A small highly-motivated user base that loves your product is better than a massive uninterested one

He will win whose army is animated by the same spirit throughout all its ranks
-Sun Tzu (The Art of War)

I would rather command a company of Marines than a brigade of volunteers.
– Capt. John R.F. Tattnal

I’ve spent the last 7 months actively nurturing a community of greeting card artists into existence. Despite my “go big” entrepreneur mentality, it is clear to me now that going slower and developing a small highly-motivated core group of users was vital. Swinging for the fences right away and having a massive but uninterested user base shouldn’t be considered a success. The slow growth has allowed us to work with them personally and has endeared them to our cause. They tell their friends to buy from us, they actively recruit their favorite artists for us and they help each other through issues instead of requesting support.

The word of mouth that these users generate is incredible. A full 25% of all our traffic is new direct visits (people typing CardGnome.com into their browser after they are told about us) and 95% of our new artist acceptance has come from word-of-mouth referrals. They are starting to cost us less to support because they take the time to know the system better, and because they ask each other for support on our forums instead of emailing us.

They spend more, they cost us less to support, they recruit artists and they find us new customers. I don’t just view this in terms of economics, but they lower our cost of customer acquisition and increase our average lifetime value. If you are just starting, focus on making a few users extremely happy instead of spending money to acquire uninterested ones.

A small highly-motivated user base that loves your product is better than a massive uninterested one

A lesson in marketing from Jay-Z

Until I met Dre, the only one to look past, gave me a chance,
and I lit a fire up under his ass, helped him get back to the top,
every fan black that I got, was probably his in exchange
for every white fan that he’s got, like damn, we just swapped.

– Eminem (White America)

Over the past year I’ve started to really take an interest in the strategies companies use to distribute their product. One of my favorites is a sub-set of co-promotion that I’ll call the “Network of networks” strategy whereby a single product brings together a couple small but passionate groups. Rappers do this extremely well by featuring many artists into each song. Each artist comes with their own small but passionate group. Each group is strong within its own social network, but nothing on a macro-level, when they come together they can bring a product to its tipping point.

“Social” startups are trying to take advantage of this and are starting to make it work. This or That, for instance, runs contests where one networked group competes against another networked group. Each group feels compelled to mobilize their group to get votes and thus build a user base for the company.

The next time you sit down to think about your own strategy, think about how you can build this network effect into the model.

A lesson in marketing from Jay-Z

What Wikileaks can teach an entrepreneur

All warfare is based on deception. Hence, when able to attack, we must seem unable; when using our forces, we must seem inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near. Hold out baits to entice the enemy. Feign disorder, and crush him.
– Sun Tzu, The Art of War

Behind the divisive politics, pundit rampage and laugh-out loud diplomatic correspondence of the past month lies a few great lessons in strategy. Every unexpected or game-changing event must be looked at as an opportunity to revisit our objectives and further our interests. As with most things in life, attitude and resilience in the face of a shifting environment is what defines success.

The market is never in our control, the best we can do is understand its basic dynamics. When the environment changes, much like it did for diplomats following the leaks, calm determined actions are required. The US government knows it can’t stop Wikileaks, so while they developed new strategies in each region, they also acted like very publicly like they were in panic mode.

Startups often get caught in in reverence for honesty and openness and forget that business is a complex strategic game. Their is a time and place for openness, and also for deception. A startup by its very definition survives by the sheer disbelief of the establishment, quietly building market share and technology assets. Help them ignore you and believe you are a non-entity.

What Wikileaks can teach an entrepreneur