Startup "incomplete cycle" - what is it?

One of the algorithms for the [content] publication process includes five essential points: (1) content creation; (2) identification of market niches / ways to promote content; (3) distribution; (4) determining the most appropriate user interface or user interaction format for this content; (5) and business monetization.

At the same time, it does not matter if it’s about publishing: whether it is, in fact, content or, for example, commercial information. Therefore, in order to increase the efficiency and value of interaction with users in particular, as well as increase the value of the business as a whole, the company must successfully cope with these tasks. Of course, all this rests on modern technology.
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Last year, Chris Dixon proposed one way to achieve such harmony. He called this method the work of a “full-cycle startup” (a startup responsible for all stages of creating its product / service):

"A new approach is to create a fully-completed product or service that surpasses the development of existing companies ...

[To do this] you need to succeed in different areas: software development, hardware utilization, design, consumer marketing, supply chain management, sales, building partnerships, control, and more. ”

The key phrase: “You need to succeed in different areas.”

But maybe a year or two later we will observe the emergence of something new. Something close to the separation of content business and e-commerce from the Internet as a whole (and from the application segment). We can witness the breakdown of full-cycle startups, when companies, instead of striving to perform many functions at once, focus their efforts only on the final stage of adding a total value to a product that they can do better than others.

This phenomenon can be referred to as the emergence of “ incomplete cycle ” startups — services that focus on the qualitative performance of only one function and the use of third-party services to perform the remaining steps of [product / service creation].

This, though not a completely new phenomenon, challenges the established order by the fact that with such an approach a number of tasks - such as, for example, design - may fall out of the core competencies of the business.

Some examples made me think about this:

The entertaining blog The Shade Room on Instagram deals only with searching and producing content.

Stefan's Head is a commerce company that designs products and uses (it seems to me) Twilio and Stripe to distribute its offers via text mailings.

Weiguofang is a fruit selling company that works through the WeChat messaging and voice calling application.

TextRex - recommendations restaurants through SMS.

The main feature that unites all these companies is that they use other platforms and APIs (or protocols, in the case of SMS) to form a service, and rely on them in almost everything except for the very task that they, as business themselves perform better than others. And, perhaps even more importantly, they all use other platforms to create user experiences.

Take Facebook, for example. In some ways, Facebook is a very suitable platform for selling, distributing, promoting, and, perhaps, today, for monetizing content. Users are familiar with the interface and features of Facebook - they have improved over the course of several years; Facebook visitors shaped their attitude to the platform based on billions of cases of interaction with it, leaving comments and sharing publications.

Thus, Facebook performs 4 of the 5 points listed above. Everything except the creation of the content itself. A similar situation arises with other platforms, for example, with Instagram :

“If you have an Instagram account, you can attach a price tag to anything, take a picture of it and sell it. Even my grandma does an Instagram business! She sells dried fruits. My friend's cousin sells strange potted plants that grow in artificial turf. ”

These “incomplete cycle companies” are unlikely to offer “excellent user experience” (in the traditional sense), but they are probably “good enough in their business” (watch this presentation - it provides an excellent overview of the development of trends in Asia).

Of course, most of these companies do not use the “mobile first” policy (designing a mobile first, and then a desktop version of the product) —they are mobile only: their projects were initially created for work only from mobile devices.

Often, they don't even have their own websites (and applications, for that matter): “if it was the homepage that was the face of the company, now customers are accessing Facebook, Instagram, Twitter and Amazon to find information about you,” - Jonathan Libov ( Jonathan Libov ).

From a historical point of view, services and APIs have been around for quite a long time - all this time they allowed to integrate their capabilities into third-party products. But until recently, they all served the backend infrastructure.

Now, as it seems, something else has been added to this. Backend services have become really high-quality and diverse (see Stripe, Twilio, Shippo, Kabbage, Ziggeo, Layer - these are just a few examples of services responsible for making payments, sending messages, delivering, cash transactions and creating video).

But it went further. Start-ups of the “incomplete cycle” also use third-party front-end services on top of the “non-native” backend. They use services that could originally have been developed for completely different purposes. But they work, because in many ways they (third-party services) provide an optimal user experience that is already proven by the market.

Thus, a “incomplete cycle” startup does not attempt to recreate a successful UX, it relies on other interfaces that solve this problem quite well and eventually only get better. Obviously, this changes the very concept of “user experience” and even gives a new meaning to the design as such (my friend Albert told this very well at the TEDx conference).



What is even better, using interfaces of other platforms, a “partial cycle” startup gains access to users of these platforms. In a sense, to paraphrase Jeff Bezos : the one who creates these new services, studies other platforms, builds his business on their basis and thinks: "Your users are my opportunities."

I suggested that I could follow. Here are a few ideas:

“Paving the way to other services”, the platforms themselves can experience different, even stronger (compared to current) network effects than previously thought.

Now, as it seems, it's time to become a creative entrepreneur and use the emerging new technology, although it is completely unclear how to measure the sustainability of these new approaches.

For existing content creators, the environment is becoming more competitive, and the rate of receiving feedback will grow faster than we think.

Even without taking into account all these consequences, reducing the number of tasks in which the company needs to create a unique value (product / service) requires us to new approaches to the definition of the concept of business and entrepreneurship.

In addition on a subject: "An era of serial innovators " in our blog on Geektimes.ru .

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Announcement:

September 8, 2015 (Tuesday) at 17:00 will be held DEMOday - Final sixth accelerator of IIDF. The number of participants is limited.

All participants must receive confirmation that their registration is approved.

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