August 11, 2007

 

First Mover Advantage is dead

Some background information to set the ground for this post.

Shyam wrote a scathing review of Brijj.com, business networking site aimed at Indian users. Brijj.com is the product of Info Edge, the owner of most widely known jobs site Naukri.com. According to Shyam, the site lacks even some of the basic functionalities he would take for granted. Sanjeev Bhikhchandani, CEO of Info Edge, responded to the criticism, the kind-of first I came across. Sanjeev's rationale is that the site is "good enough" and needs to capture the early mover's advantage.



"In early stages of product category evolution on the Internet aggregation will beat bells and whistles hollow - so long as the core required features are there." - Sanjeev


I disagree. I am in the technology industry for barely a decade when I started as a student. But, in last few years industry has thrown up some prime examples which prove that First Mover Advantage (FMA) is non-existent. In fact, it can be called as First Mover Curse, if you go through this list.

Internet Search: "As long as we're 80 percent as good as our competitors, that's good enough." That's what somebody from the then online portal told Larry Page and Sergey Brin. In the early days I recall using Yahoo, Altavista, Excite, Lycos, AskJeeves, Infoseek among others. Less than a decade later, only Yahoo is a competitor to Google. The story of how ruthlessly Google killed its competition with the technological firepower is well documented.

Email: My first email account was with Hotmail. I simply loved its clean, fast, usable and fast interface. I also got Yahoo mail account primarily to access Groups. For five long years, there was very little to no innovation in this space. (Hotmail in Microsoft's fold had 200 million users.) In April 2004, Google launched Gmail with prime feature being 1GB mailbox (250x of its nearest rival, Yahoo.) Now, who needs that amount of space, I thought. But, then going ahead with such bold statement again required huge technological innovation. (It took Microsoft more than a year to match that.) Now, 95% of people in my contact list use Gmail.

Online Photo Sharing For sharing photos, till 2005, Yahoo Photos seemed far ahead of its lousy competition (most of the belonged to camera manufacturers.) Flickr out-innovated Yahoo, and ended in its lap. Recently, Yahoo officially shut down its photo service, even though it had a staggering 1.5 billion photos in comparison to 500 million of Flickr.

Personal Music Player iPod was the nth personal music player to be launched in the market. "It's freakin' expensive" people reacted at its launch. 5 years down the line, they have sold 100 million iPods.

Browser Netscape Navigator's earlier versions were remarkably better than Internet Explorer (IE), which was built on NIH technology. IE's market share at that time had just crossed double digit percentage. After IE 4.0, it seemed they will stop only at 100% market share (Non-Windows OS don't count.), which they were close enough. Ironically, Firefox is playing the same game with IE now.

Social Networking Friendster was one of the first companies which launched the idea of Social networking. Today, social networking is dominated by Myspace and Facebook (valuations of which are astounding) with some other sites popular in certain geographies.

Cell phone It's 2007. More than a billion people in the world have a cellphone. One would expect that no major innovations are left and having a more powerful camera in phone than a standalone camera is not even an incremental innovative. The market leader Nokia launches dozens of new models which we don't even notice. And ONE new model of cellphone from another company has taken the world by storm. Right! iPhone from Apple.

I'm sure there are more such examples in technology industry since 70s.

The epitome of this long list of example is simple - if you can offer a product/services which is 10x better than competition, you can decimate the competition. That is true even if a service has high exit barrier (Email, cell phones have a very high exit barrier for obvious reasons.) Again, here the key is an order of magnitude improvement. Think of 250x mailbox size, or 100 albums on music player instead of 10. Tiny features don't count. And if tiny features are all that marketing has to talk about, nothing kills the product faster that huge marketing campaign surrounding it. [I should not be saying this here, if you know what I mean.]

So, should the company wait to build a great product or just go ahead with good enough service and get early adopters on board? My take is the decision varies with each company. If two guys out of garage are coming out with some innovative product, it just needs to be good enough. On the other hand, any service launched with blue-red-yellow Google logo on it, has to be "great enough". Users will not accept anything short of that. Coming back Sanjeev's comment, as they are a large player, users' expectations are already set (high) with their popular site - Naukri.com.

On a side note, Sanjeev refers to development of refined product as building Taj Mahal. In my prior company, this term, Taj Mahal, was used for technologically superior products/ideas which have either been shelved or completely killed for varied reasons. It was not pejorative, but it, definitely, was not a compliment.

2
Comments:
Here is a comment I posted on Contentsutra



Hi

I have been reading the various posts and comments about brijj.com on all the blogs - fatalerror, contentsutra, watblog, alootechie etc. with considerable interest.

My favourite comment is the one from Nisha on Alootechie saying that this site cannot be from Info Edge because the interfaces are not cluttered enough. Be patient Nisha - give us time and we will clutter up this one as well. After all this is only a Beta.

Lots of interesting issues have come up. I would like to throw in my two bits.

Why have we launched this site?
We launched because it made sense to do so. Sooner rather than later.
It fits well with our other sites. We are in the business of enabling handshakes - all our sites do that. We charge money for the prospect of enabling a successful handshake. Consummation of the handshake into a transaction is self service and takes place offline. Content on all our sites is user generated (resume’s, jobs, matrimonial profiles, real estate listings) with the exception of asknaukri which will also move more towards that direction in the coming months (strange how an alleged Web 2.0 feature like UGC was integral to naukri and many other sites as far back as ten years ago) . A networking site possesses all these characteristics of our other sites. We know how to run those businesses. We feel at least some of that knowledge can be useful here.

What will people use the site for?
You are missing the point if you think this is a recruitment site or a site to find passive job seekers. That’s what you think the site is for if you evaluate it only from the naukri prism. The site can be used to connect with people for many things - sales leads, career guidance, employer evaluation by job seekers, reference checking, finding a vendor, meeting people with common interests, travel advice, problem solving, product recommendations, demand aggregation, finding old friends and acquaintainces - whatever you need to connect with people for you can do on this or for that matter another networking site.
When was the last time you wanted to do something and you sought out advice or could have done with some or tried to find a contact somewhere or badly needed one. I face half a dozen such situations every week where I feel the need and cant fulfill it. And my friends say I am incredibly well networked.
Of all countries India runs on Jaan Pehchaan.
Sure Brijj may also help recruiters find passive job seekers. And from the naukri viewpoint that will be a useful thing. But that is only a very thin slice of the pie.

What was the effort that went into building the Beta version?
We put together a team around nine months ago and operated in stealth mode till now. Sure there were leaks in a couple of places but no details came out. In public we talked about our other projects - career guidance, education etc. but kept mum on this one till the last analyst call. The Brijj team studied over forty networking sites internationally - what were the features, what was the privacy policy, what was the information being captured, who was visiting these sites, what were they doing there, what could the possible revenue models be, who was getting what kind of traction, how smart was the recommendation engine, what kind of communities were being formed, was it a hang out kind of site or was it for passive networking and so on. We then spoke to Indian users of the various networking sites to understand their perceptions, usage, needs, satisfaction levels and need gaps, what makes them switch etc. We also spoke to non users and understood their mind. It was only after three to four months of this did we begin to narrow down on our target user and what features the offering should have. And then we got down to execution. The engineering feat in building architecture that’s stable and scalable for a networking site that if it succeeds can grow exponentially is considerable.

I have two or three more things to say but have to rush to office. Will do so later today or tomm.

Sanjeev
 
This is the full text of my response to Syam. It is not about us being happy with good enough. We have gone with the essential feature set and speed to market. The differentiation will come from network aggregation and a superior friend finding engine.

Hi Shyam

Thanks for taking the time off and doing a detailed review of brijj.com

The site is in Beta as you can see on the home page and is still going through the final stages of testing and stabilisation. We have done extensive QA and we do have a pretty good QA and testing competence within the company.

We have gone live with the basic feature set that we felt was essential to make a start.

There is an ambitious product enhancement agenda on the anvil for Brijj and there will be improvements on an ongoing basis - some of which will be visible to the user and some that wont be.

Granular privacy settings are in the pipeline and so are many other features which we would not like to announce at the moment.

Yes pricing options are clearly communicated however we do not expect revenue anytime soon.

What a lot of people dont realise is that the bulk of the value of a networking site lies in two things :

1. How well the network is populated and by whom

2. How easy it is to find people who are relevant to you

Now on both these we felt there was a gap in what is needed in India and what the current international sites are providing.

What we have done is built in a friend finding engine that we believe is far superior in the Indian context than that of any international site. So once the network is populated we will be able to recommend many more people you would want to connect to than would a comparable international site with the same number of people registered from India. This would enhance the value of the network.

This capability is currently not apparent since the network population is low but it will make itself felt in a few months time hopefully.

As far as populating the network is concerned most international professional networking sites don’t currently have a very large registered user base from India - although this is growing. We feel that we have the wherewithal to catch up in this area.

So we had two choices - delay launch by four to six months and build a Taj Mahal and then go to market with all the bells and whistles. Or else build the essential feature set while ensuring the core proposition of a larger network population and a superior friend finding capability are met.

On balance we decided to go for speed to market. We believe we have made the correct choice.

Time will tell whether we were right or wrong.

Sanjeev
 
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