⛸ Be ready when they slip

💡 The Idea

  • "You shouldn’t be afraid of competition. You never know when they’ll slip up, and their customers need a backup." - Benjamin Greeley
  • Oftentimes the slip is precedented by a long, steady decline.
  • During this decline users grow more and more frustrated with the service but keep using it and don't express their dissatisfaction publicly.
  • When enough negative emotions have built up, eventually it's often a small event that makes the big boat sway.
  • If at this point a viable alternative exists, many users are happy to jump ship.
  • Importantly, this only works when the alternative is already usable when the slip happens.

👀 Examples

Gumroad vs LemonSqueezy

  • Gumroad is a 10-year-old company founded by Sahil Lavingia that went through many ups and downs.
  • It's one of the cornerstones of the creator economy as it allows creators to easily sell digital and physical products, as well as subscriptions and memberships.
  • I was always a huge fan and have been using it for many of my products.
  • But recently, things have started to go south.
  • There's little to no progress on many key features that are marked as "Coming Soon" on their public roadmap.
  • They introduced a controversial new pricing structure.
  • Previously you could either pay $0/month and a 5% fee on all transactions to Gumroad or $10/month and 0% transaction fees to Gumroad. (In any case you had, of course, to cover the Stripe charge fee of 3.5% + 30 cents per transaction.)
  • With the new pricing, you need more than $100,000 in lifetime revenue in your account to get down to a comparable level. Everyone else now pays more.
  • Gumroad calls this a "simplified fee structure" and tries to put a positive spin on it. But it's really just a way to increase their revenue. The fact that they act as if their customers were too stupid to notice is not putting a good light on Gumroad.
  • And then they decided to put a completely new, controversial design online, on Black Friday of all days.
  • They're not just alienating many user groups with the new design but also introduced plenty of bugs that cost creators real money.
  • (All this might or might not be related to their No Full Time Employees policy. Here's an insightful thread on the general issues that arise with such a policy.)
  • So you can imagine how excited I was when I discovered that there's finally a viable alternative.
  • LemonSqueezy launched just a few months ago but already now it's become a viable alternative to Gumroad.
  • So taking all this into account, it's hardly surprising that former Gumroad powerusers, like me, are happily switching to LemonSqueezy right now. (In fact, I'm using it for a project I launched today.)
  • This is not an ad for LemonSqueezy or anything. I'm just happy that I finally found a viable alternative and think this story nicely illustrates the general mechanism.
  • Interestingly, so far LemonSqueezy provides zero innovation compared to Gumroad. They just do everything that Gumroad used to do well and that's enough to win users like me over. (However, they do have plenty of cool stuff on their roadmap.)

Nomadlist vs. X

  • NomadList started as a crowdsourced spreadsheet and is now a seven-figure business.
  • In recent months, the founder Pieter Levels started to put more and more features behind a paywall.
  • Eventually NomadList was no longer useful as a research tool without a paid account.
  • As a result a lot of resentment built up over time against NomadList.
  • So when some guy complained on Reddit about being banned from NomadList, many saw this as an opportunity to finally share their feeling about its development.
  • What's interesting about this story is that Pieter was able to turn the ship around. He quickly reverted the most controversial changes and no viable competitor was ready at the time when this happened.

🔮 Opportunities

Google

  • "Google Search is going downhill, they seem to be losing the content junk spam SEO fight. Recently, I've had to append wiki/reddit/hn to queries I search for because everything near the top is shallow copied content marketing." - a recent comment on Hacker News
  • There seems to be such broad agreement that Google results have become quite bad that there's for sure a market for a competitor.
  • What's stopping most people from even trying to build one is the assumption that you need lots of funding to even start. But crawling significant parts of the internet is surprisingly cheap nowadays.
  • Also there are quite a few interesting experiments like Teclis and Marginalia that show what's possible even without a huge budget.
  • If we trust the usual wisdom that the more negative the comments on Hacker News, the bigger the company's eventual success, Google competitor You.com is going to become a billion-dollar company. (Jokes aside, I'm not bullish on You.com. Like DuckDuckGo it's primarily a fancy wrapper around Bing's APIs.)

Upwork

  • There's a lot of talk in entrepreneurial circles about the importance of outsourcing work. But at the same time, everyone I've talked to recently on the topic complained about the experience of hiring freelancers.
  • Filtering through the list of applicants is oftentimes just as much work as the task you want to outsource itself.
  • The experience for freelancers isn't particularly good either. You spent a lot of time crafting personalized messages only to be completely ignored.
  • There are, of course, alternatives but they mostly focus on long-term positions in the premium segment or cheap productized services.
  • Hence an Upwork competitor with a better signal to noise could really take off in case Upwork inevitably slips.

Indiehackers

  • Indie Hackers is a site where people building humble online businesses can connect and share their journeys.
  • But many feel the site is going downhill for some time now.
  • For example, people used to share updates on their projects and these features were prominently featured on the homepage. Now this part of the site has been replaced by a "Remote Jobs" section.
  • Just two days ago a lot of negative energy unloaded in a thread.
  • As someone building humble online businesses myself, I feel like a viable Indie Hackers alternative is long overdue.

I hope you enjoyed this report. If you have a minute, please respond and let me know what you think.

Thanks,

Jakob

Please do share with your friends. I spent 5+ hours on this so it would be nice if a few people read it.

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