What if the giant wants to eat your lunch

WWDC. The annual Apple event is a situation where no one really knows what products they plan to launch and only rumors are in the air and are discussed by the public. A large company does not give any hints to small competitors in order for the latter to have time to prepare. We are in a market where 300 kilogram gorillas rush into new areas, and everyone else is trying to react and survive.

Any iOS product development company spends weeks clearing the crap from their pants in front of WWDC. No leave is allowed either before or after this event. Release details appear during the day, and even if you managed to survive this year , you still have to scramble up in order not to stay far down next, and be sure that the product will work and be sold.

This is madness.
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The same thing happens with Google. Each change in the algorithm erases the years of operation of some companies, as it happened the last time with the release of Google Panda .

Or in the situation with Twitter, which runs its own application for sharing photos, integrated into their product.

What should a startup do?

For a start - do not be afraid. This is not the end of life. In any case, you will have to deal with unbearable investors and journalists. They take little risk, but always think they know more, or understand better than others.

This is the same movie that I saw 10 years ago, when every venture capitalist told me: “Well, yes, I realized that you have a service for online sharing of documents, but what happens when Microsoft enters this market? You will die. "

Yeah, right now. Tell it to DropBox. Or Box.net. Go with these speeches in DocStoc, Scribd or SlideShare.

Just as Microsoft crushed AOL, AOL at one time supplanted Yahoo! from the market of Internet portals. And, in turn, Google was killed when it came to search. And Google was stopped by Facebook during the social networking revolution. However, Twitter turned out to build an open social network, without allowing FB to do the same. The latter, again, is now pressing FourSquare.

And so on. eBay / StubHub. Amazon / Zappos. Twitter / Instagram.

Wins concentration.

After all, in your head you know for sure - the reality is that large companies are simply unable to compete effectively on all fronts. The concentration and focus of talented teams always win volume and size. This is the reason why we exist.

The golden rules for survival are as follows :

Platforms are channels, not business. Do not confuse these concepts. If you put all your eggs in one platform - shame on you, not on eggs. If their (competitors) business throws you out of the market, then you should be more diversified.

You need to clearly understand how you are different from your biggest competitors or you will die anyway. If your product is at least 10 times cooler in your presentation, you can immediately dry the paddles.

The differences between you and the biggest competitors should be known to everyone. Even if the press begins to write you an obituary, because Facebook, Google, Apple, Twitter, or anyone else, eat up your lunch, it should describe it as part of "they copy you." When the press says that “check-ins will die” is because you created them. Innovation should be your synonym.

You need to stay focused. Have clear goals. Do not get into a corner of fear. Be prepared to move the positioning, based on the information that the market brings to you, without losing the internal core and concept.

Here are some examples.

FourSquare - I was recently asked on Quora if FourSquare would die now when Facebook launched its “Places” service. Others are afraid of yelp. I? I grinned. Of course, if Zuckerberg thought that the check-in would be the only and most important part of his business, and put 200 engineers to solve this problem throughout their market, they would crush Foursquare like a mosquito. But this will not happen.

In reality, only a small group is involved in Facebook to solve this problem. They will have to integrate this service with the entire network, adjusting it to common internal standards. They will have to contend with resources. The end user comes to Facebook to share photos, chat with friends or play games. Check-ins will come to the majority only at the very end, when there will be nothing more to do. Foursquare is a different, unique, product. The law of large numbers suggests that Facebook will still have a large number of check-ins in Places, but this does not cancel the success of a focused competitor.

I can not say that FourSquare will end up as a huge and long-lived company. I'm not an insider. But I am calm about her future and her ability to innovate, as well as her success in competing with Facebook. Several times I publicly suggested that perhaps the biggest competition for FourSquare in the future will be understanding what the next feature will be, following the check-ins. What will be the next big innovation. And it seems that they have some interesting ideas.

This will definitely be extremely interesting to watch.

Group messaging - we all saw it at the annual WWDC, as Apple introduced its new product called iMessage. Apple built it, so no one doubts that it will be very cool. I, personally, am confident that I will use it on two Macs, 2 iPads, 3 iPods and 2 iPhones. Yes, we have a family of fanatics. The New York Times has even made a list of companies affected by the release of this new Apple feature, each of which should check its pants.

The most notable players in this market are GroupMe, Kik and TextPlus (where I act as an investor). In fact, I do not consider all of them to be companies engaged specifically in “group text messaging,” but the press has a different opinion.

Let's take a look at a few simple facts:

Apple will allow you to easily communicate with all your friends using Apple devices, and this is a huge number of people. But an even bigger market for smartphones is represented by non-Apple devices, which means companies engaged in group messaging products will allow you to communicate with even more people using different platforms. iMessage does not provide such an opportunity, at least initially. She does for Apple what BBM (BlackBerry Messenger) for RIM has done.

In addition to the “application-application” communication, some of these products will allow you to also send SMS messages to tens of millions of people who do not yet have smartphones.

Many of the services will provide you with phone numbers, voice mail and free phone calls. Some services, such as Tango, already allow you to make video calls, which is already better than Apple's Facetime technology, which comes in the same box with everything else.

In addition to all the above, I see how the market will begin to absorb "universal players" who will build services like iMessage, only cross-platform. These companies will evolve into mobile apps, social networks, or social (mobile) games. iMessage will not be able to move quickly along any of these paths.

BBM is also preparing some major changes, but other than that we are waiting for a response from Google to the iMessage application. Being originally a “group messenger” squeezed in the grip of a giant, Apple imagines a new market, although in reality this is just another opportunity, a feature.

Are companies that compete in the same market sector crap? Hardly. They remain focused. They know their goals and know where they are going. And the market will be differentiated. Big players will have a hard time competing with their vision. And if startups cannot compete, the problem will be only in the quality of execution.

Bit.ly - you may remember how Twitter announced its own link shortener, and Bit.ly obituary was written by every self-respecting media resource within 24 hours. As far as I can tell, this company is still doing well. In fact, they continue to be the most popular link shortener, providing a wealth of analytical data for everyone. Next steps? I dont know. But are they dead? Hell no. I still use this service almost every day.

Conclusion

This is not an effective strategy - to think that you will win, because you are competing with big and stupid companies. Usually they are much smarter than you imagine. But they are not quick enough. They can not take a lot of risks. They can not quickly iterate. They cannot afford to easily combine marketing and user experience, which will allow the user to clearly understand their goals.

You need to determine how you can deliver to the end user an understanding of how you differ. What you think will be what others think of you. You need to have a core. Do not allow yourself to worry about market fraud or unfounded press statements. Be impenetrable and indestructible. And remember that competition with the big guys is not for wimps. Fight to the last and do not let snot. The big guys will do what the big guys usually do. And in the event that investors come to you, you can be sure that they have a long-term vision of partnership, and internal endurance will not disappear in a few months, when the next gorilla will have to eat your lunch.

If there are no big players around you, then you are most likely on the wrong market.

Good luck.