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😇This assumes that 85% market penetration is achieved in five years

85%?? When you start with these kind of assumptions the rest of math doesn't matter.




The 85% is not pulled out of a hat, it's an empirical number that's been used people like Geoffrey Moore of The Gorilla Game fame. What's the market PENETRATION of footwear? I would guess very close to 100%. BTW, the 85% does not apply to a single vendor but to the technology, the reason the table has five columns with increasing market SHARE by one supplier of the technology.

The five year figure IS pulled out of a hat! That's the number that should have set off your alarms! 😇

But there is a reason for it. SaaS/Cloud is a business model that allows for very fast implementation. Let me go back to my IBM sales rep days in 1963. You had to make the sale. Once the contract was signed IBM had to teach the client's staff to program. They then had to write the software for their company. The client had to build the computer room, air conditioning, power supplies, false floors, etc. If everything went smoothly, nine months after the sales contact was signed the computer was delivered. Then the client had to be nursed through the implementation. Now the client already has PCs and trained operators, all they need to do is connect to the suppliers URL (OK, so I skipped a few details). The point is that cost and time to implement has shrunk very much like the size of transistors has shrunk. Today many systems have over 10 billion transistors. Had I proposed a system with a million transistors in 1963 they would have carted me off to the loony bin! Yet I would have been short by FOUR ORDERS OF MAGNITUDE.

Ray Kurzwei said that not only are things happening ever faster but that time itself was accelerating. My point is that SaaS/Cloud is now so easy to implement based not only on the product/service offered but also on the in-house technological expertise at the customer, that the "S" curves are going to become very compressed in time. The 5 years to 85% market penetration implies that the technology has a lifetime of around 15 years based on old empirical data. I believe that the three equal time durations of the "S" curve will change making the initial take up and the later cash-cow segments longer and the middle fast growth will be steeper and shorter. Using that model, the 5 years to 85% market penetration gives the technology has a lifetime of around 25 years. How long do you think Saul's SaaS picks will be around? Five years? Ten years? Disruption will happen ever faster.

Denny Schlesinger



Transistor count https://en.wikipedia.org/wiki/Transistor_count
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