“It’s better to make a few people really happy than to make a lot of people semi-happy.” – Paul Buchheit
This is a common saying amongst tech entrepreneurs. Successful tech entrepreneurs have noted that something which a few people really love is always better than something which only a few people merely like somewhat.
This has made sense to me ever since I heard it. It seemed like common sense: If you make something people merely like a little bit then if your product or service dies or disappears then no one would really care that much. And if you make something a few people really love then it is likely that more people will think it’s “really really good” or just “really good”.
But I’ve thought about this subject a lot deeper and after reading some of Nassim Taleb’s* essays and books, I think I was missing a key insight. The insight is that minorities, if vocal enough, often win and impose their beliefs and wants on other people who remain indifferent.
Let’s take the example of GMOs and Non GMOs. If we have a family (mother, father, son and daughter) and the daughter decides she is staunchly opposed to GMO foods. It is likely that the rest of the family will cave in and everyone in this family will start to eat non-GMO foods to placate the daughter.
As there isn’t a massive price and taste discrepancy between GMO and non-GMO foods the family doesn’t mind eating non-GMOs.
Now let’s say that this same family attends a party. The host of the party will be informed that the whole family doesn’t eat GMO foods. The host decides that it would be easier to make all the food at the party Non-GMO, rather than making separate dishes for this one family. After all the price is pretty similar so shouldn’t effect the budget of the party by very much.
All of a sudden this large party of say 50-100 people are all subject to eating Non-GMO foods without even noticing and more importantly this large group of people don’t even care!
As a result of this party, local vendors will start to realise that they can increase their profits by selling Non-GMO foods. As a result, a large part of society is made to eat Non-GMOs despite not caring much about eating GMOs.
There are two things at play here. First the cost different between GMOs and Non-GMOs is not that much. Also, there is an asymmetry present in this example: The people who won’t eat GMOs will not eat GMOs under any circumstance – they are staunchly opposed to it. However, the people who eat GMOs do not mind eating non-GMOs. When this asymmetry is in place, the minority can overtake the majority and impose changes on everyone.
Halal (Muslim approved food) is another example of an asymmetry. Apparently a large proportion of the meat imported to the UK is Halal. The asymmetry is present – non-Muslims don’t really care what type of meat they eat, but Muslims won’t eat anything but Halal. The price of buying Halal meat will also be pretty much the same as non-Halal meat.
McDonald’s is also an interesting example, which is relevant to business. Everyone I know of has had some sort of McDonald’s food at some point in their lives. In fact when I go on holiday these restaurants are often packed with foreigners as a respite from exotic food or the possibility of contracting some type of food poisoning. The fact is that society is largely indifferent to McDonald’s – no one really hates McDonalds – whether upper or working class, no matter which country they are from. So, we can all agree that McDonald’s doesn’t make the best burgers in the world, but no one really hates them either, which means that people still go.
Now to turn this conversation back to business. I am wondering whether this effect is what plays out in successful startups and makes business spread. 1 – Do they have a core group of people who love the product, 2 – Is there an asymmetry where people adopt a certain technology/service, refuse to give it up and therefore force people to also use the product or service and 3 – are the rest of the people who end up using the startup indifferent to adopting the change.
Thinking about different startups, I really do believe this is closer to the truth than I had originally thought.
If we take Google as an example. I cannot even remember when I made the switch between Yahoo! and Google. It just seemed to happen and I became just another user – I was indifferent to the change. It is likely that when Google first launched, there were a core group of users that loved it and refused to use Yahoo!. There was an asymmetry here – Googler’s refused to use other search engines. The rest were indifferent and the switch to a different search engine was easy to make. As a result Google spread, when people started to simply set the homepage as Google, no one was staunchly opposed to using Google/in love with Yahoo!. This is probably how I made the jump without even thinking.
Moral of the story? Make something people love! This way, to create a massive success you only need three or four percent of converts to start using your startup instead of penetrating the whole market.
Good advice after all it seems!
* However, Mr Taleb was mainly talking about how this insight effects society, rather than startups and entrepreneurs.