’s and Google’s payment rules in Fortnite, invite its removal from both stores and sue both companies Mixed
  17. Subscription Software (SaaS) · 1969 Price software, training and services separately from computer hardware Paid off
  18. Subscription Software (SaaS) · 2011–2013 Stop selling boxed Creative Suite licences and move all customers to monthly or annual Creative Cloud subscriptions Paid off
  19. Subscription Software (SaaS) · 2024 Price AI agents by the conversation or action they handle, rather than by human user Too early
  20. Online Marketplaces · 2003–2006 Run its Chinese business, EachNet, on eBay’s global platform and fee model, against a local rival that charged sellers nothing Backfired
  21. Online Marketplaces · 2003–2004 Charge sellers nothing to list, hold buyers’ payments in escrow until goods arrived, and let buyers chat with sellers Paid off
  22. Open Source Software · 1999–2003 Give away the software and sell subscriptions for certified, supported, long-maintained versions of Linux for enterprises Paid off
  23. Large Language Models · 2023 Release capable language models with downloadable weights that others could run and modify Mixed
  24. Large Language Models · 2026 Test advertising in ChatGPT for free and low-priced tiers Too early
  25. Word Processors · 2023–2025 Make the word processor write: drafts, rewrites and summaries, priced into subscriptions Too early
  26. Email · 1996 Make email free, run it in the browser, and put an invitation at the foot of every message Paid off
  27. Email · 2004 Offer a gigabyte of storage, replace folders with search, and pay for it by scanning mail to choose ads Paid off
  28. Social Media · 2013–2016 Run a creator-driven video app without giving creators a way to earn Backfired
  29. Memo: Elon Musk · 2006 Start with an expensive, low-volume sports car and use the money to fund progressively cheaper, higher-volume cars. Paid off
  30. Memo: Steve Jobs · 2007 Call publicly on the major record labels to abolish copy protection (DRM) on music sold online, rather than opening Apple’s own DRM to competitors. Paid off
  31. Road not taken: Minitel · 1978–1983 Build a national videotex network and give households terminals free of charge, initially to replace the paper telephone directory. Paid off
  32. Road not taken: Minitel · 1984 Introduce the kiosque billing system, charging users per minute on their phone bill and sharing revenue with service providers. Paid off
  33. Road not taken: Iridium · 2000 Buy the satellite network out of bankruptcy at a tiny fraction of its cost and serve niche markets. Paid off
  34. Road not taken: The Semantic Web · 2001 Pursue a web of machine-readable meaning built on formal standards, shared ontologies and logic, intended to be adopted broadly by publishers. Mixed
  35. Road not taken: The Semantic Web · 2011 Launch schema.org, a shared, simple vocabulary for structured data, rewarded by richer appearance in search results. Paid off

31 cases

Open standards out-reach closed gardens

A system anyone can implement can reach more people than any single company can sign up. Closed systems win early on control and polish; open ones tend to win once reach matters more than control.

Ask of your own product

  • Is our advantage control of the experience, or the size of the network we can reach?
  • What would happen if a competitor made our core interface an open standard?
  1. Chip Foundries · 1987 onwards Never design or sell chips under its own name, so that it would never compete with its customers Paid off
  2. GPS and Digital Maps · 1983 Announce that GPS would be made available for civil aviation once it was operational, after Korean Air Lines Flight 007 was shot down Paid off
  3. GPS and Digital Maps · 2000 End Selective Availability and commit to a civilian GPS signal at full accuracy, free of charge Paid off
  4. Digital Payments · 1970 Turn Bank of America’s licensing programme into an independent organisation owned by its member banks, with shared rules and no single owner Paid off
  5. Digital Payments · 2016 Build an instant payment system owned by a not-for-profit company of banks, open to any bank and to third-party apps, using simple addresses instead of account numbers Paid off
  6. Operating Systems · 1991 Build the kernel in the open and release it under a licence that keeps it free Paid off
  7. App Stores and Platforms · 2008 Allow Android users to install apps from sources other than Google’s own store Mixed
  8. App Stores and Platforms · 2022–2024 Require designated gatekeepers to allow alternative app stores, sideloading and outside payment, and ban self-preferencing Too early
  9. Subscription Software (SaaS) · 1969 Price software, training and services separately from computer hardware Paid off
  10. Online Marketplaces · 2000 Open Amazon’s product pages to independent sellers, letting them compete directly with Amazon’s own retail offers Paid off
  11. Recommendation Feeds · 2006–2010 Release anonymised viewing data and offer $1 million to anyone who could improve its rating predictions by 10 percent Mixed
  12. Open Source Software · 1983–1989 Build a complete free operating system, and protect it with a licence (copyleft) that requires anyone distributing modified versions to share their changes on the same terms Paid off
  13. Open Source Software · 1991–1992 Release the Linux kernel under the GPL and accept contributions from anyone over the internet Paid off
  14. Open Source Software · 1998 Release the source code of its web browser, Communicator, under an open licence Mixed
  15. Open Source Software · 2007–2008 Release the Android operating system as open source, while keeping its app store and key services proprietary and licensed to phone makers Paid off
  16. Open Source Software · 2018–2024 Change licences from open source to source-available terms that prevent cloud providers from offering the software as a service Backfired
  17. Open Source Software · 2023 Release the weights of its large language models for broad use under a custom licence, rather than offering them only through an API Too early
  18. Spreadsheets · 1987–1995 Sue makers of compatible spreadsheets for copying 1-2-3’s menus and “look and feel” Backfired
  19. Large Language Models · 2017 Publish the Transformer architecture openly, in keeping with academic norms Mixed
  20. Large Language Models · 2023 Release capable language models with downloadable weights that others could run and modify Mixed
  21. Large Language Models · 2025 Release a strong reasoning model openly, with a technical report emphasising low training cost Paid off
  22. Mobile Phones · 1991–1992 Put the subscriber’s identity on a removable SIM card, and use spare signalling capacity for text messages Paid off
  23. Mobile Phones · 2007–2008 License the operating system to many manufacturers Paid off
  24. Email · 1982 Accept mail from any server and believe whatever it says about the sender Mixed
  25. Note-Taking Apps · 2020 Store notes as plain Markdown files on the user’s own computer Paid off
  26. Memo: Bill Gates · 1995 Reorient the whole of Microsoft around the internet, and treat a browser company as the main threat to Windows. Mixed
  27. Memo: Steve Jobs · 2007 Call publicly on the major record labels to abolish copy protection (DRM) on music sold online, rather than opening Apple’s own DRM to competitors. Paid off
  28. Memo: Steve Jobs · 2010 Keep Adobe Flash off the iPhone and iPad for good, and explain the decision publicly as a choice for open web standards, battery life, reliability and touch. Paid off
  29. Road not taken: Xanadu · 1989 Build hypertext with one-way links between documents on independent servers, with no central control, and accept that links may break. Paid off
  30. Road not taken: Betamax · 1974–75 Launch Betamax on Sony's own design and seek partners to adopt it, rather than co-developing a shared standard with rivals before launch. Backfired
  31. Road not taken: Betamax · 1976 Launch VHS with longer recording time and license it widely to other manufacturers. Paid off

25 cases

A small working thing beats a grand design

A modest system that works today tends to persuade, spread and survive better than an ambitious one that arrives late. Grand designs often contribute ideas; small working ones contribute products.

Ask of your own product

  • What is the smallest version that would convince a sceptic?
  • Are we adding scope because users need it, or because the design feels incomplete?
  1. Music and Video Streaming · 2007 Add streaming free to its DVD-by-mail subscriptions instead of selling it as a separate service Paid off
  2. Chip Foundries · 1985–1987 Found a semiconductor company that would only manufacture chips designed by other companies, with Philips as the main foreign partner Paid off
  3. Chip Foundries · 2003 Back 193-nanometre immersion lithography, which images chips through a thin layer of water, and cancel orders for tools using 157-nanometre light Paid off
  4. Digital Payments · 2007 Launch mobile money for people without bank accounts, using a network of shopkeepers as agents to convert cash into electronic value Paid off
  5. Digital Payments · 2010 Sell online payments to software developers, through a simple programming interface that hid banks, card networks and compliance Paid off
  6. Operating Systems · 1961 Demonstrate time-sharing with a modest system that ran alongside batch work Paid off
  7. Operating Systems · 1969 Leave the ambitious Multics project and build a small system, Unix Paid off
  8. Web Search · 1998 Rank pages by the links pointing to them, and offer a plain search page rather than a portal Paid off
  9. Subscription Software (SaaS) · 1999 Deliver business software through the browser from a single shared (multi-tenant) system, priced per user per month, with no installation Paid off
  10. Enterprise Software (ERP) · 2004–2012 Replace hundreds of legacy logistics systems with a single commercial ERP-based system while also changing its logistics processes Backfired
  11. Recommendation Feeds · 1992 Filter information using the reactions of other people, rather than only the content of the documents Paid off
  12. Open Source Software · 1991–1992 Release the Linux kernel under the GPL and accept contributions from anyone over the internet Paid off
  13. Spreadsheets · 1979 Launch first on the Apple II, a hobbyist machine, at about $100 Paid off
  14. Large Language Models · 2022 Release a free chat interface to an existing model as a “research preview” Paid off
  15. Large Language Models · 2011–2016 Turn a quiz-show demonstration into a business unit aimed at cancer care and other high-stakes fields Backfired
  16. Social Media · 2004–2006 Require real names and college email addresses, and open one campus at a time Paid off
  17. Memo: Elon Musk · 2006 Start with an expensive, low-volume sports car and use the money to fund progressively cheaper, higher-volume cars. Paid off
  18. Memo: Jeff Bezos · 2016 Use different decision-making processes for irreversible and reversible decisions, and fight the tendency of large organisations to treat every decision as irreversible. Paid off
  19. Memo: Mark Zuckerberg · 2023 Cut about 10,000 jobs and 5,000 open roles, remove layers of management and cancel lower-priority projects, while protecting investment in AI and the long-term technology bets. Paid off
  20. Road not taken: Xanadu · 1960s–1970s Design hypertext as a single coordinated docuverse with two-way links, transclusion and versioning, rather than as links between independent documents. Too early
  21. Road not taken: Xanadu · 1988 Invest in the Xanadu project to turn it into a commercial product. Backfired
  22. Road not taken: Newton and General Magic · 1992–1993 Launch the Newton MessagePad as a new category of pen-based personal digital assistant with natural handwriting recognition. Backfired
  23. Road not taken: Newton and General Magic · 1990–1994 Build a complete platform for communicating devices, Magic Cap and Telescript, licensed to manufacturers and carriers through a large alliance. Too early
  24. Road not taken: Iridium · 1987–1991 Develop a global satellite telephone network for business travellers and others outside terrestrial coverage, and spin it into a separate company with outside investors. Backfired
  25. Road not taken: Google Wave · 2009 Launch Wave as a broad new category meant to unify email, chat and documents, with an invitation-only preview. Backfired

24 cases

Compatibility becomes gravity

Once programs, files or habits depend on an interface, keeping it compatible becomes more valuable than improving it. Compatibility pulls future designs toward the past, and data outlives the systems built around it.

Ask of your own product

  • Which of our interfaces will we still have to support in ten years?
  • Are we choosing formats and APIs we are prepared to keep forever?
  1. Digital Payments · 1970 Turn Bank of America’s licensing programme into an independent organisation owned by its member banks, with shared rules and no single owner Paid off
  2. Operating Systems · 1964 Make an entire range of computers run the same software (System/360) Paid off
  3. Web Search · 2002–2021 Pay browser and device makers to make Google the default search engine, under revenue-sharing contracts that in many cases excluded rivals Mixed
  4. Subscription Software (SaaS) · 2011–2013 Stop selling boxed Creative Suite licences and move all customers to monthly or annual Creative Cloud subscriptions Paid off
  5. Subscription Software (SaaS) · 2011–2017 Sell Office as a subscription while continuing to offer perpetual versions Paid off
  6. Enterprise Software (ERP) · 1972 Build standard business software that many companies could use with configuration, processing data in real time, rather than writing custom programs for each client Paid off
  7. Enterprise Software (ERP) · 2011–2018 Adopt a standard SAP retail system while keeping its own long-standing practice of valuing inventory at purchase prices, which required extensive customisation Backfired
  8. Enterprise Software (ERP) · 2015–2027 Replace its older ERP with S/4HANA and set a date for ending mainstream support of the old system, pushing customers to migrate, increasingly to SAP’s cloud Too early
  9. Online Marketplaces · 2006 Store, pack and ship goods for independent sellers, and make those goods eligible for Prime delivery Paid off
  10. Spreadsheets · 1983 Build only for the IBM PC, in assembly language for speed, and integrate spreadsheet, charts and database Paid off
  11. Spreadsheets · 1987–1991 Concentrate on a version of 1-2-3 for OS/2 rather than Windows Backfired
  12. Spreadsheets · 1987–1995 Sue makers of compatible spreadsheets for copying 1-2-3’s menus and “look and feel” Backfired
  13. Spreadsheets · 2020 Rename 27 human genes whose symbols spreadsheets turned into dates Paid off
  14. Virtualization · 1964 Use the machine’s instruction set as the interface, giving every user a complete virtual copy of the computer Paid off
  15. Word Processors · 1983–1989 Bet on a graphical, what-you-see-is-what-you-get word processor for Windows Paid off
  16. Programming Languages · 1995 Ship a scripting language in ten days that had to “look like Java” Mixed
  17. Programming Languages · 2012 Add optional types on top of JavaScript instead of replacing it Paid off
  18. Databases · 1970 Protect users from knowing how data is stored (the relational model) Paid off
  19. Road not taken: Lisp Machines · 1984–1994 Standardise Common Lisp so that Lisp programs could run on many machines, including general-purpose ones. Mixed
  20. Road not taken: Betamax · 1974–75 Launch Betamax on Sony's own design and seek partners to adopt it, rather than co-developing a shared standard with rivals before launch. Backfired
  21. Road not taken: OS/2 · 1985–1987 Jointly develop OS/2 as the successor to DOS, initially targeting the Intel 80286 processor. Backfired
  22. Road not taken: OS/2 · 1992–1994 Position OS/2 2.0 and Warp as "a better DOS than DOS and a better Windows than Windows", emphasising their ability to run DOS and Windows programs. Backfired
  23. Road not taken: Itanium · 1994 Jointly develop a new 64-bit architecture based on explicitly parallel instruction computing, rather than extending x86. Backfired
  24. Road not taken: Itanium · 1999–2003 Extend x86 to 64 bits with full backward compatibility, announced in 1999 and shipped as Opteron in 2003. Paid off

24 cases

Distribution beats elegance

The technology that ships where people already are often beats a better design that requires them to go somewhere new. Being bundled, free, embedded or viral matters more than many technical virtues.

Ask of your own product

  • Where are our users already, and how do we get there with the least friction?
  • Is the invitation to new users built into the core action of the product?
  1. Music and Video Streaming · 2003 Sell songs one at a time for 99 cents, with the copy protection the labels required, through its own software and player Paid off
  2. GPS and Digital Maps · 2005 Launch a free web map that users could drag, zoom and search in the browser, funded by advertising, and let outside developers build on it Paid off
  3. Operating Systems · 1969 Leave the ambitious Multics project and build a small system, Unix Paid off
  4. Web Search · 1998 Sell the order of search results by open auction, with advertisers paying only when a user clicks Mixed
  5. Web Search · 2002–2021 Pay browser and device makers to make Google the default search engine, under revenue-sharing contracts that in many cases excluded rivals Mixed
  6. App Stores and Platforms · 2007–2008 Open the iPhone to outside developers only through an App Store in which Apple reviews every app, distributes it and takes 30 percent of paid sales Paid off
  7. App Stores and Platforms · 2008 Allow Android users to install apps from sources other than Google’s own store Mixed
  8. Open Source Software · 1998 Promote “open source” as a practical development method, dropping the moral language of “free software,” to win over business Paid off
  9. Open Source Software · 2007–2008 Release the Android operating system as open source, while keeping its app store and key services proprietary and licensed to phone makers Paid off
  10. Spreadsheets · 1979 Not to seek a patent on the electronic spreadsheet Mixed
  11. Spreadsheets · 1991 Release a spreadsheet that separated formulas from data and organised numbers by named categories, first on NeXT Too early
  12. Large Language Models · 2022 Release a free chat interface to an existing model as a “research preview” Paid off
  13. Large Language Models · 2023 Put an OpenAI model into its search engine within weeks of ChatGPT’s launch, then cap conversations when it misbehaved Mixed
  14. Virtualization · 2013 Package applications as portable images rather than inventing new isolation Paid off
  15. Word Processors · 1983–1989 Bet on a graphical, what-you-see-is-what-you-get word processor for Windows Paid off
  16. Programming Languages · 1995 Ship a scripting language in ten days that had to “look like Java” Mixed
  17. Mobile Phones · 2007–2008 Allow only web apps at first, then reverse course and open a native App Store Paid off
  18. Mobile Phones · 2007–2008 License the operating system to many manufacturers Paid off
  19. Web Frameworks · 1994–1995 Mix code into HTML pages and make deployment as simple as copying a file Paid off
  20. Email · 1996 Make email free, run it in the browser, and put an invitation at the foot of every message Paid off
  21. Social Media · 2016 Copy Snapchat’s Stories format openly Paid off
  22. Memo: Bill Gates · 1995 Reorient the whole of Microsoft around the internet, and treat a browser company as the main threat to Windows. Mixed
  23. Road not taken: OS/2 · 1990 After the success of Windows 3.0, shift strategic priority to Windows and away from joint OS/2 development. Paid off
  24. Road not taken: The Semantic Web · 2011 Launch schema.org, a shared, simple vocabulary for structured data, rewarded by richer appearance in search results. Paid off

23 cases

Users decide what the product is for

Many products found their real purpose in a use their designers did not plan: text messages from spare signalling capacity, chat tools built for game studios, graphics chips that trained neural networks, a query language used for transactions.

Ask of your own product

  • What are users doing with the product that we did not design for?
  • Are we prepared to let the unplanned use become the main one?
  1. Music and Video Streaming · 1999–2001 Run a central index of the songs stored on users' computers, with the files themselves passing directly between users Backfired
  2. Digital Payments · 2000–2002 Build its own fraud detection software and concentrate on payments between buyers and sellers on eBay Paid off
  3. Digital Payments · 2007 Launch mobile money for people without bank accounts, using a network of shopkeepers as agents to convert cash into electronic value Paid off
  4. Online Marketplaces · 1996 Let buyers and sellers rate each other publicly after every transaction, instead of policing disputes itself Paid off
  5. Online Marketplaces · 2003–2004 Charge sellers nothing to list, hold buyers’ payments in escrow until goods arrived, and let buyers chat with sellers Paid off
  6. Online Marketplaces · c. 2010 Let customers pay in cash when goods were delivered Paid off
  7. Recommendation Feeds · 2016 Build a video app around a feed chosen entirely by algorithm from all content, rather than from accounts the user follows Paid off
  8. Recommendation Feeds · 2022 Fill the main feed with full-screen recommended videos from accounts users did not follow, following TikTok Mixed
  9. Spreadsheets · 1979 Launch first on the Apple II, a hobbyist machine, at about $100 Paid off
  10. Large Language Models · 2022 Release a free chat interface to an existing model as a “research preview” Paid off
  11. Mobile Phones · 1991–1992 Put the subscriber’s identity on a removable SIM card, and use spare signalling capacity for text messages Paid off
  12. Databases · 1974 Design an English-like query language for non-programmers Mixed
  13. Compute · 2006–2017 Open graphics chips to general computation (CUDA), then design chips only for neural networks (TPU) Paid off
  14. Note-Taking Apps · 2013–2018 Rebuild the product four times around blocks that can become databases Paid off
  15. Memo: Steve Yegge · 2011 Argue that Google should treat every product as a platform, as Amazon did after Jeff Bezos required every team to expose its work through service interfaces. Paid off
  16. Memo: Stewart Butterfield · 2013 Position a group chat tool as organisational transformation, and make the team’s job selling that change rather than features. Mixed
  17. Road not taken: Betamax · 1975 Launch with a one-hour recording time, favouring a smaller cassette and picture quality. Backfired
  18. Road not taken: OS/2 · 1990 After the success of Windows 3.0, shift strategic priority to Windows and away from joint OS/2 development. Paid off
  19. Road not taken: Newton and General Magic · 1992–1993 Launch the Newton MessagePad as a new category of pen-based personal digital assistant with natural handwriting recognition. Backfired
  20. Road not taken: Iridium · 1998 Launch commercial service with large handsets priced around $3,000 and calls costing several dollars a minute. Backfired
  21. Road not taken: Itanium · 1999–2003 Extend x86 to 64 bits with full backward compatibility, announced in 1999 and shipped as Opteron in 2003. Paid off
  22. Road not taken: Google Wave · 2009 Launch Wave as a broad new category meant to unify email, chat and documents, with an invitation-only preview. Backfired
  23. Road not taken: Google Wave · 2010 Stop developing Wave as a standalone product about fifteen months after its unveiling, and carry its technology into other products. Mixed

21 cases

A defining strength becomes the constraint

The choice that made a product succeed in one environment can hold it back when the environment changes: a keyboard built for email, a language that trusts experts, a graph of friends that everyone thought was the moat.

Ask of your own product

  • Which of our strengths depends on an assumption about the world that could change?
  • What would a competitor build if they assumed the opposite?
  1. Music and Video Streaming · 2000–2001 Pursue Napster in court until it closed, rather than license it as a paid service, even after Bertelsmann broke ranks to back a membership version Backfired
  2. Music and Video Streaming · 2007 Add streaming free to its DVD-by-mail subscriptions instead of selling it as a separate service Paid off
  3. Chip Foundries · 2013–2019 Aim its 10-nanometre process at an unusually large increase in density, 2.7 times its 14-nanometre process, without extreme ultraviolet lithography Backfired
  4. Operating Systems · 1981 Let any program touch any part of the machine (no memory protection) Backfired
  5. Web Search · 2000 Use Google’s results to power Yahoo!’s web search, with Google credited on the page Backfired
  6. Subscription Software (SaaS) · 1998–2001 Host conventional client-server business software in their own data centres, one installation per customer, funded largely by debt Backfired
  7. Subscription Software (SaaS) · 2004–2006 Consolidate the market for installed enterprise applications by acquiring PeopleSoft and Siebel Mixed
  8. Enterprise Software (ERP) · 2011–2018 Adopt a standard SAP retail system while keeping its own long-standing practice of valuing inventory at purchase prices, which required extensive customisation Backfired
  9. Online Marketplaces · 2003–2006 Run its Chinese business, EachNet, on eBay’s global platform and fee model, against a local rival that charged sellers nothing Backfired
  10. Open Source Software · 2018–2024 Change licences from open source to source-available terms that prevent cloud providers from offering the software as a service Backfired
  11. Spreadsheets · 1987–1991 Concentrate on a version of 1-2-3 for OS/2 rather than Windows Backfired
  12. Programming Languages · 1971–1973 Trust the programmer with memory and leave out automatic checks Mixed
  13. Mobile Phones · 2007 Remove the keyboard and buttons and make the whole front a touchscreen Paid off
  14. Databases · 1964 Store relationships as chains of pointers that programs navigate Mixed
  15. Social Media · 2016–2018 Choose every video with a recommendation model instead of from the people you follow Paid off
  16. Note-Taking Apps · 2008 Promise to “remember everything”: capture anything, find it anywhere Mixed
  17. Memo: Steve Jobs · 2010 Keep Adobe Flash off the iPhone and iPad for good, and explain the decision publicly as a choice for open web standards, battery life, reliability and touch. Paid off
  18. Memo: Stephen Elop · 2011 Prepare Nokia’s employees to abandon its own smartphone platforms, an announcement that came days later as a partnership to build phones on Microsoft’s Windows Phone. Backfired
  19. Memo: Satya Nadella · 2014 Redefine Microsoft as “the productivity and platform company for the mobile-first and cloud-first world,” moving the company’s centre of gravity away from Windows and devices. Paid off
  20. Road not taken: Lisp Machines · Mid-1980s Continue investing primarily in proprietary Lisp hardware as general-purpose workstations improved rapidly. Backfired
  21. Road not taken: Minitel · Mid-1990s Continue to rely on and protect Minitel as the national online system while the internet spread elsewhere. Backfired

21 cases

Hiding the machine wins once the machine is cheap

Raising the level of abstraction (compilers, relational queries, virtual machines, declarative interfaces) costs efficiency at first. It wins once hardware gets cheap enough that people’s time is the scarce resource, provided the translation is trustworthy.

Ask of your own product

  • What do our users currently have to know that the system could know for them?
  • What is the single objection (speed, cost, trust) that would stop people adopting a higher-level approach?
  1. Chip Foundries · 1985–1987 Found a semiconductor company that would only manufacture chips designed by other companies, with Philips as the main foreign partner Paid off
  2. GPS and Digital Maps · 1973 Combine the Air Force and Navy concepts into one system with atomic clocks on the satellites and receivers that only listen, so that any number of users could share it Paid off
  3. Digital Payments · 2010 Sell online payments to software developers, through a simple programming interface that hid banks, card networks and compliance Paid off
  4. Digital Payments · 2016 Build an instant payment system owned by a not-for-profit company of banks, open to any bank and to third-party apps, using simple addresses instead of account numbers Paid off
  5. Enterprise Software (ERP) · 1972 Build standard business software that many companies could use with configuration, processing data in real time, rather than writing custom programs for each client Paid off
  6. Online Marketplaces · 2006 Store, pack and ship goods for independent sellers, and make those goods eligible for Prime delivery Paid off
  7. Recommendation Feeds · 1998–2003 Recommend products by relating items to items, computed in advance from purchase histories, rather than matching each customer to similar customers at the moment of the visit Paid off
  8. Spreadsheets · 2006 Offer a free spreadsheet in the browser, built for sharing and simultaneous editing Paid off
  9. Spreadsheets · 2023–2026 Add Python and an AI assistant inside the spreadsheet Too early
  10. Large Language Models · 2025 Release a strong reasoning model openly, with a technical report emphasising low training cost Paid off
  11. Virtualization · 1964 Use the machine’s instruction set as the interface, giving every user a complete virtual copy of the computer Paid off
  12. Programming Languages · 1953–1957 Treat the compiler’s efficiency, not the language design, as the real challenge Paid off
  13. Mobile Phones · 2007 Remove the keyboard and buttons and make the whole front a touchscreen Paid off
  14. Web Frameworks · 2013 Describe the interface as a function of state and let the library work out the changes Paid off
  15. Databases · 1970 Protect users from knowing how data is stored (the relational model) Paid off
  16. Databases · 1979 Let the database choose how to run each query using statistics about the data Paid off
  17. Compute · 1945 Store the program in memory alongside the data Paid off
  18. Compute · 1971 Build a programmable processor instead of custom calculator logic Paid off
  19. Email · 2004 Offer a gigabyte of storage, replace folders with search, and pay for it by scanning mail to choose ads Paid off
  20. Memo: Steve Yegge · 2011 Argue that Google should treat every product as a platform, as Amazon did after Jeff Bezos required every team to expose its work through service interfaces. Paid off
  21. Road not taken: Lisp Machines · 1979–1980 Commercialise the MIT Lisp machine as dedicated hardware rather than as software for general-purpose computers. Mixed

21 cases

Making something cheap moves the cost to someone else

Costs rarely disappear. A technology that makes sending, building or shipping cheaper usually moves the cost onto the receiver, the user’s device or a later team, often people who did not make the choice.

Ask of your own product

  • Who pays for the effort this feature saves us or our users?
  • Does the person bearing the cost have any say in the decision?
  1. Chip Foundries · 2020 Build advanced fabs in Arizona, under pressure from the US government Too early
  2. GPS and Digital Maps · 1990–2000 Deliberately degrade the accuracy of the public GPS signal through Selective Availability Mixed
  3. Digital Payments · 1970s–2010s Fund card systems through interchange fees paid by merchants’ banks to cardholders’ banks, with rules that kept merchants from charging card users more Mixed
  4. Digital Payments · 2016 Withdraw ₹500 and ₹1,000 banknotes as legal tender with four hours’ notice Mixed
  5. Digital Payments · 2020 Set the merchant discount rate on UPI and RuPay debit payments to zero by law Mixed
  6. Web Search · 2024 Put AI-generated answers at the top of the results page, above the links Too early
  7. Online Marketplaces · c. 2010 Let customers pay in cash when goods were delivered Paid off
  8. Word Processors · 2023–2025 Make the word processor write: drafts, rewrites and summaries, priced into subscriptions Too early
  9. Web Frameworks · 2010s Build sites as single-page JavaScript applications Mixed
  10. Databases · 2007 Choose availability over consistency: an always-writeable store Paid off
  11. Databases · 2009–2021 Drop SQL, joins and schemas for scale and flexibility Mixed
  12. Communication Tools · 1996–1997 Show everyone whether you are online (presence) Mixed
  13. Communication Tools · 2013 Sell “a reduction in information overload” through open, searchable channels Mixed
  14. Communication Tools · 2010s–2020s Give receivers control: threads, do-not-disturb, scheduled send, status messages Mixed
  15. Communication Tools · 2023– Add AI assistants that summarise, triage and draft messages Too early
  16. Compute · 2003–2005 Respond to the end of Dennard scaling with multiple cores Mixed
  17. Email · 2002–2024 Fight spam with learning filters and sender reputation rather than a price on sending Mixed
  18. Note-Taking Apps · 2023 Let a model read a person’s notes and answer questions grounded in them Too early
  19. Memo: Stewart Butterfield · 2013 Position a group chat tool as organisational transformation, and make the team’s job selling that change rather than features. Mixed
  20. Road not taken: Lisp Machines · 1979–1980 Commercialise the MIT Lisp machine as dedicated hardware rather than as software for general-purpose computers. Mixed
  21. Road not taken: Minitel · 1984 Introduce the kiosque billing system, charging users per minute on their phone bill and sharing revenue with service providers. Paid off

18 cases

Decide at the speed of reversibility

Decisions that are hard to undo deserve slow, careful process; decisions that are easy to undo deserve speed. Organisations get into trouble by applying one process to both, becoming either reckless or slow.

Ask of your own product

  • If this turns out wrong, how expensive is it to go back?
  • Are we spending one-way-door process on a two-way-door decision, or the reverse?
  1. Chip Foundries · 2020 Build advanced fabs in Arizona, under pressure from the US government Too early
  2. GPS and Digital Maps · 2012 Replace Google's maps on the iPhone with its own, assembled from licensed data, in iOS 6 Mixed
  3. Digital Payments · 2016 Withdraw ₹500 and ₹1,000 banknotes as legal tender with four hours’ notice Mixed
  4. Enterprise Software (ERP) · 1993–1996 Install SAP R/3 and a new automated warehouse system at the same time, and bid for contracts on the basis of savings the systems were expected to deliver Backfired
  5. Enterprise Software (ERP) · 1999 Switch on new ERP, customer relationship and supply chain systems together in July, shortly before the Halloween ordering season Backfired
  6. Enterprise Software (ERP) · 2004–2012 Replace hundreds of legacy logistics systems with a single commercial ERP-based system while also changing its logistics processes Backfired
  7. Large Language Models · 2019 Withhold the full GPT-2 model over misuse concerns and release it in stages Mixed
  8. Large Language Models · 2023 Put an OpenAI model into its search engine within weeks of ChatGPT’s launch, then cap conversations when it misbehaved Mixed
  9. Mobile Phones · 2007–2008 Allow only web apps at first, then reverse course and open a native App Store Paid off
  10. Email · 2014–2019 Launch a separate experimental email app, then close it and move its best ideas into Gmail Mixed
  11. Memo: Stephen Elop · 2011 Prepare Nokia’s employees to abandon its own smartphone platforms, an announcement that came days later as a partnership to build phones on Microsoft’s Windows Phone. Backfired
  12. Memo: Reed Hastings · 2011 Split Netflix in two: keep streaming under the Netflix name and move DVD-by-mail to a separate service called Qwikster, with separate websites and accounts. Backfired
  13. Memo: Jeff Bezos · 2016 Use different decision-making processes for irreversible and reversible decisions, and fight the tendency of large organisations to treat every decision as irreversible. Paid off
  14. Road not taken: Xanadu · 1988 Invest in the Xanadu project to turn it into a commercial product. Backfired
  15. Road not taken: Newton and General Magic · 1998 Discontinue the Newton platform. Paid off
  16. Road not taken: Iridium · 1987–1991 Develop a global satellite telephone network for business travellers and others outside terrestrial coverage, and spin it into a separate company with outside investors. Backfired
  17. Road not taken: Itanium · 2004–2020 Adopt 64-bit x86 for mainstream products while continuing Itanium for high-end servers. Mixed
  18. Road not taken: Google Wave · 2010 Stop developing Wave as a standalone product about fifteen months after its unveiling, and carry its technology into other products. Mixed

18 cases

Permissive defaults are borrowed time

Trusting every input, every sender or every programmer makes a system easy to adopt. The bill arrives later, when the system is connected to people who do not deserve that trust, and tightening a default after millions depend on it takes years.

Ask of your own product

  • If this default is wrong in five years, how would we tighten it without breaking everyone who relies on it?
  • Who outside our current users could exploit the trust we are extending?
  1. Music and Video Streaming · 1999–2001 Run a central index of the songs stored on users' computers, with the files themselves passing directly between users Backfired
  2. Music and Video Streaming · 2005–2007 Let anyone upload video and remove infringing material only on notice, then build a system that matched uploads to owners' works and let owners block them or take a share of the advertising Paid off
  3. GPS and Digital Maps · 2010s Collect precise location from phones through apps and advertising code, and sell or share it Backfired
  4. Digital Payments · 1958 Launch a general-purpose credit card by mailing 60,000 unsolicited cards to residents of Fresno at once Mixed
  5. Operating Systems · 1981 Let any program touch any part of the machine (no memory protection) Backfired
  6. App Stores and Platforms · 2007–2015 Open the social network to outside apps with broad access to users’ data and their friends’ data, then progressively restrict it Mixed
  7. Enterprise Software (ERP) · 1999–2019 Treat data from its Horizon accounting system as reliable evidence against sub-postmasters, prosecuting and pursuing them for shortfalls, despite reports of errors Backfired
  8. Spreadsheets · 2012 Run a new value-at-risk model for a large derivatives portfolio on manually maintained spreadsheets Backfired
  9. Spreadsheets · 2020 Load laboratory results into a spreadsheet format with a fixed row limit as part of the national Covid-19 reporting pipeline Backfired
  10. Large Language Models · 2024 Let a website chatbot answer policy questions, then argue in a dispute that the chatbot was responsible for its own words Backfired
  11. Programming Languages · 1965 Add the null reference because it was easy to implement Backfired
  12. Programming Languages · 1971–1973 Trust the programmer with memory and leave out automatic checks Mixed
  13. Email · 1982 Accept mail from any server and believe whatever it says about the sender Mixed
  14. Social Media · 2006 Turn profiles into News Feed, a continuous stream of friends’ activity Paid off
  15. Memo: Bill Gates · 2002 Make security, availability and privacy Microsoft’s highest priority, and choose security over new features whenever they conflict. Paid off
  16. Memo: Mark Zuckerberg · 2012 Tell public investors that Facebook’s mission came before profit and that it would keep a culture of rapid, iterative building, which Zuckerberg called the Hacker Way. Mixed
  17. Road not taken: Xanadu · 1989 Build hypertext with one-way links between documents on independent servers, with no central control, and accept that links may break. Paid off
  18. Road not taken: The Semantic Web · 2001 Pursue a web of machine-readable meaning built on formal standards, shared ontologies and logic, intended to be adopted broadly by publishers. Mixed

16 cases

Computing swings between the centre and the edge

Work moves between central shared machines and personal devices as the relative cost of computing, storage and networks changes: time-sharing, then PCs, then the cloud; servers, then browsers, then servers again.

Ask of your own product

  • Which cost (compute, bandwidth, latency, privacy) is changing fastest, and which way does it push our architecture?
  • What would our product look like at the other end of the pendulum?
  1. Music and Video Streaming · 2017–2019 End its Netflix distribution deal, keep its films for its own service and launch Disney+ at a low price Mixed
  2. Music and Video Streaming · 2022–2023 Add a cheaper plan with advertising and charge for accounts shared outside the household Paid off
  3. Subscription Software (SaaS) · 1999 Deliver business software through the browser from a single shared (multi-tenant) system, priced per user per month, with no installation Paid off
  4. Subscription Software (SaaS) · 1998–2001 Host conventional client-server business software in their own data centres, one installation per customer, funded largely by debt Backfired
  5. Subscription Software (SaaS) · 2005 Build human resources and finance software for large enterprises from scratch as a shared online service Paid off
  6. Enterprise Software (ERP) · 1987–1992 Rebuild its system for client-server computers rather than staying on mainframes Paid off
  7. Spreadsheets · 1985–1987 Launch Excel on the Macintosh first, designed around the mouse and a graphical interface, before bringing it to Windows Paid off
  8. Spreadsheets · 2006 Offer a free spreadsheet in the browser, built for sharing and simultaneous editing Paid off
  9. Virtualization · 2003 Ask the guest operating system to cooperate with the hypervisor (paravirtualization) Mixed
  10. Word Processors · 2006 Move the document into the browser with simultaneous editing Paid off
  11. Mobile Phones · 1947–1970s Put capacity and intelligence in the network: small cells, reused frequencies, simple handsets Paid off
  12. Web Frameworks · 2010s Build sites as single-page JavaScript applications Mixed
  13. Web Frameworks · 2019–2021 Render pages on the server and hydrate only small “islands” of interactivity Paid off
  14. Compute · 2006 Rent computing capacity by the hour Paid off
  15. Compute · 2006–2017 Open graphics chips to general computation (CUDA), then design chips only for neural networks (TPU) Paid off
  16. Memo: Satya Nadella · 2014 Redefine Microsoft as “the productivity and platform company for the mobile-first and cloud-first world,” moving the company’s centre of gravity away from Windows and devices. Paid off

14 cases

The metric becomes the target

Any number chosen to stand for value (likes, comments, open rates, time spent) will be optimised directly, by users, by competitors and by the product itself, until it stops measuring what it was meant to.

Ask of your own product

  • What would someone do to raise this metric without creating any real value?
  • Which behaviour would we be ashamed to see the metric reward?
  1. Web Search · 2002 Sell text ads by cost-per-click auction, rank them by bid multiplied by expected click-through rate, charge just above the next bidder, and keep them labelled and separate from the organic results Paid off
  2. Web Search · 2003 Extend the ad auction to other people’s websites, sharing revenue with publishers Paid off
  3. Web Search · 2011 Change the ranking to demote large volumes of thin, low-quality pages, even though many of them displayed Google ads Paid off
  4. Subscription Software (SaaS) · 2013–2024 Default many customers to an “annual, paid monthly” plan that charged a large fee for cancelling in the first year Backfired
  5. Recommendation Feeds · 2006–2010 Release anonymised viewing data and offer $1 million to anyone who could improve its rating predictions by 10 percent Mixed
  6. Recommendation Feeds · 2012 Rank and recommend videos by expected watch time rather than clicks or views Mixed
  7. Spreadsheets · 2012 Run a new value-at-risk model for a large derivatives portfolio on manually maintained spreadsheets Backfired
  8. Large Language Models · 2024–2025 Replace much of customer service with an AI assistant, then reverse course and hire people again Backfired
  9. Large Language Models · 2025 Add a reward for users’ immediate thumbs-up reactions to the main ChatGPT model, then roll it back Backfired
  10. Social Media · 2011–2019 Build a social network on top of everyone’s Google account Backfired
  11. Social Media · 2018 Re-rank the feed for “meaningful social interactions” Mixed
  12. Note-Taking Apps · 2008 Promise to “remember everything”: capture anything, find it anywhere Mixed
  13. Memo: Jeff Bezos · 1998 Tell investors in advance that Amazon would sacrifice short-term profit for long-term market leadership, and how it would make that trade. Paid off
  14. Memo: Larry Page · 2004 Go public on Google’s own terms: a dual-class share structure that kept control with the founders, no traditional earnings guidance, an auction-based offering and an explicit commitment to long-term, high-risk projects. Paid off

13 cases

Real values are what you reward

An organisation’s stated values matter less than what it hires for, promotes, pays for and tolerates. Documents that change culture work by changing those decisions, not by naming virtues.

Ask of your own product

  • Which behaviour did we actually reward in the last promotion round, and does it match what we say we value?
  • What would a new hire infer about our values from the last ten decisions they saw?
  1. Chip Foundries · 1987 onwards Never design or sell chips under its own name, so that it would never compete with its customers Paid off
  2. App Stores and Platforms · 2021–2025 Respond to a court order requiring it to let developers link to outside payments by charging a 27 percent commission on such purchases and adding warning screens Backfired
  3. Subscription Software (SaaS) · 2013–2024 Default many customers to an “annual, paid monthly” plan that charged a large fee for cancelling in the first year Backfired
  4. Enterprise Software (ERP) · 1999–2019 Treat data from its Horizon accounting system as reliable evidence against sub-postmasters, prosecuting and pursuing them for shortfalls, despite reports of errors Backfired
  5. Recommendation Feeds · 2019 Reduce recommendations of “borderline” videos that came close to violating its rules, without removing them Mixed
  6. Memo: Jeff Bezos · 1998 Tell investors in advance that Amazon would sacrifice short-term profit for long-term market leadership, and how it would make that trade. Paid off
  7. Memo: Bill Gates · 2002 Make security, availability and privacy Microsoft’s highest priority, and choose security over new features whenever they conflict. Paid off
  8. Memo: Larry Page · 2004 Go public on Google’s own terms: a dual-class share structure that kept control with the founders, no traditional earnings guidance, an auction-based offering and an explicit commitment to long-term, high-risk projects. Paid off
  9. Memo: Reed Hastings · 2009 Replace most rules and processes with high talent density, candour and context, and let people go who are merely adequate. Mixed
  10. Memo: Reed Hastings · 2011 Split Netflix in two: keep streaming under the Netflix name and move DVD-by-mail to a separate service called Qwikster, with separate websites and accounts. Backfired
  11. Memo: Mark Zuckerberg · 2012 Tell public investors that Facebook’s mission came before profit and that it would keep a culture of rapid, iterative building, which Zuckerberg called the Hacker Way. Mixed
  12. Memo: Satya Nadella · 2014 Redefine Microsoft as “the productivity and platform company for the mobile-first and cloud-first world,” moving the company’s centre of gravity away from Windows and devices. Paid off
  13. Memo: Mark Zuckerberg · 2023 Cut about 10,000 jobs and 5,000 open roles, remove layers of management and cancel lower-priority projects, while protecting investment in AI and the long-term technology bets. Paid off

10 cases

Network effects run in both directions

Each new user makes a network more valuable for the others, so growth accelerates. The same mechanism works in reverse: when a key group leaves, the network becomes worse for everyone who stays, and decline can be as fast as growth.

Ask of your own product

  • Which group of users, if they left, would make the product worse for everyone else?
  • Are we measuring accounts, or relationships and activity between users?
  1. Music and Video Streaming · 2008 License the major labels' catalogues for a free, advertising-supported tier as well as a paid one, granting the labels equity and advance payments in return Paid off
  2. Chip Foundries · 2018 Halt development of 7-nanometre and more advanced processes and concentrate on established ones Mixed
  3. Digital Payments · 1958 Launch a general-purpose credit card by mailing 60,000 unsolicited cards to residents of Fresno at once Mixed
  4. App Stores and Platforms · 2007–2015 Open the social network to outside apps with broad access to users’ data and their friends’ data, then progressively restrict it Mixed
  5. Social Media · 2004–2006 Require real names and college email addresses, and open one campus at a time Paid off
  6. Social Media · 2003–2006 Decline Google’s offer and keep growing while the site slowed and fake profiles were deleted Backfired
  7. Social Media · 2013–2016 Run a creator-driven video app without giving creators a way to earn Backfired
  8. Social Media · 2011–2019 Build a social network on top of everyone’s Google account Backfired
  9. Memo: Stephen Elop · 2011 Prepare Nokia’s employees to abandon its own smartphone platforms, an announcement that came days later as a partnership to build phones on Microsoft’s Windows Phone. Backfired
  10. Memo: Mark Zuckerberg · 2012 Buy young social apps, Instagram above all, before they could grow into threats to Facebook. Paid off

6 cases

Defences against abuse concentrate the market

Spam, fraud and harmful content are fought most effectively by whoever sees the most traffic. Reputation systems and filters make open systems usable, and quietly favour the largest operators over newcomers.

Ask of your own product

  • Will our trust and safety measures make it harder for legitimate new participants to join?
  • Who decides what counts as abuse, and can they be held to account?
  1. Music and Video Streaming · 2005–2007 Let anyone upload video and remove infringing material only on notice, then build a system that matched uploads to owners' works and let owners block them or take a share of the advertising Paid off
  2. Digital Payments · 2000–2002 Build its own fraud detection software and concentrate on payments between buyers and sellers on eBay Paid off
  3. Web Search · 2011 Change the ranking to demote large volumes of thin, low-quality pages, even though many of them displayed Google ads Paid off
  4. Online Marketplaces · 1996 Let buyers and sellers rate each other publicly after every transaction, instead of policing disputes itself Paid off
  5. Online Marketplaces · 2011 Apologise publicly and guarantee hosts up to $50,000 for damage caused by guests, after a host’s home was ransacked Paid off
  6. Email · 2002–2024 Fight spam with learning filters and sender reputation rather than a price on sending Mixed

6 cases

Taking choices away can be the product

Removing options (strong conventions, uniform layouts, a few well-chosen features) can be worth more than flexibility, because it saves users from decisions that do not deserve their attention.

Ask of your own product

  • Which decisions are our users making repeatedly that we could make once, well, for everyone?
  • Which options exist only because we could not decide?
  1. Music and Video Streaming · 2011–2013 Commission original series without pilots and release whole seasons at once Paid off
  2. Web Search · 1998 Rank pages by the links pointing to them, and offer a plain search page rather than a portal Paid off
  3. App Stores and Platforms · 2007–2008 Open the iPhone to outside developers only through an App Store in which Apple reviews every app, distributes it and takes 30 percent of paid sales Paid off
  4. Recommendation Feeds · 2022–2023 Require the largest platforms to explain their recommender systems and offer at least one option not based on profiling Too early
  5. Web Frameworks · 2004–2005 Make the routine decisions once, for everyone (“convention over configuration”) Paid off
  6. Memo: Reed Hastings · 2009 Replace most rules and processes with high talent density, candour and context, and let people go who are merely adequate. Mixed

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