Slow Growth = Slow Death?

Oracle Rapid Rise
Oracle Rapid Rise

Fantastic post today by Joel Spolsky Does Slow Growth Equal Slow Death?

I could feel Joel’s pain. Essentially he was jettisoning the basic premises that had guided him for a decade. Joel came to the painful conclusion that there was only room for one big company in his market, and that if he continued only growing by a responsible and impressive 50% annually, his competitor would take the market.

For the longest time, I smugly thought: We’re profitable, our sales are rising, we make terrific products, and our customers love us. So what do we have to worry about?

Then I came across a quote from Geoffrey Moore …  in Inside the Tornado, Moore writes about the great battle between Oracle and Ingres in the early 1980s. The winner of that battle is well known: Oracle now has a market cap of more than $100 billion, and I’ll bet you’ve never heard of Ingres.

“What set Oracle apart from Ingres,” Moore writes, “was that [CEO] Larry Ellison drove for 100 percent growth while Ingres ‘accepted’ 50 percent growth.” Executives at Ingres meant well. According to Moore, they felt that the company “simply cannot grow any faster than 50 percent and still adequately serve our customers. No one can. Look at Oracle. They are promising anything and everything and shipping little or nothing. Everybody knows it. Their customers hate them. They are going to hit the wall.”

Of course, Oracle overcame those concerns and eclipsed its rival. And this got me worried. Were we Ingres?

Not every market rewards the fastest company to critical mass. And sometimes the company that reaches critical mass first (Geocities, MySpace) can’t hold it. And I think Spolsky is panicking a bit and reaching some uncharacteristically (for him) mediocre conclusions.

In the post Spolsky was talking about his excellent FogBugz software, which we use and enjoy (as much as one can enjoy bug tracking software). But I wonder how this point applies to his niche Q&A sites like Stack Overflow. Will there be a winner in the Q&A space? Will the Oracle (and I’d say Wikipedia) model hold there? That is, do you achieve critical mass with high quantity and keep working feverishly to get the quality to catch up? Or do you grow slowly with high quality working in tight knit communities? Will the Q&A space always live according to Spolsky’s “Google is our site’s homepage” rule, and if so, does that make it easier for many players to co-exist?

Spolsky’s post is provocative. If it’s true, the winning move in the Q&A space is to continue growing as fast as we can, while killing ourselves to keep increasing the quality.

What do you think?