Happy 2012! Lets talk about some companies that are ripe for disruption this year. Below are 5 companies that I think are at serious risk of being unseated from their top positions in the near future. If you’re looking for ideas for a new startup, or wanting to know what startups you should be looking to join, consider these as trend lines to jump on.
GoDaddy has been the big-daddy of domain registration for years, aided by obnoxious and tactless super bowl ads which, despite all due criticism, made GoDaddy the registrar who everyone had heard of, and which many people used. They’re like the Wal-Mart of domains and hosting – if you only care about price, GoDaddy has been the go-to registrar.
They’re at the top of my list of companies itching for a takedown right now because of the recent dust up over their support for SOPA, and the ensuing exodus of domains from tech-savvy customers, but GoDaddy has been on my radar for years because of their horrible user experience. Something as simple as purchasing a single domain name turns into a dozen-page nightmare of confusing forms, aggressive add-ons and upsells designed to trick users into buying things they don’t need, and a miserable interface that would make Gandhi want to stab someone in the face. After you’ve registered that domain, managing it is often just as difficult, and despite being a relative pro when it comes to these things, I’ve had to call their phone support multiple times to figure out how to change something. God help you if you have other services with them as well.
SOPA issues aside, and those are certainly valid, GoDaddy has a huge vulnerability when it comes to user experience. Whoever comes up with a “mint for domains” will win a lot of converts, even if the price is slightly higher. I moved most of my domains out a year or so ago after being fed up with GoDaddy’s nightmare of a site, but I have yet to see someone really do it right yet. I expect soon I will. The reality is that domains and hosting and other services once the domain of the tech elite are now being sought by the mainstream, and the experience for purchasing and managing them needs to be updated accordingly.
Many people use Craigslist, but does anyone particularly LIKE Craigslist? The interface hasn’t changed in a decade, and while their interface decisions made sense in a world of dial-up connections, it’s 2012, and we all have broadband. Amazon, the world’s largest e-commerce site, has a homepage weighing in at 1MB+ and it doesn’t seem to be hurting them much.
But interface issues aside, the real opportunity here is to carve out niche’s from craigslist and create purpose-built applications. I foresee Craigslist declining as a destination, and becoming more of a repository for the fire hose of information. Padmapper.com is a perfect example of a site that adds enormous value to Craigslist apartment listings by showing them on a map, and letting users sort them by bedrooms, rent, pet allowances, etc. I expect to see a lot more sites like this showing up.
I tested these waters personally when I moved to San Francisco this summer, and decided to sell most of my belongings instead of moving them. Listing 250+ items to craigslist and then fielding all the emails from interested users was not going to be practical, so I instead set up an e-commerce site for all my stuff, allowing users to pay online and pickup later. It was a sort of virtual garage sale hybrid which worked brilliantly. Shopify even blogged about it. Everyone who purchased something from me commented about how great they thought it was, and how they wish they had done the same when they moved, or about how they had a closet full of stuff that they’ve been holding for years that they wish they could unload.
First company to replicate this and make it easy for anyone to set up a store and accept online payments with local search capabilities will steal a big chunk of classified from Craigslist. Think Etsy for local second hand goods, and garage sales are just one of many possible niches to carve out.
Does anyone really think a $17 fee added on to every ticket you buy online and print yourself is “convenient”? I sure don’t, and event venues who are losing customers don’t either. Whoever can take down this virtual monopoly in the event space will kill. Venues are getting savvy to the internet, marketing concerts and other events effectively via social media. Give them an easy way to sell tickets online in a self-serve low-cost way and they will pile on. Ticketmaster is a relic that should be sharing bin space with Blockbuster.
PayPal is a bit of a cautionary tale and a victim of their own success. Early on, PayPal experienced a flood of fraud and money laundering through it’s service, which forced it to lock down everything that looked suspicious, including a lot of false positives. I have heard at least a dozen stories of people having their PayPal accounts locked, money frozen, and business disrupted by over-eager fraud detectors. Then to add insult to injury, PayPal service representatives seem less than willing to get accounts unlocked. In fact, I was concerned that a sudden influx of thousands of dollars in my moving sale might trigger this, but I had no other choice.
We need another choice. Square and Swipe and others are popping up and have interesting offerings, but nobody is really taking PayPal head on. There’s an enormous opportunity for whoever can properly balance fraud protection and customer service, giving consumers confidence that they won’t have their account locked down as soon as something they’re selling gets popular and successful.
All of it. 2012 is the year where companies start to embrace “bring your own devices” in the workplace. That means lots of personal iPhones instead of company Blackberries, lots of SaaS instead of on-premise, and it represents a huge opportunity to start building B2B apps aimed at the workplace that don’t require a giant PO from the CTO. Employees will take it upon themselves to buy software personally, and simply expense it. This is a sales model that traditional enterprise software companies do not know how to manage, so expect them to stumble. This is also where I’m placing my personal bets this year, with Selligy.
Looking ahead, what industries and models will be in decline in 2013 and 2014?
Post script: Who isn’t ripe for a take down?
Facebook. Forget about it. They’re still on the upswing, they haven’t peaked yet. They’ll need a few more years to get big, slow, and bogged down in bureaucracy and legal entanglements. If you want to make a Facebook killer, now is not the time. Wait for them to look more like the companies above, then take aim.