Cuil – Founders View

Many companies are started to ‘attack’ a sector than is ‘held’ by another company. This sector is usually very valuable, which is the reason why start-ups try to capture these sectors.

The problem is, you don’t capture sectors, you capture markets. And when you have no customer focus, you probably won’t capture customers and as a consequence, you won’t capture the sector.

My thinking here goes as follows. Very successful companies come to dominate or create a sector because they were able to provide a unique (at least when they started) service that was (and probably is) of great value to customers. Subsequent generations of start-ups then try to ‘take that business away’ from the incumbents. This can work. However, it can only work when you manage to win over the customers. You can only win over customers, when you have a value proposition that is significantly better than that of the incumbents and that is actually valuable to the customers. If you don’t, then you can’t win the market. And if you can’t win the market, you won’t be able to win the sector.

The company that people seem to target a lot these days is Google. The reason is obvious, Google makes a lot of money and people want that money.

The latest start-up that seems to try overturning Google is called Cuil. I have probably read some 10 articles about them yesterday. Great press coverage. Indeed, it was so good, people commented on it. However, all that the press coverage seems to focus on is that Cuil wants to ‘kill’ Google. Hardly anybody seems to be raving about the features of the site. I haven’t read once an expression along the lines of: “Gosh, now this is how search should be!” Not once. Read what TechCrunch, GigaOm, and ReadWriteWeb wrote.

Cuil actually has some very interesting technology that allows it to operate its search engine at a faction of the cost that it takes Google to run its operations. This is very interesting and it is actually useful. However, it is in no way useful to the users or the customers of a search engine. Unless Cuil can find a way to translate that advantage into something that actually means users have a significantly better search experience, why should they care?

Cuil’s natural target market is the people who have a pain that they can make go away: search engines. If Cuil can significantly lower operational costs of search engines (and maybe even other companies, who knows), then these search engines would probably be very interested in talking to Cuil.

Cuil has decided to, at least according to the press, ‘kill’ Google. What a shame. There is no unique service there that I can see right now that is of great value to the customer. They could have helped Google and all other search engines to become even more successful by lowering their costs. There is some real pain there and some real customers.

Don’t kill. Make pain go away. Make happy.

UPDATE: Funnily enough, I am not the only person going through this thought process. Just saw a post by Jason Calacanis here and by Fred Wilson here.

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