MySpace and Facebook are very similar social networking sites. Even though Facebook was started after MySpace, reportedly Facebook's number of subscribers overtook MySpace's in 2008. Let's see how this happened.
When MySpace was started, people were hesitant about putting personal information on the Internet. One magazine even stated that any website that needed users to cough up their personal information could not succeed. Despite the critics, MySpace kept promoting their services. In the end, their efforts paid off. People became less sensitive about putting personal information on the Internet. Then, Facebook came into the playground and snatched users who were accustomed to broadcasting personal information over the Internet.
This is an important lesson; snatching customers from competitors is far easier than creating a market for new products. Consumers won't buy unfamiliar products, so when a business is trying to sell a new kind of product, first they have to train consumers to buy them. If you go after customers who have already been trained, you can just enjoy selling copycat products to them.
When you move into someone's market, you are using your marketing budget to snatch customers. (There will be some return on investment.) On the other hand, the competitors who have already acquired lots of customers have to prevent those customers from being taken away. That means they have to use their marketing budget just to keep existing customers (no return on investment). This is a totally unfair fight. Don't re-invent wheels. Go after markets that already exist.
© February, 2011