January 13 2014
by Scott Johnson

The Most Important Lesson Google Taught Me

Before there was Google, there was Yahoo! for category search and Alta Vista for keyword search.  I would say that the search hierarchy was well established by the time Google showed up to the party.  You see, Google didn’t invent search, they just made it work really well.  Google Maps – similar story.  Mapquest dominated before Google entered the fray.  Google tried again with Google+, with a very different result.  And therein lies the point of this post.  To be a leader as a startup, you don’t need to time a rising tidal wave perfectly.  A seemingly secure market leader can be upended by a significantly better product.  Emphasis on significantly.  There has to be a “wow” moment by customers upon exposure or you don’t stand a chance.

Alta Vista had won users based on completeness of results.  In the early days of the web, that mattered and really differentiated them.  But as result sets became unmanageable and the competition caught up, searchers wanted the most relevant answer at the top, not a 5000 page deep jumble of results.  Google delivered that.  The difference in user experience was visceral  – everyone that tried Google had that “wow” moment when first exposed.  In a mere 15 months around the turn of the century, Google and Alta Vista had switched places.  Now Google is a verb.

From Search Engine Land

Mapquest, the world’s dominant online map sat neglected at AOL for years.  Google decided to focus some energy making maps significantly more useful.  They added StreetView, traffic, spoken directions, cleaner visuals, a great API, search suggestions as you type, etc..  It all added up to a much better map.  Google passed MapQuest in 2009, and while they don’t dominate maps as much as search, and lost Marissa, they remain the US market leader.

And why can’t Google+ do the same thing to Facebook?  For one, social network switching costs are an order of magnitude higher.  With search and maps, you don’t have to get all of your friends to switch too.  But Google+ also fails to “wow”.  It may be better in a few compelling ways, but no wow, no switch.

How is this an important lesson for startup?  Consider the definition of “minimum” in minimum viable product.  It is vastly different when you are entering an early, primordial soup of a market such as drones, or Bitcoin services vs an established market like social networks.  To expand the point, the minimum necessary to knock off established competitors is “wow that is so much better!”.  The minimum in an emerging industry is “wow, that’s novel!”  In an emerging market, it just has to work.  In a lot of ways, that is a much lower bar, and you can start life as a category leader instead of trying to steal it away.  The risk, of course, is that your emerging market doesn’t get big for another twenty years.  At NAV, we generally try to find early leaders in emerging markets, and take market timing risk.  We will look at products attacking more established markets, but the marketing required to knock off the bigger players can be daunting.  In either case, we need that “wow!”

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