Page 83 - The Bootstrapper Bible

ChangeThis For many companies, Microsoft is a great example of a bad customer. Microsoft frequently wants to buy products for its suppliers that the rest of the industry doesnʼt think are all that good. Microsoft also has a habit of learning from its suppliers and then either swallowing them up or replacing them with its own technology. For many companies, Microsoft is a great example of a bad customer. Microsoft frequently wants to buy products for its suppliers that the rest of the industry doesn’t think are all that good. Microsoft invested (and lost) more than half a billion dollars in building its first two genera- tions of online products (called the Microsoft Network, or MSN). The people behind MSN had an incorrect, but very confident, view of exactly what they wanted. Now, Microsoft can afford to lose half a billion dollars experimenting online. But in the process, it wiped out dozens of businesses. Each of these bootstrappers had signed up to do Microsoftʼs bidding. Microsoft was so de- manding that for many of them, it was their only customer. And the deals were structured so that the profits, if any, came at the back end, not up front. When it was clear that the MSN wasnʼt going to make the Microsoft executives happy, they just changed direction. and wiped out whole sections of the online service in one day. And while they lived within the boundaries of their contracts, they also left their suppliers holding huge investments with no prospect of ever earning their money back—no one wanted what Microsoft had dreamed up. | iss. 6.01 | i | U | X | + | h 83/103 f