Entrepreneur Office Hours - Issue #66
An unexpected conversation with the founder of Flickr
One unanticipated advantage of hosting a podcast about something I’m personally passionate about is that I occasionally get to be a “fanboy,” too. That was definitely the case when I got to speak with startup and VC legend Caterina Fake, founder of Flickr.
Caterina and I had an incredible conversation, except there was one teensy problem: we never got around to talking about Flickr. Whoops…
We covered lots of other topics, though, as she shared her thoughts on everything from Jorge Louis Borges to Instagram. It was a fascinating conversation — if a bit of a different vibe for a Web Masters episode than what I normally release. Regardless, I hope you enjoy hearing from her as much as I did.
And while I’m on the topic of talking with people, in this issue I’m also sharing a story about a terrible conversation I had with a VC. Well, not so much a terrible conversation as it was terrible advice. By telling you about it, maybe you can avoid making some of the same fundraising mistakes as me.
Good luck!
-Aaron
The Worst Fundraising Advice I Ever Received Came from a Venture Capitalist
People who know how to invest money aren’t always the people who know how to raise it. That’s a lesson I had to learn the hard way.
The Digital Archivist Who Invented Photo Sharing
Did you know Flickr, the Internet's original photo sharing website, actually began as a feature in a game? You'll learn that and a lot more on the newest episode of Web Masters featuring Flickr founder Caterina Fake.
Listen now on:
…or search “Web Masters” wherever you listen to your favorite podcasts.
FROM THE ARCHIVES…
Venture Capitalists Don’t Invest in Magic. Neither Should You.
The title of this article I published a couple years ago might very well by my favorite article title of all time. The advice is pretty darn good, too.
Office Hours Q&A
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QUESTION:
Hi Aaron,
Thanks for all the advice you give in Entrepreneur Office Hours. I look forward to reading each issue.
Until now I didn’t have a question to ask, but I finally feel like I’ve been struggling with something you seem like the best person to help with. I run a startup with a B2B SaaS product. Up until now we’ve done most of our selling using a combination of traditional marketing like ads as well as outbound emailing.
One of our advisors has been strongly encouraging us to stop serving such a broad audience and instead focus on integrating our product with Salesforce and the Salesforce marketplace. He argues that deeply integrating with a single platform is a better growth strategy.
What do you think? Would you go very focused and concentrate on one customer segment, or would you stick to our current model of serving anyone regardless of what other platforms or tools they’re using?
Thank you,
RJ
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At the risk of being too definitive without having all the context around your company or what it does, I’m going to strongly agree with your advisor. With a few important caveats, I’m a big fan of deep integration into another product.
Before I get to those caveats, let me explain the three main reasons why I like the strategy:
Reason #1: Built-In Discoverability
By becoming part of a marketplace, you’ll be featured in a place where people are specifically searching for the kinds of things your company does. That’s good. It means you should have an easy time getting in front of your target customers.
Reason #2: Partnership Opportunities
When you integrate with a larger platform, the platform itself has a vested interest in supporting you and promoting you. Of course, getting their support and promotion isn’t easy. You still have to create something good and valuable. However, you’re at least well-positioned to have that kind of support if you create something customers really like.
Reason #3: A Focused Market
Having a huge market might seem good from a purely numbers perspective. However, in practice, too large and broad of a market is hard to capture. Instead, by focusing your customer base, you’ll have a clear sense of exactly who you should be marketing to and what messaging will be most successful.
Now, with those reasons out of the way, I’ll toss in my caveats…
First, I’m encouraging an integration because you mentioned Salesforce. It’s an enormous company and marketplace that isn’t going anywhere, and its marketplace is filled with companies spending lots of money. That makes sense. My advice would be different if the company weren’t as massive as Salesforce. In other words, you don’t want to put all your eggs in one basket and have that basket go out of business next week.
Second, by going with the integration strategy, you’re almost inherently accepting a smaller ceiling for your company’s ultimate success. That’s not a bad thing. After all, a larger chance at a smaller success can be just as compelling as a smaller change at a larger success. But it’s something to keep in mind.
And third, be careful you’re not creating an integration that can easily be replicated by the core product you’re integrating with. I’m not saying a big company like Salesforce is going to copy you, but it’s also not entirely out of the realm of possibility, particularly if the thing you do is a relatively minor iteration on their core product.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!