By narrowing its focus to women, Yahoo can beat the pants off its competitors.
By Dave McClure (Founder & Partner, 500 Startups)

I’d like to write a different open letter to Marissa Mayer that plays to both her strengths, as well as those of Yahoo. It’s a bit off the wall, but if you think it thru with me, I bet you’ll agree with the strategy.

Yahoo has struggled for the last 6-7 years – with what it stands for, who’s running the show, how to keep its employees, how to compete with Google, and how to take advantage of its amazing assets in content, communications, and community around the world. The last really bold move Yahoo made was probably acquiring Flickr (aside from turning down the Microsoft acquisition offer, or the previous hire of Carol Bartz).

Yet by tapping Marissa Mayer as the new CEO, there is still a way for the company to remain relevant, and even perhaps regain some of its former glory.

The answer is simple: Focus on WOMEN.

I’m sure you think I’m being both foolish and sexist with this statement, but consider Yahoo’s strengths: it still has huge audience that visits every day for content that appeals to women: fashion, family, shopping, entertainment, and others. In addition to these properties, Yahoo is also strong in email, chat, images, and communications, with frequent and broad usage all over the world.

Now what if Marissa used Yahoo as a bully pulpit to address the needs of a market that is roughly 50% or more of the global internet population? What if Yahoo began acquiring or partnering with properties specifically relevant to women, like Pinterest, ShoeDazzle, Gilt Groupe, BabyCenter, Oprah, People, Etsy, Ellen Degeneres, Martha Stewart (or

What about working with startups doing healthcare and wellness like EcoMom, career advice like Daily Muse, finance education like Daily Worth, children’s activities like ActivityHero and photo sites like PicCollage? (sorry shameless 500 Startups plugs there 😉
What if Yahoo went back to its vision for media and entertainment, and acquired services like EventBrite for ticketing, Hulu or Netflix for video, and perhaps picked up Zynga (which appeals to mostly women) for gaming?

What if Marissa made it known that Yahoo would be the best tech company in the world for hiring women execs, putting women in leadership positions, and advancing the opportunities for women in the workplace (as Sheryl Sandberg is so well-known for promoting at Facebook)?

What if Yahoo expanded its international advantages by focusing on half the world’s population that is still discriminated against, disadvantaged and even disempowered in many growing developing nations? Wouldn’t that be an awesome way to appeal to women globally, and be the torchbearer for women’s issues and content around the world?

While this may sound extreme, this is the Niche To Win strategy writ large – by narrowing its focus to women, Yahoo can beat the pants off its competitors. Both Google and Facebook, run by the geekiest and nerdiest of men, are clearly out of their element when faced with how to address the female customer.

And consider that in previous acquisition discussions, Yahoo was always at a disadvantage to other platform giants – but now, wouldn’t any woman-focused startup prefer to join Yahoo, run by a woman, led by women execs and focused on women customers?

So Marissa, let me suggest you make a bold move as you take Old Purple by the reins – think BIG, think DIFFERENT and think PINK.

Then go beat the living crap out of the Old Boy Network.

thx 2 Anil Dash & Gina Trapani on brainstorming 4 headline of this post.
Disclosure: shameless pimping above of 500 Startups portfolio companies EcoMom, Daily Muse, Daily Worth, ActivityHero, PicCollage… all founded or co-founded by women.

This post was originally posted at Dave McClure’s blog.

About the guest blogger: Dave McClure is the Founder and Partner of 500 Startups, a startup accelerator program and seed fund. Dave is an entrepreneur and prominent angel investor based in the San Francisco Bay Area. As of April 2012, 500 Startups had invested in 257 companies, including myGengo, Artsicle,, Votizen, E la Carte, and Udemy. Of current investments, more than 20% have participated in other incubators, 10-15% are international, and 10 have been acquired. Follow him on Twitter at @davemcclure.