Technology

Do you worry about the so-called &kill zones& of big tech companies The Economistthinks you should. The theory basically suggests that if your product or service is anyway threatening or accretive to one of these incumbents,  they will either force-buy your company or clone it and destroy your market.

Any entrepreneur that believes this should probably pack up now before ittoo late —  if itnot a &kill-shot,& it will be some other perceived death-knell that ruins your company.

Starting a company has never been easier. But growing a sustainable business is still difficult  —  as it should be. If you build something customers will pay for ,  you&re going to attract competition from copycats and incumbents. Consider it another type of validation, like product-market fit: competitors think we&re right.

Welcome to being an entrepreneur  —  you are going to be constantly battling  &  lack of cash, lack of customers, aggressive competition, better-funded competitors, underperforming staff, slow-moving sales cycle, or some other as-yet-unknown. The list of pitfalls is long. But enough willpower and perseverance — &blood, sweat and tears& —  will get you to the other side. Eventually. Remember  &  the product of an overnight success is years of hard work.

If this is sounds too daunting  &  don&t do it!

If you enter a market large enough, with deep pocketed and dominant incumbents, you have your work cut out for you. Maybe a nice UI and faster workflow attracted customers and some early adopters  & but guess what  & they are copyable features. Features alone are rarely enough to win a defensible market position.

Try to ignore advice that says you should focus on building the best product as your differentiator — this does not set you up with the highest chance of success. Instead, focus on finding and serving a targeted segment of customers, with a unique set of needs, and tailor your product and service experience specifically for them.

Iteasy for features to be copied  &  but you can&t be both custom and generic at the same time. Custom is a great approach that new entrants can take to get a toehold in a larger market with larger players that must be generic (i.e. Salesforce is a generic CRM, but there are lots of vertical CRMs that successfully compete  — Wise Agent for realtors, Lead Heroes for health insurance).

Presenting a Total Addressable Market (TAM) is the bane of potentially good startups that have been schooled in &anything less than a billion-dollar opportunity isn&t interesting.& Maybe we should reframe it as Potentially Ownable Market (POM). What are the details you can build in the beginning — where your tailored approach gives you instant leadership

Project management for chefs

Letuse project management as an example. Maybe a new entrant starts as an app for restaurants, which helps chefs build new menus. Each task list is a &recipe,& each recipe has &ingredients,& with amounts and timing, kitchen location, suppliers, alternatives and &garnishes and sauces.& The app integrates with the stock system and POS, and helps chefs predict inventory needs and staffing based on recipe times/complexity.

The founder has looked around and this is the only project management app that focuses on chefs, giving him an instant potentially ownable market. The business might be able to thrive in this segment alone and become the dominant player with its own kill zone.

Maybe this is the first step; the company gets profitable early growth and becomes sustainable, which funds development to grow the business into other vertical and complementary areas. Over time the business will grow into a large TAM  —  a far better approach than starting off in a large market with clear winners already.

Avoid the battle entirely by creating your own category.

Snap Inc got a fresh infusion of cash from the Saudi royal family to help it survive despite losing $353 million this quarter. Prince Al-Waleed Talal tweeted a video of him and Snap CEO Evan Spiegel, noting that heinvested $250 million in exchange for a 2.3 percent stake in Snap Inc. The investment raises questions about what say the Saudis will have in Snapchatdirection.

The investment comes at a $10.8 billion valuation — a steep discount to Snap$17 billion market cap. That indicates the company may have been eager to squirrel away cash as losses deplete its cash reserves.

Snap declined to comment on the news. But after an initial 11 percent pop after earnings was announced, Snap shares sank to just below the closing price as the user shrinkage and Saudi investment sank in.

Al-Waleed Talal has previously buddied up to the U.S. tech sector, investing in Lyft and Twitter. Elsewhere, herecently made investments in European streaming music service Deezer, as well as Chinese ecommerce giant JD.com. He previously owned shared of Newscorp and Citigroup.

The prince had sat down with Snapchat CEO Evan Spiegel and COO Imran Khan back in 2015 to discuss a possible investment, but nothing came of it until now. The Arabic press release explains that the deal was done on May 25th. &Our investment in Snapchat is an extension of our strategy for personal investment in new technology through leading companies such as Lyft, JD.com, and social networking sites, Twitter& the release explains.&Snapchat is one of the most innovative social networking platforms in the world and we believe it is just beginning to surpass its true potential.&

Snap could be looking for more allies abroad as itseen weak international growth after years of neglecting the developing world and its Android appperformance. While the Rest Of World region is typically a source of growth for social networks, Snap actually shrank by 1 million daily active users there. The one truly bright point of its earnings report was a 65 percent quarter-over-quarter boost in average revenue per user in the Rest Of World, reaching $0.96. The Saudi royal familyinvolvement could potentially pave the way for partnerships or growth opportunities in the Middle East at a time when Snap needs whatever help it can get.

The extra cash will extend Snapchatrunway and give it more time to stabilize its business. With its daily user count now shrinking, it will have to find creative ways to squeeze more cash out of those that remain to keep revenue growing. That may take time, and Saudi Arabia just gave it more.

Coinbase just announced two new perks that should please regular cryptocurrency traders. Starting on Tuesday, new Coinbase users will no longer have to wait for five days to trade after signing up for the exchange.

As the company explained in a blog post:

… When someone makes the decision to sign up, they don&t want to wait days before they can start buying cryptocurrency. While we do support instant transfers via wire transfer and debit cards, purchases via direct debits from your bank account can take days to appear.

With this update, customers will receive an immediate credit for the funds being sent from their bank account. They can then buy and sell crypto to and from their USD wallet right away, but cannot send their funds off the Coinbase platform until the funds coming from their bank have settled.

With the new trading restriction lifted, Coinbase is also raising the daily purchase limit for its tier of verified users to $25,000, up from the previous $25,000 weekly limit.

New users chomping at the bit to start swapping for digital currencies or current high-rollers looking to push the daily limits should note that completing Coinbaseidentity verification, which requires uploading a driverlicense for U.S. users, is a prerequisite for either new perk.

&Customers who have not yet completed this process will be required to do so before having access to instant purchases, new trading limits and the ability to withdraw or send coins off-platform,& Coinbase explains in the blog post.

Both changes will be available first for U.S. customers who have completed CoinbaseID verification requirements. Coinbase users around the globe should expect to wait a little longer for the features to become available.