Investors and advisors in the high tech business are very familiar with the idea of “me too” companies, but I find many entrepreneurs–particularly new ones–all too often fall into the trap of being the next-incremental-improvement-on-a-hot-company.
This is pitched as:
- We’re the “next YouTube”
- We’re the “next MySpace”
- We’re the “next Twitter”
- We’re the “next Facebook”
Rarely–very rarely–do companies who are incremental improvements on the hot company/service/product of the minute able to gain funding, and–even more rarely–do they turn out to be successful companies. Why is this? Usually, it’s because by the time that “me too” company shows up, the original version of that app/company is already on its way to dominance and success–that’ usually what triggered the imitator in the first place. There’s a huge market share headstart, and generally a more mature and funded firm. It’s also because, frankly, “me too” isn’t usually good enough. (Twitter + pictures, Twitter + fancy graphics, Twitter + comments, or Twitter + whatever isn’t going to move all those Twitter users over to you tomorrow, sorry.)
The other problem, as well, is often the entrepreneurs behind the “me too” company are coming from outside the industry, and without the knowledge and connections into the business. Entrepreneurs are great, but if you’ve been a heads-down engineer, without any exposure to the market, and suddenly see Facebook and say “hey, I program software to do that”–you’ve missed the point that a huge part (and probably a dominant part) of any success is marketing, partnerships, and getting that product to market. There are plenty of low cost offshore developers who could create you a Twitter/Youtube/whatever clone in a week, but that’s not going to get you very far.
My advice for aspiring entrepreneurs? Be original — really understand and figure out your own market, develop something that specifically serves customers who don’t have it or really want something else– and don’t go chasing the popular or hot companies. Don’t be a “me too” company!