DISQUS

Dan Lewis · 2 months ago

Let me reverse this, if you don't mind.

I like to read up on the history of wed media startups (so thanks for the delicious/Third Voice nugget!) and there's one theme that crops up a lot: companies which succeeded in large part because there were so many people in the space, some one had to emerge. Some call it luck, but in any case, I think it has more to do with external factors than internal ones, combined with the inevitability that if there's enough competition, some one will be be the "winner". In that case, we can look at the company's history all we want, and anything we learn is basically meaningless outside the vacuum of the time and location of that company.

The example I like to use is Yahoo!. Here's its early history, from Wikipedia, and it seems like it was (as they named it) yet another cookie-cutter product:

"In January 1994, Jerry Yang and David Filo were Electrical Engineering graduate students at Stanford University. In April 1994, "Jerry and David's Guide to the World Wide Web" was renamed "Yahoo!", for which the official backronym is "Yet Another Hierarchical Officious Oracle".[11][12] Filo and Yang said they selected the name because they liked the word's general definition, which comes from Gulliver's Travels by Jonathan Swift: "rude, unsophisticated and uncouth".[13] Its URL was akebono.stanford.edu/yahoo.[14]

The Yahoo! domain was created on January 18, 1995.[15] Yang and Filo realized their website had massive business potential, and on March 1, 1995, Yahoo! was incorporated.[16] On April 5, 1995, Michael Moritz of Sequoia Capital provided Yahoo! with two rounds of venture capital, raising approximately $3 million.[17][18] On April 12, 1996, Yahoo! had its initial public offering, raising $33.8 million, by selling 2.6 million shares at $13 each."

And given how it looked in late 1996 (see http://web.archive.org/web/19961017235908/http:...) I think it's safe to say that it was one contestant in a sea of competition with some innovation, but really, that's not what set them apart.

If I'm right, then I think it follows that in highly competitive spaces, a (temporary, at least) winner is inevitable -- and that who wins is not as much a function of how good the product is, but of a ton of factors beyond the company's control.

amanda peyton · 2 months ago

I also get somewhat annoyed when people reference a company that I've never heard of or a product I don't use as the rationale why my idea would not work. "Someone's already doing that" has got to be among the worst reasons to not get into the space, right above "no one needs that". Last I checked Zynga was one of the best web businesses out there, and I'm pretty sure a virtual restaurant where I can serve my friends pixel-food was never on my list of "needs."

While external factors and timing are huge (how many video businesses were there pre-youtube) - I totally agree Charlie, competition should be exciting and not a deterrent.

DatingRevolution · 2 months ago

It's my understanding that this is a double edged sword. On the one hand, if you're an entrepreneur in a "new industry" you have to prove that there's actually a need for your new industry. If the industry is already established, you have to fight to prove that your product is in fact unique enough that you can wrestle enough customers away from the status quo to generate enough revenue to have a solid business.

My industry is no different. The online dating market is huge ($1.9 billion for 2012) but there are major flaws with the models (both business and how the sites function). I interviewed about 700 singles before starting my company to see what they thought. They believed that there was a void in the market place.

It makes me feel like I'm back in college trying to get a petition signed. Then again, I guess the ultimate "signature" is having them join our site.

Thanks again for the post,
Ross Felix
Founder / DatingRevolution.com

ceonyc · 1 month ago

I think any investor worth there salt should seek to understand why you
can disrupt a "crowded" industry vs being dismissive about it... so
one of your sword edges shouldn't be so sharp.

DatingRevolution · 1 month ago

Well, I've gotten the site up and running sans outside investment. I'm working on refining the pitch and the business model as a whole to figure ways to scale intelligently and cost effectively. For example, instead of trying to grow nationwide day one, we're focused on NYC first (the largest singles population in the US) and will then expand to other markets as we hunt down opportunities or partnerships in other key markets (LA, DC, Boston, Chicago, Philly and South Florida to name a few).

I would love to talk with you if/when you have time about dulling those sword edges.

hotmail email · 1 month ago

Because there is never enough to satisfy everyone, there has to be some way of
allocating all resources, and the goods and services they produce. Allocating requires
rules and those rules determine the type of competition that takes place. Even no rules
will quickly become a rule—the rule of force where desirable things are acquired by the
meanest and strongest who simply take what they want from others. This rule motivates
competition that is so destructive (since existing wealth is destroyed as people fight over
it and there is little motivation for anyone to produce new wealth) that not even the mean
and strong are likely to benefit from it long.