Técnicas e instrumentos para la recolección de datos

Market leverage means that as the service grows the value of your service increases along with it while (hopefully) decreasing the value of a competing service. In the case of our video blogging service we may find that our customers want to upload their videos to the service with the biggest potential viewing audience.

Conversely the viewing audience wants to go to the site that has the greatest number of videos available to watch, and presumably the best selection. The notion here is that in a marketplace economy the biggest market is intrinsically the most valuable market.

eBay: The Masters of Market Leverage

The best way for me to illustrate the value of Market Leverage in action is to show you what I call the “eBay Effect.” As you are probably well aware, eBay is the world’s largest online auction

marketplace. They have created a simple Web- based system to allow everyone in the world to sell the crap out of their closet to someone else who apparently wants it. And they make a lot of money doing it.

But what is more intriguing about eBay is the economic effect of their growth. Let’s say you

wanted to sell an electric guitar that’s been sitting in your closet for the last ten years (yes, your Def Leppard dreams are finally over). Your primary interest is in getting this thing sold.

You hop online and find a dozen different marketplaces like eBay where you can list your guitar for sale. But what you are most concerned about is actually selling the item. It costs just about as much to list the item anywhere you go, so you are looking for the website that has the greatest number of buyers. That would be eBay.

On the flip side there is a buyer out there that is looking for an electric guitar (he is about to start pursuing his own Def Leppard dreams). He is interested in finding the website that has the greatest amount of selection, which will presumably yield the lowest price. That would also be eBay. Over time, as more buyers and more sellers gravitate toward eBay, the website itself becomes increasingly more valuable based upon the fact that it is snowballing into the biggest and best option for both buyers and sellers. I call that kind of snowball effect the “eBay Effect.”

www.ebay.com

Realizing that being the biggest market will allow us to create market leverage against our competitors, we will want a strategy in place that puts lots of influence on this growth factor.

We may decide that we will forgo a certain amount of revenue in exchange for acquiring more customers and therefore more content. So we may influence this

factor by offering video bloggers a small amount of space for free, compared to our competition that charges a fee for any use.

The Market Leverage of Swapalease.com

Understanding the value of market leverage is extremely important in a scalable business because it impacts a great deal of your strategy. At

Swapalease.com we realized that if we were the biggest leasing marketplace we would attract the greatest number of buyers and sellers, because both audiences had a vested interest in using the biggest marketplace.

If you wanted to sell your lease, certainly you would want to list with the marketplace that had the biggest audience of potential buyers. And if you wanted to find a lease to assume, certainly you would want the biggest possible selection of car leases to choose from.

For this reason we spent all of our time and efforts trying to build the size of the marketplace first, forgoing a certain amount of revenue opportunities in the early years. The gamble paid off though, and

Swapalease.com became the world’s largest

marketplace for auto leases. Now when someone wants to list their vehicle, Swapalease.com is quantifiably the best place to do it because we offer the greatest

Finding market leverage in your own model often comes down to figuring out why creating a critical mass of customers will make your product more effective than your competitors’. Often a service with a large critical mass offers more selection, more quality, and more opportunity than a smaller service offering the same product.

Recommendations:

• Look for ways to influence customer behavior so that adopting your product provides

inherently more value to the customer than adopting a competitor’s. If being the larger fish creates more value to a customer than being the smaller fish, focus all of your efforts on creating that critical mass and market leverage to achieve this position.

• Most startups sacrifice revenues for customers in order to achieve critical mass quickly. The most popular “get big quickly” strategy seems to be “give it away.” Beware that while giving your product away may be a growth strategy, it’s certainly not a revenue strategy.

Final Thoughts

You can’t Go BIG if you don’t plan to grow BIG! Having big visions and big dreams means nothing without a strategy to make it happen. As you can see from our discussion in this chapter, companies that plan on going from zero to $100 million or even zero to $1 million as quickly as possible need to have a strategy to get there.

There’s certainly no magic formula to making it happen every time. What I’ve outlined here are just the basics to spur you to think in terms of growing big and fast. Your own mileage may vary.

I can tell you first hand that what I’ve found to work best is to set a course for big growth and to keep making adjustments along the way. No one plans for “Google growth” on paper and just executes from the same playbook they devised on day one. You need to keep testing your assumptions and making changes with an eye on fast growth the entire time.

I’m a big fan of simply pointing toward the direction you want to go and running in that direction. You’re going to hit hurdles – you can’t plan around all of them. But the clock is ticking so if you intend on getting to where you want to be quickly, you need to just get started. We have less time than ever to get our ideas to market.