Since I have started this new series about the every day tactics needed to move your startup forward, I have received a lot of questions about specific issues people are having with their businesses. Specifically, I have met with three different entrepreneurs this week who are building consumer technology companies with advertising-driven business models who have sought advice on their products and go-to-market strategies. I found myself telling all three of them the same thing, so moving forward in this series I will try to make one post about the three processes of execution, and one about addressing specific scenarios startups might deal with.
In this instance, let's talk about patterns found in successful consumer tech plays. I spent the last summer looking closely at what separated successful consumer tech companies from all of their deceased competitors. Outside of the obvious answers like great UX and smart management, I found three interesting patterns that many consumer tech entrepreneurs often don't realize when building their products.
#1 There is (almost) no such thing as first-mover advantage
Entrepreneurs talk a lot about how they are the first to be tackling the idea or market they are targeting. This is considered a good thing because it means you are out in front of the competition and have a better chance of winning market share before they can.
In the case of consumer technology however, history suggests you may not want to be the first mover in your market. Yahoo, Lycos, AltaVista, Dogpile and other search engines were out well ahead of Google. MySpace and Friendster came before Facebook. There were a number of photo filtering apps before Instagram.
Why is it the first movers do not seem to be the ultimate winners? There is no right answer. But in my opinion, it is a combination of the fact that ideas are often pursued before the market is ready for them and the winners are usually smart about observing the incumbents and simplifying what the core, gratifying experience needs to be for the consumer.
#2 The winners are not wildly different, but the devil is in the details
Like most other search engines, Google returned pages of links relevant the search query inputted by a consumer. The three things that differentiated Google were 1) speed of the results being returned, 2) their algorithm, and 3) the clean design of the page.
Facebook allowed users (specifically smart college kids) to create a profile with a picture and some basic information. Not wildly different than what Friendster and MySpace allowed you to do. Actually less functionality, but cleaner and faster than their counterparts.
WhatsApp is basically AOL Instant Messenger but on your mobile phone. They've flourished due to iOS enabling push notifications, the speed of their app, and because people loved the two little check marks that appear confirming a message has been delivered.
In addition to market timing being critical, consumer tech winners don't tend to have wildly different ideas that the market hasn't seen, but rather they are finely tuned versions of concepts that already exist with a few key differences. Speed in almost all cases is a common characteristic of the winners (save Twitter—remember the fail whale?)
#3 Growth is slow until it is not
User acquisition for consumer technology is quite tricky, and like the core user experience, the devil is in the details. Often times the press and the tech community at large likes to remember consumer apps taking off with ease. Most folks don't put enough emphasis on the fact that Zuckerberg started with Facemash, Instagram was Burbon, and Snapchat was Peekaboo. And even after Snapchat changed its name, it was laughed out of Stanford classrooms as creepy before it took off in a California high school.
Consumer adoption is both a mix of luck and incredible attention to every detail of your product's UX, sign up funnel and distribution sources. Very rarely, if ever, do these things come together immediately.
