4 ms·

Innovation, Or the Complete Lack Thereof, In the Start-up Community

22 points by bootload 18y ago

raganwald 18y ago
The author has apparently discovered that Sturgeon's Revelation applies as well to start-ups as as it does to science fiction.
olefoo 18y ago
His point about copycat companies is well taken; one of the shortest paths to failure is to slavishly imitate someone who is already successful.
- babul 18y ago
  imitate then innovate? Many businesses start successfully (first mover advantage) but are unable to maintain it allowing competitors to overtake them.
- mechanical_fish 18y ago
  I agree only with the strong form of your statement -- the one that requires us to define slavishly imitate as "with no distinguishing special feature, and targeting the same market". But I think the weak form of your statement is wrong. Here's Eric Sink, urging you to start a company in a field where there are already competitors: http://www.ericsink.com/Choose_Your_Competition.html http://www.ericsink.com/Choose_Your_Competition.html "The big problem with avoiding competition is that you are also avoiding customers. The existence of a competitor indicates the existence of paying customers. If you can't find anyone who is making money with your idea, you really need to wonder if there is any money to be made there at all." Let's consider the original article's example: cloning Flickr. There may be lots of good reasons to clone Flickr. It's a really new idea, and we haven't had much time to explore the space. For all we know, there might be all sorts of niche markets for Flickr-like services: Flickr for amateur baseball, Flickr for fashion designers, Flickr for medical illustrators, Flickr for architects. Each of these apps might have slightly different features (perhaps Flickr-for-architects would allow you to estimate the sizes of rooms by pointing at the corners of various objects in the photo, or provide various easy-to-use UI elements for matching photos with locations on a floor plan), and each would certainly be sold to a different market (or else they would likely fail -- in the Generic Photosharing market, they risk being crushed by Flickr itself). But there's no reason why they should not all coexist, just as the existence of Starbucks does not, in fact, doom all other coffeeshops everywhere to extinction. Now, if you clone Flickr but don't add a differentiator, that's probably a mistake. And if you clone Flickr but don't have a revenue model that will keep you afloat, that's a mistake. [1] But there's no reason to expect successful businesses to be novel. Novelty is irrelevant. Only making money is relevant. [1] This is the real reason why it's easy to laugh at many of the Flickr clones: Many of them have also cloned Flickr's revenue model, which involves being acquired by a company that has deep pockets and a large number of servers. It seems unlikely that this plan will work out for everyone...
  - olefoo 18y ago
    I put the adjective in to restrict it to the strong sense, imitation isn't necessarily bad, intelligent emulation of successful strategies is the basis of progress; but it's a mistake to think that you can succeed as a follower. The thing I see is that there are a lot of bright young things out there who want to be entrepreneurs but who have not the disposition or the discipline to be creative as entrepreneurs and who for whatever reason don't take a critical look at their goals and methods. Leaping on to the business model of the week becomes a substitute for self-assessment and critical reflection. And of course there is the "ooh that's cool, I want to build one of those!" factor to be considered.
cousin_it 18y ago
Nature works like this: stumble upon a successful model, spawn a million tiny variations and let them struggle for survival.
- coglethorpe 18y ago
  And there's room for more than one winner, especially if they can find a sub-niche. Flickr seems to specialize in "photographers" and Photobucket has crappy myspace photos. They both "won" in their respective areas.
pxlpshr 18y ago
Based on my experience during 1.0, I've been speculating a fall-out relatively soon as I've seen a lot of me-too popups from the critical areas (SF/NY). Roughly 1 year after this influx in 1.0, the bottom fell out. During 2.0 that pattern was contradicted as social bees tend to migrate and have a lot less loyalty. Friendster > MySpace > Facebook is one example, and there have been a quite a few other. However, is it really a great migration or simply natural segregation at work? I'm beginning to think it's the latter and that being said, maybe there is a play to be made for the me-too sites this time around.
- coglethorpe 18y ago
  While me-too ideas have their place (see my other comment), the game has been to profit by getting VC money more than profit by having a valid business model. People know they can get funding for a relatively "safe" idea possibly easier than a "cazy-but-just-might-work" idea.
tc7 18y ago
It's natural to lean towards just copying the latest big hit. 1) Market research is done for you, so you don't have to be as convincing to get funding, 2) there's room in any niche for > 1 competitor (first, best, cheapest, at least :)), 3) creativity is hard, new ideas are hard, innovation is hard. And there's the major reason. We all* want easy money, so we groan and slap our foreheads with poorly disguised jealousy whenever a 14-yr old girl makes a million bucks with crappy myspace layouts. But the thing is, there's positive feedback for taking the low-hanging fruit: You can make a ton of money. And if you don't, at least you didn't have to invest much thought. The 'problem' (if so you categorize it) is that there's no promise of greater return for greater effort. You can spend your life trying to solve BigProblems until you die, and get further than anyone else, but the guy in the next dorm room retired at 25 after making a social-networking site for parakeets with dyslexia. In two days, in ASP classic. So if you're motivated by money, success, fame, there's not a lot of reason to go for the hard problems. And those are pretty common (and powerful) motivations. *All including you, unless you don't, in which case it doesn't.
edw519 18y ago
We are constantly hearing advice like "Scratch your own itch," "Find problems close to you," and "Code what you know," which is all good advice for finding a startup idea. What then, do you do if you're not exposed to much? When I spent time talking to people in SV 2 months ago, I noticed something I never expected: lots of people have very little exposure to "real world" problems. People come up with "me too" startups because that's all they know. Sure it's easy and cheap to start a business, and if you're smart and can hack, all the more reason. But what about the giant issue hardly anyone mentions: real world experience. I've been doing programming work in real businesses for years and still get excellent startup ideas from my customers almost every day. In the past week alone, I have been challenged with problems I've never seen before that are really affecting these people. Just a couple of quick recent examples: - One customer is preparing blanket purchase orders for '09 models, but since the SKUs change every season, their ERP system is of little help. - Another is setting up a new warehouse, but their app won't allow bulk updates so they have to hire clerks just to enter 10,000 new bin locations. - Another has a call center whose response time has doubled with an upgrade to their app. Now they want the new release's functionality with the old release's interface. And this is just one week! People will pay big bucks for technical solutions to these real world business problems. My advice to a young hacker with lots of skill but not much experience (outside of college apps): you may want to consider getting a job for a year or two. I know, everyone wants to start the next <whatever>, and get rich now and no one wants to sit in Megacorp's cube farm. And a startup, even a failed one, may be a better education. OTOH, you will acquire dozens of great startup ideas (and contacts) and avoid the "me too" trap. Something to think about.
- kschrader 18y ago
  It's true. Sometimes the echo chamber out here can be almost deafening.
- mechanical_fish 18y ago
  I agree with all of this and would add just one observation: All of these valuable, profitable ideas will probably seem really boring to (e.g.) the audience at the typical Web 2.0 conference. SKU's, yawn. Call centers, yawn. Warehouses, yawn.
babul 18y ago
There is nothing wrong in being a "me too" clone. In the early stages of a market (in any business), when someone stumbles upon something new/novel/untapped, there is always a land-grab and (initially) often plenty of users for everyone. Ultimately success really comes down to the offering provided (e.g. you offer same service but USP being simpler GUI that saves you time) and the ability to iterate quickly and develop features that users want and find value (ideally without adding unnecessary complexity to what you already offer). Many a successful company started as a "me too" clone (or late entrant), later becoming the dominant player. It is only when the market is saturated do other issues such as "churn" etc. (e.g. as seen in the established mobile-phone markets) start coming into play. Now entering the market is actually not a good idea, unless you are offering something radically different (ideally a disruptive technology), but then you would not be a "me too" clone.
- kschrader 18y ago
  Correct. The problem is that I am still running into people who are making "Youtube with a twist". That boat has sailed.
menloparkbum 18y ago
Without specific examples, this article is as useless as the vague me-too startups the author can't be bothered to write about. Thumbs down.
- kschrader 18y ago
  I'm not going to burn bridges with people when it really wouldn't add anything. The point is valid with or without specific examples.
mechanical_fish 18y ago
Here's my hypothesis: The cost of starting a tiny startup is now so low, and recovering from a failed startup is so easy, that people are founding "startup companies" as a way of educating themselves. I wish I had time to build a slavish, mindless clone of Youtube. I would learn a ton of useful things about the data-center requirements for streaming video hosting, the state of the codec universe, Flash programming, how to sell in a crowded marketplace, how to look at another video site and figure out if they're competently designed... I could even practice presenting to crowds of bored investors. Who cares if the project is ultimately doomed? If you compare it to a college senior-thesis project, instead of to a serious attempt to found a future megacorporation, it all makes a lot more sense. It's practical education. And it's probably cheaper than a master's degree (which can't teach you this stuff, anyway). After you graduate from the silly me-too project you can use your new-found skills to either get a better job at someone else's company, or to help found a second startup with a much greater shot at success.
LPTS 18y ago
The truth is that computer programming skills are a commodity and that the silicon valley culture is no longer relevant to big problems. The world has moved on, the same way it has moved on from industrial and agrarian economies. These silicon valley folks are as desperate and clueless about solving todays big problems as the corporate people were about solving the big problems silicon valley sprang up to solve. Getting them to understand is like yelling at water not to flow downhill.

22 points by bootload 18y ago

The author has apparently discovered that Sturgeon's Revelation applies as well to start-ups as as it does to science fiction.

olefoo 18y ago

His point about copycat companies is well taken; one of the shortest paths to failure is to slavishly imitate someone who is already successful.

babul 18y ago
imitate then innovate? Many businesses start successfully (first mover advantage) but are unable to maintain it allowing competitors to overtake them.
mechanical_fish 18y ago
I agree only with the strong form of your statement -- the one that requires us to define slavishly imitate as "with no distinguishing special feature, and targeting the same market". But I think the weak form of your statement is wrong. Here's Eric Sink, urging you to start a company in a field where there are already competitors: http://www.ericsink.com/Choose_Your_Competition.html http://www.ericsink.com/Choose_Your_Competition.html "The big problem with avoiding competition is that you are also avoiding customers. The existence of a competitor indicates the existence of paying customers. If you can't find anyone who is making money with your idea, you really need to wonder if there is any money to be made there at all." Let's consider the original article's example: cloning Flickr. There may be lots of good reasons to clone Flickr. It's a really new idea, and we haven't had much time to explore the space. For all we know, there might be all sorts of niche markets for Flickr-like services: Flickr for amateur baseball, Flickr for fashion designers, Flickr for medical illustrators, Flickr for architects. Each of these apps might have slightly different features (perhaps Flickr-for-architects would allow you to estimate the sizes of rooms by pointing at the corners of various objects in the photo, or provide various easy-to-use UI elements for matching photos with locations on a floor plan), and each would certainly be sold to a different market (or else they would likely fail -- in the Generic Photosharing market, they risk being crushed by Flickr itself). But there's no reason why they should not all coexist, just as the existence of Starbucks does not, in fact, doom all other coffeeshops everywhere to extinction. Now, if you clone Flickr but don't add a differentiator, that's probably a mistake. And if you clone Flickr but don't have a revenue model that will keep you afloat, that's a mistake. [1] But there's no reason to expect successful businesses to be novel. Novelty is irrelevant. Only making money is relevant. [1] This is the real reason why it's easy to laugh at many of the Flickr clones: Many of them have also cloned Flickr's revenue model, which involves being acquired by a company that has deep pockets and a large number of servers. It seems unlikely that this plan will work out for everyone...
- olefoo 18y ago
  I put the adjective in to restrict it to the strong sense, imitation isn't necessarily bad, intelligent emulation of successful strategies is the basis of progress; but it's a mistake to think that you can succeed as a follower. The thing I see is that there are a lot of bright young things out there who want to be entrepreneurs but who have not the disposition or the discipline to be creative as entrepreneurs and who for whatever reason don't take a critical look at their goals and methods. Leaping on to the business model of the week becomes a substitute for self-assessment and critical reflection. And of course there is the "ooh that's cool, I want to build one of those!" factor to be considered.

cousin_it 18y ago

Nature works like this: stumble upon a successful model, spawn a million tiny variations and let them struggle for survival.

coglethorpe 18y ago
And there's room for more than one winner, especially if they can find a sub-niche. Flickr seems to specialize in "photographers" and Photobucket has crappy myspace photos. They both "won" in their respective areas.

pxlpshr 18y ago

Based on my experience during 1.0, I've been speculating a fall-out relatively soon as I've seen a lot of me-too popups from the critical areas (SF/NY). Roughly 1 year after this influx in 1.0, the bottom fell out. During 2.0 that pattern was contradicted as social bees tend to migrate and have a lot less loyalty. Friendster > MySpace > Facebook is one example, and there have been a quite a few other. However, is it really a great migration or simply natural segregation at work? I'm beginning to think it's the latter and that being said, maybe there is a play to be made for the me-too sites this time around.

coglethorpe 18y ago
While me-too ideas have their place (see my other comment), the game has been to profit by getting VC money more than profit by having a valid business model. People know they can get funding for a relatively "safe" idea possibly easier than a "cazy-but-just-might-work" idea.

tc7 18y ago

It's natural to lean towards just copying the latest big hit. 1) Market research is done for you, so you don't have to be as convincing to get funding, 2) there's room in any niche for > 1 competitor (first, best, cheapest, at least :)), 3) creativity is hard, new ideas are hard, innovation is hard. And there's the major reason. We all* want easy money, so we groan and slap our foreheads with poorly disguised jealousy whenever a 14-yr old girl makes a million bucks with crappy myspace layouts. But the thing is, there's positive feedback for taking the low-hanging fruit: You can make a ton of money. And if you don't, at least you didn't have to invest much thought. The 'problem' (if so you categorize it) is that there's no promise of greater return for greater effort. You can spend your life trying to solve BigProblems until you die, and get further than anyone else, but the guy in the next dorm room retired at 25 after making a social-networking site for parakeets with dyslexia. In two days, in ASP classic. So if you're motivated by money, success, fame, there's not a lot of reason to go for the hard problems. And those are pretty common (and powerful) motivations. *All including you, unless you don't, in which case it doesn't.

edw519 18y ago

We are constantly hearing advice like "Scratch your own itch," "Find problems close to you," and "Code what you know," which is all good advice for finding a startup idea. What then, do you do if you're not exposed to much? When I spent time talking to people in SV 2 months ago, I noticed something I never expected: lots of people have very little exposure to "real world" problems. People come up with "me too" startups because that's all they know. Sure it's easy and cheap to start a business, and if you're smart and can hack, all the more reason. But what about the giant issue hardly anyone mentions: real world experience. I've been doing programming work in real businesses for years and still get excellent startup ideas from my customers almost every day. In the past week alone, I have been challenged with problems I've never seen before that are really affecting these people. Just a couple of quick recent examples: - One customer is preparing blanket purchase orders for '09 models, but since the SKUs change every season, their ERP system is of little help. - Another is setting up a new warehouse, but their app won't allow bulk updates so they have to hire clerks just to enter 10,000 new bin locations. - Another has a call center whose response time has doubled with an upgrade to their app. Now they want the new release's functionality with the old release's interface. And this is just one week! People will pay big bucks for technical solutions to these real world business problems. My advice to a young hacker with lots of skill but not much experience (outside of college apps): you may want to consider getting a job for a year or two. I know, everyone wants to start the next <whatever>, and get rich now and no one wants to sit in Megacorp's cube farm. And a startup, even a failed one, may be a better education. OTOH, you will acquire dozens of great startup ideas (and contacts) and avoid the "me too" trap. Something to think about.

kschrader 18y ago
It's true. Sometimes the echo chamber out here can be almost deafening.
mechanical_fish 18y ago
I agree with all of this and would add just one observation: All of these valuable, profitable ideas will probably seem really boring to (e.g.) the audience at the typical Web 2.0 conference. SKU's, yawn. Call centers, yawn. Warehouses, yawn.

babul 18y ago

There is nothing wrong in being a "me too" clone. In the early stages of a market (in any business), when someone stumbles upon something new/novel/untapped, there is always a land-grab and (initially) often plenty of users for everyone. Ultimately success really comes down to the offering provided (e.g. you offer same service but USP being simpler GUI that saves you time) and the ability to iterate quickly and develop features that users want and find value (ideally without adding unnecessary complexity to what you already offer). Many a successful company started as a "me too" clone (or late entrant), later becoming the dominant player. It is only when the market is saturated do other issues such as "churn" etc. (e.g. as seen in the established mobile-phone markets) start coming into play. Now entering the market is actually not a good idea, unless you are offering something radically different (ideally a disruptive technology), but then you would not be a "me too" clone.

kschrader 18y ago
Correct. The problem is that I am still running into people who are making "Youtube with a twist". That boat has sailed.

menloparkbum 18y ago

Without specific examples, this article is as useless as the vague me-too startups the author can't be bothered to write about. Thumbs down.

kschrader 18y ago
I'm not going to burn bridges with people when it really wouldn't add anything. The point is valid with or without specific examples.

mechanical_fish 18y ago

Here's my hypothesis: The cost of starting a tiny startup is now so low, and recovering from a failed startup is so easy, that people are founding "startup companies" as a way of educating themselves. I wish I had time to build a slavish, mindless clone of Youtube. I would learn a ton of useful things about the data-center requirements for streaming video hosting, the state of the codec universe, Flash programming, how to sell in a crowded marketplace, how to look at another video site and figure out if they're competently designed... I could even practice presenting to crowds of bored investors. Who cares if the project is ultimately doomed? If you compare it to a college senior-thesis project, instead of to a serious attempt to found a future megacorporation, it all makes a lot more sense. It's practical education. And it's probably cheaper than a master's degree (which can't teach you this stuff, anyway). After you graduate from the silly me-too project you can use your new-found skills to either get a better job at someone else's company, or to help found a second startup with a much greater shot at success.

LPTS 18y ago

The truth is that computer programming skills are a commodity and that the silicon valley culture is no longer relevant to big problems. The world has moved on, the same way it has moved on from industrial and agrarian economies. These silicon valley folks are as desperate and clueless about solving todays big problems as the corporate people were about solving the big problems silicon valley sprang up to solve. Getting them to understand is like yelling at water not to flow downhill.