Copycat product just got backed by Mark Cuban, what do I do?
Hi, so I'm building www.BuyLocalized.com . A week ago a copycat popped up, they aren't identical in execution (We show our information right on the page, they show it as a popdown from the top right of the browser), but they are in utility.
Well I'm browsing Facebook and up comes an article showing they have been backed by Mark Cuban. https://www.cnbc.com/2020/07/21/mark-cuban-backed-cultivate-find-american-made-products-on-amazon.html.
What do I do now! If a big name investor is funding something super similar (though theirs is quite a lot worse than ours currently) then I assume the idea is more viable than we were thinking. We have been stretching trying to get ours ready to start charging, and were honestly pretty pessimistic on our ability to generate revenue (not allowed to do affiliate revenue or ads in extensions, so we're trying to work it as a freemium model). People like the product but monetization is very uncertain.
There are 4 of us working on this, and it's all been self funded. Do I go and use this as a way to get funding for us, what do I do!
Focus on your users. Don't be so distracted with what others are doing.
You know who decides if you'll win? Your users. Not Cuban!
Make them ecstatic and you'll do fine.
what he said!
This is really good advice. Think of this as more validation than anything else because rarely you'll get a good idea that has no competition. Use it to push yourself farther, don't use it as an excuse to pullback.
In regards to monetization, look at how camelcamelcamel does it, I suspect you could find something similar that works for you. Also consider how you can create a marketplace that businesses want to get listed on. I suspect you'll be able to monetize from that side as opposed to from the consumer side.
Camelcamelcamel, Fakespot, Reviewmeta, Share-a-cart, they all don't make money from their extension. They made the extension because it was easy and was good for users, but they only make money when people go to their sites and end up purchasing something on Amazon through their link.
Keepa and Fakespot have a B2B offering too.
Frankly I spoke to most of the companies I mentioned there, and most called me crazy. The general viewpoint is extensions are free. I don't get it though, the format doesn't matter, the value it delivers does. I've had users say "lol not paying for an extension", but like, this is the best way to deliver the information. For the 2 price comparison sites and the 2 review sites, they have information for every Amazon listing. But we don't, only a tiny fraction of stuff on Amazon are made in the states. Most of the time we won't have a good option for you, and that's if we had way more research done than we do so far. The problem with going the same route as them is do people really return to a site that has an option 30-40% of the time? I don't think I would.
Ya we want to pursue getting revenue from businesses, but that's far away. People look for an incredible variety of items, it's mindboggling. We have 350k products, and we provide a good result like 20% of the time. Any company who listed with us now would be getting tiny amounts of views a week, and extensions have rules about ads.
I'm not sure why you think they don't make money from their extension. CamelCamelCamel adds their affiliate link to all of the links they send as notices. They make a lot of money with the amazon aff program that way.
ReviewMeta also does something similar. I've looked into this extensively last year. It's possible that it has changed but all of the business you've mentioned were made to make money on the aff program.
I'm playing with both the reviewmeta and 3camels extensions and I can't see affiliate links in any of them. They send you to their sites from the extension if you want, and if you click links from their sites to go back to Amazon there are affiliate links, but you can use a lot of their functions through the extension without the programs monetizing in anyway, or at least that's what I find.
I'll go check again. They're main source of income is affiliate, but when I looked a few months ago it wasn't on their extension, cause you usually aren't allowed to.
Thanks @Deepak09, @indigoblue, and @EvankRob. It always makes me laugh (and cry... mostly cry) that my essays tend to fall by the wayside and a quick off-hand comment gets the love lol.
+1 on good ideas always getting competition. Especially in DTC, CPG, and all that stuff. Perhaps in extremely high tech where the tech is also the economic moat do you have to worry about that a little less. But hey, that's why things like branding were invented. Psychological tools to get an unfair advantage!
This advice is 💎
Keep going. As much as I like mcuban and the rest of the sharks, their "internet pull" is minimal. From my previous experience, they will be in the spotlight for about 15 minutes and then will simply fizzle from the media space. Sharks have hundreds of companies they need to promote so it will be gone as swiftly as it appears.
Your job is to remain steady while its going on and, when possible, capitalize on the work that has been literally done for you: incorporate the better parts of the system into your own product and chime in on where you see them show up with your own product.
Being aware of them is great. You have your eye on the space. And they may take "market share" from you.
but if you're "ahead" of them in any way, money can't solve all their problems.
Do you have customers? Talk to them.
Keep building. It can prove to be a distraction. You don't want to get into a war, unless it really helps the entire industry move up. You may engage with them and from that people see there's "heat" in that sector and jump in too.
But maybe that's a good thing. IF you have a good solid customer base and revenue model. Use it to gain attention, for you, and the entire idea.
p.s. the text in your main site is hidden by the image when not using full width of the browser.
Cuban has probably invested in it for the karma/PR, he's always up to say supporting American small business and such, it's an image thing, I won't be surprised if doesn't expect this to be a huge return for him.
As simpler as their website is and more amateur I'd say theirs is better than yours.
As from your other posts, I think you should pull your head in and focus on your business not your operations, IDK how your team is composed, but is one of you on 100% sales/marketing and another 100% on biz dev? if you all 4 are on operations, you are doing this wrong.
I'd think if possible, before taking money (giving away equity) you should try to have, a tested and proven income module, and proven market fit demonstrated by conversions and/or growth. (the 2nd more important than the first I guess)
Hi, It's 3 on building it and me half on building it and half on marketing/admin/strategy.
I don't know what deal Honey has with Amazon, but I think they got onto Amazon really late because they couldn't profit from it. I haven't found any extensions that get affiliate revenue from Amazon, and everyone I've spoken to says you can't. There are ways to get around it and affiliate is a more natural fit for this type of business, however customer experience wise what we are doing now is the best, so we figure we will stick to it and see if people will pay, and look more seriously into our affiliate options once we have found they won't.
I don't really disagree with you about the website, and I will fix the text thing you mentioned. We've been waiting for information from paying users to come in before changing a lot of things. We don't want to make changes now, then start charging and make changes again. We've been pushing a lot building the product so we can ask people for money and change the website based on what appeals to our paying audience. As this has taken a lot longer than planned to build the website has sorta of been half fiddled with a few times.
Everything changes once we ask people for money and see how they react. The website, name, logo were all things we didn't put a huge amount of thought into. We are fine with placeholders, with the assumption that we will do serious work on that stuff once we know who the people who are willing to pay for this are. Since it's been almost 8 months now I would have spent more time on it, but we thought we would be able to start charging in around 3 months.
Thanks for the feedback!
Just curious, regarding affiliate revenue: why don't you link to your own domain's listing for a given product (mirror the product data on your site) and then link back to Amazon to get the affiliate link so that you're not doing it directly from within the extension. I'm sure there's a reason you're not working around the affiliate limitation so I'm curious.
I don't think something like that is within the rules of the Amazon affiliate program.
Got it. That makes sense.
Lean startup.
If you all 4 are on if from the start
8*4 = you have 32 man months / almost 3 years of building
Still no knowledge of who will use it?
Who will pay for it?
How much?
What do they want out of it?
...
I've been there building things for a long while to discover later it's trashable ...
Honey for example attaches to many, many sites, which is why they would probably not customise the sites themselves, they have more flexibility, a wider audience and use cases...
Also from things that burnt me in the past, did you consider what happens when Amazon does redesigns?... I've been playing catch-up for months doing nothing productive, just bringing back functionality that broke... (Wasn't Amazon, was something that has been stable for years...)
You need to get some room out of working in the business, so you can work on the business.
Wear the CEO hat and think resources allocation between the company functions, you can't have a business is 100% builders.
Ya Amazon could add this information themselves, that's one of the big risk points. However they've been selling stuff for 20 years and haven't done it, nor do more than a handful of big marketplaces in other countries. I'm assuming that showing where things come from has a large negative effect on conversions.
We've spoken to hundreds of people, we email everyone who signs up and I'm very involved in the communities online. I feel we have a fairly good idea of what they are looking for.
I wouldn't be building at all were it in better shape. It really doesn't work very well currently though, building it has been a way larger task than we assumed, both on the research side and the software side. I'm far from thrilled we are this far in without asking any users for any money, but this is just how long it's taken.
IDK if you mentally can disconnect at this point, but can you take a step back, redefine the problem, it's intensity, frequency and the person experiencing it.
Than what would be the MINIMAL MVP, that a customer would be willing to pay 1$ for? (the MVP should be a 2 week thing - 1 month of a single person)
"(the MVP should be a 2 week thing - 1 month of a single person)".
This is not applicable to all scenarios. Depending on the product you are making, making an MVP will take a certain amount of time, there isn't just a flat 2 week to 1 month MVP building window for every product. Due to the amount of information we need to collect, and the search functions we need to build it just takes a relatively long time to make this. We could have made a more narrow version, where we don't bother building a search and we do an exceptionally narrow range of products. For example wrenches, and then when someone searches on Amazon we would have configured results to a ton of searches for Wrenches. However we felt spending time building those pre-determined results wouldn't have scaled, and didn't believe people would have this problem strongly enough to install the extension just for a single product category.
We don't have a clear idea on when it will get to good enough shape that a reasonable amount of people will pay for it. We've spoken to a ton of people, and we've had people say they would pay for it. But we can't actually charge them yet because the IRS was closed for a few months, so maybe when we approach the people who said they would pay after we get the ability to charge, they actually refuse to.
I agree about the time context, but was pushy by design.
It does make sense to start with some narrower thing than all business for sure, probably the niches that are more popular, and if you start and have customers or at least users, you start getting accurate data on what they actually use, and can set priorities by actual user behaviour vs a theoretical one... ("Every system is perfect until it meets it's first customer"..)
At the worse case, as you have the interested people, and you probably have some part of the system already working? you should get a few of them in as alpha users...
You should try to have as close to full of a cycle as possible, if you can, pass a full payment process that just doesn't charge if that part can't be ironed out yet... mock the areas that aren't done yet...
We've got users, they are all just free. We've got 500 users, and around 10% of them use it on a day to day basis. We didn't bother setting up the fake payment signup thing, mainly because we had enough resources to continue and I was fine continuing without doing it. We spoke to a ton of people before starting it, following generally the mom test. We then spoke to a lot of people as we've built it, and we all talk to current users more than once a day (through email though). I don't really like those fake payment things, and we felt we got enough of a positive reaction that we could continue without demanding a stronger sign of payment. Plus freemium is not the most natural source of revenue for this, it's just the simplest to do it within the current constraints there appear to be. So we felt we had so many people react favorably, and actually go and download+use it, and our eventual revenue model was so unsure, that we would just continue building it.
We can't get a bank account, is why the IRS being closed impacts us.
The discussion we are having here is one that is sort of past us. We spoke to a lot of people before starting, and we've spoken to a lot of people as we continue. We are past the minimum viable product stage now, but just can't charge and see if people will put their money where their month is. Discussing making our focus more narrow is sort of a waste of time, the level we are at came after a result of a lot of thinking, and isn't a decision we would change. It's just one that required months of building and 10's of thousands.
The development has been a big bottleneck for us, and still is. I've had a long and hard week since posting this thinking about what to do. The current developer co-founder is a real hard worker, but he is inexperienced. We both agree we need someone else, but I don't want to spend that kind of money before getting an idea if people will pay for our project, and I don't have another developer friend who will come on for equity. The week has been hard because the new competitor has a much better search function that we do, way way way better. Our product list is a lot better, but you wouldn't know it from using the extensions, it's a huge problem. I don't have any big backer or anything and revenue is so uncertain, I'm really scratching my head trying to figure out how we can get it up to par in the next month or so :(.
So your 2 current challenges are:
Is that about there?..
What is the search your currently using? Is it just a string search against the db? Do you have a full text search engine? Can you use a 3rd party?...
Can you estimate/figure out what the competitors are using?
So what is your progress path for the income module?
@PayOffWizard Amazon search has an API
https://webservices.amazon.com/paapi5/documentation/search-items.html
So you can use them and keep paging until their item matches yours (assuming the datasets matching are reasonable)
Or use these initial results to than search the internal elasticsearch for items close to that of Amazon... (Assuming less unions and more loss matching is ok)
Ya our future plan involves working more off of Amazon, however we don't think you can work off the API. We've got a homebrew solution that will take more insipiration from Amazon, but it's gonna take weeks to build, and the search we anticipate from that won't be as good as our competitors current search, I have no idea how they've made it.
I would have assumed there was something off the shelf, either for an Amazon affiliate catalog or just Elasticsearch ecommerce, but the developer doesn't think so, and he has a family member who does Elasticsearch for a living. It's wild to me that everyone seems to start from square one, when it's so far off getting "good" results.
I would be pushing to do something like that if I was more optimistic. We have the research, but the search is just really bad. Even though we've had people want to give us money/pay, I just don't think it's going to be many people. And since we are missing one main piece of the puzzle for giving it a real shot, even charging now and getting a terrible conversion rate wouldn't change us from going until the search is improved.
@PayOffWizard are you able to somehow play off google search for example?... Or out of Amazon API in some way?...
Or contact elasticsearch / contract some work around that... (IDK personally if there is something you can customise there to reach that)
For the payments, can you do something temporary, like take into a PayPal account or something for now? Like you can use that as a temporary bank account?.. (Not accounting advice or anything) (don't know if it's different for USA, if you have to get an accountant advice on using a personal account even.. or see if transfer wise could provide an account for you... I'm kinda saying if you can find a path that doesn't require waiting for an unknown amount of time, again IDK what's going on with IRS..)
Ya those are the 2 main things.
For the search we use elastisearch. It's almost vanilla, and the results we get are 3/10 I would say. The developer spent a while on it and it didn't make that much of a difference, we then shelved it while we added another feature and worked on the pricing. Our new competitor has a great search. We haven't been able to find an applicable out of the box solution, but I can't imagine the competitor built their's in the 2 months they've been around, while also making a ton of other stuff.
For the income we are just waiting for a bank account, which will be 2 weeks from now at the soonest. We will be able to charge then but I'm extremely pessimistic. I completely agree with not getting in the feature grind "Oh no one will pay now but just add this and they will". But frankly it just doesn't work that well. You search shoes, we have more than 1000 shoes and 3 of the top 8 results are for a shoe horse, insoles and an odor spray. I think we will have a much clearer idea once the search changes are done, but we have no leads on that.
If the problem your solving is big, there will be competition regardless. Just focus on the people who you're solving problems for.
Make 10 people love you not 100 people like you
Use the news as motivation that your idea is validated so now its just about being creative with marketing it
All the best
you will see many more copycats because there is no barrier to entry. you have a browser add on that surfs another site. basically you are at the mercy of the browser and the other site providing you the information. the question you have to answer is that if you raise money what would do with it..
We have the information, that's why no one has done this until now. Finding out the country of origin for the few million products you need to provide a good experience is quite expensive and wouldn't be viable if people weren't so pissed off at China currently, even then who knows. We do datamine and screenscrape, but there is still a large manual component.
You just proved my point. Datamine / Scraping manually or otherwise can take you only so far. End of the day you neither own the data source nor the channel you are using to reach your customers. Anyone with some manpower or hired overseas help can copy the idea. Going back to your VC question - I would say go for it but story should not be that Mark Cuban funded XYZ. The story should be how you can build a real business out of what you have.
As you would say it you can apply it to any business then. We are building a service, if someone makes a better one then they will get the customers.
keep going.
Sounds like validation of a good idea, focus on creating the better product.
In this regard, you can only control your efforts and your product. I would suggest provide a great experience to your users and that will be the best indicator for the success of your product.
Don't worry about it. Focus on providing a great customer experience.