Network Effects, The Startup Hustle, & Sweet Marketer-Engineer Love

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Bear with me here; this was originally three different posts, but I quickly realized the crucial connection between all topics involved.

If you’re even remotely following the startup world / new sharing economy, you’ve noticed all the two-sided marketplaces sprouting up – Uber, TaskRabbit, Airbnb, Handybook, Elance, Lyft, and so on. They all face a pretty common challenge, which is the chicken and egg problem. These platforms do not offer prime value to either side until network effect is achieved on a relatively large scale (when Member X joins, Member Y benefits). And this isn’t exclusive to strict buyer-seller services, as it’s also in play for companies like Tinder and CoFounders Lab. I’m currently working with a few startups that fall into this category, so I thought it useful to research and outline some real-life examples of solving this problem. This will lead right into my next two points: 1) startups need biz dev hustlers on Day One and 2) engineers should cozy up with marketers much closer and much earlier than they typically do.

Udemy: To fill the site with content (since convincing professors and professionals to set up online courses on the empty platform wasn’t quite working), the team cross-posted hundreds of courses that were already online – in different places, mind you – and free. This was followed by personal 1-on-1 recruitment for field experts.

Flickr: The founders spent a ton of time in the early days of the photo sharing service “playing party host” – interacting with their first users on the site, greeting each one individually, manually seeding and furthering conversations along.

Listia:  Because the goods buying/selling site works with credit, as opposed to cash, the founders seeded every new sign-up with free credits, so there was immediate opportunity to purchase items. The founders used their connection to Y Combinator to secure Paul Graham-owned items for the site, and then bought a few high-end products to put up as pretty big dangling carrots.

Yelp: As CEO Jeremy Stoppelman told the NYT, “There was a time in our earlier days where we experimented with paying for reviews directly in cities outside of San Francisco to help get the ball rolling in our otherwise empty site.”  It also rewards consistent reviews with “Yelp Elite” perks like invitations to sponsored events.

Airbnb: In one of the most shared “growth hacks” of late, Airbnb siphoned existing rental listings from Craigslist onto its platform, sparking immediate growth.

Craigslist: Founder Craig Newmark started CL as an email list amongst friends by collecting, curating, and distributing local San Fran events listings.

Reddit: The founders and their friends essentially spammed their own site by posting every interesting piece of content they could find on the Internet to Reddit…and mostly under fake account usernames.

Tinder: Former Tinder CMO Whitney Wolfe executed a nationwide college tour of all her sorority’s chapters, convincing the girls to join the dating app. She then visited frats, showed them all the girls on the app, effectively tripling user count.

Belly:  Belly cold-called, emailed, and visited hundreds of Chicago small businesses until the team signed up enough customers to kickstart a local network effect.

See any patterns emerging here? Creativity + Hustle + Behavioral Dynamics = Grinding Out Launch Successes.

Copy of Quote for desktopVariations of this quote appear all over the tech media and blogosphere, and there’s good reason for it. I can certainly argue that there are “other” tasks that should rank high on the priority list of an early stage startup (namely operations and content creation), but building and selling will most likely make or break you.

Why, then, do marketing and biz dev seem to take a back seat to programming and developing for many startups?

It’s great to see POVs written from startup founders calling for others to “invest in marketing from the start” and to involve marketing in product development from the get-go, but I wonder if the message is getting through. When I survey the landscape, I too often run into startups launched by engineers who build products according to what they know and believe, with limited customer development. Then come the freelance marketer job postings after key decisions are made. If you buy into the build-or-sell edict, then you see what’s wrong here.

HUSTLE

Let’s go back to the marketplace examples referenced above. Almost every tactic and execution here involves some sort of marketing/biz dev hustle. Can engineers hustle? Can non-marketing founders hustle? Of course they can. But guys like me are built to do that kinda stuff.  And we do it best when we’re part of the process from the beginning.

“How can you know that you’re building something people want unless you try to sell it to them first? You need to validate product-market fit as soon as possible, and the only way to do that is to figure out the value proposition as you’re building the technology.”  – Robbie Mitchell, Head of Marketing for Knewton


GROWTH HACKERS ARE NOT REAL

I think this growth hacker fallacy as an actual job description is standing in the way of our engineer-marketer love fest.

Screenshot 2014-07-27 10.07.10

As long as founders continue to seek out what does not exist, then they won’t think about attacking the problem from a different angle. The marketing department should have its own engineering team. Shit, call it the “growth hacking group”. I’m fine with that. Whatever gets it done. As a marketing guy who owns hardly enviable tech chops, I could do SERIOUS DAMAGE with a skilled and creative group of engineers. We’d be all like:

ben-stiller-35206

After all, you need me on that wall. And I need you to build it for me.

 


Today’s Beats: Blow Up by Kid Francescoli

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