Salesforce

Salesforce launched cloud CRM in 1999 when 'software as a service' was still heresy. SAP sold million-dollar licenses and 18-month implementations; Salesforce offered $50/user/month with weeks-long setup. That 13-year timing advantage could have evaporated when incumbents caught up. Instead, Salesforce converted temporary lead into permanent moat through network effects that make displacement nearly impossible.

The genius was ecosystem architecture. AppExchange (6,000+ apps), Trailhead certification (millions trained), and API integrations made Salesforce the hub of enterprise workflows. Each customer makes the platform more valuable to developers; each developer makes it more valuable to customers. Switching costs become astronomical not from contracts but from entanglement - ripping out Salesforce means rebuilding your entire workflow infrastructure. This triggers preferential attachment: 'Nobody gets fired for buying Salesforce.' Risk-averse buyers choose market leaders because social proof eliminates decision risk, even when alternatives offer comparable features at lower cost.

At 19% CRM market share, Salesforce is dominant without being monopolistic, defending with 8% of revenue. The lesson: first-mover advantage expires quickly unless converted into lock-in. Being first to cloud mattered for maybe five years - but building an ecosystem that creates switching costs matters forever. Salesforce also became the primary source of enterprise sales talent, exporting its practices industry-wide. Temporary timing advantages become structural moats not through IP but through ecosystems that make switching feel impossible.