5 patterns behind successful billion-dollar consumer Web companies


Emma Butin

January 16, 2014

This article originally appeared on The Next Web

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This post originally appeared on Geektime.

There are five strategies, or patterns, that set apart leading internet startups – or the billion-dollar club companies – from all the rest.

For the past several years I have been intrigued by what constitutes a successful habit. I’ve poured over myriads of books, professional articles, and TED Talks about consumer behavior, habit forming, thought patterns and the human brain’s capacity for ongoing evolvement. I’ve studied a host of startup ventures in quest of the patterns behind their success.

Coupled with my penchant for analyzing the performance of multi-billion dollar consumer-internet entities, I came to realize that there are several defining patterns that set the trajectory of their meteoric rise.

Celebrated football coach Tony Dungy once said: “Champions don’t do extraordinary things. They do ordinary things, but they do them without thinking, too fast for the other team to react. They follow the habits they’ve learned.”

Charles Duhigg quoted Dungy’s coaching philosophy in his book “The Power of Habit,” in which the story is told of the Tampa Bay Buccaneers, once a perennial loser until Dungy got the team to change some of its habits, or behavioral patterns, and in a short time led them to the playoffs and turned it from an underdog with no future prospects to becoming one of the strongest teams in NFL history.

The book is a fascinating account of how habit changing can pave the road to success. It demonstrates how failing companies were able to realize their full potential after changing some of their operational patterns. Duhigg asserts that the climb to the top inevitably entails identifying the habits that are non-conducive to success and changing them.

But the question is: To what exactly?  Well, according to Dungy – to winning habits.

Following the trajectory of billion-dollar consumer web companies such as YouTube, Pinterest, Chegg, Groupon, Airbnb, Shazam, Instagram, Waze, and Twitter, what I like to call the Billion Dollar Club (or BDC) made me realize that all of these giants adopted the same five patterns, or fundamental habits, that awarded them success almost overnight and bought them a ticket into the billion-dollar club.

Following are my own observations on what these habits are.

Habit #1: Separating emotion and practicality: Sending out an emotional or a functional message

When it came to new products in the market, each of the BDC giants introduced their product to the market with one succinct message that was either functional – underscoring the practical aspects of their product, or emotional – conveying the emotional or psychological benefits for the user.

Here are a few examples: Twitter aimed at our emotional-social needs, prompting us to share our personal experiences and thoughts with friends.

At the other end of the spectrum, Shazam responded to a straightforward practical need for a tune-recognition search engine in a touch.

Pinterest conveyed a clear practical initial message as well – save and share your pictures in a click, via the Pin button; YouTube allows us to share videos with the world; Airbnb offers a marketplace for vacation-rentals.

Google made searching the web practical by introducing an easy to use, plain yet elegantly designed homepage featuring just a search bar; and Apple appealed to a growing desire to own the technological marvel called a PC by stating its mission: “a computer in the hands of everyday people.”

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Today it’s hard to imagine a time when we weren’t Googling, tweeting or pinning.

Behavioral economists such as Prof. Daniel Kahneman and Dr. Dan Ariely found that we tend to make quicker decisions when the underlying message appeals to our emotions or to our logic. That decision applies to an entire gamut of responses wherein we become aware of the product, examine and accept it and eventually purchase it.

Most important of all, it will brand the product into our consciousness and create a perceived need for it. This means that the process of creating awareness for an innovative groundbreaking product is as crucial as its development.

This modus operandi has a clear objective:  it aims to tap into our minds – fast and it does this by directing the right message to the right part of our brain, making it an effortless decision to choose and use the product.

Habit #2: Getting extreme: Developing one simple, yet extreme, feature

When the BDC introduced us to their products, all giants chose to do so with the introduction of a new cognitive message via one principal feature. That only one killer principal feature is the DNA of the App on which everything else is built later on.

Applications such as Pinterest, Shazam, YouTube, GetTaxi, Instagram, Snaptchat, Twitter and Waze deliver user value in just one, in some cases two, clicks which makes them extremely accessible and user friendly and most off all – an inseparable part of our daily routine. That one small feature is literally branded into our fingertips – and that’s what’s so extreme about it.

And there’s a good reason for this: our level of stimulation is constantly on the rise and the gamut of our responses decreases correspondingly.

We’ve become so habituated to a high degree of stimuli and adept at ignoring it that we get bored easily and little seems new to us. The “extremization” of the message or user experience has become sin qua non for achieving differentiation in the cacophony of publicity messages.

Perhaps the most famous example of such an “extremization” belongs to the late iconic founder of Apple, Steve Jobs who from the onset insisted on an extreme approach and minimalistic look for the company’s product design.

Despite strong headwind from his employees he insisted on launching a revolutionary music player – the iPod – that features just one button. He repeatedly sent the engineers back to the drawing board until they came up with the world’s first single-button MP3 player. Now that was extreme!

Jobs stuck to the same approach when launching the iPad in which he adamantly refused to include a USB port in order to maintain the simple and sleek design. And the customers just couldn’t get enough.

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