It doesn’t matter whether it is a first time entrepreneur or a seasoned and successful one.
No one wants to visit a ghost town. A fully packed restaurant may make you grunt and grumble, but you would surely prefer dining there as compared to a restaurant where you can sit on ANY of the tables. And then, it is not just about the footfalls and traffic, it is also about how consumers feel about the product.
These are true for all businesses.
- You are more likely to buy a product on Amazon that has ‘a lot of ratings’ even if the review is 4 as compared to the same product with a rating 5 from two customers.
- Uber matches riders with good ratings with drivers who have good ratings themselves. As a matter of fact, from what drivers themselves acknowledge, if their ratings are good, the ‘idle time’ tends to be on the low end of the spectrum.
- Would you ever order from a restaurant that has a 2/5 rating?
But, we are getting ahead of ourselves. When we launch a business, we don’t have ratings, we don’t have orders. Hell, we have neither suppliers nor customers. So what are we supposed to do then?
“Build and they will come” may have been true at one point of time, but it surely went out of fashion a while ago.
And that is where the entrepreneurs’ ability to hustle comes into play. Entrepreneurs are famously hustling all the time. If you have read up on how any of the ‘now well known’ companies got their initial traction, you would have found some amazing stories.
The reddit guys didn’t particularly employ what you may call ‘ethical’. Like what many would do, they created fake profiles and used these profiles to post content so as to give the impression of having a community that was posting a lot of content. So, anyone who dropped by wouldn’t get the impression that it was all being posted by the same set of guys. Steve Huffman even admitted that they had to continue seeding content on their own (just to give the homepage the impression of appearing fresh) for months before the community had taken it over.
Quora did something similar, albeit a tad bit differently. They knew they couldn’t build a Q&A system that looks like a ghost site, so Adam D’Angelo, and everyone else pulled up their socks and started adding questions and answers themselves. Just as Drew Houston used digg to promote Dropbox, the guys at Quora used reddit and other sources to try to get users to notice this new platform they were building.
AirBnB had a different challenge. Just giving the impression of a system with content was not going to help their business. They needed both?—?suppliers and consumers, and while they needed consumers to use their services, they needed to absolutely help the suppliers make money if they were to continue using the service.
So AirBnB took on to Craigslist, looking for people who had listed their Bed n Breakfasts on the platform. Once these people were identified, a personalised mail was sent to them?—?from personal email ids?—?recommending a new amazing platform for them to list their properties on to. Now, the content of these emails were such that it was apparent that these were being sent by someone at the company, but it still worked. Half the battle was won; now all that remained was to get on to the platform people who would be booking these properties.
Dropbox had a different problem altogether. Dropbox was acquiring new customers at ~$300 via search ads, and its product was priced at $99. Naturally, the unit economics did not make any sense to them, so they needed to take different approach. Now, they did a few different things:
- Shared a video on digg explaining the benefits of Dropbox to the audience. This, in itself, got them a fair number of new subscribers.
- Offered 150+MB of additional space to anyone who was helping them spread the word about Dropbox on social media.
- Offered more and more space to existing users for inviting their friends to use Dropbox.
With the company valued at more than $10 billion today, I think its fair to say that Drew & Co. did not take the wrong call.