Why most successful startups are CRUD apps

Ever wonder why most billion dollar startups are basically CRUD apps in increasingly niche markets?

On one hand I think the simpler a companies offering, the more appealing it will be to a mass audience. Most of their customer base are not technically savvy by definition, because most people are not technically savvy. How can you get customers if only a few hundred people understand what it is you that offer?

I think there is a deeper layer to it though. Every company has to innovate on something. Why is that Airbnb and Facebook can catch on and grow as fast as they did?

Most startups think about how they can offer a technology innovation.

That is hard. Really really hard.

It usually comes out of university or lab research.

The majority of valuable startups are actually marketing innovations. They take aren’t reinventing any wheels. Airbnb isn’t building any house. GoPro didn’t invent a new kind of camera. These companies have one sole focus.

Sometimes you get huge companies out of technology research though. In fact, they are usually in a much stronger position if they can make progress. Boston Dynamics isn’t making tons of cash, but their technology is unparalleled. They won’t be going anywhere no matter what happens. Apple can of course do whatever they and move fast because they have such control over their hardware and supply chain. When Amazon started, they were just a marketing innovation for books but they have grown AWS into the leading edge of cloud computing.

Your company has to not only iterate and have a technological breakthrough, but still market decently anyway to stay alive. That’s why many researchers fail to become good founders. And many attempt to partner with someone who does the marketing and “business” stuff.

The downside of a marketing innovation is how easy it is to copy. Once you prove even a little successful, there will be dozens of exact clones of your product. Competitors will pop up in other countries.

You will have to compete with them or buy them out once you decide to expand.

There are billion dollar companies growing out there with original technology. They will just take longer to grow.