This post is giving bad advice. It sounds like good advice, but it's bad advice. Let's say I'm looking to buy an FTP client. What do I do? I'll search for FTP client on google, take a look at the first 5 clients, download and install the ones that look interesting and have about the same feature set, then buy the one that is easiest to use/and or cheaper.
New customers coming into a market do not have preconceptions about who is the biggest or the best! That's the fundamental flaw in the argument.
The correct way to take on an established product is:
1. Offer all their features
2. Make sure you are visible on the same locations as they are
Sure, I can give you many examples. Here are some of them:
Google Search - At a time when Web search (portals) was dominated by the likes of Altavista, Excite, Yahoo etc., Google focused only on the search side of things. A minimal homepage, no groups/usenet, no frills. Just better search.
Twitter - They focused on short messaging (status updates). Unlike Facebook (who also offer status updates), they have no photo albums, no groups, no advanced privacy controls. Just simple messaging in 140 chars.
Vimeo - They focused on online videos. YouTube already dominates this space. Vimeo on the other hand kept it simple - allowing only videos created by the users - user generated visual content. No 3rd party videos, no copyrighted content. Just original creative work.
Campaign Monitor - They are a great example of a slick yet simple service. No fancy marketing bullshit. Pure simple email newsletter delivery with only the necessary tracking tools and highly customizable newsletter designing templates. Pay as you go, no monthly fees. Send newsletters to 5, or 100,000 people.
GitHub - Source control and code repository is nothing new, but GitHub offers just what's needed. Nothing more, nothing less.
iPod Shuffle - Music on the move? Been there, done that. No radio, no fancy controls, no digital display. Under $50.
Posterous - Blogging started a new wave of online expression and information sharing. How about a dead simple place to post everything, through email. No fancy admin panel, no hassles with updates and templating.
Feedity (shameless plug) - Create instant RSS feeds, for pretty much any public webpage. No filtering, no fancy UI (pipes!), no signup required. Today, four of our paying customers are state government offices.
All these products/startups are notable and profitable (ok, except Twitter, but they are not far from it). What do they have in common? In my opinion, they started by offering less. And, less is more.
Marketing is a different, and unrelated (to this discussion), topic altogether. My viewpoint is to keep the feature-set simple.
None of the products you mention took over the market, they just addressed a different market. Only google took over the market, but they did that by differentiation of the core product, not by stripping down anything out of search.
Starting up a business is not about taking over the market. It's about making profits to sustain and grow. You can't learn to walk, until you learn to crawl.
This article is really good and the advice in it is excellent - and the font size is brilliant too :-)
The only wtf is the fact that the author thinks social news is dominated by digg, when in my view it's roughly split between digg and reddit (but maybe I'm wrong). Still, if HN gets a mention, reddit should too, really.
Hey swombat, thanks for the feedback, that's a good point about Reddit, I was mostly just basing that on a graph I saw of traffic a while ago comparing the two. But to be honest we all know how inaccurate those things can be!
A related article I'd like to see is how to take the lead in a divided market. My (unlaunched, in progress) startup is in a space where there are a three or four competitors with a large customer base, and a dozen or so others with significant ones. They're almost all offering the same (aged) feature set. But it's not like the service has become commoditized the way basic web hosting has.
I feel like we're going to have strong differentiators, and a much easier time getting adoption from the slice of the market not already using one of our competitors. But what's the best way for us to get all the people who have sunk their money and time into a competitor's service (and its learning curve)?
On a side note, my only complaint is your analysis of iStockPhoto's quality compared to expensive stock players. IMO, most microstock (while good enough for many people's needs) isn't on par with professionally produced stock photography and many people can see a difference. Plus, if you say that in a room of professional photogs, you're likely to get a beat down :)
New customers coming into a market do not have preconceptions about who is the biggest or the best! That's the fundamental flaw in the argument.
The correct way to take on an established product is:
1. Offer all their features
2. Make sure you are visible on the same locations as they are
3. Offer more value for the money
4. Be more convenient and or easy to use