Archive for June 12th, 2007

How to destroy competitors’ business model. Web 2.0 style. Part 1

How to destroy competitors’ business model. Web 2.0 style. Part 1 of seven parts detailing the themes behind a rapidly encroaching competitor using Web 2.0 techniques

Don’t Spin Your Own Fan

  • aGet others to do it
  • Remove potential limits to growth

Get Others to do the work

  1. Build? Not when you have open source, where you borrow before you buy.
    In building web applications, the lowest cost thing is to get code. Plus you never build it all yourself. Use open source libraries as well as the plethora of scripts and small applets that are being posted daily. Then your team builds up their aps based on the best work that is out there. The developers community will tell you about the best and where it is being used. In this case we are using code developed and used in Europe, the US and Asia on monster traffic sites. The community acts also as a trouble shooting resource . You are not alone.
  2. Reverse auction for contractors
    There are numerous international sites out there where you post your need for some specific application . Coders bid in a reverse auction process where they compete with each other to do it better for less. You pay nothing until it is delivered and works.
  3. Allow users to create and police content. Competitors need to vet their online content for ensure it is appropriate. We do much less as our community has a sense of ownership and self-polices content more and more each day. You pay nothing for this. Good user generated content pours in at very low cost
  4. Affiliate sites and worldwide partners pay you to be on the site, and you have no upfront cost to bring them on. Its all about access to our exclusive demographic
  5. Advertisers (today Google) pay us to display their messages. Initially you spend nothing to get these ads. As the site grows, you can increase our share of revenue by finding and placing your own advertisers on the site.

Remove limits to growth by employing the following design criteria in rank order:

  1. Build an extremely fast site for high load levels, the target audience wants instant gratification
  2. Multilanguage design from Day 1 (do not forget this).
  3. All future sites share the same back end design. We can build and grow sites faster and cheaper than going out to buy membership sites in an overheated market. The targets do shift to the site that has the most value to them.
  4. Unlimited Scale – Not 1.0 solution.
  5. This is an open site , not closed by subscriptions , which reduces the need for paid content administration.
  6. SEO/translation services are outsourced to wherever, no direct employees. The low price locale for this work shifts, today perhaps it is Argentina.
  7. Use modular technology layers to allow any new UI/device to attach whenever it becomes available.
  8. The first site is one brand, as a new demographic is identified, build a a new brand, this ensures no brand dilution fighting brand extension at the source.
  9. Market growth is phased. User feedback drives rapid development
  10. The site shifts as target shifts. Deploy a new site look in weeks, not years
  11. Develop in days what others used to do in month. Develop in weeks what others do in years

As a result of these criteria you can build an application with unlimited growth upside while driving costs down daily
This allows you to dramatically reduce site costs today and in future. Smart people can do this. Mediocre ones need not apply.

Next: Building a Great DevelopmentTeam.