Web Apps: On Value, Originality, Execution and User Needs

In your quest to build a successful web application, your exciting new ideas are almost certainly nothing but a distraction. Instead, concentrate on the boring same-old stuff, but do it brilliantly.

For the sake of a pretty graph, let’s start with some self-fulfilling logic. If we plot the 2008 profit of the Fortune 500 companies – from highest to lowest – we see a symmetrical long-tail trend, inverting in the middle (source data).

The peculiar logic then follows:

• Although the Fortune 500 is not web-specific, there is no reason to believe that the profit distribution of any specific sector is vastly different; therefore we can apply the above distribution to the web market.
• From some rudimentary research (see later), we estimate that between 5 and 10% of web applications are ‘original’: based on new ideas.
• These ‘original’ businesses are either clustered towards the top-end of the graph, the bottom end, or evenly distributed throughout.
• As only 10% are original, the middle section of the graph (where the vast majority of businesses are located) is comprised of mostly non-original businesses.
• Now the very precarious leap: as there is very little chance of you creating a business at the high end of the scale, your best bet for a successful business is to aim for the middle ‘good but not great’ profits section, which we’ve previously stated has a majority of non-original ideas.

Admittedly, the logic is totally flawed (you’d be just as likely to create a business that falls into the ‘unprofitable’ category using the same reasoning). However, it is worth pointing out that comparing the ‘profitable’ to ‘unprofitable’ businesses, or even ‘highly profitable’ to ‘barely profitable’, there is no trend for where businesses based on ‘original ideas’ appear (from our rudimentary research). In other words, you don’t need a great new idea to make a successful business; rather, most successful businesses are based on old ideas.

Why is this? Let’s create a possible theoretical model of how the potential value of a web application relates to the uniqueness of the idea:

At the very bottom end of originality, the market is over-saturated with competition, which even an exceptional offering would find difficult to penetrate.

As we increase the originality slightly, but not enough to be vastly original, we’re decreasing the competition, but still making a connection with the user based on needs that have been proven and solutions that they can identify with.

With further increased uniqueness, the user loses sight of how the product solves a known need, and instead questions the usefulness of such an offering.

However, extremely original ideas will have absolutely no connection with existing products or known needs, which will remove the cynicism, and conversely create a curiosity and sense of opportunity (“our secret weapon against our competitors!”).

So if you’re creating unoriginal businesses, how do you get noticed? Why would a consumer choose your offering over the long-standing competitions? The answer lies in the execution of the idea.

Successful modern companies like Apple have known this for a long time; they certainly weren’t the first to invent the Portable MP3 Player (iPod), Cell Phone (iPhone) or Online Music Store (iTunes), but boy, when Apple do something, they execute it to perfection.

Among other things, this ‘execution’ of an idea includes:

• Usability
• The Right Features
• Design
• Accessibility
• Quality
• Non-Product features: Customer Service, Price (not necessarily lowest), Community, etc.

We’ll talk more about these specific facets of execution in a future blog post. In the meantime, let’s take a look at what kind of ideas we could execute brilliantly.

We analyzed the Alexa 100 most visited websites in the US, and created a  taxonomy of ‘user needs’ from these websites. Note that these are not mutually exclusive (in fact, more often than not, a website meets a number of interlinked needs). Also note that the taxonomy doesn’t yet sub-divide business needs.

If we classify each of the top 100 websites by its primary User Need, we find that Information Seeking (Timely and Generic) make up 25% of the websites, as might be expected by a medium as vast and immediate as the web.

We also classified each website into ‘Original’, ‘Not original’, or ‘Not original but first mainstream/successful offering’. 85% of the websites were NOT original, 10% partly (i.e. first mainstream offering of an idea), and 5% could be seen as original ideas. 

As it happens, the original and partly original websites were fairly evenly distributed throughout the top 100, which lends some weight to our strange logic at the beginning of this post (OK, so it doesn’t really, but it’s a nice way to end!).