How can my app compete with a bigger company?
Tim Bornholdt
Published on October 5, 2016
As we mentioned in our last article, app developers in the Apple community are intimiately familiar with the story of Karelia Software's Watson.
In early 2001, Karelia was inspired by Apple's "Sherlock" program, which helped to quickly find files on your computer. Watson was designed to quickly find content on the Internet (things like plane ticket costs, movie times and so forth).
In 2002, Apple released a new version of Sherlock which was nearly identical in look and functionality to Watson.
Many developers were outraged that a giant company like Apple could swoop in, incorporate another app's functionality, and basically leave that developer high and dry. Apple claimed that Sherlock 3 was simply an evolution of Sherlock 2.
This incident has led to the term "Sherlocking," which represents a fear that has been prevalant in our industry ever since. How can you, an intrepid mobile app entreprenur, deal with billion-dollar companies who decide to enter into the same market as you?
We've worked on a few apps that have had its core functionality implemented by a much larger business, and here's what we've done to level the playing field:
Cope with the competition.
There's probably nothing you can do about it.
The stark reality is this: there is nothing you can do to stop other people from taking your idea and implementing it themselves.
In 2013, Apple took Samsung to court over their alleged copying of the iPhone. According to Apple, their legal bill was more than $60 million.
Let that sink in for a second: Apple was willing to spend more than $60,000,000 to defend themselves in court.
The New York Times reported that in 2012, Apple and Google spent more money on patent lawsuits than they did on research and development. Their estimated expenditures? $20,000,000,000.
Your competitor might not be Apple or Google, but if they are bigger than you and decide to take your stuff, your recourse is akin to the kid who gets bullied on the playground: you can either face him head on (and risk an atomic wedgie or knuckle sandwich), or you can fight back in a more clever way (keep reading to see some strategies for fighting back).
Note that stealing the concept behind an app isn't the same thing as stealing the exact design and implementation. If someone completely copies your app from top to bottom and puts it on the store, you can get Apple and Google to remove the infringing version.
But as a rule of thumb: if your app is well-designed and solves a problem that many people have, you will eventually see clones of it on the app store.
Recognize that this may be a blessing in disguise.
Instapaper is the first app I ever purchased on my iPhone. The idea is simply fantastic: take a webpage you want to read offline, strip out all the ads and crap you don't want to read, and save it to your device.
No one had done anything like this prior to Instapaper, but you would probably not be surprised to learn that similar products were launched shortly after. None were as potentially fatal to Instapaper as when Apple announced Reading List in 2011.
Reading List was a feature for Mac OS X Lion which allowed you to bookmark a webpage on desktop Safari and read it later on your iPhone.
People were concerned for Instapaper's future, but Marco Arment, the developer, didn't seem all that concerned. In fact, he seemed surprisingly pleased that Apple was bringing this little known feature to the attention of their massive audience. He drew a parallel to the Starbucks effect, a phenomenon which shows that smaller, niche coffee shops receive a nice boost in traffic whenever a Starbucks opens next to them. The theory goes that Starbucks acts a gateway to other, more unique (and likely higher quality) coffee shop experiences.
When a bigger company sees your somewhat narrow niche and incorporates it into their bigger software package, people might discover a problem they never knew they had. When they find the limitations of the larger product, some of those users will seek out a better option for solving that problem.
Find a way to overcome the competition.
Do things that they can't do.
Paul Graham wrote an awesome essay entitled Do Things that Don't Scale. It's required reading for this blog post.
If you want to make an app that is going to outperform Google and Apple, do things that they can't do:
- Go to your customer's house and give them a half hour walkthrough of how to use the app.
- If you're building hardware alongside the software, "pull a Meraki" and build the hardware by hand instead of outsourcing it to a factory.
- Take a new customer out for lunch to thank them for choosing your product.
Bigger companies may have a bigger budget for marketing and product development, but they also have loads of red tape, bureaucratic procedures, and shareholders to which they need to be fiscally accountable.
You probably don't have these same problems. Find a clever, unscalable technique to make yourself stand apart, and start doing it right now.
Focus on a niche.
We are often pitched apps which are "for everyone." When something is for everyone, it's really for no one.
The apps we love building here at the Jed Mahonis Group solve a very specific problem for a very specific set of people. Things like:
- An app to help billiards players analyze their break shots
- A digital timesheet submission form for PCA workers
- A portal for automotive industry executives to keep informed on changes in the autonomous vehicle industry
You'll notice that all three of those examples share two common traits:
- The products only have appeal to very narrow markets.
- The people in those markets are willing to pay for a solution to their problem.
That's really all it takes to beat the bigger players.
Find an underserved market and tailor your product to serve their needs. As you grow, you can always expand to fit the needs of different customers, but in order to get your product established in the market, play in an area that the bigger firms aren't willing to play in.
Another thing to note: most niche areas don't bring in the same dollars as more generic areas. A big company might not care about a niche market that brings in $70,000 a year, but your one-man shop might be very interested in that salary.
Be 10x better than them.
One of the most difficult tasks you will encounter in this space is convincing someone to stop using a product they've already invested time and effort to learn in favor of using yours.
Most companies make a software decision and stick to it for years. It's usually easier to keep using an app they've been using for years than to change, even if that app is universally reviled by its employees.
Because of people's adversity to change, you cannot be just a little bit better than your competition; you need to be 10x better than them.
The "10x better" figure is clearly subjective, but in your specific niche, you should know what it takes to have a vastly superior app to your competitor.
If you don't know what it would take, just ask your customers! If you are selling to an organization, see if you can talk to the person or people who will be spending most of the time in the app. They may be able to tell you what that "killer" feature would be that will make you become that app they don't want to move from.
The business around mobile apps is no different from any other business. The "app store gold rush" is certainly over, and the people who are still playing in this market are going to have very stiff competition.
Starting an app in this landscape is very similar to starting a coffee shop. Not only do you need to compete with Starbucks and Caribou, but you also need to compete with all of the clever, interesting smaller shops in your neighborhood.
Whether you're starting an app or a coffee shop, you need to target a niche that is underserved, offer something that the bigger companies can't do, and be so much better than your competition that it becomes a no-brainer for your customers to choose you.
If you have an app idea and are intimidated by the incumbents, we'd love to help bolster your confidence. Get in touch with us for a free app consultation today!
