March, 15th 2021 • 5 min read
For many reasons “being first” is one of those “truths” that we take for granted when building a new product. However, when we take a closer look, it turns out that perhaps it is not as important as it might seem at first glance. Of course, everyone is familiar with platforms like Amazon, AirBnB and Steam, which at some point “were first.” But what about Bolt, Skillshare, Pluralsight and GOG or other examples of companies that at the time of its inception entered an already developed market, achieving considerable success? Undoubtedly, “being first” is very helpful, but are we really doomed to failure when we open the fifth portal dedicated to a particular niche?
Let’s takea closer look at the story from the book “Chasing Black Unicorns” by Marek Zmyslowski (highly recommended). The background of the story is the way in which Rocket Internet, established years ago by the Samwer brothers, operates. In mid 90’s they were interested in introducing Ebay to the local, German market. Unable to find an agreement with the auction giant from across the ocean, they decided to launch a direct copy of it. This is how Alando was created. After a few years Ebay bought them for 43 million USD.
So, at first glance, the above story seems to confirm that “being first” is crucial. However, the truth is that, when Samwar brothers launched their platform, they had a strong competition in Germany. How they managed? The most important factor for startup, is not who is the first but… how big is your market. The market always comes first — not the team or the product, and it turned out that the market was huge.
Thus, the first and most important thing when creating a new product is to determine how big the problem it solves is and how many people have to deal with it. Only then should you consider what your competition looks like and whether you have any. However, don’t fall into the trap here. Not being able to determine who is your real customer, is the biggest mistake when creating a new startup. So, how to do it right?
The longway is to be your own customer. It is easier to create a product for car mechanics when you are one of them. In our case it took us four years in IT training services market to form an idea for Teamsharq, a solution for instructor-led, live courses. The shorter way is to talk to your potential buyers. Prepare a simple mockup, landing page or video explainer and ask them what they think about that. But remember — “everybody lies”. Some people will say your idea is interesting just because they don’t want to offend or discourage you. Therefore, when you talk about your idea with potential clients, you should have an offer ready for them that they are willing to pay for. Not tomorrow, or next year. Today. Only money tells the truth.
And it’s not that you’re supposed to earn a lot right now or show all your cards at this point. By making a real-time remote working and learning tool as we do, you simply need to validate that people are interested in this type of learning, why they prefer it to video courses, and what their biggest issues are among the other tools on the market. Then you have to ask yourself, if you are really able to solve their problems.
If the market is big enough, being second has another advantage. Someone may have already done all the work for you. Market research, selling strategies, Growth Hacking etc.. All you have to do now is be a little better, act more agile, be smarter. After all, it’s not like the horse that gets to the finish line first is ten times better than the next one. Your goal is simply to effectively solve a problem, not to come up with 1,000 amazing features that nobody needs.
All in all, being first in a given niche is undoubtedly an advantage, but it does not alone determine the success or failure of your product. The startup recipe is: relevance of problem * number of people that have this problem. Nothing more. Don’t think too much of adding yet another great feature that makes you first but may also confuse your clients with its uniqueness. Focus on the market, not the product itself. It is just as simple as that.
Written by Dominik Olszewski ( Linkedin)Back to Blog