MappingTheWeb //

The typical marketing plan of a clueless, old-school Internet company looking to kick it up a notch with some new-school, trendy social marketing strategies. 

Sound familiar? Countless Internet companies have become brain-washed. They are convinced that these new technologies are critical to their future success. In some cases, they may be right. But for the most part, they lack fit. Successful marketing techniques have to be strategized on an individual basis. What works for one start-up may not work for another. In other words, RSS may work for company A, while widgets may be best suited for company B.

My consulting background has really driven this point home. I’ve heard things like: “Our website NEEDS tagging” or “Let’s throw in some AJAX”. My subsequent steps are as follows:

1. I laugh (well, not aloud).
2. I describe the technology in detail and outline the benefits.
3. In most cases, I dismiss the use of the given technology.

My basis is simple: the ‘trendy’ technology MUST further the user experience and/or provide a greater marketing punch. The simple implementation of a technology for the sake of an implementation is pointless. Simply put, the questions that a company needs to ask itself are as follows:

• Will this technology create a more enjoyable user experience?
• Can we reach more potential users if we implement this technology?
• Do we simply find comfort and security in new, buzzword-compliant marketing techniques?

All jokes aside, this is a serious problem. More and more, we are seeing the use of these technologies in places they shouldn’t be. They are a waste of resources and confuse the offering.

Simplicity is key.

If traditional Internet marketing strategies (such as e-mail marketing or SEO) will provide the greatest ROI, then forget about RSS, podcasting, and the rest of their buzzword siblings. With all due respect, I am a huge advocate of all the technologies mentioned. Their place on the Internet cannot be argued, but they must be used in the proper context. 

PS. Another correct answer to the initial question would have been: the typical business plan of a Silicon Valley start-up. Too many start-ups are looking to jump on the web 2.0 buzzword bandwagon - VCs just don’t buy it anymore, literally.

There are two things that Google needs to do in the next year to maintain its current momentum and market position:

1. Reinvent itself.
2. Explore new revenue channels. 

Yes indeed, Google needs to reinvent itself. People like to cheer for the underdog. Google used to be in that position. It is no longer the case. Due to its control and substantial market share, Google is now the big kid on the block. With this dominating presence comes a certain level of community backlash and disapproval. Microsoft experienced this and continues to do so.

Google has always had a habit of not only meeting expectations, but also exceeding them by a wide margin. Product launches have caused phenomenal buzz. Product quality has been second to none. Google needs to continue this tradition to be successful and well-liked by the Internet community. Marketing can only go so far. The products must speak for themselves. The lack of innovation, launches, and recent news (acquisition aside) has put the company in a stagnant position. I am not being critical - I am just making an observation. Having said that, I think that big things are in the works. I expect to see a full office suite (obviously), as well as a surprise in the coming months. A social network? A Google browser? A Google wi-fi network? I don’t know, but I have high hopes.

Secondly, Google needs to rethink its revenue model. Putting all their eggs in one basket has worked well for them up until now. Increased competition, click fraud, and lack of diversification are all now working against the company. Something like 98% of Google’s revenue is derived from advertising. This is not sustainable over the long term. The company needs to explore alternatives. Who would have ever thought Rome would fall? What about Enron? The big guy is never at the top forever. Nevertheless, things can be done to hedge against a collapse. For Google, this starts with revenue diversification and perhaps even an overhaul of the current AdWords/AdSense system.

If Google is able to reinvent itself and adopt new revenue channels, I think it has the opportunity to stay on top longer than it would otherwise. I have confidence that the current management team will make the right decisions. Although I doubt any of them read this blog, I hope that they are thinking the same things as I. It would be a pity for Google to run the same course as Microsoft.

Every successful start-up needs a revenue model. Some choose one early in the game, while others choose to wait. The latter strategy sounds very familiar in the web 2.0 world. These start-ups prefer to build their user base before settling on a revenue model. Not only does this tactic affect short-term cash flows, but also the long-term perception of service quality.

Quality? How so? Well, if a start-up chooses to provide a free service from the get-go, suspicions around the quality may arise. This may not seem obvious or apparent at first. Some people might even find this statement offending. But subconsciously, people may initially judge the service to be inferior simply based on the perceived monetary value. In other words, even though the service may be of high quality, the free price tag may signal low quality to some observers.

For obvious reasons, a given service needs to be tested, analyzed, and compared to other similar competitor offerings to determine the actual level of quality.

The downfall of charging for a service from the start is purchasing dissonance on behalf of the user. This creates a barrier to entry for service adoption. Subsequently, there is likely a longer path to critical mass. Having said that, revenues are being generated from Day 1. Furthermore, the perceived quality of the service will likely exceed that of a free offering. This strategy seems quite rare in the web 2.0 world, as start-ups are afraid to introduce initial barriers. Instead they try to build a user base as quick as possible, ignore monetization, then try to sell to a bigger company (AKA the web 2.0 revenue model). Failing that, they slap on Google AdWords and pray that they can generate enough page views to cover costs until the next round of financing - definitely not a sustainable model for about 98% of start-ups.

The “free-mium” model offers the lack of commitment and security of a free product, as well as the option to upgrade to a premium offering with added functionality. Many popular web 2.0 companies, such as Flickr and LinkedIn, offer this tiered system. 37signals is also very well-known for its suite of free-mium web applications. By offering a tiered system, a given start-up is able to project an image of quality and confidence. These two characteristics radiate from a company that can offer a free service, but is confident enough that the premium offering will sell itself.

Try and say that ten times fast. Tongue-twisters aside, the topic has spurred endless debates and countless discussions. Though a successful business requires more than just a great idea, the idea itself plays a key role in the vision and evolution of company. Perseverance, determination, and dedication are all critical to any new venture, but the basis for any new company must start with the core offering. This leads us to the original question: do the most successful start-ups stem from the identification of a market need and/or inefficiency, or from a simple problem-solving exercise that happens to bring about an unlikely business opportunity?

Science

Some believe it is more of a science. These entrepreneurs start by identifying a potential market inefficiency or flaw. Research and due diligence is then conducted. If the idea is validated and a significant opportunity presents itself, then a business venture is launched.

This systematic approach usually follows a more traditional path, which includes the likes of an incorporation, financing, and strategic business plan. Specific goals and milestones are set forth and board meetings ensure that these targets are being met.

The key to this approach is tactical planning and pinpoint execution. If the idea is good and the implementation is smooth, then success is probable.

Serendipity

Often times, serendipity plays a role in the business creation process. An average citizen, likely with little business knowledge or expertise, attempts to solve a nagging problem. In doing so, he/she stumbles across an ingenious solution which may help others with the same problem. This discovery stage leads to a entrepreneurial stage when a business is created.

A more sporadic, less formalized business direction is usually followed. This dynamic form of business bodes well for flexiblity and change, but lacks in terms of guidance. Nevertheless, such an unplanned strategy has worked successfully for many in the past. Craigslist is a great example of this. Initially, Craig Newmark launched a simple, regional list of current events. His idea eventually blossomed into the world’s largest online classified ads site.

Conclusion

What can we all learn from this? Successful start-ups can stem from either origin. Essentially, this means that we haven’t learned anything at all, other than the fact that a great business idea can be conceived at any time, under any circumstances.

In order to gauge the success rate of both approaches, comprehensive research would need to be conducted. Even then, a case-by-case analysis is the only way to truly extract any reasonable conclusions. Therefore, an idea should be judged based on innovation and opportunity, not origin.

What’s your take on successful start-ups? A science? Serendipity? A combination of both? Neither?

After taking a look at widget marketing, widget fever, and the monetization of widgets, I have come to one conclusion: widgets are NOT a business model. They are a marketing tool. There needs to be an underlying product or service behind all of this embedding. This made me wonder, “What are widgets comparable to in the offline world? What’s a good metaphor for the world of widgets?” Then it hit me - flyers.

Flyer Analysis

Flyers are created by a given store, then distributed to potential customers. The flyers themselves are worthless. They are a tool to entice customers into the store. Only at that point can revenues be generated.

Flyers can easily be moved from one location to another. They can also be easily disposed of. Furthermore, their very presence can catalyze word-of-mouth marketing and provide much needed brand exposure.

Widget Analysis

The widget world works much in the same way as flyers. A given widget is fabricated by a company with the intention of widespread distribution on the Internet. This embedded marvel provides value to the destination site, but can easily be removed if the publisher so desires. The widget itself is relatively useless to the company when it comes to revenue generation. Widgets are meant to drive traffic back to the parent property, which can then monetize the user via advertising or a subscription model, perhaps. Finally, as is the case with flyers, widgets can also create general brand exposure and awareness.

Obviously this isn’t the perfect metaphor - the biggest difference being that flyers cost money to print and distribute, while widgets cost nothing other than the cost of human labour. Having said that, I still think the metaphor helps to provide clarity when thinking about the purpose of widgets. It is also a great way to explain widgets to a non-techie or Internet user with little knowledge of web 2.0 world.