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Jul 28th, 2015 Share: Share on Twitter Share on Facebook Share on LinkedIn

The Ugly Truth About Consumer Internet

A lot of the entrepreneurs I meet these days are building their startups in the consumer Internet space. It makes sense: Billions of people are already online, many more are coming online every day. Building products in this space is typically not terribly capital-intensive and (in theory) your sales and marketing is pretty straightforward as the person who uses your product or service is often also the one who pays for it.

Consumer Internet is also the space most people intuitively understand best — as we are all consumers ourselves, we often can experience the problems we are solving with our ventures first hand. You can quite literally design your product for yourself.

But consumer internet is also hard. As in: Really hard.

Most products launched in this space never work. They fail to attract a large enough audience. They are not differentiated enough (can you count the number of todo apps alone?). They fall into a strong long-tail distribution curve. They don’t generate enough revenue per user. Customer support volume is high and thus costly. Marketing to a large, diverse user base is expensive and hard.

On the flip-side of this equation stands the knowledge that if your startup works — it tends to do spectacularly well.

Just understand that it’s incredibly hard to break through.

P.S. I recently gave an interview on Mixergy — go check it out; it’s fun.

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