This was a great Twitter post from @Li_x_Jiang, retweeted by @hnshah
This obviously speaks to free content and the popular “Freemium” business model, where a 2% conversion to paid services is a huge success….. 2%. That means it takes a million free users to get 20,000 paying customers. Silicon Valley may support those odds but it’s tough everywhere else.
Consider owning 15 – 20% of a much smaller universe. You do that by understanding your markets really well and solving specific problems for those customers in that market.
There are still a lot of people who pay for good music!
Jack Dorsey, Founder of Twitter, was interviewed recently on 60 Minutes. He was talking about getting his first job. It involved a bit of hacking into a website. The interviewer said, “But isn’t hacking illegal?” to which he replied, “Illegal hacking is illegal.”
Wikipedia includes this as one of the definitions of hacking: “who combines excellence, playfulness, cleverness and exploration in performed activities.”
I believe hackers, in the true sense, use their talents and skills to ask “what if?” Like anything, this can be used for good or ill.
If you have the gift, look for a problem to solve…
It’s true you have to create value. But much of what you have to do has been done already.
Take a look at successful business models and pricing strategies. See if they apply to your startup.
If you want to create an exceptional customer experience, look at Zappos or Apple Stores or CD Baby.
If you want a great mission statement, look at J&J and read Good To Great.
Of course test all this on with your customers. They will tell you what they want…
Fail fast, fail cheap.
The value for the entrepreneur at exit is the return on value he or she has created. The point is to adjust your lifestyle and your company culture around the fact that the financial reward comes in the future.
The Aeron chair, the BMW, the house on the lake, the prime office address…they all consume cash with little to show for a return.
You don’t get to decide if your innovation will be successful. The market does. Don’t you think you should ask them what they want to pay for?
Check out the post in outofthegarage.com
Anyone who figures out how to sell coffee drinks for $4.50 after standing in line for ten minutes knows a thing or two about customer value.
People will pay for value. Find it and sell it for a premium.
Forget about the one percent vs. the ninety-nine percent. It’s all noise.
Go create value.
Go make meaning.
Go delight customers.
Value is created in the market. This is tough news for the inventor. The technology, the patent, the idea all are worth very little until someone is will willing to exchange their cash for it. You are better off finding a need in the market BEFORE you spend a lot of time and money inventing something no one will buy. In that case, you just have an expensive hobby.