Budding entrepreneurs are often advised to find a niche by producing “new solutions to old problems”. But what if you’re late to the market?
It can seem like a thankless venture if several other money-making start-ups also mirror your seemingly-original idea. However, this doesn’t mean you need to return to the drawing board. Instead, register your business, appoint a new director and embrace the opportunity of being a new company attempting to launch in an already-thriving industry.
You Have a Vantage point
When you’re late to join a trend, you have something your potential competitors don’t – a vantage point. You have the opportunity to see what companies are doing in your burgeoning industry and follow the patterns and blueprints laid out by them.
Look out for things other start-ups may be missing — or use what they are doing well in your model. You could reduce your workload by a considerable amount, simply by taking advantage of “starting late”.
Take inspiration from global giants, Google and Facebook, both of whom joined their respective markets at a comparatively late stage.
The first version of Google launched in 1996, 16 years after “Archie” — the world’s first search engine. Archie hosted an index of downloadable directory listings, but due to limited space, only made the listings available — not the content.
Google initially launched as BackRub, a search engine which used backlinks for search. BackRub determined a website’s credibility by the number of people who linked back to the site — as well as the reliability of those links.
Between Archie and the launch of Google, there have been a number of search engines vying for the number one spot:
|1991||Veronica and Jughead||Gopher Index System used to search file names|
|1992||VLib||A virtual library set up by Tim Berners-Lee|
|1993||Excite||Created by six Stanford University graduates. Purchased by Infospace for $10 million in 2001.|
|1993||World Wide Web Wanderer||A bot used to capture actual URLs. However, the bot captured the same page many times, causing it to lag.|
|1993||Aliweb||Allowed users to submit pages to be indexed, but many failed to comprehend the process.|
|1993||Primitive Web Search||Used the World Wide Web Worm. No ranking used for indexed titles and URLs.|
|1994||Infoseek||Webmasters could submit a page in real time. Used by Netscape as their default search engine.|
|1994||ENet Galaxy||Used many web search features but had an oversized library.|
|1994||AltaVista||Pioneers in allowing natural language enquiries. Advanced search techniques implemented.|
|1994||WebCrawler||The first crawler to index whole pages. Daytime lags due to being overused. Bought over by AOL.|
|1994||Yahoo! Directory||Creators: David Filo and Jerry Yang. Outsourced their search services until 2002, when they began working on their own. Commercial sites included for $300 a year.|
|1994||Lycos||Went public with over 50, 000 documents. By 1996, Lycos had identified 60 million records. Eventually sold to Daum Communications in 2004.|
|1995||LookSmart||Competed with Yahoo by increasing inclusion rates. Lost a lot of reliability when it transitioned into a PPC provider. Rejected by Microsoft in 2003, losing 65% of annual revenue.|
These companies were competitors in Google’s target industry — but they were also companies the organisation could learn from.
Had Google not launched their company for fear of being late to the “search” party, then its founders Larry Page and Sergey Brin would probably never have reached a net worth of over $100 billion.
Immortalised by a movie and owned by one of the most publicised business owners in the world, Facebook is the world’s leading social network. However, although Facebook is the premier company in its niche, like Google, it was far from the first:
Friendster: A popular platform during its infancy, Friendster managed to accumulate 3 million monthly users. Google offered Friendster’s founder, Jonathon Abrams, $30 million in 2003 to buy the site. However, Abrams opted to gain venture capital investment instead to try and scale the company.
Friendster’s failings: The company failed to keep up with an ever-increasing number of users, resulting in slow running web pages and downloads. As a result, the company’s current business model targets the Asian market, with 90% of its users based in Asia.
Facebook grew steadily since Mark Zuckerberg launched the website in 2004 and managed to avoid the major technical pitfalls that dragged Friendster back to social networking obscurity.
MySpace: Arguably as popular as Facebook at its peak, MySpace exploded onto the start-up scene in 2003. It was conceived when it’s co-founders, Tom Anderson and Chris DeWolf, grew frustrated from Friendster’s weak infrastructure.
To improve on Friendster’s flaws, MySpace was created with an impetus on scalability, and with a good reputation behind it, MySpace was purchased for $580 million by NewsCorp in 2006.
MySpace mistakes: Struggling to keep up with the instant nature and increasing popularity of Facebook, MySpace was eventually sold for just $35 million to advertising network Specific Media, with celebrity performer Justin Timberlake owning a substantial stake in the company.
Entering the social networking trend at a later date, Facebook was able to capitalise on the popularity of this form of communication, capitalising on existing demand. The company’s fashionably late entrance gave it the perfect vantage point to observe and exceed its rivals.
Things to Look out for When Starting Late
When you’re looking to launch your business after the proverbial party has begun, you could follow these tips to reach the forefront of your industry and beat the competition:
Make a list of investors and read about their latest acquisitions. What trends are they interested in — and how much are they injecting into certain industries?
Read Industry Media
If you’re a tech start-up, find out about the latest tech news from trusted sources. A lot of journalists and specialist writers are skilled at spotting trends before they become common knowledge. Study industry media and get yourself educated before you set out.
Attend Industry Events
Attending events in your industry provides you with the perfect opportunity to network and meet some key figures. You’ll likely come across several new start-ups, all keen to get their products and services into the public domain. Assess what they’re providing and take inspiration from their ideas — or improve on their current service.
Visit Research Labs
Go one step further and stay ahead of trends. Visiting key research centres such as SRI (inventors of the mouse and Siri) and IBM research (home of the hard drive) will allow you to see what possibilities lie ahead in your industry. You can then go back to your own desk and brainstorm ways you can form a pioneering start-up based on what you’ve learned at the labs.
Observe. Learn. Launch
Whatever industry you’re in, remember — it’s never too late to launch your idea. And as Google and Facebook have proved, starting late may even lead to greater things than those companies that went before you. Your vantage point is higher, so observe, learn — and launch.