Story: Startups, don't focus on competition. Instead, "make your own business work"

Very cool post from Brett Martin in which he provides a candid postmortem on his tech startup company, Sonar. There are lots of great mistake stories in the piece; here's one:

In the run up to SXSW 2012 when the insider media had fabricated Highlight as heir to the throne and some of our more fair weather investors had written us off, my confidence was against the ropes. We reordered our roadmap to rush out comparable features but were now BEHIND. I put on my best brave face but inside my gut was rotting away. I still remember thinking on the flight to Austin “fck, we had it, and now we are going to lose it.”

Oops! Highlight never went anywhere but we definitely wasted a ton of energy and sleep “responding to the threat” when we should have been figuring out how to make our own business work.

Lesson Learned:

Be steady at the wheel. The only way one startup can kill another startup is by getting into the other’s head and leading them off a cliff.

If you don’t believe me, try this proof. Are your competitors releasing a bunch of the same features that you have on your roadmap? Yes? Do you know what consumers want*? No? Great, then neither do your competitors. Get back to figuring out what users want!

*Hint: If you did, you would already have traction.

Hat tip Failcon.

Flipboard's Mike McCue: at Netscape, focusing on competition over customers was a mistake

From McCue's interview with Adam Bryant of the New York Times:

One of the biggest mistakes I made at Netscape was to focus too much on competition. Microsoft was trying to kill us. And that caused us to think about what we were going to do about Microsoft. What we really should have been thinking was: How do we focus on what our users want? Why did they love our product? How do we make it more of something that they love? So my advice is, every time you have a thought about the competition, replace that with a thought about your customer and you’ll do far better as a business.

A coda to the story is that Netscape was "killed" by Microsoft despite Netscape's focus on trying to counter their competition. The lesson is that a customer focus might have done better.

"All failures of strategy are rooted in the assumption that outcomes are predictable"

Marvelous quote from Horace Dediu in a post from hbr.org. Dediu is comparing HP's and Apple's strategy approaches in the wake of HP's exit from the PC and mobile businesses. The entire post is excellent, especially his illustration of HP's and Apple's radically different competitive positions at a key turning point in 2001.

But that's the nature of unforeseeable growth: you cannot foresee what will happen and plans never work out. Data and planning don't help. The lesson is that you need to plan for that which cannot be planned. When you are at your peak you must assume failure is imminent and when you are at the trough you must assume success is inevitable.


All failures of strategy are rooted in the assumption that outcomes are predictable.