After The Hype

Loic Le Meur has a great post up where he talks about what happens after the initial wave of hype wears off. He wrote it in response to some negative posts about G+ but the situation Loic describes is something we see in almost all of our portfolio companies.

The shiny new toy syndrome lasts a month or two at best these days and then the hot new app crowd moves on. In the wake of that you will have built a base of loyal users who will be a fraction of your total users. 30% is a good number. If you kept more than that, you are doing great. If you kept 10% or less, you’ve got serious problems. In between those numbers is where most entrepreneurs land after the hype is over.

The thing to do is focus on those who remain, service them incredibly well, and start building from there. Forget about the hot app crowd. They may or may not be back. Your loyal users will.

This is one area of business building where being a startup helps. You have nothing else you can do. You can be laser focused on your product and your users. Big companies can lose patience and focus and kill things off before they have had a chance to develop.

USV invested in Twitter, Tumblr, and Zynga the same summer (2007). Zynga and Twitter took off fast. Tumblr was a slow build. They are all Juggernauts now. Fortunately the USV team were all active loyal users of Tumblr. We loved the product then and now. So we were patient and comfortable in our committment to the business. As were the founding team.

The hot companies come and go. You can’t create lasting value on hype. It can give you a boost for sure but at the end of the day product wins and that is where all entrepreneurs must focus, particularly when the hype cycle ends.

#VC & Technology#Web/Tech

Comments (Archived):



    1. fredwilson

      correct. but knowing how to race is also key



        1. TRAINER

          Also; run on the ball of your feet

          1. JimHirshfield

            And eat a good breakfast

          2. fredwilson

            yes indeed

          3. fredwilson


        2. Michael Lewkowitz

          One of your best FG… one of your best.

        3. Guest

          & your stick shift + clutch. You need to be in the right gear.

        4. CliffElam

          & wear clean underwear in case you get run over by a competitor

        5. Mark Essel

          Not die is requirement for survival?

          1. Kasi Viswanathan Agilandam

            Survival is not good enough for a WIN.FAIL FAST is the mantra many are following now.

          2. Mark Essel

            I hear ya Kasi, but I was merely extending FG’s thoughts. My comment isn’t quite right, quitters can potentially win in many situations (founders quitting and retaining equity that liquidates in a sale). Folks that pass away don’t ever survive.

    2. falicon

      I’m not in a race…I’m just going a specific direction at a really fast pace…I have no idea why all those other people running behind me (or is it after me?)

  2. William Mougayar

    Hype helps your visibility, but when the sizzle stops if the steak is not good, the client won’t eat it.I don’t like hype, but if you have a good product, the right amount of hype helps. It’s a balancing act.The worse part of hype is when some VC firm funds you based on initial hype, allowing you to continue the hype. And 2nd bad thing about hype is that it inflates multiples for valuation.I still hear VCs tilting their investments towards what’s “hot” which is another term for hype, instead of doing their homework to see beyond the mountain of hype.

  3. JimHirshfield

    Hype is an opiate. The buzz always wears off.

    1. Mark Essel

      Yup, and everyone wants another hit.

      1. JimHirshfield

        And we know where that’ll get’em: face down in a gutter.

  4. CliffElam

    I guess that’s why I prefer to build/sell enterprise apps.  More of a grind-it-out kind of sale.-XC

    1. Tom Labus

      They also stay around for awhile too.Lots of consumers side trends are gone in a heart beat.

  5. awaldstein

    Hoping for the ‘big bang’ launch to pay off is like pinning the future of your company on that big deal you are working on. Work hard at it but count on it not at all.I think things have changed, certainly since the ‘Crossing the Chasm’ days. Still sense to it, still the big ‘IT’ early adopters to corral but the gap for products that need a dynamic between people (and their data) to work is larger…and the process more complex in many ways.The value gap between those that know about, registered for, have used it and are giving it their time is considerable. The 30% number of ‘stickaround’ seems large but I bet the true ‘users’ number is much lower.I like the beta community strategies of ‘invite only’ and ‘invite a friend’ as a foundation to launch. Restaurants usually open and go from free friends and family, to a soft launch to an opening sometimes six months later. There’s something to be learned here.I see launch and buzz and social loops and block and tackle traffic building as critical, just subsets of a larger marketing point of view.

    1. fredwilson

      The 30% comes from monthly actives. Daily actives of 10% or higher is excellent

      1. awaldstein

        Thanks for these numbers. You have a way broader sampling than I have access to.It’s interesting that start-up or monster platform, the process of gathering new users, creating engagement and then broadening (or deepening) the user base again never stops. The cycle of building community ongoing.

      2. Rohan

        I thought the daily actives number would be much much higher. But then again, maybe I’m thinking of facebook. 

      3. ShanaC

        Why are actives so low?  I mean, why do websites seem so not sticky?

        1. Stevengermain1

          Low barriers to entry, crowded space, user dilution and fickleness?

          1. ShanaC

            Yes, but this creates a question about there are sticky sites to begin with…hmmm

      4. Loic Le Meur

        that’s a good precision, I thought 30% was high, but 30% of actives, not signups, totally makes sense.

    2. leigh

      I would mostly agree although i think it backfired a bit with google +. lots of pple felt snubbed by their ‘invite’ only approach.  it lacked integrity and felt like a marketing game vs. a beta and improve strategy.

      1. awaldstein

        True but Google wins sometimes in spite of its lack of understanding of social loops and human behavior and good marketing.Rules for monsters like Google, play different at street and start-up and early stage level. Their every move is seen. The rest of us need to fight invisibility.

      2. Cam MacRae

        It was infuriating. But for all my desire for an invite, I deleted my account after a month. It didn’t seem credible because, well, they’re Google, but apparently their reasons for the limited release stemmed from a genuine desire to know they could scale it. Finding out you can’t scale isn’t fun. Back in 1999 my company ran a TVC during a football final and naturally the site when down for a day and half. Back then being a little flaky was par for the course, and scaling meant scraping together the cash to place another order with Sun. Our expectations of availability have come a long way since then!

      3. Rohan

        Yeah. it put me off as well. Exclusive but not so exclusive.. I felt the same with Wave.

      4. Elia Freedman

        It strikes me that it is really ha to judge companies like Google, Microsoft and Apple. They could sell a million units of snot to their loyal followers. The real question is what happens after the first wave sign up for G+ or Windows Vista or Apple TV? I almost think we should start judging companies like that and the success of any product after they capture the first 10M users.

        1. JLM

          They are the nation-states of technology with such big fan bases that they sell 1MM of something and it is not a meaningful business segment for THEM.Of course, they can buy any technology company they want to get the technology or to ransom/kidnap the people.

        2. JamesHRH

          it is actually really easy to judge them.GOOG = AdSense + AdWords (everything else looses money)MS = Windows + Office (everything else looses money)APPL = everything makes moneyThis is not even a APPL fanboy comment. Its justing laying out the cultural differences. MS & GOOG do not understand their market positioning and refuse to limit themselves in anyway.FB is the same as GOOG & MS – they are doing a bunch of stuff that is useless and a waste of $$$.

          1. Pete Griffiths

            MS = Exchange

          2. Matt A. Myers

            And in the end consumers/people win, as long as we get rid of these stupid patents..

          3. ShanaC

            How is their display doing (aka everything and everybody surrounding DoubleClick)

          4. Guest

            how about iCloud ? I think that is not designed to make money, or how about facetime ? Apple did have mobileme, that flopped hard, and they pivoted and made it free and renamed it as iCloud. iMessages is free too(apple to apple messages at least)I think Google and Microsoft are different. Android is a cost center but it is meant to defend search(precluding microsoft from simply taking away all the anti-Apple space), but how exactly does bing help their windows and office sales ?Apple will have to give away more free stuff and affordable stuff in order to compete with android. That is great for consumers and all round competition

      5. Matt A. Myers

        Google+ is a slow build. Their initial loyal fans IMHO are developers who can see the potential with it and who want to associate with what Google is presenting so far as a platform. Some larger social media players like Mashable’s Pete Cashmore are already onboard: 188k+66k people have him in their circles. The quality of applications, and the quality of the platform will only build from there.”Google doesn’t need to create the applications that drive people and have them coming back – they need to provide the platform.Google doesn’t need to create community either. The applications will create the communities, G+ will connect them all.”- Lines from a blog post I am writing (they also happen to be tweets I made the other day..)

        1. leigh

          “The applications will create the communities” not sure i agree with this – i get what you are saying about platform but ultimately, if Google can’t figure out the evolution of their mission and how that relates to social, they run the risk of being the next Yahoo/AOL.  I know most of their internal focus has been on mobile so i’ll be interested in how that plays out in the next 12.  

          1. Matt A. Myers

            Yahoo/AOL have never offered to be a platform; I know Yahoo was doing an API – but I don’t know much more about it after that. I’ll add to my future blog post about that.. pinged a thought.I have some pretty good ideas as to where Google’s going – but they still don’t need most of it to happen in the next 12 months.

    3. LE

       “Hoping for the ‘big bang’ launch to pay off is like pinning the future of your company on that big deal you are working on. Work hard at it but count on it not at all.”A great comment. I would like to add that I’ve seen a numberof negotiations where the other side was overly confidentof their position and underestimated the effort thatcould be put in by the other party to win.So by being to confident they didn’t do prep work as if theywere desperate.They weren’t hungry enough and let theirguard down and lost.(I’ve also been involved with legal cases like this as well as the sale of a business where the same thing happened.)

    4. JLM

      Brilliant comment!I am friends with a family which may be the largest privately owned restaurant firm in the US and the guy who runs it swears by the quality of the launch being the single most important manageable impact on their success.That and being Greek, I think.These are the hardest working, humble folks who have a slew of the smartest children. I got to know the Grandfather years and years ago when they had a “few” restaurants and they have lived the American Dream for three generations.And it is still the quality of the opening process almost identical to the process you have outlined.

      1. awaldstein

        It was (and continues to be) an eyeopener to watch this process.I’ve built businesses online for a while and measure and test and retest everything. Seeing this in play in a completely different biz proves the fact that attention to detail and a maniacal drive to understand your customer and your value is the core of most of our successes, regardless of business type.

        1. Matt A. Myers

          It’s always reassuring I’m hear “normal.” 😀

    5. ShanaC

      question about your comparison to restaurants..It has been discussed here before that restaurants have a lifecycle.  Do web products and websites also have a lifecycle?

      1. awaldstein

        Everything has a lifecycle but technology is time and trends and behavioral evolution on steroids.With restaurants this is true also but some stuff just hits it right.Think about the Odeon in TriBeCa. Opened in 1980 for the Basquiat, Warhol, De Niro crowd. I’ve been eating there for 10+ years and while it’s evolved towards healthier food (and more organic wine), its brand and appeal is still constant.Or Lucky Strike in Soho. Both by Keith McNally (no surprise).The web is on a supercharged time clock of course. Constant new platforms enables new behaviors and taste and change is frenetic and fluid. But, then again, I still use IMDB every day since it started.

        1. Guest

          “I still use IMDB every day since it started.”And is this just by the nature of what IMDB provides? Or does this have to do with the way they provide it?Or something else?

        2. Donna Brewington White

          “I still use IMDB every day since it started.”And is this just by the nature of what IMDB provides? Or does this have to do with the way they provide it?Or something else?

          1. awaldstein

            Strictly info Donna.No love affair here. No social connections. Just pure geek movie info that I seem to have an insatiable need for. I’d switch if something was better immediately. What I really want is that information tied to purchase/rental streaming/DVD access.

          2. Matt A. Myers

            All the industry people use IMDB as an info resource, so it stays up-to-date too. It would take some effort to move them onto a different platform – but it certainly needs improvement from a UI/UX view..

          3. JamesHRH

            All media properties have core audiences (dailies) and reach audiences (monthlies) and then they have brand awareness (irregular users).The trick is to satisfy the core while not diluting the core brand proposition for the reach and aware audiences.Not that hard; unless you have never done it before or you are Rumsfeld on it.

        3. JLM

          I think in the restaurant biz there is a huge difference between a restaurant and a restaurant entrepreneur.I met Jeffrey Chodorow through YPO years ago and listened to his explanation as to his approach v having a “joint” completely different.The ability to scale up and create deeper capabilities in training, customer engagement and menu development is huge.Years ago I used Pat Kuleto out of SF — designer of Wolfgang Puck’s restaurants — to develop a restaurant in Austin (Louie’s 106) that was wildly successful for 20 years to see it disappear because of a garden variety rent renewal dispute after I had sold the office building.Shit happens because restaurateurs are artistes.

          1. awaldstein

            Well said and thanks for sharing that.Working on something in the food biz (very early stage) and thinking a lot about the crossover and differences from my consumer tech background.

          2. JamesHRH

            A decade ago, the tech term was ‘founderitis’.They weren’t all artistes.The founders that I worked with who showed ‘Founderitis’ symptoms, I now describe as unprepared: personally, professionally or for the startup journey.

        4. laurie kalmanson

          and most joints by danny meyer

          1. awaldstein

            So true! 

        5. ShanaC

          If the web is on a supercharged timeclock – eventually some very popular site will give.  I can even seeing one day that site being IMDB…

      2. Stevengermain1

        Everything does.

    6. Matt A. Myers

      If all it takes is one big deal to make your company take off – then you better hope there are no other ‘big deals’ possible that competitors could make.The only way to own a long-term lasting company is build a quality product. That means finding a problem that could use a solution, and then working with the people who would be using it – and every step of the way. Sure, lots of parts can be theorized as to how they should work – but I wouldn’t suggest making a business tool if you don’t understand business.Along with understanding of how something works, being able to quickly translate that into something functioning is the next important part (into UI/UX-workflow). The better you can do this the better your product will be able to be. (How someone writes and articulates thoughts is a good example of how well they can manipulate and manage ideas, etc).I wholeheartedly agree Google that hasn’t understood social loops / social human behaviour and they lucked out initially on having the name Google for their company (variation of Googol which means the digit 1 followed by 100 zeros: only geeky engineers would come up with such a name). Google+ is perfect though. I have more thoughts in my draft blog post – – it’s not posted yet though.Recently though they’ve seemed to have found some brilliant marketing people, and they’re doing the slow-play. They don’t need a wave (no pun intended) of people to start using their products, and it’s a good plan to not have a wave (the point of invite-only) – so the quality of people’s first exposure will be better the later they’re exposed to it. Google can build the tech, and their slow-play marketing can plant the seed for the feeling behind it from the tech. Their sentimental-fuzzy warm awww Google search videos are good examples,Example:…I think this is the proper way to do it as well. You need personality integrated into your products and for your products to allow a feeling to be instilled, but that doesn’t mean putting permanent pictures of bunnies in your logo – unless 80%+ of your users absolutely always love seeing bunnies; Switch bunnies with kittens if you want to immediately think of the largest media sites related to cats.. By giving people a feeling before they reach your product (via excited word of mouth referral or “it’s useful” testimonial or via video marketing ad), then they’ll give it more of a chance – and then the easier it is to use and navigate once they get there the higher conversion rate/use-rates you’ll get.By Google’s tech being ‘plain’ and focused around usefulness/utility, it allows it to be more neutral so 80%+ of people will be okay with it.Build the tech, then use marketing to create feeling and teach users at the same time.P.S. Someone(s) give me seed money so I can continue to build my products and plan/build/test my marketing strategy. Pls & thx *wink* Maybe I’ll just knock on Google Ventures’ doors, but I’d rather play that card when my hand is stronger.Edit: This comment disappeared, now is back after letting Disqus know – and it’s forever lost at the bottom of reply threads being 2 hours old at this point. Sad face. I wonder if anyone will see it..

      1. awaldstein

        Just found this Matthew. Will read and digest and get back to it.Quick question…you seem to feel that Google is turning a corner and starting to understand the consumer, that is you and I. And marketing to us.So…What is Google+ then to the mass market?Not as a why it’s different from Facebook but the answer to “Why Google Plus?”. Being purposefully dense because they may get slow roll but they don’t seem to get how to roll it out to the broader marketplace. As yet.

        1. Matt A. Myers

          Wrote a long reply but brain is mush at end of day and will edit it / post possibly only tomorrow.

    7. laurie kalmanson

      shorter: you can spend all your money on a superbowl commercial, or you can keep showing up every day making your product better and the users will come and tell their friends

      1. awaldstein

        Yes… on the lack of market logic for the big bang theory, that a better product value is a pathway for usage and community, and on the power of word of mouth.We violently agree I think.But great content alone on the web is not an answer on its own. Just building it is not enough.You need to smartly figure out, and go out, and make those connections happen. Marketing at its core (and its best) does this.Community and markets happen. But almost never without intent.

        1. Trish Burgess-Curran

          Sometimes, when there are too many things to do, as I imagine can happen when you are starting up a company, that you suddenly don’t know in which direction to go or what to prioritize. When I feel like that, I just tell myself ‘keep rowing’ or, at the Brits would say, ‘keep calm and carry on’. I think this is completely in line with what you guys are saying. Don’t give up, just keep at it.Your comment about the importance of marketing has really resonated with me. You need to have something worthwhile to show the world but, at the same time, the world has to know about it and you are the only one that can tell them! Scream (gently and with a great smile) if you need to!

          1. awaldstein

            Well said.The less discrete, the less a special team, the more integrated marketing is to the company, the more naturally iterative it becomes…and I think the more successful.There is a time for launches and campaigns and rollouts, but marketing works every play in between. Connecting company value to customer appreciation and finding those customers is a perpetual ongoing endeavor greater than the sum of all the tactics and all the measurements.

        2. laurie kalmanson

          all true, all good; all as it should bebreaking thru the noise is a longtail thing … being remarkable will get u there … but smart marketing helps get u there faster. that, and viral love because it’s awesome

          1. awaldstein

            Spoken lie a true digital marketer Laurie.

          2. laurie kalmanson

            😉 i’ve been at it since the first boom …

          3. laurie kalmanson

            kind of u to say

      2. leigh

        Depends on what your product is and what category.  Sometimes a superbowl commercial makes sense.  

        1. laurie kalmanson

          if you have a ton of money, sure, go for itdon’t make it your only bet

        2. awaldstein

          Would love to see that spreadsheet Leigh. Not before the ad but after it was run when the data was in 😉

          1. leigh

            oh you cynic…..  Audi of America http://www.metrobusinessmed…

          2. awaldstein

            Thank you! And yes, I didn’t hide my bias very well 😉 I’ve never worked for large brand that I wasn’t part of the team that built or rebuilt it. Broad based brand advertising has never been core to my approach.

          3. JamesHRH

            @awaldstein:disqus remember: broad reach brand ads remind people of the core positives of brand. Audi is a classic Super Bowl customer (reach and association of brand to popular / world class event ).Founder of IMG closed Rolex sponsorship of Wimbledon by just taking CEO to the finals….association is powerful and reach of Super Bowl is very efficient. Dynamite brand combo….

    8. Steve Poland

      I Jane always felt the same about launch/viral concepts being critical, but I question it now… if your product is amazing, isn’t it just going to spread? is addictive and just great, if they didn’t have FB friend velvet rope, I don’t know it would have mattered. Twitter didn’t need/have viral strategy. Ditto on Foursquare. Kik had a viral component already baked into the product for it to blow up so fast. Andother companies had a great product, but maybe took longer to catch on.

  6. leigh

    I so enjoy going in early and seeing what it starts out as and then coming back later to see what it eventually becomes.  For me there is a great deal of insight found in that evolution.  



    1. Matt A. Myers

      Managed hype. If I wasn’t restricting my domain name addiction I’d register …

  8. testtest

    Users want to find products that solve their problems. They love it. And when they find them they want to stick with them; they want to tell their friends about them; and they want to get other people to use them.

  9. ErikSchwartz

    The far left hand side of an exponential growth curve looks an awful lot like mediocre growth even for rapid growth companies. I was on twitter about a year before you invested (there were like 3000 people then). For the longest time I was followed by biz, noah, greg clayman and a very few others. I was following about 10 people and got maybe a single update a day.

    1. andyswan

      Me too.  Well maybe not that early.I was posting my trades on twitter.  People “went crazy” for it.  At the time, that meant like 200 followers and 5 replies per post.  That’s what led to the “real trade sharing” invention at mytrade that took us over the top.Now I don’t tweet about stock trades anymore, mostly due to regulatory restrictions….and I have 4k followers, I post nonsense during the day, and I rarely get 5 replies to a post. Another “this party was a lot more fun before Kardashian showed up” moment.  

      1. Mark Essel

        Regulation prohibits public knowledge of trades you make personally?I’m pretty far from in the know when it comes to trading but thats like an investor not being able to talk about a new hot company they invested in.

        1. andyswan

          It’s because I am an employee of a regulated entity and apparently some people might think I am making recommendations on behalf of that entity.  

          1. Mark Essel

            Fair enough, can’t fit disclaimers in tweets.Or an entire legal department.

          2. Aaron Klein

            The day I stopped working for a regulated entity was a great day. 🙂

          3. andyswan

            The day I started working for one was the best day of my career 🙂

          4. Aaron Klein

            (RE the comment below, and my email reply didn’t post)I’d venture to guess that’s because you arrived when they bought your company, and I left to start mine. 🙂

          5. andyswan

            email replies have been dropping for me too.  Not sure what disqus is doing with those.Good guess.

          6. Tyler Hayes

            Re: email replies not posting: sorry about that. We just pushed a fix.If this persists, can you please forward me (tyler at an email reply that didn’t post? Make sure to forward the email itself, not just its text, as we’ll want to see its headers. cc @andyswan:disqus 

    2. Tom Labus

      Twitter was best during the first part of the financial crisis in late 08/early 09.  There were great people around and legit dialogue.

  10. andyswan

    Surfing the hype-wave…. 1)  Capture what you can on first visit.  Contact info, etc.  2)  Get people into some sort of subscription billing if it is possible in your business model.  3)  Don’t be afraid to listen to why people are leaving.  FIX THAT and then use #1 to tell them it’s all better.4)  Be honest.  One of the reasons I think twitter survived the fail whale shitstorms was because they used the fail whale and admitted that they sucked.  Nothing wrong with “whoops we weren’t expecting ALL of you!” and then fix it.5)  Realize that you’re lucky and this will end.  Fred’s post today is awesome and gives numbers to drive home the point (though you can improve these with the steps above!)You can’t count on hype, but you can be prepared to maximize it for the long-term.  Just think how much better off Groupon is LONG TERM with millions of emails and transaction histories than if they’d just setup “” and never knew who bought from the merchant….

    1. markslater

      you have to be kidding me about the groupon statement. the lesson we are learning from groupon is: don’t be a tidal-wave – be the tide. 

      1. andyswan

        Yes it would suck to have hundreds of millions of dollars in the bank, a worldwide footprint, a relationship with 100k+ small businesses, millions of valid email addresses and the billing information of millions of customers……..2.9 years after launch.

        1. markslater


          1. Matt A. Myers

            Did your jaw lift back up yet?

        2. JLM

          In spite of that, would you have passed on $6B deal?I applaud everything you have enunciated and yet I see no real barriers to entry or protective moats.How many bikini waxes can I use per year.I get about 23 of these daily deals and I use them frequently but I am just using them to get a better price for stuff I would buy at retail anyway. I no longer pay retail.It is my sense that Groupon will regret not going to the pay window when it could. Who knows?

          1. andyswan

            No, but then again I thought Zuck was a moron for passing on $1b at the time.I’m not here to say groupon is the best business in the world.  I’m saying it’s better that they captured as much user contact/billing as possible during the hype than if they had not.

          2. JLM

            I am sure that you and I are guys who think the same about going to the pay window while leaving some meat on the bone for the next guy. Take a profit, get some rest and find the next leggy blonde.

          3. JamesHRH

            MarkZ said this was the leggiest, blondest idea he would ever have, so he sees no reason to rest……

          4. markslater

            ofcourse not. it was insane. The unwind is imminent. anyone that thinks this is anywhere near a sustainable business model is also the former.

          5. andyswan

            So are they better off with the contact, billing and small biz info they’ve gathered during the wave, or not?That is the entirety of my point.

          6. Matt A. Myers

            In reply to @andyswan:disqus , Their competitors who have a different model, the model that will be around after Groupon goes, will already be gathering that data as well and be fine-tuning / discovering.

          7. markslater


          8. ShanaC

            Honestly, a lot…But would you go to groupon to get them…Interestedly, I am not sure why they aren’t chasing up the food chain (more big retailers and service providers) and why they aren’t hosting some serious lectures for the SMBs about how not to lose money on a groupon.  Currently they are shooting themselves in the foot about the poor break evens…

          9. JamesHRH

            Uhhhhh TMI.Anyone who has ever sold local media know there is a place for coupons. It is a trial program and a reward program. Yes, 15% of coupons are used by lousy, disloyal customers. Shana is right that they have failed to talk coupons effectively to their customers.

          10. JLM

            Their business deal is really not very attractive unless you can embrace a CTA v LTV thought process.

          11. markslater

            their business deal is lipstick on a pig.wait till someone allows real market forces to re-calibrate local supply and demand.

          12. ShanaC

            @jameshrh:disqus – only reason I know is my girlfriends and II are somewhat smart.  We run the numbers somewhat.  It isn’t worth it to switch providers if you have a very specific interest, no matter the coupon offer. Under what situations is it worth it to run coupons – and what should the coupons be offering….@JLM:disqus LTV = long term value, but what is CTA, because I keep thinking that you don’t mean Chicago Transit Authority

          13. Carl J. Mistlebauer

            My mentor had a saying in regards to discounts, “once a whore always a whore….” and that pretty much sums up the benefits of GroupOn to small business.When consumers say, “I am just using them to get a better price for stuff I would buy at retail anyway. I no longer pay retail.” that is pretty much the kiss of death.GroupOn has some tangible assets, as Andy noted, but the reality is Kmart and Sears had some valuable real estate assets also…that does not make them a great company or a great investment….its just value on paper.

          14. leigh

            Friend here became the CTO of a startup that is about local coupons.  Guess who they did a huge deal with?  Canada Post (our mail delivery service).  Why?  Canada Post makes a HUGE amount of their revenue delivering flyers.  It’s a massive business.I just think Groupon has missed the forrest for the trees on this one.  They aren’t thinking postal code enough.  

          15. JamesHRH

            Great point – a coupon across the city (in CGY, only 1M+ people but huge geo footprint) is useless.Your CTO friend is smart. GRIM no eat him!

          16. markslater

            no brainer.

          17. Matt A. Myers

            “How many bikini waxes can I use per year.”I dunno – how fast does your hair grow?…P.S. I have the same sense re: not going to pay window. Google was merely buying the brand and following/emails (and was offering value of those).

        3. Tom Labus

          Groupon has a full tank, they just need to figure out where they want to go.

  11. Kasi Viswanathan Agilandam

    Google can afford to create a hype and have some fun … because they are GOOG not the start-ups.

    1. William Mougayar

      Google doesn’t create hype. They take gambles and see what sticks. 

      1. awaldstein

        That’s why they aren’t a consumer mass market company in a nutshell. They are not missing hype (certainly!) they are missing innate understanding and caring of the market.There is a significant widening of the circle of tech aware and Beta as acceptable product population. But to market to the mass market that way is just not the way to win.Google TV is the biggest case in point.

        1. JamesHRH

          +1.They have the consumer insight of the monster grad school culture that Eric Schmidt talks about. Any professional marketer would be ashamed to work there, given the hit to miss ratio.

  12. William Mougayar

    On the topic of hype, if you want to see hype, just read the TC headlines.

  13. Elie Seidman

    Amen. Many are the overnight successes that take 5 or 10 years to build. Fads come and go every month.

  14. falicon

    This is also why it’s important to focus on engagement and long term value before going after the early adopters…the products that have something of real value baked into the core are more likely to develop those long term users…those that are just interesting for a day are going to make the splash and then fade just as fast…Many moons ago I started and ran a fantasy football community…for every 1,000 paid subscribers I would get, only one or two would actually convert to die-hard community members (and ultimately good friends – but that’s a side point)…it was a long and slow uphill battle that ultimately I couldn’t figure out how to do more than break even with (the community was great, the profits were not).On the flip side, was born out of a quick email from Whitney and about a three hours of coding…but his idea had a viral nature baked in…so we got an initial splash because of timing (we released it just a week or so after Twitter released lists)…and we’ve held thousands of ‘active’ users because it’s set-and-forget…and we continue to get new users because the common list name and the way Twitter lists works draw more people in.My service was another that kept engagement high by initial design (email alerts and communication)…so it retained close to 80% of the people that signed up (I recently closed this service because Twitter eventually released this feature itself)My service however had no ‘real’ long term value…so it generally only keeps people interested for about 10 minutes…It’s a little early to tell for my latest project – – but so far we are seeing around 35-40% daily active engagement (almost entirely driven by our daily emails)…about 10% of users who check us out drop out after the first day…and maybe 20-30% over the next few weeks…the users we can get through that period seem to be sticking (and reaping the benefits as we evolve the system)…So anyway – my point is, make sure you’ve got something sticky before you get that initial splash…think about how you are going to keep people around (and coming back) just as much, if not more than, you are thinking about how you are going to get them in the first place…

  15. Weathervane Music

    Great posts (both of them), thanks for sharing.It makes us think about the parallels with the music industry. Hype is highly prized by musicians, but doesn’t lead to a career. Like entrepreneurs, there can be quite a valley on the other side of hype. But the rules hold the same. Find your fans and connect with them. It’s your core that matters, not the fickle winds of hype. 

  16. Steven Kane

    Hype? What hype?

  17. Pete Griffiths

    Absolutely.  Eric Ries covers this rather well in his discussion of ‘vanity metrics.’

  18. laurie kalmanson

    i have read exactly the same math about restaurants1. can’t get a table; only celebs and vips2. no reservations avail, but you can try standing in the bar and waiting3. reservations avail 2 months out, to the day, via various arcane systems4. book a table 2 weeks in advance and you’re setthe limos and the crowds move on but the regular people who stay loyal become the regulars, plus the special event crowdand once in a while you can bring the kids there by the time it’s summer and the place has become an institution

  19. Irving Fain

    Great post Fred and couldn’t agree more. It’s easy to get overcome with the excitement that hype and press bring, but I always remind myself that there’s no such thing as an overnight success. This is a marathon and not a sprint…You have to be your own harshest critic.

  20. hypermark

    My main comment is that a lot of companies struggle with the internal narrative of “what does this drop-off mean,” and like a lot of things, gravitate between the extremes – it’s a non-event and the sky is falling.Where internal communication is good, the team settles on a context, and moves forward. When the internal communication isn’t good, you see a lot of thrashing as folks break into camps aligned with each of the extremes, side agendas pop up and the like.Having this metric – combined with intellectually honest, open communication – is super helpful in that light.

  21. Chris Johnson

    Fred-And then welcome the people that tried and left back with open arms and gratitude. 😉

  22. Douglas Crets

    The most annoying thing to me is that media reports on the hype, not on the news. I try not to do that as a tech blogger. 

  23. Reykjavik

    But this exactly the problem with the latest tech wave. So many shiny toys, so little time. I don’t care how cool your platform is — you have to make it incredibly easy to integrate into my life without experiencing greater fragmentation. I guess this is why cool point solutions hustle to get acquired by strategic buyers who can bury their features in a larger product.

  24. Tarakit

    big companies, doesn’t care if they are killing small businesses and entrepreneurs, they just love to surf and got no patience with slow productivity and progress

  25. Loic Le Meur

    thanks Fred, glad you liked my post. I have fallen into that trap myself many times.

  26. Gregory Krajewski

    Google is not a regular startup.  It should be able to keep more of it’s users after the shine has worn off.

  27. testtest

    Another variable with user adoption — speed of user adoption, and particularly concurrency — is the amount of value the application supplies via network effects. An application, for example, that relies heavily on network effects needs to maintain its critical mass of users to provide value. An app that is less network effects heavy doesn’t.A product could minimize its exposure to a lack of network by launching to a subgroup  — that are connected — targeting additional subgroups once each has stabilized. This also has the benefit of minimizing resources needed at the early stage.Another could be judiciously selecting the features at launch. Limiting those that require a broad/deep network etc. This is more than Minimum Viable Product, it’s being cognizant of dynamics of customer acquisition.The product isn’t in isolation so the, current offering, position, and market share, of the competition set should also be taken in to account.

  28. Vinay Pai

    Agreed, hype can be a nice way to kick off a launch  but won’t sustain engagement beyond the next trending topic on twitter. 

  29. Steve Koh

    Specific to G+ though…C’mon. After seeing the F8 announcement today, how is G+ going to compete?  Google just launched a nearly identical Facebook type product of which FACEBOOK is walking away from very soon in favor of Timeline.

    1. Guest

      google+ is not exactly a product from a startup. Don’t forget android, youtube, gmail, chrome and search. They can leverage all that and easily get a few hundred million users. Both will survive just fine. But I have to say after f8, I think facebook has put its nose ahead of Google. Good move by facebook, but google can copy this easily if the new features prove to be successful. It is not an insurmountable barrier for google really. Nothing is over.

  30. Carl Rahn Griffith

    What do people think of the Hype Cycle visualisation – as used by Gartner – in this context?

  31. Ramon B. Nuez Jr.

    As an entrepreneur I somethings find it difficult to stay focused. My partner and I had to pivot recently. We had 5 video properties and they were consuming massive amounts of our limited time. We consulted a good friend Epi Ludvik and he explained that we must focus on one product. We have been doing that for the last 4 weeks and we are getting much better traction, today.

  32. jonathanmendez

    Fred – Interesting that you don’t consider Twitter a slow build. I always have looked at it in that light. Searcher interest in twitter points towards 2 years of slow growth until spring of 09:…

  33. paramendra

    Tumblr might have taken its sweet time, but now is on a tear. 

  34. Aaron Brazell

    Reminds me of Brad Feld’s 2006 post, “The First 25000 Users Don’t Matter”.

  35. LissIsMore

    Sage observations, Fred.I am working on launching a new product and we are taking the “build it slowly” approach.  It is an app targeted at Architects and the Construction industry.  We are starting with a “friends” approach to a closed beta as a starting point.  The thought is that we test this out in a small, focused, easy-to-get-feedback way before we unveil this to the great unwashed crowd.

  36. shaukat hayat khan

    i found some thing new

  37. Gisli.N

    If you have been following semantic technology developments and Web 3.0 then I came across an interesting forthcoming internet search engine, the first of it’s kind to understand concepts instead of keywords, pretty interesting stuff.

  38. awaldstein

    The restaurant example is something I saw with a  friend’s new spot.Hours, menu, wine list adjustments. Widening social loop, including celebrity as things become fine tuned and you know what is working and why. There is a trajectory towards market success that makes the launch, the opening, not the first circle of early adopters but the larger mass market.Pie against the wall is really not a thoughtful strategy in any way.

  39. andyswan

    Keep crankin Charlie.  There is no time limit.

  40. Matt A. Myers

    I agree with you. Am there too – in many senses.I am a slow build, as Fred mentioned Tumblr is. The good part of it is I have hype around my product when people hear about it / check it out, it just doesn’t have a big loyal following immediately (Note: bookmarkers-return visitors), because that’s not how it should evolve because the functionality isn’t where it will be. It will be purely organic growth, and the marketing strategy will help give a little bit of a boost to the growth (while really just being customer support/service).They are simple features but features nonetheless they take time/resources to build – and quality needs to be assured when there are plans to scale to 100+ million per year users/visitors, so you don’t have to go back later. Building on a bad foundation is bad bad bad, and it makes things feel so slow at that same time.I will admit, the prototypes I have created now were pushed through so they’d be done – but it’s not so far along that a month of dev time with a more permanent team can’t overhaul and set it all up to allow for speed in service and speed in agile dev for the future.

  41. falicon

    heh – and these are just some of the things I’ve dabbled with…the reality is just that I learn best by doing…and I always have a lot to learn 😉

  42. Steve Poland

    What are you working on?

  43. Steve Poland

    I have been down a similar path… you can’t count on the 100,000 users. Get it up and out, if its great you will have plenty of time to optimize/rebuild. Look at, they optimized for months andmade little change to product. Look at Foursquare, spent about 2 years doing same and building team, but product remained basically same- cuz it worked for users.

  44. Jon Atrides

    Would you say its possible to define a time period after which a company failing to attract users should just give up? i.e. when do you call a slow build a no build?

  45. Steve Poland

    …which is why you need to be working a project that is solving your own problem that you have, rather than a made up one. That’ll help keep your focus. But yes, as an entrepreneur, ditto issue with multiple ideas all the time… the wheel never stops. I find blogging the ideas gets them out of my head and let’s me move on.

  46. Matt A. Myers

    I haven’t ever shared my top-level idea with you, yet. :PI’m much more organized now – it’s helped a lot, along with regular yoga, and weekly therapy. Good times … when you discover how memories / situations from when you were 3, 4, 5, 6, 7 years old contributed to procrastinatory, ADD, etc. tendencies – and once you realize they’re there then being able to slowly change that behaviour.

  47. Matt A. Myers

    Exactly. And I’m aiming for the slow-play anyway. The market will be much different in 5-10 years from now – I know I will be around then.

  48. Matt A. Myers

    I have sooo many problems though.. 😉

  49. Donna Brewington White

    Charlie — do you have a target user?Edited: Meant “Who is your target user?”

  50. Donna Brewington White

    Part of your charm.

  51. Matt A. Myers

    <3 Charlie

  52. Matt A. Myers

    Every case will be unique. It’ll depend on the person running the show’s understanding of everything – not a small feat. If the person running the show doesn’t have strong passion and vision and belief that if it reaches a certain point or they haven’t figured out how to reach that point (or even what that point is) then I’d be worried.

  53. JLM

    Goog is very impatient and given their magnitude, it is a problem.

  54. Matt A. Myers

    It’s a platform, and G+ is a startup. I’m writing a longer blog post on it that’s not up yet; http://mattamyers.tumblr.comAnd true, not really anyone is using it yet, that’s because it’s really really young.

  55. Tom Labus

    Buzz II

  56. Kasi Viswanathan Agilandam

    really liked “I know I will be around then”… especially the “I know”….that tells how confident you are on what you are doing. Good luck.

  57. Matt A. Myers

    Thank you. I have big plans, with many parts to those plans and the different parts can succeed on their own without the bigger plans working out. Worse case scenario I go into politics full-time, however I can get more done if I have money coming in.