What decision you made in 2009 had the biggest impact on the growth of your business?


7

I started treating - information as a commodity.

This change in mindset opened up many more possibilities and opportunities. Basic idea is that much information can be treated like any food item. People consume it, make use of it and then they want more and more everyday.

More Info: First things first, human beings (and other organisms) have sensory organs which detect a change and transmit this information to brain which in turn decides what to do (or what not to do). Second important thing is, humans are very habitual. I won't go deeper into neuron pattern formation and other stuff that makes us do, what we do. So lets talk about NEED and a commodity that fulfills this need.

So what I'm stressing here is that when we are surfing the internet, what we are actually looking for is "change ". I simply close my email app when there are no new emails. I don't read that same blog post again and again. However, I do tend to play games over and over again cuz the dynamics keep changing. Videos/Music/Games are designed in a way to survive an infinite information feedback loop and they offer fun to kill boredom (a need). In fact these things make people habitual and addicted. And when people spend more time engaging with something, its much more likely that they're gonna spread the message to their friends. Hence successfully activates a viral loop.

This is not new, created by me theory. It has existed since ages - music addiction, email addiction, adsense addiction, analytics addiction, internet addiction and even stackoverflow addiction.

I think we can classify web users into these three NEED categories -

  1. Value seekers - 10%, willing to pay money to get things done quickly.
  2. Entertainment seekers - 30%, basically kill time and won't pay cuz too many free alternatives exist already.
  3. Have no clue what they want - 60%, irrelevant traffic, high bounce rates.

A website can have three digit growth if and only if they could give everyone a reason to come back again and again. Until now I was only focusing on the 10% and had no idea how to satisfy the rest 90%. Then I figured out if I could update the site every few hours by treating information as commodity that satisfies a need, I could actually initiate a feedback loop and hence grow.

Google, Facebook, twitter, dating sites and all other social networking sites, news websites, games, youtube, digg, stackoverflow and every other successful website in one or other sense actually treats information as a commodity that satisfies a need.

@Jason - Eyeballs in my opinion is an insignificant metric. I prefer "activity" as a measure of growth. Activity as in more registrations, engagement, messages, value creation, assets/brand etc.

Money itself isn't lost or made, it's simply transferred from one perception to another. The illusion has become real, and the more real it becomes, the more desperately they want it. Capitalism at its finest. ~ Gordon Gekko

Strategy Decision Growth

asked Dec 3 '09 at 20:40
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Arpit Tambi
1,050 points
  • I like your concept a lot. However, what about "information" in the form of e.g. a popular blog? Surely having (earned) eyeballs is more than commodity. Or do you mean "information" as in "data" as opposed to more of a set of relationships? – Jason 9 years ago
  • Hey, just added more info above... – Arpit Tambi 9 years ago
  • +1 for a very interesting analysis! However, I'm not sure if the term "commodity" is well chosen. From Wikipedia: "A commodity is some good for which there is demand, but which is supplied _without qualitative differentiation_ across a market." English isn't my mother tongue so I'm not quite sure what would be the accurate term. Does that make sense? – Olivier Lalonde 9 years ago
  • This URL helps you go into much more details - http://www.nii.ac.jp/publications/kaken/HTML1999/99Perry02-E.htmlArpit Tambi 9 years ago

3 Answers


7

I cleaned house. I had a bunch of people on board who were nice guys, pleasant to have around, but were complacent, unproductive, incompetent, and did not strive to become better. We went from 3 partners plus 10 employees down to 2 partners plus 3 employees. I now own 64% of the business instead of 50%. I now have the power to do things without needing a consensus from other people. The funny (or sad) thing is that right now we are almost getting the same output as we were before. Talk about dead weight.

This is the toughest thing I've ever done. I'm a dreamer, not a tyrant. It's not in me to fire people. It wasn't in me to get rid of business partners either. And that's precisely what caused the situation to get out of hand. I realized and took it to heart that you don't start a business to make friends or give away opportunities as if they were charity. You don't start a business to give a chance to individuals to who have not solidly earned that opportunity. You start a business to create value, to build something bigger than you, and to create opportunity only for the right people. With all the business training I've had, you'd think there'd be no chance of me falling into this situation.

Someone asked in another question what the best movies about business were. I think Glengarry Glenross was a great movie, and I think this 7 minute piece of the movie packs more business knowledge that startups need than any other business course, speech, or rant of equal length that I've ever seen: http://www.youtube.com/watch?v=y-AXTx4PcKI. Or maybe I like it because it's the rant I've spent the last couple years fully understanding. Nearly every word spoken in the clip resonates with me now that I've learned what it is to surround yourself with incompetence.

Anyway, cutting out the dead weight was the best business project I did in 2009, but I am not congratulating myself. The responsibility lies squarely with me, I am the one that allowed that situation to take place, and everyone suffered for it: The people that stayed and the people who left. My aim is to never allow that situation to ever happen again: I'll never partner with people just because they are friendly; I'll never hire people who have not proven themselves extremely hungry for the opportunity beforehand; and, unpleasant as firing people is, I'll never delay firing someone once I find out they will not grow along with the job.

answered Dec 3 '09 at 22:20
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Gabriel Magana
3,103 points
  • Oh, and the last quote is the truest of all: "My true advice? They should fire your a** because a loser is a loser." This hard to hear, but it's true. People _tend_ not to change, and businesses are not social welfare clubs. If an employee does not carry their weight, they are a net loss to the company. If the business was a social club, they should maybe keep the bad employee. But a business is not a group of friends. Businesses exist to make money, people work at them to make money too. If the organization does not, then it's not a business, it's that simple. – Gabriel Magana 9 years ago
  • I hired wrong. That's what I did wrong. I hired people who did not want to learn, and so everything I did to try to correct it failed, even in-house training during normal business hours. So yes, it's my fault for letting it get to that point, but also my responsibility to fix it, which I did. And I'm not patronizing you, since I know _nothing_ about you (do you about me?). Anyway, I am not advocating the manner of delivery in the clip (who wants to have that environment?); I am just saying that it's dead-on on the subject matter, and has a lot of content for a 7 minute clip. – Gabriel Magana 9 years ago

2

We (me and my partners) had to chose from going international or finished up a specific, most wanted by customers, functionality.

We decided to go for the functionality and it was a great decision.
It helped the sales and, better yet, allowed us to start talking with investors.

answered Dec 4 '09 at 01:25
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Fernando Martins
798 points

0

We pivoted our product away from our competitors' space and into a new space with much more upside.

answered Dec 14 '09 at 15:22
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Craig Daniel
223 points

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