Becoming A Platform: How RunKeeper Continues To Keep Competitors At Bay

from the business-model-jujitsu dept

Last year, we wrote about the very interesting case of RunKeeper, a small startup, which initially focused on software for iPhones for people to track their running information, and how it successfully outran Nike and other big sporting goods companies. This was in response to the claim we hear all the time that a small company "can't compete" with some big company that can just "copy the idea and throw lots of money at it." The reality is a lot more complex. Can big companies sometimes do that? Absolutely. Does it happen that often? No. The reasons aren't too difficult to understand. If the innovation is truly disruptive, the big companies are often at a steep disadvantage: (1) They don't fully understand the innovation or really why consumers/users want it. Instead, they understand the superficial reasons and that's all they copy. (2) They are held back by legacy issues, and their legacy business model, which might be undercut by the true innovation. That was definitely the case with RunKeeper, which could be brand-agnostic in its solution, whereas players like Nike and Adidas were somewhat held back.

Since then, I've been following the situation with RunKeeper pretty closely (and got to meet CEO Jason Jacobs a few months ago, where we got to totally geek out on innovation and business models). Anyway, the company has now taken things to the next level, distancing itself even further from the competition. Over the past few years, the company has added ways for other data and systems to hook into RunKeeper, which has become a wider "fitness" app rather than just a running app. One of the things that the company developed during this time was a "Health Graph" that pulled a lot of this info together in a very useful manner:

Imagine a system that can identify correlations between a user’s eating habits, workout schedule, social interactions and more, to deliver an ecosystem of health and fitness apps, websites, and sensor devices that really work, based on a user’s own historical health and fitness data. The Health Graph has the potential to completely alter the health and fitness landscape.

But where things get really interesting is that RunKeeper has now opened up the Health Graph API so that others can not just tap into Health Graph but build on it as well, basically letting all sorts of other services and devices build on this pretty cool and complete platform -- something which the other players in the space simply don't have:

What does this mean for device manufacturers and developers? They now have the opportunity to build an endless array of apps, that draw on the powerful data within the Health Graph. Health Graph developers also benefit from the social features on RunKeeper.com to gain exposure and drive sales. Social features, like our FitnessFeed and Facebook & Twitter sharing integrations, are a fundamental part of the RunKeeper.com experience; we’re opening up these forums to apps and devices that build on the Health Graph, to provide our 6MM+ community members with easy access to all the tools that integrate with RunKeeper.

I find this especially interesting considering our recent discussion on platform reliance, and how the big opportunities are in becoming your own platform. Think about this for a second: many people dismissed RunKeeper, early on, as a small app for tracking running info, and lots of people assumed naturally that once the "big players" got into the ring, RunKeeper would inevitably be crushed. But RunKeeper has continued to innovate and continued to focus on that core goal of making the overall "fitness" community better informed and better able to do things with their data, so that they're able to stay ahead of the big guys, even though we're talking about some of the biggest companies around, with tons of cash and the most recognized brands in the world.

Filed Under: business models, competition, platforms, small companies
Companies: adidas, nike, runkeeper

How Patents Are Harming Small Companies Too

from the it's-not-big-vs.-small dept

One of the more annoying things about the whole debate on patent reform is that some have tried to position it as "small companies" vs. "big companies." That's not even close to true. While there have been plenty of high profile fights between patent holders vs. big companies, that's only a small part of the issue. And, in fact, it's often smaller, more innovative companies that are the most harmed by patents. Joe Mullin has a great post looking at how small mom-and-pop photo sharing sites are being hit with a bunch of patent infringement lawsuits. Basically, a few different companies are all claiming that they own patents on the ideas behind photo hosting online. But, of course, since the idea is so obvious, there are a lot of photo hosting sites out there, including many run as small businesses. Yet, they're getting hit by patent infringement claims which seem ridiculous to them. But... since the cost of going to court (or, even getting a patent lawyer to talk to them) is so outrageous, some are choosing to settle -- even though it's taking away from being able to do valuable things, like invest in the business. It's a sad story of patent holders (often with no product being offered themselves) harming lots of small businesses.

This is a big issue. Whenever the rather vocal group of angry inventors show up in our comments defending the patent system at all costs as being "necessary" for "the little guy" they seem to conveniently ignore all the "little guys" harmed by the patent system. What about the guy who thought the idea was obvious and didn't bother to get a patent, but now has to fight off an infringement suit by someone who did get a patent on the idea? What about the guy who invented the same thing just slightly later, but understands the market better and can do a better job bringing the product to market? What about the guy who can put a bunch of different ideas together to make a much better product, but is unable to because multiple patent holders all want a huge % of his earnings? Time and time again we hear stories of small businesses who feel the patent system is holding them back in significant ways -- and it's a true shame.

Filed Under: patents, photo sharing, small companies

The Big Company Doesn't Always Win

from the a-reminder dept

In our debates over the patent system, one message is repeated over and over again by those defending the patent system: that it's needed to prevent big companies from coming in and stomping out smaller companies. Unfortunately, the evidence just doesn't support this. Yes, it does happen sometimes, but there are so many examples of smaller companies outrunning bigger companies that the idea that a big company can easily beat a smaller company is just rubbish. In fact, the NY Times now is running an article noting how no large tech company has ever really been able to thrive through multiple generations of technologies. A smaller, more nimble "game changer" comes along and out-innovates the larger company -- in many cases because that larger company isn't just slow to react, but also because they have legacy lines of business that prevent them from fully embracing the cannibalizing nature of disruptive businesses. Once again, this highlights the the importance of the process of innovation, rather than just the idea. The big company with lots of money may get "the idea," but if it can't full embrace it, it won't do a very good job implementing it. So, while big companies do have some advantages, it's a clear myth that any big company can step in, take a smaller company's idea, and succeed with it. Microsoft outran IBM. Google outran Microsoft. Netflix outran Blockbuster. YouTube outran Google (and then got bought by it). The list goes on. Being smaller doesn't mean you can't win against a larger player if you do a better job providing what customers really want.

Filed Under: big companies, small companies, tech industry
Companies: microsoft