I recommend Joel Spolsky’s Strategy Letter VI, which looks to explain the future by looking at the past:
In the late 80s, Lotus was trying very hard to figure out what to do next with their flagship spreadsheet and graphics product, Lotus 1-2-3. There two obvious ideas: first, they could add more features. Word processing, say. This product was called Symphony. Another idea which seemed obvious was to make a 3-D spreadsheet. That became 1-2-3 version 3.0.Both ideas ran head-first into a serious problem: the old DOS 640K memory limitation. IBM was starting to ship a few computers with 80286 chips, which could address more memory, but Lotus didn’t think there was a big enough market for software that needed a $10,000 computer to run. So they squeezed and squeezed. They spent 18 months cramming 1-2-3 for DOS into 640K, and eventually, after a lot of wasted time, had to give up the 3D feature to get it to fit. In the case of Symphony, they just chopped features left and right.
Neither strategy was right. By the time 123 3.0 was shipping, everybody had 80386s with 2M or 4M of RAM. And Symphony had an inadequate spreadsheet, an inadequate word processor, and some other inadequate bits.
“That’s nice, old man,” you say. “Who gives a fart about some old character mode software?”
Humor me for a minute, because history is repeating itself, in three different ways, and the smart strategy is to bet on the same results.