31–40 of 110 posts
In those early days of running a business, spending money on marketing is no way to guarantee new revenue. Word of mouth almost always is. Plus, it's a hell of a lot cheaper.
> All companies that grow really big do so in only one way: people recommend the product or service to other people. This is a bad opening premise. Time Warner and Comcast are huge and they don't seem like word of mouth companies to me. Boeing is pretty huge and they don't sell anything directly to ordinary consumers. I would never run around marketing Pfizer products to my friends. Take a scan down the Fortune 500 a…
Cable absolutely became huge as a result of word of mouth. It's been a mature business for 25 years so you may not be old enough to remember, but when it started people were pretty excited about 50 clear channels instead of 2 staticky ones. They told their friends and invited them over to watch shows they otherwise couldn't get. Boeing became huge in the 1920s and 30s. I imagine pilots talked to each other a lot abou…
For example, Time Warner Cable Oceania now provides cable service to the entire Hawai'ian island chain, but they had just bought out the last two systems (by island) in 2002 when I visited. Where I live, Comcast acquired Adelphia, who had acquired AT&T, who had acquired TCI, who had acquired Telemedia.
The Robber-Barons of the 1920s consolidated steel, railroads and banking. Edison and Westinghouse (with Tesla's AC) consolidated small utility companies AND supplied most of the equipment.
I think acquisitions played a huge part in the growth of airplane companies too (McDonnell-Douglas was originally two companies) ... there are very few car companies now compared to the early part of the 1900s and most recently we've watched banks become huge through acquisitions.
Unfortunately, I think the premise of the article is completely wrong, but I wasted my time reading until the end and wondered how so little content could consume so many words. You grow big by knowing a market could be huge and then having the confidence to buy when the price is right (even if the indicators aren't in your favor at the moment).
Earlier quoted context omitted.
Cable absolutely became huge as a result of word of mouth. It's been a mature business for 25 years so you may not be old enough to remember, but when it started people were pretty excited about 50 clear channels instead of 2 staticky ones. They told their friends and invited them over to watch shows they otherwise couldn't get. Boeing became huge in the 1920s and 30s. I imagine pilots talked to each other a lot abou…
I'm an almost 25-year veteran of the cable industry and I can tell you that Comcast and Time-Warner didn't grow huge via word-of-mouth. The benefits of cable service grew community systems by word-of-mouth, then Comcast and Time-Warner grew by acquiring and consolidating systems. For example, Time Warner Cable Oceania now provides cable service to the entire Hawai'ian island chain, but they had just bought out the la…
We've been launching a new product quietly, building a simple landing page[1] that asks subscribers to tweet or share the page by email after they enter their business name/email. I thought I was wasting my time but didn't want to just leech away the engagement.
The very first business that signed up immediately brought others.
We hadn't even got a prototype yet, it's how we framed the problem and offered a solution that made it compelling enough to share. OK, it's important to make it easy to do so but if you're not compelling who'll bother?
I wish I'd done this the first time round. Of course not every business in every industry can do it with social media but the principle applies. Looking at some of my friends launching businesses in competitive sectors I immediately started wondering how they could do it and, if not, why they weren't already. I suppose it's good peripheral validation as well. If your product isn't enough to make people talk what can you do to make it so?
In this case the most common misunderstanding seems to be not to realize that present day big companies were once small. You could have pre-empted that by reminding readers that once companies reach a certain size they don't have to rely on making something great to grow bigger, but that if you look back at the earliest history of those companies, you'll find most did.
I usually put these pre-emptive replies to probable misunderstandings in footnotes, because I don't want to clutter the text with things that are obvious.
This is grossly simplistic view of the world. Enterprise sales does not work this way at all. And no financial company/banker will recommend your super-duper product to anyone; in fact, some purchasing officers will ask you to NOT sell your product to their competition before they consider buying from you. In industrial supplies business, some factories require you to not sell their product to anyone one else in thei…
Which companies have become huge by doing that?
This is a great article, but really only applies to a small subset of companies for whom organic growth is the only way to grow huge. An abbreviated list of counterarguments: Epic, CenturyLink, NBC, Waste Management, Honda, Vanguard.
Honda and Vanguard absolutely grew through word of mouth, and NBC probably did too but it was before I was born. I compare notes with friends when buying a car, and people are not shy about recommending Honda or Toyota. Very few of them recommend GM or Ford. I also heard about Vanguard through word-of-mouth, where everybody gave the general advice that indexing funds are much more sane than other investing systems, a…
Other commenters have argued that repeated success in an RFP environment comes from reputation (and thus word-of-mouth), but I think that's stretching too far from the original thrust of the article.
[^1] I read this in a book but Wikipedia says that its first index fund in 1976, was available to individual investors, so I'm not 100% on this.
Earlier quoted context omitted.
On the contrary, it is absolutely correct. You forget these huge companies were once small upstarts. As upstarts, their growth was propelled by buyers recommending the product to other buyers. (You can substitute users for buyers here if it is an app). So his point is valid. If you go back to the early days of Oracle for example, they were providing a highly flexible database and would do it on (mostly) any computer…
> You forget these huge companies were once small upstarts. As upstarts, their growth was propelled by buyers recommending the product to other buyers. (You can substitute users for buyers here if it is an app). So his point is valid. That's pretty forced. There are plenty of ways for companies to grow, and word-of-mouth is just one of them. For example, a company can grow by getting a military contract, thus being i…
Yeah, I recommend all my friends to get Exxon gas and buy GE lightbulbs...
There are some things essential to us(inelastic), and those are the things where we'll see really big changes-- Invent things that everyone uses all of the time, not something that some people use some of the time.