I think that the three big areas most startups (I use this word loosely) fit into is:
- Providing a product, like 37signals.
- Creating a community, like Pinterest.
- Building a useful platform, like Twilio.
Many successful startups end up with hands in many buckets, but those identify the three main areas pretty well.
Right under building something useful, the most important problem that all three encounter is generating some sort of scale. The chicken-and-egg situation is a central topic of many, many talks (it certainly was at Startup School) and for good reason: almost everyone has to deal with it to some extent.
Most of these talks deal with solving the problem (Airbnb says create the supply before you create the demand, and Groupon/Facebook tackled the problem by targeting a certain location and growing). However, I think the most effective solution is…
This doesn’t mean put up false testimonials (“Great app; use daily! — Barack Obama), create fake real-time activity (extremely easy to spot), and fake your numbers (though I know plenty of startups that do, and it works).
Rather, you can engineer your appearance to give off a sense of size. There are plenty of ways to do this; here are a few I’ve heard of from famous startups:
- Quora’s staff started off answering as many questions as they could. This helped create a site that had activity on it, which encouraged other users to participate. Suddenly, they didn’t have to spend hours answering questions themselves.
- Whenever Reddit‘s admins posted submissions, it would randomly generate a submitter’s name. This is similar to what Quora did, but slightly more… cunning.
- ██████ takes their real-time user numbers and multiplies them by a randomly generated number. Whereas before, it would say “6 users online,” it would say “68 users online.” They don’t fake any activity, but just that extra magnitude of users generates a large amount of actual user activity. Soon, they won’t have to do that, as their real user activity will generate enough momentum by itself.
- Several communities, including Pinterest (one I feel especially fondly about), just need activity to succeed. It’s tough to generate meaningful activity to a point of scale with a small number of employees. To solve this problem, they start as an invite-only community. Because they’re invite-only, they have the time to generate useful content, gain really passionate users (when user’s get invited in when mere mortals aren’t, they’re more likely to participate, empirically). Then, once you reach a point you’re happy with, you can open it up to the public — and bam, massive growth follows.
Create a presence.
I think the most useful thing I’ve learned over time is to create a presence online, from day one. Create a Facebook account and a Twitter account. Create a website, even if all it does is get you indexed in Google. Have a footer with links to an About page or a Team page, policy pages, and maybe even a jobs page that says you’re not looking for hires at the moment (this link alone changes your project, in my mind, from a side-project to a full-fledged business). Create a CrunchBase entry about you and your business.
Then, when you want TechCrunch or Mashable to write about you, their Google result (they will, no doubt, search for information about you) will be filled up with pages about you.
Of course, it’d be awesome if you had the scale, but most people don’t. Build something useful, then feign the users to get the users. Every startup starts at 0 users. Every successful startup users some sort of social proof to increase their conversion rates. Faking it is probably a harsh term, but it’s pretty true.
And if it ends up leading to real user activity and a nice valuation, nobody’s going to care.
Originally posted to my (now defunct) blog on November 19th, 2010.