This week my main update is that I had an appearance on the Startup Playground Podcast, as part of season 2 which he is calling the #CasualUndistancingTalks. The host Elvis (great name) and I had an in-depth chat. We mostly covered mindset about launching new products, and how to think about it, especially now during the pandemic. As well as the importance of teams and teamwork.
I had a lot of fun, and for some reason a lot of the examples were around mp3 players (remember those) and the launch of the original iPod. Makes sense, since we’re both podcasters. 🙂
In the early days, when I was just polishing off the manuscript of Launch Tomorrow, I gave it to a friend who also lived and breathed startups. I specifically requested that he keep it quiet and just asked for feedback. Professionally, he was a marketer but in this case I was hoping to get some honest “tough love” from him. To make sure the book would be good.
After speaking with him in person, I dropped a pdf into gmail, and forwarded it on to him. Coincidentally, I also happened to have an early trial version of Streak installed on my gmail account, which is an app which measures email opens, now primarily used by salespeople.
Over the next week or so, it turned out 37 people had opened that email 56 times in different locations around London and Europe. This simple indicator was enough to convince me that the manuscript is definitely at least a minimum viable product. If not a bit more. There were a lot of tweaks I wanted to make, but clearly my idea audience was enjoying and using it. Even though this viral spread was accidental, ultimately I was pleased that my friend had effectively proven to me that my product was ready.
This was a special case of someone who knew me well, the fact that he forwarded it without my consent and that it was re-forwarded so many times implied that my soon-to-be released product will be able to generate word of mouth referrals when I do launch. This was particularly poignant, given that this was a B2C product. Like most impulse buys, books (on their own) tend to be low $ value products. There is little margin for error with a high customer acquisition cost, yet you need to be great at generating awareness and discoverability. So you can only use channels that have a fixed cost up front but little additional variable cost of reaching another person.
Going Viral
While virality seems “free” from a financial point of view, it’s expensive in terms of your time. The idea is to create enough product (content in my case) which people naturally want to share. Once you have their attention, you include some kind of call to action which then turns into a conversion , like a sale. Or at least a micro conversion, like getting an email subscriber.
Your riskiest assumptions are probably related to your prospects and customers. Establish empathy quickly with your target prospect, figure out what's valuable, and get your innovation into the market.
Once people hear about your idea or your product, then they decide whether to buy it or not, and also whether to share it or not. Nowadays, it paradoxically seems easier to convince people to buy an inexpensive product than it does to get them to share it (at least for me). ????
Why virality can be an engine of growth
Matthew Lieberman, author of “Social: Why Our Brains Are Wired to Connect” and professor of psychology says:
We always seem to be on the lookout for who else will find this helpful, amusing or interesting, and our brain data are showing evidence of that. At the first encounter with information, people are already using the brain network involved in thinking about how this can be interesting to other people. We’re wired to want to share information with other people. I think that is a profound statement about the social nature of our minds.
The main reason viral growth can be a massive growth engine is the fact that once you get beyond a certain tipping point, the sharing be comes so extreme that it reaches disproportionately many people. Numerically, if you see it as a coefficient, it will be multiplied with each person (or step), and that number can quickly get disproportionately large.
My high school math teacher had a good example of this compounding effect. Would you prefer to get $1 mln today, or one penny today, two pennies tomorrow, continuing to double that amount for the entire month? This is, of course a trick question, designed to put teenagers in their place. The compounding penny option ends up being a much larger amount than the initial million.
This metric of 37:1 was my viral transmission ratio on this particular event. Basically anything above 1:1 will lead to geometric growth, if it sustains at that rate. At a rate of 2:1 on a daily basis, you’d be at 2147483648 within 31 days. It’s just raw arithmetic: 2^31. So if the true long term viral transmission rate settled at 2:1 that would still mean the book had a captive audience with high latent demand-and that I needed to get it out there.
The good thing about a viral growth engine is that it’s costless growth. As you don’t spend any money on building initial awareness, any revenues you do make are fully yours. If you do have financial constraints initially this can be a good place to start.
About to start a greenfield project?
Have Launch Tomorrow run an in-house "riskiest assumption workshop". Remote delivery options also available. Discover where to prioritize your validation efforts, to get to market fast.
The main drawback of viral growth is that results tend to be highly unpredictable and difficult to manufacture deliberately. Depending on how effectively you make your content unique and engaging, people will be more or less willing to share it. More often than not, all it takes is one share from someone with a large audience, and it will give you a big spike in traffic. It’s just that it’s difficult to get those initial share, particularly if no one knows who you are.
Manufacturing Engagement
The hard part is writing content good enough that people want to share it with their friends. To some extent, you can pre-test this by using what Andrew Chen’s twitter technique. He writes potential headlines as tweets, and then sees if anyone interacts with it. Once the idea is proven, via a favorite or a retweet, he uses that as a basis to write a longer piece on that topic. As a result, his growth hacking essays tend be highly focussed on his target audience’s needs. As a result of forwards, he effectively “clones” his existing audience. The content people forward tends to attract other interested in the same type of content.
Create an explainer video for your complicated new product.
Make sure your audience understands it, without being overwhelmed by technical details.
Another approach is to repurpose a backlog management service like uservoice or a kanban tool like trello combined with audience interaction. You can create a backlog of writing ideas, and then have your existing audience vote on them. This way you are naturally spending your time writing things which is attractive for them. It’s effectively a vetting and prioritization system for content, similar to prioritizing features in agile software development.
If you’d like more ideas of how to experiment with growth, take a look at Your First startup experiment my book on getting you to that first experiment. De-risk your startup idea and figure out how to grow, grow, grow with Your First Startup Experiment.
Key Takeaways
Virality can be an engine of growth because it rapidly raises awareness at a low per-user cost
The key is that you have each person refer more than one person to your product
While the best way to get and keep this effect is to build a great product that addresses a market need, you can experiment with some tools to help engineer in virality
From the very beginning, Apple always had a flair for marketing. Mike Markkula believed that a fledgling venture needed to act like a successful company if it wanted to become one, at least in terms of external perception, and Steve Jobs always insisted on the highest possible production values, even while Apple was still in the garage. The Apple II was featured in an expensive, two page spread in the September 1977 issue of Scientific American, for example, even though Apple had less than twenty employees and minimal sales at the time.
Apple’s advertising agency was Chiat-Day, founded by Jay Chiat in 1968. Jay Chiat was compulsively innovative, brash and irreverent, much like an older version of Steve Jobs, and the two hit it off great when they were introduced in 1981, just before Chiat-Day acquired Regis McKenna’s advertising operations. Jay and his talented team, featuring Creative Director Lee Clow and star copywriter Steve Hayden, crafted Apple’s first TV commercials, recruiting talk show host Dick Cavett as a spokesperson, and created the campaign that launched the Lisa, including a TV commercial that starred Kevin Costner while he was still unknown.
Toward the end of 1982, art director Brent Thomas and Steve Hayden came up with the idea of doing an ad campaign based on the timely tagline “Why 1984 won’t be like 1984”. Chiat-Day shopped it around to a number of clients, including Apple, where it was proposed to be used for a print ad in the Wall Street Journal promoting the Apple II. But Apple didn’t go for it, and the idea was filed away until the spring of 1983, when they met with the Mac marketing team to start working on the launch, which was scheduled for January 1984.
Steve Jobs wanted to launch the Macintosh with an inspiring commercial that was as revolutionary as the product itself. He loved the Orwellian tagline when it was presented, and he encouraged the Chiat-Day team to pursue it. Steve Hayden and Brent Thomas put together an intriguing story board, envisioning a visually striking, highly symbolic, miniature science fiction epic featuring a young female athlete who liberates the subjugated masses from totalitarian domination by throwing her sledgehammer to smash a huge screen displaying Big Brother.
Macintosh marketing manager Mike Murray and Steve Jobs loved it, but they needed to get new CEO John Sculley’s approval for such a large expenditure. Sculley was a bit apprehensive (after all, the commercial hardly mentioned the Macintosh), but he gave his OK for an unprecedented production budget of over $750,000, to make the one-minute commercial.
Your riskiest assumptions are probably related to your prospects and customers. Establish empathy quickly with your target prospect, figure out what's valuable, and get your innovation into the market.
Chiat-Day hired the best science fiction oriented director they could find, Ridley Scott, whose previous movie, Blade Runner, possessed the visionary dystopian feel they were striving for. Ridley was based in London, so they decided to shoot it there, at Shepperton Studios. Several Apple and Chiat Day executives, including Mike Murray and Steve Jobs, travelled to London for the week of filming.
By the time the Apple folks arrived, Ridley’s team had assembled a cast of almost 200. To play the oppressed, downtrodden baldheaded workers, his people recruited dozens of authentic British skinheads, paying them $125 dollars a day to participate. It was harder to cast the young heroine, since most of the models who tried out had trouble spinning with the heavy sledgehammer. Luckily, one named Anya Major was an accomplished discus thrower, and she could do it faultlessly, so she got the part.
When he arrived at the studio, Mike Murray went looking for Jay Chiat, who was supposed to already be there. He found him lurking off to one side, seemingly hiding behind some scenery. Apparently, some of the skinheads were in a nasty mood, and they were looking for trouble during breaks in the filming, so Jay thought it was prudent to make sure he stayed out of their way.
While the filming was taking place in London, I got a call from someone at Chiat-Day asking if I could write an Apple II Basic program to flash impressive looking numbers and graphs on the screen, to be overlayed on the image of Big Brother. I spent an afternoon cooking something up, and I sent it off to them, although I was never sure if it was used or not.
Lee Clow and Steve Hayden presented a rough cut of the commercial to the Apple team a few weeks later, and everyone was ecstatic. The commercial was classy, suspenseful and enigmatic, and seemed certain to garner lots of attention. It was shown for the first time at Apple’s 1983 annual sales conference in Honolulu in October, with Steve preceding it with a clever rap positioning Apple as the industry’s last alternative to IBM (see The Times They Are A-Changin’), to a rapturous reception, almost as apocalyptic as the commercial itself. The response was so great that Apple booked two expensive slots, for sixty seconds and thirty seconds, costing over a million dollars, to show it during Super Bowl XVIII, which was just two days before the Mac introduction.
Mike Murray and Steve Jobs screened the commercial for Apple’s board of directors in December, to get final approval for the huge Superbowl expenditure. To their surprise, every outside board member seemed to despise the commercial, with Mike Markkula suggesting that Apple begin a hunt for a new ad agency. One of the board members remarked that it was the worst commercial that he had ever seen. Steve and Mike were devastated.
About to start a greenfield project?
Have Launch Tomorrow run an in-house "riskiest assumption workshop". Remote delivery options also available. Discover where to prioritize your validation efforts, to get to market fast.
The chilling reception from the board compelled John Sculley to ask Chiat-Day to sell back both time slots that they had purchased. But Jay Chiat was true to form, and only sold off the thirty second slot, telling Apple that he wasn’t able to get rid of the longer one at so late a date. Apple considered using the slot for a more conventional commercial, but in the end decided to take a chance on the 1984 spot.
The Mac team was told that the commercial would air early in the third quarter, at the first commercial break after the second half kick-off. Burrell and I wanted to see a real audience’s reaction to the commercial more than the commercial itself (since we had already seen it plenty of times), so we watched the Superbowl at a sports bar near Stanford called the Oasis, with some other Mac team friends. The game was boring, but the bar was packed, and the commercial looked great when it aired at the designated time. We thought we heard a small murmur in the bar after the commercial, but it was hard to tell if there was any significant reaction.
Create an explainer video for your complicated new product.
Make sure your audience understands it, without being overwhelmed by technical details.
That evening, we were surprised to see the commercial run again on the evening news shows. Apparently, it made such a big impression on lots of viewers that, coupled with the fact that it only was supposed to run once, it became a news item itself, as well as increasing expectations for the upcoming launch. It ran dozens of times on news shows in the next couple of days, gathering Apple over five million dollars worth of free publicity.
A week after the Macintosh launch, Apple held its January board meeting. The Macintosh executive staff was invited to attend, not knowing what to expect. When the Mac people entered the room, everyone on the board rose and gave them a standing ovation, acknowledging that they were wrong about the commercial and congratulating the team for pulling off a fantastic launch.
Chiat-Day wanted the commercial to qualify for upcoming advertising awards, so they ran it once at 1 AM at a small television station in Twin Falls, Idaho, KMVT, on December 15, 1983. And sure enough it won just about every possible award, including best commercial of the decade. Twenty years later it’s considered one of the most memorable television commercials ever made.
This was a repost from folklore.org, a collection of war stories from Apple’s early days.
