Times have changed. It used to be that a startup had to show a 'significant barrier to entry' in terms of IP that is not easy to replicate due to technical complexity, deep domain competence and, often, the large number of person-months that went into building the product. Flaunting the barrier was pretty much de rigueur for funding conversations.
But things are very different for web apps now. Tools are readily available (experienced developers, not so much) and development is usually fast and cheap. A large number of companies that have consumer-oriented products don't always have unapproachable, deep technology that would daunt other developers. What they do have is the other requirement for success: eye-popping traction with legions of users. Many successful offerings (YouTube being a prime example) did not start off with a complex product but they hit pay dirt when their user base started expanding geometrically. And most importantly (for revenue planning), this large user base will only come to your site if your offering is free.
As I was explaining to a would-be entrepreneur today, it is no longer about the complexity of the code. It is more about filling a need, doing it well enough to attract a large number of users and being able to extrapolate that to many millions. But, there is the slight catch that usually all this has to be done with very little money - maybe that's why not everyone who's a coder (or knows one) is an entrepreneur. Now there's a barrier to entry.
No comments:
Post a Comment