Tuesday, December 25, 2012

Product Management: Fear the unknown competitors

After reading Ben Parr's piece Why startups shouldn't be afraid of Facebook cloning them, I thought about the topic a little bit.  I agree with Parr's observation.  Facebook jumping in and cloning the app should not be a death sentence to a startup.  If anything, it should be seen as a validation that the idea is interesting and there is that much more potential for the market.

The reason is multiple fold.  The main one is that a big company like Facebook will not focus on single application idea because it's just too small and unproven to move Facebook's needle.  It means two things.  One, Facebook has other bread-earning business that they cannot let go, and two, although Facebook touts moving fast and breaking things, it is not going to be as fast as the laser-focused startup of a single team.

Facebook Poke is not the death sentence for Snapchat.
Snapchat should focus on its customers and building its roadmap.
Source: http://techcrunch.com
Instead any startup should pay more attention to other startups that may not be on the market today.  As Paul Graham describes well in his essay The Hardest Lessons for Startups to Learn (Section 4. Fear the Right Things), startups should fear other new small entrants who may not even in the market today.

"What you should fear, as a startup, is not the established players, but other startups you don't know exist yet. They're way more dangerous than Google because, like you, they're cornered animals."
- Paul Graham

It's easy to understand why.  None of Facebook disadvantages apply to any other startups that are just as hungry as you are.  Their whole reason for existence is not proven yet, and their job is to prove it by winning your customers over.  To make it worse, they are just as focused and fast as you are.

There are many examples of this.  Yahoo getting beaten by Google in early 2000.  Apple iPhone eating Nokia and Blackberry's lunch in late 2000.  Instagram beating Facebook on mobile photo sharing in the last couple of years.  Nothing indicates that history won't repeat itself.

Don't lose sleep over the big players jumping in.  Instead watch out for the dedicated hackers who are tirelessly iterating their products.

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