I get so annoyed when the only insight a tech reporter can write about in a product category is market share. Who the hell cares? Of course, lots of people do. But they’re misguided.
I believe that market share is just not very relevant to anything these days in most product categories. Tech, being a monster set of markets, can often set the standard for what people look at as indicators of the success of a business. How we measure tech companies, we in business, often measure other companies. And for a time, market share was the thing that could make or break a tech company. But that was in the 80′s. Let me explain before you close your ears and go ‘la la la la’ 
There’s a method to my madness here.
Back in the day, there was something web historians now refer to as the PC wars. This was long before even the browser wars. It was Microsoft against the world. Windows was fighting to establish itself as the dominant platform. Any hardware or software vendor had to choose up front whether they would build for Microsoft, IBM or Sun. Because once you made your choice, you’d be incompatible with the others. So the obvious data point to look at was market share. Which of the 30/40/20/10 market share owners do I want to bet on?
That was when compatibility was the big battle ground that these wars were being fought on. Most of the hardware and software could only play nice with one ecosystem, then you’d be locked out of the others. So market share was king! Who wants to build products for the poor ecosystem that only has 10% market share? No one! And so you get squeezed out of existence. If you were lucky enough to get 70% in a market though, you won. Because that 70% was enough to make those other decisions of which ecosystem to choose, a no brainer. If you got 70%, you’d get 100%.
But then came standards. Hardware standards. Software standards. Web standards. Cell phone standards. Compatibility is no longer that big of an issue. We’ve moved past it. Products from any ecosystem, Macs, PCs, Android Phones, iPhones, Linux Servers… they all play nice together. So what does that mean? Consumers don’t need to (and shouldn’t) look at market share any more. Because whatever products they choose, for whatever reasons, are going to play nice everywhere. We are finally free to choose the products that suit us best, without the fear of not being compatible with the products that our friends and colleagues choose. It’s awesome.
The compatibility issue is solved. And yet tech journalists continue to hold market share as some sort of beacon of success – or the name of the game. Even when in one particular market, smart phones for example, one player who came out with the least market share, gobbled up 50% of that market’s profits. The journalists still prattle on about market share.
When did market share become more important than the financial health and success of your business overall? Isn’t building amazing products, making your customers happy, and taking home ridiculous profits much better than market share for the sake of market share? Apparently tech journalists don’t think so. Neither do some investors. How the financial markets focus on market share as the bell weather for the success of a company blows my mind. It also signals a naiveté for the fundamentals of business. It tells only such a small portion of the larger story.
If you’re an entrepreneur building a business, forget market share. Worrying about how you’re going to ‘dominate the market’ is going to lead you off into the weeds, focus you on a feature race with the other players in your market, and commoditize you real fast. It’s going to take your eye off all of the challenges of TODAY that you need to be worrying about to survive and grow. Like deepening your relationship with your customers. Focusing on making their experience with your business and your products as delightful as it can be. This is what builds loyalty, and grows your business.
