This weekend popular startup publication TechCrunch ran an article reviewing Facebook’s newest feature.
“Friendshake” is an application designed to help you discover friends, and friends of your friends, that are nearby. Social discovery, as these type features are called, is not new to the startup world. Social discovery startups took the world by storm at the most recent SxSW convention a few months ago.
What’s most intriguing is going to be how this new feature affects social discovery companies like Highlight and Glancee that got the lion’s share of the attention at SxSW. Slightly less intriguing to me personally, is that one of my own startups has been active in social discovery for almost two years now. So, this is nothing new.
It is however problematic. As a startup you have only three possible scenarios when it comes to competing against larger companies that have deeper pockets.
Option 1 – You have to grow fast enough that is more attractive for the larger company to buy you out, instead of just spending cash to build their own model of what you do.
Option 2 – the larger company buys a similar company in your space.
Option 3 – out execute everyone and become the top company.
As you can see there is only one favorable outcome. In the case of Highlight, Facebook chose door number two and purchased Glancee.
The message is clear. Go big or go home.
