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Businesses Solve Problems for People And Why You Need to Build Yours Around Them

Our vision is to be earth’s most customer centric company; to build a place where people can come to find and discover anything they might want to buy online. – Amazon.com

Whatever I’m building, I try to model parts of it on what Jeff Bezos has been able to do with Amazon.

My version of their story:

They launch as an online book store in 1995 and then go public a year later. They tell investors to buckle-up and that they shouldn’t expect to make money for a few years. The dotcom bubCble crashes, Amazon survives. They make e-commerce mainstream and steal the position as the largest online retailer,  without any major market innovation (ex Apple with the iPhone). Now they offer consumer electronics like the Kindle and  Amazon Web Services which is used by companies like Netflix, Pinterest, Tumblr and Instagram.

Key to success:Amazon serves the marketplace by making the online shopping experience any type of product simple.

Two things you need to know when you’re working on your idea.

Businesses exist only to solve problems.

Whenever you’re working through an idea, take a step back from the intricate details and ask yourself, “What problem am I solving?” It should be simple and definitive. If you can’t definitively answer that question, then you’re already building in the wrong direction.

By identifying the problem that your customer has, you’re able to tailor your business (solution) around their needs. Every step of the process should be designed to satisfy the user and make it easier for them. It doesn’t matter if they’re calling to order pizza or you operate a home cleaning business. The best way to spend money on reputation management is by delivering awesome to each one of your customers.

Problems are either obvious or unknown.

Obvious: Cars break and people crash them. // Solution: Automotive shops.

Unknown: Syncing files from A to B to C. // Solution: Cloud storage by Dropbox.

Your initial marketing / customer acquisition strategy will heavily depend on whether the problem is obvious or unknown. It is much easier to market to a potential customer when you are offering an obvious solution to their problem.

Groupon became the fastest growing company of all time by selling coupons to local businesses. Often these coupons come with a discount greater than 50%. So when an advertisement for 50% off your favorite sushi restaurant pops up, it gets your attention and then you make a purchase. At first it was easy for Groupon to expand; more advertising dollars = more customers. They burned through cash by spending on adwords, facebook ads and a terrible Super Bowl Commercial.

Dropbox offers seamless file sharing between all of your devices. At the bottom level, their service replaces the need to email files from one computer to the next or carry a flash drive around. But how do you get this message to people when they don’t even know that it’s a problem? Essentially they went after their core market (heavy internet users) with a video submitted to digg. Dropbox encouraged word of mouth marketing by offering a referral program and people wanted to share because it’s an incredible product. Drew Houston offers most of their strategy in this interview.

Build for Customers Not Competitors

If you’re competitor-focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering. – Jeff Bezos

If you are competitor-focused, you’re constantly playing catch up and trying to change your business to imitate another. What benefit does this provide? If anything potential consumers will judge you for being the same. To operate in the market you will have to offer something comparable. But to thrive in the market you need to show some sort of differentiation that provides value to consumers.

So after you have identified the problem that your business will solve, and then designing your process or product around the consumer experience. The best companies continue to thrive because of this.

I use this principle with everything we do at WhiteRaverRafting. I don’t do anything based on what our competitors are up to, rather I’m looking at blogs like Mashable or communities like Humans of New York. I’m interested in how they engage their user base and attract new people.

More insight via Jack Dorsey, Co-Founder of Twitter / Founder of Square – Let’s Reconsider Our Users

Other stuff I read this week:


I make money online through websites and business consulting. Everyday I'm challenging myself to learn and do more.

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