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April 9, 2007
Concurrent Startup Idea Generation and the Pervasive Copycat Fallacy
As an early-stage VC, I have a unique privilege of confidentially spending time with a number of entrepreneurs throughout their company formation and initial product development process. And it’s amazed me how many times I’ve seen two entirely separate groups of entrepreneurs without any knowledge of the other’s activities independently come to launch very similar products/services.
Information about new startups and trends affecting them is near ubiquitous given the rise of influential and well-read blogs, as well as the mainstream press and conferences. And based on these visible and salient market trends, smart people tend to be led to the same conclusions about wherein lies the opportunity. If a large objective market opportunity exists, it would be unusual for it to go entirely missed by those with experience in the space. However, not everyone sees it that way – entrepreneurs, bloggers, and others sometimes privately/publicly accuse and dismiss other groups of copycat tactics.
This copycat threat leaves entrepreneurs hesitating about spreading knowledge about their startup endeavors, especially early on. Yes, there is certainly risk in this perspective and there is a logical set of reasoning for operating in stealth mode, as I wrote about a couple of years ago (my opinion is that the best course of action isn’t a binary approach, but rather a nuanced one.) But I believe the risk of another someone literally copying an entrepreneur’s startup idea is largely overperceived and overweighted. Generally-speaking, isn’t it better to bang your drum about your idea with better hopes to attract co-founders, employees, advisors, capital, and other important continents to make your company successful?
Of course, there are exceptions to every rule – sometimes a founder has unique perspective given his/her past experiences that allows her to recognize an opportunity in the market which others do not see. And I would highlight a distinction between the essential startup idea and a trade secret or other proprietary information which provides unique competitive differentiation. But I always start with a skeptical stance about first-mover advantage claims as the primary barrier to entry into a competitive set. Sure, network effects provide clear competitive advantages in many markets, but it hardly guarantees success without other differentiation. Defensibility with other aspects of the business model and above all, execution, mean so much more than a few months time-to-market.
Give entrepreneurs credit where it’s certainly due – very few set out to pursue a true copycat strategy. Almost all are reacting to market dynamics and an authentic (though sometimes incremental) idea. The question when pursuing a new idea for a business isn’t "has someone else thought of this and how can we prevent that from happening?" but rather "how can we beat someone else who is thinking of this right now?"
(And when you see a new company that launches that rhymes with another, I wouldn’t assume it’s a copycat endeavor that doesn’t have other tricks up its sleeve which aren’t yet visible.)
April 3, 2007
Measuring the Effectiveness of Measurement
Many have cried about the death of the pageview, largely due to the emergence of video content and AJAX-enabled pages with non-reload updated information. But the pageview isn’t dead. At least not yet. Rather, it’s just being dethroned. In Web1.0 it was the only way to measure engagement. Now it’s becoming one metric of many. Ask someone in online ad sales if pageviews don’t matter today. Of course, pageviews are going to matter less and less over time as other measures emerge, and people have been talking about this fact for months. But I think for a long time coming the act of completely refreshing and loading a new page reflects a deliberate act on the user’s part which signifies a level of interaction and engagement with the web that is meaningful. What is more interesting, however, is not the diminishing stature of one metric, but rather the emergence of others. It’s simply a reflection of the fact that all pageviews are not created equal – and that’s always been the case.
Two weeks ago comScore (with its eye towards announcing its plans to go public yesterday) added the notion of "visits" to its scoring of websites. Peter Daboll of Yahoo subsequently applauded this move (which reboosted their stature in the comScore rankings saying, "This by no means is a silver bullet, as this metric doesn’t count ad consumption and impressions (which, by the way, is also a drawback of pageviews). What it does provide is a valuable reference for advertisers to determine where to increase their ad exposure and budgets." And yesterday Compete introduced a new metric called "attention" which "fuses engagement (measured by time) and traffic (measured by unique visitors) into a single, more complete picture of a web site’s value."
Other notable measurement statistics have emerged when innovators take a fresh perspective as the web has evolved with the “new” content type of video. Early-stage startups like TubeMogul (which performs cross-site video and video publisher tracking across MySpace, Metacafe, Revver, Yahoo Video, and YouTube) are trying to make sense of how many people watch video, when, why, and what that actually means. The past few weeks of posts on TubeMogul’s blog have contained some insightful commentary around views of political videos and the effect of those on parties and candidates (see here and here).
Last week Ari Rosenberg wrote an Online Publisher Insider article rightly claiming that we shouldn’t kill the pageview. But his reasoning for doing so is completely incorrect, as he contends that it will hurt the industry with confusion around metrics. I think this is a short-sighted approach to a long term problem about how to effectively measure user’s engagement on the web. As Jeremy Guterman at PaidContent has written, "what do we get with more information? A muddier picture, but maybe a more accurate one." We’re in the midst of a sticky transition about how we measure actions online – to say that the pageview is dead may be overly sensational, but to contend that we shouldn’t press forward looking for new solutions is myopic.