Friday, December 02, 2005

A thought on the Google Factor for startups.

In the Web startup world, the Google Factor is a large part of any business model today. The Google Factor works something like this: For any given WebWidget idea, you have to consider how much time is likely to pass before widgets.google.com enters "beta." If you think you can beat Google to the punch by a wide margin, you might be able to sell your WebWidgets to them. (Look at this Blogger thing here.) But it's a bit dangerous, since Google might already be working on their version, or they might just not like you, or they might be in a mood to build instead of acquire. Which leaves Yahoo, Microsoft, or going it alone. Going it alone is very tricky if you're going to end up competing with Google. Not impossible, but tricky. Most people already think of selling to one of the big three, either as a direct strategy or as a way to handle growth (see Flickr). If Gwidgets is already out, you should think seriously about doing something else. Just now I had an interesting thought on this subject. Maybe it's better to be faster than two of those three than to be faster than all three of them. If your WebWidgets are the first ones out, everybody will wonder what Google's going to do. (Do we seem a bit like ancient Greeks lately, worrying about capricious gods?) But if your WebWidgets are gaining popularity at exactly the same time as Gwidgets, Ywidgets!, or (marginally) MSWidgets - but only one of these - then the interest of the other two is likely to be strong indeed. Keep up with the Brins and so on. Even in this famously innovative territory, the big boys spend a lot of time sniffing each other's behinds. It's part of being big. If you smell familiar to them, you smell a little like fear, and then they're after you. This is off the cuff, but it seems to make sense this morning. Hey Vincenzo, file this idea away for your grad thesis!

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