Haven't watched the whole thing yet, but I will push back on some of the popular mythology that everyone thought successful startups we're just toys or would fail in their early days. IMO that's mostly bullshit.
Amazon, Google, Uber, Facebook (despite some cherry picked article from the video about it never being able to hit profitability) were all hugely popular right off the bat, and indeed, many people saw them as being more worthy successors to what were already huge businesses (e.g. the pre-Google search engines, MySpace).
In a similar vein, you often here how pg and other top VCs thought AirBnB was a horrible idea early on. Well, that's just their own individual myopic vision IMO. Couchsurfing was already very popular, as were other vacation rental platforms like VRBO - it's not hard to see how AirBnB could grow into that space.
If anything, what I see as the common thread is that the most successful startups executed extraordinarily well at just exactly the right time (e.g. there were other video sites before YouTube, but you didn't really have enough broadband adoption until the late 00s the make it viable).
All this hoo haa about startup ideas - Just make products that excel at every aspect of what it does and make sure there is a demand for such a product. I see people making a better soap dispenser, the hardware equivalent of what most SaaS startups are working on. You need to invent a new kind of soap that is better than anything else out there. It should take the grime off of everything from kitchen to bathroom scum. It replaces IPA, Acetone, LimeOff, EasyOff, Ivory bar, Dawn soap, and Gojo. You've got an explosive popularity just around the corner. Popularity isn't luck. It germinates from knocking people's socks off when they use your product.
I equate startup advice to those "Teach you how to become a millionaire" books you find at grocery stores. If these people really were good at making soap, they wouldn't be around giving advice. That includes my own advice in this comment ;-).
I've actually funded 9 unicorns in the past 8 years and work with startups at the earliest possible stage, writing checks of $1M to $5M. And I give this advice away for free, because I find those "get rich quick" guides to be totally misleading.
I'm doing YouTube mainly to directly get the things I think work for founders out to people, just to help. So, I'm with you— but you have to understand my intention for the videos is to be something very different than those millionaire books.
Method soap is the example of a better soap dispenser like you say. It doesn't work on everything but it had the uniqueness that it was made with natural ingredients, so much that you could drink it, which the founders did to demonstrate that fact.
I used Method foaming hand soap for a while. I probably went through about 10 bottles, and I'd say at least half of the dispensers started experiencing pumping issues before they were empty. So, in my experience, they were actually the worst soap dispensers I ever purchased.
The soap was great. However, I don't know how much of that was the soap itself and how much was simply the experience of using foaming soap compared to liquid soap for washing my hands. If the dispensers actually worked, I would have kept buying it.
At the same time, selling ordinary things in a better way has also built many fortunes. I know several self-made people running ecommerce businesses in the most mundane spaces. There's plenty of opportunity everywhere.
Yes, you're 100% right. I meant "startup" in the sense of silicon valley rush to become a unicorn giant.
Soap dispenser business is in own right quite interesting. If you made a substantially better soap dispenser, it won't be in the newspapers. It has a shorter lever, but a good business nevertheless.
Toothpaste (as pills rather than paste), chewing gum (nootropics/flavors), sneaker care stuff, home decor, and a very specific set of auto repair tools.
Those are 5 completely separate businesses ranging from 500k/yr to 5m/yr. Only the first is a "new" product.
Really? Haven't really looked into indiehackers, but are you implying that it's mostly a platform for attracting investors through fake growth stories like in the good old crypto days with fantastical IPO's?
Just because there is demand for something does not mean it is a viable business idea. There is tons of demand for food yet the margins selling food are tiny and it is very competitive. There is tons of demand for listening to music online, yet it was never profitable until Spotify came along. There is huge demand for watching videos online yet YouTube ran at a loss forever. Everyone thinks that their product is great and will stand out among the competitors.
Amazon had its ups and downs, but with them and Uber it was never a great intellectual leap to see how they could be very profitable. That's not at all the case for Google or Facebook. As late as 2002 Google itself wasn't convinced that it could succeed by selling ads, and their next best idea for making money was so uninspired that Silicon Valley spent several seasons mocking it:
Exactly!! I always wondered why it took so many years for someone to figure out a revenue model for couchsurfing ('couchsurfing' website started in 2003 and AirBnB in 2008). AirBnB is just that (atleast at start)
The folks at the famous ad firm Widen and Kennedy like to say "the best story wins." AirBnB did have one thing different in it's story vs VRBO, which was that it was initially pitched at people's spare bedrooms, not owners of vacation properties. It's a small difference, but meaningful in how the marketing message spread imo, even if AirBnB did come to be dominated by "professional" hosts.
> with VRBO predating Airbnb by a lot, except for a more slick execution.
And "the more slick execution" was key. VRBO was until quite recently basically just classified ads - all transactions were done off platform, which was a major PITA and left a huge vector for fraud. I remember back in the late 00s I rented a place in Europe, and the only form of payment the owner would take was cash, so I showed up and paid 1200 euros in cash like I was buying half a kilo of heroin.
AirBnB solved the transaction issue right from the get go, with all payments going through their system and the owner not getting paid until like a day or two after the guest checked in. In addition, AirBnB worked off a commission model, which makes much more sense from a business perspective and which VRBO finally switched to a couple years ago.
Joel said from the beginning that their goal was to kill Experts Exchange, which at the time was a scammy site that used dark patterns to lure people into paying for answers, but still popped up all the time on Google. And although I often found my question posted on other forums, I swear that half the time the only response was "Never mind I figured it out" or "Just Google it."
MySpace was massive when Facebook was a year or two old. I had accounts on both and MySpace looked way more attractive compared to FB (it had the feel of Instagram).
So no, FB did not take over overnight. And even a few years into FB, no one (yes, no one) knew that FB will go past MySpace and there will simply be no comparison between the two 10 or 15 years down the road.
When FB took over MySpace a full FOUR years in [0], investors knew FB had momentum, but no one (yes, no one) had any idea why.
Not only that, many investors had no second thoughts about MySpace, and it felt like a competition space, instead of a winner take all. There was still an opinion that MySpace will retake the top spot again 'any minute now.'
So why FB took over MySpace? We don't know. Yes, we don't know in 2020, 16 years later.
(I'm not dismissing hard work, marketing, execution, commitment. But it was there for both FB and MySpace. It's a pre-requisite. You think MySpace folks slacked off and that's why FB got ahead? think again).
I wish I could downvote you, but as a direct reply I'll have to settle for replying instead. You seem to have completely misunderstood my argument. I'm not "Monday morning quarterbacking", and I in no way think that Facebook's success was guaranteed.
The point I was making was the idea that it was believed early on that social media was a "toy" or that it would never be profitable or that people poo poo-ed the idea of Facebook in its early days is not accurate, at all. Indeed, the example of MySpace shows that it was already well known that there would be a scramble for dominance in the social media realm.
> So why FB took over MySpace? We don't know. Yes, we don't know in 2020, 16 years later.
Uhh, I think we have a pretty good idea. First and foremost, Facebook was always focused on your real, offline identity, which was rather new at the time. MySpace and the early social networks were primarily based on different online personas (e.g. online usernames, no real name policy, etc.) MySpace tried to get people to add their real names and identities later, but it was basically too late by then. This isn't hypothetical, either, one of the founders of MySpace told me as much in a conversation about a decade ago.
I just want to point out one thing, for the record.
I'm sorry "Stop Monday Morning Quarterbacking (MMQ)" isn't directed at you per se, but the general direction of whoever is reading my comment.
MMQ is, unfortunately, practiced widely in many prediction/retrospection circles like startups, finance, economics, politics.
I'm speaking from a the point of view of scientific rigor, or at least quantitative data analysis. No one does that when it comes to opining about the cause-and-effect of an event in the past. If you're "the winner", anything you say about why you won, would be taken as gospel. "Winner is always right". Rigorous analysis is very hard, and costly, and to what end? Just so you could say "my reasoning is based on analysis"? That's a very boring thing to say. Unless rigorous-analysis finds utility in applications like decision-making for future startups, and is shown to work over and over again (maybe we'll need AI for that), no one is going to bother with it.
You must have had a very different experience if you think 'MySpace looked way more attractive compared to FB'.... MySpace pages were ugly as hell, with tiled backgrounds, autoplay music, and mismatched themes. Facebook was CLEAN, and everyone's page looked uniform and consistently styled. This lack of customization, I think, is what made it become so popular. That, and the feed; myspace never had the concept of taking posts from all your friends and putting them into a list that you could scroll through. You had to visit each page to see what was on it, and that meant seeing the horrible styling and autoplay music.
I attribute the success more to creating a tight and more complete personal network due to the campus focus early on. I do think the features of MySpace were a novelty that was also wearing off. And fb provided a cleaner bug free interface
Amazon, Google, Uber, Facebook (despite some cherry picked article from the video about it never being able to hit profitability) were all hugely popular right off the bat, and indeed, many people saw them as being more worthy successors to what were already huge businesses (e.g. the pre-Google search engines, MySpace).
In a similar vein, you often here how pg and other top VCs thought AirBnB was a horrible idea early on. Well, that's just their own individual myopic vision IMO. Couchsurfing was already very popular, as were other vacation rental platforms like VRBO - it's not hard to see how AirBnB could grow into that space.
If anything, what I see as the common thread is that the most successful startups executed extraordinarily well at just exactly the right time (e.g. there were other video sites before YouTube, but you didn't really have enough broadband adoption until the late 00s the make it viable).