Want startup success? Give businesses a way to sell to their potential customers
Want to create an incredibly successful startup and make the world a better place in the process? Create a communication channel for businesses to reach their potential customers, and they’ll pay you handsomely for it.
Your approach to creating the communication channel doesn’t matter as long as you acquire a large enough user base with some spending power.
Let me explain what I mean with examples.
Facebook
Facebook did this by creating a social network where it gave people the power to share and make the world more open and connected. Then it built an ads platform so that businesses could reach out to all these potential customers. The hard part was and still is acquiring and keeping people on the platform because the day they leave, so will the businesses, and so will the revenue.
Based on their Q4 2015 and Q1 2016 results, Facebook is doing a damn good job of keeping consumers on the network. Where it’s stumbling is getting new users from the “Rest of the World” category (the developing world). And they need new users to continue their growth rate. The desperation with which they need these users was evident in how they went bat-shit crazy trying to defend Free Basics (Internet.org) in India. Read more about that on link 1, link 2, link 3 and link 4.
Instagram
Instagram is interesting. They acquired users but didn’t give businesses access to these users for a long time. Smart brands quickly found a way to still get to consumers through women with large followers. Instagram is making no revenue out of that and recently launched the Instagram for Business service.
Youtube
Youtube is slightly different from the pack because others are responsible for creating the content that brings in users, but they share some of the revenue with original content creators who attract and keep potential customers on the platform.
B2B industry news websites
Take for example iEntry, which owns WebProNews. They churn out “technology news” and somehow convince people to visit their website and signup for their email newsletter. Then these two channels are provided to businesses to advertise to their potential customers.
Chrome push notifications
Google was getting concerned that unlike native apps, websites had no way of engaging mobile users. It responded by allowing them to send push notifications through the Chrome browser installed on user’s Android phones. Firefox soon followed suit.
While Google was responding to a different threat, some smart people immediately figured that a new channel for businesses to talk to customers had just opened up. And soon you have a whole bunch of SaaS products (25 as on date of publishing) that basically bring marketing automation capabilities to website push notifications.
Difference here is that businesses have to acquire and retain their own set of potential customers.
Google Search
The largest of “business to potential customer” advertising channels because of one reason: relevance. Think of every search query as a person looking for an answer to a problem. Google lets businesses bid for access and priority in the advertising channel with appropriate measures in the system to promote relevance.
Chat bots
“Facebook’s big announcement at its annual F8 Developer conference, was to make Messenger, its 900-million-user messaging app into a full-fledged platform that allows businesses to communicate with users via chatbots.” — 3 trends driving the chatbot revolution, VentureBeat
How to search for flights with Skyscanner’s new Facebook Messenger bot — Skyscanner
Wrapping up
The hard part is getting and keeping users.
Businesses will happily come after you’ve acquired users.
Or you could simply provide the means to the communication and let businesses build their own audiences… like website push notifications or email marketing software.
Think of all the interesting ways in which people have acquired users and then made them available to businesses: Mobile chat bots, Amazon, Linkedin, Zomato, Yelp, Woot, mobile games, content and news websites.
All you need to do is successfully replicate one of these or find a new way to create a channel. At the end of that difficult task lies pure, unadulterated glory.
I originally posted this on my personal blog, but since Medium has more ‘brand value’ people seem to think that if it’s on Medium it’ll be of better quality. And the last one ranked higher on Google than my original post.
