It's a customer's detachment, the ability to choose.
Every tech company, seeing its success, thinks it is very clever, that its products or business model are exactly what the marketplace wants. It focuses then on maximizing its advantage with customers, and often takes those slight, temporary technology advantages for granted.
This is dangerous. Because technology is constantly changing. Customers, like you, know that change is constant, and that you will always have choices. If not right now, then soon. (Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG) fanbois, take note.)
When any tech company stops focusing on making its stuff better, focusing instead on monetizing the advantages it has, you need to take your money elsewhere.
Research In Motion's (RIMM) Blackberry phones were the thing when email was the killer phone app. Netflix (NASDAQ:NFLX) was a fantastic innovation at a time when the alternative for a night out was a trip to a store. Those were big advantages in their time. And the holders of those advantages took full advantage.
But you're a customer. You know better. The iPhone brought a host of new Internet applications to the handset. Netflix's move to streaming put it into competition from a host of players who had just as much access to the customer as they did.
Rather than respond to these threats, both companies did what Wall Street wanted them to do. They monetized their success. RIM did not respond to what the iPhone did until it was far too late, until Google had grabbed the rest of that market with its Android design. Netflix decided to push through a price increase.
As a customer, as a user, you saw these changes coming. You went to the carrier store and saw the Blackberries off in a corner, the Androids and iPhones front-and-center. You saw the price increase notice from Netflix and realized you didn't have to pay it.
Add to that Microsoft's determination to scoop up the rest of the smart phone market and reports that the Post Office – the channel Netflix dominated – was about to collapse, and you knew well before the smart guys did these stocks were about to be pummeled. (Apologies here to Rocco Pendola and Joel West. It pays to read Seeking Alpha.)
The lesson is dead simple. You're doing market research every day, in making your choices and (most important) seeing the choices your neighbors are making. For every investment you have in tech, keep your ear to the ground. Notice when a friend changes brands. Ask them about what they are enthusiastic about.
And when the buzz on a competitive product or channel starts growing, get out fast. Don't listen to Wall Street. If you've done your homework, go with your gut.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.