In theory, the level of competition is proportional to market size and market size is proportional to competition.

Anyone can be tempted by entering a market with an intense competition. A common business plan statement is: “market size is estimated at $100 Millions, we assume conservatively to get $1 Million”.

Never conservative enough, I think. Top players have marketing budgets matching their size, and newcomers-business will be hardly profitable.

Niche markets are hot.

Apart from the top five (Dassault, Ansys, MSC, Siemens PLM and LMS), Computer Aided Engineering company average size is as small as $5 Millions. Because big players don’t pursue such small markets before they eventually grow, niche software live a limited competitive pressure, i.e. bigger profits and growth.

Quoting Seth Godin “because everyone in Hollywood is trying to be George Clooney, there are a lot more opportunities for the few Danny DeVito willing to show up.” My advice then is to invest (your time) in niche software companies.

Companies like Google and Netscape knows what it takes to run a successful business. It is the business model, and not the product that determines success or failure of software companies. That’s what many start-ups have unhappily discovered for themselves.

I’ve still much to learn, yet something have learned on what start-ups should better do:

1. -remain a “product company” long enough to build a customer base, before offering customization and services
2. -run the business independently from distribution channel
3. -avoid appointing the chief engineer as business manager.

Motoring shows on the TV rarely give negative reviews of a car. The first I’ve ever seen was referred to a Chinese SUV, the JiangLing Landwind.

Also the Times was quite negative: ”…rated zero in safety tests, the most unsafe vehicle in 20 years of testing”.  A car not to buy then, though I remember the same things being said about Japanese cars during the eighties.

The Times also says that “JiangLing Landwind sold only 100.000 car in late 2006″. Only? It seems to me enough for western manufacturers to start worrying. And for motoring shows to review their reviews.

YouTube succeded over GoogleVideo.

Although YouTube had unique features, and more elegant interface if compared to Google Video, it was its viral impact that made the difference. In YouTube, not only can users know about the popularity of a video posted, they can also make it more popular -via comments, ratings and embeddings. Users can make a video succeed or fail, and this is having a viral effect.

I wonder which comments and ratings would be given to the contents of our corporate websites, if our clients were allowed to.