Starting Out and Ramping Up

June 04, 2015

We at Supply Clinic will be opening up our site to all users in the next few weeks. Naturally, this means that I’ve taken a bit of time to read up on the early strategies of today’s software and online giants, especially the ones that pioneered technical solutions and growth strategies that so many other businesses have come to emulate.

Google is always a good place to start. The company’s Gmail rollout is fascinating, and largely uninstructive for anyone who isn’t already some sort of internet behemoth. When Google began its foray into the world of email, its signature change was a significantly improved ability to search through old emails. Of course, searching isn’t of much value when you only have access to 10 MB of old emails. So Google also decided to allow all users to store up to 1 gigabyte of archived emails, an order of magnitude more than competitors. The catch was simple- Google would also use its vaunted search algorithm to scan through users’ emails and provide targeted ads based on the content of those emails.

The Gmail rollout itself was one that only a well-established company can pull off. After three years of product development, Google publicly announced the service in a press release issued on April 1, 2004, the same day they announced that they were hiring for a new research center on the moon. The release of Gmail, once people accepted it as more than an April Fools’ joke, helped incite the privacy debate that has since become entrenched in the increasingly digitized popular culture. So, too, has Gmail.

A mere five years later, Google finally removed the word “Beta” from the Gmail logo.

I say that the rollout is uninstructive because almost no non-established companies can afford to spend three years focusing exclusively on product development. Dropbox, by contrast, was far more willing to test out its products on select users. Many of those early adopters came from a video Dropbox posted on the site Digg, a content aggregator. Such a strategy may not be as replicable for a company selling, say, dental supplies. However, Dropbox has been an ardent promoter of referral systems, whereby existing users get additional storage space for referring friends to the service. Today, everyone does that. Uber gives me a free ride for referring my brother. So does my local ice cream shop.

What’s most interesting is the extent to which e-commerce sites change in their early days. eBay began as AuctionWeb, and looked like this:

(source: http://mashable.com/2010/08/07/ebay-facts/)

Zappos began as ShoeSite.com, but quickly changed its name to allow it to expand. And expand it did. The company had a singular focus on customer service, rather than a specific product line. Nothing was too far-fetched for the future, not even hotels and airlines, as long as the focus remained on customer service.

By contrast, Amazon’s focus was always on the long term. They’ve proven willing to sit still through media firestorms rather than try to accommodate all customers and journalists. So far, it’s paid off handsomely. Venkatesh Rao wrote a great feature about their long-term strategy on Forbes, and found a gem of a memo written by Jeff Bezos reflecting on the year 1997. Amazon has come a long way since.

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So where does all that leave a double-sided marketplace for dental and healthcare supplies getting off the ground in 2015?

Perhaps with the word “Beta” attached to its logo for the next five years?

 

--Jacob