Om Malik and Niall Kennedy on ONPodsessions have an interesting podcast “Snakes on a Business Plan” here.
My rules surrounding the discussion:
- Don’t go after markets where you’re #51 into market. This is where “curve jumping” is really necessary to stand out – if you can’t jump the curve, you’ll find it difficult. There’s no use duking it out on a past curve where you’re already at a disadvantage. If you think you can do something better, I suggest doing it with 5 competitors around (even if one is Google) instead of 50 competitors – it’s only realistic that the more competitive the market, the more you’ll have to do to differentiate yourself.
- Don’t just be a feature. This one’s certainly up to interpretation. Om and Niall mention the example of Flickr, which is not just a feature. A calendar is an application (but there might already be 50 online calendars), but it might be #51 on the radar screen. 37Signals says that you shouldn’t shy away from Google-entered (or other competitors) markets, but further comments more accurately state that you shouldn’t shy away from these markets when you can differentiate yourself appropriately. In 37Signals’ case, the calendar is part of an overall more useful application, BackPack – this point is slightly understated on their site.
Features can be ripped off easily – something you can be fearful will be ripped off quickly and often. Real applications with real uses and real businesses are much more difficult to replicate.
- Be focused. If you scale down your expectations, you might be able to cater to a niche need within a crowded market. Generally less lucrative, but can lead to a level of success that is perfectly fine for many people.
- Know your customers. Find your customers. Make a profit from your customers.
Seems obvious, but there’s a lot of Web 2.0 companies that ignore these rules. Those that don’t ignore the rules and then execute appropriately (the difficult part), succeed.
P.S. There’s a link in the right sidebar for our new start-up, iLetYou, where you can sign up for a private Beta invitation when it becomes available.