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up vote 2 down vote favorite

a bit of background before my question:

I've built a video sharing website that is specific to extreme sports, where users currently embed videos from third-party websites like Vimeo or Youtube. Really, the site is a blog that many users contribute to. I'm already live with a Beta, and will come out of Beta within the next few weeks. There is a strong likelyhood that I will soon obtain a bit of entrepreneurship funding from my government (a loan), and I believe that I have a solid plan for using this money to quickly scale the business. A key thing to note about the industry:

  • Over the past 2-3 years I have observed about 50% of my competitors make large investments in an attempt to integrate user-generated videos / social networking into their extreme sports websites, in some cases completely redesigning their brand in order to do so. It appears they have been relatively unsuccessful, and in my opinion, this is due to poor execution.

And my question:

Many of my competitors are large extreme sports blogs that host their own videos, and do not use vimeo or Youtube. Among these competitors many provide an API which, if integrated, would allow my users to add their extreme sports videos to my website as easily as a video from youtube or vimeo. These are very high quality action sports videos, and would be of great benefit to my community. In some ways this could be beneficial to my competitors, all of which run pre-roll advertising on embedded videos (i.e. they will make money by me having these videos on my website). On the other hand, my website directly competes with their recent investments in user-generated content / social networking.

Embedding my competitor's videos in my website will undoubtably tip them off to my existence, I strongly believe that I have implemented user-generated content / social networking better than my competitors. My competitors have the means to relatively quickly integrate my implementation into their own websites.

And the question is, should I be worried about tipping off my competitors to my existence before I've had a chance to get my foot in the industry, build my brand, and at least to some extent scale my business?

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2 Answers

up vote 3 down vote accepted

Its always a consideration and a worry but in general new startups worry about this a little too much.

"They" have a few hurdles to overcome ... they

  • Have to actually notice you. Your likely just one of 100s that have taken feeds, they will rarely focus on where the content is being used ... especially if they are making money from you, they are more likely to focus on how they can get you more of what you need ... so that it makes them more money.
  • Have to see you as a threat. In most cases they see themselves in a defensable and controllable position. They may watch you to see if you have "the right answer" and once you have proven the concept they may try themselves OR they may just buy you seeing you have all the learning behind you now.
  • Have to have the resources to apply to it. They seem much "bigger" but this rarely means they have 3-5 developers sitting round playing cards until your idea comes along at which point the spring into action ... Usually they have 100s of ideas, and lots of smaller players (including you) that they are fighting against plus they are heavily committed to their own development cycles and it would take them a long time to change tack. ...
  • Have to have the leadership control. If your idea can be done by them in under 2 weeks (1 sprint) and executed properly then you may have an issue ... if its a complete rethink that changes their 2 year plans ... that could take months for them to argue about and to sell every "stakeholder" on the new concept.
  • Have to actually be hurting them OR taking their revenue stream from them. Are you taking a large (> 5%) amount their market and can they see it is clearly you making the change? Until you hit a level around this point you probably won't appear on their radar, they have larger problems to focus on.
  • Have to have your vision and long term ability to execute. If they don't they will always be playing copy and catchup. If all they do is copy your idea but don't see the vision/potential for the next 2-3 years then your safe and actually in a good position ... this is the key factor that will make you a buy out target ... do we try and build it OR do we buy the guy who has built it? This is most likely what your aiming for anyway.

More likely senarios include

  • they see you as a potential partner, someone who makes them money, try and keep it that way.
  • they dismiss you out of hand as "just another one", until your established enough to prove them wrong.

Looking at your business:

You need to get content from somewhere, unless you have an established core of people submitting or you have a deal with the likes of Warren Miller your best bet is to make a margin on their content and slowly reduce it as a percentage of the content on your site over time ... so far this is a necessary evil from your point of view.

If your idea is a simple UI change or a reformatting of the same data, then your in trouble, possibly rethink the strategy or drop it as "good but too easy to rip off" and save your time for the next good idea.

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up vote 0 down vote

Most likely they have google alerts set on all relevant keywords, so they will know about your existence anyway, without you using their API. Robin's answer covers all the rest.. If there is quality content, use it.

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