How to lose 90% of your customers in 5 years?

How to lose 90% of your customers in 5 years?

In 1995, Netscape Browser was the best browser. I remember talking with my friend Andrew who had the idea to bring this business solution into Asia. 

1995: 90% market share

1996: 86%

1997: 51%

Netscape didn't just lose; they committed suicide. They had a 90% market share. And they threw it all away because they forgot the most important rule: Focus on what the customers want.

Here's how they blew it:

1. The Rewrite Trap: 

This was their biggest error. They re-wrote their code, meaning they stop new releases for 3 years to "clean up your code". While Netscape was busy, the world moved on. You don't win by being perfect later; you win by being better right now.

2. Software Bloat: Turned a browser into a "suite" of emails, newsreaders, etc. Became slow & buggy. Users want a tool that works.

3. Wrong Business Model: Trying to sell when the competitors were giving it for free. Microsoft realized the browser wasn't a product; it was a feature of the operating system. Google's free browser was a door to their world of fast searching and apps, while profiting from ad revenues. 

By the time Netscape realized they were in a fight, the fight was already over.

It's been 30 years. Has successful startups learnt this lesson? Or are they still bragging about their 1st-mover advantage that gave them a major share of the market (for now).

1st-movers in the past:

1. 1st successful PDAs: PalmPilot 1000(1996). 

2. 1st digital music player: MPMan F10. 

3. 1st digital camera: Kodak 1975.

These companies don't exist today. 

Marc Andreessen, Netscape cofounder: "Netscape will soon reduce Windows to a poorly debugged set of device drivers". this quote didn't age well..