The Ken Olson Question
Monday, July 7, 1997 by Dave Winer.
I read an article a few months back in the New York Times about an elderly man in a southern U.S. city whose house was encircled by a construction project. A bank bought all the lots on his block, but he refused to sell, saying he wanted to die in the house he raised his kids in.
A helicopter shot tells the story. A big boulevard running in front of his house. A big rectangular hole with a small omission. A picture of the man sitting in his yard. The bank president says "It's OK with us!"
Everyone admires the old man for his stubborn nature, even the construction workers. But they go on digging and building right around the old man's house.
In Bill Gates's Money, 7/3/97, I asked why he is so rich. Gates's money is such a big entity, there's so much of it, and it's so powerful. An ingenuous argument comes back from Microsoft public relations. Gates doesn't have that much money. He couldn't sell his Microsoft stock, so it's just a paper fortune. He makes just $450K per year for being the CEO of Microsoft.
But he can invest a billion dollars in a cable company, buy WebTV for over $400 million. Bill Gates and Microsoft's money. It's a silly distinction. They're in the same body. Do they think we're stupid? His $450K annual salary and the value of the stock he's sold doesn't begin to measure the financial power of the man.
In Bill Gates vs The Internet, 10/18/94, I asked if Bill Gates would be the Ken Olson of our era. Olson is the founder of DEC, the Microsoft of the 1970s. Olson didn't catch the transition to the microcomputer and now DEC is totally marginalized, having exhausted its last strategic advantage.
The only lesson DEC taught us recently is that momentum is a powerful force. It takes a long time for a company of DEC's size, with all those users, to die. DEC got a second chance after missing the transition to the micro, but they must have lacked the courage to bet the company. Their spiral is close to complete.
As you would expect in a transition the size of the net, the landscape is littered with corpses. Who's left standing in the tech business? Did Bill Gates go down?
In the 1994 piece I said "Microsoft is too heavily invested in the way things are to let it grow in the random way that the Internet is growing. The innovative fun stuff will happen outside of the reach of Microsoft's FUD."
It didn't turn out that way. No, Bill Gates is not the next Ken Olson. He totally made the transition.
Marvel, Microsoft's answer to CompuServe, Gates's eWorld, is a dim memory. He cut his losses, zigged into the new market while his old competitors stayed where they were. The standards bodies were no contest. Microsoft is on every committee and their programmers move quickly.
He's in the driver's seat again. It may be possible for new standards to come out of left field, but you have to always be thinking of Bill Gates as you move. Eventually he's going to look at what you're doing and if your strategy undermines his power, they'll build the standard right around you.
It's funny that Microsoft seems to want us to ignore their power, but at the same time, if you're in the technology business, you can't avoid it.
It's too complicated a situation to say someone is to blame. Every other technology vendor had the same opportunity as Microsoft to transform itself thru the net boom. The stream of opportunities is well documented in the back issues of this column.
The rest of the industry, in my opinion, isn't victimized by Gates. Those of us outside Microsoft can only win by leveraging off each other's strengths and by taking big tranformational risks.
PS: FUD stands for Fear Uncertainty and Doubt.