BERKONOMICS

It doesn’t happen by accident.  Not every new game-related site is a Steam, and surely not every social network is a Facebook. And not every texting application is a Twitter.

A story of an app from nowhere to near dominance

Then how did Discord “suddenly” become so hot that even Microsoft was rumored to want to buy it for staggering amount?  Discord is a great example of a company going viral mostly from word of mouth.  From its start in 2015, the number of registered users has “suddenly” climbed from 45 million in 2017 to a reported 300 million by the end of 2020.   That compares with a reported 330 million for Twitter which had a nine-year head start and so much more free press from famous users over the years.

Soon, Discord could become dominant, even before an entire generation of millennials even knows the name.  How has this happened, and are there lessons for us in this?

How do you make your product go viral?

What are the elements needed to focus upon in making the attempt to take a product viral?  Intrigued by the thought, I recently made a list. It was as much in reaction to my getting blank stares from entrepreneurs when I asked the above question as it was for me to better understand the problem itself.

Here is my list.

First: Planning. Retail or end user web sites aren’t even noticed  by potential users or customers without being discovered through a real marketing program, aimed at finding the flywheel effect (the moment of going viral that makes all the difference between failure and success.) In today’s world of social marketing, it takes someone knowledgeable if not expert in understanding how to use available resources in promotion and marketing.  Some apps, like Discord, attach a brand link to the bottom of each message so that every recipient can click upon the link and become a user of the product without further marketing by the company.  So, the lesson is: always find a way to make a second-generation recipient or buyer a future raving fan.

[Email readers, continue here…]   Second: channels.  I was chairman of a company that distributed its product through over one hundred fifty retail Internet travel channels, all websites where someone else spent the money attracting their users and attempting to go viral. We could not have begun to reach a fraction of that audience with any amount of money if we did not reach through these channels.  Sometimes, it is just the right idea to brand your product inside that of a known presence.

Third: cost. Even a great marketing plan to gain an audience fails if there is not enough money to prime the pump and start the flywheel effect moving.  And of course, that could easily require a large amount, far beyond the capability of a small company looking for its initial audience. And yet, word of mouth sometimes is all that is needed. Google became an overnight industry standard for search strictly by word of mouth, never spending a dime on advertising in its early years. Marketing cost is not the best measure of success. Accurate targeting measured by acceptance is more important, even if the cost is near nil.

Fourth: measurement. If you can’t measure the results of your attempts to gain a viral response, how can you know when to focus upon reinforcing or changing the effort?  Well-tuned metrics are an absolute must. And the tools for most are available, sometimes free, for the educated marketer.  You cannot be successful if you cannot measure the results of your effort.

Fifth: reaction.  If everything goes right in finding the right plan, channel, cost, and measure of success, and if you do nothing to reinforce the success or change the focus, the rest of the effort can easily die a slow death.  Respond to positive niche adoption with increased focus upon those niches.

And sixth: the pivot.  A reaction is not often enough. Many times, it takes an intelligent repositioning of the entire offering to try again with revised ideas based upon learned experience.   And, like the story of Discord and Twitter, it takes continual product and feature updates to stay ahead of the competition or overtake a sleepy competitor.  A pivot or product enhancement in reaction to user or customer comments will advance your chances of success.

It is a cycle that must be learned and followed to successfully maximize an opportunity in any industry and for any product or brand.  So, where in that cycle are you today?

My stories of missing the context of the times

Over the years, as I managed my several computer companies as CEO or executive chairman, I made the decision to go to market with a brand-new product that had never before been exposed to my customer’s marketplace.  In each case, after overwhelming publicity, certainly noticed by a great number of potential decision makers, and after record-breaking sessions at industry trade shows to introduce these to the potential buyers, the products failed in the marketplace.

Artificial intelligence thirty-four years ago

I recall the introduction of artificial intelligence into the hotel reservation process, a “one-up” on the airline method of yield managing the price of airplane seats.  With the cover story in the industry trade journal, record-breaking overflow education sessions at the international trade show, and even glowing reports from the first hotel user’s management, the product failed to attract more than two customers and had to be withdrawn from the market, even though it was an unqualified success for the first users. 

Changing the rules to fit the market

 As a side note, we returned to market with the application as a software-only product without artificial intelligence and without some features, reduced the price from $150,000 to $8,000, and had a subsequent hit on our hands.

In another instance, we introduced the first kiosks for hotel lobby check-in.  They were large, a bit clumsy looking, and gathered cobwebs in the lobbies of some great hotels.

“Do you have the resources to evangelize?”

[Email readers, continue here…] These and other efforts to be first over the years have led me to ask my current crop of CEOs as I serve on various boards, “Do you have the resources to evangelize the market, educate your potential customers, AND sell your product?”  The answer is invariably ‘no,’ because the cost of evangelizing a new product is completely unknown.  A marketing professional or the marketing department certainly can work to obtain good press, appealing to curious journalists and early adapters. Early meetings with potential customers will yield enthusiasm for a “free test” of the new product.  But if it is a radical departure from the comfort zone, the cost of promoting and marketing the new product will be beyond the capability of most small or medium sized companies.

Apple as a surprising example

Even Apple rarely attempts this, with all its resources.  Apple is well known for building upon the work of early adapters.  After failing with its early Newton tablet, Apple waited for fifteen years before reinventing and repositioning the tablet as a much friendlier consumer device.  The same occurred with the iPod.  Apple was not first or second.  They just added the infrastructure needed to seamlessly purchase and download content to their offering and produced a friendly way to use a product (iTunes) that previously required early adapters to manually download songs to their devices.  For argument’s sake, let’s credit the iPhone with igniting an entire product class.

My unexpected advantages of being first

I will readily admit that the half million I spent on the artificial intelligence system that failed generated the greatest positive press we ever had.  As a corporate promotion, it was a hit. As a product marketing effort, it was a failure.

Set your expectations if you still want to be first

If you are going to be first in a market, plan on a very long time from introduction to acceptance.  Triple the time you estimate for the effort and add four times the cost you estimated for marketing.

Remembering a massive first-to-market failure

Does anyone know how much Toshiba lost with its HD DVD format marketing effort?  First to market over blue ray with what some say was a better product, Toshiba dropped over a billion dollars into that one and lost it all.  There are numerous examples like that one.

You might be an exception. 

Chances are that you’d do much better by inventing a better mouse trap, and marketing it for its advantages over a product that the consumer already understands.  But there is always a winner at a table with the odds stacked against the player.  It just doesn’t happen often enough to expect success.