How Would An Entrepreneur Attack Your Business?

This is a question I like to ask our more developed portfolio companies who have built large markets/networks/user bases. I ask them "if you were a startup and you wanted to compete with our company, how would you go about it?"

I think it is very important to understand your weakest flanks/vulnerabilities and then shore them up. If someone will compete with you by coming at the market "mobile only" while you struggle with maintaining a large web and mobile presence, then you should know that. And it probably means you need to rethink your mobile strategy so you can close off that open flank. If someone will compete with you by offering a free version of what you charge $10,000 a month for, then maybe you need to think about a freemium offering to close off that open flank.

This question is a particularly good one to ask at a senior management offsite or board offsite/strategy session. It often leads to changes in priorities and/or strategy. I have engaged in many excellent strategic discussions that came out of asking this very simple question.

I thought of this today when reading Benedict Evans' post on how one might do this to LinkedIn. I would suggest the folks at LinkedIn read it as well as anyone else who likes to think this way.

#entrepreneurship#VC & Technology

Comments (Archived):

  1. Avi Deitcher

    Excellent! Far too many companies simply assume the “gravy train” will go on forever. They mock or belittle the small potential challenger until they are swamped. Heh, look in the dictionary under “Research in Motion.”For a few years now, my joke has been that they were changing their ticker symbol from RIM to RIP!So how do you get them to break out of their groupthink/existing-model mindset?

    1. fredwilson

      ask this question of them

      1. Avi Deitcher

        I am sure Balsillie and Lazard asked (or were asked) questions like that.Every company I have ever consulted with has asked questions. Their ability to be open-minded enough to take it seriously, different story.

        1. fredwilson

          I agree. That is one of the many roles of a board

          1. Avi Deitcher

            Very good point. I can think of a lot of companies that failed at that challenge, and in almost every one, the Board was passive.

        2. JamesHRH

          It turns out that asking the right questions is only 1/3 of the battle – assessing the existence of open flanks & then assessing the threat / generating the right responses to the new threst are the other 2/3.Both Lazaridis & Balsillie are on record ax saying that a consumer device would never be a way into their market ( even though the reverse was true, to the benefit of BB ) & that the touchscreen UI was not a threat, as corporate users required a physical keyboard as a critical product feature ( they totally misread the impact of the product innovation).An historic strategy whiff.

          1. Avi Deitcher

            We’ll need @JLM in on this one, but I think one of the big issue isn’t awareness of the open flank, it is taking the openness seriously.Just finished reading another article about the Yom Kippur 1973 War. The top Egyptian brass refused to take the idea of an Israeli offensive on the West side of the Canal seriously. Oops.

          2. JamesHRH

            We are agreeing violently.Marketing and warfare analogies including terminology are fairly common. Jack Welch went to West Point to get GE up to speed strategically. This is a great book, despite the goofy cover (… ) – one edition had them riding in a tank on the cover, a la Mike Dukakis!

          3. LE

            Side note those wars were great for my father who was in the israeli giftware business. On the one hand he had to worry about the factories getting bombed. But demand in the US for his goods shot up because jews wanted to support Israel by buying goods made there. You could slap a jewish star on anything (bookend, ashtray, wall plaque) and it would sell.

          4. William Mougayar

            They did it to themselves. The minute Balsillie started pursuing the Phoenix Coyotes 3-4 years ago, I knew he wasn’t paying attention to RIM anymore.

          5. JamesHRH

            No shortage of ego in the co-CEO position, according to someone I know who took a meeting in that office.Balsillie’s tactical approach to the NHL showed that to be true, as well, obviously.

        3. Ana Milicevic

          On the bright side, their inability to answer these questions through implementation is what guarantees that me, you, and other folks who do this type of business advising have a solid pipeline of projects lined up 😉

          1. Avi Deitcher

            LOL! Yes, indeed. Although to be fair, it is not a weakness of the company that they cannot do so on their own. It is the inherent nature of being *in* their business.It is is a sign of strength that they turn to Ana or Avi (or their Boards push them, like Fred) to make sure they don’t miss something crucial.

    2. JamesHRH

      The best thing a large company can do is hire really smart 20-somethings, keep them away from the main campus & fund a a mandate that, in essence, is ‘ eat our lunch ‘.As usual , Fred shows his colours as a consummate BoD member.

      1. Avi Deitcher

        I am ambivalent about that. I like the idea of non-polluted ideas in a company – I make a lot of my living being that outsider with a fresh perspective – but I am wary of the lack of experience of a bunch of 20-somethings running off without some real supervision. Can you harness their ideas and imagination and energy without their often lack of experience?

    3. LE

      “Heh, look in the dictionary under “Research in Motion.””In order for RIM to fail Apple had to succeed. Business see threats everyday. You just don’t hear about the other ones that they successfully ignored that never came to be.This is a version of the “I told my doctor about the pain and he said forget it now I’m dying he fucked up” deal. You don’t have data on the amount of time the doctor was right with all the other patients and dx’s.Or “IBM could have ruled the copier business but they passed it up and then came Xerox” (not true but for illustration purposes). You don’t know all the other businesses that IBM also passed up that never turned into anything.Business and business decisions are not digital they are analog.

      1. Avi Deitcher

        Fair, it is a signal-noise ratio problem. It is easy in hindsight to pick out the ones that do matter. Like the old joke about the rookie cop at his first murder scene, who is so impressed that the guy managed to fall right into the chalk line!Still, many of those epic fails are full of arrogance and “no way that will work here!”-itis.”not digital, they are analog.” That is very good. Is that yours? I want to quote you on that in my next article.

        1. LE

          Yes and I use that all the time to describe business, people, personalities all types of things.Things basically fall on a continuum with certain things requiring more or less precision.Computer programs are all the way over under “digital” because precision is necessary and a single “.” out of place can kill something.Driving a car is over closer to analog because when you steer you have leeway and precision is less important. But driving a boat is more analog than driving a car because you have even more leeway with that. An engine is analog even though it has digital components. Karate is more analog than golf or baseball. But breaking a board using karate is more digital than breaking someone’s arm. (See where I am going with this?)Medicine tends to be analog. Things are closer to arbitrary the medicine you take could almost just as easily be 19.5 mg as 20mg and be taken every 26 hours rather than every 24 hours.Someone who is digital will find a way to pick apart the examples that I give above. Someone who is more analog will get the total picture and understand the concept.Digital thinkers tend to be more rigid.People and situations are a mix of all this stuff in varying degrees. It’s like counting cards you only improve your odds of understanding behavior knowing this you don’t guarantee it by any means.Anyway the reason that I made my comment in the first place was after so many years of reading the business press where they fawn over companies and try to reduce everything down to “so he did that” or “but they failed to do this”.As I like to say people do suck and people do make the wrong decisions. But they make decisions based on what they see in the world at the particular point in time given the info that they have. It’s all a mash up and when you read about something you never know the full picture of why something happened writers just tend to latch onto the sound bite that will easily explain what happened or didn’t happen.By the way one of the things that always makes me run for cover is when I see digital people or writers using numbers from the past to prove their argument. Because there are many things behind the numbers that change the context. Like the examples I gave with war and my fathers increased sales of giftware. (Which is the way I spin the story I could also spin it some other way if I wanted I’m sure).

  2. awaldstein

    Best quote of that piece that I was about to share is:”I spent 10 minutes searching without seeing his new job listed anywhere other than his profile itself, and indeed I couldn’t actually find a way for LinkedIn to tell me about it – there is no view of ‘job changes in my network’, though that would seem like something that would have been implemented at launch. However, it’s eager to tell me Deepak Chopra’s ten tips for how successful people wipe their arses. “

    1. fredwilson

      Yeah. He really savages LinkedIn

      1. William Mougayar

        I’m not sure he’s totally correct with that. LinkedIn sends you an email with job change notifications.

        1. leapy

          Correct but Benedict questions whether that is good enough. Why can’t we have a stream within the website/app that aggregates that info for us?

          1. William Mougayar

            I’ll admit LI needs a serious UI/UX re-think. It has become bloated from a usage point of view.

          2. LE

            Fire in the belly gone. Typical thing that happens in business with the old blood that has cashed in or is out golfing or doing whatever Reid is doing.Business is full time. You can’t be out there doing other shit and keep on top of your game. Have seen this happen time and time again over the years.Gates chugged away for years and years in his business. Then I remember the day the WSJ front page talked about him getting engaged to Melinda. And I remember thinking “oh boy his priorities are going to change now once he has a wife and kids”.

          3. William Mougayar

            Do you think Gates will have the desire to come back and revive Microsoft?

          4. LE

            The idea probably scares him shitless I’m sure.He has more to lose than he does to gain. The magic that he had was born out of a different era. He’s never done anything but microsoft and he’s never done something like what amounts to a turnaround. And he’s older now as well.Gates had a really long streak where he totally concentrated on Microsoft and little else. As compared with some of the current crop of internet guys who are all over the place trying to do all sorts of things rather than focusing on their actual business.It’s highly unusual for a person who exhibited the drive that Gates had to simply drop out the way he did at the age he did. My personal feeling is that it wouldn’t surprise me if he had some medical issue or other huge change of life event that killed his motivation and made him step away. Despite what I said I don’t think the devil (Melinda not that she is a devil) made him do it. And I don’t think it was some kind of existential thing ala “meaning of life” either.Lastly as my saying goes it’s one thing to take advantage of the low hanging fruit of opportunity which is what gates did when he created microsoft. It’s another thing to have the skills to turn around microsoft.Also most of the young talent today doesn’t have any special halo around Gates. I mean they know he is rich but to them Paul Graham has more of a shine. Gates to younger people is just some older guy with grey hair that is on the forbes list that their dad talked about.People like continuing in business because it’s addictive and they get a rush even once they have made all the money they possibly could ever need (why I think medical issues).

          5. CJ

            I think he’s the wrong person for the job. His focus is Windows first, Windows always. In order for MS to succeed they have to be willing to bend in ways that Windows is incapable of doing. Gates has imagination but this world is a hugely different one than the world he left.

          6. AbbeyPost

            Funnily enough, I know Melinda. Regardless of the fact that she “gave him some kids” (which BTW please don’t get me started), she’s not exactly the type to be all, “Oh, Bill let’s just relax and have a nice dinner at the club”. That woman is a ball buster.So, blaming any limpness of MSFT on her is pretty much a non-starter. And frankly pretty sexist. I expect better from you, @domainregistry:disqus

          7. LE

            My exact statement which you are referring to was “oh boy his priorities are going to change now once he has a wife and kids”.How is that sexist exactly? What if he adopted two kids and no wife and I said the same thing? What if he got cancer and I said the same thing? [1]And where was I “blaming any limpness of MSFT on her”?A man gets married. A person gets married. And they have kids. And their priorities change.”I expect better from you”I’ll take that as a compliment! (thanks) but I think you have assumed something that isn’t there (at least in the statement you are referring to).[1] Speaking of women there is a story that Trump tells about how when he got involved with Marla Maples he took his eye off the ball and was traveling overseas and neglected business. I’m sure if you have children in school you recognize the impact of them being in a relationship with the opposite sex (or the same sex?). That it can be positive but also negative and distracting from concentrating on their school work.

          8. greggdourgarian

            Excellent response LE.Urban Dictionary defines Ms Post’s ‘ball buster’ term as “A female who humiliates, belittles, injures, chastises, disabilitates, or otherwise causes distress to a man through non-physical means.”

          9. AbbeyPost

            @LE my comment came out a lot more judgy than intended, and for that I apologize.You’re just being realistic, and it’s true for everyone that personal relationships & obligations can be distracting. I’m just pretty sensitive to that sort of thing when it’s applied to a woman.Samson et Delilah, you know?

        2. kidmercury

          agreed. his diss on linkedin is largely unsubstantiated.

          1. LE

            But this is definitely a case of where there is smoke there is fire.Linkedin is in the fat and lazy stage after the IPO.

          2. kidmercury

            i don’t see how it’s much different than many of these wide-scale internet services. they all suffer from graph pollution. linkedin at least makes money.

          3. ShanaC

            they can be, they have a huge moat of network effect of resumes

          4. LE

            Well you are forgetting that resumes need to be up to date. So if they start to lose their way all the sudden the outdated information makes linkedin much less useful. And then the decline is accelerated. Myspace had a moat at one point as well in terms of usage and content.Although I will point out that the fact that linkedin gives employment as if whatever your top job is is listed “till present” lessens the obvious stale information on it’s face.As opposed to a blog where if the top post is “October 2012” you know there is nothing new.

        3. fl1nty

          They also send you 100 other emails every week so the signal of job change notifications is drowned out by all the other gunk noise where linkedIn is trying to get you back into their garden.

      2. JamesHRH

        It is an interesting post, in that it takes 3 category creators and complains that they are not acting like category flanking specialists.I deleted my LinkedIn account earlier this year, as I saw no value in it. I still receive ‘so and so would like you to connect with them on LinkedIn’ emails. I assume they kept my CV in the DB.In short, all of these category creators have the same origin story – they put a major offline media category online:Li – online DB of CVsFb – online DB of friendsCl – online DB of want adsThere is a strategic school of thought that says that you cannot be the general category creator and the highly focused specialist as well.With the growth challenges of these companies, that seems reasonable.

      3. awaldstein

        The point behind the piece to me, and why I read his blog, is that mobile like the web equalizes opportunity through change. That’s his point of view…and he’s right.I don’t really care whether LInked In wins of looses. The market on a mobile platform is simply evolving forward.

      4. Anne Libby

        His comments are the tip of the iceberg (from a individual user perspective.

      5. Elie Seidman

        The usability of LinkedIn for the core core had always been a bit unintuitive (of which he has spoken early and often in his tweets). It’s ever more so these days. But on the flipside, it’s actually proof that a business with powerful network effects can have a messy UX and still be an economic beast. Just making it pretty and easy to use does not a good business make.

    2. Richard Carlow

      They have killed all top ten lists for me. I am grateful.

      1. awaldstein

        I truly dislike lists generally.Everyone who says that there are three big questions, is following rhythm not thought usually.As soon as I read the top blah blah blah I move on.

        1. pointsnfigures

          That’s Business Insider’s total strategy. Intriguing headline, lots of lists.

          1. awaldstein

            A varient of shock blogging and everywhere….all over tech and health.I’ve been unsubscribing a lot, removing myself from aggregators and curators especially and finding more more easily.

  3. jason wright

    i’m sure google has a team dedicated to this question.

    1. fredwilson

      And we have a portfolio company, DDG, dedicated to the answer 🙂

      1. William Mougayar

        Ah, that’s what the G really stood for, Ditch Ditch Google.

  4. takingpitches

    Another universal question that comes out of Benedict Evan’s piece is:If you are a two-sided marketplace, are you taking one of your customer base’s for granted?

    1. fredwilson

      Yup. Great question

    2. William Mougayar

      It’s a calculated risk if you do. The underlying factor is switching costs, which is also the barrier of entry for others.

      1. takingpitches

        Agree and would also add that counting on switching costs is a calculated risk as well. Have seen a lot of companies count on that and find out they aren’t as high as everyone thought.

        1. William Mougayar

          Yup. It varies between consumers and business users of course, because you’ve got processes involved in business vs. mostly habits in consumers.

    3. Matt A. Myers

      Makes me think of Facebook..

  5. Jan Schultink

    The LinkedIn degradation could also have something to do with management metrics or “KPIs”You make someone responsible to increase return visitors or page views and monitor those KPIs constantly, the system starts to morph into a machine that delivers your numbers.What you measure is what you get, what you don’t measure gets diluted

    1. leapy

      Totally agree. Have seen this so many times…..

    2. awaldstein

      truly well said.

    3. ShanaC

      still, i would rather measure than not

      1. Matt A. Myers

        Most of the time qualitative measurements are more valuable.

        1. CJ

          Yes, for the most obvious reason that they typically require feedback from real people and that’s hard to get.

    4. Michael Elling

      It’s a corollary of “knowing to skate where the puck will be” or “blue ocean strategy” of creating your own playing field. If you don’t know enough to anticipate a priori you’ll not be able to measure ex poste. There’s also a factor of eating your own lunch once the competition has figured out your strategy and tactics.

    5. CJ

      Truer words have never been spoken. I fight this problem all the time, KPIs should be used to surface problems not become targets in and of themselves.

    6. Aaron Klein

      Very, very, very true. Metrics are great. But they should NEVER override your basic vision, philosophy and direction for a product.

    7. Ben Chestnut

      Amen. KPIs can be helpful, but when management’s KPI is “Number of KPIs” it’s the beginning of the end.

    8. fl1nty

      you cannot improve what you do not measure. So it is important that you measure the right thing.

    9. fl1nty

      Also looks like the priorities of linkedIn are disconnected from the priorities of its users. LinkedIn is trying to optimize their business for page views and frequent revisits through news and other content sharing. Whereas most users really only care about some updates in job status or skill changes from their networks.

  6. William Mougayar

    It’s better to shoot yourself in the foot, than to have someone else shoot you in the head.There are 3 ways to attack a company:a) if you’re #2 or #3, you always attack #1b) if you’re new (like most startups), you land in an uncontested area with a Flanking attack. No one expected you there. c) you can also be a guerrilla where you inflict some damage, but you’re not there for the long term. Typically, you can’t do too much about guerrillas, because they will not last.If you’re a leader (like in the cases you’ve mentioned), you need to keep working on your defense, because everybody wants to attack you. And you need to shoot yourself in the foot every once in a while.

    1. JamesHRH

      Jack & al would love that post – is the shooting line yours or theirs?

      1. William Mougayar

        The shooting line is mine. I used it back in 1998 in one of my Business 2.0 columns to describe the effects of the Internet on large companies that weren’t getting it yet.The other stuff is Marketing Warfare by Al Ries and Jack Trout, of course.

    2. awaldstein

      You are assuming that markets are dictated by the leaders.Not true. You don’t win by attacking, you win by doing something different. The market will follow regardless of what the incumbent does.

      1. William Mougayar

        You are correct. I didn’t want to make a long comment earlier.The other way is to disrupt a market totally. Like Hailo and Uber are doing in their markets. It takes more bucks to do that, generally speaking.

        1. pointsnfigures

          like is doing in real estate

          1. William Mougayar


        2. AbbeyPost

          like is doing in fashion.

    3. Ana Milicevic

      “It’s better to shoot yourself in the foot, than to have someone else shoot you in the head.” —> I am stealing this with proper attribution, of course.

      1. William Mougayar

        Please do…I’m going to try and find that old article from B2. In their infinite wisdom, Time/Fortune took them all off line, after the acquisition.

  7. William Mougayar

    I wouldn’t under-estimate Reid Hoffman, nor count LinkedIn out. You need to read this long essay by Reid, Disrupting the Diploma, about his vision of “Certification as a Platform”. It’s long, but really good, and I’m sure LinkedIn will be that platform.…And I wouldn’t discount anyone who just raised about $1 billion dollars for LinkedIn.

    1. fredwilson

      I agree that Reid is one of the best strategic minds out there and Weiner is a great leader/manger. Thats why I asked them to read Benedict’s post. I have heard a lot of negative chatter here at AVC about LinkedIn in the past year. So that post got my attention

      1. William Mougayar

        Yes. What do you think of Reid’s vision about the future of certifications as it relates to education? I think we have discussed this previously here. If anyone can pull it off, that’s LinkedIn, as it would be a massive project.Are you using wifi in the air?

        1. fredwilson

          No. Delayed on the ground at CDG. I think its more likely that a startup will do the cert thing

          1. William Mougayar

            Sorry about the delays. Bonus for us here 🙂

      2. LE

        Weiner, in Wharton Alumni Magazine (April 2013), essentially the business they are in doesn’t really match to the typical commentors on AVC.…WHARTON MAGAZINE: How would you describe what you’re trying to accomplish at LinkedIn?JEFF WEINER: LinkedIn was founded as a professional graph that connected professionals up to three degrees. However, that’s just the beginning. We actually believe that longer term we’re in a position where we can map the global economy. The points on that map would be all of the economic opportunities in the world, full-time and temporary, all of the skills required to obtain those opportunities and all of the companies offering those opportunities. Lastly, we want to overlay on top of that all of the professionally relevant knowledge that is possessed by those individuals. And then we want to allow capital—intellectual capital, working capital and human capital—to flow on that graph to where it can best be leveraged. In doing so, we believe we can take much of the friction out of those traditional flows and help lift the global economy. – See more at: So what we have is a play to make money off of resumes.

    2. Benedict Evans

      One of the things I find perplexing is the enormous gap between the vision Reid Hoffman articulates and the reality of using LinkedIn from day to day. It could be great and yet it’s so painful.

      1. ShanaC

        i get the feeling that if it were great, you wouldn’t go back. Linkedin has this rock and a hard place problem in that resumes don’t change very much on a year to year basis.(also, hi! welcome 😀 )

      2. Tyler Hayes

        Maybe he should stop articulating a vision and just execute.

      3. William Mougayar

        Time will tell.In the meantime, we can’t fault them for pretty good financial results:”Revenue for the second quarter 2013 was $363.7 million, an increase of 59% compared to $228.2 million in the second quarter of 2012.”

      4. karen_e

        I use LinkedIn constantly at work. It’s so helpful networking nationwide, which we do in architecture/engineering/construction.

  8. Tom Labus

    The new CEO of MSFT will have to address this big time.

    1. William Mougayar

      I hope that Bill Gates returns for a couple of years or so.

  9. Carl Rahn Griffith

    Building a better mousetrap is no longer a pejorative business-model…

    1. pointsnfigures

      you have to know how to sell that mousetrap….

  10. Brandon Burns

    LinkedIn is all about relationships. Who worked where with whom. The service that will beat it will distill everything down to those connections, using them to replace the resume as the “atomic unit” that’s central to the platform.

    1. Dave Pinsen

      The relationships on LinkedIn are mostly weak. That’s what I don’t get about it. I’ve been endorsed for skills I don’t have by people I don’t know. Heck, I was 3 degrees away from the president of the United States on LinkedIn last time I checked. I guess everyone is.Someone I know had over 500 LinkedIn connections and was out of work for years regardless. That sounds like 500 weak connections. It sounds like bullshit.

      1. Brandon Burns

        Exactly. Strengthening the relationship part of it is where the opportunity lies.

      2. Bruce Warila

        Agreed. I worked with someone >> super weak.I endorse someone >> weakA strong relationship might be: I learned X from Mary, and she authenticated this…

        1. Dave Pinsen

          If you worked with someone and remained friends with him, you don’t need LinkedIn to connect with him; if you were never friends, LinkedIn probably won’t help you anyway. And I’d bet most LinkedIn connections are even weaker than that – they’re people who have never worked together or done business together before.

          1. LE

            Well though one thing that linkedin does is to put someone’s name in front of you regularly (if they do updates) so you are more likely to think of them. Same reason pepsi has billboards at local sports fields. It’s not so you go out and buy pepsi. It’s because the advertising repetition gets brainwashed into you so you are more likely to buy that product vs. brand b when you are actually in need of a product.This is what I would call my “out of sight out of mind” concept.The reason you need a good retail location is that people walk and drive by everyday. And so they get bombarded by your store sign everyday so it’s in the forefront of their mind. And when they think “I need a laptop bag” they will walk into your store and not the store that is on a street that they never pass by. Unless that store does a shitload of advertising. Which is why rent is not just rent in a good location it’s also advertising.Another example of this is right here on AVC. I see Arnold’s comments everyday so I constantly think “wine and lulitonix”. If Arnold didn’t post regularly then I wouldn’t remember him to connect him with any opportunities that come up in those areas.

          2. Dave Pinsen

            Disqus is a social media exception, one where high value participants are most likely to engage with you. Twitter offers a bit of that, but you’re more likely to get a response from Arnold on Disqus than Twitter, and you’re much more likely to get one from Fred on Disqus.What Disqus and Twitter have in common is the candor they elicit. You can learn a lot more from someone’s tweets and Disqus comments than his LinkedIn profile.

          3. awaldstein

            The big item is whether you consider Disqus a network. Not whether it could be or whether some use it as such but whether indeed it is a social net at its core and whether that is what they are building towards.Big user. Big believer. That is not who they are to the market.

          4. AbbeyPost

            But that’s who they COULD be. And in my opinion, should be. Disqus has a huge opportunity here. Promoting their dashboard as a product = massive. But they don’t.

          5. LE

            You can learn a lot more from someone’s tweets and Disqus comments than his LinkedIn profile.Maybe you mean to say that you can learn things about someone from their twitter or disqus comments that you can’t learn from linked in. The info to be gleaned from comments typically aren’t the type of things that show up on linkedin. The things that show up on linkedin though might of course show up in comments. We know for example that JLM went to VMI from his comments. We don’t know the name of his company from his comments we’d have to see his linked in.Disqus is additional intelligence about a person. That of course assumes that the information they are conveying is an accurate representation of what they really believe and think.

          6. Drew Meyers

            “one thing that linkedin does is to put someone’s name in front of you regularly (if they do updates) so you are more likely to think of them”That would be true…but only IF I actually looked at the feed. Whenever I go to LI, I immediately go straight to a person’s profile (which I had in my mind prior to even showing up at LI). I never discover anything via their feed.

          7. AbbeyPost

            that’s a great series of points. It comes down to the hated phrases “personal branding” and “top of mind”.PS this is @cynthiaschames, hahaha.

          8. ShanaC

            i cycle through friends and friends news. The problem with many social services is that it filters my friends, irrespective of the ebb and flow of my relationship with them

      3. kidmercury

        any large graph will experience graph pollution (i.e. spam, weak links, false data) but it is all relative. linkedin is better than most when it comes to career graphs. niche services focused on employment within a specific industry will produce a smaller graph of higher purity.

        1. LE

          “graph pollution” is fine but it’s a problem when the majority of people who end up being someone’s contacts don’t have any real connection.The original idea that I remember was that if I was a contact of you and someone wanted to get in touch with you I would be the go between to get the parties introduced. Like IRL.But it’s no longer that because you end up having contacts that you don’t even remember how you know because maybe you dealt with them one time 3 years ago.I remember at the start purposely not even including certain people as contacts because I didn’t want anyone to know they were important subcontractors. [1]That no longer matters though once you pollute the contact list so much that they can’t be easily identified. Harder for mom to find the porn in a messy room.[1] Old school business might come as a shock today to all those who are open with everything.

          1. kidmercury

            agreed, and that is why i think linkedin will be defeated by more focused graphs (i.e. linkedin for graphic designers, linkedin for copywriters, linkedin for stock brokers, etc) as niche graphs trade size for purity. however, a polluted graph is better than no graph at all, sort of like how dirty water is better than no water at all. linkedin is still purer than google+ or facebook when it comes to career graphs, but if the pollution problem continues, google+ and facebook may have sufficient purity to compete from the wide scale while niche services compete on graph purity.

          2. LE

            Kind of what happened to craigslist. There was a graphic showing the businesses that didn’t replace craigslist but carved out a piece of a business that had grown large enough to survive off of craigslist.Actually this is also what happened to department stores when big boxes came along.Another example of this is Staples which was started after Tom had an interview at Makro (I used to go into that store as a kid I remember it well and remember the office supplies section that he talked about. IIRC the original true “wholesale” club.)…How did you come up with the idea for Staples and what were the challenges of turning the idea into a business? MAKRO, one of the European pioneers of the wholesale club business, was recruiting me to become CEO of their US business. I did not like their approach, and suggested they consider focusing on office produts, which were flying off the shelves in their Langhorne PA store. They rejected the idea. My partner Leo Kahn and I ran with it!

          3. kidmercury

            i don’t really believe that graphic. i think craigslist is in the business of delivering a full set of features to a specific geo-local region, whereas the others are delivering a highly specific feature to anyone on planet on earth. i think the craigslist approach is better, and that CL will be defeated by a company (or probably more than one) that does a better job delivering a full feature set to a specific geo-local region. for instance, i was working on (but have since shelved) on something like craigslist but for a specific neighborhood in chicago. CL applies the same feature set to every geo-local region, when in fact i think tweaking things for each geo-local region will yield a better approach.

          4. LE

            CL works because it’s the place the everyone knows to go to.Because it’s legacy and started back in the day when newspapers had very little to talk about internet wise so they gave lots of free publicity to those early good companies (yahoo, ebay, cl, etc.) Back in the day of geocities and web rings.There was a case back in the day where someone took on the yellow pages and sorta somewhat made a business about it.It went like this. YP controlled the market because it was tied into the actually bell operating companies. The contractor that did the actual printing and sales though was rr donnelly. They lost the contract or it expired or something like that. So they decided to put out a book called the donnelly directory and compete with the old legacy book.Essentially there are three components to a yellow pages.1) Ads from business (need sales force they had that and that force had the legacy contacts as well in many cases.)2) Listings of everyone (can easily get that)3) distribution (can do that and they had that already set up).So #1 was really the big thing. If your book was dropped off at a home or business people would use it because it was there even if there was a competing book. As long as it was big and yellow.So the only issue was getting the ads. And with incentives and freebies for the major advertisers that was possible. Not easy but possible.The thing that is missing from your idea is the way to get everyone to use the product you want to build like craigslist is now. That is way harder than simply selling ads to businesses that donnelly did. Because you have to change behavior.By the way donnelly did ok with their competing directory (iirc) but they in no way shut down the YP or knocked it off it’s perch.I never placed any ads in the dd even with the big discount they were offering. Nor did many yp advertisers. As a result it lacked the thickeness that would make it a go to destination when you wanted a plumber. In the traditional yp you would see a shitload of ads vs. much less in the dd.By the way legal advertising probably saved the dd because lawyers had reasons to go in the new book if they couldn’t get good placement in the legacy book (seniority went by size of ad and length of time in the book).Would like to lastly point out that you could build a business, from scratch, with just yp advertising much as you can today with google ads. But it was much easier with YP ads if you were willing to commit to 1 year in advance. So it kept out all the pain in the ass bystanders iterating and testing. It was great the YP.

          5. awaldstein

            It’s industry specific also.For the food business CL is amazingly efficient. Want a cook, a delivery person, someone to prep, CL location by location is incredibly valuable.Tech, useless.

          6. Drew Meyers

            A mobile first approach, started in one location, per category could totally work. A startup should attack CL based on its weakness of chronological postings. With a native app, you could avoid that entirely and focus on content. If someone discards something…then they never see it again vs on craigslist you’re likely to have to browse past the same posting multiple times if you are looking for something for any length of time. Imagine, if CL had the ability to send me a push notification when something that fit exactly what I had been looking for? That would be killer..

          7. awaldstein

            Maybe.Certainly you can build something better from scratch to suit the market as it is tomorrow better than adopting a monster legacy site.Why do it is the first question? It won’t be fast nor cheap to build a local marketplace 1000X times over. Is the money there? I simply don’t know.For job listings browsing is essential. There is no engine smarter enough that I’ve experienced that for job seekers can deal with the parameters of what they may consider.

          8. Drew Meyers

            “Why do it is the first question?”Yup..I certainly don’t care enough about that problem to tackle it.For jobs, that is true — I was thinking the example of cars, a dollhouse, queen bed, etc

          9. Drew Meyers

            Agree. Angel List is primed to take a substantial slice out of LI, IMO

      4. LE

        Linkedin has lost it’s way and holds no utility for me. It used to be at least good because you could see who someone is and what they did which was helpful (even with the local guy who you get your lighting supplies from). Now that’s just to much work and many people are blocked unless you go in by SEO or some other trick or pay to see them. This is an example of the people higher up not knowing what is going on in the engine room. It’s become a free for all.”That sounds like 500 weak connections. It sounds like bullshit.”I do wonder though to what extent they reached out to any of those connections. At the very least it gives you a plausible reason to spam the contacts which you can’t do w/o the contacts even if they are weak.

        1. Dave Pinsen

          The social network paradox is that the guys who build them don’t need them, so there’s bound to be a bit of disconnect between them and their users.

          1. LE

            What I would call lacking “seat of the pants” feel which allow you to understand the actual user experience.But I would also say that this is also a case where managing by numbers allows you to lose track of what is going on and other things you might need to be paying attention to.So if something is growing well you shift your attention elsewhere. In other words problems are papered over. A busy restaurant doesn’t worry until competition opens up and they find that people don’t think the food is that great. It’s just that they have no good alternatives so they keeping lining up in droves.No easy answer but I wonder if, among all the people that work at linkedin, if there is a department whose job it is to monitor out of band what people who use (or as I would say more importantly people who don’t use) linkedin are thinking.I don’t mean by a stupid survey. I mean by directly spending time and money to reach out, observe, and collect information.

        2. Timothy Meade

          Isn’t that the real metric here, how many people have you contacted and have responded? Couldn’t you weigh the graph by that and by William’s engagement metrics and get a more useful picture of who a person is really connected to? Google may be in the perfect place to do that, if you opt in the graph data from Gmail (but there’s a danger with that as there was with Buzz.)

          1. LE

            I’m not sure I understand the question you are asking? Besides what happens when you just have a bunch of contacts and have no need to contact them for anything?Separately here is a great example of someone levering contacts in order to raise money on kickstarter:…Particularly this:Personally I thought I was going to jumpstart things with press articles, but the first five hours mostly came from an email I sent to friendsDan sent me the email but I’m not a “friend”. I’m someone who sent him an email because he said something about rc helicopters. We traded a few emails back and forth and that was some time ago. One day Dan’s email arrived talking about robot turtles. Just checked and Dan’s not on my linkedin either. My point is that the fact that I had traded emails with Dan gave him the right to send me a solicitation. I don’t mean “legal” right or “not spam” right but meaning that since I recognized the name I at least read the email and thought it was ok that he sent it to me.

          2. Timothy Meade

            The question I was asking is if there are better ways to measure the value of a collection of contacts, such as by how often you have actually communicated with the person beyond the ‘approval’ interaction where they accept your invitation.When I think of ‘robot turtles’ I think of the early Logo implementations with physical robots driving around with pens in them and drawing on paper. I’m intrigued not quite sure what they are doing. I guess you may have been singled out as a ‘robot’ contact when Dan did a query on his contacts?Google could probably tackle this with something like a +1 button in emails that allows you to indicate you should have received that email, as they always have their negative ‘spam’ button and other ways to identify email. (As well as the hated by email marketers tabs concept.)

          3. CJ

            Fred invested in those guys, it didn’t make it sadly. I thought it was a great concept.

      5. ShanaC

        nah, I’m 2

  11. Guest

    Eat your own dog food, then cannibalize 🙂 (Sunday’s good for mixed metaphors that don’t quite work).This really is best for established companies (as you say). New startups should consider it but keep focused on your core, your gut calls. It’s easy to get distracted by possibilities. It’s worth revisiting every so often because maybe you discover something in the process, but be careful not to undermine the energy of your direction unless you’re absolutely convinced in the new one. Can lead to thrashing.

  12. Dave W Baldwin

    Do not attack, just know your opponent and their weakness. Some readers know I’ve had this going on and when I’ve updated, I do not trash. No matter what product we’re talking about, if there is truly something disruptive/unique, either you know how best to do it or not.

  13. kidmercury

    linkedin, like many other big internet businesses, will die a death of a thousand cuts by competitors that focus on a smaller niche (like fred’s portfolio company behance). all that matters is the customer you target and delivering a full feature set designed specifically for that customer niche. the whole unbundling thing is wrong in my opinion; or rather, you can unbundle to find new processes to reduce costs, but ultimately you must rebundle to extract profits.folks can hate on CL all they want, all i know is when i want to do local stuff, i go to CL. because they are focused on treating each locality as its own independent node rather than trying to scale in the manner that is all to common for companies that went down the bubble 2.0 path and are now condemned towards chasing unachievable scaling goals due to the absurd valuation they took on. CL is indeed overdue to be defeated, but not by 1,000 unbundled services; rather by platforms that do an even better job of delivering a full feature set custom designed for a specific geo-local region.

    1. pointsnfigures

      I don’t think LinkedIN dies the death of a thousand cuts. They have a big checkbook and can buy competitors. They need to constantly innovate-then be very wary of anyone flanking them. They can choose to stomp the flanking business, buy them, or figure out a way to co-exist.LinkedIN doesn’t seem to have built in network effects yet for free users. That’s a danger. It simply was first, and no one could startup an online resume placeholder to compete.

  14. Ana Milicevic

    Re: asking sr. management/board the weakness question –> In a similar vein, I like to challenge my product teams with the following question: if you were building our service from scratch today (no existing technology debt, full understanding of current and prospective marketplace as well as our own product/market fit) what would you build differently and what are the top features you’d make sure you had? For more mature products I find this to be a good annual exercise that helps balance strategic vs. must-get-this-done shorter-term thinking.

  15. pointsnfigures

    I don’t know if Fred’s title is the correct approach for an entrepreneur. Attacking a business isn’t a strategy. Although, I get the point he is making, which I agree with.Solving a problem that a business doesn’t solve is a strategy. What problems is LinkedIN not solving? What problems has the advent of LinkedIN uncovered that previously weren’t visible? Attacking invites “hammers looking for nails”, and investing in them could cost a lot of money.

  16. JimHirshfield

    Is Brewster… could Brewster be the startup to take on LinkedIn? A new verb: you’ve been Brewster’d.

    1. pointsnfigures

      I don’t think so. One advantage of LinkedIN is you see how you are connected to people (assuming it’s a real and not virtual connection)

      1. JimHirshfield

        Any contact manager with enough traction could throw a switch and make that feature available. Take gmail’s contact manager. Don’t you think Google knows who knows who? (And more, by virtue of being email provider)

        1. Ana Milicevic

          I’ve wondered why Google Plus isn’t making a more direct play at this space.

          1. JimHirshfield

            Great question. They’re trying to crack the code on social by focusing on content sharing more than on the relationships between people. The former is an easier “ask” of people.

          2. ShanaC

            because that’s how marketers consider “social” right now. not so awesome, but doing otherwise would require rethinking a lot of what we know about marketing

          3. Ana Milicevic

            On that topic, Rishad Tobaccowalla of DigitasLBi, Razorfish, and Vivaki wrote a great post today on the rethinking of marketing that needs to happen:

          4. JimHirshfield

            I guess so.

          5. Tyler Hayes

            What do you imagine them doing?

          6. Ana Milicevic

            Since they already have the information on relationships b/w people (w/ classifications of strength and nature of relationship) they could create templates for professional pages where users upload details of their careers, professional accomplishments, etc. Templates could vary to highlight different skills/experience (e.g. photographer vs. engineer vs. actor vs. builder). Since G+ results feature prominently in Google search rankings this could be the much needed incentive towards greater mainstream adoption of the service. This ‘Google Plus Pro’ can be completely additive to their current product while providing a viable alternative to LinkedIn w/ relatively low switching costs.

          7. kidmercury

            i’m sure it’s all coming. i get the impression they are debating how much to execute via developers and APIs versus how much to build core into the platform.

    2. Michael Elling

      Shame. Not on Android. Over 1 year since launch. Looks like a great cross-silo app. Also, some weirdness on website, like about and home buttons.

      1. JimHirshfield

        Likely due to focus, which means saying “no” to lots of stuff.

    3. Drew Meyers

      I actually just got an email about Brewster from someone sharing their contact info. And I accepted, clicked around the site, downloaded the app, played around with that for a bit….and couldn’t really figure out what the app is trying to help me do. Maybe it’s more a value add in the background, and send me push notifications about things I need to know? I’m not sure, but I couldn’t figure it out in the 5-10 minutes I spent with it yesterday.

      1. JimHirshfield

        It’s been a while since I played with it. I’m not on my iPhone much. Gave it to my son. But I think they’re trying to reinvent the contact manager on mobile.


    This is a real good post Gadgeteer. Businesses not only need to be concerned about normal competitive attacks. But they have to be leary of all electronic communications. Many times people will let an assistant communicate for them electronically because it’s difficult for the receiving party to know who sent the message. This means you could think you’re talking with a decision maker when you’re not..Also if you look at how much money has been poured into the economy with no real changes happening. It makes you wonder if some people can harm businesses without that business even knowing!? A person(s) working at a competitor could start a slander campaign that harms a business or business leader. Gaining access to a contact list can let someone target a business’s customers directly..Look at the recent gov insider attacks. If the gov tracks email networks then someone could easily use that information to attack a particular business. It looks like the Maxwell Smart glass dome “meeting room” will soon be the only why to protect yourself.

  18. John Revay

    Saw this on my dashboard the other day……What A Difference Six Years Makes…Steve Ballmer, 2007:Right now we’re selling millions and millions and millions of phones a year. Apple is sellingzero phones a year.Steve Ballmer, a few months later:It’s sort of a funny question. Would I trade 96% of the market for 4% of the market? (Laughter.) I want to have products that appeal to everybody.Now we’ll get a chance to go through this again in phones and music players. There’s no chance that the iPhone is going to get any significant market share. No chance.Steve Ballmer, yesterday:Mobile devices. We have almost no share.

  19. BillMcNeely

    As an individual who has been unemployed/underemployed for 22 months a couple observations:When I sold cars LI was helpful in finding out more about internet leads. Were they real people or folks who worked at Banks or credits unions sending out inquiries to 20 dealerships.Use the connect with option sometime gave a last last opportunity reach out for a sale if I had a bad email address or phone number.LinkedIn seems to be de emphasizing Groups as of late.When interviewing, an LI profile helped me asked questions about the interviewer and the business. It helped breakout of the HR approved questions and have a real conversation.I also liked the WHO HAS VIEWED MY PROFILE function helpful to let me know where I am in the interview processUsing the search function I have found veterans at firms I am interview with and they have attempted to get me in line for an interview.As far as the news above the fold goes sometimes its good sometimes its not.

  20. LE

    If someone will compete with you by offering a free version of what you charge $10,000 a month for, then maybe you need to think about a freemium offering to close off that open flank.Going along with this is the idea that if the price of your product is high enough it will attract competition because an entrepreneur will do a “hand over fist” calculation and say “I can do that for less and still make money”. Doesn’t even matter if his calcs are right.So let’s say you see the local bike store is mobbed with customers. You see they are selling bikes for $750 and you think “hm I wonder if that is a good business?”. So you do a little checking and see you can buy the same bikes wholesale for $350. You say “hand over fist I can make money selling bikes for less money I don’t even need a napkin to figure this one out. I will just sell them for $700”.So when you are pricing your product at the start there is more than just “sell it for free”. There is sell it close to cost or at a price that others won’t think there is enough margin to make any money.Back at the start of competitive registrars Network Solutions was charging $35 for domains. The initial price for domains that all registrars paid at the start was “regulated” at about +-$6 for .com/net/org. Anyone can figure out there is enough margin there to make money. So godaddy and others come along and charge $10 and start the race to the bottom.Now godaddy by choosing to sell that cheaply (this is all from memory by the way they varied their prices) well they actually kept many people from going into the business that might have competed with them. (Also tucows was at $10 iirc).Had godaddy chose a price of $20 many more would have gone into the business to compete with godaddy who would then have an innovators dilemma. Instead they limited the competition to those that just wanted a piece of the network solutions pie and were able and willing to charge at or about the $10 level (many did $15 etc.) Godaddy of course makes most of their money on things other than the domain sales obviously.

  21. ShanaC

    I kind of think this is bad advice for a baby bay startup.I keep a list of my competitors. I also right now am barely paying attention since mine is such a baby startup that what they do is not what matters to us right now (getting out there, finding users, figuring out which users are going to be customers is)

  22. Carl Rahn Griffith

    As a plongeur I fear no-one.

  23. Semil Shah

    Specifically on the topic of LinkedIn, it’s possible, but I think very unlikely to occur. LinkedIn’s brand has standardized the resume/CV, so it’s harder to unbundle the brand that ties together the data with identity. More practically, if anything does threaten LinkedIn, they can pull a Facebook and just buy it. One app that unbundles one little feature of LinkedIn is

    1. pointsnfigures

      I think there are startups trying to do that. With video as an example.

    2. Tyler Hayes

      LinkedIn already employs the keep-your-friends-close-and-acquire-your-enemies strategy:….Because they’ve standardized the CV and it’s so central to what they do I think LinkedIn’s biggest sideways threat is actually for their standardized CV to become non-valuable.For example: I pretty much perennially contemplate shutting down my LinkedIn account because I get no value out of it. But that’s because 1) I live in SF so in-person networking is extremely prevalent and 10x more valuable, and 2) I’m a developer so I have my own site. When someone says “Send us your LinkedIn” I say “I don’t have one. Go check out what I’ve built at”. Still a CV of sorts but it allows me much more freedom of expression in how I get across what I’ve accomplished with my life.

      1. Semil Shah

        I agree, but won’t the solution either need to be branded and therefore somewhat standardized in order to send a signal?*-semil**twitter: *@semil <http:“” semil=””>*more info: *

        1. Tyler Hayes

          Branded and standardized in what sense?

          1. Semil Shah

            LinkedIn has branded the CV online, so you trust it and it’s standard format across the world.

          2. Tyler Hayes

            Ah, yes. And that’s where I think Linkedin can improve. More and more are doing more things online like commenting, tweeting, forking, and blogging. Those things are 100x more valuable to me than looking at a CV and trying to weigh a person based on how they talk about themselves. Actions speak louder than words. So LinkedIn offers 100x more value when they natively let me integrate my most recent Github commits, blog posts, etc. into my profile.That’s mostly for hiring though. That’s not why I connect with people on LinkedIn.I connect with people on LinkedIn to show how popular and powerful I am because I know other popular and powerful people.

          3. Semil Shah

            All of those signals, right now, lead back to LinkedIn. With their data, they are Rome.

  24. Matt McCormick

    I think a problem a lot of businesses have – big or small – is they worry about taking away sales of existing, profitable products/services by introducing a “competitive” product/service. But as Steve Jobs said about the development of the iPhone when people at Apple mentioned it would hurt their current iPod sales: “If we don’t cannabalize our own sales, one of our competitors will do it for us.”This quote actually inspired me to open a second store in our most profitable market. Sure we “lost” sales at our flagship store, but we not only made those sales at our new store and some additional sales by being closer to some of our core customers, but we prevented a potential competitor from coming in and taking those same sales from us – which would have been sales lost forever.

  25. John Minnihan

    When you have a green field, anything is possible.The moment you have legacy infrastructure + processes – a by-product of any amount of success – you’ll have weaknesses. Because by design, part of your ongoing effort /resources is allocated to simply keeping that working.

  26. John Revay

    MS and missing mobile….I came across this line from a piece on Ballmer……”If there’s one thing I guess you would say I regret, I regret that there was a period in the early 2000s when we were so focused on what we had to do around Windows, that we weren’t able to redeploy talent to the new device form factor called the phone,”

  27. CJ

    This question is not just relevant to startups. We’ve recently had a management change, first thing I plan to ask my boss tomorrow is how would an outsider to our company attack our department if he/she became our boss. It beats looking at metrics all day.

  28. george

    Hard to build a moat around social platforms. LinkedIn is pretty fortunate to own the first position; there are many vulnerable flanks but switching costs (personal network), help buy them some time…

  29. Friv Jogos

    Thanks for giving me the useful information.

  30. Phick Steven

    The very first thing required to beat a company in competition is the revenue and the ultimate support behind the support is the the right management that drives out the company. Prior to that the time keeps more importance I think so. Right time allocation for a task should carry more importance in any of the industry. Then only an entrepreneur can beat another one.I work for a service based company, where in I have seen the growing stage at a vast pace. The only reason behind this is that we have been precisely using time tracking software which is automated and makes a huge difference to the productivity indirectly. Thanks to the online web based time tracking solutions from Replicon (… ) that has made things go possibly in the right track and has made us to be in the top level against our competitors.