4 ms·

Not intended to come across as aggressive, but have you started a business? How about one that competes with entrenched players in an existing space? Or one tha

Not intended to come across as aggressive, but have you started a business? How about one that competes with entrenched players in an existing space? Or one that appears on page seven or eight in Google for relevant search queries when your competitors are on page one? There is a reason most YC companies are trying to disrupt markets rather than compete head-on-head with existing business models. Because while it isn't impossible to break into markets dominated by competitors, it is much harder and you are at a severe disadvantage. How do you reach consumers? How do you build brand awareness? How do you advertise profitably? And why should the NYT or RWW or anyone write about your business when there is already a bigger story out there? There are ways around these problems, but they all involve tradeoffs that work against small startups and that take time and money to overcome. Blogging heavily to try to overcome SEO problems will take at least 12 months in the best case to see any results and gets less effective every year, while requiring quite a bit of work up-front that does not drive revenue. Viral loops can take time to function effectively in the real world. And meanwhile you have to be building something that will drive revenue eventually in addition to addressing user concerns, iterating and improving your product. Your best bet is often just to produce something really good and aim for word-of-mouth. But even in this case, your speed of growth will be much slower than initial entrants ceteris paribus, and you'll often need to compete by giving more stuff away for free. If Google didn't have VC funding they wouldn't have been able to spurn the sponsored placements that their competitors used and would have ended up with an internal marketing department. Would their product have seemed so much different/better then? So ask yourself -- can you give away your product for free for four or five years while you find a better way to make money (AdSense)? And do you really have an advantage in this search compared to your profitable competitors who are also looking to innovate and improve their products, and who also have non-trivial budgets to back their development efforts?

spc476 15y ago
Microsoft made a killing by being second to market, except maybe for BASIC when they started. Operating systems, second (or third even). Applications? Second. Graphical interfaces? Second (and I remember when Microsoft was the David to Apple's Goliath in the "Look-and-Feel Lawsuits" of the mid-80s). There's not much Microsoft was first at.
- trevelyan 15y ago
  If a startup has the resources of Microsoft isn't it a bit disingenuous to call it a startup? No-one is saying that it is impossible, simply that it is much more difficult and you tend to need a lot more time, money and resources to do it. Google needed significant venture capital to fund free search when its competitors were paying the bills with sponsored placements. Ford had a ton of investment to start, while Microsoft leveraged its position with DOS to push Windows. Of course there are examples of companies taking market share from initial entrants and eventually dominating markets. The point is that if you're a small startup this is really difficult. As I see it, the only really decent example listed above with relevance to this community is Reddit, but even that is a somewhat cautionary tale given the fact the founders sold it. Which isn't a critical observation, but probably gives a fairly objective read on what Alexis and crew must have felt their prospects were for keeping the business independent.
mbesto 15y ago
Not aggressive at all. Yes, I've started two actually (completely boot strapped mind you). One was a creative agency (huge market saturation) and one that is a niche social network (another huge market saturation). I haven't technically started my third, but I am essentially responsible for growing a consulting practice right now. >There is a reason most YC companies are trying to disrupt markets rather than compete head-on-head with existing business models. I also think the reason most YC companies disrupt markets is because they are generally younger and less experienced entrepreneurs who have little to no market network. And in many cases either sell B2C or sell to B2B to the same tech companies that sell B2C. Many small businesses (the one I worked for currently) are created by individuals who have massively entrenched business networks. The practice I currently am growing has gone from 3 people to 10 by the end of the year. We compete with IBM, Accenture, Capgemini, etc. in the professional services industry. We do ZERO SEO or generate word-of-mouth. Are we disrupting a massive services industry market? Yes. Honestly I feel like you've gone off on a little tangent here about my original point. While you've raised many wonderful and valid points (that I don't have the time to give my answer) it doesn't negate the fact that being first really doesn't mean anything other than "I learned a lot". Ideally I want to be third or fourth, so that way I can just take all of the painful (read->expensive) learning experiences that the first guy did when trying to capture his product/market fit and just run off from there. Categorically, let's look at some successful companies/products - Apple's iPad/iPod/iPhone - not first / Google's search - not first / Ford's Automobile - not first / Reddit - not first / Microsoft Office - not first Being first as a qualifier for success is a myth. Doing it RIGHT first will make you successful.
- Hyena 15y ago
  Your experience is much more representative and more likely to succeed. Noting that there is a shortage of Italian restaurants or exploitation of a scaling problem in advertising and so on is how most successful companies get built. More deeply, it is a strange incoherence: "only disruptive companies are successful" leaves you wondering what there'd be to dirupt, since everyone else went bankrupt years ago.
  - trevelyan 15y ago

spc476 15y ago

Microsoft made a killing by being second to market, except maybe for BASIC when they started. Operating systems, second (or third even). Applications? Second. Graphical interfaces? Second (and I remember when Microsoft was the David to Apple's Goliath in the "Look-and-Feel Lawsuits" of the mid-80s). There's not much Microsoft was first at.

trevelyan 15y ago
If a startup has the resources of Microsoft isn't it a bit disingenuous to call it a startup? No-one is saying that it is impossible, simply that it is much more difficult and you tend to need a lot more time, money and resources to do it. Google needed significant venture capital to fund free search when its competitors were paying the bills with sponsored placements. Ford had a ton of investment to start, while Microsoft leveraged its position with DOS to push Windows. Of course there are examples of companies taking market share from initial entrants and eventually dominating markets. The point is that if you're a small startup this is really difficult. As I see it, the only really decent example listed above with relevance to this community is Reddit, but even that is a somewhat cautionary tale given the fact the founders sold it. Which isn't a critical observation, but probably gives a fairly objective read on what Alexis and crew must have felt their prospects were for keeping the business independent.

mbesto 15y ago

Not aggressive at all. Yes, I've started two actually (completely boot strapped mind you). One was a creative agency (huge market saturation) and one that is a niche social network (another huge market saturation). I haven't technically started my third, but I am essentially responsible for growing a consulting practice right now. >There is a reason most YC companies are trying to disrupt markets rather than compete head-on-head with existing business models. I also think the reason most YC companies disrupt markets is because they are generally younger and less experienced entrepreneurs who have little to no market network. And in many cases either sell B2C or sell to B2B to the same tech companies that sell B2C. Many small businesses (the one I worked for currently) are created by individuals who have massively entrenched business networks. The practice I currently am growing has gone from 3 people to 10 by the end of the year. We compete with IBM, Accenture, Capgemini, etc. in the professional services industry. We do ZERO SEO or generate word-of-mouth. Are we disrupting a massive services industry market? Yes. Honestly I feel like you've gone off on a little tangent here about my original point. While you've raised many wonderful and valid points (that I don't have the time to give my answer) it doesn't negate the fact that being first really doesn't mean anything other than "I learned a lot". Ideally I want to be third or fourth, so that way I can just take all of the painful (read->expensive) learning experiences that the first guy did when trying to capture his product/market fit and just run off from there. Categorically, let's look at some successful companies/products - Apple's iPad/iPod/iPhone - not first / Google's search - not first / Ford's Automobile - not first / Reddit - not first / Microsoft Office - not first Being first as a qualifier for success is a myth. Doing it RIGHT first will make you successful.

Hyena 15y ago
Your experience is much more representative and more likely to succeed. Noting that there is a shortage of Italian restaurants or exploitation of a scaling problem in advertising and so on is how most successful companies get built. More deeply, it is a strange incoherence: "only disruptive companies are successful" leaves you wondering what there'd be to dirupt, since everyone else went bankrupt years ago.
- trevelyan 15y ago