Comparitive Chart: BRCD, NTAP, VRSN, BRCN, AMCC, PMCS, RBAK Important group of wireless/handheld/voice/data transfer companies and some of their 'innards' involved in gorilla and royalty games at the moment: Important mature group of client/server architecture of computing involved in a variety of games at the moment:
"The problem is everyone, and I mean EVERYONE has now read the GG theory. It seems EVERYONE still believes it. When EVERYONE believes something, that advice stops working. Always has, always will."True with any sort of 'system'. Yet, the series of books written throughout the 90's by Moore, (Crossing the Chasm, Inside the Tornado, The Gorilla Game and Fault Line), present a lot of information as to how the high technology market place works. How standards are developed, accepted and what the network effects are to the companies that have the 'fixes' for the 'broken' problems. It went on before the third book in Moore's series was written. It went on before the consulting firms in Silicon Valley became well known for guiding technology companies and their product niches. Likewise, it will go on in the future even though many know and understand a little more as to how the high technology arena works these days. There will always be broken problems requiring fixes in high technology. No book can or will change that.
Misheldo, could you nail down for me in specific terms what criteria are required for a gorilla game? Could you then list 5 current companies that are locked in a gorilla game within their specific niche and detail what standards are involved?
Even though many professional venture capitalists and investors are well aware of disruptive technologies and what the dynamics are that go on in the market place to create and address a new technology adoption life cycle, I fail to see how the advice stops working. What happened to IBM Selectric typewriters? What about the generations of computing platforms? What about the operating systems? We are well into the Web architecture of computing. 1994, 1995, 1996 and 1997 were big wake up calls to that matter. If everyone that has read all of the books understands the way high technology works, why did they miss key games to invest in throughout the 90's? Even if we go back to 1998 when the book was introduced, we were well into the Web architecture TALC.
Let's just drop back a little bit in time to when many first encountered the first edition of The Gorilla Game even though Tornado and Chasm had been out for years, to see if the advice has stopped working:
Two important young group of Web architecture platform of computing companies involved in gorilla or royalty games at the moment:
Comparitive Chart: JNPR, BEAS, SEBL, ITWO, CHKP, VRTS, CIEN
Comparitive Chart: QCOM, NOK, RFMD, ARMHY, WIND, PALM, TXN
Comparitive Chart: ORCL, DELL, PSFT, SAP, MSFT, INTC, CSCO
We can certainly see that investors who focused on only holding the mature gorillas and dominant royalty plays since the book first came out have had less success than those investors that took those principles and criteria found in the book and applied it to the newer technology adoption life cycle of Web architecture and voice/data access companies. There are other areas of technology that have gorilla and royalty games going on at the moment as well. It's a vast field of study and few can keep up with every game and do the type of research required to find and follow them all.
I imagine we could argue about each and every one of the above companies in terms of valuation, growth prospects, location in the TALC and longevity for the 'fix' they bring to the 'broken' problem. Likewise we could argue about the 'timing or entry' into each of those companies, but I simply picked the 2 year time frame since the book was widely read by many investors here at the Fool in the second half of 1998.
Of course, gorilla companies like Oracle, Microsoft, Intel, Cisco, IBM and royalty companies like EMC, Dell, Compaq, Hewlett-Packard were well into their TALC's by the time "The Gorilla Game" book hit the bookshelves. They were all highlighted in the book as to how games had played out in the past. It wasn't a recommendation to buy all of those companies, but to use the criteria and search out where new games are taking place. From the gorilla digest listserv, we've come to know this year that Geoff Moore, who has always had his money managed through professional funds, now owns shares in three IPR companies after all these years of writing books about high technology, consulting many companies in Silicon Valley and making numerous public appearances as a guest speaker. One of those stocks he owns, Qualcomm, was denied during much of 1999 on the list as not being in a gorilla game, but in a royalty game. He's since changed his views and now owns shares of the company. I just tossed that in as an interesting tidbit since I participate on that list and have read thousands of posts on Qualcomm since the beginning of 1999 on that list alone.
Understanding the issues behind a high technology game can confuse even the most well-read and studied technology investor. To think everyone has it figured out and it's a piece of cake would be far from the truth. Be it a professional investor, fund manager, venture capitalist or retail investor. It's not quite so easy and open to such flawless execution by any of these segments of investing. Not to mention, it's not quite so easy for the companies with a 'fix' for a 'broken' problem, either.
It's easy to plug into the discussion the move we saw in the markets during the past 12 months. You cited Qualcomm as an example that an investor who purchased at higher prices and held through the drop is not liking the 'game' at the moment. However, let's not confuse share price movement or the timing issue of buying at some of those highs with the underlying game going on in CDMA and third generation wireless voice/data. Well, just about every stock in technology has been 'Qualcommed' over the past 12 months. That extends to many non-technology stocks as well. Simply because of an historic 12-month period in the Nasdaq stock market occurred - it doesn't change the game of high technology. High technology could care less about stock prices. It does care about broken problems and providing solutions that fix those problems. It takes time to address the problems and fix them. It doesn't happen in 12 months.
Comparitive Chart: BRCD, NTAP, VRSN, BRCN, AMCC, PMCS, RBAK
Important group of wireless/handheld/voice/data transfer companies and some of their 'innards' involved in gorilla and royalty games at the moment:
Important mature group of client/server architecture of computing involved in a variety of games at the moment: