Guest Post by Ashley Verrill
When launching a new company or marketing campaign, your major concern shouldn’t be whether or not you can execute on the plan. It should be whether the idea is worth investing in at all.
This was the major theme behind a discussion my company hosted recently with “Lean Analytics” author Alistair Croll. He suggests that instead of believing the mantra “if you build it, they will come,” companies should instead say, “if they would come, you should build it.” Fortunately, today we have access to enormous amounts of behavioral data that can answer this latter assertion. I regularly review and write about technology that analyzes such data from social media, so I wanted to know more about strategizing around such insights.
We shot the video during this year’s SXSW Interactive Festival in Austin, Texas. Croll was in town leading a workshop called “Advanced Social Media Monitoring.” We discussed how companies can use data to test the riskiest parts of their business or marketing campaign idea first. Then once they learn what the market responds to (and what moves the needle on revenue, site traffic, clicks or another performance metric you’ve identified as most important to your business), you can invest in fully building out the concept.
He gave the example of the rental-by-owner startup AirBnB.com. The company wanted to continue to grow revenue, which meant they needed more rental listings and more people renting. The founders had a hypothesis that people would be more inclined to rent if properties had better images. Also, homeowners would be happier to do business with AirBnB.com if their homes rented faster.
Instead of hiring an army of photographers and building out new website features for the idea, the company first created a curated “minimal viable product” for the service – or the very least they needed to do to try out the idea. They created something that looked like an actual feature, but behind the scenes, much of the work was done manually.
Afterwards, they compared revenue between those properties with professional photos, and those without. As it ended up, the homes with the better images sold two to three times more than comparable rentals without nicer images. The theory panned out in revenue; so they made the service part of their product, added more features and hired a team of professional photographers.
This was just one example Alistair gave during the interview. To learn more, check out the entire video interview below.
About Ashley Verrill
Ashley Verrill is a market analyst atSoftware Advice. She has spent the last six years reporting and writing business news and strategy features. Her work has appeared in myriad publications including Inc., Upstart Business Journal, the Austin Business Journal and the North Bay Business Journal. Before joining Software Advice in 2012, she worked in sales management and advertising. She is a University of Texas graduate with a bachelor’s degree in journalism.