#43 - Welcome, __________. Seriously.
I blame it all on Apple.
In the late 1970s, the PC industry was just beginning to bloom, and Apple, with Steve Jobs still at the helm before he got ousted, was betting big on its new Apple II PC to take the market by storm. Then in 1981, IBM entered the PC market, confident that it would be the one to win it all. After all, IBM had absolutely dominated the mainframe market, and the saying at the time was that “Nobody ever got fired for buying an IBM.”
IBM was the dinosaur, Apple was the fly, and Steve Jobs was furious. He immediately went out, bought an IBM PC, and took it apart—did it have the craftsmanship of an Apple? Was it user-friendly like an Apple? Will IBM win out? According to the Apple team’s first impression, the answer to all these questions was a resounding no. As Walter Isaacson wrote in his biography of Jobs, the Apple folks called the IBM PC a “half-assed hackneyed attempt” at a PC. Then, Jobs and Apple, brimming with “cheeky confidence,” had this marketing idea: Wouldn’t it be funny and ~cool~ if we backhandedly humiliated IBM by taking out a full page ad in the Wall Street Journal “welcoming” IBM to the PC industry? And so they did.
Yes, it must’ve been funny for Apple when it posted the ad, but it also must’ve been funny for IBM when its PC sales immediately sky-rocketed, far eclipsing sales of the Apple II. Indeed, Apple lost, notwithstanding its full-page ad. In Isaacson’s words, “Apple became cocky, not realizing that corporate technology managers might feel more comfortable buying from an established company like IBM.”
In fact, Apple actually lost doubly bad. Not only did IBM PC sales far outpace Apple PC sales, but Microsoft was actually the one that ended up eating everyone else’s lunch. IBM, looking to get PCs on the market ASAP, decided to use Intel’s processors and Microsoft’s DOS operating system (since they were more readily available). Over the next 20 years, it would actually be the operating system (i.e., Microsoft) that would capture the majority of the value in the PC value chain. Everything else, including the Apple and IBM hardware, became commoditized and modularized around the operating system.
In short, Apple “welcomed” IBM at the door. IBM PC sales took off. Microsoft stole the show. And Apple was eventually thrown out of the party.
I’ll just come out and say it: I’m not a big fan of these “Welcome, ______. Seriously.” posts. I’m willing to cut Apple some slack since it was the first to do it, and I guess it must’ve been cool or funny back then. But ever since then, this edgy marketing tactic has been copied over and over again. Now it’s trite and cringe, and to make things worse, the companies writing these posts haven’t exactly been super successful against the incumbents they’ve been “welcoming.”
In June 2015, music streaming service Rdio responded to Apple Music with a “Welcome, Apple. Seriously.” post on Twitter. Rdio went bankrupt by the end of the year.
In November 2016, Slack responded to Microsoft Teams by taking out a full-page ad in the New York Times “welcoming” Microsoft as a competitor in the enterprise communication space. Less than three years later, Teams passed Slack in daily active users. Slack CEO Stewart Butterfield is now back-tracking and saying that Teams isn’t a competitor at all. In the months after Slack went public in 2019, its stock price tanked to ~50% of its high while Microsoft’s stock kept going up and up. And, Salesforce recently announced that it would be acquiring Slack, giving Slack a much-needed boost to compete more effectively against the likes of Microsoft.
Now, a couple weeks ago, Substack’s co-founder wrote a post titled “Welcome, Facebook and Twitter. Seriously.” after Twitter acquired Revue and Facebook was was rumored to be entering the paid newsletter space. Only time will tell whether Substack can win out, but if the track record of company success after a “welcome” post is any indication, it’s not looking great for Substack. Yes, obviously, the data is extremely limited, but at least let me get away with saying that these posts don’t necessitate success, and they’re just personally exhausting.
All of these public welcome proclamations say the same kinds of things: This is a huge, important opportunity, so try not to screw it up! We were here first, thank GOD you finally realized this is something worth pursuing! Here’s how to succeed in this space (and by the way we don’t think you’ll be able to do it, because ~disruption~)! We’re not going away anytime soon! Good luck!
It’s all just so cringe. On one hand, it could be thinly-veiled condescension. On the other, it could be cowardly false courage, like when you’re a kid and you think there are monsters in your closet and you unconvincingly whisper to yourself, “It’ll be okay…” while you simultaneously shit yourself. So arrogance or insecurity, pick one.
Okay, listen, I kinda’ get it. When a well-capitalized incumbent comes after your business, it’s a big deal, and you’re probably not happy about it. But what is writing a public post or taking out a full-page ad on the New York Times going to do for you? Why not just write something internally to your employees? Will going public with your feelings bring you more customers? Earn you stronger customer good-will? Help your team execute better? Maybe, I guess (???), but my gut tells me no. Of course, I unfortunately don’t have any hard empirical metrics, but I reiterate that making these public proclamations doesn’t necessarily mean you’ll crush the incumbent… just look at Apple (in PCs), Rdio, and Slack.
Could these public proclamations actually be net negative? Well, on a micro-level, probably not. Maybe you have a few people like me who think it’s cringe, so we cringe, write a post about it, and then move on with our lives. I still enjoy Substack, so it’s not like I’m going to leave, or at least not until competitors build something better. Maybe the post draws attention to the competitor’s new product, so the post becomes counter-productive? Plausible. But I think the best argument that these public proclamations are actively bad is that they could be reflective of a losing culture. Again, I’m not so sure since I have no metrics, but it makes intuitive sense: The way to beat a rich incumbent is to build a better product. But instead of focusing 110% on building a better product, the leaders feel the need to post something publicly (again, out of either arrogance or insecurity). The leaders, through their actions and principles, establish the company culture, which trickles down to the employees who are actually building the product. So, I wonder the extent to which these “welcome” posts cause employees to fix their attention and value on public peacocking rather than private execution.
I personally think that the proper way to deal with incumbents is to focus internally. I’m always struck by this story of Mark Zuckerberg when Google entered the social media space with Google+. He didn’t write a “Welcome, Google. Seriously.” marketing post for the world. Instead, he gathered all the Facebook employees around his office for a speech. Here’s the story as told by early Facebook employee Antonio García Martínez:
[Zuckerberg said,] “You know, one of my favorite Roman orators ended every speech with the phrase Carthago delenda est. ‘Carthage must be destroyed.’ For some reason I think of that now.” Zuckerberg’s tone went from paternal lecture to martial exhortation, the drama mounting with every mention of the threat Google represented. The speech ended to a roar of cheering and applause. Everyone walked out of there ready to invade Poland if need be. It was a rousing performance. Carthage must be destroyed!
Zuck put the whole of Facebook on “Lockdown.” It was wartime. Employees hunkered down, worked nights and weekends, and eventually beat Google+ to the dirt. No public proclamations. No angst nor cringe. All business.
📚 What I’m reading
Why did I leave Google or, why did I stay so long? Reflections from the founder of Waze. (Noam Bardin)
How timeless is timeless advice? (John Luttig)
Statement on New York Times article. The New York Times article on Scott Alexander finally came out, and here is his very fair response. (Astral Codex Ten)
Clubhouse’s inevitability. (Stratechery)
The false and exaggerated claims still being spread about the capitol riot. (Glenn Greenwald)
The corruptive force of AI-generated advice. (arXiv)
The U.S.' vaccine rollout is world-beating. (Noah Smith)
An interview with Bill Gates on climate. (MIT Technology Review)
Finally, thanks to video enhancement technology, we can now enjoy Rick Astley’s Never Gonna Give You Up in 4K resolution at 60 fps: