It's hard to build a customer base when Facebook can just come in, copy you, and corner 95% of the market on the day they release.
This is the exact same advantage that Microsoft had in the enterprise market. Sure, competitors could release enterprise products and have some success, but if Microsoft decided to copy you, they had an army of enterprise sales agreements already in place and would eat 50% of the available market in the first year. The network effects of their enterprise sales channel -- which existed at nearly every company in the world thanks to the ubiquity of Office documents -- made it very, very difficult to compete with them for a long time.
Network effects are much stronger in the consumer space (mostly because the consumers are poorly educated about their choices, and often have little incentive to become informed). Which is why we're seeing Facebook eat the world when it comes to consumer communication platforms.
This is the exact same advantage that Microsoft had in the enterprise market. Sure, competitors could release enterprise products and have some success, but if Microsoft decided to copy you, they had an army of enterprise sales agreements already in place and would eat 50% of the available market in the first year. The network effects of their enterprise sales channel -- which existed at nearly every company in the world thanks to the ubiquity of Office documents -- made it very, very difficult to compete with them for a long time.
Network effects are much stronger in the consumer space (mostly because the consumers are poorly educated about their choices, and often have little incentive to become informed). Which is why we're seeing Facebook eat the world when it comes to consumer communication platforms.