QuizUp visit & Competition - Yay or nay?

On our fifth lecture we discussed competition and we also payed a visit to a startup company located in Reykjavik called QuizUp. In this post I'll go over what I learned from the visit and I'll also discuss the competition. Is it a good thing or not? I'll start with the QuizUp visit.

On 2014 QuizUp had more than 20 million users. (Source)

 

QuizUp is a mobile trivia game from an Icelandic company Plain Vanilla Games which has gotten very popular. We had a few presentations at their office about the programming aspect of their app. It was a very interesting visit. The presentations themselves were very technical with a focus on programming techniques. To be honest I did not understand most of the technical stuff but I would still say the visit was very much worthwhile since I learned a lot just by talking with the founders and hearing their story. It also helped that they had beer and pizza as well.

What I found interesting was the fact that the company was still unsure about their business plan. That was actually pretty comforting since our own startup team is also currently unsure about how to monetize our idea. It's good to know that this is a problem which others face also. I just find it peculiar that QuizUp has a very popular app with millions of users but currently no means to make money from the it. Adding adds would be a simple solution but that is a route they would not like to take.

Before we went to visit QuizUp we also had a lecture about competition. If you ask yourself is competition a good thing I think most of people would answer yes. This makes sense since for us consumers competition is good. It forces companies to keep innovating and improving their product and also helps to keep the price down. 

However, if you are sitting on the other end of the table as startup founder competition is a very bad thing. Competition is something founders want to avoid since it will distract founders from their focus on the customer and the product. Competition also diminishes profits. Striving to be first in the market by offering unique product is something much more interesting for a founder. Being the first in the market with a unique product will offer a monopoly state with very little competition as was discussed in my previous post. 

Monopolies are only bad if we're dealing with a static world because in that case they can create artificial scarcity. This was very much the case with resource based businesses such as energy and oil for example. However, with a dynamic world monopolies are a good thing. Creative monopolies will actually improve the society and make life better for everyone. These are the companies that are so good at what they do that no other firms can offer a close substitute. Creative monopolies create so much more value compared to the substitutes that customers are willing to pay extra. These companies also increase the abundance of choices a customer has by adding entirely new categories from which to choose from. These kinds of companies are for example Google, Apple and Facebook, just to name a few. These companies have successfully created something that is completely new or ten times better than the competition. 

Here's all for now. Next post will focus on growth. Until next time!