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Startup Secrets?

May 10, 2008

When we developed the ‘buyer pays’ interconnection model at LayerOne it WAS our business model.  It was our ’secret sauce’, but we had to reveal our model to everyone if it was going to be a success.  Ironically, we had to convince our competitors to accept it as well if we wanted to change an industry.  We did and interconnection will never be the same.

We faced the same problem at Architel.  Our model of aligned interest, shared risk by offering all-you-can-eat IT support for a flat monthly fee was unique in 2001.  Small businesses were used to paying for IT support by the hour and our model was so new many clients didn’t believe we could really offer it.  They assumed there must have been a catch.  We needed someone else in the North Texas market to validate our model so I began meeting with each of our competitors explaining our business model and exploring the potential to partner or acquire their companies.  By 2003 half of the companies I met with had augmented their models to include a flat fee model.  The half that didn’t were either acquired or went out of business.  By telling our competitors our ’secret’ they were able to copy it ultimately validating our model throughout North Texas.  Today clients expect our model.  Did we make a mistake by sharing it?  I don’t think so.

Mike from Everonit insists that his competitors ‘Be ORIGINAL!‘ as he complains about a competitor that has ‘ripped off’ their website.  My advice to Mike: send your c&d letter and chill.  You are obviously winning!  We had a similar situation arise a couple of years ago when another company literally ‘lifted’ our website design:

Written by Alexander Muse · Filed Under Blog, Startups 

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