I need to take a couple minutes here to do something I've been meaning to for along time: Thank Heroku for being so baller.
Many people know that I'm a big fan of the "release early, release often" motto that still echoes from my days going through YC as an early developer with Frogmetrics. When I launched Snapm I tried to live by this mantra as I built and released v1 in a little under a month. That proved to be one of the most valuable decisions I made as it allowed me to get plenty of feedback and early user testing way before anyone normally would have seen the working site. In my latest project, JumpPost, I attempted to push the boundaries of an early release even farther by rolling back the curtain as soon as the product did one simple thing. (The JumpPost background and story to be written about in a future post). Why do I do this? A couple of reasons.
Normally I don't like it when startups describe themselves as, "Trying to revolutionize X." Everyone is trying to start a revolution, and very few companies really end up affecting massive revolutionary change in the world. Instead, it may be more appropriate to be honest and say that a startup is, "Trying to carve out a small piece of market X." After all, a small piece of a large market is generally good enough.
- No paper receipts – why would I want a 3 inch piece of paper when I buy a soda?
- Searchable online receipts tracked at the item level and not the merchant level.
- Centralized online transaction manager containing said receipts so that you only have to go to one place to organize all your spending.
- Automatic expense report generation and tie-in.
- Electronic submission of expenses and receipts to IRS.
- Don't have to carry 6 different credit cards.
- Don't have to carry even 1 credit card.
- Ability to pay anyone, anywhere.
Why are professionals with years of experience and talented work to show off nervous that amateurs and hobbyists will steal work from them?
There’s been a bunch of buzz among internet photography communities lately about the hypothetical “$500 wedding photographer.” Does he have the right to undercut the competition so dramatically in order to make a living for himself? Or is he doing a disservice to the entire photography profession by offering his work at such a low price? There are of course, views on both sides, but many longtime professionals are adamant the undercutter is ruining their industry.
But shouldn’t the price be determined by the market, and not by an artificial point agreed to by the industry brass?
My new startup, Snapm.com, is a marketplace that connects amateur photographers with paying jobs. Not unexpectedly, the reaction from amateurs and up-and-coming photographers has been positive, but the reaction from professionals has been incredibly negative, bordering on angry. The amateurs on the site are happy to charge $50/hour for jobs, whereas many pros are accustomed to making over $1000 per shoot and upwards of $5000 for a wedding.
These professionals are worried that the young up-and-comers will take work from them. But should they be? If they are providing a superior product (much higher quality photography), at a price that the market can bear, then they should have nothing to worry about. Believe it or not, I’m the first to recommend to people that for a once-in-a-lifetime event like a wedding, they should hire a proven professional. It will be worth it, and you’ll notice a clear difference. But there are plenty of other events where no matter how important it is, there’s no way to afford or justify a $300/hour photographer. It’s these occasions where hiring an amateur at a much lower price isn’t taking any work away from a professional at all, and instead is creating a new opportunity to use a service that wasn’t affordable before.
Long Tail Marketplaces As A Growing Trend in Startups
I have seen these lower end markets as a growing trend in startups over the past few years, and it’s a trend that serves the consumer well and keeps markets honest on the whole.
In the case of Etsy, longtime professional jewelry designers can’t be excited that people are buying homemade craft-jewelry from do-it-yourselfers over the internet. And hotel managers definitely can’t be thrilled by the prospects of travelers opting to rent people’s extra bedrooms through Airbnb when traveling to a new city. Much like pro photographers aren’t jazzed about people booking hobbyists through Snapm to shoot portraits of their families.
But what the high end jewelers, proprietors, and photographers don’t seem to get is that in these cases the option isn’t between paying for a professional or paying for an amateur, the option is between paying for an amateur, or not paying at all. There will always be customers who will buy the fancy jewelry, will spring to stay at the Four Seasons, and will book the experienced wedding photographer. But there will also be people who wouldn’t buy jewelry that cost over $30, wouldn’t travel to New York City if they didn’t have an apartment to crash in for under $100/night, and wouldn’t hire a photographer to shoot their Christmas party if they couldn’t find one for $40/hour.
If professionals are looking to compete in these lower end spaces, then they need to get honest with themselves and appreciate what the market is willing to pay, instead of artificially trying to manipulate prices through pressuring their less-experienced colleagues. Provide a great service, and you’ll succeed, and make plenty of money in the process. But if you’re worried that people will opt for amateur level service over what you’re offering, then maybe you better take a good look at the work your producing and make sure that you’re really charging people what it’s actually worth.
Trying to keep prices artificially high is a remnant of the pre-information age. It’s fighting an uphill battle that will inevitably be lost. With Craigslist, and startups like Etsy, Airbnb, and Snapm, consumers now have access to true price points that work for both the buyer and the seller. And what was once never an option, is now as easy as point, click, pay.