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Mike Markson wrote an article yesterday which was published on Fortune/CNN about how it’s nearly impossible to break into the online media space and be innovative because there is so much competition. While he does make some good points, I think that his article will invoke a lot more fear into people than is really necessary. Should you use caution when venturing into online media, especially for the first time? Of course you should. But that advice holds true for any new business venture — online or not. Let’s break down the article and look at it from a different perspective.
Many a consumer looks at an “overnight sensation” such as Twitter or Facebook and muses: “That service is so simple — I could do that.” If only it were true.
It turns out that starting a business on the web is hard. Very hard. And I’m not talking about the technology – although that part is hard, too. I’m talking about the business part: building a user base and finding a way to make money. Those are really hard problems.
There is definitely some truth here. Not a day goes by that I don’t see a post on Craigslist from some guy with $500 who thinks that he’s ready to launch the “next big thing” in social media. Even if that were a sufficient budget to start such a project (and it’s most definitely not), the vast majority of these people aren’t coming to the table with any new ideas. They’re simply rehashing the same concepts that we see over and over again: microblogging, photo sharing, friend networks, games, etc. Without a new idea that’s completely innovative and game-changing, there is absolutely no way a new social media site can succeed; there is simply far too much saturation in the space already.
However, this absolutely does not mean that if you have a great idea, you should abandon it completely. It’s entirely possible that you do have a good idea, and that with enough patience and expertise, you can grow it into something successful.
So what do you need to watch out for? Let’s look at the eight points made in Mike’s article…
All the good names are taken. All the “real word” URL’s are taken and buying one will cost you a pretty penny. That means your options are made-up words and phrases (YouTube) or deliberate misspellings (Digg). These names are hard for users to remember and type correctly into a browser.
This is absolutely not true. While it does take some creativity and time to find a fitting and memorable name for your company or product, it is certainly not impossible. Let’s use Conversant Logic as an example, since I had to solve the naming problem myself when starting the company. The approach I took was to ask myself what the company offered that would differentiate us from our competitors. In Conversant Logic’s case, we wanted to position ourselves as a company with the expertise to allow different software and systems from competing vendors to talk to one another easily — or to put it another way, to “speak the same language.” Once I had that mission statement in mind, I began thinking of words that represented my vision. “Conversant” means “having knowledge or experience” [source], and “logic” means “the arrangement of…elements needed for computation” [source]. Put together, then, the name “Conversant Logic” means “having the knowledge or experience to arrange all elements of a system in such a way that computation is possible”. Now I have a name that is meaningful, isn’t using “made-up words”, and is memorable — in fact, I have gotten a lot of positive feedback from clients and partners on our name.
Once you do find a name and launch a site, good luck getting the press to cover you. The modern public relations channel is broken. No one reads newspapers anymore, and they only cover “stories” anyway. Unless you have some big time founder or VC, you’re probably not a “story.” Blogs can give you some exposure, but their audiences are typically not big.
With all due respect to Mike, this sounds like little more than bitterness to me. While the traditional publishing landscape has changed tremendously over the last few years, and print newspapers are increasingly giving way to their digital counterparts, I think that saying that “no one” reads newspapers anymore is an exaggeration. They are simply consuming the content in different ways than they used to. For example, I read Atlanta’s newspaper every day, but I do it via Google Reader or their website, rather than via their print edition.
As for blogs not having large audiences, this also is not true. TechCrunch is a large blog (and Mike should know this, given that they’ve been one of the only places online to cover his yet-to-be-launched Blekko search engine) and they cover a lot of small startups. Robert Scoble has also been known to talk about startups in their early stage, especially if it’s a compelling business model and something that he thinks is cool — and he has quite a large audience of readers too.
The key to getting your social media idea launched successfully is — ready for it? — to use social media to your advantage. Keep a blog, comment on blogs written by others, use Twitter and make friends with well-connected folks like Scoble, Guy Kawasaki, etc. These people are more than willing to help you promote an idea if it’s a good one. And when they talk, people listen.
Offline advertising won’t help you with exposure. Don’t bother spending your money on billboards, TV ads, radio spots or print ads – none of them will grow your audience. People don’t migrate their attention from offline ads to online activity. Spending your money on this type of marketing is a well-beaten path to failure.
Offline advertising doesn’t work, eh? Forget the TV ads, you say? Somebody needs to tell that to Best Buy, whose recently launched “Twelpforce” initiative (which has the retail giant using Twitter as a customer service tool), runs quite a few TV ads. Volkswagen has seen tremendous success in their online efforts by directing viewers of their TV commercials directly to their Facebook page. And Starbucks — a company that has notoriously struggled during the recent economic downturn — has taken an innovative approach with their offline marketing. It’s unlikely that these companies would invest large amounts of money using offline advertising to promote online initiatives if it didn’t work.
Even smaller companies can take steps to bridge the gap between the offline and online world. Something as simple as offering an exclusive discount to your Twitter followers can be very effective in both improving existing customer relationships and developing new ones via word-of-mouth.
Online advertising won’t work much better. Banner ads suck – no one clicks on them. Search ads are great for one-off visitors (or if you’re actually selling something and then they’re an arbitrage play), but won’t convert to organic visits. You’re buying your visitors literally one at a time, and that’s no way to build an audience.
This one is partially true. Banner ads aren’t as effective as they used to be, but they do still deliver some value — and in many cases, they result in increased repeat visits. Search ads work well for driving purchases [source], but visitors who arrive at your site via organic search are more likely to participate in communities and spend time on the site [source].
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There are more points to cover from the article, but we’ll go over them in our next post. In the meantime, I’d love to hear your thoughts. Has your company had success bridging the offline/online gap? What techniques have worked well for you?
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