The first startup to attain gorilla status wins the new category.
That is the first rule of startups.
When one company becomes so dominant, so strong, that it has twice the share of market as its nearest competitor, the game is over. Think Google, Facebook, iPhone.
So I recommend you watch an exciting race for gorilla of the new textbook-rental category. At the moment, Chegg is clearly in the lead but the smaller Bookrenter is growing faster.
Here are a couple of things to think about and apply to your startup thinking:
- Chegg raised $200 million of venture capital. Bookrenter raised $20 million. Why the big difference? Which startup has superior investors?
- Chegg is 100% independent. Bookrenter teams up with local college bookstores. That is a huge difference in business models. Which do you think will win?
- Chegg has replaced its CEO with a celebrity CEO. And now Bookrenter has replaced its CEO with one touted as a techie. So which is the better CEO for the next stage of the race? One from large, not-startups? Or one familiar with new enterprises?
So which startup do you bet will emerge as the gorilla?
Which company has the best "out-maneuver-you" strategy?
Which new enterprise will be superior at executing their plan?
BOTTOM LINE: Great startups emerge from new categories as dominant gorillas. That is your primary goal as a startup. Watch the textbook-rental race and learn. Then apply your lessons to your startup. That's how you build an unfair advantage.
I wish you The Best on your Adventure!