I started working at Bronto back when it was called BrontoMail. Back when companies featured downloadable .pdf brochures on their website and everyone scoffed at GOOG's overpriced IPO...way before email marketing was an "industry."
At the time, there were lots of players clamoring for position in an emerging market that we all expected would get big, fast. (Turns out it did.) Funny thing is that everyone's product looked the same and more or less did the same thing - especially from a "checking the box" perspective. Every product could track clicks, de-dupe lists, dump data to .csv files, etc. It wasn't rocket science, even though it seemed like it at the time.
The biggest differences between vendors - even though I would never admit it while on the phone with a prospect - were price and packaging. The core technologies and product concepts were the same across the board. Some vendors charged $25/month and targeted SMBs with ease-of-use and consumer-esque marketing messages. Others charged $2500/month and targeted the top of the market with high-powered marketing speak and brand name customers. Others tried to find their way in between.
Fast forward to today.
Many of the names that mattered in 2003 are still around and thriving - ConstantContact (which IPO'ed in 2007), ExactTarget (which should IPO any day now), SilverPop, Responsys, Cheetah, and of course Bronto - which mattered to me at the time, but wasn't big enough to matter in the broader email marketing software conversation.
Several other names that mattered in 2003 are MIA - CoolerEmail, iMakeNews, Topica, and probably more if I really thought about it. If I recall correctly, CoolerEmail was actually one of the first to productize email marketing software. So much for a first-move advantage.
So why do some players win and some players lose early markets? I can think of three reasons:
1.) Financing. Some companies started out with enough capital to out-spend, out-market, and out-last the competition.
Some hung around long enough to get it right. Others hung around long enough to pay themselves nice salaries while they spent their company out of business.
I'm too lazy to do the legwork necessary to confirm my hunch, but I'm certain that many of the leading vendors in the market today started off with a healthy slug of financing. Though I think it has MUCH less to do with their success than #2:
2.) Focus. Some companies focused on a particular market segment and pounded it into submission.
ConstantContact dominated the $20/month segment in 2003 and it still does today. It never wavered from a stripped-down, simple, easy-to-use product marketed with a "You can do it! It is so easy!" message.
Bronto didn't have product/market focus in the beginning - we were happy being "a step up from ConstantContact...and less expensive from ExactTarget". A precarious place to be. The company finally figured it out a few years ago, re-focused the offering/message around ecommerce, and has been killing it ever since. Turns out the middle is a tough place to be when it comes to marketing products - customers are either trying to step up their game with a better app or cut costs with a cheaper app.
3.) Fudge Ups. Some companies just had bad products and/or poor execution.
Stay tuned for Part II when I explain why I think all of this matters.