Audience vs Monetization, which comes first?

Articles,Networks, Theory, and the Web — Sean Bonner @ 3:26 am
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This topic has come up a several different times in many different circles over the last few weeks so I thought I’d make a post about it just to sort of document some of my thoughts on it. I’ve been talking to companies and groups about their situations and trying to help them isolate their current problem or bottle neck. Often times people know something isn’t working right, but aren’t sure exactly what the problem is and an outside perspective can sometimes help make things more clear and that is where I come in. It’s been a little surprising to me how frequently the problem has boiled down into one of two things:

1. They have an audience but don’t know how to monetize it.
(aka traffic but no business plan)

or

2. They have a good business plan but no audience or idea how to attract one

Which of these problems people have often comes from their approach – are they trying to make something cool or are they trying to make a business. Not that there is anything wrong with either of those approaches, and in fact both should be on your mind, but one without the other will lead to one of the above problems, and one of those problems is definitely better to have than the other. People often confuse this with the “build it and they will come” idea which isn’t really reliable because some people think “it” can be anything, but really “it” needs to be something awesome for that to work. Most people aren’t awesome product factories so there are other aspects that need to be considered.

“Would I want to use thing?” is a fantastic question to ask yourself. I asked an entrepreneur that the other day about the product they were pitching me on and it stopped him cold, he thought about it, and then told me he wasn’t really the person he was building it for and it would be much more helpful to a different kind of person. I don’t need to tell you anything else about that other than that and you should know it’s likely going to fail because the guy isn’t invested in his own product. He’s not trying to solve a problem he is having, he’s trying to solve a problem he thinks someone else is having. Really it’s a solution without a problem. And while it might have positive numbers in all the right places in the business plan, if no one ever uses it.. ? Well, you get the idea.

I think in a lot of situations people have this idea of getting everything perfect before they launch so drilled into their heads that they lose sight of the original idea. At some point they thought of this product and thought it might be fun or useful or cool for people, or might make their own lives easier and decided to get it built. But along the way they got more focused on the finances and exactly how much they will make from each user and by the end what they’ve built isn’t fun or useful or cool and doesn’t make anyones life easier. It doesn’t matter if you will make $100 from every user every month if only 1 out of ever 10,000 people to your site signs up, and you only get 10 people to your site a day. See the problem?

Conversely if you make something cool, something that people find useful and that makes their lives easier, they will use it and they will tell their friends to use it. Having thousands upon thousands of people going to your site or using your product is great even if you don’t know how to capitalize from that, because that allows you room to figure it out. Doing tests on an existing audience is easy, not so much the other way around.

It’s because of this I’ve been telling people to stop worrying about perfection, get their produce out there and see if people find it useful, if they don’t, what changes can be made to make it useful? Tweak, tweak, tweak until it makes sense to the users – then figure out where the cash is. If it doesn’t make sense to the users, well, time for a new idea.

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1 Comment »

  1. “Having thousands upon thousands of people going to your site or using your product is great even if you don’t know how to capitalize from that”

    Sounds like YouTube or Google search engine. When they started up, they were not really sure how they were going to make money on it… and in some respects, they still aren’t. Hackerspaces are a similar issue, although we do see the basics of monetary stream – membership $. Still it is a fair distance from ‘i/we want a space’ to having a thriving community with equipment filled space. CrashSpace seems to be going pretty well 6 months out. Having the LA community around has helped with large pool of potential members and guest speakers. Its a bit scarier here in the middle of the pacific! I am getting some good interest, even some from politicians in current elections. and gaining fail fail fail win experience on the way.

    Comment by Jerry — June 29, 2010 @ 11:06 pm

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