Fundamental Principle of EntrepreneurshipShare
What does it take to launch a successful start-up in the digital age? The answer may be simpler than you think.
What makes some startups succeed and other startups fail? Entering a search query into Google will pull up thousands of results, ranging from personal tales of success and woe, to step-by-step instructions outlining the practicalities of launching your own company. However, the real secret, according to Reddit founder and serial entrepreneur Alexis Ohanian, is simply to make a product that people love. If you’re able to create something that people can rally around, then your position in the online marketplace will grow and flourish. If your product is shoddy or poorly thought out, then no amount of money spent on advertising & marketing will ever succeed in bringing you better sales.
Going back only about 8 years ago, it was much easier for a company to sell a bad product or service by bombarding their potential customer base with flashy ads and well-written copy. However, the rise of social media has empowered customers and changed the way businesses must think about those they serve. Social media is akin to the world’s largest water cooler, providing a very public (and well-documented and archived) forum for customers to share information on products and services they like, or don’t like. This means companies hear their customers’ complaints at the same time as the rest of the social sphere, instead of fielding them directly through their customer service departments. To ignore or underestimate the influence of these blog comments, tweets, Facebook postings, and online reviews on decision-making and customer behavior could mean certain death for a business. A 2011 article from Forbes opened with the foreboding line “The End is Near: Why 70% of the Fortune 1000 Will Be Replaced in a Few Years.”
Companies who have effectively navigated this radical change have tended to be the ones who embrace Alexis’ philosophy, such as Zappos, the online shoe and apparel store. In a Business Week article, CEO Tony Hsieh explains why he made the risky decision to transform the business from being essentially a middleman—collecting orders from customers and then having other companies fulfill those orders—to owning the whole sales process:
“We asked ourselves what we wanted this company to stand for. We didn't want to sell just shoes. I wasn't even into shoes—I used to wear a pair with holes in them—but I was passionate about customer service. I wanted us to have a whole company built around it, and we couldn't control the customer experience when a quarter of the inventory was out of our control.”
This passion for service has helped Zappos generate an annual revenue of over $1 billion dollars in under 10 years. If, like Zappos, your entrepreneurial endeavor is driven by a desire to provide a good quality product or service over high sales, then the organic, online conversations that spring up around it will be equally as good – and ones that no amount of money could buy.
Hear more of Alexis’ thoughts on how the internet has changed our lives for the better on THNKR.