News aggregator

Mark Brooks had a Kindle idea which got me thinking: Let me see the percentage of people who have bought a book and actually finished reading it. (The Kindle knows, right?) Even better, let me see Kindle books that are... Seth Godin

Opinion Polls & Market Research

Here's a hypothetical situation.  You've been working with a VC for a while.  You've gotten through a lot of business diligence and there's one last pitch to the partnership before you get a thumbs up/down on getting a term sheet.  The CEO and head of sales are able to attend in person, but you (founder) have a scheduling conflict so you are participating by phone.

The pitch goes off okay.  You can hear the meeting winding up with your team mates leaving the conference room when all of the sudden, the VC partners immediately jump into a vigorous discussion of the merits of the presentation, team, company and whether they should offer to invest.  It's clear that they do not realize you are still on the line and they have no real way of finding out if you are or are not.

What do you do?

A few people have told me that pitching the “first mover advantage” for a startup isn’t always the best thing. Being first doesn’t guarantee success. If anything, being first is fraught with more peril; since you don’t have anyone to copy or compare to. And, depending on how innovative your product offering, you might be too early for VCs to get it too, making raising money even harder. Often, when a space heats up, after the first few companies have gone in and made their mark, is when you’ll see even more money pour into it.

Don Dodge just posted a reprint of an article he wrote a few years ago: First Mover vs. Fast Follower - Who Wins?

The article is just as relevant today (if not more so). Startups are launching faster than ever and require less capital than they used to — at least in the Web 2.0 world — and that means more opportunity for first movers, but even more opportunity for fast followers. And I think we’ll look at the next 5 years or so in the Web 2.0 world as the “me too” years; when fast followers took over from the first movers in a whole bunch of areas.

The benefit for “me too” companies, or “copycats” is that they get to learn from the mistakes made by the first movers. First movers tend to have trouble innovating as quickly - they’re dealing with problems, customers, etc. They’re burning through more money than the copycats. So fast followers can simply move more quickly, and benefit from the first mover’s lessons.

This doesn’t mean I want to see a million more “me too” companies. In fact, I typically yawn when I see new stuff come out that looks so similar to its predecessors — and therein lies the problem for copycats. Learning from other companies’ mistakes isn’t enough. Copying almost exactly what others have done isn’t enough. Even “just a little twist” on something old won’t sustain you for long, although it might get you some good press, and early adopter uptake. Followers can only succeed if they’re innovative. That’s easier said than done — especially if you’re focused almost entirely on comparing yourself to the first mover startup — and you lose sight of what makes you unique, and you lose your ability (if you had it at all) to innovate.

Followers can correct the mistakes of leaders because they already know what to watch out for. In Don Dodge’s article he uses a number of examples of first movers that failed versus fast followers, and attributes the failure, in part, to bad management decisions made by the original companies. Copycat startups have the opportunity to implement better management and make better choices. But Dodge also points to the fact that his example fast followers were also innovators:

They have continued to innovate far beyond the original idea or feature set and have maintained market leadership. If you look closely at these companies they have a mix of technical visionaries and business management leaders.

For copycat startups, it’s critical to have more well-rounded businesses - combining innovative technology and good business management. First movers can capture the hearts and minds of an audience with their technology alone - they’re first in the space, defining it and grabbing bucketloads of attention - but followers need to think more seriously about how to tackle the market, leveraging marketing, PR, social media, etc. alongside their technology.

Ultimately, whether you’re first or not doesn’t seem to determine your chances of success. If anything, you may have more chance of success if you’re not the first mover, so don’t focus on rushing out foolishly. And don’t throw in the towel if you’re not first to market … there’s plenty of room to hit a home run.

I just read this article in the New York Times about how the Obama campaign has dramatically advanced the use of social networking in politics.  It's an interesting read.  The article talks about how the Obama campaign hired Chris Hughes, one of the four founders of Facebook to run its online effort.  The article also talks about how the McCain campaign is playing catchup by launching McCainSpace (I wonder if the Facebook/MySpace angle was intentional?).  Anyway, the author didn't have kind things to say about the McCain campaign's foray into social networking so I took the bait and went onto JohnMcCain.com and clicked on the "Join McCainSpace" link.  So how surprised was I when I got the following "page load error"

Ouch!  Bad SSL certificate.  That's embarassing...

The biography of George Costanza is five times as long as that of Tim O'Reilly. As Wikipedia matures, there are hard decisions to be made about depth and breadth. Shouldn't Tim's entry be many pages long? He's one of the... Seth Godin

The biography of George Costanza is five times as long as that of Tim O'Reilly. As Wikipedia matures, there are hard decisions to be made about depth and breadth. Shouldn't Tim's entry be many pages long? He's one of the... Seth Godin

Sometimes, busy people need to remind themselves (and us) how busy they are by shaving off the last two seconds of what would otherwise be a pleasant interaction. At a restaurant yesterday, the maitre d, who is paid to be... Seth Godin

Sometimes, busy people need to remind themselves (and us) how busy they are by shaving off the last two seconds of what would otherwise be a pleasant interaction. At a restaurant yesterday, the maitre d, who is paid to be... Seth Godin

Founders Gary Swart and Stephen Pieraldi presided over the Venture Capital and Seed Financing Workshop at GigaOM’s recent Structure 08 conference . This week, the pair sat down with Found|READ to share additional lessons from their careers in fundraising. Swart is CEO of oDesk, a staffing platform that lets companies hire and manage their global talent [...]

At GigaOM’s recent Structure 08 event, Meebo co-founder and engineering chief, Sandy Jen, joined a panel to talk about scaling your computing infrastructure for explosive growth. Jen also spoke with Found|READ, this time to offer founders tips on how to overcome what she calls the internal scaling challenge: hiring. Meebo launched in September 2005, when [...]

Some businesses seem to be really lucky. Some careers, too. They have good things happen, things that push them along, that change the game in a positive way. If you think about parades, one thing that's clear is that marching... Seth Godin

Some businesses seem to be really lucky. Some careers, too. They have good things happen, things that push them along, that change the game in a positive way. If you think about parades, one thing that's clear is that marching... Seth Godin

The world needs fixed-price web podiatrists. Podiatrists, not doctors. Doctors do surgery and prescribe expensive drugs and stuff. Podiatrists can just make it easier to get around. So, a pretty smart web-savvy person could have a checklist of fifty items... Seth Godin

The world needs fixed-price web podiatrists. Podiatrists, not doctors. Doctors do surgery and prescribe expensive drugs and stuff. Podiatrists can just make it easier to get around. So, a pretty smart web-savvy person could have a checklist of fifty items... Seth Godin

GigaOM’s Structure 08 event offered a terrific opportunity to survey the changing landscape of computing infrastructure. But as with all technology shifts, innovation won’t just belong to the big established players like VMWare, Amazon, Google, Sun Microsystems, Salesforce.com and NetSuite. With that in mind, Found|READ asked a panel of conference participants to share their thoughts [...]

Scoble has a great post about a 14 year old kid with 45 million viewers on YouTube. 45 million! He wins. You lose. You won't have more traffic than he will. Ever. And what about your ads? Are you busy... Seth Godin

Scoble has a great post about a 14 year old kid with 45 million viewers on YouTube. 45 million! He wins. You lose. You won't have more traffic than he will. Ever. And what about your ads? Are you busy... Seth Godin

The Seinfeld fans out there will clearly recognize the reference to "the opposite" episode.  Basically, George tries to change his life by going against his natural instincts and doing the exact opposite.  [For the fanatics out there, I think this is Episode #86, aired May 19, 1994.

Here are a couple of clips from the episode:

George : Why did it all turn out like this for me? I had so much promise. I was personable, I was bright. Oh, maybe not academically speaking, but ... I was perceptive. I always know when someone's uncomfortable at a party. It became very clear to me sitting out there today, that every decision I've ever made, in my entire life, has been wrong. My life is the opposite of everything I want it to be. Every instinct I have, in every of life, be it something to wear, something to eat ... It's all been wrong.

Jerry : If every instinct you have is wrong, then the opposite would have to be right.

George : Yes, I will do the opposite. I used to sit here and do nothing, and regret it for the rest of the day, so now I will do the opposite, and I will do...something.
---

As it turns out, this "do the opposite" strategy works out for George.  Things start working out for him.  By going against his natural instincts, he ends up doing things "right".  He's noticed.  He comes off as being different. 

So, what does this all mean for startups?  Well, I've found that often "doing the opposite" (zigging when others are zagging) can actually work.  Conversely, if you take the tried and true path of others (like your competitors), in your best case scenario, you kind of wind up where most startups wind up -- in an unhappy place.  Why not try to be different?

A few examples to mull over:

A Startup Doing The Opposite

VC funding negotiation:  Tell the VC:  "We don't know what the pre-money valuation should be.  You have a better sense than we do about this.  We're not looking for the highest "price".  We just want a fair deal and a board member that is not a jerk.  You seem like you're smart and not a jerk.."

Recruiting early employees:  If you're just looking to make a lot of money, this is probably not the place.  Sure, we're going to give you some options but nobody knows what those are going to be worth (including the founders and the investors).  We all work our butts-off and make less money than we could likely do otherwise.  We all must have some sort of genetic flaw that makes us do this.  If you have that genetic flaw too, you'd probably enjoy it here. 

Early customer conversation:  Yeah, the software kind of sucks but we use it ourselves and it does do useful things.  Why am I charging you to be a beta tester?  Although your input is priceless, we think it just distorts the relationship for you to get it for free.  If you're a paying customer, we're going to kill ourselves to make you happy. 

The idea is to be honest, direct and surprise people by taking an approach that they're not used to seeing.  A lot of times this may fall flat -- but lots of things fall flat anyways.  Why not try it? 

By the way, each of the examples above are based on reality from my own startup adventure. 

So, next time you're in a situation go against your instincts to "spin" things and be super-sophisticated.  Just do the opposite!

Original Article
Copyright 2005-2008, Dharmesh Shah - OnStartups - Software Startup Blog

There aren't so many statesmen. People who speak truth to power. Leaders who describe what they see, whether or not it serves their short-term interests. They say what needs to be said, do what needs to be done, as long... Seth Godin

There aren't so many statesmen. People who speak truth to power. Leaders who describe what they see, whether or not it serves their short-term interests. They say what needs to be said, do what needs to be done, as long... Seth Godin