Start-ups: How to Survive in the Rising Competition?
The article introduces us to an age of technological innovation. As the financial and regulation barriers are lowered, small start-ups emerge at a pace faster than ever before. The information technology enables better services that cost less to customers, and more resources are pouring into the field to develop further improved technology. Subsequently, there are great competitions in the tech industry. However it is no longer a competition of the qualities of the products, but rather a competition on marketing strategy and utilization of information. I think part of the marketing solution is embedded in the topics on threshold percentage and tipping point that we learned in class.
First, I’d like to compare the major competition occurred between Facebook and Myspace. In the second article from digitaltrends, it points out that Myspace’s failure to persist in the market can be attributed to the use of anonymous pseudonyms. In class, we learned that when a new technology arrives, people tend to adopt it if certain percentage of their friends adopt it as well. In the case of anonymous pseudonyms for Myspace, it violates this rule of threshold percentage by blocking the users from knowing how many of their friends have accounts on Myspace. While pseudonyms can protect people’s privacy, it also impeded the growth of Myspace’s user space by setting a percentage lower than the threshold. Thus I argue part of a successful marketing strategy lies upon opening access for customers to know any existing customers they are related to. Facebook has utilized this principle well by showing commercial websites that one’s friends liked on the person’s new feeds to encourage he/she to surf the website.
However, increasing people’s awareness on their friends adaptations is not enough to make a new technology successful in the long term. In class, we also learned about tipping point, which is the equilibrium market share that new business have to pass in order to obtain a steady market share. Here I argue that only a combination of tipping point and threshold percentage is sufficient to form the marketing strategy to start-ups. While they should purposefully make it transparent for the customers to know who else are using their technology, they should also take approaches that oriented toward reaching the tipping point. In order to do so, they should conduct market research and launched campaigns on specific target groups. Because in class we learned that new technology may be hard to spread over to certain group due to their dense rate, It is important to have promotion deals in these target groups to overcome the threshold percentage. While the proficiency of the products are ultimately the most important aspect of the success of a start-up, it is as important to develop marketing strategy that cater toward the rising competition in the tech industry.
Link to the article:
http://www.inc.com/neal-cabage/adapt-or-die-new-technology-landscape.html
http://www.digitaltrends.com/social-media/former-myspace-ceo-reveals-what-facebook-did-right-to-dominate-social-media/