Picking a fight with an 800 lb gorilla, startup marketing | Hacker News Reader

Picking a fight with an 800 lb gorilla, startup marketing

wepay.com

119 pointssophmonroe26 comments

Great description of when they realized how valuable the comparison with PayPal could be: "The first time we actively embraced the PayPal comparison was when PayPal froze the account of the Flux foundation – a non-profit arts organization – just a few days before the Flux Crew headed to the desert to build their famous Temple at Burning Man.

The Flux Foundation and a bunch of other people and organizations collecting donations ended up turning to WePay in protest (and in desperation). Our pitch was easy: yes, you can use WePay instead of PayPal. WePay.com is better than PayPal for collecting donations, and we won’t freeze your accounts.

After that, people started referring to us as the consumer-friendly or “community-oriented” version of PayPal. CNN actually referred to us as the anti-PayPal."

Really amazing and Funny

Something I'd be very interested to hear about is how WePay is going to handle fraud. Fraud and abuse prevention is a huge part of what PayPal does and I would guess the major reason behind their atrocious customer service and the issues with groups like the Flux foundation.

It seems like every other week on Reddit there is someone who says they have disease X or is raising money for disease X and would you please PayPal them some money. This is immediately followed by a bunch of people digging internet dirt on that person and declaring them a fraud, which is then immediately followed by another group of people telling the first group that the person is legit and that they made them cry.

I don't even know how you start to deal with that situation as a financial entity. Do you call the person up and ask them if they have cancer? Do they fax you medical records?

> Fraud and abuse prevention is a huge part of what PayPal > does

Interview with Max Levchin in "Founders at Work" is a good read in this context. After long part about fraud and prevention of it:

  Linvgston: So is PayPal in a sense a security company?
  Levchin: I think a good way to describe PayPal is: a security company
  pretending to be a financial services company.<…>
  So the company's core expertise, by definition, has to be in this
  ability to judge risk<…>.
  Livingston: What did you do that your competitors couldn't?
  Levchin: The really complicated part is figuring out the risk.

Agreed completely, I'd heard a separate interview with Max Levchin where I believe he quoted the amount of money that PayPal lost at around $150 million (IIRC). That was their "learning money" to figure out how to handle fraud.

Seeing as how Mr. Levchin has actually invested in WePay I'm assuming that they are have some strategy for fraud prevention.

   It's also not easy for big companies to change course, add
   features, iterate, or experiment. PayPal can't simply decide
   to shift its focus toward consumers, nor would they want to.

This reminds me of an outstanding article I read some time ago which advised: "Attack your competitors' strengths, not their weaknesses." In other words, WePay might have failed if their goal was (for example) just to provide better customer service, PayPal's weakness. This is because PayPal could ostensibly improve their customer service without affecting their bottom line. Merchant-oriented services are PayPal's strength, and WePay "attacked" that strength by catering to non-merchants, which, as the article states, they could not do without a core shift in values and focus.

I'm incredibly intrigued by the advice from that article, I'd love to read it. Do you remember where it's from?

Sorry... I searched for it, but for the life of me I can't track it down. I think the original article was talking about DuckDuckGo and Google; the "strength" in that case was Google's information-gathering: Google's bottom line is partially defined by using the information it records about its users to drive advertisements and other usability tweaks (such as marking search results with stars, etc). By focusing on privacy, DDG "attacked Google's strength"--Google can't compete with DDG on privacy because it's precluded by what Google does best.

You can obviously frame "lack of privacy" as a weakness of Google, but the important part is that it's a weakness that can't be addressed without huge changes to work around their established strengths.

I agree with all of your points, but I think it's important however to note that there have been successful entrepreneurs who have offered similar products/services as the 800 lb. gorilla and have succeeded by being better than their competition which of sometimes means improved customer service.

Taking an example from the article, when Richard Branson joined the airline industry and took on British Airlines his main leverage was better customer service. They installed seat-back televisions in their planes and focused on hiring attractive and friendly stewardesses. Their product wasn't all that different from British Airlines, but they packaged it in a better way.

I think it would have been interesting to see if WePay was in the merchant-oriented business and see if they could have beaten paypal at their own game. It might sound crazy, but I think with the right marketing and company mantra it could be done.

I'm not sure if Richard Branson is really a 'little guy' taking on an 800-lb gorilla, but the idea of taking on competition by actively inciting them has worked many times.

It would be especially effective when:

- you are able to gain significant attention (press, viral) over your comments/attack

- the 800 lb gorilla doesn't even know you are attacking it

He is an 800-lb gorilla that thinks he is stronger than all the other 800-lb gorillas.

Always interesting to see two beasts battle.

I posted this as a comment on the blog, but it kind of disappeared... so whatever.

I mentioned that sometimes the 800 pound gorilla isn't as slow or bureaucratic as you would think. With PostageApp, we have several large competitors (SendGrid and MailChimp) and they are frighteningly good at pivoting and offering new and exciting features.

I'm having a really fun time watching the developments of all the players in our industry. If you can take something away from fighting with the 800 pound gorillas, it's that you will learn a lot.

SendGrid and MailChimp might be large competitors relative to the size of PostageApp, but the scale difference is orders of magnitude less than the scale difference between WePay and PayPal.

I counted 18 people on the "team" page of SendGrid, and MailChimp's website lists them as having about 70 people working for them. I haven't been able to find exact numbers of employees at PayPal, but I know it's easily into the thousands, and very possibly into the tens of thousands.

I think you have a good point: that relying on being able to move faster than your competitors can be dangerous if your competitors aren't actually slow. I don't think you can really make an accurate comparison between SendGrid/MailChimp and PayPal though. The scale (and culture) is just completely different.

You are completely right, they are huge relative to the size of PostageApp, but they are the 800-pound gorillas in the industry.

There are other, much larger companies such as Exact Target, Eloqua, and Constant Contact, but they serve a different market and are not directly in competition with us.

Wasn't a completely accurate comparison, but just an anecdotal way for me to explain that not all competitors are slow. :)

WePay is awesome. I found out about them a few weeks back and within seconds had a account ready for my skydiving group to get going.

I'm still waiting on support for outside the US & it would be nice for them to support transactions & become a full-fledged paypal competitor, but with leadership thinking things through this well, I'm really hopefully we'll finallY have another alternative.

Still doesn't help individuals selling products online and are stuck using paypal and risking having their accounts frozen.

stay tuned...

... for support outside the US! =)

I kid, I kid! Much love from someone whose spent 10 years now dealing with banks and the credit card companies.

the two requirements are pretty related.

Not many consumers (besides people collecting donations) need international, and very few merchants would be happy without it.

It's been made clear to us that this is a pretty big opportunity.

Don't worry, I know better then most all the issues you face in doing what you are doing, and frankly, you're being smart about it, which is why I'm rooting for you. =)

Apropos, but not directly pertinent information: male Gorillas range in weight from around 200-400lbs. The Wikipedia entry on Gorillas says they've reached around 600lbs but those were very obese Gorillas in captivity.

I certainly understand the idiom, but it's probably useful to remember it in context. You never know when you may need to know the approximate weight of a gorilla, and relying on a faulty idiom may just bring you into harm's way :>

That is an interesting piece of information. :) Thanks for sharing.

I hope I'm not alone, but it's impossible for me to differentiate what you do versus as something already provided by PayPal.

PayPal was revolutionary, but WePay seems something that PayPal already provides.

Borland (with their IDEs and Quattro) taking on Microsoft is akin to a little-guy taking on a 800lb gorilla.

I fail to see the parallel here.

I'm not sure which comments to answer first: The ones that say WePay is nothing like PayPal and the comparison is misleading, or the ones that say WePay is just a feature of PayPal and therefore undifferentiated.

We'll just keep building the product and let people decide for themselves.

Not the best video in the world, but check this out: http://vimeo.com/18765571

If you were to make a demo video of PayPal, what would you show?

I believe WePay provides something that Paypal doesn't (or atleast not easily ) i.e. ability to split payments between multiple users/collectors using multiple accounts. Paypal X/adaptive can possibly provide some of this functionality but WePay does it better and signup is much easier is my guess.

In time WePay may evolve to be revolutionary. Remember once upon a time all paypal was a peer-2-peer money transfer service.

If you take a picture of someone, don't stand close and your camera in wide angle. Move away and zoom in. Your picture will look more realistic. When you stand too close the wide angle makes the centre part of the image look fatter because it is a fish eye. Model photographers never stand close to a model. The same for your webcam.

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