I am Aarihant Aaryan! Welcome to the Iron sharpen Iron newsletter,
I share my weekly homework from my startup journey, learning about human behavior, and sometimes decoding industries and business models for fun.
I can’t control my curiosity :) )
A couple of weeks back I was having a conversation with a founder who is building a fintech company, one of the investors they reached out to said what if a tech giant does this?
The same question I was asked by many investors and everyone has a way to answer that
After that conversation, I started thinking we always talk about how a tech giant can turn products into features but we rarely discuss what can kill a tech giant.
Today on Iron Sharpen Iron, I’ll be sharing my thought process on how & what can kill tech giants
Ps: I am not rooting for anyone’s failure, I know the pain of experiencing failure. I as a person definitely want to see every business, and product experience immense success.
What does tech giant mean?
A tech product that is extremely powerful ( huge distribution), influential, and too big to fail is called a tech giant, generally, companies like Google, Twitter, Meta, Netflix, and Spotify come under this radar.
A tech giant becomes stronger as more people keep using it, and the market cap of the company increases
When a company becomes a tech giant, people adopt to it even if it is not built for them because of heavy distribution
Example: WhatsApp was made to be a messaging application but in India, people use WhatsApp for many purposes -colleges and universities have their groups on Whatsapp which is extremely contrarian behavior to the west, small businesses use Whatsapp to sell and there are many examples like this
Youtube which was meant to be a video-sharing platform is actually used by religious institutions to serve their audience it was never made for them but user compromises and goes forward with the products
Google docs were created to write your make your documents, it was never made to write your PRD, Personal journals, do tasks, or build a report but people still adapted to it and compromised
Since people adapt to these products, once they experience superiors products that are customized for their specific use-case → people shift to that platform because that’s tailored for them, that product solves their pain points and creates a huge experience, sometimes it creates a delta4 experience
Ps: You can actually read this newsletter to understand what’s, DELTA 4 & WHY PEOPLE ARE EFFICIENCY TRAVELLERS 👇
When sector niche products are built, it sees an immediate massive adoption and takes away the market cap of tech giants, imagine if a tech company does 10 things and there are 10 new companies that do the same thing with much more efficiency - that’s how a tech giant will die
I know people will argue, that tech giants can again copy the newest player and save themselves. That is not the most efficient way, copying won’t do anything well.
What builds a company or even a product is the “Consumer Insight”
You build a better company when you experience the truth, you only get to experience the truth, when you have an actionable Insight.
When a company tries to compete on price or giving cashback, it means the company lacks insight but has deep pockets, well deep pockets don’t last long
The same thing happened with Square and Amazon - the square is a POS machine company, and you can accept payments using your mobile phone as a POS machine
When the square was growing so rapidly, amazon entered their market and charged less commission or zero commission compared to square, “the founder of square did nothing about it” In less than 3 years amazon shut down its POS machine business.
Most of the time the best thing you can do as a founder after learning what your competition does is do nothing.
What will kill Netflix/ Prime/ Hotstar?
Products like AHA ( Telugu movie, web series, live shows, and serial platform), alt balaji (Multi-Lingual 18+ content platform), Lionsgate play ( A subscription video on demand service that allows you to stream superhit movies and TV shows), stage (A OTT platform that caters to local dialects and languages) that are eating away market share of Netflix & prime by solving for local content curation
What will kill Spotify/Audible?
KUKU FM, and POCKET FM (Both of them have raised $140M+ together ) are wonderful products they are audio platforms that have book summaries or entire books in an audio format, that fit their consumer’s lifestyle pretty well - both these apps have 10cr+ downloads and millions of paying users.
Kuku FM and pocket FM are clocking $25+M in revenue
Shri Mandir by apps for bharat is a super app for Hindu’s it has various services and it has all poojas in audio format, most people who are 40+ years old use the audio feature every morning.
What will kill google workspace tools:
Most google workspace tools have been getting replaced, a major shift has happened in last 5/6 years
Google docs were replaced by Notion, Notion is extremely efficient compared to google Docs - Notion has 30M+ users and $30M+ in revenue.
Now most companies buy notion doc subscriptions for all their employees, previously it was just google workspace
Google chat/ hangout was replaced by slack, Slack has more than 12M daily active users - Slack makes close to $1B+ in revenue every year and it was acquired for $27.7Billion by the sales force.
Google hangout meet was replaced by zoom, In 2021 zoom made $4 Billion in revenue and has had 350M+ daily meeting participants
Google forms are getting replaced by Typeform, Typeform has more than $175M+ in revenue, is used by 125,000 businesses, and has 500M interactions per year
Final thoughts: The next big businesses will be built by solving for a sizeable niche market or sector and usecase specific markets.
If you have any thoughts or tips share them in the comments :)
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