8 ms·

Really intrigued by how he got into this: “I thought I could do it just as well and cheaper,” effectively trading product market fit issues for direct competiti

Really intrigued by how he got into this: “I thought I could do it just as well and cheaper,” effectively trading product market fit issues for direct competition.

HeyLaughingBoy 2y ago
That's how essentially 99% of businesses get started. The obsession with PMF and being "unique" is a very strange affectation specific to software startups.
- billllll 2y ago
  Unlike regular businesses, software scales infinitely and delivers immediately. You absolutely must have a "unique" selling point, even if it's just being cheaper. Otherwise, your competitors are just a click away. I'd argue the author HAS found PMF, just not the kind that gets you to $1b.
  - yao420 2y ago
    Literally every software I have ever used or company I worked for has had multiple competitors doing the exact same thing.
    - billllll 2y ago
      I really doubt "literally" every software you used or worked for has multiple competitors doing the "exact" same thing. VC money can temporarily prop up multiple competitors doing the same thing, but over time, winners definitely spring up. A lot of software that on the surface does the "exact same thing" often has different nuances, either to the business or the product that makes them appeal to different niches in the market. Understanding the nuances and exploiting the market niche is your only goal when starting a business. It's not something you ever do or think about when working on software, but people who strike it out on their own quickly realize that simply building is not enough, you MUST give people a good reason to use your software. Just because you don't see or understand the nuances, does not mean they are not there.
      - yao420 2y ago
        I can’t think of a single software that does not have fierce competition. Just today, YouTube, slack, chrome, Claude, burpsuite, interm, obsidian, nest, outlook, Zillow, AWS, cloudflare,GitHub, Roborock, jetbrains. They could all be replaced and do 90% of the job immediately and a week later figure out the last 10%. As as for work, coinbase is not the only exchange, square is one of many, meta is another social media site.
        deleted 2y ago
        [deleted]
  - xiaoape 2y ago
    > You absolutely must have a "unique" selling point, even if it's just being cheaper. I don't think you have to have a unique selling point all the times. You can make an exact product as the market leader and layer on top a distribution that you own or you sell the product to a underserved groups. It will work too. In fact, this way of doing business happens a lot to non software products.
  - p1necone 2y ago
    > Unlike regular businesses, software scales infinitely and delivers immediately. In theory? Maybe. In reality? Your scale and delivery depend on the competence of your devs and your processes and there's a very good chance you could do it better than all the big companies from your garage as a solo dev if it has a relatively small feature set.
- asdev 2y ago
  Being unique is important if you actually want to dominate the market. A product like his has captured a piece of the pie, but someone with equal distribution can easily eat into that since he has no moat.
  - twojobsoneboss 2y ago
    His moat is his price. And it absolutely is a moat because most bigger competitors would not bother competing in the segment with even lower prices, as there’d be no upside
    - xiaoape 2y ago
      > His moat is his price. His moat is a combination of pricing + cost structure + time spent to cumulate the customer base. If someone were to enter the market and try to take his business, they will have to consider if their conditions can result in the same offerings. I don't think it's easy to match the same offerings.
    - make_it_sure 2y ago
      there's no moat. Indie hackers can build a tool like this in a month and i think there are already many copycats.
      - camdenreslink 2y ago
        Indie hackers frequently think they can build tools like this in a month (hence the "I could build that in a weekend" trope). But making something that actually works well takes time (that this founder has taken).
  - seanhunter 2y ago
    What if he doesn't actually want to dominate the market? The idea of an "economic moat" comes from Warren Buffett[1] and it was/is part of his investing philosophy to look for companies with some sort of unique feature which allows them to dominate markets and create effective monopolies on their particular niche. It makes sense in that context but it doesn't necessarily apply everywhere. What if you're just trying to create a business that gives you a good lifestyle and you're not looking to dominate? Maybe the market is big enough that if you just take a piece of it that's plenty. There are plenty of businesses out there that are offering a product that is one of a range but the market is large enough to sustain multiple offerings. Not everyone needs a moat because not everyone is trying to build a castle. [1] I believe he first used it here in his shareholder letter where he describes GEICO's low costs as creating a moat that competitors couldn't cross. May have been earlier but most people credit the invention of the term to him anyway https://www.berkshirehathaway.com/letters/2016ltr.pdf https://www.berkshirehathaway.com/letters/2016ltr.pdf
- edanm 2y ago
  It's not "strange" nor an "affectation". Most software startups are consciously trying to innovate, create a new product that didn't exist before. That's a perfectly valid thing to try and do. The fact that it's not what most new businesses try to do is true, but doesn't mean anything. 99% of people who go to university don't do it to create new science, but 1% eventually go the academic route and do create new science (hopefully). That's not an affectation, it's just a different goal.

Really intrigued by how he got into this: “I thought I could do it just as well and cheaper,” effectively trading product market fit issues for direct competition.

HeyLaughingBoy 2y ago

That's how essentially 99% of businesses get started. The obsession with PMF and being "unique" is a very strange affectation specific to software startups.

billllll 2y ago
Unlike regular businesses, software scales infinitely and delivers immediately. You absolutely must have a "unique" selling point, even if it's just being cheaper. Otherwise, your competitors are just a click away. I'd argue the author HAS found PMF, just not the kind that gets you to $1b.
- yao420 2y ago
  Literally every software I have ever used or company I worked for has had multiple competitors doing the exact same thing.
  - billllll 2y ago
    I really doubt "literally" every software you used or worked for has multiple competitors doing the "exact" same thing. VC money can temporarily prop up multiple competitors doing the same thing, but over time, winners definitely spring up. A lot of software that on the surface does the "exact same thing" often has different nuances, either to the business or the product that makes them appeal to different niches in the market. Understanding the nuances and exploiting the market niche is your only goal when starting a business. It's not something you ever do or think about when working on software, but people who strike it out on their own quickly realize that simply building is not enough, you MUST give people a good reason to use your software. Just because you don't see or understand the nuances, does not mean they are not there.
    - yao420 2y ago
      I can’t think of a single software that does not have fierce competition. Just today, YouTube, slack, chrome, Claude, burpsuite, interm, obsidian, nest, outlook, Zillow, AWS, cloudflare,GitHub, Roborock, jetbrains. They could all be replaced and do 90% of the job immediately and a week later figure out the last 10%. As as for work, coinbase is not the only exchange, square is one of many, meta is another social media site.
      - deleted 2y ago
        [deleted]
- xiaoape 2y ago
  > You absolutely must have a "unique" selling point, even if it's just being cheaper. I don't think you have to have a unique selling point all the times. You can make an exact product as the market leader and layer on top a distribution that you own or you sell the product to a underserved groups. It will work too. In fact, this way of doing business happens a lot to non software products.
- p1necone 2y ago
  > Unlike regular businesses, software scales infinitely and delivers immediately. In theory? Maybe. In reality? Your scale and delivery depend on the competence of your devs and your processes and there's a very good chance you could do it better than all the big companies from your garage as a solo dev if it has a relatively small feature set.
asdev 2y ago
Being unique is important if you actually want to dominate the market. A product like his has captured a piece of the pie, but someone with equal distribution can easily eat into that since he has no moat.
- twojobsoneboss 2y ago
  His moat is his price. And it absolutely is a moat because most bigger competitors would not bother competing in the segment with even lower prices, as there’d be no upside
  - xiaoape 2y ago
    > His moat is his price. His moat is a combination of pricing + cost structure + time spent to cumulate the customer base. If someone were to enter the market and try to take his business, they will have to consider if their conditions can result in the same offerings. I don't think it's easy to match the same offerings.
  - make_it_sure 2y ago
    there's no moat. Indie hackers can build a tool like this in a month and i think there are already many copycats.
    - camdenreslink 2y ago
      Indie hackers frequently think they can build tools like this in a month (hence the "I could build that in a weekend" trope). But making something that actually works well takes time (that this founder has taken).
- seanhunter 2y ago
  What if he doesn't actually want to dominate the market? The idea of an "economic moat" comes from Warren Buffett[1] and it was/is part of his investing philosophy to look for companies with some sort of unique feature which allows them to dominate markets and create effective monopolies on their particular niche. It makes sense in that context but it doesn't necessarily apply everywhere. What if you're just trying to create a business that gives you a good lifestyle and you're not looking to dominate? Maybe the market is big enough that if you just take a piece of it that's plenty. There are plenty of businesses out there that are offering a product that is one of a range but the market is large enough to sustain multiple offerings. Not everyone needs a moat because not everyone is trying to build a castle. [1] I believe he first used it here in his shareholder letter where he describes GEICO's low costs as creating a moat that competitors couldn't cross. May have been earlier but most people credit the invention of the term to him anyway https://www.berkshirehathaway.com/letters/2016ltr.pdf https://www.berkshirehathaway.com/letters/2016ltr.pdf
edanm 2y ago
It's not "strange" nor an "affectation". Most software startups are consciously trying to innovate, create a new product that didn't exist before. That's a perfectly valid thing to try and do. The fact that it's not what most new businesses try to do is true, but doesn't mean anything. 99% of people who go to university don't do it to create new science, but 1% eventually go the academic route and do create new science (hopefully). That's not an affectation, it's just a different goal.