Thursday, December 19, 2024

Technology Platform "Chicken and Egg Problem"





If you come out with a new hardware or software platform (like a new chip or new operating system), customers will not want to buy it unless it has a lot of useful apps.

App developers, however, won't write for your platform unless they see values, in terms of many customers.

Almost 25 years ago, Joel Spolsky wrote about this problem (https://www.joelonsoftware.com/2000/05/24/strategy-letter-ii-chicken-and-egg-problems/), and he feels that the solution to consider is backwards compatibility.

In other words, you spend a lot of time figuring out how your system will run apps from the current popular platforms.

For example, Microsoft DOS got established on IBM PCs because it offered backwards compatibility to CP/M, the operating system in use at the time, which had Word Star, a popular word processing application.

Also, competitors to Intel's x86 chips did not make any progress until they made their new chips capable of emulating x86 chips.

Spolsky also mentions the case of early, online bill payment services. The ones that succeeded offered "backwards compatibility" for merchants that weren't directly enrolled with them. They simply provided a mailing address where customers could have their bills forwarded, where they were manually scanned and uploaded.  It was tedious but, once they got a critical mass of customers, they could go back to the merchants and show them how much they can save by not having to mail paper bills.

© 2024 Praveen Puri