INDUSTRY INSIGHTS YOUR PEERS ARE READING
and by substantial amounts of invested capital in formal amenities required by incumbent brands that are frequently cost centers rather than profit centers (lobby restaurant, room service, etc.). Image courtesy of Mint House Real estate lies at the core of our everyday lives?—?it MORE
Airtable isn’t the only company in this collaboration space — incumbents have invested resources in “low-code” platforms, such as Google’s App Maker, Microsoft’s PowerApps, Dell’s Boomi, and Intuit’s Quick Base; other great products on the startup side include Superhuman, Notion, Front, Coda, and a few others. MORE
Incumbent client/server technologies have lost their market dominance to new incumbents. Last week, I participated in two discussions about the changes in the SaaS world. I believe they are fundamental. The most important force shaping the industry today is competition. The level of competition in many core SaaS segments is intense. The SaaS era is about 20 years old. Salesforce was founded in 1999. Since then, many major categories of software have been saasified. MORE
Conventional wisdom dictated that incumbents should focus their innovation efforts on R&D and growing their cash cows while investing in a few startups. The following is an excerpt from 500’s CVC report. How has corporate venture capital changed? In the decade since the Great Recession, we have seen digital upstarts – taking advantage of disruptive technologies from AI to IoT – reshape the economy and the corporate pecking order. MORE
So when Sam Rosen came to me with the idea of disrupting storage with a product that is priced cheaper than existing incumbents and he could build a product that is a better service I was intrigued. dominated by a few very large incumbents who control much of the distribution or are you going into a market that is “fragmented” where nobody controls the industry. Incumbent Strengths & Weaknesses. Many startup businesses – tech or otherwise – fail. MORE
Ones that offer amazing value (low relative margins) at high volumes that makes it nearly impossible for high-cost incumbents to compete. How does the incumbent respond? Does your product dramatically reduce costs in an industry with large incumbents and fat margins? MORE
These near-instant feedback loops challenge incumbents to continue to earn the attention of their user bases with better products than rivals’ applications. For incumbents, the race is on to save their businesses. From zero to $19B of business value in five years; WhatsApp’s sale to Facebook is an important moment in the history of the consumer web. The deal proves distribution, reach and large user bases aren’t the competitive moats they once were. MORE
Incumbents can’t react. The reason that incumbents can’t react is that their revenue and defensibility are continued by serving the high-end of the market for which it would take too much time & money for any competitors to effectively challenge. MORE
And new SaaS companies who aim to displace incumbent systems of record will architect their products in a radically different way. The next generation of multi-billion dollar SaaS platforms, the startups who will displace incumbents, will do it with event-driven architectures and optimized workflows. A senior SaaS executive once told me, “Reports sell software.” ” In a top down sale, that’s absolutely true. MORE
Most customers won’t drive more than a few miles to a self storage unit making the incumbents essentially local retail businesses. Amazon. It is a household name. MORE
More recently, this trend has shifted a bit within the Bay Area, which today’s giants like Uber, Airbnb, and Stripe being built in San Francisco proper while incumbents down south have begun scooping up premium commercial real estate in the city. This is a post I’ve wanted to write for a long time, but I needed the time to digest all the other great posts on the topics by other investors, and to analyze specific portfolio data from Haystack over the last five years. MORE
You can’t simply drop a bunch of electric scooters in a market and hope to compete with the data and software advantages of the incumbents. The Truth About the Scooter Economy?—?An MORE
We have reached a point in SaaS where a small fraction of an incumbent is a billion-dollar company. the industry has been looking for ways to compete with some of these incumbents for a long time. I suspect old-fashioned product marketing may be the disruptive force to prise $1 billion worth of market away from some of these incumbents. Salesforce is worth $113 billion. 1% of $113 billion is $1.13 billion. ServiceNow is worth $34B and Workday is worth $33B. MORE
Hello. It has been a while since I’ve posted here, nearly 3 months. My fingers are well-rested, but my writing prowess is likely rusty, so please forgive any rustiness in this post. I do plan to write a lot more this summer, so stay tuned. MORE
Using the proliferation of newly GPS-enabled mobile devices to enable taxi hailing and beat out stagnant incumbent providers was always going to be a big win for consumers. It provided a better service than existing cabs were going to be able to do for at least several years—cutting out lots of unnecessary overhead in the system. Had it been built differently, it could have been a better company and honestly I’d like to believe maybe even a more valuable one in the long term. MORE
There are spaces where pricing innovation is welcome, especially when there is a large, expensive incumbent. Startups are innovation machines. They identify market opportunities, develop novel products and go out to change the world. MORE
Incumbents became increasingly annoyed with our successes in the country’s largest market – NYC – that they started even taking out ads against us. It’s no wonder incumbents don’t want us to exist. MORE
The thesis of the book is that incumbents in markets – especially large and well entrenched markets – seldom survive fundamental technology changes in their industries. It should affect how you think if you are an incumbent but also if you’re a startup. MORE
This has massively reduced the power of incumbent banks, allowing for rapid innovation in the banking and payments sector. Here we are again in 2019 debating speech online and specifically the case of Facebook. Zuckerberg speaks at Georgetown trying to invoke the civil rights movement and to draw a sharp distinction to China. Warren quickly fires back on Twitter. Pundits everywhere weigh in. And yet hardly anyone gets to the heart of the matter: power. MORE
Jarvis Johnson was previously a software engineer at Patreon, Yelp, and Google. He’s now a YouTuber. You can find him on YouTube at Jarvis Johnson and on Twitter @jarvis. Topics. 00:00 – Jarvis’ intro. 00:30 – Where his videos first got traction. 1:10 – Being part of the software industry while critiquing it. 3:45 – How he got into programming. 6:10 – Moving to California. 7:30 – Interning at Google then Yelp. MORE
Can you compete in a niche where incumbents don’t care or cannot move quickly? I won a fake stock market competition in elementary school. MORE
What’s fascinating to me about my mornings is those six startups, and they are startups, are all very much part of my life and have completely disrupted the incumbents in those space. Brian Halligan is the CEO and cofounder of HubSpot. HubSpot builds software for marketing, sales, and customer service. You can try it out at HubSpot.com. Kevin Hale is a Partner at YC and cofounder of Wufoo. Brian is on Twitter @bhalligan and Kevin is @ilikevests. Topics. MORE
Instead of reviewing the incumbent’s strategy, I’m going to flip these around to reverse engineer these defenses and build a startup’s playbook for disruption with examples from our portfolio. MORE
And our competitors are not really each other but the incumbent businesses that have 99.9% ” In summary: The competitors are the incumbents. This morning Clutter.io announced they raised $9 million from Sequoia , arguably the best venture capital firm that exists. Congratulations. Sincerely. Conventional wisdom says I shouldn’t tell you this because I invested in their main competitor, MakeSpace. MORE
So it’s incumbent on you to know what a smart business plan and use of cash looks like. There’s a quick litmus-test conversation any early-stage VC will have with the founder and it’s one that you should be as prepared for as your elevator pitch. MORE
Quarterly data from Gust, the online platform for the global angel investment industry, reveals that while incumbent leaders show no sign of slowing down, new industries and areas Read more >. MORE
Not only did the incumbents fail to grasp the potential value, but it would have made no sense for them to go after such a small unprofitable niche, which would have been irrelevant to their top line, and eating away at their bottom line (CDs were 90%+ gross margin products back then). MORE
Given how polarizing “the stakes” can be and how critical persuasion is to winning, it is now incumbent upon politicians to improve their own dealmaking skills and to effectively communicate their positions repeatedly to their constituents. Start spreading the news, indeed. Today, Amazon announced it will entirely abandon its plans to build its second headquarters (a/k/a “HQ2”) in Long Island City, a residential neighborhood in the borough of Queens, New York City. MORE
I’ve been involved with several startups where a giant incumbent attacks you and tries to sue you out of existence. When you first receive the threat it feels like the local pizza shop when they first get a call from the local mafia boss and you can feel the shake-down coming. MORE
It’s the company that pursues an incumbent with faster, better or cheaper solution and in particular a solution that cannibalizes the incumbent’s business model typically because of a lower cost structure. MORE
They have studied their market, talking to customers and doing competitive intelligence on incumbents. Nobody can predict the future. Everybody can tell you what’s possible. The art is in knowing what’s probable. MORE
I love businesses that aim to massively reduce the costs of products or services in a way that makes a product or service vastly more accessibility and in which incumbents would have a hard time competing. I was speaking recently to the team at NuOrder , an LA-based company we’re an investor in about “realism in startups” — an impromptu talk I have given to any of our portfolio companies who ask. MORE
Then a large incumbent announced a new module that filled the same function as her product. #GiveFirst is a Techstars mantra. Simply put, it means giving—advice, resources, assistance, etc.—with with no expectation of getting anything specific back. MORE
One analyst estimated $15b+ of incumbent market value was wiped out. By now, one wonders what tech news will be tucked into the public record the days before a major holiday travel week approaches. MORE
Incumbents launch products, VCs throw cash at other competitors, team members quit, the economy dips — whatever. MORE
They’ll have to back up the truck for their best companies, take acquisitions off the table, and go right after the incumbents head-on. Speaking of acquisitions — many leaders of larger VC funds have privately given up on the incumbents buying their companies. Instead, they would prefer to back their winners to take on the incumbents head-on — hence, we have larger funds and longer hold periods to get liquidity. It’s an unusual time in the markets. MORE
They say things like “we have a unique feature” and “the incumbents are dumb,” which might be true, but isn’t a strategy. Startup strategy is like Kung Fu. There are many styles that work. But in a bar fight, you’re going to get punched in the face regardless. I can only teach you my style. MORE
FinTech - challenger banks, new electronic stock brokers, AI-powered investment advisors; startups are besieging the incumbents of this regulated world and assailing them in ever greater numbers. Which sectors see more startup company formation than others? MORE
The exuberant acquisition environment should enable some early-stage companies to menace their incumbents and take share, as those behemoths are distracted by M&A. Many of the most of apparent and immediate opportunities in the software market have been filled by now SaaS incumbents. About $1B has been invested in early stage SaaS startups as of November 1. Over the last nine months, marketing startups have raised more dollars in aggregate than any other segment. MORE
The conventional wisdom is to wonder if these firms are getting too big — the counterargument is equally as valid, with technology seeping into every sector and spreading across the world, and with private markets bulging, new companies are able to raise enough capital where they can directly challenge and overtake incumbents rather than waiting for them to acquire them. MORE
Today, global energy corporation Equinor and startup Crux OCM are working together to test Crux OCM’s software, which functions as an “autopilot” for oil and gas control room operators. MORE
As expected, many developers didn’t love the news that some of their work would be concentrated in the hands of a tech incumbent. Satya strikes again. After being installed in 2014 as Microsoft’s new CEO, Nadella has turned around the Seattle ocean liner on a new course after the Ballmer regime. MORE
Finding scant market demand from the incumbents whose owners prefer status quo, these startups start their own agency. In 2015, I wrote about the trade-off facing vertical SaaS companies. Vertical SaaS companies focus their efforts on a particular group of customers. Procore targets construction with their software and Veeva targets pharmaceuticals with their CRM. This concentration limits the market size, but improves product market fit. MORE
If you have more money than the incumbents, try it, but don’t look for investors. People are always asking me for an inside tip on Internet sites that will be “the next big thing.” MORE
incumbents Related Topics TechStars
MARCH 14, 2019
Today, global energy corporation Equinor and startup Crux OCM are working together to test Crux OCM’s software, which functions as an “autopilot” for oil and gas control room operators.
500
OCTOBER 25, 2019
Conventional wisdom dictated that incumbents should focus their innovation efforts on R&D and growing their cash cows while investing in a few startups. The following is an excerpt from 500’s CVC report. How has corporate venture capital changed? In the decade since the Great Recession, we have seen digital upstarts – taking advantage of disruptive technologies from AI to IoT – reshape the economy and the corporate pecking order.
Both Sides of the Table
NOVEMBER 4, 2010
The thesis of the book is that incumbents in markets – especially large and well entrenched markets – seldom survive fundamental technology changes in their industries. It should affect how you think if you are an incumbent but also if you’re a startup.
Gust
OCTOBER 30, 2015
Quarterly data from Gust, the online platform for the global angel investment industry, reveals that while incumbent leaders show no sign of slowing down, new industries and areas Read more >.
Revolution
JUNE 10, 2019
and by substantial amounts of invested capital in formal amenities required by incumbent brands that are frequently cost centers rather than profit centers (lobby restaurant, room service, etc.). Image courtesy of Mint House Real estate lies at the core of our everyday lives?—?it
TechStars
MAY 16, 2019
Then a large incumbent announced a new module that filled the same function as her product. #GiveFirst is a Techstars mantra. Simply put, it means giving—advice, resources, assistance, etc.—with with no expectation of getting anything specific back.
Jason Calacanis
FEBRUARY 10, 2019
They have studied their market, talking to customers and doing competitive intelligence on incumbents. Nobody can predict the future. Everybody can tell you what’s possible. The art is in knowing what’s probable.
Both Sides of the Table
OCTOBER 22, 2015
And our competitors are not really each other but the incumbent businesses that have 99.9% ” In summary: The competitors are the incumbents. This morning Clutter.io announced they raised $9 million from Sequoia , arguably the best venture capital firm that exists. Congratulations. Sincerely. Conventional wisdom says I shouldn’t tell you this because I invested in their main competitor, MakeSpace.
Tomasz Tunguz
AUGUST 8, 2019
FinTech - challenger banks, new electronic stock brokers, AI-powered investment advisors; startups are besieging the incumbents of this regulated world and assailing them in ever greater numbers. Which sectors see more startup company formation than others?
Both Sides of the Table
MARCH 25, 2016
So when Sam Rosen came to me with the idea of disrupting storage with a product that is priced cheaper than existing incumbents and he could build a product that is a better service I was intrigued. dominated by a few very large incumbents who control much of the distribution or are you going into a market that is “fragmented” where nobody controls the industry. Incumbent Strengths & Weaknesses. Many startup businesses – tech or otherwise – fail.
This is going to be BIG.
MAY 13, 2019
Using the proliferation of newly GPS-enabled mobile devices to enable taxi hailing and beat out stagnant incumbent providers was always going to be a big win for consumers. It provided a better service than existing cabs were going to be able to do for at least several years—cutting out lots of unnecessary overhead in the system. Had it been built differently, it could have been a better company and honestly I’d like to believe maybe even a more valuable one in the long term.
Tomasz Tunguz
FEBRUARY 19, 2019
There are spaces where pricing innovation is welcome, especially when there is a large, expensive incumbent. Startups are innovation machines. They identify market opportunities, develop novel products and go out to change the world.
Continuations
OCTOBER 18, 2019
This has massively reduced the power of incumbent banks, allowing for rapid innovation in the banking and payments sector. Here we are again in 2019 debating speech online and specifically the case of Facebook. Zuckerberg speaks at Georgetown trying to invoke the civil rights movement and to draw a sharp distinction to China. Warren quickly fires back on Twitter. Pundits everywhere weigh in. And yet hardly anyone gets to the heart of the matter: power.
Tomasz Tunguz
MAY 23, 2013
It’s the company that pursues an incumbent with faster, better or cheaper solution and in particular a solution that cannibalizes the incumbent’s business model typically because of a lower cost structure.
Both Sides of the Table
APRIL 18, 2019
You can’t simply drop a bunch of electric scooters in a market and hope to compete with the data and software advantages of the incumbents. The Truth About the Scooter Economy?—?An
Both Sides of the Table
DECEMBER 22, 2011
Ones that offer amazing value (low relative margins) at high volumes that makes it nearly impossible for high-cost incumbents to compete. How does the incumbent respond? Does your product dramatically reduce costs in an industry with large incumbents and fat margins?
Tomasz Tunguz
AUGUST 25, 2018
We have reached a point in SaaS where a small fraction of an incumbent is a billion-dollar company. the industry has been looking for ways to compete with some of these incumbents for a long time. I suspect old-fashioned product marketing may be the disruptive force to prise $1 billion worth of market away from some of these incumbents. Salesforce is worth $113 billion. 1% of $113 billion is $1.13 billion. ServiceNow is worth $34B and Workday is worth $33B.
Haystack
DECEMBER 26, 2018
They’ll have to back up the truck for their best companies, take acquisitions off the table, and go right after the incumbents head-on. Speaking of acquisitions — many leaders of larger VC funds have privately given up on the incumbents buying their companies. Instead, they would prefer to back their winners to take on the incumbents head-on — hence, we have larger funds and longer hold periods to get liquidity. It’s an unusual time in the markets.
Haystack
MAY 4, 2019
Hello. It has been a while since I’ve posted here, nearly 3 months. My fingers are well-rested, but my writing prowess is likely rusty, so please forgive any rustiness in this post. I do plan to write a lot more this summer, so stay tuned.
Both Sides of the Table
FEBRUARY 24, 2016
Incumbents became increasingly annoyed with our successes in the country’s largest market – NYC – that they started even taking out ads against us. It’s no wonder incumbents don’t want us to exist.
Haystack
NOVEMBER 25, 2018
Airtable isn’t the only company in this collaboration space — incumbents have invested resources in “low-code” platforms, such as Google’s App Maker, Microsoft’s PowerApps, Dell’s Boomi, and Intuit’s Quick Base; other great products on the startup side include Superhuman, Notion, Front, Coda, and a few others.
Tomasz Tunguz
JANUARY 17, 2019
Finding scant market demand from the incumbents whose owners prefer status quo, these startups start their own agency. In 2015, I wrote about the trade-off facing vertical SaaS companies. Vertical SaaS companies focus their efforts on a particular group of customers. Procore targets construction with their software and Veeva targets pharmaceuticals with their CRM. This concentration limits the market size, but improves product market fit.
Both Sides of the Table
MAY 27, 2016
I love businesses that aim to massively reduce the costs of products or services in a way that makes a product or service vastly more accessibility and in which incumbents would have a hard time competing. I was speaking recently to the team at NuOrder , an LA-based company we’re an investor in about “realism in startups” — an impromptu talk I have given to any of our portfolio companies who ask.
Y Combinator
MAY 1, 2019
Jarvis Johnson was previously a software engineer at Patreon, Yelp, and Google. He’s now a YouTuber. You can find him on YouTube at Jarvis Johnson and on Twitter @jarvis. Topics. 00:00 – Jarvis’ intro. 00:30 – Where his videos first got traction. 1:10 – Being part of the software industry while critiquing it. 3:45 – How he got into programming. 6:10 – Moving to California. 7:30 – Interning at Google then Yelp.
Both Sides of the Table
SEPTEMBER 21, 2016
Incumbents launch products, VCs throw cash at other competitors, team members quit, the economy dips — whatever.
Both Sides of the Table
SEPTEMBER 19, 2011
Incumbents can’t react. The reason that incumbents can’t react is that their revenue and defensibility are continued by serving the high-end of the market for which it would take too much time & money for any competitors to effectively challenge.
Both Sides of the Table
MAY 28, 2018
So it’s incumbent on you to know what a smart business plan and use of cash looks like. There’s a quick litmus-test conversation any early-stage VC will have with the founder and it’s one that you should be as prepared for as your elevator pitch.
Haystack
JANUARY 24, 2019
The conventional wisdom is to wonder if these firms are getting too big — the counterargument is equally as valid, with technology seeping into every sector and spreading across the world, and with private markets bulging, new companies are able to raise enough capital where they can directly challenge and overtake incumbents rather than waiting for them to acquire them.
Tomasz Tunguz
AUGUST 16, 2016
And new SaaS companies who aim to displace incumbent systems of record will architect their products in a radically different way. The next generation of multi-billion dollar SaaS platforms, the startups who will displace incumbents, will do it with event-driven architectures and optimized workflows. A senior SaaS executive once told me, “Reports sell software.” ” In a top down sale, that’s absolutely true.
Tomasz Tunguz
NOVEMBER 6, 2016
The exuberant acquisition environment should enable some early-stage companies to menace their incumbents and take share, as those behemoths are distracted by M&A. Many of the most of apparent and immediate opportunities in the software market have been filled by now SaaS incumbents. About $1B has been invested in early stage SaaS startups as of November 1. Over the last nine months, marketing startups have raised more dollars in aggregate than any other segment.
Haystack
FEBRUARY 14, 2019
Given how polarizing “the stakes” can be and how critical persuasion is to winning, it is now incumbent upon politicians to improve their own dealmaking skills and to effectively communicate their positions repeatedly to their constituents. Start spreading the news, indeed. Today, Amazon announced it will entirely abandon its plans to build its second headquarters (a/k/a “HQ2”) in Long Island City, a residential neighborhood in the borough of Queens, New York City.
Both Sides of the Table
MAY 17, 2017
I’ve been involved with several startups where a giant incumbent attacks you and tries to sue you out of existence. When you first receive the threat it feels like the local pizza shop when they first get a call from the local mafia boss and you can feel the shake-down coming.
Tomasz Tunguz
DECEMBER 2, 2012
Instead of reviewing the incumbent’s strategy, I’m going to flip these around to reverse engineer these defenses and build a startup’s playbook for disruption with examples from our portfolio.
Y Combinator
MAY 8, 2019
What’s fascinating to me about my mornings is those six startups, and they are startups, are all very much part of my life and have completely disrupted the incumbents in those space. Brian Halligan is the CEO and cofounder of HubSpot. HubSpot builds software for marketing, sales, and customer service. You can try it out at HubSpot.com. Kevin Hale is a Partner at YC and cofounder of Wufoo. Brian is on Twitter @bhalligan and Kevin is @ilikevests. Topics.
Both Sides of the Table
MAY 4, 2015
Most customers won’t drive more than a few miles to a self storage unit making the incumbents essentially local retail businesses. Amazon. It is a household name.
Unvalidated Learnings
JUNE 8, 2017
Not only did the incumbents fail to grasp the potential value, but it would have made no sense for them to go after such a small unprofitable niche, which would have been irrelevant to their top line, and eating away at their bottom line (CDs were 90%+ gross margin products back then).
Gust
JULY 27, 2014
If you have more money than the incumbents, try it, but don’t look for investors. People are always asking me for an inside tip on Internet sites that will be “the next big thing.”
A Smart Bear
FEBRUARY 26, 2019
They say things like “we have a unique feature” and “the incumbents are dumb,” which might be true, but isn’t a strategy. Startup strategy is like Kung Fu. There are many styles that work. But in a bar fight, you’re going to get punched in the face regardless. I can only teach you my style.
Haystack
JUNE 5, 2018
As expected, many developers didn’t love the news that some of their work would be concentrated in the hands of a tech incumbent. Satya strikes again. After being installed in 2014 as Microsoft’s new CEO, Nadella has turned around the Seattle ocean liner on a new course after the Ballmer regime.
Tomasz Tunguz
OCTOBER 21, 2017
Incumbent client/server technologies have lost their market dominance to new incumbents. Last week, I participated in two discussions about the changes in the SaaS world. I believe they are fundamental. The most important force shaping the industry today is competition. The level of competition in many core SaaS segments is intense. The SaaS era is about 20 years old. Salesforce was founded in 1999. Since then, many major categories of software have been saasified.
Haystack
JULY 20, 2018
More recently, this trend has shifted a bit within the Bay Area, which today’s giants like Uber, Airbnb, and Stripe being built in San Francisco proper while incumbents down south have begun scooping up premium commercial real estate in the city. This is a post I’ve wanted to write for a long time, but I needed the time to digest all the other great posts on the topics by other investors, and to analyze specific portfolio data from Haystack over the last five years.
Haystack
JUNE 29, 2018
One analyst estimated $15b+ of incumbent market value was wiped out. By now, one wonders what tech news will be tucked into the public record the days before a major holiday travel week approaches.
Tomasz Tunguz
FEBRUARY 22, 2014
These near-instant feedback loops challenge incumbents to continue to earn the attention of their user bases with better products than rivals’ applications. For incumbents, the race is on to save their businesses. From zero to $19B of business value in five years; WhatsApp’s sale to Facebook is an important moment in the history of the consumer web. The deal proves distribution, reach and large user bases aren’t the competitive moats they once were.
130 
Let's personalize your content