So, how does one define and identify this “one thing”? What exactly is a feature? A product? And, what do investors consider to be businesses?
A matter of perspective
Here’s the secret: investors themselves often struggle to delineate the difference among these identities. Wasn’t Twitter just the status bar feature on Facebook? Facebook Places launched in 2010, a year after Foursquare. Did Foursquare then qualify as a feature?
Bill Gurley from Benchmark Capital drew criticism after claiming Dropbox to be a “major disruption” because the team “had taken a hard problem – file synchronization — and made it brain dead simple” as disbelievers fell into the Steve Jobs camp that file sync is a feature, not a product. Rory O’Driscoll from Scale Venture Partners came to Gurley’s defense, stating that the feature label should be taken as a compliment. “To get any traction in software today you have to start with a feature — an atomic unit of delight. You have to solve one problem superbly.” Dropbox is currently valued at over $4 billion.
I face a different version of this misunderstanding frequently. The historical differences between B2B and B2C is a derivative of product and feature dichotomy above.
Lumatic’s revenue is comes from the use of our Map SaaS outside our iPhone app, so I am frequently asked, “When are you going to discontinue your app and focus on your API?”
Answer, “We can’t. The app, with its million monthly searches, etc. is the only way our API advances and remains the best thing our customers can license.”