I was recently thinking about the changing business model for many brick and mortar stores, like Best Buy. Where Best Buy used to be price competitive, they now charge a steep markup in-store. People making these purchases seem to be mostly those unaware of the true price. I occasionally purchase from their stores as well, when I absolutely need a physical item and can not get it shipped. Chris had the pleasure of listening to me vent about the absurdity of purchasing a $25 ethernet cable the other day.
Basic economic theory holds that competition should put downwards pressure on prices to where they approach equilibrium, and are fairly close to the cost of manufacturing. Yet this is not happening for ethernet cables. Why is that?
When you boil it down, it seems to be convenience -- you're able to purchase the physical item when you want it, and examine it before you purchase it. Going further, though, convenience doesn't only apply to in-store items.
Weebly is a great example of the power of convenience. When we started off, we heard "Oh, web hosting... that's a commodity" quite a bit. Most people considered it a "solved" problem, and quite boring. But the problem of designing visually appealing content, uploading media, and hosting web pages was far from solved, and a simple, easy to use solution gained quite a bit of traction fairly rapidly.
Which begs the question: "How do you model convenience?"
When analyzing competition, it's quite easy to model out all of the service characteristics, such as features and price. In fact, if you compare Weebly to several horribly outdated web site creators, the feature list might not look that different. The user experience, on the other hand, would be. Where Weebly shines is its simplicity and ease of use. Or, more simply: convenience.
Hopefully, someone with experience could shed some light. How do you model for convenience?
In a couple week's time, the teams YC has invited will be flying out to Palo Alto for a quick, shotgun style interview that they'll base their funding decisions on. There's one thing you'll almost certainly need when starting a company: other people's help. The right introduction at the right time can make a world of difference. Was reading an interesting post by Seth Godin this morning about bounce rate called Silly Traffic. Google Analytics defines "bounce rate" as "the percentage of single-page visits". Which got me thinking -- what's our bounce rate? You've built a cool product. Great! Now, you need to show it off to people. Usually, this is a demo: a quick, 5 minute tour around the product. Do you take into account the hidden cost when making decisions? It's one of those areas where I used to fail miserably. I've learned to take it into account over the last couple years, but only recently was able to formulate the concept properly. I first started working on Weebly in February 2006. I worked for about a year on it with Dan and, later, Chris' help, and we launched a (very) early version of Weebly in mid-November 2006. We were TechCrunch'ed a few days later, and accepted into Y Combinator the same day. (On the morning of our YC interview, we woke up to discover we were on TechCrunch). The first is a graph of our new signups per day, and the second is a graph of our total user count per day. I've annotated the top graph with what events caused the major spikes. These graphs look a hell of a lot better. There's 2 things I'd like to point out: Once you launch, people start to know about you. If you launch early, you can start earlier on the process of acquiring users. Don't launch with a crappy product -- launch as soon as what you have is better than what is out there. But don't wait for a perfect product -- launch as early as you can, get user feedback, and keep improving the product. How do you get press to write about your new startup, your new product or your feature launch? Here are ten tips to attracting press attention and dealing with the conversations that follow. The most important of them all (unless you're trying to get launch press): Be launched. We have spent $0 on press for Weebly, but we've gotten some big mentions (Newsweek, Time, NBC, BBC). Half of the battle is having a product that people can write about -- if you're not launched, people won't know you're there. If you aren't launched and people are still trying to write about you, although it feels good to be exclusive, you're missing out on an opportunity that might not come again. There's one thing I can guarantee any new startup is going to be worrying about when they launch: "Is my one (or less) web server enough?" I keep noticing startups (and larger companies, too) making some really basic mistakes that end up leading to a lot of downtime. Here's my list of 6 really easy things you can do to avoid major downtime. |
David co-founded Weebly, an incredibly easy to use tool that helps millions of people create a professional web site, blog or online store.
He was named to Forbes' 30 under 30 list, is a part-time DJ and has traveled to over 20 countries. Investments include Cue, Parse, Exec, Churchkey, Streak, Incident Technologies, Adioso and Zenefits. ![]() Categories
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