

What to do when an $8 million gorilla launches 3 weeks before you - szopa
http://drstarcat.com/archives/163

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dksf
Love this quote from the article... I actually had to re-read it to make sure
I got it right:

"If you’re an investor, I’m looking for a partner to help me make Clicker the
Ask.com of online video guides. I think you’ll find SetJam is a real bargain!"

~~~
gizmo
Good catch!

I don't think it's a nice quote because it's about Clicker losing. Doesn't
sound like a convincing pitch. The whole "let's not read the article because I
might not like what I see" attitude also doesn't inspire confidence.

His honesty and frankness is cool, though.

~~~
thaumaturgy
Maybe sometimes you have to know when to focus on your product, and when to
focus on your competitor's. What he said sounds pretty straightforward: they
were busy, in a critical part of their business development, and he knew that
looking at their knew competitor would just distract him from what his team
was already doing.

He didn't ignore it altogether, he just waited for the right time.

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tptacek
There's no such thing as "8 million dollar gorillas". Companies with 8 million
dollars in funding are monkeys just like you.

The gorillas make more than 8MM in _profit_.

~~~
Shooter
I think of 'gorillas' as having revenues in the _B_ illions or customers in
the millions...

I guess everyone has a different concept of the boogeyman?

~~~
tptacek
I guess I'm just trying to say, you might change up your strategy competing
against Cisco, Microsoft, Google, or even Salesforce.com. But an 8MM round
from a competitor probably shouldn't alter _anything_ about your plan, unless
it's to capitalize on the attention their inevitable vanity launch will
generate.

~~~
Shooter
I totally agree, Thomas. I was just trying to take the bounds of the spectrum
a bit further. I tend to work in areas with strong network effects, so tens of
millions in funding or profits is really nothing. It doesn't affect our
strategy at all. We usually just have to be wary of the true behemoths
(Google, Nokia, Microsoft, etc.) that can wield enough force to actually
change the market.

On the other hand, we sometimes also have to be wary of the tiny, unprofitable
startups that have gotten enormous mindshare in the market for some reason.
This, of course, is relatively rare - but it happens. The majority of
companies are in the middle of that spectrum, and they're the ones that tend
to piss away millions without affecting us in any way whatsoever. Except maybe
for pointless patent skirmishes. I _hate_ the US patent system with a red-hot
glowing passion that knows no bounds.

------
jacquesm
When spotlife.com launched the demise of Camarades.com/ww.com was widely
announced, spotlife was backed by heavyweights Logitech and Philips ($30M).

Spotlife went under many years ago, ww.com is still ticking along. Don't say
it can't be done. Be prepared to put in a lot of time and effort though. And
forget about finding external capital for the moment.

~~~
cousin_it
It's good. How is ww.com doing now? I'm actually in a similar situation with
openphotovr.org - the competing services from Google and Microsoft turned out
to be not nearly so popular (or well-implemented) as I'd feared, and it almost
makes sense for me to start pushing the site again.

~~~
jacquesm
Slowly dying, and has been doing so for the last 5 years or so. There is a lot
of competition out there and we've shrunk little by little.

We're in talks with a company about some major move though, so maybe we can
get it to be top of the line again without breaking the bank.

To be honest, in spite of making tons of money from it I really can't get
excited over webcams any more, it's been enough. Time for fresh blood.

~~~
caffeine
You know, mentioning that ww.com is NSFW would've been nice. I just visited
the home page and was greeted by a picture of some guy touching himself.
Gross.

~~~
jacquesm
That's another excellent reason why I want to get rid of it. Sorry about that,
it definitely isn't intended to be NSFW but there always seems to be people
that find great fun in shocking others.

Once again, my apologies. We try what we can to keep the jerks out but it is
altogether an impossible task to continuously monitor 400+ video streams for
abuse.

------
launic
When your competitor has raised $8M in funding and you barely have $50k you
get the feeling that it is not a fair competition. (And it can not be fair, no
matter what you say...). But when your product gets better reviews, you
suddenly become more optimistic.;)

~~~
jyothi
And being more optimistic is the scary part especially when you don't have
enough money. I wouldn't care much about how much money the guerilla's have
got.

Have been through both positive and negative end result on two different
products.

On a ecommerce product discovery site ReviewGist.com - we had a technically
superior product, reviewed on TC and host of other big tech/startup blogs. But
sustenance, financial muscle to extend reach matters a lot. Other VC funded
companies marched past us long ago.

On a facebook book reading community "Books iRead/weread.com" we were new,
small and of course used no budget. We bet the biggies in the market like
goodreads, shelfari, librarythings who were there for long time on internet
and well funded.

When it is consumer oriented business there can be wonders. But it is
definitely a big red alert to watch for the biggie constantly. You get lucky
if they don't do things right.

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meterplech
also, clicker seems to be getting a lot more publicity. this is obvious
considering they have more money, PR people, or whatever, but you should work
on some basic attempts to get your name out there. why aren't you on
crunchbase? googling "set jam" sends me to a website on proper handling of
cherry jam. The way to win against the gorilla is to use your position as a PR
move and write to dozens of blogs, forums, and newspapers (even those old
things on the tree-based substances are still read, especially when content is
placed online).

You are definitely facing unbalanced competition, the way to beat the bogeyman
is to enhance your product's value proposition and use every opportunity for
free PR

edit: I do understand the company is called "setjam" not "set jam" but, I
imagine many others do not

~~~
drstarcat
Believe me, this is what really scares me. I feel like a lot of the startup
game has turned into a popularity contest, and I've never won a popularity
contest in my life. If you look at my twitter stats or blog traffic, you can
see that I just write about geeky things that no one cares about. Promoting
myself just doesn't come naturally.

My hope is that by listening to our users and focusing 100% on them, we can
build a better product and that will be enough. In the end though, I'm the CEO
and I've promised my team to get the word out so our efforts aren't in vain.
I've set myself to tackling the PR problem with all the intensity I bring to
our product. I hope it's enough.

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rythie
If anything they could be over funded. I wouldn't call them a gorilla unless
they were someone big like Yahoo, Google, Microsoft or have proved themselves
in the market over 6+ months.

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joshu
This is a bit inane, given the N billion dollar gorilla already in the room is
the people that actually own/licence the content.

------
jasonmcalacanis
Very simple: go raise $8-12M based on Lanzone creating a market for a web-
based TVGuide. Almost every market worth being in has two winners (think cola,
search, fedex/ups, burgerking/MCdonalds, etc).

Also, on exit have two players in the market will help. they will probably not
want to exit under $100M and you can carve out the quick exit at $25M.... or
not.

the best thing to do is:

a) raise some capital ASAP b) focus on your product c) focus on users and what
they think of your product d) focus on distribution (i.e. consider strategic
money maybe).

best jason

~~~
drstarcat
Thanks Jason. That's pretty much the plan, though I'm focusing on "b" until
Tuesday, "c" for the rest of my life at SetJam, and going to work overtime to
make sure "a" happens in spite of putting it behind "b" and "c".

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prakash
Firstly, don't characterize competition as a 8MM gorilla, when they are a
startup.

Second, don't worry about competition. Focus on your users. Listen to them.
Iterate rapidly. Add features request by your early users.

The other way to think about it is the facebook > twitter status update* as a
product. Taking one component of a successful product and making it a product.

* comparisons to fb might not be completely accurate since one of the founders, apparently had the idea for twitter when folks were updating their IM clients.

~~~
ErrantX
_Firstly, don't characterize competition as a 8MM gorilla, when they are a
startup._

Even when they raised $8M in funding?

[http://www.dmwmedia.com/news/2009/09/15/clicker.com-
launches...](http://www.dmwmedia.com/news/2009/09/15/clicker.com-launches-web-
tv-guide-$8-million)

I think the word _startup_ is the one misplaced :)

~~~
prakash
_Even when they raised $8M in funding?_

Yes. $8MM doesn't mean they have customers/users.

~~~
ErrantX
I dont quite understand the relevance of that? $8M is probably a lot of money
from where this guy is sitting :)

~~~
davi
It's amazing how much money rich organizations can waste, and how much time
they can spend on the wasting.

They can get tempted to reinvent a better wheel for $$$, rather than reusing
existing wheels for cheap; then they get sucked into a time/money sink of epic
proportions while the simpler solution grows like a weed.

Not what always happens, but what can happen.

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ApolloRising
If you have 50k in the bank that is not small change for a startup. That is
plenty for you to show off your skills and get things going. Just because they
have 8 mil and can hire a ton of people, does not necessarily mean they will
be able to execute at your speed. They may have countless discussions,
meetings, changes, upgrades, etc... that keep them from releasing product.
I've built stuff in a few days with a friend that some companies can't build
in 2 months due to the endless meetings and other such nonsense.

Focus on your users and give them what they ask for and remember this: To an
end user Yahoo and mydinkysite.com look the same, they have no idea if there
are 13,000 people backing it or just you. 10,000 servers or a shared hosting
account. All you need to do is give them what they want better than the
competition.

You can buy/rent a lot of talent in the valley, but you can't buy is domain
knowledge acquired by talking to your users! Engage them and they will give
you ideas that are will give you an edge.

------
jbarciauskas
Funny. I had started working on something similar as a way to learn Django.
Was going to use Netflix as my master data source and dapper to scrape Hulu,
XBox 360 (on xbox.com) and various lists of iTunes movies. This was going to
be a project over a few weekends.

I'm not sure I see where the business model is. The value zap2it and the
actual TV Guide bring to the table are by offering original content, something
more like Entertainment Weekly. That doesn't seem to be in the plan for either
company.

That leaves the affiliate model he mentions, and I can't imagine Netflix,
Apple or Microsoft are offering an affiliate model. Hulu also seems doubtful,
as an affiliate program for Hulu would be huge news. Perhaps Amazon? After
that, it's all small potatoes.

Anyway, good luck.

~~~
lyime
The business model is to position themselves as a media site. With organic
growth and tons of good content pages, you can make really good CPMS. So if
you have good traffic you can make good money.

------
danhak
I think the auther is unncessarily hung up on Clicker, which doesn't even seem
to be out of private beta yet. His real competitor is SideReel, a television
stream aggregator with huge penetration right now.

~~~
minalecs
i agree, sidereel is the best site out there for this, but the sad thing is
the more popular it becomes, the less likely it will be good and have the best
source and be able provide things that an 8m funded company can't. *hint hint.

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asdf333
Here is another option for you. Look long and hard at your business and your
partners. Decide if you want to compete w/ Ask.com (maybe you do) and also
entertain the possibility of switching directions and doing something
different.

Maybe some of the code is reusable? Is there a better idea? Ask yourself if
you were to start today, what you would do.

We went through a similar situation and we changed direction. We were lucky to
have a flexible and talented team, and looking back on it, it was the best
decision we ever made.

------
maxer
out press them, watch this interview from mixergy with the founders of
hotornot.com

[http://mixergy.com/hotornot-bootstrapped5-million-profits-
ja...](http://mixergy.com/hotornot-bootstrapped5-million-profits-james-hong/)

once hotornot bootstrapped from the guys front room- funded competitors sprung
up everywhere. He talks about getting his site to be the first article that
newspapers carried about such a site

~~~
teej
I've been at a company that successfully pulled this strategy off. We
effectively made the press think we were the leader in our space. This was
incredibly helpful in raising capital, but it horribly failed at getting us
closer to profitability.

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holdenc
No doubt clicker.com has a lot more people required to make a single decision.
In the beginning, when there many critical decisions, this is a disadvantage.

Another thing setjam has going for it is time -- it can grow at its own pace,
I suspect. Clicker.com is more sink or swim, and the clock is already running.

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alain94040
The media loves a good fight. Otherwise they are bored to death just copying
press releases.

So you have a good angle to play. At this point, I would shoot to get a free
ride on the buzz they are going to get short term, and see them die from
overweight within 2 years while you zoom past them.

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oliveoil
Isn't it unfair to say that they raised "$8 million on a PowerPoint like it’s
1999"? It definitely was harder otherwise SetJam could create something in
PowerPoint too.

~~~
drstarcat
Yes. It is unfair. They raised the money based on Jim's experience as a CEO of
a publicly traded company. Still, it's not really how the startup game has
been played in quite a while.

------
systems
There can be only "Many"!

You don't have to be No.1 or the only one to be successful. If you are a
player, I think this is good enough. And good luck!

------
edw519
Funny thing about competition, if the market is big enough and the competitors
are good enough, there's plenty of room.

 _At TC50 Clicker demonstrated a product that has about every bell and whistle
you can imagine. SetJam is stripped down to the bare essentials. I’ll let our
users tell us what they need instead of deciding for them._

How about that, he's already found a classic way to differentiate. Sounds like
a great starting point. I have a feeling they'll do well.

~~~
davidw
> ... if the market is big enough and the competitors are good enough, there's
> plenty of room.

... and if there are no big huge network externalities creating a winner-
takes-all market.

~~~
Retric
_are no big huge network externalities creating a winner-takes-all market._

Facebook did not kill off other social networking sites and it's got far more
externalities than most websites. Once the market is large enough you only
need own a tiny slice to make a small profitable company.

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misuba
How much does a gorilla cost? Like, a real one?

Given that it's probably a gray market at best, I'd guess that one or two
particularly impressive ones have traded for $8 million. To Kim Jong Il or
somebody. Seems reasonable, right?

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patio11
An $8 million gorilla only matters to the extent that you are a monkey.

You're not a monkey, so I don't know what you're doing defining yourself in
reference to a gorilla. Probably not "a lot of good".

