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First, Kill the Killer Apps
Calling the next new thing what it isIn the shimmering realm of the Internet there was no finer gold than the "killer app." The Dow Jones database of news stories from those heady days--say, from 1999 to 2000--lists more than 1,000 stories about the power, glory, and quest for the latest killer app. Jump to January 1, 2002, and killer app pops right up again, but this time on an annually published unofficial list of banished terms, compiled by Lake Superior State University. Go ahead: Kill the killer app. It may be the only way to get startups going again.Although killer app crept into the lexicon in the early 1980s, the Internet's bubble phase gave the term dangerous spin. In Unleashing the Killer App (published in 1998) coauthors Larry Downes and Chunka Mui define a killer app as "a new good or service that establishes an entirely new category and, by being the first, dominates it, returning several hundred percent on the initial investment." Many startup ventures and their investors bought into this definition. A frightening number of business plans were based on technologies alternatively described as killer apps, revolutionary, or disruptive. Microsoft's Bill Gates complained to Forbes in December 1999 that every internal proposal that reached him had a slide about why the proposed technology was disruptive. Too many business plans claimed killer apps during the Internet era, agrees Alex Gove, a venture capitalist with WaldenVC. "A lot of these companies ended up killing [only] themselves." Some professional "big thinkers" label every pivotal idea or phenomenon a killer app. Downes and Mui credit the creation of the Holy Roman Empire to the lowly stirrup, which kept Frankish soldiers from sliding off their horses in battle and gave Charlemagne's grandfather a leg up on his competition. "You gotta love the wheel," adds Nathan Myhrvold, formerly chief technology officer of Microsoft, who is now working with several startups. "Oh, and there's agriculture, and writing...." Although its precise origins are murky, most technologists agree that the first bona fide killer app was the electronic spreadsheet program, VisiCalc, introduced by Dan Bricklin and Bob Frankston in 1979. "Ben Rosen [who then wrote a computer industry newsletter and later founded VC firm Sevin-Rosen Partners, which funded Compaq Computer] described VisiCalc as the software tail that wagged the computer dog," recollects Stewart Alsop, a VC with New Enterprise Associates. Pureblood killer apps were programs so compelling that people willingly forked over several thousand dollars for a machine just to use the software. "It might be that the killer app is now an outdated concept that really only applied to the PC," muses Alsop. "The problem is," says Frankston, "you only recognize a killer app after it has become mundane." What's worse, even at their best, killer apps are not guaranteed golden geese. There are many examples of ideas that launched new industries and left their inventors collecting plaques and giving speeches but not basking on their own beaches. Based on the advice of attorneys, Bricklin and Frankston did not even try to patent their spreadsheet. (Both say they would do so now.) Netscape Communications gave away its browser, counting on revenue from licensing server software and selling "Mozilla" T-shirts to pay the bills. (They didn't.) The most poignant example comes from Mui, who is also chief innovation officer for DiamondCluster International, a Chicago-based consultancy. Much of his firsthand experience in creating a killer app, Mui says, came from the work his firm did in helping Enron develop its broadband-capacity trading program. "We created a liquid market for broadband, changing how the commodity was thought of," Mui says. "But I don't know what has happened to it now," he adds, a little sadly. In a flood of good ideas, only a few occur at the right time and have the right support to be marketplace successes, Frankston points out. "Is eBay a killer app? There were earlier auction sites, but eBay found the right combination," he says.
Sony-Ericsson Venture In Jeopardy - 8/30/02 2:41:37 PM ET Ericsson's CEO threatens to bail out if handset sales don't pick up. He might've made it worse. Mutual Fund Investors Leave The Building - 8/30/02 2:29:10 PM ET Nearly $53 billion left the funds in July. Maybe it should have stayed for the rally. America's Best-Dressed Billionaires - 8/26/02 12:00:00 PM ET Simon Doonan, Barneys New York's creative director, picks the five most stylish American billionaires. WorldCom Ex-CEO Made $11M Off Salomon IPOs - 8/30/02 4:20:56 PM ET Top current and former WorldCom execs made millions from IPOs made available by Salomon, records showed. A Win And A Save? - 8/30/02 12:15:48 PM ET Real solution or quick fix? Last-minute negotiations between baseball players and owners avert a strike.
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Market data provided by Reuters. Disclaimer Stock quotes are delayed at least 15 minutes for Nasdaq, at least 20 minutes for NYSE/AMEX. U.S. indexes are delayed at least 15 minutes with the exception of S&P; 500 which is real-time. Forbes 40 Index powered by Telemet. News may include latest headlines from Reuters. |
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