1/ Thoughts on the Myth of the "First Mover"

This thread by @danrose stirred something I've been thinking about for a while - the myth of first mover advantage

To this day, most people assume Amazon Web Services was the first cloud computing service. This isn't quite true

2/ At its March 2006 launch, AWS was probably the 4th or 5th cloud service run by a Fortune 500 firm

HP launched its Flexible Computing Service in Nov 2005
Sun Grid went into beta in 2004
IBM launched "Linux Virtual Services" in 2002!

But AWS is the only one anybody remembers
3/ I'll focus on IBM here -

From the WSJ in *2002*: "Linux Virtual Services allows customers to run their own software on mainframes in IBM data centers and pay rates based largely on the amount of computing power they use"

https://t.co/mnKH8dF6IL

Sounds like the cloud to me!
4/ Origin stories of AWS often cite how Bezo's uncanny prediction of computing becoming a utility, like an electric grid

But Bezos didn't invent this analogy - it was widespread by the early 2000s. Here's Lou Gerstner saying the same thing in 2003
5/ So why did AWS succeed while IBM did not?

IMO there are no good explanations online. IBM LVS was quietly shut down in 2005-06. The exact date is unclear

Answering this became a personal project for me at Bernstein. I ended up cold-calling multiple former IBM product managers
6/ The short answer: the innovator's dilemma

IBM LVS never achieved product market fit. IBM tried selling it to existing corporate customers. They didn't want it

And IBM's own incentives were misaligned - salespeople didn't want to cannibalize existing accounts
7/ In contrast, Amazon had no existing IT customers to cannibalize. They had to sell AWS to someone, or they wouldn't get paid

That's how to found their first best customers: independent software devs and startups, paying by credit card
8/ The cloud was ultimately adopted bottoms up, not top down. AWS laddered up to enterprise customers from there

The result is 14 years later, AWS is a $50B business growing 30% a year, while IBM is a $70B business shrinking 3% a year
9/ What's the lesson here?

Being a first mover is overrated. Predicting the future is easy - plenty of people understood the future of cloud computing, even in 2003

The hard part was everything else. Timing matters. Execution matters. Incentives matter. Luck too!

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A THREAD ON @SarangSood

Decoded his way of analysis/logics for everyone to easily understand.

Have covered:
1. Analysis of volatility, how to foresee/signs.
2. Workbook
3. When to sell options
4. Diff category of days
5. How movement of option prices tell us what will happen

1. Keeps following volatility super closely.

Makes 7-8 different strategies to give him a sense of what's going on.

Whichever gives highest profit he trades in.


2. Theta falls when market moves.
Falls where market is headed towards not on our original position.


3. If you're an options seller then sell only when volatility is dropping, there is a high probability of you making the right trade and getting profit as a result

He believes in a market operator, if market mover sells volatility Sarang Sir joins him.


4. Theta decay vs Fall in vega

Sell when Vega is falling rather than for theta decay. You won't be trapped and higher probability of making profit.