
Picking a fight with an 800 lb gorilla, startup marketing - sophmonroe
http://www.wepay.com/blog/2011/02/28/picking-a-fight-with-an-800-pound-gorilla/
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jdp23
Great description of when they realized how valuable the comparison with
PayPal could be: "The first time we actively embraced the PayPal comparison
was when PayPal froze the account of the Flux foundation – a non-profit arts
organization – just a few days before the Flux Crew headed to the desert to
build their famous Temple at Burning Man.

The Flux Foundation and a bunch of other people and organizations collecting
donations ended up turning to WePay in protest (and in desperation). Our pitch
was easy: yes, you can use WePay instead of PayPal. WePay.com is better than
PayPal for collecting donations, and we won’t freeze your accounts.

After that, people started referring to us as the consumer-friendly or
“community-oriented” version of PayPal. CNN actually referred to us as the
anti-PayPal."

~~~
headleyywood
Really amazing and Funny

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michaelbuckbee
Something I'd be very interested to hear about is how WePay is going to handle
fraud. Fraud and abuse prevention is a huge part of what PayPal does and I
would guess the major reason behind their atrocious customer service and the
issues with groups like the Flux foundation.

It seems like every other week on Reddit there is someone who says they have
disease X or is raising money for disease X and would you please PayPal them
some money. This is immediately followed by a bunch of people digging internet
dirt on that person and declaring them a fraud, which is then immediately
followed by another group of people telling the first group that the person is
legit and that they made them cry.

I don't even know how you start to deal with that situation as a financial
entity. Do you call the person up and ask them if they have cancer? Do they
fax you medical records?

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rimantas
> Fraud and abuse prevention is a huge part of what PayPal > does

Interview with Max Levchin in "Founders at Work" is a good read in this
context. After long part about fraud and prevention of it:

    
    
      Linvgston: So is PayPal in a sense a security company?
      Levchin: I think a good way to describe PayPal is: a security company
      pretending to be a financial services company.<…>
      So the company's core expertise, by definition, has to be in this
      ability to judge risk<…>.
      Livingston: What did you do that your competitors couldn't?
      Levchin: The really complicated part is figuring out the risk.

~~~
michaelbuckbee
Agreed completely, I'd heard a separate interview with Max Levchin where I
believe he quoted the amount of money that PayPal lost at around $150 million
(IIRC). That was their "learning money" to figure out how to handle fraud.

Seeing as how Mr. Levchin has actually invested in WePay I'm assuming that
they are have some strategy for fraud prevention.

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mcantor

       It's also not easy for big companies to change course, add
       features, iterate, or experiment. PayPal can't simply decide
       to shift its focus toward consumers, nor would they want to.
    

This reminds me of an outstanding article I read some time ago which advised:
"Attack your competitors' _strengths_ , not their weaknesses." In other words,
WePay might have failed if their goal was (for example) _just_ to provide
better customer service, PayPal's weakness. This is because PayPal could
ostensibly improve their customer service without affecting their bottom line.
_Merchant-oriented services_ are PayPal's strength, and WePay "attacked" that
strength by catering to non-merchants, which, as the article states, they
could not do without a core shift in values and focus.

~~~
speek
I'm incredibly intrigued by the advice from that article, I'd love to read it.
Do you remember where it's from?

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mcantor
Sorry... I searched for it, but for the life of me I can't track it down. I
think the original article was talking about DuckDuckGo and Google; the
"strength" in that case was Google's information-gathering: Google's bottom
line is partially defined by using the information it records about its users
to drive advertisements and other usability tweaks (such as marking search
results with stars, etc). By focusing on privacy, DDG "attacked Google's
strength"--Google _can't_ compete with DDG on privacy because it's precluded
by what Google does best.

You can obviously frame "lack of privacy" as a weakness of Google, but the
important part is that it's a weakness that _can't be addressed_ without huge
changes to work around their established strengths.

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silverbax88
I'm not sure if Richard Branson is really a 'little guy' taking on an 800-lb
gorilla, but the idea of taking on competition by actively inciting them has
worked many times.

It would be especially effective when:

\- you are able to gain significant attention (press, viral) over your
comments/attack

\- the 800 lb gorilla doesn't even know you are attacking it

~~~
bpeters
He is an 800-lb gorilla that thinks he is stronger than all the other 800-lb
gorillas.

Always interesting to see two beasts battle.

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JonLim
I posted this as a comment on the blog, but it kind of disappeared... so
whatever.

I mentioned that sometimes the 800 pound gorilla isn't as slow or bureaucratic
as you would think. With PostageApp, we have several large competitors
(SendGrid and MailChimp) and they are frighteningly good at pivoting and
offering new and exciting features.

I'm having a really fun time watching the developments of all the players in
our industry. If you can take something away from fighting with the 800 pound
gorillas, it's that you will learn a lot.

~~~
samdk
SendGrid and MailChimp might be large competitors _relative_ to the size of
PostageApp, but the scale difference is orders of magnitude less than the
scale difference between WePay and PayPal.

I counted 18 people on the "team" page of SendGrid, and MailChimp's website
lists them as having about 70 people working for them. I haven't been able to
find exact numbers of employees at PayPal, but I know it's easily into the
thousands, and very possibly into the tens of thousands.

I think you have a good point: that relying on being able to move faster than
your competitors can be dangerous if your competitors aren't actually slow. I
don't think you can really make an accurate comparison between
SendGrid/MailChimp and PayPal though. The scale (and culture) is just
completely different.

~~~
JonLim
You are completely right, they are huge relative to the size of PostageApp,
but they are the 800-pound gorillas in the industry.

There are other, much larger companies such as Exact Target, Eloqua, and
Constant Contact, but they serve a different market and are not directly in
competition with us.

Wasn't a completely accurate comparison, but just an anecdotal way for me to
explain that not all competitors are slow. :)

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joelrunyon
WePay is awesome. I found out about them a few weeks back and within seconds
had a account ready for my skydiving group to get going.

I'm still waiting on support for outside the US & it would be nice for them to
support transactions & become a full-fledged paypal competitor, but with
leadership thinking things through this well, I'm really hopefully we'll
_finallY_ have another alternative.

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rumpelstiltskin
Still doesn't help individuals selling products online and are stuck using
paypal and risking having their accounts frozen.

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aberman
stay tuned...

~~~
jasonlotito
... for support outside the US! =)

I kid, I kid! Much love from someone whose spent 10 years now dealing with
banks and the credit card companies.

~~~
aberman
the two requirements are pretty related.

Not many consumers (besides people collecting donations) need international,
and very few merchants would be happy without it.

It's been made clear to us that this is a pretty big opportunity.

~~~
jasonlotito
Don't worry, I know better then most all the issues you face in doing what you
are doing, and frankly, you're being smart about it, which is why I'm rooting
for you. =)

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anateus
Apropos, but not directly pertinent information: male Gorillas range in weight
from around 200-400lbs. The Wikipedia entry on Gorillas says they've reached
around 600lbs but those were very obese Gorillas in captivity.

I certainly understand the idiom, but it's probably useful to remember it in
context. You never know when you may need to know the approximate weight of a
gorilla, and relying on a faulty idiom may just bring you into harm's way :>

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skrish
That is an interesting piece of information. :) Thanks for sharing.

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jscore
I hope I'm not alone, but it's impossible for me to differentiate what you do
versus as something already provided by PayPal.

PayPal was revolutionary, but WePay seems something that PayPal already
provides.

Borland (with their IDEs and Quattro) taking on Microsoft is akin to a little-
guy taking on a 800lb gorilla.

I fail to see the parallel here.

~~~
aberman
I'm not sure which comments to answer first: The ones that say WePay is
nothing like PayPal and the comparison is misleading, or the ones that say
WePay is just a feature of PayPal and therefore undifferentiated.

We'll just keep building the product and let people decide for themselves.

Not the best video in the world, but check this out:
<http://vimeo.com/18765571>

If you were to make a demo video of PayPal, what would you show?

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shenntibbs
If you take a picture of someone, don't stand close and your camera in wide
angle. Move away and zoom﻿ in. Your picture will look more realistic. When you
stand too close the wide angle makes the centre part of the image look fatter
because it is a fish eye. Model photographers never stand close to a model.
The same for your webcam.

