American History 1988-Chapter 304 - 294 Consumer Business Division

"Aside from the prospective plan, what more important goals do we have?" Valentine was extremely curious. 𝚏𝕣𝕖𝚎𝚠𝚎𝚋𝚗𝐨𝐯𝕖𝕝.𝕔𝐨𝕞

Before Byte Company went public, the plan Dean wrote, though a mere dozen pages or so,

contained enough substance for Byte Company to develop along this trajectory for over a decade.

Now that Dean has convened the board again, could it be the plan has changed?

"Gentlemen, with the development of computer technology and the gradual spread of the Internet,

software for the office sector will see more and more applications in the future.

That is to say, this market will continue to grow; it’s far from reaching its endpoint.

And when the market becomes sufficiently large, phenomena of vertical domain segmentation will emerge."

Dean gestured for Anna to distribute the materials, which were based on the second edition of the opinion piece revised from the prospective plan.

In comparison to the first version’s general forecast and outlook, this opinion piece was undoubtedly much more professional.

Not to mention the people from Goldman Sachs and UBS, even Valentine and Durell, longtime collaborators with Dean, were frowning as they read it.

The terminology was too specialized and they couldn’t understand any of it.

"To put vertical domain market segmentation in context, let’s take computers as an example.

Twenty years ago, only behemoths like IBM and Texas Instruments could manufacture computers.

Back then, everything from chips to motherboards to keyboards, and even systems and application software, were all produced by IBM and Texas Instruments themselves.

In other words, they horizontally monopolized every aspect of computer production, from hardware to software.

But what about today, twenty years later?" Dean pointed outside toward Silicon Valley.

"Now we have Intel, specializing in designing chips, Seagate developing hard drives, and Philips with extensive experience in displays.

As for software, there’s even more—Microsoft, Oracle, Byte... these are the ones.

See, the manufacturing of a computer has been deconstructed into multiple stages and these are researched and produced by various companies."

The reason these phenomena have arisen is that the computer market has expanded so much more than twenty years ago.

It’s large enough to accommodate multiple competitors at once, and even the formerly neglected components can now sustain multiple companies.

The same is true for office software. When the Internet reaches a certain level of ubiquity, segmentation will naturally occur."

To further illustrate his point, Dean had prepared a computer in the conference room.

He directly opened Byte Company’s own software product and explained it to the shareholders present.

"Our Bit work software has many functions; it integrates process tracking, email, interest sharing, and more.

This all-encompassing strategy won’t be a problem for several years and might even be our advantage.

But like I said, when more than half of the offices around the world have installed computers and connected to networks,

the vast market will give rise to various demands, and vertical domain segmentation will happen naturally.

By then, individual features within Bit work software like email and sharing walls will have evolved into corresponding mature markets."

"Yes," Dean put down the mouse, "the sharing wall you see now could potentially sustain multiple companies in the future."

"So..." Valentine asked uncertainly, "Byte Company also needs to plan ahead for them, to prepare for the upcoming segmented markets."

"The direction is correct, but please note, Byte Company cannot take on all the business."

To prevent them from harboring unrealistic illusions, Dean felt compelled to administer a dose of realism in advance.

"Then which direction are we prepared to tackle?" Durell knew Dean must have a plan.

"Of course, our old business line, office software," Dean said, shaking the new plan in his hand.

"Byte Company’s core has always been office, but I am prepared to further segment it.

For example, Human Capital Management (HCM) software, Customer Relationship Management (CRM) software, Enterprise Performance Management (EPM) software,

Product Lifecycle Management (PLM) software, Supplier Relationship Management (SRM) software, Supply Chain Management (SCM) software, Business Technology Platform (BTP) software, and so forth..."

As Dean listed a series of professional terms, the directors looked at each other, baffled.

Alright, they couldn’t understand at all.

Valentine flipped through the plan once more but eventually put them down, unable to grasp it.

"So why these abstruse software products and not email or the sharing wall?"

"Because their barriers are high, and they have strong anti-risk capabilities," Dean explained the straightforward reason for choosing this path.

Byte Company was already a well-known brand in the office sector. Why not seize the highest profit professional software now?

"Of course, this doesn’t mean that Byte is giving up on other more popular projects."

Dean pointed to the plan in his hand, "I intend to establish a Consumer Division within the company."

"Consumer Division?" Everyone’s eyes lit up.

To them, the word "consumer" was much more interesting than the complex professional software.

If a company could make money from the general public, Wall Street would definitely like that company.

"As the name implies, the products developed by this division will mainly target the general public."

In the past, Dean focused on the office sector because that’s where the demand was.

Around the 1990s, computer penetration in the office sector was much higher than in ordinary households.

But now, with the development of the Internet, the network has gradually entered millions of homes.

Look at the construction crews outside; they are the epitome of the Federal Government’s ’Information Superhighway Plan’ in action."

Since Clinton took office, previous appropriations for information technology development have been put into effect one by one.

Now every major urban area in America is building fiber optic lines, and in a couple of years, the network will become even more accessible.

Dean had witnessed all this with his own eyes and knew that the growth rate of the Internet would exceed everyone’s expectations.

"What product is our Consumer Division planning to develop?" Durell asked eagerly.

"Still the same thing we’re familiar with," Dean said with a slight smile, "instant messaging software."

"Teams?" Durell’s first reaction was that.

"No, this one is simpler."

Dean’s explanation did not clarify the difference to everyone; they thought the way Teams is used was simple enough.

"This instant messaging software has only one feature: sending text messages.

It lacks file transfer capability, let alone voice call functions. Text messaging is its core."

Ordinary consumers don’t need software as complex as Teams; on the contrary, the simpler the product, the better.

This isn’t just because the current internet infrastructure struggles to support file transfers and voice calls.

The simpler the software is to use, the easier it spreads; idiot-proof products often become phenomenal."

It’s like how songs with simple melodies that are easy to sing often become hits.

Dean had the same positioning for consumer-level instant messaging software.

"The project’s codename, for now, is Toktok."

Alright, not only was the functionality simple, but Dean also made the naming as colloquial and slang-like as possible.

Toktok is variant form based on the "Knock" action.

At the same time, it also resembles the onomatopoeic sound you make when knocking, "toktok," which signifies a polite action of visiting someone.

In Dean’s vision, every time a friend comes online, this "tok-tok" sound would resonate.

Of course, "Tok" by itself already sounds very much like "Talk," they share a clever similarity.

"Toktok..." Valentine repeated with a weird expression, to be honest, he thought the name was too unserious.

He still preferred names like "Teams," "Bit Book," simple and formal namings.

However, that wasn’t his main concern; he was more interested in how this software would make money in the future.

"So... will it be sold like word and other consumer software, using a one-time purchase model?"

Personal consumer software that has been relatively successful so far is document processing; their sales methods are of certain reference value.

"No, Toktok will implement a free policy in the future."

Dean’s statement surprised everyone.

"Free?" Valentine thought he had heard wrong.

"We’ve invested resources, even established a separate Consumer Division, but the product we’re making is free?"

"Yeah~" Dean nodded affirmatively.

"I don’t understand," Valentine said, spreading his hands to express his confusion straightforwardly.

"Because ordinary consumers are sensitive; unless it’s a necessity, they are unwilling to pay for anything.

They buy word because they need it to process documents.

But Toktok is not a necessity; it won’t bring substantial help to their lives.

It’s more like a form of entertainment, an optional category.

Plus, there’s ’Plato,’ a free chat room on the internet, further weakening Toktok’s irreplaceability."

Dean’s explanations only made everyone more confused rather than clear things up.

"So what’s the point of us developing this software?" Durell’s question hit the nail on the head.

Faced with everyone’s doubts, Dean simply smiled.

"Ever heard the saying, ’The best things in life are free’?"

Seeing everyone still puzzled, Dean shrugged.

"Alright, let’s start by using a free policy to cultivate the market.

Once the user base exceeds ten million, it will be hard for us not to make money.

With just a little value-added service, even if only 20% of users pay, that’s a huge income.

Develop a few mini-games on this platform, or even advertisements, think about it, gentlemen.

In the internet age, whoever has the users, has the ability to monetize."

These principles will be understood by everyone in the future, but only Dean knows this now.

So although they somewhat agree with what Dean said, they were still hesitant about it.

"Alright, let’s look at it from another angle," Dean had to change his strategy.

"If we develop such software, what are we going to put in?

For Byte Company, instant messaging technology is virtually at our fingertips.

Moreover, it’s even simpler, which means negligible development costs.

And what are the costs of operating this software?

Servers! That’s the only hardware investment; fortunately, Byte Company is also rich in resources in this area."

"So..." Dean looked around, "since the cost is so low, why don’t we give it a try?"

Valentine and Durell looked at each other and then nodded.

"In that case, we have no objections."

Dean’s grand vision of market prospects did not sway them, but when the conversation turned to negligible costs, the board easily passed the resolution.

Well, that’s capital for you, stinginess is in its nature.