reecepacheco

Features Don’t Win

@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).

Its not the size of your market, its what you do with it that matters.

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.

Native Americans vs. Cape Wind Project - irony aplenty

UPDATE: The New York Times is in on the discussion too…

The Cape Wind Project is a proposed wind farm off of Cape Cod, MA that will generate about 75% of the average electricity demand for Cape Cod, Matha’s Vineyard and Nantucket.  It would be the first of its kind.

It is steeped in controversy - as many locals (including renowned politicians who ‘support the environment’) want the benefits of renewable electricity, but they don’t want giant wind turbines ‘in their backyard.’

While I think the project management and some of their choices thus far are not stellar, I am generally for renewable energy and I’d rather lose a little bit of ocean real estate to ensure that my grandkids will have an ocean to swim in years from now.

That being said, I am awed - but not surprised - that the latest ploy to stop Cape Wind is an effort to protect the ocean region on behalf of the Native Americans.  They are, of course, happy to have more protected land under their jurisdiction - maybe they can build a floating casino!

My gripe here, is that Native Americans, allegedly in touch with Mother Earth and all her ailments, are against a renewable energy source.

“The Wampanoag tribes of Aquinnah and Mashpee have said for several years that the Cape Wind project would disturb their spiritual sun greetings and submerged ancestral burying grounds in Nantucket Sound.”

OK… I get it.  Millions of years ago the ocean wasn’t so high and they’ve got some long-lost cousins down there, but are they really laying claim here?

It just doesn’t add up to me.  Someone, somewhere, has to make a sacrifice in order for us to make change in the world for the better.  In this case, it’s going to be the Native Americans, the residents of the Cape & Islands and the few gulls who fly into the turbines… but it’s all for the betterment of our future.  (And we’ve got a gull problem anyway).

Decision looms for Cape Wind; Nantucket Sound eligible for National Historic Register -The Green Blog - A Boston Globe blog on living Green in Boston