Andrew Hyde lives in Boulder, Colorado and travels frequently.

A Web Company vs A Local Shop

If I were to tell you I’m starting a new event ticket site, you would most likely tell me to back off the cliff and do something without a dominant market leader and 50,000 competitors.

If I told you I was opening up a sandwich shop, you would be a happy first-day customer, wanting to support me.

In both cases I’m taking risks to solve a problem and provide a service, but the web community reacts much differently.  “Simpsons did it.” There isn’t anything new.

On one end (event ticketing), you have to compete with the best in the world with millions of VC dollars on day 1.  With the sandwich shop, I have to compete with my block, neighborhood or city.

What does that say about how we support and interact with early-stage startups?

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5 responses to “A Web Company vs A Local Shop”

  1. electromute Avatar
    electromute

    I would also point out that there is quite a difference between products and services. Bigger isn’t always better when offering services, as many big web shops lose process (if they even had it) and you pay top dollar to get shuffled around by junior staff. A company executing on a product (while still may rely on software and technology to do so) has a different set of challenges when going up against a big player, namely consumer adoption.

  2. Max Avatar
    Max

    Thought about this more than once, its kind of a double standard. If you think about it most of the popular websites right now were not the first of their type to actually get into the same business.

    Build something that provides an easier (and maybe wider) solution to the same problem.

  3. Brent Terrazas Avatar
    Brent Terrazas

    Well you could open up that sandwich shop next door to two pre-existing sandwich shops and still do well if you found a niche or item that distinguished your place from the others….. It’s like when a caribou coffee opens up next door to a Starbucks, all of a sudden that Starbucks isn’t making as much money anymore.

    Same goes for ticketing (In college i ran a data fed niche-oriented ticket site that did well for a while then eventually crashed and burned when i tried to branch out from the initial niche and by the time i realized my mistake the other ‘heavy players’ had already taken back the niche in a way that was based on mine but, well  (and i hate to admit this but its true) a better way of doing it than I was. 

    It’s all about how you want to market yourself based on what needs you see in the industry/area/marketplace… kinda common sense.

    Now with that ticket model you’re probably thinking “great so you were pulling in money but compared to the larger ones that had every show/event, you were making chump change.” True, but I learned based on where, who and how the users found my site how to properly up-sell them, not to mention that by itself it might be chump change, but if you have a lot of it, thats one big chump you’re dealing with.

    I know someone (I think it was from 37 signals but i’m probably wrong as usual) has already said something similar but as far as early stage startups: don’t listen to your customers. Do what you think/know/see is making money………once you’ve got that down then branch out.. just don’t do what i did and go a little over-board when you branch out.. had i done it slowly instead of going from a niche to ticket master i would have most likely been able to take their better version of my ticket site and just return the favor while I still had the reoccurring clients.

  4. PaulRoales Avatar
    PaulRoales

    It does not say anything about how we support and interact with early-stage startups.  Nothing at all.

    It says everything about the core structures of the markets they compete in and thats it.

    Don’t try to pull lemonade from oranges.

  5. Michael E. Gruen Avatar
    Michael E. Gruen

    Generally, I agree with your sentiment.

    But if I buy a sandwich from you every workday for a whole month, even at the low-low cost of $5/sandwich, you’re making $100/month. And I get lunch. And there are not many businesses that can beat it. (This also assumes a good sandwich.)Web businesses exist on a different economy of scale where the general cost expectation of services is $0.

    I’d still found an event ticketing company if I thought I could offer a service at the right scale and price; though, I think I’d make more money with a deli.

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