reecepacheco

I recently finished a book in which one scientist references the Handy Hammer Syndrome:  

‘When you’ve got a hammer in your hand, everything looks like a nail.’

He’s referencing some research by a student who claimed (against established thought) that early man evolved into runners, but the scientist knew the student was an avid runner himself (so he was using the hammer in his hand).

Let’s look at a few cases* of the Handy Hammer in web-tech:

• Google’s hammer is Gmail.  They used it to hammer away at social and are failing miserably with Buzz.
• Twitter’s hammer is was its developer API.  Without it, Twitter would not be where it is today, but after their recent announcement to acquire Tweetie, the Twitter developer community is not happy at all and scared for the future.
• Facebook’s hammer is the social graph.  They’re banging away furiously now and users are not psyched about their data being collected and used without first opting in.

In each case, these companies are using the hammers in their hands to bang at problems that may actually need a screwdriver, or a wrench… or no tool at all.

Though it’s not necessarily the right approach, it’s pretty natural.  Think about anything you’ve done in your life, any problem you’ve solved.  You likely have a few standard answers or remedies for any given situation… but that doesn’t mean it’s the right solution.

People rely on their hammers (their strengths), settle into habits and consequently develop a weak tool-belt for creatively solving problems.

Think about yourself, are you using the same hammer for every problem?  Next time think twice and make sure you’re using the right tool for the job…

*Note: These companies have more than one hammer, but I picked these cases as they are the most current examples.

@robgo:

This is a continuation from my previous post about fast followers.

Several times a week, I hear a pitch from for a company that is fairly similar to existing players in the market.  When I ask the entrepreneur how they expect to win vs. the various competitors, I’ll often hear something like:

“Well, they don’t have feature x, y, and z which has been built into our product from the beginning.”

These same folks usually include some sort of Harvey Ball chart to show how differentiated they are from their competitors.

My advice: if you need a Harvey Ball chart to show how you are different, you aren’t different enough.

In my view, winning as a startup doesn’t have that much to do with individual features.  Features do drive success, but great teams and great product development processes drive features.

I saw a talk a while ago by Mike Maples.  In it, he encourages entrepreneurs to “be different, not better”.  I completely agree.

Being different means being WORSE than competitors in some dimensions.  It’s a very intentional decision to forgo some areas of potential strength and choose the 1 or 2 dimensions that no one else is thinking about and absolutely destroy the competition in those areas.

Some examples?  Tumblr, Zappos, Milo, Polyvore, etc.

Be different.

I completely agree here.  This is the way we think about HomeField in terms of some of the competition.

We actually think of most of our competition as market validation and differentiate ourselves by our lack of features. We see it as a strength that enables HomeField to become the ubiquitous video platform for sports (and achieve some other stealth goals as well).

As an early stage company with a product we consider somewhat disruptive, this is so refreshing to read. Thing is, we know our core market, we know we provide value, and we know we can scale to reach a much wider customer base, but at this stage there’s so much ‘guesstimating’ involved.  Read on…

@bryce:

One of the most pedestrain of questions that arise in many VC meetings is that of market size. How big is your market? Really. I’ve found that should this question arise more than once over a series of meetings, you’re better off looking elsewhere for funding than the blue shirt and khaki MBA staring at you pointedly from across the table.

If history is a guide you will not be able to answer this question with cleverly constructed Excel spreadsheets or elegantly cascading waterfall projections. For seed and early stage investors I’ve found that you either fundamentally and instinctively believe that something is a big market or you don’t. Because, often, the most interesting companies are operating in as-yet-undefined markets or are attacking and existing market from some niche that the large incumbents dismiss as not being big enough to warrant their attention and resources.

I posted a link a graph sizing the mobile ad market today at $215M. Now, most VCs say they won’t even look at markets that aren’t well north of a billion dollars in size. Also note that AdMob was funded pre-iPhone which seems to be making mobile ad networks a more reasonable bet. That market barely exists today and was even less obvious for the VCs who wrote the original checks to back a company in an undefined and, wait for it, small market.

The same could be said of the VCs who wrote the first checks for Facebook (social graph, wha?), Twitter (no, what you doing?) Zynga (a niche inside a niche) and many others.

Of the two new investments I made last year, I believe the current market sizing for each would be some approximation of zero. And that’s the point. Its not about the size of today’s market its what you do with it that really matters.