Will Google+ Succeed, or Pull a “Zune”? The Questions to Ask.

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I don’t know whether Google+ will succeed or not, but I have an idea about how to find out. The reason so many pundits will miss-predict the success or failure of Google+ and so many other new products and services, is that they will be asking the wrong question. The question everyone wants to ask about Google+ is “is it better than Facebook?” The problem is that the answer is usually irrelevant. It’s the wrong question. As the famed author Al Ries likes to say, “It is better to be different than to be better.” Better products almost never win unless they are first in the mind of the marketplace. You can’t “out Facebook” Facebook, you can’t “out Twitter” Twitter, and you can’t “out iPhone” the iPhone. But every company tries, and tries, and tries. (Except Apple, but that’s for another blog post.) For a great list of failed attempts to be “better,” look no further than Microsoft and Google.

When YouTube became popular, Google launched Google Videos. Was it better than YouTube? Didn’t matter. In order to win it would need to be DIFFERENT than YouTube. It wasn’t. It didn’t succeed and they ended up buying YouTube for $1.65B. When Second Life became popular, what did Google do? They launched “Lively.” Was Lively different than Second Life? Nope. Thus, it failed and was discontinued. Was it better than Second Life? Doesn’t matter. It wouldn’t have made a difference even if it was. When Twitter became popular, what did Google do? It launched Buzz. Another failure.

Maybe Google’s Orkut was better than Facebook or the old MySpace, maybe the Microsoft Zune was better than the iPod, maybe Google Voice was better than Skype, and maybe Google Checkout was better than PayPal. Many of them probably were, but they failed anyway.

To understand why, let’s look at the options that face a high-tech company when a market they are not in really heats up. Let’s take digital music players. When the iPod took off, Microsoft was seriously bothered that someone was making lots of money in a market that they were not in. Any company in that position has three options:

Option #1 = Pick up the scraps left behind by the leader
-This strategy can work, but only if you are comfortable in the ultra-low-margin business of making knock-offs of market leading products. This works better in hardware than in software or online, and none of the tech titans can settle for the scraps, so they follow option #2.

Option #2 = Leapfrog the leader
-This is very, very, very difficult to do in the marketplace, even if it can be done technologically. To “leapfrog” something assumes you can not only jump high enough to get over it technically, but also create the mindshare and behavior change in the marketplace to put you in the lead. The difficulty is that while the product or company you are trying to jump over may be tiny in the total marketplace, they are an ELEPHANT in the market that they dominate. Google may be an elephant in online search, but they are more of a mouse in voice calling (compared to Skype), online video (prior to acquiring YouTube), micro blogging (compared to Twitter), social networking (compared to Facebook), online payments (compared to PayPal),  virtual worlds (compared to Second Life), etc. Leapfrogging any of those companies is going to be very, very difficult. Being an elephant in search and having almost unlimited money still doesn’t enable Google to magically leapfrog whatever they want. If your competence and mindshare in a given market is more mouse-size, then the leapfrog approach just isn’t going to work. So what is Microsoft or Google to do when they find themselves in this position? That’s where Option #3 comes in.

Option #3 = Be different
-Whatever the incumbent is doing, do exactly the opposite. Take side roads, use different approaches, offer a perhaps loosely competing product, but in a way that is very unique to you and to the market. Option #3 has the highest chances of success, but unfortunately it isn’t a panacea, as you have to be different in a way that is valued by the marketplace. The temptation to copy a successful competitor is so strong because you KNOW the marketplace wants what they have. But that doesn’t mean you can win market share just because you can duplicate the product and value proposition. To win you have to be different, but being different means a value proposition that may not be tested in the market, so it is a lot harder to convince internal management to pursue Option #3. Google Wave actually seemed to be different from anything else out there, but unfortunately, the underlying value proposition just wasn’t compelling to the marketplace. At least it had a lot better chance of success than Google Videos, Lively, Buzz, Orkut, Checkout, or Voice.

Back to Google+. It is unlikely that people will switch from Facebook to Google+ for things that they can do at any level in Facebook. So the real questions to ask are, “How is Google+ DIFFERENT from Facebook in ways that allow me to do things that I absolutely can’t do in Facebook?” and, “Do I care enough about doing those things to make me switch?” If Google+ just isn’t that different (and it would need to be extremely different to succeed), then Google is again following Option #1 and will likely fail here again. If it is truly different and unique, then the more different it is than Facebook, the greater the chance of success.
 
So what about various Google successes such as Gmail, Google Maps, Chrome, etc.? Well, there are a few situations where a product can succeed without being different from an elephant-size incumbent. These are: #1 when the existing options are second-rate to start with, and #2 when you are willing to dedicate vast resources to replacing those inadequate options without worrying about ever making any money on that product. Last time I checked, most of the incumbents Google is up against across markets offer decent products. Unfortunately for Google, that means the success they have experienced with the Gmail/Maps/Chrome strategy isn’t going to work in most markets.

In response to my perspective, some of you may say “what about Android?” Android came out battling the iPhone—obviously the elephant in the market—and Android is doing very well. I would argue that this is a great example of Google being different. Android gave consumers a choice of handsets (versus just one iPhone option), an open platform (the opposite of Apple’s closed platform), and Android is basically the opposite of the iPhone in numerous other ways as well. Is it “better than the iPhone?” Again, this question is irrelevant. Android is very different, and since it still delivers on the basic value proposition of any smartphone, it can probably succeed even if it isn’t “better” than the iPhone.

Nothing is more powerful than being different. It is a lot harder to be different than to be better, and on the surface it seem riskier to be different, but comparing the track records of both approaches, I’d take the odds of being different every time.