This book helped clarify for me that no successful marketplace starts out as a marketplace - simply because you need to start out with ready access to one side (likely the supply side as in the Uber & AirBnB examples) and build demand.
The marketplace/network then emerges strategically as more suppliers are onboarded.
This insight helped quickly focus and filter the marketplace ideas we didn't have any business pursuing.
So for example, Uber and Airbnb started by breaking laws and helping people make money. If you are okay breaking laws, you can get many networks started.
PayPal grew by bribing people with money.
LinkedIn grew with massive amounts of spam, maybe the spammiest company in history of tech.
Clubhouse tried to be cool for a while with a few Silicon Valley famous names, but is dead.
Slack grew because the founder was very famous and could seed a large amount of initial customers based on his profile.
I can go on and on.
Out of these reddit might be the only one that actually broke the cold start problem with some light levels of seeding and pretending to be different users and also digg collapsing.
I actually hate these kind of books written by VCs who are purposely hiding the truth about a lot of these businesses.
>The suit originated in California in 2013, when LinkedIn users sued the company claiming its “Add Connections” feature hurt their professional reputation by relentlessly messaging their email contacts with requests to connect on LinkedIn, Fortune reports. In the complaint, users described being embarrassed by the emails and complained that it was very difficult to stop LinkedIn from sending more emails once the barrage had begun. The settlement affects users who signed up for LinkedIn’s “Add Connections” feature between September 2011 and October 2014.
PayPal grew by incentivizing usage. You say "bribe" to give it a negative connotation when it's not at all. Like a store giving away free samples. Or a freemium service plan. It's no different, the business is eating a cost to grow, and that technique is used a zillion times over across all commerce. PayPal was de facto spending money on marketing.
Your Clubhouse example isn't even a negative example, you're just trashing on them.
Slack grew by leveraging an advantage, like all businesses do and without exception. You might as well disqualify all founders of all businesses because they have any number of advantages, including being born with a superior mental capability (Joe Smith is a genius at math, it's totally unfair). The Slack founder advantage was earned, he had every right to leverage it. Before that he built Flickr with others and he wasn't nearly so famous then and Flickr was also a network example.
The premise you're floating is: guy that started a convenience store was able to get a loan/investment or otherwise had capital. It's unrealistic because he used an advantage someone else didn't have. Therefore not a valid business strategy.
Hotmail put a promo at the bottom of each email. Totally unrealistic that they leveraged their existing scale to grow even faster. What normal businesses can do that? (answer: most of them)
Hotmail is also interesting because they had two of these: the free email clickable link and a strategic partnership with Four11.
This book is a class of books I classify as "bullshit books" to my mentees. It is inspired by the bullshit jobs idea.
Makes all the right noises, but tells none of the actual tactics.
But yeah you have always to have in mind who is writing what you read and what the unsaid things are, great points
I always also liked Andrew's Chen blog posts, he ended up hired by a16z
1. affiliate marketing
2. paid ads
I am not a marketer, but I would certainly consider those 2 options for growth.
Direct & laser-focused is far more cost-effective in the early days.
yodon•5h ago
llamavore•43m ago