And for power users only too! Pretty sure power users are less likely to be willing to pay for a service, because they're so used to finding free alternatives to paid stuff.
No, power users are your best customers when you present a clear value proposition. Casual users don't ever see the need so they don't ever bother paying.
A friend of mine operated a pledging type service for donations, and he said in a conversation that less technologically sophisticated users definitely had higher willingness to pay. What's your evidence?
I define a power user as someone with technological sophistication. For example, one of the features Matt Cutts mentions is filtering your mail using regular expressions. That requires technological sophistication.
Being more comfortable with computers, technologically sophisticated users are more likely to google around to find free or cheap alternatives to a product they see. Thus, companies in a market with technologically sophisticated users compete more on the basis of price and less on the basis of advertising than other companies. This makes it harder for these companies to make a profit.
It's true that technologically sophisticated users will be more likely to see the merits in Matt Cutts' startup idea. But that's a defect, not a feature.
As the ecosystem around Twitter has discovered, the platform owners will sooner copy a good feature than buy it if it's cheap enough to build. It's not about OAuth or IMAP, it's about some GOOG PM copying the featureset and putting it in the MRD for the next release.
I think that depends on how sophisticated a service is. I agree that applying some regular expressions to emails is not enough to make any other company buy you instead of building it themselves. But that holds for almost anything a startup can do.
Startups need to solve difficult problems or they are nothing more than marketing firms trying to create a hype around hot air. Filtering email intelligently, including automatic anonymization of sensitive parts within the email, can be a difficult problem to solve, and I think there are many types of email integration that a startup could tackle based on the approach Matt suggests.
Twitter has actually made 4 acquisitions. Perhaps they were talent acquisitions but the still apply. I suspect that they have a buy/build strategy of some kind - i.e. could we build this product faster than the people who built it? If not, we want them on our team.
Like when Twitter acquired Tweetie and gave it away for free?
It doesn't seem like it's terribly impacted the other players, at least that's my perception. (could be wrong - someone with hard stats pls correct me)
My point being: that fear alone while is a rational one, should not be the only criteria to definitively say that an idea should not be pursued b/c it guarantees that you will fail in your startup
Not like that. That's buying the leading competitor and putting your brand on their product. It's still competing on a pretty even playing field with all the others. What people here are talking about is bundling a clone of your product in with the main product. When Microsoft made IE a part of Windows, it killed Netscape and basically the entire market of for-profit browsers forever. When Apple knocked off Karelia's Watson and included it with the system, it killed that product. Ditto with Konfabulator, which was destroyed by Dashboard.
The danger is that when your app can be absorbed into something more popular. They don't compete with you — they just destroy the market for what you do.
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Except I think startups are collectively figuring out that creating a company solely around an API plugin isn't a very solid business plan.
And for power users only too! Pretty sure power users are less likely to be willing to pay for a service, because they're so used to finding free alternatives to paid stuff.
No, power users are your best customers when you present a clear value proposition. Casual users don't ever see the need so they don't ever bother paying.
A friend of mine operated a pledging type service for donations, and he said in a conversation that less technologically sophisticated users definitely had higher willingness to pay. What's your evidence?
I define a power user as someone with technological sophistication. For example, one of the features Matt Cutts mentions is filtering your mail using regular expressions. That requires technological sophistication.
Being more comfortable with computers, technologically sophisticated users are more likely to google around to find free or cheap alternatives to a product they see. Thus, companies in a market with technologically sophisticated users compete more on the basis of price and less on the basis of advertising than other companies. This makes it harder for these companies to make a profit.
It's true that technologically sophisticated users will be more likely to see the merits in Matt Cutts' startup idea. But that's a defect, not a feature.
Not sure that applies here. Even if Gmail discountinued OAuth support, you could just fall back to IMAP.
As the ecosystem around Twitter has discovered, the platform owners will sooner copy a good feature than buy it if it's cheap enough to build. It's not about OAuth or IMAP, it's about some GOOG PM copying the featureset and putting it in the MRD for the next release.
[edit: a famous bit of company-is-a-feature carnage for reference: STAC vs. Microsoft: http://en.wikipedia.org/wiki/Stac_Electronics ]
Which makes me wonder why Matt can't get this championed internally or for someone's 20% project?
I think that depends on how sophisticated a service is. I agree that applying some regular expressions to emails is not enough to make any other company buy you instead of building it themselves. But that holds for almost anything a startup can do.
Startups need to solve difficult problems or they are nothing more than marketing firms trying to create a hype around hot air. Filtering email intelligently, including automatic anonymization of sensitive parts within the email, can be a difficult problem to solve, and I think there are many types of email integration that a startup could tackle based on the approach Matt suggests.
Twitter has actually made 4 acquisitions. Perhaps they were talent acquisitions but the still apply. I suspect that they have a buy/build strategy of some kind - i.e. could we build this product faster than the people who built it? If not, we want them on our team.
I think the worry is more that Google will offer the same service, for free, built into GMail.
Like when Twitter acquired Tweetie and gave it away for free?
It doesn't seem like it's terribly impacted the other players, at least that's my perception. (could be wrong - someone with hard stats pls correct me)
My point being: that fear alone while is a rational one, should not be the only criteria to definitively say that an idea should not be pursued b/c it guarantees that you will fail in your startup
Not like that. That's buying the leading competitor and putting your brand on their product. It's still competing on a pretty even playing field with all the others. What people here are talking about is bundling a clone of your product in with the main product. When Microsoft made IE a part of Windows, it killed Netscape and basically the entire market of for-profit browsers forever. When Apple knocked off Karelia's Watson and included it with the system, it killed that product. Ditto with Konfabulator, which was destroyed by Dashboard.
The danger is that when your app can be absorbed into something more popular. They don't compete with you — they just destroy the market for what you do.