In April 2012, Instagram was bought by Facebook for $1 billion in cash and stock. The company had been shipping its product for less than 18 months when they accepted the offer. Even if, like me, you think that Instagram’s price was frothier than a berry smoothie at McDonald’s, you have to admit that the tech sector is building companies differently than everyone else, and this may hold some lessons for cause marketers.
So, what’s different? Well, one of the tech sector’s most notable playbooks “The Startup Owner’s Manual,” suggests one approach that more cause marketers could adopt; super-fast prototyping and, short, simple and objective pass/fail tests of cause marketing concepts and ideas.
When the authors, Steve Blank and Bob Dorf, say super-fast prototyping them mean it. They advocate throwing up a website as quickly as possible. Whether you intend to sell an ephemeral service like Instagram or a physical product, Bank and Dorf recommend you prototype a version they call the Minimum Viable Product. And, again, they mean minimum. The lowest fidelity version you can get away with.
Eric Ries, the author of another Silicon Valley business bible called ‘The Lean Startup,’ suggests in some cases you do no more than just put together a sales sheet and see how prospects react.
Blank teaches entrepreneurship at the Stanford, Berkeley, and Columbia business schools. He’s founded or co-founded 8 companies and served on numerous boards. Dorf teaches at Columbia and founded or co-founded 6 companies.
Dorf and Blank’s point is to get the reactions of potential customers as quickly as possible. Naturally, one of the temptations… both conscious and unconscious…is to fudge the test so that it delivers the results you prefer. But not only is that intellectually dishonest, it’s self-defeating.
Moreover, you’re not looking only at pass/fail of a concept, you’re listening for unprompted feedback like, ‘if only this widget did x, then I’d buy it.’ Tons of tech companies starting out as something else before realizing that the business model lay in another direction.
YouTube was at first a video dating site. PayPal was a way for Palm Pilot owners to exchange money without banks. Groupon started as a way to mobilize causes. Yammer competed with Twitter in the consumer space before pivoting into a enterprise social networking site. Even Instagram had its start as a social network that was part Foursquare and part Mafia Wars. The list goes on.
Where’s the application for cause marketers?
Internet companies are like cause marketing campaigns in the sense that you really are selling fluff, air, and good feelings. Doesn’t that describe both Instagram and (RED)?
Cause marketers often feel like they have to build the whole campaign before rolling it out to the public. But just as it’s better to know if a business concept has legs before you put pants on it, it’s better to know if a cause marketing campaign is likely to work before you unveil it to all your stakeholders.
Labels: (RED), cause marketing, cause marketing tests, Facebook, Instagram, Steve Blank and Bob Dorf, The Startup Owner's Manual