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Ron Malhotra, a Contributing Writer for Thrive Global and The Huffington Post, opined a while back that there are really only three ways for a company to stand out in business today. Be first. Be different. Or be best. Being one or all of these things doesn’t guarantee success, but it does offer a potentially smoother path toward it.
Let’s start with the concept of being first. First to come up with a solution. First to market. First to innovate. For a business, being first helps to capture and capitalize on market share. For the vast majority of companies, being first is not possible. And even for those that are first, that first-in-class status is only ever short-lived until others jump into the marketplace.
In fact, being first might even be a disadvantage because it takes time for consumers to understand a truly new, innovative product, and it takes time for a new concept to gain recognition and traction. That is an uphill battle. Consider Six Degrees. What, pray tell, is Six Degrees? It was the first social media site. Created in 1997, it enabled users to upload a profile and make friends with other users. Since then, hundreds of other social media sites have sprung up like wildflowers. Today, most people don’t even know what Six Degrees is. Being first to market did not mean they were successful long-term. While being first might seem like an enviable position, it didn’t help Six Degrees. If fact, for Six Degrees, being first was a challenge and that status lasted a short while until MySpace came along and offered a better social media experience.
Being different is also good until others recognize what sets the company apart and then they can copy and even improve on it. Consider MySpace. MySpace wasn’t the first social media site, but it was the first BIG social media site. MySpace targeted the same audience, had robust capability, and went to market early in the rise of social media (well before Facebook) in August 2003. The site generated a lot of interest, got early press, had a huge valuation and investment support, and was not only an early Internet success story, but it launched today’s social media movement. Because of its initial success, MySpace was purchased by News Corporation, a powerhouse media company. Professional managers were hired to guide MySpace’s future. Employees were given tons of resources to support growth. At its peak, in 2008, MySpace was attracting 75.9 million unique visitors a month. At that point, MySpace was the leading social media site in the world. It was different than Six Degrees, but being unique did not last long.
Facebook launched in February 2004. It grew quickly from there. Facebook also aimed to be a little different from MySpace. The site was less about meeting people you didn’t know and more about keeping up with the people you did know. But that wasn’t the only difference. Facebook was willing to keep trying new things, evolving based on market demand. It added features that customers wanted. By December 2009, Facebook overtook MySpace with 350 million registered users and officially became the world’s most popular social platform.
For MySpace, its downward spiral was shockingly fast. By June 2011, just three years after its market peak in 2008, CNN reported that MySpace had sold for $35 million… a tiny fraction of the $580 Million News Corp. had paid for it. MySpace has since been bought and sold multiple times, and has faded into social media history. Meanwhile, Facebook continues to grow. It has 2.5 Billion monthly users and 1.66 Billion daily users today, and was valued at about $140 Billion as recently as two years ago. The irony is that MySpace’s CEO Chris DeWolfe held talks with Mark Zuckerberg, Facebook’s creator, about acquiring the social media newbie in 2004. DeWolfe rejected Zuckerberg’s $75 million offer.
So being different – like being first — is also a temporary distinction unless the company has patent protection or some element that is “secret” (such as KFCs recipe) or “proprietary” (such as Apple’s closed operating system). Companies whose products or services are not protected by law must keep innovating in order to continue to “be different.” That is Facebook’s formula… continually evolving, changing, adding features and acquiring competitors that offer something different. Facebook has embraced “different” as its secret sauce, and that has allowed the tiny social media company to become a global social media giant in just 16 years.
The key to being different is embracing change and a willingness to take risks. Companies that refuse to take risks and change usually perish.
Then there is being best. Being best is a space any company can occupy with enough intentionality and effort… and those are the keys. Being best requires understanding what customers want, producing that with insightful intentionality, and then delivering it with relentless, unceasing excellence. Most companies fall short of that very high benchmark in one way or another. The enemy of best is good. And, at many companies, being best wanes due to bureaucracy or complacency. There are two classic business stories that talk about how being best – which can translate into being faster, better, more customer-centric, etc. – wins the day in business.
First is the classic Borders vs. Amazon story. Borders was complacent in the face of a technological revolution, and outsourced its online sales of books to a little startup called Amazon. Amazon ended up taking all of Borders’ customers, disrupting the book publishing space, and decimating Borders. Borders neither understood nor cared what its customers wanted until it was too late. Amazon focused on being better and faster and highly customer-centric. Borders failed and Amazon went on to become not just the number one seller of books and music, but of most every other product imaginable.
The other classic business story is the one about Yahoo vs. Google. Created by David Filo and Jerry Yang in 1994, Yahoo began as a collection of favorable web pages that included a man-made description with each URL. As the company increased in size, it influenced them to become a searchable directory. Informational sites were added for free. As they expanded, they included commercial sites for $300/year, but there was a long wait time to be included. Then in 1996, Larry Page and Sergey Brin began working on BackRub, a search engine that utilized backlinks for search. Called Backrub (the original name of Google), it ranked pages using citation notation, meaning any mention of a website on another site would count it as a vote toward the mentioned site. A website’s “authority” or reliability came from how many people linked to that site, and how trustworthy the linking sites were. Google launched in 1998, taking this “different” approach to search. Just one year later, Google became the search engine for AOL. Yahoo, however, didn’t begin to work on refining its search functionality until 2002. By 2005, Yahoo was using Google’s search algorithm to power its search, even though it owned other search engines. But, by 2008, Google was emerging as the lead search engine in the U.S. Yahoo slowly continued to lose market share. Today, Google is the 800-lb gorilla of search while Yahoo has just 2% of the search market. In just 10 years, Google went from startup to global search leader. And, although it began as an online search firm, today Google — now part of the Alphabet family of companies — offers more than 50 Internet services and products, from email and online document creation to software for mobile phones and tablet computers. Its 2012 acquisition of Motorola Mobility put it in the position to sell hardware in the form of cell phones. Google’s broad product portfolio and size make it one of the top four most influential companies in the tech marketplace. These are classic business stories of companies that focused on being best as a way to not just be in the marketplace, but to actually dominate it.
Only top organizations are able to scale and remain focused on being best. Another case in point. From 2003 to 2020, LinkedIn grew from 500,000 users to over 675 million members. How did LinkedIn ward off copycats and become the number one professional networking site in the world in just 17 years? They pushed to be best. What did that mean? They looked specifically at what professionals wanted/needed and pushed to deliver that. LinkedIn provided a spectacular tool for job searching and making career connections. LI users could create their own brand on the site, and then find and connect with a similar circle of workers or users with similar interests, or similar qualifications, language proficiency etc. That detailed view of users was helpful to professionals. It also allowed users to stay up to date with potential career competitors, enabling them to assess their own work experience against that of others. And, it allowed users to find and connect with co-workers, and stay connected even after changing jobs. LinkedIn focused on being best by making the user experience as valuable as possible.
They also expanded efforts beyond acquisition to such user activity as activation, connections, retention, and resurrection. They looked as the quality of signups, and the engagement quality of members. It was not just about adding users. They wanted quality users, members, and customers. And, they sought to expand into other markets to make the networking even more valuable within a global economy. Every effort was intentional and focused on being the best social media site for professionals.
For companies wanting to scale up and not just survive, but thrive, in today’s marketplace, it helps to be first, be different or be best. And, learn from the examples set by other businesses, and let those serve as both guide and inspiration.
Quote of the Week
“The secret of success is to do the common thing uncommonly well.”
John D. Rockefeller Jr.
© 2020, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.