Getting a head-start

I was thinking about saying something about privilege (e.g. racial), but the engendered discussion tends to be somewhat… acrimonious. So instead, I’m going to talk about iPhones.

Western capitalism is purported to have two fundamental principles: egalitarianism (equal opportunities) and Darwinism (survival of the “fittest”). What’s not so clearly stated, is the way these principles conflict when you add momentum to the mix.

(All data sourced from wikipedia – it doesn’t matter if it’s not precise, the general trends are what I’m interested in)

Taking smartphone operating systems as an example, one can see both the success and the failure of the “free market” approach. Observe this graph of smartphone market share over the last few years.

Smartphone market share %

Initially (circa 2007), Symbian, Windows Mobile, and Blackberry ruled the roost; then the iPhone was released, closely followed by Android phones. They proved “fitter” than the incumbents, and so took over. You can argue about whether iOS or Android is better, but—as happened with Macs and PCs—less hardware restrictions has led to a bigger piece of the pie.

Other systems have tried, and generally failed. Even with the might of Microsoft* or Samsung behind them, they haven’t taken off anywhere near as well as the big two. You may argue that this shows they were “less fit”. It’s probably a fair assessment that Bada 1.0 was not as good as Android 2.2 Froyo (the most recent version when the first Bada phone was released), but it hadn’t been through eight versions/patches. It may well have been better than Android 1.0, but that didn’t matter because the “ecosystem” had changed by then.

iOS and Android took over because they did some things significantly better (to lapse into business-speak, they were revolutionary rather than evolutionary). I don’t know exactly what those things were, but it shows that the market is not as egalitarian as some would have you think.

It’s the same for a lot of different businesses; anyone may have the same opportunities to enter a particular market, but the same amount of effort will not lead to the same amount of success. Suppose two companies start producing a new widget—something completely new, never seen before. Company A is a start-up, whereas company B is a well-known multinational who have made decent quality gizmos for years. Regardless of the relative quality of company A’s widgets and company B’s widgets, company B can use pre-existing infrastructure and branding to create, market, and distribute, whereas company A is starting from scratch. Company A’s per-widget costs will be greater, and they don’t have the safety net of a strong trade in gizmos to fall back on. Company A cannot compete, and soon folds (or, if they’re very fortunate, gets purchased by company B).

Given such prospects, isn’t it reasonable for a government to invest in start-ups and other small businesses? The existing companies have such a head-start that to not do so would be to abandon small businesses to the Darwinian ferocity of market forces. And the world would miss out on a lot of new perspectives and innovations.

I leave readers to draw the intended parallels. 🙂

* Note that I’ve combined the figures for the Windows Mobile OS (which largely came from PDAs) and the more recent Windows Phone (as the latter superseded the former).


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