Before I came out to California to work at Yahoo, I watched the business and culture of Silicon Valley from a distance. I read lots of the trade rags, tech web sites, and books about early Internet companies (the Netscape era).

One of the things that amazed me about Internet companies (usually the portals) was how quickly they built things and were able to react to each others moves with frightening speed. Company X would do something amazing and new only to be leapfrogged by Company Y just a few weeks later.

They were putting on one hell of a show and it was all amplified by the crazy bubble of the late 90s. I loved it.

The tech and business press would say things like "in response to Company X, Company Y has just..." or "in an effort to defend their business from Company Y, Company X today launched a new..."

I saw headlines like that all the time and still see them today.

Today there's one important difference: I'm on the inside now. For the last five and a half years, I have had a front row seat to the inner workings of what I used to imagine (with the help of a small army of journalists and reports).

Now I see it first hand and hear about it from coworkers and friends at other companies. And you know what? It's even more insane than it looked from the outside.

So I'm going to let you in on a little secret about how products are developed at large companies--even large Internet companies that some people think are fast on their feet.

Larger companies rarely can respond that quickly to each other. It almost never happens. Sure, they may talk a good game, but it's just talk. Building things on the scale that Microsoft, Google, AOL, or Yahoo do is a complex process. It takes time.

Journalists like to paint this as a rapidly moving chess game in which we're all waiting for the next move so that we can quickly respond. But the truth is that most product development goes on in parallel. Usually there are people at several companies who all have the same idea, or at least very similar ones. The real race is to see who can build it faster and better than the others.

Think about this the next time a news story makes it sound like Yahoo is trying to one-up Google. Or MSN is "responding" to last week's launch of a new AOL service.

It's easy to get caught up in the drama of it all. But reality is often quite different than what you read.

As a side note, I'm sure this is even more true in the world of hardware and consumer electronics. But I have no direct experience with that world.

Posted by jzawodn at June 08, 2005 07:08 AM

Reader Comments
# Charles said:

I remember attending a lecture on product development given by a high level executive at Apple, back in the Sculley days of the mid 1980s. He talked at length about "predictive reaction." He said it took so long to develop new products, two years minimum, so there was no way to react to your competitor's products without a 2 year lag. The only logical way to compete was by predictive reaction, you had a team of people predict what the competition was going to release in 2 years, and then you planned what you would need to release yourself to compete with that.
This was when I knew Apple had lost its way. You can't compete with the future. You have to compete with yourself, you have to produce the best products you can make today and hope that nobody else can compete with YOU.

on June 8, 2005 08:00 AM
# emad said:

I only partially agree with that statement. I agree that larger companies usually don't respond as quickly as others think...but they can sometime respond quicker than smaller companies just based on engineering manpower (once the product is well defined).

Additionally, many of these companies have employees that tend to talk to each other or these companies will take actions that imply they are headed down a certain path. This usually serves as a heads up for the other companies. It is not uncommon to also have company CEOs talk about upcoming products that develop a buzz around it, causing other companies to take a reactionary role well before the product is released.

on June 8, 2005 08:22 AM
# Alex Moskalyuk said:

Jeremy, what's the project/product management process at yahoo! If you feel like a certain area of your product needs improvement, do you talk about it with the manager, or just go ahead and work on it? Or what's actually going on behind the scene when a new product from competitor arrives? Do you have a meeting with management and decide on a strategy?

on June 8, 2005 08:37 AM
# Timboy said:

I totally agree with Jeremy here --- it's always amusing to see stories like "On Monday, Y launched X, and on Tuesday G tried to play catch-up by launching their own imitation of that service." Yes, these companies move as fast as they possibly can, but no one is getting paged in the middle of the night because they must develop and launch a desktop search/mapping/social-networking product by the following afternoon.

This all does have one funny implication, though, which is that a two-day difference in the launch date of your long-awaited project may radically affect the type of press coverage it gets.

on June 8, 2005 09:06 AM
# Marcel said:

To win you obviously need intelligent manpower.

If you not hiring the most intelligent, innovative and motivated, get ready for a long long wait at second place.

on June 8, 2005 09:08 AM
# Tim Converse said:

Another way this unrealistic view of product dev expresses itself is with regard to acquisitions. A company will announce that they have acquired another one, with the intent of integrating their products; within a week or so, you will begin to see blog postings and comments wondering why the product integration hasn't happened yet ...

on June 8, 2005 09:10 AM
# Jeremy Zawodny said:

Tim: Yeah, that cracks me up too.

I remember seeing "Where's the Flickr integration?" when Y! 360 launched.

on June 8, 2005 09:51 AM
# jr said:

You know what makes me smile?

I love the fact that quite often the "team" of people actually responsible for some amazing piece of doo-wizardry can often fit into a phonebooth.

Folks often have this concept that some of this stuff requires hordes of people working non-stop, when quite often, it's just a team of four or five bright folks working together to get something done.

Sure, there are lots of other folks working on different things, that may have some benefit to that group, but generally there only peripherally linked in. So when you think about the fact that some of that amazing stuff was the product of a small team over the course of a few months, you really start to understand what companies like Yahoo, Microsoft, Ask and Google are capable of doing.

And what they're not capable of doing.

on June 8, 2005 02:29 PM
# Adarsh Bhat said:

Are we talking about Marissa's Company X and Jeremy's Company Y? ;)

on June 9, 2005 06:05 AM
# Mike said:

I have a friend that is a reporter that often *jokes* that the details shouldn't get in the way of a good story.

on June 10, 2005 09:11 AM
# rostiks said:
on April 17, 2006 02:17 AM
# Liz Lawley said:

So, Jeremy...if you believe what you say here, it's a little hard for me to understand your snarky little "typical microsoft: copycats" annotation in today's linkblog. Do you _really_ think that QnA was conceived, developed, and rolled out in response to Yahoo's product?

on May 5, 2006 10:54 PM
# Jeremy Zawodny said:

My Korean is a bit rusty, which is to say that I don't know any, but I do know that it's the first market in which we launched our Answers product (called "Knowledge Search").

According to the Wayback Machine, that was live roughly 3 years ago:*/


So, yeah, I rather hope that Microsoft managed to pull this off in the timeframe of about 3 years. If it took longer than that, shame on them. It means we have an easier future than I imagined.

Gratned, it apparently took Yahoo a while before deciding to bring it to the US market, but that doesn't change the fact that it was quite successful on its own as an alternative way to search for information on the web. The writing was on the wall.

I suppose you could try to make the argument that Microsoft wasn't paying attention to competition in international markets, but I find that hard to believe. Having been part of a global internet company for a few years now, I know that we all have good competitive tracking that really isn't limited to any single market. It's a global playing field and we all know that: Witness the recent activity in China.

All that aside, I'm surprised that someone is putting that much emphasis on a half-assed comment in my linkblog--you know, the list of stuff that is, shall we say, rather "uneven" in editorial quality. :-)

I'd put smileys on the entries if I dind't think it'd get old after seeing them day after day.

on May 6, 2006 06:53 AM
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