Google second mover advantage Archives - No More Startup Myths

Copycat Startups: Doomed From Day One Or A Better Idea Than We Think?

When it comes to startups you know the drill: 

Differentiate or die!

How come?

According to the popular maxim, it boils down to just one word: 

(In)visibility.

And in case you wonder why – the allegation is – that in today’s over-crowded ‘business world’ being a copycat startup

… almost equates to a death penalty because cutting through the noise (and getting peoples’ attention) in the over-communicated society we currently live becomes:

I.M.P.O.S.S.I.B.L.E

But at this point you probably call bullsh*t. 

After all, if that was the case how companies like Lyft, Blue Apron, Hometogo and 1000s of others that seem to have followed the ‘copycat startup’ path (some are even proud to call it a business model) managed to defy that “law” and live and thrive?

Good question…

So, without further delay let’s dive straight in and answer today’s question: 

Can a copycat startup survive, or even thrive, in today’s hypercompetitive world; or is an inherently lost case? 

Copycat Startups: Yes They Can!

Yes my friends – according to many ‘startup insiders’ adopting a copycat business model is a better idea than most people think…

The reasoning?

Here you go: 

1. You Start With a Proven Model

This does not require much explanation.

When you copy a battle-tested business model you start with many more knows than unknows.

Such as:

– Demonstrable market demand 

– Product/market-fit

– What works and what doesn’t 

Which enables you rather than spending your energy trying to prove that there is a market to focus instead on beating the incumbent companies by:

a) Building something better or,

b) Moving faster and be more responsive to changing customer needs or,

c) Outmarketing them 

2. You Have Strong Reference Points

Yes, unline businesses that start with completely new products, you don’t have to reinvent the wheel.

In fact, what you have to simply do is study what has worked with them in the past – i.e marketing, distribution channels, product placements – and just emulate them.

Nice!

3. There is Enough Space for Everyone 

You saw that coming,

Read more


A Great Product Sells Itself. What? Think Again!

So, you’ve started a (new) business and you’re ready to create a product that sells itself?

Hold that thought my friend.

Why?

Simples – we need to first see whether self-selling products really exist…

Let’s get started!

Introducing The Self-Selling Product

While the notion that great products sell themselves has long been ingrained to (many) founders’ psyche one man certainly helped popularise it over the last few years.

Who is that person I hear you ask? 

Meet Kevin Systrom…

Kevin is no other than the co-founder and CEO of Instagram.

Yep, that guy.

So, what Mr. Instagram has to say about today’s topic?

There are gimmicks, paying for downloads and stuff. But we’ve never spent a dime on marketing. Great products sell themselves.

You did read that correctly – never spent a dime…because apparently that’s how it works with great products!

In fact, according to other ‘believers’ there is even a formula.

Pumped?

You better be (if you subscribe to this line of thinking)…

So, what’s the recipe?

3 words.

Viral. Growth. Loops.

Which is the ‘method’ of building virality into a product.

But how that works?

Well, more often than not it involves baking into a product a strong incentive (which will prompt customers to sell the product for you).

Take for example Skype and WhatsApp – both companies did exactly that by creating a platform that becomes more valuable for the end-user when more people they know join in.

Or an alternative option is to have a strong referral scheme…

A company that famously used referrals was PayPal, which achieved a 7 to 10% daily growth on referrals alone.

How?

According to David Sacks, PayPal’s COO at that time, they “literally pay people to invite their friends.

So, “the experts” verdict is clear:

if you create your product – intelligently – by using either of these 2 options, the product will transform into your own best salesperson and do the job through viral word-of-mouth for you!

Of course, some people might say that both options still count as marketing, but even if that’s the case it happens effortlessly.

Read more


The Hockey Stick Growth Club: Real Thing or Just Fake News

So, you’ve just launched your startup.

And even though you know that things are meant to be tough you’re determined to…

… yep, join the hockey stick growth club!

You know what I am talking about.

THAT hockey stick moment (aka inflection point) where a startup suddenly sees a dramatic surge in its sales/growth.

Common, don’t be shy – I know you want it!

But how that happens I hear you ask?

Startups Either Take Off or Don’t

Well, as Paul Graham puts it:

A lot of would-be founders believe that startups either take off or don’t. You build something, make it available, and if you’ve made a better mousetrap, people beat a path to your door as promised. Or they don’t, in which case the market must not exist.”

So yes my friends, to answer my/your earlier question (about how it happens)…

… in many aspiring startuppers’ opinion, the hockey stick effect is simply a by-product of creating something great “take-off-able” and then letting ‘viral marketing do its thing”.

You know – the Dollar Shave Club style!

The moral of the story?

If you’ve been in the market for quite some time and haven’t yet experience THAT ‘take-off moment’, is it maybe time to…

… throw the towel (or pivot if you will) and move on into something else that looks more promising.

Or maybe NOT?

The ‘Hockey Stick Growth Fairy-Tale

You did read that correctly.

Fairy-tale!

Even though hype-driven sites such as TechCrunch love to glamorise startups and hypocritically promote the ‘fast and furious startup’ notion…

… in reality that’s FAKE NEWS.

Yep, I said the F-word!

As Chris Dixon rightly puts it:

We tend to hear about startups when they are successful but not when they are struggling. This creates a systematically distorted perception that companies succeed overnight.

Read more


Not Solving a Tier 1 Problem is Recipe for Startup Disaster: Or Maybe Not?

Tier 1 Or Nothing…

Just the other day while scrolling down my newsfeed I stumbled upon this eye-catching biz quote:

If your startup failed, it’s because it didn’t solve a tier 1 problem for a large enough audience.”

Which was a post intro from a guy named Mitchell Harper, a big shot ‘exited entrepreneur’.

His point in a nutshell?

Unless you solve one of the top 3 problems your target customer is experiencing you’re scre*ed!

Yep, irrespective how good your product is if you don’t abide by that ‘market reality’ you will fight an uphill battle.

And that made me thinking…

Is that claim any true?

Or maybe another classic business BS as usual?

Since it’s not an easy one we have to do a bit of digging…

Painkillers, Vitamins, Oxygen Or Vaccines: Which One Is Your Product?

First things first.

Why does Harper think that way?

In his own words…

…“[it’s because], they’ll be so focused on solving their first 3 problems that you’ll never get a look in… They simply won’t have time (or budget) for you if you’re not solving a problem that’s top of mind for them — a tier 1 problem”.

And that brings us to the old-age business dilemma:

Vitamins vs painkillers!

In fact, over the last couple of years – as you can see below – some additional elements got blended into the mix…

Let’s explore them one at a time!

1. “Painkiller products”:

Two words…

“MUST HAVES”

Yep, these type of products fall under the essentials category.

Another common characteristic of them is that they provide an almost immediate relief.

Some classic examples?

Gasoline, electricity, internet, telephone, just to name a few.

2. “Vitamin products”:

The main alternative to painkiller-products?

You guessed it…

Vitamins (aka “as nice to haves”).

Said differently, this kind of products are not bought out of sheer necessity.

Such examples could be things like jewellery,

Read more


What is a Startup Company? Here’s a Final Answer

So, you’ve got a killer… business idea.

What’s next?

Well, I am not a mind reader, but chances are you’ll probably be thinking:

“It’s time to do the startup thing.”

I know – classic!

After all, ‘launching a startup’ has never been sexier’…

But before you dive in, let’s consider for a moment what you’re about to build.

Why do I say that?

Simples! While people are throwing around the term startup like crazy, it seems to me that…

… there is a big confusion over:

a) What is a startup company

b) How long is a company considered a startup

c)  When a startup is no longer a startup

Whaaaaat?

I know; you’ll probably wonder: Who gives a f*ck about terms? Does it even matter?

Well, if you consider that thousands of new entrepreneurs are screw*d every day because they buy into startup fantasies (more on that later), I think it kind of matters.…

Without any further delay let’s dive straight into this topic, explore things, and give a final answer to this simple question:

What is a Startup Company?

Ok let’s get straight in…

What is a Startup Company? The Three Main School of Thoughts

Startup Definition #1: New companies that are committed to doing things differently

What does that suppose to mean?

According to Andrew Blackman, an advocate of this line of thinking:

Doing things differently doesn’t necessarily mean inventing a whole new industry, but it does mean taking a markedly different approach to the companies that are already established.

Different in what respects?

Well, even though that could be anything related to a company’s business model, I would imagine Blackman is probably talking about either…

… the product’s DNA, the company’s marketing strategy, or the biz’s revenue model (or even their company’s culture).

Startup Definition #2: New companies no more than 3 years old

Ok, this one couldn’t be more straightforward.

If a startup has been around for more than 3 years,

Read more


error: