“Is your startup idea taken?” — and why we love X for Y startups
I had a quick laugh, of course. But then seeing this infographic made me think through some deeper things:
- What are “X for Y” companies and why do they sound compelling?
- Are “X for Y” companies actually a good idea?
- When do they work? When do they not?
- .. and finally, what happens when my “X for Y” startup idea is taken?
And so this is an attempt to provide some serious ideas for this otherwise funny question.
People love describing startups as “X for Y” — why?
A few years back, “Facebook for X” companies were all the rage. And then it was “Uber for X.” And now I’m hearing about “Stripe for X,” “Superhuman for X” and “Twitch for X.”
In fact, Marketwatch did an analysis of startup company descriptions and found that startups often compared themselves to other companies in their descriptions. Here’s the list of the most common startup comparisons:
“X for Y” comparisons are popular! This is a really common format to describe startup ideas because it accomplishes a couple things all at once: First, it positions you against something successful. Unless it’s intended as an insult (ha!), no one ever describes their startup as the”[Failed startup] for X.” Second, it both conveys a lot of information and also doesn’t — when someone who hears the idea, it’s like a short puzzle to solve to try and understand what it might mean. And yet, as a one-liner, it begs for interactivity, so that people will ask more.
Third, it makes it easy for the people passionate about what you’re doing — your employees, investors, and customers — to spread the news about what you’re doing. Nivi, half of the Venture Hacks blog, wrote back in 2008:
The pitch is the perfect tool for fans who are spreading the word about your company. Investors use the pitch when they tell their partners about your startup. Customers use the pitch when they rave about your product. The press uses the pitch when they cover the company.
In other words, short, pithy descriptions tend to travel further, and you want to arm your proponents with a blurb to spread!
But the real question is, do “X for Y” companies actually work? Is this a good strategy?
The “X for Y” companies that have worked
Interestingly, although you’d think that this strategy would lead to derivative/uninspired ideas, in practice they have worked.
I asked Twitter this question and did some googling, and there were a number of compelling examples:
- YouTube was originally “Flickr for video”
- Glassdoor was “TripAdvisor for jobs”
- Airbnb was “eBay for space”
- Baidu was “Google for China”
(I’m sure if you search around, you’d find even more examples — tweet at me at @andrewchen if you have others in mind!)
So which “X for Y” companies will work in the future?
Now that I’ve talked through all this and you want to go back up to look at the Buzzfeed infographic, you might be asking yourself, which of these ideas are actually good?
In broad strokes, all the “X for Y” ideas end up falling on a spectrum of:
- [Successful product] for [vertical segment] on side…
- … to [Successful product] for [new category] on the other
An example of the former might be something like, “YouTube for Kids” — which is a segment of the existing product. This has the advantage that there’s a lot of pre-existing behaviors to work off of, and if you go deep enough on the functionality for this vertical, there might be a way to create a differentiated experience. On the other hand, you are also more likely to end up building a sustaining innovation, where an industry incumbent sees it as part of their turf, and they can extend into the category quickly. So what you gain in minimizing execution risk you trade off in terms of increased competitive risk.
On the other hand, something like “YouTube for Amazon Echo” sounds kind of weird and foreign, since it doesn’t yet exist — yet it could still possibly make sense as an idea. It might be a social platform to create and play back audio clips from other users, like a UGC podcasting platform. I don’t know. At this end of the spectrum, you’re talking about a new category of products and new user behaviors that might make sense. In that way, you take a ton of market risk — but if it works, you might dominate the whole category.
And interestingly, in the examples above for YouTube, Glassdoor, Airbnb, etc. — I’d argue that they fell more into the new category creation side of the spectrum rather than a segment. At the time the products were created, Flickr didn’t have much video capability and it wasn’t a popular format for users. Tripadvisor didn’t let you review jobs (nor does it today). eBay didn’t support reserving homes and space. And Google wasn’t in China. And so these “X for Y” concepts, once they worked, had a higher ceiling since it wasn’t constrained by a giant competitor running them down quickly. The geographical aspect of Baidu was probably, in many ways, the smallest moat in terms of product, but we know that getting into China is special and most of the largest tech giants never made it happen.
Watch out for broken metaphors
I’ve written in the past on why almost all of the “Uber for X” startups failed — you can read that here — and ultimately, even if the idea sounds cool to your and your startup friends/investors, the value proposition must still be really strong to all the customers and users involved.
Something like “Uber for cleaning” sounds great until you ask if the cleaners actually want to work this way, if consistent/high-quality service can be delivered, and if the unit economics make sense? But it can be catchy for investors. That’s not enough. Broken metaphors happen when something that’s meant for an investor pitch becomes ingrained in the product itself. Rarely does the end user care about your startup’s desire to position itself against another successful startup.
So go work on “Tinder for doctors.” Or “Birchbox for pizza.” Use it for the Linkedin blurb describing your company, and on your 5-min accelerator pitch. But don’t forget, there’s a reason why “Uber for X” startups have mostly failed — you need to lead with the customer value, not with what is easily described within the startup community.
The post “Is your startup idea taken?” — and why we love X for Y startups is also published on andrewchen.