5 Things Disruptive Start-ups Do Well
BY Ilya Pozin
Some entrepreneurs think it's crazy to go after an industry dominated by big players. Not this guy.
Lately, I've been fascinated by a start-up called Pheed. The self-made and self-funded company is trying to do something few start-ups successfully attempt, let alone accomplish: disrupt an industry that's dominated by big-name players. Will it work? We'll see--but how Pheed is going about the task offers a number of lessons for any entrepreneur.
So what is Pheed? I like to call it Twitter with a business model. The site allows users to post digital content such as text, photos, and live video and audio. The catch? Influencers can charge a small fee for their content.
In just six weeks, Pheed has grown to more than one million users, drawn celebrities such as Miley Cyrus and Paris Hilton, and gone viral in France. What's the secret?
I sat down with O.D. Kobo, co-founder of Pheed, to see what he's done to set his start-up apart.
Be a fan first.
Build something you want to use. "If you want to improve something, you have to be a user of it first," Kobo says. "When we launched Pheed, it was because we, as users, wanted it to exist. If the CEO or the junior engineer does not have the same level of fascination with the product, it shows. Build something you are proud of and make a statement."
Know that opportunities are everywhere.
"There is always an opportunity to be the next establishment," Kobo says. When Apple first launched, it disrupted big-name contenders such as HP and IBM. "Even a small company opening today can be a large corporation tomorrow," he says.
Develop a culture.
True disruption starts by introducing a culture that's different from the establishment. When Microsoft first launched the Surface tablet, the company spent millions on marketing efforts. That's because the company attempted to introduce a product without creating a culture first, Kobo says. "[In contrast,] before Apple launched the iPhone 5, fans scoured the Web for a glimpse of what it might look like," he says. "Then, they flocked to stores like fans running to see their favorite entertainer at Madison Square Garden, waiting in long lines, all for a phone. Why? Because Apple is as much about great product as it is about culture."
Pheed is one of those rare start-ups that had a number of fans supporting it before it even launched. Kobo says he built a following the old-fashioned way: offline. He went around L.A. with his laptop showing the service to everyone from local tattoo artists and record producers to Suzanne Kolb, president of E! Entertainment--and they liked what they saw. "That demonstrates to me that Pheed is in sync with the current culture of today's youthful society," Kobo says. Your start-up should allow fans to "see a part of themselves in [your] endeavor, as underdogs with a shot at the title."
Kobo was in the fortunate position of being able to fund his own company. If you're not, seek seed or first-round capital from wealthy individuals who believe in you, as opposed to obtaining funding from a venture capitalist who is just looking to add to his portfolio.Choose a partner with energy. "You wouldn't walk down the aisle with a girl you don't love, regardless of whether her father is a billionaire," Kobo says. "It is about good energy, not the money--so look at the people first. A lot of start-ups think a large funding round is an exit, and their ego balloons. More ammunition simply means more targets you need to take out."
When it comes down to it, Kobo says, never be afraid to compete with big names. Use your fear as fuel. "The great thing about the Internet is that it never sleeps, it never stops moving, and there is always somebody out there looking to take out the establishment," he says. "Just go for it, because if you don't, somebody else will."
ILYA POZIN is the founder of Open Me, a social greeting card company. He founded his first company, Ciplex, a digital marketing and creative agency catering to small businesses and start-ups, at age 17. @ilyaNeverSleeps