Customer Development — Pushing Just a bit Harder
A lot of times when clients come to Citadines Group, they ask to sign an NDA because they want to make sure their idea would be kept confidential. Below, we’ll uncover a few of companies that might not have been first, but were able to understand the proper positioning for their products and industry. And with that, they overtook their competition.
Tigertext vs Snapchat
Back in 2009, Tiger Woods, the professional golfer who is among the most successful golfers of all time and has been one of the highest-paid athletes in the world for several years, was caught being unfaithful to his wife. Allegations arose, and evidence was found through text messages. It’s tough to pin down how many women we was with, but the number was over 13.
In the fall of 2010, TigerText was launched. The value proposition was that TigerText’s mobile apps allowed users to send text messages or photos that could then be deleted off both the sender’s and receiver’s phone after a selected period of time. In 2014, after raising a cumulative $30M, TigerText pivoted toward the medical sector. “TigerText’s secure, regulation-compliant network and app have become popular in healthcare as a result, where SMS tools generally lack compliance and stand in violation of laws based on security and recipient authentication. Using the company’s app, staff and colleagues at any enterprise organization can securely message each other from any smartphone, tablet or computer within an environment that can be managed by the enterprise.”
In 2012, Snapchat was founded and raised half a million dollars. Back then, Snapchat was a photo-sharing app that changed privacy norms in a very novel way. The free app allowed users to send others photos and control how long receivers can see them. These photos lasted for up to 10 seconds, before they disappear forever.
By taking away the part about a photo lasting forever, it actually encourages users to share more.
This was the biggest differentiator between TigerText and Snapchat. It was basically the same technology — but the use case was different. Snapchat built out disappearing texts/photos to encourage MORE sharing, not MORE privacy.
In Dec 2014, Snapchat was raising at a $10B valuation and has raised over $1.2B to date — all through a simple tweak to it’s business model and target audience.
Dropbox/Google Drive vs AWS
Dropbox was founded in 2007, and Google Drive was launched in 2012. Both offer cloud storage for consumers and businesses. In the meantime, Amazon was rolling out it’s cloud computing platform to large businesses.
History of AWS
In late 2003, Chris Pinkham and Benjamin Black presented a paper describing a vision for Amazon’s retail computing infrastructure that was completely standardized, completely automated, and would rely extensively on web services for services such as storage, drawing on internal work already underway. Near the end they mentioned the possibility of selling virtual servers as a service, proposing the company could generate revenue from the new infrastructure investment.
By leveraging the existing work that Amazon was already investing in because of their ~90M monthly US unique visitors, Amazon was able to lease some of the excess computing power to other companies.
In October 2015, Amazon.com said in its Q3 earnings report that AWS’s operating income was $521 million, with operating margins at 25 percent. AWS’s Q3 2015 revenue was $2.1 billion, a 78% increase from Q3 2014’s revenue of $1.17 billion.
This is ironic because the cost of storage is declining 38% annually — so will AWS’s revenues suffer? Nope.
The reason being is:
- the companies that use AWS produce a lot of data. As they continue to onboard more users, those users will only create more data. In addition, the lowering of the cost of storage of a GB will only unlock the possibility of making higher quality content — therefore making it much larger, and needing more space to store and deliver it.
- It’s a platform which offers other services rather just storage. It also offers Computing, Networking, Content delivery, Database, Deployment, Management, Application services, and Analytics.
Distractions sometimes mask themselves as opportunities. As a business tries to refine it’s product, the highest paying client might be right one for right now, but not for the future of the company. There is a fine balance, when doing SaaS to make sure that the vendor doesn’t become your boss and directs the product to only further their own mission.
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