Do you think that your project should have a ‘launch’ event? In this extract from The Science of Growth, Sean Ammirati shows that a single, formal big launch isn’t always what kickstarts a company (or a project) into the big league. What really works might surprise you – it’s definitely something to work on when you are thinking about positive project risk! Enjoy…
A founder’s core vision, in hindsight, will typically look obvious. However, at the time the founders embark on their journey their vision is often a truth that many others don’t yet realize. It’s therefore tempting to think that the key to success is to find a big enough stage or platform on which to unveil your solution. However, as students of the lean entrepreneurship movement hear repeatedly, it’s usually not a good idea to launch your product with a “big bang.” This is solid counsel from my experience.
Although this is solid counsel on day one of a startup, it may not be such sage advice later on. One thing we repeatedly noticed in our study, across many of our chosen companies, was that some successful startups built awareness by drafting off larger events to catalyze growth once they had completed the four prerequisites described in section one.
Later, many of these events seem to be considered the startup’s “launch,” advancing the misconception that a big bang launch is a prerequisite for success. In none of the companies we analyzed is this more apparent than Twitter.
I’ve been attending the South by Southwest (SxSW) conferences since before Twitter’s breakout year in 2007. And every year since 2007, journalists rush home to talk about the next thing to launch at SxSW, and ask whether [insert startup name here] is the next Twitter. It’s a great narrative for these journalists, especially when you consider Twitter is today worth over $21 billion. This story of SxSW launching Twitter has dramatically increased the popularity of the SxSW Interactive Festival and become startup folklore.
Unfortunately, it’s not actually true that Twitter was launched at SxSW. As described by Evan Williams on Quora, here is what actually happened (emphasis mine):
. . . contrary to common belief, we didn’t actually launch Twitter at SXSW—SXSW just chose to blow it up. We launched it nine months before—to a whimper. By the time SXSW 2007 rolled around, we were starting to grow finally and it seemed like all of our users (which were probably in the thousands) were going to Austin that year. So, we did two things to take advantage of the emerging critical mass:
- We created a Twitter visualizer and negotiated with the festival to put flat panel screens in the hallways. This is something they’d never done before, but we didn’t want a booth on the trade show floor, because we knew hallways is where the action was. We paid $11K for this and set up the TVs ourselves. (This was about the only money Twitter’s *ever* spent on marketing.)
- We created an event-specific feature, where, you could text “join sxsw” to 40404. Then you would show up on the screens. And, if you weren’t already a Twitter user, you’d automatically be following a half-dozen or so “ambassadors,” who were Twitter users also at SXSW. We advertised this on the screens in the hallways. (I don’t know how many people signed up this way—my recollection is not a lot.)
I don’t know what was the most important factor, but networks are all about critical mass, so doubling down on the momentum seemed like a good idea. And something clicked.
When we look through the cases we’ve analyzed, this pattern of a product or service launching and then later having a big event “to blow it up” appears to be common. As we started looking at these later events, we started calling them a “double trigger”—the first trigger was getting the product in the market and getting feedback, but this second event was the double trigger that ultimately catalyzed growth. I’d like to highlight three types of events that can have this catalyzing impact.
Double Trigger Type 1: Something Happens to Your Product
In December 2005, Saturday Night Live aired a digital short called “Lazy Sunday” starring Andy Samberg and Chris Parnell. The video was a hit on SNL and was uploaded to YouTube shortly after it aired. While eventually the video was pulled at NBC Universal’s request (for copyright reasons), this didn’t happen until February, after over seven million views of the video on YouTube’s service. When website analytic vendors like HitWise plot the growth of YouTube’s traffic, you can easily see the day in December 2005 when “Lazy Sunday” started accelerating growth dramatically. That increase in growth wasn’t short lived, but in fact continued from that point forward.
Based on that impact, Rick Cotton, chief counsel of NBC Universal, argued at an industry event that NBC ultimately made YouTube worth $1.5 billion. While that seems a bit extreme, the popularity of “Lazy Sunday” certainly catalyzed YouTube’s growth. As a reminder, at the point Rick Cotton made the claim, Google had recently acquired YouTube for $1.5 billion.
Double Trigger Type 2: A Big Event Needs Your Product
In 2008, the Democratic Party made the decision to move Obama’s speech at their convention in Denver from the Pepsi Center (capacity 18,007) to the larger outdoor venue of Invesco Field (capacity 76,125). The decision immediately created logistical challenges, as there simply were not enough hotels in Denver to handle the expected additional visitors, but it created a catalyst for Airbnb.
Later CNN Money reported on that accommodation crisis moment:
For Airbnb co-founder Brian Chesky, that was a Eureka moment.
“We were thinking to ourselves . . . light bulb’s going off,” he said. “That’s where they’re going [to] stay: They’re going [to] stay at Airbnb homes.”
In a matter of weeks, hundreds of people started listing their Denver apartments on Airbnb for visitors to rent. Airbnb allows users to rent out everything from an extra room to a separate home.
“Had it not been for the DNC, it’s hard to know what Airbnb would be today,” Chesky told CNNMoney. “These things, it’s hard to get them going and you need a big kind of pop.”
While LinkedIn held off on all PR until it had 40,000 members and had already raised its first round of institutional financing from Sequoia Capital, once the company started its PR, it used a similar strategy to Airbnb. Instead of focusing on the overall service and how it worked, LinkedIn would pitch reporters on stories about members who found a job through LinkedIn. The company also rolled out the PR primarily through local media channels and focused on successful job searches in the home city of the reporter to whom the company was making a pitch. This allowed LinkedIn to present the value of its platform and the LinkedIn experience to the press as something much more concrete.
Double Trigger Type 3: A Competitor Makes a Mistake
Sometimes the event that acts as a catalyst is actually a misstep by a competitor. To me, the case of Movable Type vs WordPress is actually one of the most interesting examples of an event catalyzing growth. Specifically, Movable Type’s May 2004 decision to change the terms of its license.
In a Forbes magazine story eight years later, reviewing WordPress’s early history, author J. J. Colao explained:
In a field dominated by Movable Type, their service [WordPress] attracted thousands of users through word of mouth. After Movable Type’s owners decided to charge users in 2004, WordPress attracted a deluge of incensed refugees fleeing the company. By that August WordPress boasted 15,000 users and a pack of loyal developers refining code for free around the world.
As Movable Type Product Manager Byrne Reese explained in his blog postmortem later:
. . . what users feared most of all, is a repeat of exactly what happened the day Movable Type announced its licensing change: one day waking up to the realization that you owe some company hundreds, if not thousands of dollars and not being able to afford or justify the cost monetarily or on principle.
It’s clear that Byrne is absolutely right. When you go back now and look at the early reaction, that fear is clear, and WordPress definitely used it to their advantage. For example, Ari Paparo, now a startup CEO and at the time an Internet marketing consultant, wrote a post titled “Time to Update the PowerPoint” in which he said:
As part of my consulting work I’ve implemented several corporate blogs, both as intranet and external solutions. In every case, I pitched some of the big advantages to MT:
- Low cost license
- Flexible, no restrictions
- Easy to create multiple blogs
- Easy to add new users
Well, that’s all shot to hell.
It would be easy to misinterpret the recommendations of this chapter as: Just work hard and hope you get lucky with a large event. Instead, I think you need to take the steps described to look for opportunities to exploit.
Excerpted with permission by St. Martin’s Press from The Science of Growth: How Facebook Beat Friendster– and How Nine Other Startups Left the Rest in the Dust.