Brayden Haws

November 12, 2022

How to Compete with YouTube (or Die Trying)

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When a market looks homogenous and saturated, how can you stand out? How do you differentiate your product to carve out market share? These were the questions asked by companies trying to get into video hosting in the early 2000's.

At the time YouTube had begun to assert its dominance in the space. It was the first video platform to allow anyone to upload content. This first mover advantage gave it a huge share of the market. The company’s popularity was further bolstered by its ease of use and its focus on treating every user as a content producer. It was a model that worked for YouTube. But it wasn’t necessarily one that other companies could replicate. To take market share competing companies would need entirely different product strategies.

One of these companies was Megaupload. Instead of looking at users as producers they looked at users as consumers. This meant their product focused on users watching videos rather than producing them. They also saw the opportunity to capitalize on the user’s desire access content quickly. They designed the product to be fast and easy, allowing users to access their videos without any lag time. It also had less strict content guidelines, allowing for content that wasn't allowed on YouTube. This strategy proved to be very successful in the short run. The company had an estimated 200 million users and generated $175 million in revenue before it was shut down. (The FBI took issue with the content that wasn't welcome on YouTube).

Vimeo was also trying to enter the market with similar products but couldn’t compete with YouTube’s dominance. So how did they break through? By going after a different segment of the market, one that YouTube wasn’t serving well at all: high quality content creators. This focus allowed Vimeo to grab share from YouTube and have sustained success. They developed product features like a high quality uploader, and a focus on curation. Vimeo is also known as “the place where filmmakers share their work” and has a much higher quality of content than YouTube.

As product leaders looking at a market that appears saturated,  remember that there are several ways to attract users:
  1. Look at the user base from a new angle. Youtube focused on content producers so Megaupload went after consumers
  2. Further segment a user base. YouTube was for every producer, Vimeo focused on the more professional class of producers, and pulled them away from YouTube

As the product manager you are the best person to identify what strategy will work for your product. You know your users and can identify new approaches to engage them. Also, don't be afraid to look outside the box for inspiration. Sometimes, taking a different approach can get you much further than you would have thought. Good luck!

(Inspiration for this post came from reading Platform Revolution, which is essential reading for any product manager working with a networked product.)

About Brayden Haws

Healthcare guy turned tech wannabe. Doing product stuff at Grow. Building Utah Product Guild⚒️. Created the PM A.M. Newsletter. Curated the Patchwork PM Bible. Built SpeakEasy. Constantly tinkering on my 🛻. Occasionally writing poor takes on product strategy and technology.

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