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Sunday, April 27, 2008

Killer Verticals

Going back over some posts on Marc Andreessen's fantastic blog, pmarca, I came across this post that places market (and granular product-to-market fit and timing) ahead of "team" and "product per se" as a determinant of eventual success. In other words, a good product with an average team can still win if the market "pulls them along." I always thought of AOL as a company like that. You can probably think of many others. (Some in my field will say GoTo.com/Overture and Google AdWords were like that for awhile - they got better later.)

Cross-referencing these thoughts with some of the notables that show up on comScore's recent leaderboard of top web properties, I get some ideas.

Some markets are just so big, you can't dismiss them. Startups with a shot at doing something different in a vertical are not in a space that's "too crowded," arguably -- they are in the right place, with at least a solid chance of success.

Seeing Careerbuilder in 38th place, I think that startups like SimplyHired have a good shot at carving out a more than respectable sliver of a huge market, no matter how huge it seems.

In such verticals, international expansion also makes a ton of sense. Italy, Greece, Turkey, Singapore, French Canada, Mexico, "small" markets compared to the U.S.? Not if the category is big enough.

Seeing American Greetings in a ridiculously high position, I think that a greetings *feature* should probably be rolled out by Flickr, YouTube, gapingvoid, and others. If companies already have such things it may be worth pushing them a little harder. Greetings sound boring. But how many other categories have a whole store in the mall? Hallmark has a whole store in my mall.

Target (#20) and Wal-Mart (#22) are of a different ilk entirely. They actually sell "stuff." Those are some gaudy user numbers, though. Just imagine how many retailers in how many categories never thought e-commerce was worth the level of investment that could take it to that level. There are category winners in online retail still waiting to be decided. $1 million in up-front investment (or so) is all it would take some current laggards to dominate their niches. What are they waiting for?

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Posted by Andrew Goodman




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