7 ms·

How a typical person thinks: "Lots of people are already doing that. I give up. They've taken all the money there is and ever will be for this product/service

How a typical person thinks: "Lots of people are already doing that. I give up. They've taken all the money there is and ever will be for this product/service!" How a typical business person thinks: "If I can take 1% of each of my 5 competitors' market share, I can make $x millions. Better head over to EDGAR and read some 10-K reports." How uber-startups like Google and Facebook think: "If I can take the majority of all of my competitors market share through superior marketing and technology, and increase the size of the market at the same time, then we're worth $XX billions." Notice how you don't have to invent anything completely new, just innovate on existing stuff that's proven to make money.

ScottBurson 16y ago
If that's what the typical business person thinks, they're wrong. It's not about taking fractional shares of existing markets; it's about finding defensible niches. Fractional market shares have a way of going to zero if your product is just a me-too.
- tastybites 16y ago
  I think you're wrong. Take a look at the toilet paper selection at the supermarket next time you're there. Every single brand you see has a fractional market share, and very few of them are going to zero any time soon. There's millions of dollars to be made in wiping asses. According to your theory of market dominance, there should be only one type of TP available after all the 'fractional' players go to zero. Or at the very least, several 'defensible' niches - how exactly would that apply to the squares of paper you wipe your shit with? To me they look the same. They're rolls of paper on cardboard tubes that differ in price and softness. Business goes way beyond websites.
  - Klinky 16y ago
    I do believe the toliet paper market is "oversaturated", so to speak ;). The major brands of toilet paper are made by corporate juggernauts like Proctor & Gamble, Kimberly Clark & Georgia Pacific. It would be very hard to break into the TP market.
    - tastybites 16y ago
      I see startups (or at least companies much younger than P&G etc) in those spaces too - seventh generation and 'simple' are the ones that pop into mind first.
      - Vivtek 16y ago
        Agreed - with the usual exit strategy of getting bought by P&G.
  - ScottBurson 16y ago
    You answered your own question: they differ in price and softness. There's a "basic TP" niche and a "premium TP" niche -- and maybe a couple more, but not many. Okay, you say, since no two products are exactly identical, how is my talk of niches not vacuous? Because it's not enough for the products not to be identical: they must be differentiated in the mind of the market. That is, the differences must matter to at least some part of the market. If you have a small market share, and you are unable to differentiate your product from its competition in some way -- price or features or both -- your market share will go to zero. The world is littered with examples; I'm sure you can think of plenty yourself. Ask any angel or VC you know what they think of a business plan that proposes to capture a small fraction of a huge market, without laying out a viable marketing plan for differentiating the product.
    - tastybites 16y ago
      I'm not talking about ideas that angels or VCs like, I'm talking about running a real god damn business. Your mind has been twisted into thinking like a VC. You're talking about the toilet paper market having niche market segments. Are you out of your mind? Angels and VCs want 100x+ multiple exits. Business people don't need that, or anything at all like it. What they need is a business with customers.
      - jholman 16y ago
        > Are you out of your mind? I humbly suggest that this might not be the tone you ought to take, and it might not be the tone you'd like to take.
        tastybites 16y ago
        http://news.ycombinator.com/item?id=2252152 http://news.ycombinator.com/item?id=2252152 Here's an entire thread for you.
    - whatusername 16y ago
      It's funny we're talking about Toilet Paper. You do realise that 2.6 Billion people don't have access to a western toilet? But there are massive marketing and social pushes ( http://www.worldtoilet.org http://www.worldtoilet.org ) to increase the size of this market dramatically.
- alextgordon 16y ago
  Who said anything about a me-too? The point is not that fractional market shares are a guaranteed route to success, but rather that they are not a guaranteed route to failure.
  - ScottBurson 16y ago
    It's true you didn't say "me-too product", but it's an important point. There are lots of me-too products in the world, so a lot of people do think that way.
codeglomeration 16y ago
It's also about creating new markets. Identifying something along the way and taking your business in a different direction. There are successful businesses today started out as something else, and evolved in time. This continuous change of the landscape might work very well for the guy who's behind the competition and doesn't make all the money yet. Those that make the money are usually reluctant to experiment with new paths. They usually fear risking what they've got. It's basically so unpredictable and things evolve so fast right now, that it's a wild guess what you, or you competition could look like in 2 years.

ScottBurson 16y ago

If that's what the typical business person thinks, they're wrong. It's not about taking fractional shares of existing markets; it's about finding defensible niches. Fractional market shares have a way of going to zero if your product is just a me-too.

tastybites 16y ago
I think you're wrong. Take a look at the toilet paper selection at the supermarket next time you're there. Every single brand you see has a fractional market share, and very few of them are going to zero any time soon. There's millions of dollars to be made in wiping asses. According to your theory of market dominance, there should be only one type of TP available after all the 'fractional' players go to zero. Or at the very least, several 'defensible' niches - how exactly would that apply to the squares of paper you wipe your shit with? To me they look the same. They're rolls of paper on cardboard tubes that differ in price and softness. Business goes way beyond websites.
- Klinky 16y ago
  I do believe the toliet paper market is "oversaturated", so to speak ;). The major brands of toilet paper are made by corporate juggernauts like Proctor & Gamble, Kimberly Clark & Georgia Pacific. It would be very hard to break into the TP market.
  - tastybites 16y ago
    I see startups (or at least companies much younger than P&G etc) in those spaces too - seventh generation and 'simple' are the ones that pop into mind first.
    - Vivtek 16y ago
      Agreed - with the usual exit strategy of getting bought by P&G.
- ScottBurson 16y ago
  You answered your own question: they differ in price and softness. There's a "basic TP" niche and a "premium TP" niche -- and maybe a couple more, but not many. Okay, you say, since no two products are exactly identical, how is my talk of niches not vacuous? Because it's not enough for the products not to be identical: they must be differentiated in the mind of the market. That is, the differences must matter to at least some part of the market. If you have a small market share, and you are unable to differentiate your product from its competition in some way -- price or features or both -- your market share will go to zero. The world is littered with examples; I'm sure you can think of plenty yourself. Ask any angel or VC you know what they think of a business plan that proposes to capture a small fraction of a huge market, without laying out a viable marketing plan for differentiating the product.
  - tastybites 16y ago
    I'm not talking about ideas that angels or VCs like, I'm talking about running a real god damn business. Your mind has been twisted into thinking like a VC. You're talking about the toilet paper market having niche market segments. Are you out of your mind? Angels and VCs want 100x+ multiple exits. Business people don't need that, or anything at all like it. What they need is a business with customers.
    - jholman 16y ago
      > Are you out of your mind? I humbly suggest that this might not be the tone you ought to take, and it might not be the tone you'd like to take.
      - tastybites 16y ago
        http://news.ycombinator.com/item?id=2252152 http://news.ycombinator.com/item?id=2252152 Here's an entire thread for you.
  - whatusername 16y ago
    It's funny we're talking about Toilet Paper. You do realise that 2.6 Billion people don't have access to a western toilet? But there are massive marketing and social pushes ( http://www.worldtoilet.org http://www.worldtoilet.org ) to increase the size of this market dramatically.
alextgordon 16y ago
Who said anything about a me-too? The point is not that fractional market shares are a guaranteed route to success, but rather that they are not a guaranteed route to failure.
- ScottBurson 16y ago
  It's true you didn't say "me-too product", but it's an important point. There are lots of me-too products in the world, so a lot of people do think that way.

codeglomeration 16y ago

It's also about creating new markets. Identifying something along the way and taking your business in a different direction. There are successful businesses today started out as something else, and evolved in time. This continuous change of the landscape might work very well for the guy who's behind the competition and doesn't make all the money yet. Those that make the money are usually reluctant to experiment with new paths. They usually fear risking what they've got. It's basically so unpredictable and things evolve so fast right now, that it's a wild guess what you, or you competition could look like in 2 years.