Day 766 - Going all in on your only successful product is dangerous - https://golifelog.com/posts/going-all-in-on-your-only-successful-product-is-dangerous-1675556844178
What goes best with a successful product?
Another product.
Because it's tempting to go all in when one thing works well.
But here's a few things that can go wrong:
- Platform risk is real.
- Market conditions unexpectedly change.
- A competitor with boatloads of cash shows up.
Some real life examples I'm witnessing with my own eyes right now:
Never has the platform risk on Twitter been more real. And it's not just those building an audience on Twitter, but even those building apps on Twitter. In the same week, Twitter nerfed organic reach by 50%, and by some accounts, 70% or more. Twitter is pretty much dead, they say. On top of that, a once week notice to all developers building on the Twitter API that it will no longer be free. This was a few weeks after they randomly shut down access to some third party Twitter apps like Tweetbot. Imagine your Twitter app is doing well, and you quit your job, went all in last year to build the business. All of a sudden that's taken away from you. That's how a lot of devs are feeling now. The uncertainty and fear. So confident you were that going all in was the right thing to do, until the proverbial knife came down on the turkey on Thankgiving day. You're the turkey now.
Same with market conditions. At the start of the pandemic, Zoom was the poster child. Everyone needed a video call app and they were at the right place at right time. But within the past 2-3 years, the rest of the tech giants caught up. Cue Google Meet, Microsoft Teams. Now video apps are commodities. With nothing unique to stand out with, and everyone back in office post-pandemic, Zoom's stock is down so far that's it's doing worst than *before* the pandemic. Imagine you went all in and focused on Zoom 3 years ago, as the founder or as an investor. Good luck with that now.
Same with unexpected competitors. Indie bootstrapped AI profile pic apps AvatarAI.me and ProfilePicture.ai first burst onto the scene and got super viral. They were first, but first mover advantage didn't help, because then VC-funded startup Lensa came along with boatloads of cash ($6M), a bigger team, and went on to win the market, doing $1M+ in daily revenue. Sure, the earnings from the indie apps aren't shabby for solo devs. But hard to imagine they have a fighting chance against the stellar growth of the fast second. Now imagine if that AI app was your 100%. It was doing so well, you were so happy with it that you went all in on that one project. And within the span of a few short months, a competitor takes away all that from you. Thankfully @levelsio and @dannypostmaa who built those apps have other products to lean on...
Over and over again, the lesson is clear:
Going all in on your only successful product is dangerous.
Diversify to hedge risks.
Another product.
Because it's tempting to go all in when one thing works well.
But here's a few things that can go wrong:
- Platform risk is real.
- Market conditions unexpectedly change.
- A competitor with boatloads of cash shows up.
Some real life examples I'm witnessing with my own eyes right now:
Never has the platform risk on Twitter been more real. And it's not just those building an audience on Twitter, but even those building apps on Twitter. In the same week, Twitter nerfed organic reach by 50%, and by some accounts, 70% or more. Twitter is pretty much dead, they say. On top of that, a once week notice to all developers building on the Twitter API that it will no longer be free. This was a few weeks after they randomly shut down access to some third party Twitter apps like Tweetbot. Imagine your Twitter app is doing well, and you quit your job, went all in last year to build the business. All of a sudden that's taken away from you. That's how a lot of devs are feeling now. The uncertainty and fear. So confident you were that going all in was the right thing to do, until the proverbial knife came down on the turkey on Thankgiving day. You're the turkey now.
Same with market conditions. At the start of the pandemic, Zoom was the poster child. Everyone needed a video call app and they were at the right place at right time. But within the past 2-3 years, the rest of the tech giants caught up. Cue Google Meet, Microsoft Teams. Now video apps are commodities. With nothing unique to stand out with, and everyone back in office post-pandemic, Zoom's stock is down so far that's it's doing worst than *before* the pandemic. Imagine you went all in and focused on Zoom 3 years ago, as the founder or as an investor. Good luck with that now.
Same with unexpected competitors. Indie bootstrapped AI profile pic apps AvatarAI.me and ProfilePicture.ai first burst onto the scene and got super viral. They were first, but first mover advantage didn't help, because then VC-funded startup Lensa came along with boatloads of cash ($6M), a bigger team, and went on to win the market, doing $1M+ in daily revenue. Sure, the earnings from the indie apps aren't shabby for solo devs. But hard to imagine they have a fighting chance against the stellar growth of the fast second. Now imagine if that AI app was your 100%. It was doing so well, you were so happy with it that you went all in on that one project. And within the span of a few short months, a competitor takes away all that from you. Thankfully @levelsio and @dannypostmaa who built those apps have other products to lean on...
Over and over again, the lesson is clear:
Going all in on your only successful product is dangerous.
Diversify to hedge risks.