Comment by Rod | Hacker News Reader

Comment by Rod | Hacker News Reader

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"It all depends on your initial goals. If your goal is to create a company that is going to be around in its original form and that will 'change the world' then by all means, stick around. But if you create 'web-apps' for an emerging field where you'll be faced with 10's if not 100's of competitors a successful acquisition is not bad at all."

I entirely agree. I know that HN'ers love web-apps and love thinking that "building something people want" is enough. But web-apps are too "easy", i.e., the barrier of entry is too low, and the competition is fierce. If one's business is a website, then sticking around may be foolish. Just take the cash and go build something real, and let people with a large pillow of capital take the risk.

My point is this: Andy Grove and the founders of Intel were not successful because they built "something people want". They were successful because they created something people did eventually want, because they made wise decisions at the right time, and because their skillsets made them irreplaceable almost. If you want to build an empire, then create something the world will need in the future, make sure you're the only one who knows how to do it, and capitalize on your knowledge while the rest of the world is catching up. This is extremely hard to accomplish in software, but it's not impossible in hardware. I am thinking of electronics, photonics, microfluidics, and the like... not web-apps that can be built in a weekend.

Dismissing webapps isn't really fair. Facebook succeeded in building an empire. They have a massive barrier to entry via the network effect.

The webapp market is limited by people's leisure time. There can't be 10 Facebooks, because if the average person spends 30 min per day on Facebook, then it would have to spend 4h30min on the other 9 webapps. Nobody has that much time. The market for electronics, photonics is almost unlimited... because these technologies are meant to automate, not to entertain. This is not a matter of electronics being "nobler" than webapps, it's just the realization that one encounters certain limitations in the webapp area that do not exist elsewhere.

Not all web-apps are leisure oriented. Plenty of them are B2B and plenty of them are giving a tangible return on time invested to the users.

You mean software as service kind of stuff? Would you care to provide some examples?

Dating sites (b2c), dropbox (both b2b and b2c), tarsnap (b2b), drupal, wordpress, ebay and so on, there must be thousands of examples.

Freshbooks (indispensable to me), Mailchimp, Outright.com, Basecamp and Backpack. And those are just the ones I use for my day to day business.

FWIW, Tarsnap is both b2b and b2c. My best guess from eyeballing email addresses and talking to some Tarsnap users is that businesses are only 20% of Tarsnap users, although they account for about 80% of the total usage.

That's a real surprise to me! (was it to you?)

The way tarsnap is marketed I'd never ever expected it to be b2c, most private individuals I know outside of computing would have a very hard time understanding what it's all about without a lot of explanation. That's really interesting.

I didn't say that the private individuals who use Tarsnap are outside of computing. I know a lot of unix geeks. :-)

Ah right, of course, why didn't I think of that angle. That should have been obvious. To my defence I'll say I wrote that before my morning tea while on a holiday. Will try harder next time.

yes. just like friendster, myspace, and facebook had.

> yes. just like friendster, myspace, and facebook had.

Facebook had ?

hahah. getting ahead of myself there, no?

but yes, i am going on record saying that facebook will probably not be the last word in social networking. someone else will come along and figure out how to do it better, just like what happened to friendster and myspace.

They do have some strong network effects, but just like its predecessors, this market moves too fast for that to create a durable lead, I think.

Also, social networking is subject to the whims of fashion. I think part of what facebook used to kill myspace was that myspace was full of lower class people. Facebook seeded themselves from colleges, giving themselves a nice middle class base to build upon. Facebook has largely abandoned that level of control now, and it has yet to be seen if the seeding was enough.

I'm with you on that one, but I thought it was a little premature ;)

See here:

http://news.ycombinator.com/item?id=1172025

hah. I actually think Google is in a similar place. they aren't the first search engine, and I think their strongest claim on being the last isn't so much that they have some kind of moat, it's just that they've hired four out of five people who might compete with them.

I actually think the search engine market has the opposite of a network effect barrier to entry. If you made a search engine that was half of google's 'native effectiveness' (by which I mean googles effectiveness before the spammers start mucking it up) assuming your search algorithm is different enough that it's not gamed in the same way as google's, you will have a search engine that is more effective than google until it becomes worth the spammer's time to mess you up.

I think google's talent pool is interesting, though. they have a whole lot of really good people, and they are probably exploiting that talent better than any other company of similar size. It really seems like they should own more markets than they do.

I think Google's biggest weakness on that front is that they have nearly all their employees thinking that google is both competent and altruistic. I don't see the same internal dissent with my friends who work at google as I saw when I worked at Yahoo. At Yahoo, we'd point out what the company was doing wrong. At google, the employees seem to think their masters know best.

(this aside, the essential problem with search engines is that the advertising business model creates a conflict of interest; if the search results are that much better than the search ads, nobody will click on the ads. On the other hand, nobody has come up with another business model for 'generalized search')

I disagree on that prediction.

There were a load of online auction sites, then eBay won. You could wrongly say that people moved from auction site to auction site, but that wasn't the case.

Maybe there will be the next facebook, the next ebay, the next amazon, but I'm skeptical.

I was under the impression that most of the 'me too' auction sites came /after/ ebay showed how it was done, then they died, because they were trying to beat ebay by being like ebay.

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