Customers aren't so stupid after all

James Coplien said some rather dramatic things at last week's ACCU conference, among them the following:

There's a pressure that unless you're one of the first three players in the market you don't have a chance," said Coplien. "Quality is suffering for time--people pay money for the first, not the best. It comes down to the fact that consumers are willing to put up with crap systems that crash all the time.

On the one hand, he's partly right. The first mover in a market dominated by network effects (which the software market clearly is) has the best chance of staying the course, as the value of a product in such a market is based on the number of people using it, which favors the first-to-market. I wouldn't say second or third movers don't have a chance (Linux seems to be doing fine, and it wasn't a first mover), but it's certainly harder than if I were to sell oranges at the local farmers market.

I object to the implicit value judgment made in the second part, though. Consumers wouldn't bother to buy a first-mover product if they didn't decide they needed it. What if they can't afford to wait? Should victims of a natural disaster turn down the prepackaged emergency rations until someone managed to ship in fine cuisine from restaurants in Paris? Is there simply no value in getting a product early? Year one of a new car line often has more problems than year three or four. Should consumers refuse to buy until later years? Furthermore, wouldn't that cause year three or four of said car line never to appear?

Consumers aren't stupid. They buy the "best" in the sense that a particular product best meets their needs. Betamax was best from a technical standpoint, but that ignored the network effects of easy access to movies, compatibility across product lines and better range of options. That made Betamax worse in a holistic sense. Betamax might appear best to those who consider technical features of paramount importance, but worse in terms of all the things that matter to regular consumers, many of which have little to do with the technology used by a product.

Security is certainly important, though, and consumers appeared late to realize that. Then again, the market did change, and the reason for that change was the Internet. Non-networked systems have less risk from security issues. Not zero risk, mind you, as anyone who ever caught a virus from a floppy disk in the early 1990s can attest to, but a low enough risk threshold as to make security less important.

Today, Microsoft spends billions on security, even to the point where they yank developers off of the critical Longhorn project in order to release an update for Windows XP. Consumers made them do that, because security has become important to them.

See, consumers aren't so stupid after all.