Jack and the Startup Bean Stalk
If only there was a single idea that could make any startup succeed, huh? Well, it does exist: a business seed that, planted and watered, will grow to the sky. And you can have it without even giving me a gold coin.
Here it is: enable your users to thrive by using your product in a way that expands its utility to others.
First stop: think about how Microsoft beat Apple in PC Wars I: by opening its platform for developers, who could profit handsomely by developing and selling Windows applications. That drove the utility of Windows PCs, which quickly outpaced the more elegant, but closed, Macs in sheer usefulness. Internal development, even by the insanely great, couldn’t match the whole world’s inventiveness and drive.
Steve Jobs learned his lesson well. Not only is the iPhone open to developers: Apple provides them an entire development, distribution, marketing and monetization system. That took the idea of an open system to a new level, and accounts for much of the iPhone’s success.
But you don’t have to create operating systems or paradigm-shifting devices for the idea to work. WordPress dispatched Six Degrees because its developers could develop and sell templates; it’s core product became more useful than the competition’s as a result. E-bay has created legions of power-sellers who live off online auctions, but who also make E-bay an incredible place to shop. Both the HuffPo and Twitter work because they allow content creators to reach large audiences, burnishing the author’s personal brand in a way that’s otherwise not possible. Sure, the companies derive fabulous benefits from the free content; but the authors get easy, massive distribution.
Accelerating other people’s businesses is itself a fantastic business. This is especially true in our “many hats” economy: as large employers fade, nearly everyone is juggling several part-time activities to make money. So, help them. In a weird way, you can draw inspiration from the old “multi-level marketing” systems, like Tupperware. In the digital version, however, you can engage many more people, much faster, and get away with providing less reward to each one.
It’s not so hard to accumulate users when they can look at their time or money spent as an investment in their own prosperity. Work it so your company’s offering becomes more powerful at the same time and you’ll be waking up giants.
Written by Bob Rice
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