Good Growth Vs Crazy Growth: Which Do You Want?

Having spent the last few months since launching Advisor Garage looking at the successful launches of other sites – there seems to be one core principle that young sites need to be aware of when launching and one key question that needs to be answered by the founders.

“What kind of growth do you need for your Business Model?”

This may seem a strange question as the obvious answer is ‘Whichever gets me the most members fastest’ but is that the right answer take one good example – Friendster Vs. Match.com.

Match.com launched in 1995 and as a dating site is currently #1 with 15 million members, and allows members to search other members with a view to finding their ideal partner or even just a good or perhaps lousy date.  We all know Match.com right, right. So, 15 million members collected over 12 years.

Friendster on the other hand, launched in 2002 so in just five years Friendster has acquired 40 million members.  Its not a dating site as such, although it can be used in that way but why the significant difference in growth?

My view on the secret sauce here is what members need to do to get value from the site…with Match.com, you can join, search, find and contact.  You can leverage all the hard work from Match.com’s marketing folks, promotions and all the rest and access their member database without putting anything ‘back’ into the system aside from your cash! But it means that people on the site want to date – they’re not just ‘friends’ of someone that wants to date.  There would be nothing more annoying than paying for a service to find that 80% of the people on the site are not members for that reason but are just virtually hanging out with their pals.

Friendster is different – The more people you invite to Friendster, the more people you connect with and the more value you get from the system.  See the difference.  There is a real benefit from bringing others into Friendster with you…and that’s a core reason why Friendster has deliver ‘CrAzY’ growth for it’s founders i.e. almost 3 times the members of Match.com in less than half the time.

So when creating your own networking site – you’ll need to figure out if your business model is about value, volume or both.  And based on what you decide, you’ll need to consider the functionality you deliver and how people extract value from your service – will they need to plug others in to get value or can they just tap into the value you create as you grow.  The answer will be key to the steapness of your membership curve.

At Advisor Garage – Our niche is focused on connecting the ‘Best Business Advisors on the Planet’ rather than ‘All Business Advisors on the Planet!’.  For that reason any member can access the value of Advisor Garage i.e. connecting with hot new companies as an Advisor or connecting with great Advisors as a hot new company without inviting anyone else.  As value is delivered daily, we grow but will we grow to 40 million members in five years? Unlikely and frankly not too desirable as the value of the members will deteriorate if it becomes just about membership volume.

It’s a tough balancing act, because members pay the bills (when you finally get to charging) and the temptation is there to deliver functionality that will unleash the power of the members a la Friendster, but our niche is select and exclusive, our members come from recommendations from other great members so I’m sure we’ll grow, heck, we’re already bumping up against a 1000 members in four months…but I have quiet confidence that our growth will be steady not crazy. 

It’s the right growth model for our business model, what’s right for yours?

Andrew – Founder
http://www.AdvisorGarage.com

NOTE: I grant permission for every reader to reproduce on your website or blog the article you are now reading. But copy this article ONLY, without any alteration and please Include the copyright statement. (NOTE: I am giving permission to host on your website this article AND NO OTHERS. Reprinting or hosting my articles without express written permission is illegal, immoral, and a violation of my copyright.)“Copyright © 2007, Advisor Garage LLC. Advisor Garage Blog. All rights reserved. Permission granted to reprint this article on your website without alteration if you include this copyright statement and leave the hyperlinks live and in place.”

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One comment

  1. Pingback: Low Budget Startup » Blog Archive » Keeping the Momentum Alive in your Startup

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