Archive for January, 2007

Creating Barriers to Entry Online

Monday, January 22nd, 2007

It’s pretty hard to create strong barriers to entry online, especially for start-ups. Without a ton of cash or an army of programmers, Google or Yahoo can quickly and easily swipe your idea and churn out a prototype in mere weeks. Protecting against this potential threat is key.

The best way to prevent users from defecting and joining a competitor service is via strong brand loyalty and a stellar product offering. This cannot be over-emphasized. Just as content is everything to a blog, the product is of utmost importance to a start-up. I hate using cliches as I just did, but it’s true.

Another way to protect against rivals is by harnessing the power of the Network Effect. Though not all companies can use this phenomenon, if you plan accordingly it may very well be a saving grace. Examples of companies who exploit this include:

Partnerships, strong relationships, and/or exclusive deals with select companies may also provide a barrier against other companies. Solidfying relations and maintaing excellent communication is vital.

Finally, some companies turn to a more traditional approach - the Law. It seldom occurs on the net, but sometimes companies file patents to guard their business systems and practices. Examples include:

I don’t think a company should ever bank on a patent or legal barrier. Patents are only as good as your ability to fight them in court. In addition, rivals may find a way to dodge around them or give them a slight twist, thereby bypassing your defence.

Protecting against competitors is key to a successful long-term strategy. However, critical planning and execution is necessary. Failing to do so may erode your user base and ultimately lead to your demise. Don’t let it happen.

Guest Posting on Friedbeef’s Tech

Saturday, January 20th, 2007

I will be guest posting Friedbeef’s Tech blog from time to time. The popular tech blog is focused around “solving everyday problems with simple technology”. It also has a very loyal following. I look forward to contributing to its success.

To read my first post on PhishTank, click here: Here Phishy, Phishy

Thanks for the continued support.

New Name for Web 2.0

Saturday, January 20th, 2007

Many critics shun the term ‘web 2.0′. This is understandable, although I do feel there may be room for a term to describe a new web experience focused around user-contribution and social media. Or maybe a term isn’t needed? What do you think?

I tend to use the term “The New Web”. It works for me and isn’t overly cliched. Although I dread a time when “The Newer Web” or “The New & Improved Web” come along.

As a side note, many techies are already mentioning the term ‘web 3.0′. Yikes. This may be a sign that we are actually in a bubble (which I still don’t believe). Although, acceptance is the first step in AA…

In any case, let me know your thoughts. If you have a different name suggestion, be sure to mark it down. If you don’t think a term is needed, let us know why.

Dethroning the Internet Giants

Saturday, January 20th, 2007

On the net, there are several industries dominated by one major player. Some include video, search, books, social networks, auctions, and classifieds. If you are unaware of who the industry leader is in any of these categories, then you’re probably living under a rock. In any case, check your answers against my list:

These Internet powerhouses dominate their respective realms with little threat from the competition. Furthermore, in most cases, they’re surging even farther ahead of the competition as we speak.

So how do you dethrone these Internet kings? By slicing their product or service offering into verticals.

Chop, chop, chop. It’s the only way to compete. Any start-up looking to break into the above categories needs to carve out a niche and extract of subset of the larger player’s target market.

I touched on this concept a little bit in my post about the Evolution of a Hot Internet Space. I’ve said it once and I’ll say it again and again and again… Verticals, fragmentation, and niches are what’s in store for the new web. Nobody can directly compete with the big guys right out off the gate. It’s certain death. But if they choose a smaller market, they can prosper.

Let’s look at potential niches within the big headings:

  • VIDEO - Vlogs, funny videos, news clips.
  • SEARCH - Product, forums, blogs.
  • BOOKS - Used, rare, comics.
  • SOCIAL NETWORKS - Age range, region, topic of interest.
  • AUCTIONS - Product type, region, auction type.
  • CLASSIFIEDS - By region… jobs, for rent.

As you can see, it’s easy break down the main categories into sub-groups. The hard part is creating a tailor-made service for the group.

An interesting point is focused around the marketing of the service. A generic offering is actually harder to market than a more specific service. Having ‘everyone’ as your target market is great, but doesn’t bode well for a marketing campaign.

Nowadays, blogs, blog communities, groups, forums, and niche interest sites are rampant. These make the task of marketing a targeted service much easier and more manageable. In addition, it’s also be much easier to locate and convert potential product evangelists and influencers.

So, next time someone says their target market is potentially everyone, tell them to grab a niche.

Web 1.0: User Participation?

Friday, January 19th, 2007

The concept of user-contribution is relatively new. Only recently has it really gone mainstream. Wikipedia proved out the model and many corporate entities are now harnessing the power of wikis. The evidence is real and the trend is here to stay.

But the notion of ‘user participation’ has been around for longer than we think. Often times, we hear the term used interchangeably with its sibling mentioned above. Nevertheless, they shouldn’t be confused as they represent different concepts.

In my opinion, user-contribution describes a situation where users contribute on an individual level and the aggregate of the contributions is more powerful than the individual expenditures. In other words, the more people that collaborate, the better the overall outcome or results. Meanwhile, user participation simply conveys the idea that users participate on an individual level and add separate pieces to the cause. There is no aggregate and every piece needs to be examined. Obviously, conclusions can be pulled from the various sources, but there is no resounding interpretation.

Basically, I’m saying that user participation has been around awhile in the form of forums. Wikipedia describes a forum as “a facility on the World Wide Web for holding discussions and posting user generated content, or the web application software used to provide the facility”. The system essentially runs itself with little or not human intervention - ignoring the moderation aspect, of course.

These discussion facilities have been around since the dawn of the Internet.

My point is that is user participation is old school, not something new or revolutionary. The idea of user-contribution (or crowdsourcing in some cases) is newer and much more powerful. It harnesses the knowledge of the masses to create an entity or solve a problem that could not otherwise be achieved by the individuals pieces.

Wow, that began to sound like an introductory philosophy class.