Back when I was an equity analyst one of the favorite put-downs I would hear from portfolio managers was for them to sniffingly say, “What’s to prevent Microsoft from doing that?” It was an all-purpose way for a PM to kiss off any software company whose stock I was flogging, a way of saying “No” without denying that maybe the company’s stock was currently cheap.
Near as I can tell, people don’t do that much any more. While I’m not out flogging stocks (thank God) any more, I am in a lot of pitch sessions from early-stage companies. Many of those firms are in software, but it is increasingly rare for someone in the meeting to invoke the unholy wrath of Bill Gates and mighty Microsoft when dismissing a company’s prospects.
Does that mean everyone gets funded? Of course not. Now people just invoke Google — to the word. Just last week I was in consecutive meetings where two different people asked/told two different entrepreneurs, “What’s to prevent Google from doing that?”, which pretty much ended the meeting.
Lest anyone think that these were both search companies, they were not. One was in a search-related space (advertising, if you must know), but the other was a pure & speedy online app in the Ajax sense of the word. Trouble is, Google is getting a rep for doing good Ajax apps, so ….
What is interesting about all of this, of course, is that neither Google nor Microsoft are market-beaters in every category in which they now (or could) compete. It is just lazy rhetoric that has people using Microsoft and, increasingly, Google, to say No without having to do any deep thinking about markets, competitiveness, and technology advantage. Because Microsoft couldn’t do every “that” succesfully then, and Google can’t do everything now.