Will this market tip to a single winner, or stay split?
You have the better product and the smaller installed base. This model runs ten periods of adopter choice, where quality, sticker price, network pull and complement providers all feed back into share, and reports how often the market tips to you, to the rival, or to neither. The uncomfortable part is how little the quality edge buys once the feedback loop is running the other way.
SaaS Advanced Monte Carlo Pro engine
After you install, this is the model to open.
Format War Tipping Simulator
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
Ten periods, five uncertain inputs redrawn every trial, and one number that decides the company.
- Market tips to the rival
- 68 % of trials
- Market tips to you
- 9 % of trials
- No tip, market stays split
- 24 % of trials
- Your final share, median trial
- 18 %
At these defaults the market tips to the rival in 68% of trials and to you in only 9%, even though your product wins new buyers by 10 share points on quality alone. On the mid path your share slides from 44% to 19% over ten periods, and it drops through the 30% line by period 3 in the median trial. Doubling the quality edge to 20 share points is what it takes to flip that mid path, while neutralising the complement swing and closing the price gap gets you to 66% of the installed base with no product change at all.
The model
The defaults describe a standards fight you are losing on distribution, not on product: 330,000 seats against 420,000, a genuine quality edge, a higher sticker, and complement providers who pile onto whoever crosses 55% share.
| Your installed base today | 330,000 seats (44% of the market) |
| Rival installed base today | 420,000 seats |
| New adopters per period | 700,000 seats |
| Your quality edge | 4 - 10 - 18 share points (uncertain) |
| Network effect strength | 0.9 - 1.6 - 2.4 (uncertain) |
| Complement swing to the leader | 3 - 8 - 14 share points (uncertain) |
| Affordability handicap | 1 - 6 - 12 share points (uncertain) |
| Execution shock | normal, 0 plus or minus 6 share points |
| Complement tipping threshold | 55% share |
| Market counts as tipped at | 30% / 70% share |
| Horizon | 10 periods, 10,000 trials |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
- Should you sell the hardware below cost to win the platform?Platform Launch Pricing
- If you raise prices, do you come out ahead?If We Raise Prices, Do We Come Out Ahead?
- How long until a customer pays you back?How Long Until a Customer Pays Us Back?
- What gross margin can you actually promise?What Gross Margin Can We Actually Promise?
- One load took three seconds. Is the site faster?Faster Site, Proven Without the Bell Curve
- Every day improved. Could that just be luck?Did the New Process Cut Ticket Times?
Every model like this one, and the method behind them: Monte Carlo simulation.