Category Archives: Management

It's not B2B, it's not B2C, the problem is it's G2G

We look at a lot of early-stage mobile and internet companies.

Companies with really cool technology. Companies with really cool technology and lots of users. Companies with really cool technology and lots of users, that are failing. Companies with really cool technology and lots of users, that are failing and almost out of money. Companies with really cool technology and lots of users, that are failing and almost out of money……

because none of their users will pay for their product!  

These entrepreneurs tell us “that’s because we focused on B2C aka. the “consumer market” when we should have been focused on B2B aka the “business market,” or vice versa. or whatever.  On closer examination we find that, besides adopting the Freemicide model, in itself a death-wish, they have unknowingly, or perhaps naively, focused on G2G –  the Geek-to-Geek Market.  Their MLVP (Minimum Less-than-Viable Product), rather than attracting legions from their intended target market, has instead found a flock of interested early-adopters (Geeks) who will put up with almost any kind of roadblock or pothole to try a product.  Many of them become faithful users (while not paying a dime for the service).  Soon growth slows and stops and the founders decide that “if we shift our focus on the {fill in the blank} market, we can charge money (almost always deciding on $9.95 per month) and will most certainly succeed.”  They “pivot,” trying to sell their G2G product in the B2C marketplace, burning precious time and money, and producing dismal results.  The simple truth is that their current product is simply too-geeky for the average user to adopt.

There have been online storage providers since prehistoric times (the mid-90s).  Yet none of them were very successful and most have died a painful death – painful for them and also for their G users.  Along comes Dropbox which, in a very short time, dominates the consumer (and small business) on-line storage business.  Why? Because, while they recognized the value of G users, they also understood that the population of G users is relatively small.  They focused their efforts on a larger market – every web user in the universe – and built their product so that it was simple enough that anyone who could fog a mirror and could log on to the web was able use their service. They beat the odds of their freemium model, garnering a gazillion users, enough of whom wanted the paid version for them to succeed — all because they did not focus on the G2G market.

Moral:  Don’t decide that you are wildly successful because you have x thousands of users.  You might have captured 100% of the (non-paying) G market.  Instead, focus on a much larger market – C and/or B – and make your product sufficiently simple to use that anyone can buy it and use it.  Recognize G2G for what it is – simply a data point on your path to success and not an end in itself.

— Steve Hogan

Required Reading for Entrepreneurs

Here’s a GREAT POST from Brad Keywell, co-founder and Managing Partner of Lightbank Ventures and co-founder of a few well-known start-ups (such as Groupon), wherein he talks about a book that should be required reading for entrepreneurs. In my humble opinion, it should be required reading for everyone, especially our “leaders” in Washington.  Brad says that this book changed his life.  Your thoughts? -Steve Hogan

Don Mattrick Needs a Hat Trick

This morning’s news was brimming of stories surrounding Microsoft’s Don Mattrick taking over as Zynga’s CEO. While original CEO, Mark Pincus, is not completely out of the picture, Pincus will be taking the position of chairman and chief product officer. For the sake of Zynga, both Mattrick and Pincus will need to work together to nurse the company back to health.

Being CEO is hard, but taking over as CEO is even trickier. We know this because it is something we do when necessary. Although we mentioned it is tricky, there are a few things that Mattrick must keep in mind if he wants to turn Zynga around.

 Utilizing Pincus

Obviously the founder will be crucial to Zynga’s success, CEO or not. While Pincus couldn’t fair the weather as CEO, he is a valuable resource.  Just  because he is no longer CEO, he can still provide vision of where he would like the company to go with Mattrick holding the reigns on operations.

 Going Mobile

One of the reasons Zynga is amidst so much turmoil is their lack of speed in moving to mobile. Everything is moving towards mobile and if Zynga wants to stay afloat, they need to innovate quickly.

Repair Company Culture

It’s no secret that Zynga hasn’t been portrayed in the most positive light as of late. With news of mass layoffs, unhappy workers and unhappy investors, Mattrick has a lot of work to do in the morale department.

In order to best manage this transition; it is crucial for Mattrick to focus on the essentials. In the end, we want everyone to win in this game.

What other options do you foresee Mattrick running into? Even better, do you have any advice for the gaming savant?

– Nikki Griggs, Business and Marketing Associate, Tech-Rx