Korva is a scroll of the internet’s best ideas.
Start with a tiny market
Tiny starting points
Amazon began as a bookstore with more books than any other store in the world, and expanded into every form of e-commerce from there. eBay began with Pez dispensers, moved on to Beanie Babies, and grew into auctions for goods of every kind.
PayPal and Facebook
PayPal began with eBay power sellers, about 20,000 people, right after its launch around December 1999 and January 2000. They looked like terrible customers, people selling junk on the internet. But PayPal built a product that was much better for that whole group and reached something like 25 to 30% market penetration in two or three months, with some lock-in and brand recognition. Facebook began with 10,000 people at Harvard and went from zero to 60% market share in ten days. Business school analysis would have judged these markets too small to be worth anything.
Clean tech's huge market
Clean tech went the other way. Nearly every clean tech pitch deck between 2005 and 2008 opened with the energy market, measured in hundreds of billions or trillions of dollars. A startup in a market that size is a minnow in a vast ocean, with competitors it cannot even name: the fourth online pet food company, the tenth thin film solar panel company, the hundredth restaurant in Palo Alto. The restaurant industry is a trillion dollar industry, and a market size analysis would call it a fantastic business to enter.
Why did eBay power sellers need PayPal so much?
Power sellers handled a steady stream of sales to strangers, and waiting for checks or money orders to arrive slowed every one of them. A payment that cleared in minutes let them ship sooner and run more auctions. Because they made so many transactions, the time saved added up faster for them than for occasional users. eBay bought PayPal in 2002 for roughly 1.5 billion dollars in stock.
How did Facebook grow so fast at Harvard?
Facebook launched in February 2004 as a site open only to Harvard students, who needed a Harvard email address to sign up. A network is more useful when the people you already know are on it, and a single campus packed those people together. Within months it opened to students at other universities, each one added the same way.
Why was a bookstore a good place to start online?
Books are standardized, easy to ship, and come in an enormous range of titles. A physical bookstore has shelf space for tens of thousands of titles, while millions are in print. An online store could list far more than any building could hold. Amazon opened in 1995 describing itself as the earth's biggest bookstore.
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