What makes small companies innovative?
What makes small companies innovative?
"Everything Starts Out Looking Like a Toy" (No. 40)
This week’s toy: an eInk newspaper display. With this, you could hang information radiators throughout yourself. The current version is a little pricy and if you squint, you can see a world where we have several of these when they are 1/10th of the cost. As a newspaper nerd, I love it! Edition No. 40 of this newsletter is here - it’s April 3, 2021.
The Big Idea
This week, Unsplash announced they were being acquired by Getty Images. Unsplash is an image community built around the sharing of free stock photo images. Getty is a brand based on selling stock photo images. One of these things is not like the other. Getty undoubtedly saw a popular community and thought they could determine how to monetize it.
As an Unsplash fan, I wondered immediately how things might change under new ownership, and that prompted me to think: what makes small companies innovative?
Speed to Market
When you’re first in market, you can move at a speed different than incumbents. Building a basic search model and allowing people to upload stock photos was not a new idea in 2013, when Unsplash was created as a blog on Tumblr. At the time, photo innovation had slowed down. Yahoo’s acquisition of Flickr (founded 2004) in 2005 had stalled, and finding stock photos was often a “search on Google and see what you find” effort.
Unsplash’s innovation was to take a few elements people knew well:
search from a minimal interface (Google)
easily available photos (Flickr, Tumblr)
And to combine these with three things that made photo discovery much more successful:
Faceted search (Facebook + others) — allowing you to search for a specific item like “signs”
Machine learning and image recognition (many) - automatic detection of items in photographs
Attribution - giving a platform to photographers and making it easy for them to publish and be discovered in a wider way than Smugmug, 500px, or other photography-specific services.
Because Unsplash started out without any tech, they could run towards their vision of photo discovery.
Try Things That Don’t Work
“Build a search engine for free stock photos” sounds like a counter-intuitive and slow goal for Shutterstock or Getty, and it worked great for Unsplash. It would have been very hard for those existing services to build this product, and that’s one reason they didn’t do it.
Building a distribution system without settling the rights of who owns a photo beyond a Creative Commons license doesn’t sound like a business model. But the Unsplash team was focused on building a community. They built something focused on the user experience. Finding photos was (and is) a joy if you search there. Because the model is moderately curated, the quality is much higher than an average Google search for images.
Unconstrained by Existing Business Model
Unsplash worked because they didn’t build a business on the Getty or Shutterstock model. Building a community and letting that community drive the product built a successful experience. Now, the challenge is to maintain that product and expand it in the face of a model that is very different than the current one.
How could Unsplash succeed going forward?
Here are a few ideas:
Don’t force creators into a stock model
Do give them tools to model professional licenses so that they can participate in the stock photo market
Do publish an index of the most popular photos for a search term so that they are easy to find; and the “most artistic” ones also
Let’s hope the folks at Getty learn from Unsplash in creating a beautiful and more friendly experience for people who have never purchased stock photography and would like to support their favorite artists.
What’s the takeaway? Fast-growing businesses are more successful when they are both community-led and experience-focused. That doesn’t always mean building whatever the community wants; it means nailing a broad use case with a beautiful and intuitive result.
A Thread from This Week
Twitter is an amazing source of long-form writing, and it’s easy to miss the threads people are talking about.
This week’s thread: on product discovery (h/t @edsim)
Links for Reading and Sharing
These are links that caught my eye.
1/ Apple using Tesla Batteries - Further proof that Elon Musk is creating multiple business lines out of the basic components of the Tesla business comes in the news that Apple is purchasing Tesla batteries to store solar-generated energy. What if the long play for Elon Musk is building ecosystems (Battery, Satellite, Space) instead of building cars? By doing this he could eventually exit the messy consumer business and instead land huge contracts all at once.
2/ “Happy Belly” and other store brands - If you’ve ordered from Amazon Fresh, you’ve seen “Happy Belly” and other unusually named store brands. This is not new - in fact, it’s quite similar to the tactics large retailers have used for decades - so is it new the way Amazon does it? Ben Evans suggests it’s not just Amazon who’s doing it. The bigger question here is how much transparency we want (or should demand) in the supply chain.
3/ ⭐️ ⭐️ ⭐️ ⭐️ ⭐️ - Ben Collins writes great spreadsheet tutorials. This one shares how to use the REPT function in Google Sheets to add some visual pizzazz to your rows and columns. Adding a swipe file of great spreadsheet formulas can make it much easier to build applications out of your spreadsheets.
On the Reading/Watching List
The Mosquito Coast is a favorite adventure book of mine - there is a limited series coming out soon on Apple TV+ recapping the classic book. Here’s hoping it will be more adventure and less angsty drama, but it will take a watch to find out.
Adam Grant’s new book Think Again: The Power of Knowing What You Don’t Know is on my list of Spring books to read because he always makes me think. Opening yourself up to the possibility of new is an excellent Spring theme.
What to do next
Hit reply if you’ve got links to share, data stories, or want to say hello.
I’m grateful you read this far. Thank you. If you found this useful, consider sharing with a friend.
Want more essays? Read on Data Operations or other writings at gregmeyer.com.
The next big thing always starts out being dismissed as a “toy.” - Chris Dixon