Bill Gate's 2:10 Rule of Technology Innovation
Microsoft’s Bill Gates has developed a model he calls the 2:10 Rule. It helps predict how and when new technologies and services evolve.
In the early years of any significant innovation, the hype builds expectations way beyond what is practically deliverable.
This results in a period of disappointment, often two years after the original hype. The disappointment is usually driven by the media and manifests itself in the form of underperforming services and high-profile business failures.
However, Bill Gates argues that over a 10-year period, many of these technologies go on to meet all of the earlier expectations – and often outperform them.
Short-term under-performance is an inevitable and usual precursor for many technologies and services, before they become widely adopted and achieve their full potential.
Gates illustrates his theory with many technologies, including the fax machine; desktop PCs; operating systems; PDAs; GPS; mobile phones; email and ecommerce. All of these products and services were launched with great fanfare that touted the way they would revolutionise our lives. All of them failed to live up to their hype in the early days. But all of them have gone on to over-deliver on their original promises and expectations.
Internet subscription publishing may be added to this list of examples.
Many subscription websites created in the late 90s that charged for online access to specialist content were hailed as part of a publishing revolution. Commentators filled many column inches predicting that the publishing industry would be brought to its knees and that paper and print were dead.
Two years later, many of these early subscription websites changed their business model to advertising, were taken over or went out of business.
It appeared that membership website publishing had failed.
But eight years on the market is looking very different. The large sites like the Wall Street Journal are getting most of the headlines as they power towards one million online subscribers, but it is with the small niche sites where the biggest growth is happening.
The web has lowered the cost of entry for individual experts and small companies wishing to sell their knowledge and expertise. It is also possible for highly specialised sites to reach a global audience, which makes them commercially viable.
If Bill Gates is right, we are entering into the period when earlier predictions are realised and paid membership websites pass their tipping point. Once consumers and businesses start to subscribe to online content and experience the advantages it gives them, it is unlikely they will return to print.
We are already observing that many new publishers are choosing to solely set up and publish online.