The Paris Hilton problem

Joel Spolsky has an article in Inc describing the tension between growth and quality at his company. The issue is, if your competitor is outgrowing you, their dominance might become self-fulfilling: customers prefer a safe choice, and the safe choice is what other customers are buying. Even if your product is better, nothing attracts a crowd like a crowd.

Your competitor begins to look like Paris Hilton: famous for being famous.

It’s easy to see this as a simple narrative of quality vs quantity. The little “bespoke” software developer focuses on the customer while the big, ugly product runs away with the market. But it’s not as simple as that, and the reality might depress you.

Joel doesn’t quite get at it, but it makes the Paris Hilton problem even more deadly: a by-product of market dominance is that you are relieved of the demands of customer service.

An ecosystem will grow up around the market leader’s product. And that ecosystem will fill in the gaps that the mothership can’t fill. So your little-guy advantage (caring! listening!) can be eclipsed as well.

Thus the slow-growth conundrum becomes even more dangerous: the market leader wins on both speed and quality. Perhaps this is why so much of the technology industry is winner-take-all.