Life in the Crosshairs

Like many of you I tuned into the news flowing out of Apple’s WWDC yesterday. As the nerdgasm of news and features climaxed many began to wonder aloud how this new wave of software releases would impact the ecosystem built around Apple devices As VentureBeat noted:

Many of the new features shown at the WWDC keynote Monday looked very much like ideas first seen in iOS apps from independent developers…Similar tactics won Microsoft opprobrium in the 1990s, when the company incorporated features into Windows that had previously only been available through Windows software created by Microsoft developers. It contributed greatly to the impression that Microsoft was a ruthless company that would even stab its closest allies in the back, if that’s what it took to make its OS more competitive.

As the keynote concluded journalist began to furiously churn out lists of roadkill companies who only hours before were their darlings. The NYT asserted that Apple was trying to put such notable companies as Dropbox, GroupMe, Kik, Instapaper, Remember the Milk and Hipstamatic (among many others) out of business. A damning move for a company who only moments earlier announced having paid out $2.5B to the developers building to their devices.

So, are these companies screwed? No.

The first rule of startup club is that if you’re doing anything interesting you’re in someone’s crosshairs. Get over it. Startups are at far greater risk of putting themselves out of business than having Steve Jobs do it for them.

Take a deep breath and remember that this is still a very emergent mobile market. As Marco noted:

Today, fewer than 1% of iPhone, iPad, and iPod Touch owners are Instapaper customers, despite Instapaper spending a lot of time (including today) at the #1-paid-app spot in the App Store’s News category for both iPhone and iPad. The potential market is massive, but most people don’t know that they need it yet.

Having been involved with a number of portfolio companies in the crosshairs of big company press releases and hostile moves from platform partners, there are worse places to be. Its means what you’re doing matters and the market you’re going after is a real one. 

But, life in the crosshairs tends to have a better outcome when you don’t start there; meaning, its best not to start your business as an obvious missing feature or a better version of an existing one. Most crosshairs take aim on what’s at the center of the bullseye. Going after pieces of an emergent platform that would bring them to parity with their competitors will occasionally lead to a small exit, but it’s generally a losing strategy.

We’ve found that creating your audience at the edge of a market allows startups to build and educate a user base on the value of their service before the platform vendor takes note. That existing user base will tend to pull you to other platforms and technologies which will mitigate the competitive risk of being tied to a single platform vendor’s technologies and objectives. 

As a startup you can’t out Apple Apple, but you can compete in ways they can’t. And if you find yourself locked in their crosshairs, the worst thing you can do is get scared and freeze. Its much tougher to hit a moving target.