The Power of Customer Misbehavior explores the idea that customer misuse of features is the key to viral growth through product development based on this information. This book introduces the concept of self-identity as a motivator for participation in social networks as well as product purchases. Additionally, The Power of Customer Misbehavior covers several technological features such as the user interface and page load time and their impact on user adoption and retention.
http://akfpartners.com/books/the-power-of-customer-misbehavior
4. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Other Publications
4
5. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Our Business – 10 Countries & Growing
5
6. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
The Power of Customer Misbehavior
6
7. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Growth is Good!
For Profit Businesses:
• Higher Valuations
• Greater Access to Capital
• Larger Profits
• Higher Employment
• Better Able to Contribute Socially
Not For Profit Businesses:
• Greater Social Impact
• Better Network Effects
• Better Access to Funding
7
9. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Comparison of Social Networks
Founded by Jonathan Abrams and
Chris Emmanuel in 2002 in
Mountain View, CA
Live in March 2003, adopted by 3
million users within months
Total funding $48.5M
Only $40.7M invested by 2007,
eventual total investment $1.49B
Pages eventually took up to 40
seconds to load
IPO raised $16B valued the
company at over $104B
Hired four CEOs in three years
In 2009 sold for $26.4 million
MOL
Founded by Mark Zuckerberg and
fellow Harvard students in 2004
Initially restricted to college
students (.edu email)
500 million users by 2010
9
10. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Social Networking for Pets
“These are fakesters, they're not people. This is
supposed to be for actual people, so let's get
them off of there.” – Jonathan Adams
By 2012, there were an estimated 22.9 million
misclassified accounts including millions created
for pets (Kelly 2012). A Facebook executive
observed, “I still run across occasional people
profiles that are actually of their cats or dogs or
something like that.”
10
11. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
College Parties
Friends
Groups
Events
11
12. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
How Do You Achieve
and Sustain
Viral Growth?
12
17. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Users Help “Create Value”
Co-Creation
Co-Production
“the act of interacting, creating content
or applications by at least two people”
(Trogemann and Pelt, 2006).
“the process through which inputs used to
produce a good or service are contributed
by individuals” (Ostrum, 1975)
The contributions of users to Wikipedia
are typical examples of co-creation.
Creating social media accounts for pets
Adding hashtags to find updates
Using a product in new, innovative and
unforeseen ways
Posting status updates, pictures, sharing
links, etc. through user generated content
(UGC)
17
18. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
The Virtuous Cycle of Misbehavior:
Co-Creation Leads to Co-Production
Use/
Co-Create
Misbehavior/
Co-Produce
18
22. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Simplified Model with Feedback Loops
Identity
Usefulness
Misbehavior
Growth
Ease of
Use
22
23. ABBOTT, KEEVEN & FISHER PARTNERS
PARTNERS IN HYPER GROWTH
Be Open to Misbehavior
23
Hinweis der Redaktion
Iowa Agricultural Experiment Station had developed hybrid corn seed that was drought resistant and could increase yields by 20%1941 Neal Gross was a grad student working for Bryce Ryan at Iowa State University and interviewed 345 farmersRyan and Gross published their results which included: - hybrid corn required 12 years to reach widespread diffusion or near complete saturation of potential adopters. - the average farmer needed seven years to progress from initial awareness of the hybrid corn to full-scale adoption - The cumulative number of adopters when plotted over time results in an S-shaped curve - MOST IMPORTANTLY The sources of information about the innovation were different at various stages in the decision process with the mass media more important at the awareness stage and peers more important at the persuasion stage.
Everett Rogers was a young boy growing up on a farm in rural Iowa in 1930s. His father loved electromechanical innovations but was leery of biological-chemical innovations. In 1936 a sever drought hit Iowa, devastating Roger’s family’s corn crop. Neighbors who had switched to hybrid corn seed were able to withstand the drought. Finally Roger’s father switched.Rogers had no plans on attending college until a teach drove him to Ames (Iowa State University) where he ultimately received his PhD in 1957.Rogers, Beal, and Bohlen introduced the Technology Adoption Lifecycle, in their 1957 paper, “Validity of the concept of stages in the adoption process” published in the journal Rural SociologyInnovators – Larger farms, high status, active in the communityEarly Adopters – Younger, higher educated, read more papers and magazinesEarly Majority – Slightly above average in age, education, and farming experience; attended more agricultural meetings.Late Majority – Older, less educated, and less socially activeLaggards (Non-adopters in the report) – Least educated, oldest, receive and read the fewest bulletins, papers, and magazines.
Based on 1970’s Theory of Reasoned Action by Fishbein and Ajzen which states that a person’s attitude when combined with subjective norms creates a behavioral intent.In other words, a person’s voluntary behavior is predicted by their attitude toward that behavior and how he or she thinks other people would view them, if they carried out that behavior.Fred Davis proposed the Technology Acceptance Model in his doctoral thesis at the MIT Sloan School of ManagementThe model was developed in order to “provide an explanation of the determinants of computer acceptance that is general, capable of explaining user behavior across a broad range of end-user computing technologies and user populations, while at the same time being both parsimonious and theoretically justified.”perceived usefulness was defined as "the degree to which a person believes that using a particular system would enhance his or her job performance.”perceived ease of use was defined as “the degree to which a person believes that using a particular system would be free of effort”
Simon Rothmon was a typical young executive,MBA from Harvard Business School in 1995, joined McKinsey & Company, in 1998, joined eBay.In 1998 eBay had net revenues of $47.4 million, up from $5.7 million the prior yearAt this time Used car sales were becoming big business, with retail dealerships selling more than twice the number of used cars as new cars (20.5 million used vs. 8.8 million new)If eBay Motors only addressed 50 basis points (0.5%) of the used car market in the late 90s, it would mean as much as $1.75 Billion in gross merchandise sales.