Fred Wilson Nails Early Stage Distribution Playbook

Posted on February 25, 2011. Filed under: Hyperpublic, venture capital | Tags: |

Fred Wilson just wrote a post on marketing/distribution for early stage companies that is an absolute must read (to the point that I feel a need to reblog it).  His main point is that spending money to grow before your product is awesome enough to grow organically, is a waste of time and resource.  I’ve been thinking about this a ton vis a vis hyperpublic and also in preparation for a talk a gave on Wedneday at Jon Steinberg’s Viral Meetup at General Assembly.  I just wrote a response to Fred’s post which I’ll reproduce below because I think his lesson goes beyond just how to think about paid growth, but also to how to think about spread in general, and when the right time is to optimize for spread:

My response to Fred:

“wow…weird…almost identical to my talk at Viral meetup on Wednesday…but I went even further. forget about paying for traffic in early days, but I also said forget about trying to induce virality in early days. your last point about making the product not suck was my entire point. I talked about the idea of “gift virality” which I’ll define as “users perpetuating your product out of affection to the recipient.” If I think about why I share Groupme, it’s not because I’m unlocking a new feature by hitting Fbook like, or even saying something about myself, by displaying my usage. I pass groupme along because it’s a gift i can give to friends that doesn’t cost me anything. Too many viral mechanics focus on rewarding or incentivizing spread before the product has become awesome enough that it is a “gift.” That type of inducement is non-replicable and short term. Rather than chasing the techcrunch company that got 1 million users in 48 hours, especially for early stage companies that are resource constrained, I would argue that early teams should spend all their attention turning their product into a gift. Once that’s achieved, all of the mechanics which you very clearly and helpfully outline are known science. Too many consumer internet apps chase growth before their product is awesome. It’s important to have users and data to make a product better, but optimizing for spread before your product is a “gift” (especially for utility based products) is a distraction and inefficient use of internal bandwidth. Paying for growth is an amplification of that mistake. Both induced viral mechanics and early paid acquisition are band-aids that artificially inflate but do not solve the problem of distribution. Great post Fred, one of my favorites you’ve ever written”

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    I’m a NYC based investor and entrepreneur. I've started a few companies and a venture capital firm. You can email me at Jordan.Cooper@gmail.com (p.s. i don’t use spell check…deal with it)

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