It is interesting that most entrepreneurs use simple online products on a daily basis and don’t realize why they use exactly those products.
It is even ironical that we don’t realize what it is exactly that makes all these super successful products so successful and what these products all have in common.
Ok, I will be more specific. I talk about successes such as:
I will show you how they did it and how we can employ the same methods in our enterprises.
But there is a problem. I can keep on giving examples to illustrate the thesis, but I will not succeed in case you define “success” or “Mega success” in other ways than I do. To eliminate that problem: When I talk of “mega success” than I talk about a company that succeeds to create revenues where others failed, or that has gathered more public and fans than others.
This article is specifically about how the Big Guys make humongous amounts of money from their products/services while frustrated entrepreneurs struggle to sell just one product or subscription. There are reasons why this happens – it is not a question of luck.
The most important reason why Google is Google, and Groupon Groupon, etc, is because these businesses weren’t run by marketeers but by strategists. Don’t get me wrong, I am a real marketing man and I will continue to use marketing to let my online stores and future companies grow, but when we are fair – marketing is just a piece of the cake called commerce.
In reality strategy is much more powerful to achieve “mega success” than marketing.
I know that you like to talk about “earning the money”. I too, but I had to first make clear how important strategy is, so that the following examples are easier to grasp.
What happens when we make a list with what has to be on our “state-of-the-art” online store/website? We start with an ABOUT US page, CONTACT page, HISTORY page and another 107 ideas that no one in the world really cares about.
What did Google do? Google removed Google Weather, Google News, Google company history and another 987354 things that no one was interested in and just focused on the most important part – the Google Search Engine.
What is the most important part for your online business?
I hope you can appreciate the fact that users only care about the core product (or service) that is user friendly, free of risk, easy and effective.
Is that what you deliver?
So the first rule is that you should give something of great value for your users/visitors, in a simple and direct manner.
But wait… the Google search engine is free for users, Google make their money with ads. When you ever did something with advertising you will know that sellers most of all like to put shameless advertisement space on their web pages and sell those to advertisers.
I am also convinced that the typical advertisement salesman would recommend Google to place the advertisements on the home page of Google.com. The company would probably make a lot of money in that way, but not for long.
I hope this sounds logical. The company has to be designed to be of great value for its users. When you sell advertisment space on your website, keep in mind that your users want to get something out of that. The advertisements should be relevant. The point I try to make is simple: think first of your visitors, not about your advertisers. When the core of your business is good, than the money generating part follows naturally.
Many probably don’t know that Groupon only became the current Groupon after many experiments and modifications. The original concept was thepoint.com (http://www.groupon.com/about) that lets users start their own campaign. Such a campaign could be anything, from “raising money for charity”, “ban Ebay for x days” to “let publishers publish magazines without photoshopping the models”. These campaigns were used to call people to action.
So you could start any campaign you like and if you like give rewards in return. Hmm! The website encourages groups to get into action, but in a very open, not focussed and confusing manner. Great concept, but a lack of focus.
One day the founders decide to split off the branch with group discounts and make a new company out of it: Groupon was born. This was a great decision and we now know Groupon as the fastest growing billion dollar company in history.
I have given two examples – Google and Groupon. Did they use marketing or strategy for their success?
Above I wrote “When the core of your business is good, than the money generating part follows naturally.” It is, however, not always that simple. If it were, Open Office would now be the world’s most used software.
O, you don’t know what Open Office is??? Fine, the point is made then. 😉
Open Office is a software package with everything in it needed for word processing, calculation tables, presentations, databases, and more. Simply put you can do everything with Open Office what can also be done in Microsoft Office. The only difference is that Open Office is free.
For MS Office 2007, Open Office was literally a copy of MS Office – the same functionality, user experience and no compatibiliy problems.
Open Office became a fail because of a lack of strategy. MS Office continued to ask money for their product and marketing for a large audience while Open Office couldn’t even spread her product for free.
There are a few reasons for this, but let’s focus on this:
How business should operate – the Google method
Google introduced her version of MS Office, first named Google Docs, now Google Drive. Google Drive has only a small part of all the features of MS Office or Open Office, but Google gave it a nice twist. A user can open and share his/her document everywhere on the world, when there is internet access.
But wait! Where do they earn the money? Not with advertisements.
Do you remember that I wrote that the money comes automatically when the product is good? Google introduced a premium version of Google Docs and the mail service for companies desperately looking for a way to share and centrally save their data. Many companies also have problems with their e-mail servers and tada! Google Apps was born. I use it myself too, the solution is simple and works fine.
Again – Strategy
The Google Search Engine, Groupon and Google Apps filled a niche in the market, but it is important to notice that they all deliver a clear and focussed service.
For the search engine it was about the search functionality; for Groupon about group discounts; and Google Apps focussed on achieving higher office productivity via cloud computing.
There are many differences between the big guys and the small guys. An important difference is that the big guys are self-secure enough to say “no” to mediocrity. They have the same mental capacity, but the big guys use it differently. I mean, I am sure that Google could have added 87 extra features above the features already offered by MS Office, but they didn’t do that. They introduced basic features and cloud technology in the office software – quite neat! Remember, marketing follows strategy, and not the other way around.
Leave conventional wisdom and continuously challenge existing ideas.