I am inspired by Seth Godin's insights into how and why people act the way they do.You will find that deep level of thought from the majority of successful business leaders is a requisite that takes you beyond selling widgets to consumers. Seth has even mentioned my fill in the ___ philosophy in his own daily blog, so I figured I should gather my favorite of Seth's comments here:
One theory of technology marketing and acceptance goes like this: A technology causes a media hypestorm and rising expectations. Then it crashes to Earth as the popular press and the public discovers that it's not all the hypesters said it would be--through no fault of the technologists who brought it to the world in the first place. Then, gradually, the truth about the technology seeps out until finally it reaches its use case--and then becomes that status quo, just waiting to be disrupted as it previously disrupted what came before.
While the violent vicissitudes of this chart make for good TV movies, in reality very few innovations follow this path. That's because it ignores 'being ignored.'
90% of the time, new technology triggers are widely and aggressively ignored. While we're more eager than ever for a savior that will change everything, the number of technologies, pundits, prophets and entrepreneurs is so large that there's now a line out the door. As a result, most of the things we now take for granted (cell phones, tweeting, insulated windows, email) didn't follow this curve at all.
In fact, just about every innovation I know of has to make it through the wilderness before it gets anywhere close to a hype cycle. The wilderness is the term for the years (or decades) that a founder/entrepreneur/artist/
technology must spend being ignored and unfunded before the breakthrough of overnight success occurs.
Six questions for analyzing a website
It's tempting to believe that any website can become a perpetual motion machine of profit. But before you start one, invest in one or go to work for one, a few things to ask:
What's the revenue per visit? (RPM). For every thousand visitors, how much money does the site make (in ads or sales)?
What's the cost of getting a visit? Does the site use PR or online ads or affiliate deals to get traffic? If so, what's the yield?
Is there a viral co-efficient? Existing visitors can lead to new visitors as a result of word of mouth or the network effect. How many new visitors does each existing user bring in? (Hint: it's less than 1. If it were more than 1, then every person on the planet would be a user soon.) This number rarely stays steady. For example, at the beginning, Twitter's co-efficient was tiny. Then it scaled to be one of the largest ever (Oprah!) and now has started to come back down to Earth.
What's the cost of a visitor? Does the site need to add customer service or servers or other expenses as it scales?
Are there members/users? There's a big difference between drive-by visits and registered users. Do these members pay a fee, show up more often, have something to lose by switching?
What's the permission base and how is it changing? The only asset that can be reliably built and measured online is still permission. Attention is scarce, and permission is the privilege to deliver anticipated, personal and relevant messages to people who want to get them. Permission is easy to measure and hard to grow.
Do the math on successful companies online and compare it to those that are struggling and these six metrics will help you understand the difference. For example, if the RPM is less than the cost of getting a new visitor, you've got trouble. If the site is relying on fads and occasional PR but isn't building a permission base, that's trouble too.
The good news is that each of them can be changed if you're alert and willing to do surgery on the business model and structure of the site.
The ideal structure is a business that's a platform, not merely a place to stop by. Once people move in and become members, they're hesitant to leave, they share permission over time, they tell their friends, their RPM goes up and the cost of acquiring and hosting members goes down. The real question is: are you on that path?
When "minimal viable product" doesn't work
One of my favorite ideas in the new wave of programming is the notion of minimal viable product. The thought is that you should spec and build the smallest kernel of your core idea, put it in the world and see how people react to it, then improve from there.
For drill bits and other tools, this makes perfect sense. Put it out there, get it used, improve it. The definition of "minimal" is obvious.
Often, for software we use in public, this definition leads to failure. Why? Two reasons:
1. Marketing plays by different rules than engineering. Many products depend on community, on adoption within a tribe, on buzz--these products aren't viable when they first launch, precisely because they haven't been adopted. "Being used by my peers," is a key element of what makes something like a fax machine a viable product, and of course, your new tool isn't.
Minimumviable
With enough patience and push and consistent enthusiasm, these products have a shot at crossing the threshhold. But if the mindset is "see what works and do it more," you'll often discover yourself giving up long before that happens.
2. There's a burst of energy and attention and effort that accompanies a launch, even a minimally viable one. If there's a delay in pick up from the community, though (see #1) it's easy to move on to the next thing, the next launch, the next hoopla, as opposed to doing the insanely hard work of sticking with that thing you already launched.
Inherent in the process of minimal viable product, then, is a trusting, large permission base that will eagerly listen to you, try your new work and let you know what they think. And you don't have the option of building that audience once the product is ready--that's too late.
Lifestyle media isn't a fad. It's what human beings have been doing forever, with a brief, recent interruption for a hundred years of professional media along the way. That interruption is fading away, and lifestyle media is resurging. People publish. Instead of denigrating user-generated content (what an obscure way to describe human stories), marketers need to understand that this is what we care about.
We shouldn't be surprised when someone chooses to publish their photos, their words, their art or their opinions. We should be surprised when they don't.
Improving your condiments
It takes a bold and confident cook to serve a naked hot dog. No roll, no kraut, no mustard.
And a movie shown on a bare wall in an empty room is never going to be received as well as one seen in a crowded theater.
It might be bold to put your work into the world unadorned, but it's probably ineffective.
We know that a placebo works better if it's handed to you by a doctor in a lab coat, and that the little show the sommelier puts on improves the taste of wine.
The packaging, the service, the environment, the hours, the interactions, the way it feels to tell our friends--these are all the free prize.
This bonus, the extra free prize that doesn't seem to be the point of the item itself, is often more important than the thing you think you actually make. The single most effective way to improve your impact is to do a better job of providing it.
Sure, a better hot dog is always appreciated. But when you want to increase user satisfaction, don't forget to offer better mustard.
Buying the thing your project truly needs
In our commercial culture, it's easy to buy just about anything—except the things you really need.
• Like a decision. (And the confidence to execute on it.)
• Grace.
• Persistence.
And one hundred other things that are valuable precisely because they can't be bought, can't be outsourced and don't appear precisely when needed.