Sometimes startups we meet with (I've personally seen over 1,000 pitches in the last two years) talk about their network effect in a hopeful way. But most of the time it is just that - hope, and hope is not a strategy. But Bazaarvoice actually has a working network effect that benefits all participants: retailers, brands that sell through those retailers, consumers that shop at those brands and retailers, and Bazaarvoice and some of its partners. In other words, the more participants that are on the Bazaarvoice network, the great the effect of that network for the benefit of all. I wrote about this in detail in my first annual shareholders letter after Bazaarvoice became a public company.
A very bad trend for Microsoft
This just cannot be good for Microsoft. I don't see how this turns around. Windows 8 and the Surface are just not getting the traction expected to maintain their monopoly. For entrepreneurs, though, this creates a lot of opportunity. It also does for Apple, Amazon, and Google, of course.
One of my favorite books is The Innovator's Dilemma and here it is in action again. I consider this a must read for entrepreneurs. It will give you the confidence to go from a perspective of "that's already been done before" to "that's already been done before and can be disrupted because of the dependency on the old order" (Who Moved My Cheese?).
Here is the full article.