Last week, Mark Zuckerberg turned 24.
And my guess is, he’s pretty pleased with himself so far.
A college dropout, but from Harvard. A self-starter who launched a business from his dorm room. And, oh yeah, the world’s youngest self-made billionaire, according to Forbes magazine.
Make that a “theoretical” billionaire, since nobody is really sure exactly how much his hugely popular social networking website – Facebook.com – is actually worth. It’s not publicly traded (although Microsoft recently laid out $240 million for a 1.6 percent stake). It’s not clear where it’s headed. (Mark himself isn’t sure.) To some people, it’s not clear what purpose it’s supposed to serve either.
But at least two things are sure.
First, people love it. Nearly 70 million visited the site last month alone. And second, it’s looking like one of the greatest entrepreneurial innovations since, well, since someone launched the first business that offered sliced bread.
One area that’s receiving plenty of attention is Facebook “apps” (applications). From useful tools such as stock market tickers and productivity management helpers… to complete time wasters such as “Give the Imaginary Puppy a Bone” and “Who’s the Coolest Person You Know”… there’s a Facebook app for just about everyone and everything.
After (if) you’ve chosen to add one of them to your Facebook homepage, it appears in your browser whenever you sign into Facebook. Most of these mini software programs are developed by third-party entrepreneurs and monetized (not always successfully) through a classic advertising model: Get eyeballs and sell ad space or place affiliate ads.
Facebook apps are so big right now that B.J. Fogg, a professor at Stanford University, launched a semester-long project just to develop more of them for Facebook users.
At the end of the project, Professor Fogg and his students published a report to name the entrepreneurial “discoveries” they had made. But were they really breaking new ground… or just reinventing the wheel?
I decided to take a look.
Combing back through the longstanding principles you’ve come to know and love by reading ETR and Michael Masterson’s new blockbuster book, Ready, Fire, Aim, I found at least seven “power principles” with fascinating parallels to the Stanford project.
ETR Longstanding Principle #1: Introducing Products in a “Mature” Market
Consumers aren’t looking for brand-new products. They are looking for clever new adaptations of products they already know and love. When it comes to new, the human brain can take only a little bit of it. Eighty percent of the old and 20 percent of the new is a good ratio. Your goal is not to develop brand-new ideas, but to notice trends that are beginning and develop products that anticipate that trend by a little – just enough to catch your customers’ attention.
Stanford Students’ Discovery: “It’s Never Too Late to Create a Winning App.” When Stanford launched its project, over 6,000 Facebook apps already existed. Just 10 weeks later, the students had six apps in the top 100. None of them were radically innovative.
ETR Longstanding Principle #2: The Power of Simplicity
You can sell your product very well by talking about its many benefits, but the most successful advertisements are those that highlight a single benefit above all the rest. When this benefit can be presented as uniquely characteristic of your product, you have an advertising proposition that can last and last and last. Consider any great marketing campaign – Burger King, Charmin, Marlboro. Examine any best-selling, non-fiction book – The 7 Habits of Highly Effective People, What Color Is Your Parachute?, Chicken Soup for the Soul, etc. What do they all have in common? Simple themes. Ideas so simple they can be expressed – and understood – in a few short words.
Stanford Students’ Discovery: “Simplicity & Clarity Are Key to Success.” Too many and too clever features must be avoided. Make the app easy to understand and easy to use.
ETR Longstanding Principle #3: Ready Fire Aim
Prudent entrepreneurs do not want to risk all their time and money on a single product. For the best chance of having a successful business, they need to be flexible about what they are going to sell. If their first product idea doesn’t sell well, they have to be able to generate a second one. Innovation matters. And so does speed. Combined, they give your business extraordinary growing power.
Stanford Students’ Discovery: “Speed & Flexibility in Launch & Iterations.” Many fast and imperfect trials beat deep thinking. Flexibility beats quality. Getting too attached to one app idea can be fatal.
ETR Longstanding Principle #4: Teamwork Accelerates Success
Don’t even try to be a solo creator. You will get much better results much faster by working with a creative team. Sometimes you might get ideas while showering or exercising or sitting on an airplane. But don’t act on those ideas. Write them down and bring them up when you’re brainstorming with a group.
Stanford Students’ Discovery: “Community Cooperation Leads to Success.” Students helped each other a lot, sharing app development tools, tips, and insights.
ETR Longstanding Principle #5: Check Your Ego at the Door
How do you know your product idea is good? Because you think it is? Business is not and must never be about what the business owner thinks is good or right. Business is about providing value to the customer. And that value can be determined only by the customer. Don’t let your ego convince you that you can teach the marketplace what it should and should not buy, or you and your ego will soon find yourselves in the poorhouse.
Stanford Students’ Discovery: “Individual Opinions About Apps Are Worthless.” Don’t be swayed by one person’s opinion. Just get the app out there and see what happens.
ETR Longstanding Principle #6: Don’t Be a Pioneer in a Market
When it comes to answering most of the fundamental questions about selling your product, the best answer will always be this: Imitate the industry norm. If you are always trying to come up with product ideas that are completely new and different, you will likely have a very poor success record. Let others live (and die) on the “bleeding edge.”
Stanford Students’ Discovery: “Copying Success Is a Cheap/Fast Way to Succeed.” Novelty isn’t the best approach to apps. If you’re desperate for a win, just copy something that’s working. Flipside: If your app is doing well, expect imitators.
ETR Longstanding Principle #7: Accelerated Failure
Success isn’t usually about genius. It is more often about trial and error. Money loves speed, so spend your time trying new permutations of existing successes rather than endlessly hoping to find the “next big thing.” Don’t be satisfied when things are “running smoothly.” An entrepreneurial business should never be running smoothly. Accelerate failure. Cut your losers and run with your winners.
Stanford Students’ Discovery: “Success Comes From the Chaos/Control Cycle.” Successful innovation is a process.
So there you have it…
Now I didn’t have access to the details of everything Stanford attempted. They probably made a ton of easily avoided mistakes. And it sounds like they had some very nice successes as well.
Over the course of their project, they generated somewhere in the neighborhood of $1 million in revenue from their Facebook apps… not to mention at least three new companies that were formed during the experiment, two others that were acquired by outside interests, and reports of lucrative job offers for all those who completed the program.
But I’m willing to bet they could have had a LOT greater success, a LOT sooner, if they’d spent some time reading Early to Rise and Ready, Fire, Aim first.
That’s where you have an advantage. You see, every day you get (for free!) what took about 75 smart Stanford students months and months to learn. (And think of all that tuition you saved too!)
So congratulations to the smart and energetic Stanford students who learned these lessons the hard way – valuable business principles that most people never discover. You’re getting them the easy way… but now it’s up to you to go out and use them.
Of course, you’ve got to be careful out there. Just because lots of people are talking and writing about Facebook doesn’t necessarily make it a lasting business model. There have been plenty of “next big things” on the Internet that have turned out to be quite the opposite.
But you’ve got the knowledge to find out quickly, without spending a fortune, if a business idea is going to work. So who knows? Use ETR’s ideas to develop an “app”… and maybe YOU will be next to make a million bucks on Facebook![Ed. Note: If you’re interested in taking a look at Facebook, you can get started by “friending” Charlie. Just go to his blog and click the Facebook link on the right side.]