Putting the market before the product

Build it and they will come. A byte of conventional wisdom that has moved from cool to cliche. This essentially asks businesses to focus (almost) entirely on getting a good product out and not worrying about the market. While that might have worked during the initial days of the internet, it is becoming increasingly difficult to get traction today. In the case of a platform, it becomes all the more difficult because platforms, communities and marketplaces require a swarm of users, often two completely different sets of users, to start off interactions.

In the case of a one-sided business, it may be fine to let the users trickle in, but a platform can never take off unless there is a burst of activity leading to enough interactions among the users. Such bursts of activity require a large group of users to simultaneously arrive. Successful platforms often take off with traffic spikes.

As a result, building a potential market beforehand is all the more important in the case of platforms. When you finally launch, you have the chops to get a swarm of interested users to the platform at the same time.

The following are common ways of building a market before hand

Blogs – Leverage expertise and aggregate your target market

This wasn’t a conscious strategy on the part of Jeff Atwood. He never built a blog with tens of thousands of loyal readers so that he could launch a company some day. Joel Spolsky, too, never blogged with this strategy really. But the single most important reason that StackOverflow hit critical mass in its early days is arguably the fact that both its founders had already built a market for it over time. Both their blogs targeted programmers and so did StackOverflow. The blogs provided the perfect leverage to get a very targeted demographic started on the platform, all together at once.

Mint.com went around this in a more planned manner and undertook several content marketing tactics during the pre-launch phase including writing a very high-quality personal finance blog which ultimately became the #1 blog on personal finance in the US.

Widgetization – Get the word out before time

Shareability is one of the key ways platforms gain traction when they allow users to share content from their site across the web. Mint.com took this a step further and launched pre-launch widgets; badges that declared “I Want Mint” in return for early access to the product, creating a sense of anticipation about the product as well as riding on a sense of exclusivity.

 

Invite Lists – The deferred call to action

Everybody’s doing pre-launch invite lists these days. In the case of communities and marketplaces, this becomes critical not just because it aggregates the right bunch of people beforehand, but more so because it aggregates them on a promise of future benefit. Done right, this can lead to very high conversions and transactions from Day 1.

Groupon started in Chicago, but it would often expand to new cities based on how well the invite lists were performing. Groupon would allow users to sign up in cities where it hadn’t launched. For Groupon to be successful in a new city from Day 1, it needed enough number of consumers in the new cities to make deals tip. Hence, Groupon would closely track cities where the maximum number of consumers had signed up and would launch its marketplace in those cities, allowing it to hit substantial traction from the start.

The key cause of failure of pre-invite lists is a poorly structured call to action or proposition. Users sign up because they expect to get something specific when the service launches. Typically, invite lists fail to kick off traction when there is a mismatch between what users are led to expect and what actually launches.

Harvesting existing interest elsewhere

Before founding Etsy, the founders ran a web design shop and were working on getcrafty.com for one of their projects. During this, they discovered the need for a marketplace for handmade crafts. While building Etsy, they also reached out to Craftster.org, which had an even larger user base of interested and relevant sellers.

At launch, they already had a lot of interest generated among two large groups of sellers, and that helped get the required inventory and start off transactions on Etsy.

Pivoting the user base – Recycle-able users

Startups have always had to pivot, even before it was fashionable to do so. 🙂 While pivoting at the right time is what leads many startups to success, leaving behind the user base would be a lot of effort wasted. A few companies that have done a spectacular job of pivoting their user base are Groupon (from The Point) andFab.com. Bebo took off like a storm with a high viral coefficient when Michael Birch leveraged the community he had created on Birthday Alarm and set up a link to Bebo for users to try it out.

If you are starting a platform, marketplace or community where users need to drive engagement and transactions, getting a large number of users in advance can vastly increase the chances of early success.

I’m sure I’m missing a few pre-launch user acquisition strategies here. If you have any to add, do share it as a comment.

Image Source: SoundBite Blog