Description

Approximate transcription of presentation given on 9/15/08 at NextWeb NY. For the complete transcript please visit http://blog.heavybagmedia.com

2.
Has everyone seen Forrester’s technographic ladder?

It’s a way of categorizing how people use the web

the people in this room are not only at the top rung, they’ve climbed up on the roof and are looking down at the rest of the world like they’re a bunch of ants

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I’m going to talk a bit tonight about marketing. Many people mistakenly get marketing and advertising or promotion confused. The fact of the matter is that marketing means looking at markets and making sure that everything from your product to your UX to you messaging, really everything about your company, aligns with a market.

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How many people here are at a startup? It’s a sad fact that statistically speaking 90% of the startups represented here won’t make it past the first three years.

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There are many reasons why startups fail

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But more often than not they’re simply not making stuff that people want or need. Or they’re not letting the right people know about it if they are.

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I want to discuss the danger of being a shiny new toy. The proliferation of shiny new toys means that the attention of early adopters is constantly pulled in a million different directions. It’s extremely difficult to gain a significant amount of attention over a long enough period of time for diffusion to mass markets to happen.

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Case in point...

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How many here are familiar with this graphic? It’s fairly well known, it comes from Geoffrey Moore’s “Crossing the Chasm” originally published in 1991 and revised in 1999.

It’s become a staple in developing methodologies to market technology companies. I see a few problems with this approach. For one, it was developed in 1991. In 1991 there was hardly the proliferation of technology products that there is now. New products appeared infrequently, which meant that when one did, it was easy to capture the attention of early adopters and keep it long enough for diffusion to happen. To give you an idea, it actually took 18 months for the first 100 domains to be registered. Not a lot of options for early adopters. In 1994 when Amazon launched there were about 60,000 domain names registered, now there are about 165m.

The other problem I see with using this approach is that it only applies to disruptive technologies. I’m willing to bet that most of the startups in this room are not presenting anything incredibly disruptive compared with what’s already out there. And if you are, you might want to think about how you can take that killer technology you have developed and put a less disruptive front end on it.

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I think we’ve all been drinking each other’s koolaid a bit too much. What I refer to as the echo chamber is the Silicon Valley/Silicon Alley/Web 2.0 crowd. They are feature-hungry, gratuitous Ajax loving, hyper communicators who have dozens of information streams flowing around them in cyberspace.

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Even if we do follow Moore’s model, if we go by the book, early adopters should comprise 13% of your total market. Depending on who you talk to, it’s estimated that there are roughly 50 - 75K early adopters of technology in the US. That’s only about 1/2m users total, hardly enough to sustain an online consumer product.

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Most startups conduct private Alpha and Beta releases. They try to get TechCrunch, Mashable, VentureBeat and the like to cover the launch. They then initiate an Alpha or a private Beta and invitation codes go to the early adopter elite. The early adopters are integrated into the feedback loop. The product is then modified based on this feedback.

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The way I look at it, this is a process that if anything widens the chasm. We’re integrating features, UI, functionality that the early adopter crowd wants, but that mass markets have little if any use for. Look at successful companies like Amazon a