Let’s say you want to build a website that relies on ad revenue. Basically, how do websites like Yelp! and Angie’s list protect their concept from competitors?
In: Technology
Because ‘concepts’ are usually not worth anything really. It’s the same thing with aspiring writers who don’t want to share their drafts because they are afraid that someone steals their idea. Honestly, if anyone gives a shit about their book enough to read through it, it’s already a huge success
By being bigger and/or better.
The only *legal* protection for ideas is a patent. Patents were originally designed for mechanical processes and physical designs.
Getting a patent on software is (a) difficult and expensive (tens of thousands of dollars, if not more) and (b) not a surefire protection.
Just getting the patent is a challenge. To be award a patent the idea has to be a *unique, original* invention and that’s *really* hard to satisfy in the software world where everything builds on everything else. If you want a realistic chance of being awarded a patent, you need to hire a patent attorney to help you with the filing, and that’s going to set you back thousands of dollars.
Even if a software developer gets the Patent Office to award the patent, defending it in court can be difficult, expensive, and result in spending a lot of money on lawyers, still not being able to win the case, and losing the patent protection.
And because of the requirement that every patent be original and unique, they will almost *never* cover something like “neighborhood reviews, but online” (Yelp) or “classified listings for local handymen but online” (AngiesList). Just doing something that already exists, but doing it online will not satisfy the unique and original requirement to earn a patent on the idea.
So the only legal protection — patents — are not a reliable mechanism to protect your idea for a website, especially if the company lacks resources.
Which is why companies turn to (a) scale and/or (b) a superior experience for customers.
In a space where there may be multiple competitors, the company that can reach “Internet scale” (millions of users) first stands a better chance of winning the market because many online platforms rely on “network effects.” I.e., Yelp is valuable because lots of people use Yelp; that’s a “network effect.” More users = more reviews and more users consuming reviews, and that makes business more interested in being listed on or advertising on Yelp.
Even if a new site that has better interface or technology comes along, it can be difficult to unseat an existing leader if it doesn’t quickly gain enough users. A review site with very few users and very few reviews isn’t going to be very interesting to businesses looking to advertise.
But sometimes just being better is enough, especially if the product doesn’t rely on user-generated content for its value. When Google launched there were over 20 Internet search engines in the market vying for a leadership position. Because Google’s algorithm (PageRank) was so significantly _better_ than the methods that other companies used at delivering users the results they were looking for, within a few years Google became the leader and within a decade had more than 90% of the global search engine business. The original Apple iPod wasn’t the first MP3 player by any means, or even one with the best interface. But Apple leveraged the integration with the existing iTunes app and, more importantly, tied in the iTunes Store where (for the first time), you could buy digital songs for $0.99 … and that differentiated them enough from the compeition (i.e. made for a better experience) that they quickly were able to dominate the MP3 player market. And so on.
At minimum everyone who worked for them or partnered with them in any capacity needs to have signed a non-disclosure agreement protecting confidentiality.
They don’t above the bear minimum. They rely on building a community that believes in their services, listen to their client base, adapt where needed.
Latest Answers