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Recipe for Success: Facebook, Google, Twitter
Lessons from Silicon Valley
If you look at the Inc 500 Fastest Growing Companies, a large proportion of them are Internet- or Information Technology-based companies. Never in history have so many people become so extraordinarily wealthy from a single industry.
The IT industry, and in particular, the Internet has created such an incredible vehicle for reaching such a massive and growing audience that those few who can and have figured out how to unleash the secret formula have made themselves, and their partners (and investors) unfathomably wealthy.
Internet billionaires (and celebrities)
Certainly, there are the obvious success stories like:
- Bill Gates (Microsoft)
- Steve Jobs (Apple)
- Steve Case (AOL)
- Larry Page and Sergey Brin (Google)
- Jerry Yang (Yahoo!)
- Mark Zuckerberg (Facebook)
- Jeff Bezoz (Amazon.com).
In addition, there are hundreds of equally wealthy but less famous (less celebrity-like) founders and co-founders such as:
- Peter Thiel (PayPal)
- Elon Musk (PayPal)
- Max Levchin (PayPal)
- Chris Hughes (Facebook)
- David Filo (Yahoo!)
- Pierre Omidyar (eBay)
- Craig Newmark (Craig’s List)
- Dustin Moskovitz (Facebook)
- Divya Narendra (classmate of Mark Zuckerberg – Facebook)
- Tyler and Cameron Winklevos (classmates of Mark Zuckerberg – Facebook)
- Andy Bechtolsheim (Sun Microsystems, early Google investor)
- Jawed Karim (YouTube)
- Steve Chen (YouTube)
- Chad Hurley (YouTube)
- Marc Andreessen (Netscape, Ning, Opsware)
- Sabeer Bhatia (Hotmail)
- Jack Smith (Hotmail)
- Biz Stone (Twitter)
- Jack Dorsey (Twitter)
- Evan Williams (Twitter)
- Richard Rosenblatt (Demand Media, iMALL, Intermix, MySpace)
- Joshua Schachter (Delicous)
- Tom Anderson (MySpace)
- Chris DeWolfe (MySpace)
- Caterina Fake (Flickr)
This list goes on … and on.
What do these people and their creations have in common? What lessons can be learned from their success … and their mistakes? Is it possible to reverse engineer these case studies and create a formula or common set of elements that can be a predictor of success? How do you create a winning website that will take off like a rocket?
The secret formula of success
Sorry to disappoint, but there is no secret formula. Or, if there is … it’s still a secret. But, thanks to the help of a few observations and some great authors (and their books), the list that follows may be a guide to building successful web applications.
The following tips, concepts and lessons come from:
- Guy Kawasaki, The Art of the Start
- Adam Penenberg, Viral Loop
- Malcom Gladwell, The Tipping Point
Common elements of highly successful companies
Driven by personal need. Great companies are often started because of a personal need of a founder or co-founder because he or she has not been able to find a satisfactory solution elsewhere. In other words, an unmet need exists and this is substantiated by the founder’s personal experience.
- Hotmail founders, Sabeer Bhatia and Jack Smith, created a web-based e-mail application so they could conspire, while at work, a new web application. They did not want their employer to be able to trace their e-mails, so they created the foundation for hotmail in order to send e-mails privately and securely.
- Hot or Not founders, James Hong and Jim Young, conceived Hot or Not during a drunken debate over Young’s argument that a women he met at a party was a perfect 10. Hot or Not became a social media site where people could submit and vote on women.
- eBay founder, Pierre Omidyar, created an online auction site after placing an order through Charles Schwab to purchase stock in a company. By the time the order was placed, the stock had already jumped 50%. Frustrated with financing the profits of inside traders, Omidyar created online auction site eBay.
Started by rapid prototypes. Highly successful startups did not start out as mature, sophisticated, monstrosities. Some of the most successful launches were self-funded, bootstrapped prototypes initially built in 2-3 weeks using basic code and/or freeware stitched together.
- Twitter was prototyped in about 2 weeks using Ruby on Rails, a rapid application development platform.
- eBay was cobbled together using open source software.
- Facebook was thrown together in about 3 weeks.
Focused and simple. The more precisely you can describe your customer, the better. As Guy Kawasaki states in his book, The Art of the Start, most successful companies started off targeting specific markets and grew to great size by addressing other segments.
Google kept it simple and focused
- Google established a beachhead by spearheading the market with only one function: search. Moreover, they kept it simple. You can’t get much simpler than Google’s original interface.
- Twitter started out serving only one function and asking one simple question: What are you doing? Like Google, Twitter’s primary interface was pretty stark, clean and simple.
- YouTube had one and only purpose: sharing videos. It too, shared an extraordinarily simple user interface. No instructions or user’s manual is needed to navigate YouTube.
Sticky, memorable name. Guy Kawasaki states that a remarkable name for your organization is like pornography: it’s hard to define, but you know it when you see it. He goes on to suggest that we spend the time and effort to come up with a good name because it makes positioning easier. I will go on to say that a good name helps with the stickyness factor – the name sticks in your memory longer.
- YouTube
- Yahoo!
- Hotmail
- Amazon.com
- eBay
- PayPal
- Napster
Certainly, Hotmail and PayPal give you a clue as to what the product is about, but the 8 don’t really describe the product, mission, company or user experience. However, they are sticky and memorable. In addition, you can use their company name in the following statement, “Are you on …?” Are you on Facebook? Are you on PayPal? Are you on Napster? Are you on YouTube? If you can finish this sentence with the company name and it still sounds good, then you are on the right track.
Sticky websites. Most successful websites give you a reason to come back and/or linger longer. Great websites create an addiction that compels you to return again and again. If your company or website is a “fire and forget” type of thing that only compels people to visit once or twice a year, then it’s not going to do very well.
- Linkedin gives you a progress bar to let you know how complete is your profile and what you can do to make it more complete, like asking for a reference or recommendation.
- Hotmail makes you come back again and again to check your e-mail and to send e-mails.
- Facebook compels you to log in on a regular basis to update your status, connect with friends, respond to requests, upload photos and maintain your account.
- eBay drives people back to its site again and again to check on their bid or the product they are auctioning.
The more, the merrier. Most successful website are more valuable as the number of subscribers or members grows. Think about it…
- PayPal becomes more valuable as the number of subscribers grows. The more people who use and accept PayPal, the more it becomes a de facto standard in making and receiving payments online.
- Facebook becomes more fun and meaningful when more of your friends, relatives, associates and those you want to be your friends continue to grow and become Facebook members.
- Napster becomes more valuable as more people and use it and as more music becomes available on it.
- YouTube, like Napster, becomes more valuable as more people load more videos onto it.
Create a unique experience. In general, most investors, angels and venture capitalists are going to want to invest in first movers – those who are like the Starship Enterprise – venturing where no man (or woman) has gone before. VCs want to invest in companies with the ability to provide a unique product or service.
But, history will tell you that there is another element to this. After all, Yahoo was on the scene before Google but Google dominates search. MySpace was on the scene before Facebook but Facebook clearly dominates social media. Photobucket existed before Flickr.
Guy Kawasaki suggests that being a “fast second” (rather than a first-mover) might be better – let someone else pioneer the concept, learn from their mistakes and leapfrog them.
What is more important, I believe, is a unique experience. Even though potential competitors may exist, if you can do 100 things better than your competitor (or 1,000 things better) or integrate functionality in a unique way, then you stand a chance of winning. In the end, you need some kind of special sauce that makes you truly special. For me, that would be a unique experience.
Unleash a virus. In Malcom Gladwell’s book, “The Tipping Point,” he writes about how contagious epidemics start. He refers not only to disease but also ideas, fashion, concepts and businesses.
Gladwell suggests that if you want to spread the word about your company, product or service then you need to leverage The Law of the Few. That is, the 20% of the people who seem to know 80% of the people. You need to reach out and find Connectors, Mavens and natural Salesmen or Cheerleaders. Once they grasp and appreciate your offering, they will do the selling for you.
He also suggests that the message, concept or idea needs to have a Stickiness Factor. The idea needs to have legs. As Guy Kawasaki puts it, your company, product or services needs to be cool, effective and/or distinctive. I have read Pennenberg (Viral Loop), Kawasaki and Gladwell all talk about making your site, product or service sticky. Make the message stick, make it memorable, make it easy to share and make people want to come back again and again.
If you can develop a contagious idea and then present it to a few people who are extraordinarily connected and well respected within their sphere of influence then you can take a giant leap forward in propelling your concept. Then, if your website has some type of multiplier effect where people have valuable incentives and motivation to share your site with their sphere of influence, then your viral coefficient will be great enough to unleash your viral concept and allow it to grow exponentially.
Find out how you can make people want to share your site with their circle of friends, family, colleagues and associates.
