I think STFU is brilliant advice and I do it myself. A metaphor:
In 1866 a young shepherd named Erasmus Jacobs found a small white stone on the bank of the Orange River in South Africa. It turned out to be a 21 carat diamond which they named "Eureka" and it kicked off a diamond rush in the area that centered around Colesberg Kopje. Turns out that this little hill was an old volcanic pipe filled with diamonds and every prospector for thousands of miles descended on the place and started digging.
Here's what it looked like:
Every prospector had their own pulley and own demarcated area they were allowed to dig.
So if you were digging in, what is today called Kimberly's big hole, and started finding way more diamonds than anyone else, what would you do? Start giving everyone around you advice about how and where they should dig?
Sadly, business is largely a zero-sum game because customers and their money that we compete for are finite.
But the only reason capitalism works is that it's a clearly positive-sum game overall. New competitors are mainly worth investing in because they figure out a way to create more value for customers. That in turn makes both customers and producers richer.
Silicon Valley does so well partly because there's a great culture of sharing information here. I agree with the main article: if you're raking it in and it isn't obvious, you shouldn't crow about it. But sharing techniques isn't a problem; money fountains like Google share open-source software and publish papers all the time.
You can't avoid fast-follow competitors by keeping your mouth shut; eventually people will notice your success no matter what you say. The best you can do is avoid it for a little bit.
For many businesses, "a rising tide lifts all boats" is the most accurate description of the field.
Compete easily with your direct competitors by "changing the game"
I guess the most understandable example (if maybe not 100% correct, and not even in the book) is Mac vs PC. If you want to compete in the PC market, it's a fierce competition. In the Mac market, there's only one seller (the Mac market is 'The Blue Ocean' created by Apple).
Where are they? I'm not convinced that STFU really is brilliant advice. I'm not convinced that big companies with lots of resources will jump at the chance to clone an idea just because someone has shown it can generate enough profit to make an individual financially comfortable. I'm not convinced that small companies with the skill to execute well on a clone will choose someone else's idea over one they come up with themselves.
Clones do happen, but if there's a connection between publicizing financial success and getting eaten by clones, please show me. As far as I can tell, you get clones when you get popular, regardless of information you publish.
The original article now has a parenthetical note: (edit: if your 'trick' can be easily cloned)
I agree with the updated article and with your example. If mmaunder also conditionalizes his comment on the idea being easily cloned, we're all in agreement.
If it takes a decade to clone your idea, by all means, publish all your data.
In the semantic technology space I've seen some pretty astonishing stuff in the last few months, but almost all vendors have the problem that they're a few years ahead of where their customers are. It's like they're selling rocket fuel to people who drive Fords.
In a case like that, success for the individual might be a matter of optimizing the ecosystem (bigger pie, faster) rather than aiming for a bigger slice.
Gives an interesting alternative to business as a zero sum game. Bob Young, founder of Red Hat:
"The challenge is to focus on market size, not just market share. When consumer demand for bottled water grows, Evian benefits, even though many of those consumers start with a bottle other than Evian. Red Hat, like Evian, benefits when other Linux suppliers do a great job building a taste for the product. The more Linux users there are overall, the more potential customers Red Hat has for our flavor.
The power of brands translate very effectively into the technology business. We have evidence of this in the Venture Capital investors who have recently invested in several Open Source software companies. The one common denominator between all of the investments to date have been that the companies or their products have great name recognition, and are recognized as being quality products. In other words, they have successfully established a brand."
As such only to find successful way to "dig" is to try it personally and find out your own way.
Advices are like recipes might be nice starting points since they give you some confidence that someone invested some time into them and in the end you have to make them your own.
Digging doesn't always apply to informational markekets - internet, software etc. As those shift so fast that anything is outdated before you ever know it.
Advice can be good, remember it - if it is a good story. Retell it, it might lead to some informal contact(anecdotes anyone?). Often other part of business is being well known - to be acquired / get new contacts / support.
But seriously, if you stumble into a diamond mind worth a couple billion that does all the work for itself maybe you can find a way to keep all that money to yourself. But I'm willing to bet you're talking about 1% cases here, not the standard type of story that is brought up on HN.
He could have bought the mineral rights to the land, have a survey taken, realize there are billions in diamonds in them's hills, and have complete control of the entire mining operation and its profits.
Notre sure if the example is relevant, as I'm largely basing it on US law. But your argument doesn't really stand as an excuse to tell someone else.
Every now and then someone hits the jackpot. An easy concept, maybe an app or a small website that makes a ton of money. Or one of those 10 year overnight successes.
Congratulations! Seriously! I'm really happy for you and I hope that it will last you for a long long time to come.
One thing you probably don't want to do is to brag about it in an open forum. The reason why is very simple: A runaway success is what almost every wanna-be business guy is looking for, and you're just out of the gate so you are still vulnerable.
Of course it is fantastic that you want to contribute to the knowledge base and that you want to tell the world exactly how you did it. Which marketing tricks made the difference and why this works and how much it is making.
But really, you're killing your advantage. Copying your concept (or even your website or your binaries) is about a hundred times easier than coming up with the original. You've already validated that it works! And suddenly you find yourself competing with yourself. At a lower price-point (after all, the investment was much lower too). You really can't win that way.
It's a dog-eat-dog world out there, and the web and the app stores in particular are brutal when it comes to having any kind of success.
Be a submarine. Stay underwater, rake in the $ and be happy with your success. Loose lips sink ships. At some point you will be able to afford being open but right now, on the eve of your first success it is not the right time. Of course, if you're an altruistic type and you don't care about the money by all means, tell all. But if you have hit a home-run for the first time and you could do with a bit of extra cash then do yourself a favor: count your blessings and STFU.
If you don't I guarantee you that your app or website will be cloned multiple times before the digital ink on your income report is dry.
If they had stayed quiet, most of these success stories may not have happened at all.
- The guy who sells the ebook on making money through android
Often, these scenarios have marginal success, which the owners then blog about, which gains a lot more attention, which drives the business forward and makes their success larger. This then becomes even more news worthy and the process repeats.
I imagine he's made very few sales of BCC on the back of his internet fame (how many people on HN are in the market for Bingo Card Creation software?)
His consulting business on the other hand...
- That alone ensures he will rank top of Google for any Bingo Card Creation based key words.
- Then there's word of mouth from anyone who has ever read one of his articles to anyone who may benefit from using his software.
If I recall correctly- most of his traffic comes in through long tail keyword searches, which he constructs mini-sites for (e.g. Halloween Bingo Card maker). In these cases I expect that keyword matches, and relevant content are a lot more relevant than links from tech sites (which mostly go to his blog, on a separate domain)
I suddenly feel the need to read through his posts again.
So talk all you want in an open forum, just avoid talking to much about the core stuff that gives you a competitive advantage.
I guess you haven't really taken a stance on whether this is good or bad, but it just doesn't seem bad to me. The best tech has never necessarily won, and good blogging is good marketing.
(Site's down didn't get to read it)
My latest adventure in startup land has been going well. As this is my first real taste of "success" and because I, like many of you, feel a sense of obligation to share with my community how I stumbled upon something that works I have been somewhat loose-lipped about my methods and my progress.
When things started to really pick up I decided to post on the Twitter account how many total sales had been completed. I thought it would help attract more sellers (and it probably did) but it also got the copy-cats interested. (Though I display the number of sales on the site, so if you go and add everything up you can figure all this out anyway.)
I recently found out about my first direct competitor, who it seems is knocking off other people's creations to sell and clearly got some "inspiration" (i.e., ripped me off) on how I do things on my end. Right down to copying HTML from my site. Needless to say it is discouraging, but it also forces you to hunker down to try and stay ahead of the competition.
I strongly urge others who are in a similar position to reconsider just how open they are. Especially with the people who will email you privately and ask for guidance in what they will usually tell you is something that in no way competes with what you're doing. There are indeed many sharks in the water.
I do think there's something to the whole 'brag about your success and more people will find out about you' thing. In some cases this probably does turn out to be better for the business if it attracts a much larger audience. It is a fine line though and should be walked carefully.
I hate getting lawyers involved, but that is what they exist for.
I have talked quite openly for about six years on both how much money I'm making and with very specific information on exactly why the business works. If there is a web app begging to be cloned, it is BCC, since you could make a decent 1.0 as a CS102 final lab project. BCC (and AR, incidentally) have been cloned multiple times, right down to button copy (not really a competitive threat) and the SEO strategy. (P.S. The SEO strategy is not "get popular with geeks, make out like a bandit", though being quote-unquote Internet famous certainly has never hurt me. It just doesn't make BCC scads of money. What makes BCC scads of money is 970 niche bingo activities all designed to rank #1 for a narrowly targeted search term.)
A lot of people I respect in the space enormously are similarly open about their business, similarly have clones up the wazoo, and similarly don't really mind. Fog Creek, 37signals, and Balsamiq suggest themselves fairly readily but there's probably another dozen I could think of given a few minutes.
There's also kind of a fixed-pie thing going on here, where Jacques seems to be saying the world has (making this concrete for an example) 5,000 teachers a year who want bingo cards to split up among all the bingo software and they're going to choose based on price. First, if you learn one thing about software pricing, learn that software is not sold on price. Second, there are all sorts of ways in which that sharing information helps to improve the size of the pie. This is true in both hippy-dippy "everyone gets better!" ways and in you-can-deposit-the-larger-pie-in-your-bank account ways. (Someone below mentions BCC and related Internet participation eventually opened quite a few doors in my consulting career. This is very accurate and consulting is rather substantially more lucrative than BCC is, though I probably won't continue doing lots of it forever.)
Also, jealously guarding the pennies you have right now is almost certainly not the thing you can most effectively be doing to have dollars tomorrow.
I've seen a lot more people who think they have maximized their success and want to keep their "secrets" to themselves who end up crashing and burning because they don't realize what they're doing wrong. Meanwhile, people with 4-figure hourly rates keep talking strategy to root out mistakes and find new areas to exploit.
Now, if you think you alone are smarter than the collective then go for it I guess. If you think the community isn't trustworthy and you get less from it than you gain maybe you should find another group to work with.
But isolation isn't going to make you more successful.
"Bad is relative obviously since you have to be in the top 5-10% to be making money once you start playing rake."
It's also worth pointing out that the highest stakes tables have starting stacks in the 10s of thousands of dollars and pots in the hundreds of thousands. Your ROI doesn't have to be super high to pull in 4-figure hourly rates at those levels.
But for fun sometime, do a search for "Isildur1" in late 2009, early 2010.
And the biggest pot in online poker history ($1.4M)
It depends on what kind of business you're running.
Some businesses benefit from lots of publicity and buzz, and have real barriers to entry. These are generally companies with teams, bigger than a one-man shop (though not always). If it takes months to clone your product and build the right expertise, you can be comfortable telling everyone about how well you're doing.
Some businesses have very low barriers to entry, and the publicity they get in places like HN won't help them significantly grow their business. These businesses should STFU and crank.
Then there are a bunch of businesses in the middle, where there's no right answer and the people leading the company have to make a gut call on the benefits of publicity vs. the risk of getting ripped off. It's business, it's not black and white, and you have to make decisions like this all the time.
B2C apps, especially those that rely on network effects to grow (Instapaper, Gumroad, Buffer) would do well to shrug off any concerns about clones, and continue to do what they do best: iterate on product and get more visiblity.
And while Instapaper and Gumroad might not have shared a detailed analysis of their journey in the "How I made $X in Y days on platform Z" format, their ability to succeed is in some ways tied to their perception as a successful business. In Instapaper's case, as a user, I'm building a repository of articles, and I wouldn't invest any effort if I felt the service wouldn't be around in a few months. A similar argument might be made for Gumroad - as a "paywall for everything", it just can't afford to seem small-and-under-the-radar, something that could easily be misconstrued as fly-by-night.
Copycats are not something to be worried about unless you managed to find something very easily copied, hasn't been done before, and also is very profitable. That is a very small slice, and when people notice you at the top it won't last long anyways.
I think Bingo Card Creator is a great example. There are tons of copycats here, but he is selling more than ever. Presumably all the links he gets talking about his story help his search rankings.
Shortly after we see 1-2 popular posts that adress the same story and usually use an attention grabbing headline that relates to the original post and rant about it.
I dont really like this, HN shouldnt become a marketing vehicle for opportunistic bloggers...
I know a lot of HN users 'out-of-band' and we have seen this phenomenon several times now. Not everybody that visits HN does so with good intentions, there are enough sharks here that you need to weigh the pros and cons of this kind of openness. If there is no gain for you then you have to wonder if being open is the right way to go.
Honestly, i dont think thats the right approach to openness.
But I also think that many of those who copy will do a bad job. I'm not sure whether this would always be bad for the original creator...
Go back and watch a couple SpaceX launches and re-read Peter Thiel's comments on the slowdown in innovation. There are plenty of big problems to solve. The good ones involve contrarian thinking, so are further protected from clones.
Even if you don't want to work on basic advances, at least build a product with network effects. Dropbox and Airbnb aren't rocket science, but their businesses are protected by network effects.
The part that you should keep a secret is that you're idea actually makes money, not the technical part.
Just wondering, how does Dropbox have network effects?
To Thiel $5 million in wealth isn't a big deal, nor is $500k in annual income. It is to nearly everybody else on this planet. You can generate those kinds of results by solving smaller problems on the web / mobile / software.
That being said, it's a good post and well written. Thanks for sharing.
Are you really advocating that the model for sustaining/growing good business is to keep shctum about it and hope your competitors don't notice?
I must say it seems somewhat backwards that someone would actively seek to stunt the popularity of their product by keeping it under wraps and so trading off overall reach.
Personally I would rather work in an environment where imitation is viewed as catalyst for innovation.
No, that was not what I was advocating.
I certainly agree that one should be careful to not just completely erode any competitive advantage, however I would absolutely support anyone sharing the success of their app. I mean, that's one of the reasons we're all here, right?
Closing off that rant and moving on to an actual comment, I don't know that I agree with the 'advice' here. If you have to hide the fact that your idea is making money out of fear of copy-cats stealing up your business, then it was certainly not a sustainable model to begin with. It's a good way to make a quick buck and, in that context, this is likely good advice, I just wouldn't count on some project that depended on it to last any meaningful amount of time.
This assumes the approach is repeatable, and applicable to other products. These success stories are a nice way of sharing knowledge and giving others hope.
Not all stories are luck, but clever ways of researching and solving problems.
I am thankful to those that share and have learned lots. Please keep sharing!
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As a community of hackers/business people we want to find out what works. Sharing results allows us to analyse the data. Any person that knows a bit about business understands that sharing the data is not a problem. This due to the fact that any competing business that uses your data is trying to repeat your success without all of the parameters. The data is one part of the success, the other is the implementation.
The implementation is what makes something a sucsess. You can go and download all of the data of Google, and you won't be able to duplicate it.
Now, like I said, be prudent with what you share. Maybe you have some marketing trick that is working magic. Don't share it until it stops working. Then tell people all about.
I disagree with prescribing the opposite extreme. The most successful products don't become successful because nobody has heard of them yet. It's selfish to not share what you've learned with others, and just as bad it deprives you of opportunities to learn from their feedback.
The best don't become that way by being kept secret. They're the best because they add value to the service by being good at what they do. If your level of dedication to making good product is clonable, you're dead already.
I think that this point should be emphasized:
At some point you will be able to afford being open but right now, on the eve of your first success it is NOT the right time.
Reading a bit too quickly, I lost the meaning of the blog post and thought one should never share details ;)
Three on HN alone that I know of. Probably more. I'll leave it to the people that launched those efforts to step forward if they want to, it's not exactly a secret but it is not a very nice thing either.
> I'm thinking about the full lot: writing/publishing a success, seeing people clone/steal/implement, and then a resulting loss of money?
Yes, exactly like that.
> Reading a bit too quickly, I lost the meaning of the blog post and thought one should never share details ;)
It's fine. As long as you first dig your moat and sharpen your sword.
My product remained successful, but they also did quite well too.
Ouch, bad luck! But was this after you published an article or two talking about your success, or was it cloned independently?
The idea that you can build buzz for your product and have the exact same screenshots you're building buzz with be used to trick people into thinking they're in contact with you, but it's some shady fly by night, is just unacceptable to me.
How would you feel if this company http://news.ycombinator.com/item?id=3955265 went even farther than it currently does with it's 'tribute' title and (hypothetical example, not to pick on them!) actually used YCombinator all over its keywords, and had pixel-for-pixel YCombinator's front page, which they stole, to trick people into thinking they're the YCombinator site, and in every way were virtually identical to the confusion of searchers?
This kind of commercial ripoff activity was resolved legally hundreds of years ago. It's unacceptable.
There is no such thing as "easy money" -- hence the term "10 year overnight success." If you implemented an idea first, you will be the space leader, and your competitors won't be able to budge your position unless they significantly improve upon your idea. Look at Angry Birds or Minecraft. They both were relatively easy to make, but hard enough that not just anybody could do it. Despite both of them constantly releasing their numbers, no one has been able to take over their space (there have been many clones, even successful ones, but they are still far behind in terms of monetary success).
What you WANT to do:
Brag about your success. Even fudge the numbers if you have to. Your success will get you in the headlines, which is free advertising for you.
Being open turns winners into bigger winners. I would not have looked at either services without their blog posts. Yes, the strategy attracts me-too services. BUT, the strategy only attracts wannabes if it is working. So, if you post your earnings and it draws no attention, it is unlikely the competitors which Jacques fears will start circling because no one read the post! I think there's a pg quote somewhere about none of the YC companies ever "losing" to a competitor...
I also think the characterization of most businesses as zero sum games is wrong. The difference is that we're creating diamonds rather than finding diamonds.
If it isn't working by all means post your figures. If it is working, keep them to yourself until it no longer matters. Finding something that works is hard enough without having to fend off a horde of clones competing for the same space.
And in the case of app-store stuff 'clones' could be bit-for-bit clones, made in minutes off your hard work.
Actually, there are probably a dozen serious Minecraft clones, some of which arguably have better execution than Minecraft (at least on the technical level), and some of which have realized pretty good sales (FortressCraft sold almost a million copies, from what I remember).
Minecraft does have something that those copycats lack, but it's not just the technology.
You can share in even more generic ways such as business strategies in general, without going into great deal about your particular path. I think it's easily possible to share and be a part of the development/business community, yet still maintain your competitive edge.
There is great value in it. Greater still for the wrong people.
> You really think they might bet copied and eventually failed because they shared their stories on HN or something?
I don't 'think' this, I know this for a fact, I've seen it 3 times up close now. And I fully expect there to be a fourth within a week, see the current HN homepage.
I personally find valuable to see examples of people next to me who managed to succeed. It means to me that it could not just be a dream.
Besides, ideas often aren't cloned because someone talked - they're cloned because (a) multiple people/groups often co-create very similar ideas because we're all feeding off the same pool of inspiration, and (b) your idea probably isn't as unique as you think it is, and the "brilliant stroke of insight" you experienced to create this thing was probably obvious to a lot of people.
Yes, you may loose a margin of profit that might be redirect to your cloned app, but if your app is really good you are safe. People tend to use the original, not the copy-cat.
Look at Angry Birds, the cloned games tend to be called "that game that looks like ANGRY BIRDS" even if they don't even have birds, but pigs or elephants.
(If you have an app that is clearly better and is at the top of the marketing pile, then there's no problem of course. Let others clone you all they want - you'll still stay ahead.)
People probably look at Farm Town and assume it's just another FarmVille ripoff...
First to market only makes a difference if you're huge, otherwise you might as well be doing market fit analysis for your competitors.
Then again, games are an area where success is particularly easy to track, so you gain very little by keeping sales figures private. In other areas, you might be giving away a lot more information by letting people know that your weekend project is selling 10k a day.
But what if telling the world you're making money is a great way to market your product?
Even one person knowing about your app (regardless of money) risks someone cloning it, or competition springing up.
If you think you have a chance of staying ahead of the competition (improve UI, improve design, add features, build a community, engage with clients/customers), you should probably shout about your product from the rooftops at every chance you get.
I can see it both ways. My instinct would be to stay below the radar as long as I could. But I do see advantages in publicizing success:
1. Large and rising revenue signals desirability to other customers / clients, and thus works as marketing.
2. Known success stories can more easily recruit talent.
3. Can't be bought out at crazy premium from stealth mode.
Looking through some cases would help sort it all out.
Sure, you don't need to brag about it or post sales figures directly on your site (Minecraft), but people are going to notice and often try to clone your game.
I'll just add that if you have something actually worth saying, being so gruff just to get attention is probably unnecessary.
Utility apps sold via the App Store are indeed much more easily (and profitably) cloned.
People fearing someone will steal their idea forget that the execution is the hardest part and most of the times clones don't have the same success.
1) These are, by far, the most inspiring stories on HN. I would so much rather read about how a developer or small group sold X dollars of product Y than about a mega-corporation going public.
2) The SEO benefits of creating buzz and links around your product must be worth something. I don't know how applicable this is to something like iPhone apps, which I assume are generally discovered within the iTunes store.