‘Too convenient to fail’ was a phrase coined recently by Matt Levine of Bloomberg. He coined it in the context of how some of the biggest American banks, whose earlier philosophy used to be that they try and become ‘too big to fail’, are now taking a different approach. These banks now aim to become ‘too convenient to fail’ and thus eliminate competition from smaller and local banks. Not too dissimilar from what Amazon is doing to retail. These banks, and Amazon too, can do so by virtue of them being big.
The idea of becoming ‘too convenient to fail’, however, is a philosophy any startup can adopt right from its inception, as a way of ensuring longevity of the business. The obvious success stories here are Google, when it comes to search, and Uber, when it comes to getting around. Well, before they became the behemoths that they are today, they had already insured their existence by always making sure that they are the most reliable and convenient option for any user who wants to either search for information on the Internet, or hail a cab. I talked of how entrepreneurship for many is a cult that they choose to belong to. And of all the ideas that this cult worships, the idea of being the most convenient option to anyone using their product or service, is by far the least evil one.
There are a few other ways that ‘too convenient to fail’ can pan out too. There are some startups that grew bigger and bigger on how utterly convenient they were, and attracted bucketloads of venture capital, but are still constantly trying to figure out how they can possibly make money. Here’s looking at you, Twitter. There are also startups like Splitwise, which has been around now for half a decade, very widely used, without even the beginnings of any plan to make money. Another way the ‘too convenient to fail’ plot plays out is what happened in the case of IMDb, everybody’s go-to website for all things movies, which eventually got bought by Amazon, because as Amazon’s plans grew into streaming video content, IMDb’s extensive data on movies and TV shows became an ideal integration.
One luxury that being too convenient to fail offers startups is a moral upper ground, which can then be leveraged to raise capital in ways other startups cannot. Take Wikipedia, or the Wikimedia Foundation, for example. Nobody gives them too much grief when they periodically solicit monetary contribution to keep them going.
If you think of Indian startups, there do seem to be a few companies whose longevity has been ensured because they chose the ‘too convenient to fail’ route. Swiggy and Zomato are possibly the best examples. While these companies may not be raking in profits, they have enough stickiness to make themselves valuable to investors, who want to play the long game. India is a market where there is a serious deficit of convenience across many sectors, and it really is an opportunity for many ‘too convenient to fail’ startups to blossom.
The author heads product at a mid-sized startup in the real estate space
