On the Wagon
Reading Jeffrey H. Rohlfs's book, Bandwagon Effects in
High-Technology Industries, made me feel like one of the bored British
grade school kids watching John Cleese have relations with his wife in
Monty Python's Meaning of Life. In both works, what could have
been a scintillating experience in any other context was drained of life
and passion by odd pacing and an attention to all the wrong details.
That is not to say that Rohlfs's short book is all bad. Just like
Cleese's naked bottom, this book is pockmarked with occasional insights
and has a strong premise. Obviously, Cleese's bottom lacks the latter
aspect, but you know what I mean.
The "bandwagon effect," as any fan of Napster can tell you, occurs
when an innovation follows the "hockey stick" graph: slow growth in the
first few months followed by a massive spike due to the growth of perceived
utility in a population. It's why folks dumped millions into the stock
market. They saw that their friends and neighbors were raking in the
dough, and they figured they, too, could see a piece of that action. In
this way, the stock market followed other great bandwagons including
AT&T's Picturephone, the Beta videocassette format, and Kula Shaker.
Overall, however, Rohlfs's book is a scientific look at
popularity. The jocks in high school weren't cool because of any overt
reason. They were cool because all of the other kids, including all the
cool girls, thought they were cool. That's why you weren't cool: you got
in on the whole cool/uncool too late. The cost of entry goes up as the
acceptance rises, meaning Can't Buy Me Love and all those other
teen movies were lying to you.
Ultimately, it all boils down to Metcalfe's law, which states
that the value of a network goes up as the square of the number of
users. A world where only two people have telephones is pretty useless.
A world where a million people are all connected to a central telephone
exchange is a gold mine.
Rohlfs, who teaches and Stanford and received his doctorate from
MIT, has made a living telling this to people. From his days at Bell
Labs where he convinced the company to invest in optical cable, to his
current work at Strategic Policy Research, Inc., Rohlfs is all about
looking for the next hockey stick on the horizon. His book discusses a few
bandwagon items, including the internet and the compact disk, and he
often gleefully points out that Microsoft was "just a small software
house in Washington" before they chewed up the world, riding the hockey
stick for all it was worth.
The book is for economists. It gives an introductory look at
Rohlfs's pet research project, the growth of telecomm networks, and then
goes into some interesting detail before petering out with a
half-hearted look at the operating system wars and a chapter dedicated
to graphs. No big finish here.
It's an important book in that it takes a calm, measured breath
and describes the source of bubbles and "irrational exuberance." It's a
bad read because it rarely comes up for air after the initial effort and
loses you in details you don't need to know (for instance, CDs were made
so they fit two-for-one in the slots designed for old vinyl LPs, believe
it or not.)
Don't rush out and buy this book, but become acquainted with
its premise: that popularity is not arbitrary and once it starts
building, there's no stopping it.
