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Don’t Waste Time Chasing Yesterday’s Opportunities

June 30, 2011 by


Chimpanzee Thinking

People are always asking me for an inside tip on Internet sites that will be “the next big thing.” Those are hard, since someone has to invent something innovative, but I do have some views on other ideas whose time has come and gone.

In some cases, these are concepts that have already been done too many times, and the space is crowded. In others, the concept has been tried too many times, or no one has yet succeeded in making any money. Or both. Here are my favorites:

  • Social and business networking sites. Just for starters, Wikipedia now lists about 200 sites by name (once over 300), which they claim is just some of the more notable social networking sites. I still get about one business “idea” per week for a new networking site, which will combine the “best of all the sites” into a new one. If you must do one of these, skip the “me too” and focus on a niche, if you can find an unoccupied one.
  • Online dating sites. Recent research on this subject tells me that there are over 8,000 existing ones world-wide, including two or three new ones per day. Most of these will fail, or never turn a profit. I hope you have a better idea than Women Behind Bars, or Herpes-Date.com. But then, this is an emotional need every single seems willing to spend money on (not to mention the 40% more who are already married).
  • Search engines. You can find several lists of the “Top 100 Alternative Search Engine” on the Internet, and there used to be a web site dedicated to tracking these. Remember the three “big gorillas” in this space, Google, Microsoft, and Yahoo. There may be room here for something really innovative, but just a better user interface, people prioritized results, or one millisecond faster will probably not do it. If you have more money than the incumbents, try it, but don’t look for investors.
  • Micro payments, micro loans, micro investments. Micro “everything” has had lots of entrants over the years, but all are gone, or not making any money. Paying for your ice cream on your cell phone through Twitter is more trouble than cash, and getting a $10,000 loan accumulated from 50,000 people is hard to manage. The latest is “crowdsourcing” your startup with thousands of tiny investments. It won’t happen tomorrow.
  • Portals and single sign-on sites. A portal is a “home page” which you can partition to be the entry to a dozen others, with a single login to minimize the “yellow stickies” on your computer. The trouble is there are thousands of portal sites, like My AOL and My Yahoo, so you need a portal for the portals. Single sign-on is a technical dream that requires world-wide standards be set before it can be implemented.

Somewhere below this list is another tier of questionable potential startups, including more calendar sites, blog aggregators, Craigslists, photo sharing sites, music sharing sites, or more instant messaging sites. Web 2.0 has made it cheap and easy to launch a site, but that doesn’t mean it’s easy to succeed.

In my view, the single biggest reason for startup failures on the Internet is a lack of real innovation. Changing the user interface, and adding a couple of features doesn’t compensate for not being there first (“me too”). The second biggest reason is lack of focus. Combining the features of several successful products will not assure success (“something for everyone”).

For some ideas, the wave has simply passed. Rather than trying to hang on, be the first to start a new one. The rewards are worth it, and it’s a lot more fun. What’s your idea?

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  • Marlon Stevenson

    I like this! It was really insightful and made me rethink my own idea for a professional network and try to see it from your perspective. I wonder would you approve!

  • Boris Fowler

    I would also add deal of the day sites. Unless a city does not have one that operates within it, there are already too many of them.

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  • Peter Knight

    I’m not really buying the failure of ‘micro’-models as a whole, I think those areas continue to look promising – at least from a consumer perspective. Micro investments seem to be doing well in fact…I’m not sure what you’re basing your view on there. If anything, that area just needs more time to mature. It took a long time for Social Networking to evolve to what it is now. I think the micro-models have more technical hurdles to overcome, but some will succeed. Anytime there is an advantage to cutting out the incumbent middle man and makes things more customer friendly, their is a pull to create something disruptive – I hope entrepreneurs keep persisting. 

    • http://www.caycon.com Akira Hirai

      I think you’re right. The failures that Marty identifies are failures of execution, not necessarily failures to spot an umnet need in the market. Even crowded markets have room for new entrants with better execution.