Sunday, September 9, 2007

Popularity caused by Popularity

Thinking about the competitive environment in web applications as part of the whole Office 2.0 conference pre-think, it seemed worth analyzing (a gross overstatement) what makes some new applications just zoom past the competition in terms of user popularity - and therefore, success (from a usage, not a revenue, perspective).

The examples already seen are obvious, including auction markets (eBay), Video (YouTube), demographically-focused social networking (MySpace, LinkedIn, FaceBook) and plenty of others. Popularity seems to bring popularity. Once a winner is chosen in a certain cross-section of function and demographic (or business vertical), it becomes a peer magnet. The obvious reason this occurs is:
  • Critical Mass. It often adds value to have more people involved in a service – for example with bidding services, you want 200 potential bids, not 2... or with social networks, there's not much sense to using one which your friends won't use.
But there are 3 other reasons people (or their companies) select particular apps, which might apply more to non-social business-focused apps or at least apps which do not rely on critical mass:
  • Trust. People perceive something that other people already use as more trustworthy and safer. "If Avis and Budget already use for CRM, than I'm probably ok selecting it for my business".
  • Laziness. Given the time commitment of a proper analysis to chose a service, people are willing to save time by going with what peers are already using.
  • Promotion and Buzz. The more people use a service the more other people hear about it and the more likely they are to at least try it (then it must rely on it's own value).

The speed at which people communicate in this new environment, fosters this phenomenon, since the above reasons given rely on knowing what applications or services others are using. Maybe this is why it seems that a winner in more recent years becomes a winner faster than in the past... or maybe it's just that time seems to be going by quicker...

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