Why Google ads, Facebook ads , SEO , sales funnels are not efficient in creating a productocrasy

[Red ant]

The majority of threads in this forum related to marketing strategies praises push marketing which in my opinion is not reliable for companies starting from ground with little or no funding .
- From my consumer of view I hate been harassed by ads .
- I rarely pay attention to sponsorised contents I usually consider companies which do those campaigns as companies delivering low value.
- Infact I consider companies who uses so much this techniques as companies which are overpromising and underdelivering.
These are the advertising techniques that works effectively on me and also on common Joe and Jane .
1) I rarely put in doubt the value of products recommended by friends and family .
Some years ago when I was a begginer in programming a friend recommended that I should start learning on sololearn and programming hub .
l never did any research to verify the quality of this sites I went straight forward and started using them . I even recommended them without never doing a market research to see if the were other sites providing more value than those 2 .
2) I don't use Facebook because its the best social media but because my friends and family uses Facebook @Andy Black @MJ DeMarco @BizyDad @blackbird @BlackLands
to be continued ....

 

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[Red ant]

This is the strategy used by PayPal to create their productocrasy
Max Levchin, twenty-three years old, was born in Ukraine and granted political asylum when he moved to the U.S. with his family. Levchin grew up in Chicago and studied computer science at the University of Illinois at Champaign–Urbana, where he developed a passion for cryptography—the science of making and breaking codes. By 1998, he was ready to apply his genius for crafting secure forms of computerized communications to the world of business.
Thiel and Levchin (along with a third partner, John Bernard Powers, who soon departed) launched Confinity, a startup aimed at enabling money transfers on Palm Pilots and other personal digital assistants (PDAs) equipped with infrared ports. At the time, the Palm Pilot was an exceptionally popular mobile device whose adoption rate was expected to grow, and launching a payment system on a mobile device that people carried with them everywhere made sense. The business logic behind Confinity seemed indisputable. The notion of a payment mechanism that could potentially liberate millions of people from reliance on government-sponsored currency also appealed to the idealistic Thiel’s libertarian streak, much as another ambitious online payment platform—Bitcoin—would fire the imagination of libertarians a decade later.
Nonetheless, Confinity attracted few users. After two years, having gained only 10,000 signups, Levchin and Thiel shut Confinity down.
Along the way, however, they unlocked a much more promising business prospect. Back in October 1999, a Confinity engineer had cobbled together an online demo to accept payments via email. This side project represented a significant potential improvement in payments processing; unlike previous systems for online payments, it allowed anyone in the world to receive an online payment from anyone else without needing to use the unwieldy system for transferring funds from one bank account to another. Levchin and Thiel recognized that it might be possible to turn this new form of online payment into a significant business on its own—one that could serve millions of consumers and the online businesses they patronized.
They came up with a name for the service—PayPal—and set out to build a company around it. It was, at that point, an inauspicious moment in the business cycle to launch such a service; the possibility of a collapse of the so-called Internet bubble was looming over the high-tech industry, and within a few months a precipitous decline in the NASDAQ index would make the dot-com bust official. Adding to the pressure was the fact that Thiel and Levchin knew they would have to make PayPal successful fast—they were spending some $10 million per month on the business, a large amount in the platform world, where huge capital expenditures are normally not required.1They also realized they would have to overcome one of the toughest challenges associated with creating a business designed to serve two sides of a market—the chicken-or-egg problem. When trying to build a two-sided market in which both sides are equally essential, which comes first? And how do you attract one without the other?
In the case of a new payments mechanism, the chicken-or-egg problem is particularly obvious and acute. Without sellers who are willing to accept the new form of payment, buyers won’t adopt it. But if buyers don’t adopt the new form of payment, sellers won’t invest time, effort, and money in accepting it. So how do you launch a new payments platform from a base of zero, starting with neither sellers nor buyers—when neither group has a reason to join until the other side joins first?
In terms of simple logic, the chicken-or-egg problem might seem insoluble. PayPal solved the problem through a series of ingenious strategies.
To start with, PayPal reduced the friction involved in accepting online payments. All a user needed was an email address and a credit card. This simplicity was in stark contrast to previous online payment mechanisms, which demanded multiple rounds of verification before an account could be set up, thereby discouraging early users. PayPal’s user-friendly, almost frictionless system attracted a significant initial base of consumers—though not enough, in itself, to make the platform attractive to the universe of online sellers.
In a lecture he later gave at Stanford, Peter Thiel explained what happened next:
PayPal’s big challenge was to get new customers. They tried advertising. It was too expensive. They tried BD [business development] deals with big banks. Bureaucratic hilarity ensued. … the PayPal team reached an important conclusion: BD didn’t work. They needed organic, viral growth. They needed to give people money.
So that’s what they did. New customers got $10 for signing up, and existing ones got $10 for referrals. Growth went exponential, and PayPal wound up paying $20 for each new customer. It felt like things were working and not working at the same time; 7 to 10 percent daily growth and 100 million users was good. No revenues and an exponentially growing cost structure were not. Things felt a little unstable. PayPal needed buzz so it could raise more capital and continue on. (Ultimately, this worked out. That does not mean it’s the best way to run a company. Indeed, it probably isn’t.)2Thiel’s account captures both the desperation of those early days and the almost random experimentation the company resorted to in an effort to get PayPal off the ground. But in the end, the strategy worked. PayPal dramatically increased its base of consumers by incentivizing new sign-ups.
Most important, the PayPal team realized that getting users to sign up wasn’t enough; they needed them to try the payment service, recognize its value to them, and become regular users. In other words, user commitment was more important than user acquisition. So PayPal designed the incentives to tip new customers into the ranks of active users.
Not only did the incentive payments make joining PayPal feel riskless and attractive, they also virtually guaranteed that new users would start participating in transactions—if only to spend the $10 they’d been gifted in their accounts.
PayPal’s explosive growth triggered a number of positive feedback loops. Once users experienced the convenience of PayPal, they often insisted on paying by this method when shopping online, thereby encouraging sellers to sign up. New users spread the word further, recommending PayPal to their friends. Sellers, in turn, began displaying PayPal logos on their product pages to inform buyers that they were prepared to honor this method of online payment. The sight of those logos informed more buyers of PayPal’s existence and encouraged them to sign up. PayPal also introduced a referral fee for sellers, incentivizing them to bring in still more sellers and buyers. Through these feedback loops, the PayPal network went to work on its own behalf—it served the needs of users (buyers and sellers) while spurring its own growth.
However, the company leaders didn’t sit back and rely on the positive feedback loops to do all the growth work on their own. They looked for opportunities to jack up the growth rate still further.
In early 2000, they noted the growing popularity of PayPal on eBay, the most popular online auction site. It was a natural place for PayPal, since most of the sellers on eBay aren’t full-time merchants but ordinary people without facilities for accepting credit cards or other forms of online payment.
PayPal’s marketing team opportunistically refocused its efforts toward enabling payments on eBay. Among other techniques, they simulated consumer demand on eBay by creating a bot (an automated software tool) that bought goods on the site and then insisted on paying for these transactions using PayPal. Noting this apparent growth in demand, many eBay sellers signed up for the PayPal service—which in turn made PayPal even more visible and attractive to consumers. The sellers began posting PayPal icons on their sites, enabling buyers to access the payment system with just a single click of the mouse, reducing friction still further.3Within three months, PayPal’s user base grew from 100,000 to one million.

 

[Red ant]

The seeding strategy
Create value units that will be relevant to at least one set of potential users. When these users are attracted to the platform, other sets of users who want to engage in interactions with them will follow.
In many cases, the platform company takes the task of value creation upon itself by acting as the first producer. In addition to kickstarting the platform, this strategy allows the platform owner to define the kind and quality of value units they want to see on the platform, thereby encouraging a culture of high-quality contributions among subsequent producers.7
When Google launched its Android smartphone operating system to compete with Apple’s, it seeded the market by offering $5 million in prizes to developers who came up with the best apps in each of ten categories, including gaming, productivity, social networking, and entertainment. Winners not only got the prize money but became market leaders in their categories, attracting large numbers of customers as a result.
In other cases, the value units may be “borrowed” from another source rather than created by the platform developer from scratch. Adobe launched its now-ubiquitous PDF document-reading tool in part by arranging to make all federal government tax forms available online. The size of this instant market was huge, encompassing any individual or business that might need to pay U.S. taxes. Adobe induced the IRS to cooperate by suggesting that millions of dollars in printing and postage costs could be saved. Taxpayers, in turn, got fast, convenient access to documents that everyone needs, at least once a year. Impressed by the value provided, many adopted Adobe as their document platform of choice.
In still other cases, seeding is done through simulated (“fake”) value units. As we’ve seen, PayPal employed this strategy when it created bots that made purchases on eBay, thereby attracting sellers to the PayPal platform. This was especially clever, since a bot could then turn around and list for sale the item it had just bought, thereby covering both sides of the two-sided market—and precluding PayPal from ever having to warehouse and ship the item itself.
Dating services often simulate initial traction by creating fake profiles and conversations. Many skew their profiles to showcase attractive women, in a bid to attract men to the platform. Users who visit the site see the activity and are enticed to stay on.
Reddit is a highly popular link-sharing community that circulates vast amounts of Internet content. When it first launched, the site was seeded with fake profiles posting links to the kind of content the founders wanted to see on the site over time. It worked. The initial content attracted people who were interested in similar content and created a culture of high-quality contributions to the community. Over time, its members have learned to rely on one another for guidance as to what’s worth scrutinizing and what is not. (The success of Reddit’s launch and expansion have not shielded it from controversy, of course, as the 2015 battles over allegedly racist and bigoted content on the site made clear.)
Similarly, when Quora first started, the editors would ask questions and then answer the questions themselves, to simulate activity on the platform. Once users started asking questions, editors continued to answer them, thereby demonstrating how the platform was intended to work. Eventually, users themselves took over the process, and the “pump-priming” by Quora personnel could cease.

 

[MRiabov]

There's a book about this: Badass: Making Users Awesome. Someone recommended it to me on the forum. Basically tells about how to create a productocracy.

 

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