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Launch: Chicken or egg? Eight ways to launch a successful platform -…
Launch: Chicken or egg? Eight ways to launch a successful platform
VIRAL GROWTH
What is viral growth?
Viral growth is a pull-based process based on encouraging users to spread the word about the
platform to other potential users.
Example
Instagram
The sender
The value unit
The external network
The recipient
Airbnb
encouraged users with rooms to rent to list their offerings on Craigslist
motivated to rent those rooms
began renting out rooms of their own
OpenTable
encourages diners to share their dinner
reservations over email or Facebook with their friends
The sender
Word of mouth happens when users like your platform so much
platform designers must avoid discouraging the spread of value units.
The value unit
an embodiment of platform usage that
can spread on an external network and demonstrate the platform’s value.
Instagram
Facebook
among users intrigued by the images they’ve seen
The external network
grow on top of other networks
Airbnb spread on Craigslist; OpenTable spreads on email.
Problem
Users become jaded over time and stop responding
LinkedIn
chose integration with Microsoft Outlook
Microsoft Outlook, the software that housed most of the business connections that LinkedIn wanted to access.
The recipient
When the value units are intriguing enough, the recipients spread them further
disadvantage
since value units are created by users, managers of platforms have limited control over them.
But
a platform can nudge users in directions that will make seeds more attractive to recipients
The chicken-or-egg problem is particularly obvious and acute.
Without sellers who are willing to accept the new form of payment.
buyers won’t adopt it.
if buyers don’t adopt the new form of payment
sellers won’t invest time, effort, and money in accepting it
THE INCUMBENTS’ ADVANTAGE:
REALITY OR ILLUSION?
In the traditional business world dominated by
products and pipelines
there is usually time to observe the rise of outside competition and to make
adjustments
The rules of the growth game have changed
if you
understand and master the new rules
you have as good a chance of surviving and thriving as anyone
Large enterprises do have some advantages when launching platform businesses.
these advantages can create complacency
THE HEART OF PLATFORM MARKETING: DESIGNING FOR VIRAL
GROWTH
The industrial world of pipelines relies heavily on push
Traditional push strategies continue to be relevant in the world of platforms
But in the world of platforms, rapid, scalable, and sustainable user growth is most often achieved
through pull processes.
building a platform business differs from traditional product or pipeline marketing in a number of ways
the world of platform marketing, pull strategies rather than push strategies are most effective and important
There Are Many Ways To Launch A Platform
competing online video platform
Youtube
first democratic video hosting platform
contest incentivizing content creators
videos off-platform
Myspace
Flash-based
one-click video experience
unrelenting focus on producers
seeded platform with content
created curation dynamic
leveraged producers
created content creators that had investment
Megaupload
employed alternative launch strategy
late-move problem
focused on consumers
gained significant traction
Vimeo
succeeded with producer-first strategy
compete with Youtube
creating high-quality tools
providing with superior infrastructure
built-in support for high-definition
8 Strategies for Beating The Chicken-Or-Egg Dilemma
The follow-the-rabbit strategy
staging value creation
designing the platform to attract one set of users
simultaneous on-boarding
The piggyback strategy
connect with existing user base
Paypal
Justdial
The seeding strategy
create value units will be relevant to at least 1 set of potential users
value units may be “borrowed” from another source rather than created by the platform developer from scratch
The marquee strategy
provide incentives to attract members of key user set onto platform
Microsoft ( Xbox)
Sony (PlayStation)
Nintendo (Wii)
The producer evangelism strategy
Design platform to attract producers, who can induce their customers to become users of the platform
The single-side strategy
Create a business around products or services that benefit a single set of users
convert the business into a platform business by attracting a second set of users who want to engage in interactions with the first set
The big-bang adoption strategy
Use one or more traditional push marketing strategies to attract a high volume of interest and attention to platform
The micromarket strategy
Start by targeting a tiny market that comprises members who are already engaging in interactions
4 of 8 Strategies
The single-side strategy
create
Benefit of single set user
Products or Services
Eg
Opentable
RedBus
The producer evangelism strategy
Induce
To become user of the platform
On platform
consumer
Become interested in their products and services
producer
Benefit from data-driven cross-pollination
Eg
Crowdfunding platforms
Eduction Platforms
The micro-market strategy
Target
A tiny market
To provide the effective matchmaking characteristic of a large market
Facebook
The big-bang adoption strategy
Use one or more traditional push marketing strategies
To attract a high volume of interest and attention to your platform
Eg
Twitter(2007)
Tinder
Foursqaure