Startups that Killed Giants : Case Study for all Startup Owners
Our generation has witnessed many serial killers in the past 10 years which not only killed some giant companies but transformed the entire industry with their innovations. Carefully read this to understand how few Startups have killed the giant companies and ruling the industry with great power.
☞ Netflix :
The days of standing in line to get your Friday night video is over. Blockbuster which was valued at $8.4 billion in the beginning of this century had to file bankruptcy for an embarassing starting price of $290 millions because of the new technical startup Netflix. Although Blockbuster began as a rentals-by-mail company and also started streaming service later to fight aganst the strong competition from the upcoming startups like Netflix, they didn’t come soon enough and strong enough. It was a battle between the new cutting edge technology and the old technology, and the new technology which understood the increased convinient demands of the public won the battle.
Although Netflix is not the only company which took down the Blockbuster, that is definitely the most successful among the Blockbuster-replacement services like Hulu Plus. Even the paid television services are losing the subscribers to this cheaper streaming site. Netflix is also coming up with some interesting and innovative videos and movies. Amazon (prime videos) is giving a good competition to Netflix. Let’s see which one will win the race.
Interesting Fact : In 2011 itself Netflix surpassed 20 million subscribers in the USA and Canada which is almost equal to the entire population of Australia. Read 6 Reasons why you should not launch a startup.
☞ Uber :
Uber has removed an entire layer of middle people (small business men) by making the customers directly book a taxi from their mobile phones. This platform has helped the drivers to save 20%-40% depending upon the market. The cab booking app startups are attacking on all fronts offering less expensive and more convenient rides. Since the launch of Uber app, it has sparked protests in cities such as Paris, Berlin and London from cab drivers threatened by its low prices.
One of the most important factors contributed to the enormous growth and funding of Uber is their usage of technology and simplicity in the hands of both customers and drivers. They minimized their cost of operations by hiring only 3 employees in each city they are operating. Uber is also focusing on developing own self-driving cars technology which would be a major deciding factor for its existential question as well. Uber is great in following the 7 best Startup Marketing Strategies
☞ Spotify :
Spotify killed Apple’s iTunes pay-per-song model by offering the entire song collection on demand over the air at a monthly rate. Spotify is the undisputed king of on-demand streaming music. This Swedish company has tens of millions more paying subscribers than Apple and countless millions more free users. Although Apple’s streaming service has shown impressive growth in the listening memberships, it still has to do much more to reach the popularity of Spotify.
Spotify gained its dominant position on the strength of its impressive 30 million plus songs catalog. It also adds more 20,000 news songs each day, exclusive live sessions, latest record releases and various new singles right to its New Releases tab each Friday – your ears don’t even know what to do with these.
☞ Robinhood :
Robinhood killed hundreds of thousands of stock brokers’ profits with a new commission-free trading methodology and quickly attracted a great number of new investors to start trading easily and quickly.
Robinhood has an exceptionally clever business model. They offers free trading, but free doesn’t mean costless. They make majority of their revenue by routing orders through frequency trading firms like Citadel, Two Sigma, KCG and Apex Clearing. This is the main source of controversy for the critics. Robinhood explains their business model as “collecting interest on the cash and securities in Robinhood accounts, much like a bank collects interest on cash deposits.” One of my friends made very good profits by investing in penny stocks
☞ Airbnb :
Airbnb started as platform for the travelers to provide accommodation services at much cheaper costs compared to the hotels. This attracted many avid travelers as they not only get some shared accommodation for lesser price but also able to get in touch with the local vibe which is usually not seen in the hotels. This had hit the profits of the hotel industry by expanding its services across 190 countries across the globe. Airbnb’s vast list of freelance photographers go to the specific locations and provide high definition pictures. It makes billions of dollars of business acting like a middle man between host and the traveller without owning any hotel or retail space. They charge 10% commission from the hosts and 3% from the travellers.
There are few other companies we can talk about in detail. For example, Dropbox arguably killed USB drives and Craigslist killed the newspaper industry (classified ads revenue). I will explain about few more companies in detail in my next article.
Please let me know if I have missed any important company that must be listed out here. Which company do you think would have profound impact on our daily lives in future? Read other Startup Related Stories