squared99

Obvious by the days between this post and the one below I have been a bit slack in my blogging duties.

I can only say that I have been very busy with voeveo, optimizing some of the architecture, working with the development team on new features, and putting a lot (a whole lot) of effort into seeking investment with the business team.

A typical VC type query that seems to come up a lot is, “What’s to stop so and so multinational mega-corp from building the same thing.” The real answer in almost all cases is nothing. There is absolutely nothing to stop anyone from trying to build the same thing. Just like there’s nothing to stop McDonalds’s from building a Search Engine and competing with Google and Yahoo.

That might sound a bit silly and exaggerated. McDonald’s is not likely to divert their resources from the highly competitive fast food industry and focus on the SE business, but this isn’t obvious when talking about Internet companies.

All services on the web tend to get lumped into the same broad industry term, “Internet Company,” regardless of what the underlying business model is. Therefore if “they” are on the web and “you” are on the web, then they are in the same business as you.

I’m not saying it isn’t a fair question to ask. Anyone seeking funding has to be prepared to answer it and give damn good reasons why they are the better choice. But I do disagree with giving large multinational mega-corps some sort of advantage because of their size.

The Dreaded Google
I’m gonna use Google as an example, because they are the typical company used in the “What’s to stop…” scenario.

According to this logic I guess every person on the planet who has a good idea for the Internet better just forget about trying it because of Google. Let’s all just sit back and wait for Google to build everything on the Internet.

Google does not have a strong track record of duplicating an idea and automatically dominating the space. Actually I’m wrong, there was one instance when Google duplicated a business idea and dominated. It was something called a ‘Search Engine’, and back then they were the little guys competing against bigger players.

YouTube is probably the most high profile example. Google put out their own video service, and then decided it would be easier (and probably cheaper in the long run) to buy and work with YouTube.

There are plenty other less high profile examples. Did you know Google has a social network site and a photo sharing site?
Possibly not, because they don’t dominate either space.

There has been some recent dissatisfaction expressed with Google’s blogging tool, Blogger. WordPress continues to improve and grow through hard-work. They’re always building new features, reacting to and working with their loyal community.

So why is it that Google doesn’t own every business space on the web?

One big reason is probably because Google is known as a Search Engine first, their core business model and brand, just like burgers & fries are McDonald’s. That means people may not prefer them as an off-deck provider of independent mobile content (like voeveo), just like they aren’t the preferred video or a photo sharing service.

Secondly, within every business space on the web, just like the real world, there is plenty of room for competition. Social Networking sites are hot, with Facebook and MySpace on top at the moment, yet Bebo who is running 3rd (by a bit of a margin) was just acquired by AOL for 850 million dollars. LinkedIn has found a niche within the business social network. Come to think of it where did Facebook come from? Didn’t MySpace have the social networking thing sewn up? Why did they even bother? I guess they thought they had a better idea….

Lastly, what does it really take for an Internet service to succeed?
- The team
- Usability
- Personal Preference
- Relationships
- Loyalty
- A willingness to react to your customers needs
- Scalability
- Dependability
- Money
- and about a billion other factors that are just as difficult for Google as for anyone else.

Money and technical resources are no guarantee of success.

No doubt funding is needed, but having more money does not always equal a better chance of succeeding. There are a billion other factors equally (or more) important. Unfortunately, they often depend on money as well.

The Internet is the biggest level playing field out there. More often than not small, creative, smart companies can out-compete larger, slow-moving behemoths. The little guys are closer to the product and the reason for creating it goes beyond a decision to expand their portfolio of services. They are passionate about it and they believe in it. They can react and adapt quickly. They are hungry.

The more important question is what’s to stop another small, creative company from competing? The answer again is nothing. It comes down to everything I’ve said above. Will it be easy for them? No way in hell!