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In the eyes of its users DropBox is a fundamentally different product from the filesharing sites like YouSendIt that already existed, or the techie utilities like rsync that HN commenters compared it to. There's an easy way to see this: people talk about dropping a file in their DropBox, they don't talk about this new filesharing program they're using called DropBox.

Similarly, people talk about buying a GoPro and putting footage of it up on YouTube. They don't talk about buying a digital camera from GoPro and putting their videos up on this video-sharing site called YouTube.

Similarly, people Google questions and Xerox pages, they don't search the web with Google and copy documents with a Xerox copier.

Conversely, people stop at the gas station (which might happen to be a Mobil or Exxon or 76 or Valero) in their car (which might happen to be a Honda or Subaru or Ford) on the way to the supermarket (which out here is probably a Safeway, but that varies depending on location). Or they might stop on their way to Whole Foods, which actually did succeed in differentiating, while driving a Tesla.

The customer's mental model is the only thing that matters here. If you're building a car or a skateboard, you're seeking to fit into an existing category in their head. Even if you win (which is unlikely, because incumbents optimize very heavily with lots of resources), you lose, because you're a commodity in a market with lots of substitutes. If you want to actually win - in the sense of create a monopoly product that defines its own market - you, as an entrepreneur, need to be thinking in terms of the overall problem that the user wants solved (transportation, or information access, or answers) so that you can define the terms of the market in a way that you're the only reasonable solution.




Your explanation is very clear and really makes a lot of sense.

> The customer's mental model is the only thing that matters here.

Totally right

> If you're building a car or a skateboard, you're seeking to fit into an existing category in their head. Even if you win (which is unlikely, because incumbents optimize very heavily with lots of resources), you lose, because you're a commodity in a market with lots of substitutes.

> If you want to actually win - in the sense of create a monopoly product that defines its own market - you, as an entrepreneur, need to be thinking in terms of the overall problem that the user wants solved (transportation, or information access, or answers) so that you can define the terms of the market in a way that you're the only reasonable solution.

At what point should you start doing that?

Using one of your examples: I don't think the Google founders had a vision of defining a new category of service. And they didn't even have a business model for several years. So what actually made them "win"?


I think the Google founders had a vision of solving a problem. They wanted to make search work right.

(Well, technically, they wanted to get their Ph.Ds - the actual history of Google was that Larry had the idea to download the web and throw away everything except the links, so he did that. Then he had the idea to visualize it as a big eigenvalue calculation on the probability of a random surfer ending up at a given page, and that's where he got the idea for PageRank. Then someone - might have been him, Sergey, or Scott Hassan - got the idea to sort webpages by PageRank, and the results were better than existing search engines, and so they launched BackRub as a search engine. Then Andy Bechtolsteim thought it could be a really big company and gave them $100K to make it one, and the rest is history.)

If you steer towards problems, and do so without fear of the unknown, you'll naturally move towards ideas where you get to define the category. They wouldn't be problems if someone had already solved them! The rest - building a business, making money, marketing it, defining it in customers' heads, etc. - can all follow later.




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