The secret formula for getting rich online (Hint: It involves speed)
Last fall, Twitter founder Ev Williams gave an excellent talk at XOXO* in which he nailed down what makes some online ventures succeed, and others fail:
Yes, your company needs to have rock-solid technology and excellent management, but if what you’re offering doesn’t somehow make your users’ lives easier, then it will fail.
So, how do we define convenience? According to Williams:
Convenience on the internet is basically achieved by two things: speed, and cognitive ease…
[The Internet is] a giant machine designed to give people what they want… We often think of the internet enables you to do new things, but people just want to do the same things they’ve always done.
Here’s the formula if you want to build a billion-dollar internet company: take a human desire, preferably one that has been around for a really long time… Identify that desire and use modern technology to take out steps.
It sounds like a no-brainer, but raise your hand if you’ve ever encountered a tech start-up whose premise was so convoluted that not only could the founder not give you an elevator pitch, they couldn’t even give you a space elevator pitch. (No need to raise your hand if you’ve ever worked at this type of start-up. We’ve all been there.)
Now consider these former startups that all use speed as a competitive differentiator…
Google wasn’t the first search engine, but it was the first engine that let you search more of the web and find the most relevant results, and do it quickly. Nor surprisingly, Google has been at the vanguard of numerous initiatives to make the web faster, including their audacious goal of making every web page load in 100 milliseconds or less.
Approximate current valuation: $350B
Facebook wasn’t the first social network, but it was the first to allow you to quickly and easily scan your directory of connections through the main feed page. (I don’t know about you, but when I first encountered my Facebook feed, back in 2007, I was blown away by its simplicity and elegance relative to other social networking sites.)
Approximate current valuation: $90B
Amazon’s history is a series of firsts. Yes, it was the first major online bookseller, but it was also one of the first companies to champion the notion that page speed is a critical factor for success. Amazon’s one-click ordering option is a textbook example of taking out as many steps as possible to facilitate user convenience.
Approximate current valuation: $90B
People hate waiting for cabs. Like, they really, really hate it. It’s interesting that it took so long for this hole in the marketplace to be recognized, but you know what they say about hindsight. Uber emerged to fill the void, offering a snappy online experience that dovetails with its snappy real-world experience. (Side note: I used to own this domain back in the mid-90s, when I published an online zine — remember those? — with some friends. It gives me a vicarious kick to see how well-known it’s become.)
Approximate current valuation: $3.5B
As a die-hard crafter and craft enthusiast, I remember the pre-Etsy days when ordering a handmade item from an indie maker was difficult and didn’t exactly inspire me with confidence. Terrible out-of-box checkout technology + dodgy delivery practices meant that you never quite knew if or when your package would arrive, no matter how well-intentioned the seller might be. Etsy revolutionized the craft industry by making it ridiculously easy to browse an insanely massive inventory, check out with ease and security, and track your order through to delivery. And Etsy takes a very aggressive approach to optimizing performance.
Approximate current valuation: $800M
I write a lot about user experience. User experience could be defined as the pursuit of the maximum level of human convenience. Humans are hardwired to conflate speed with convenience. Remember this the next time you hear a tech entrepreneur try to justify why users will be willing to endure a prolonged wait for his or her unique online offering. Because odds are, he or she is dead wrong.
*The entire talk merits watching, but the part that I’m alluding to begins at around the 16-minute mark.