Venture Capitalist at Theory

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2 minute read / Oct 22, 2012 /

No startup is an island - The three ecosystems startups should develop

It’s tempting to burrow within a garage or basement or apartment to develop a product for several months and emerge from the darkness with a new shiny product. But the launch will likely fall flat.

Products must be launched into ecosystems, in particular, into receptive ecosystems. In my view, there are three types of ecosystems that startups should cultivate. These ecosystems provide distribution leverage - that’s what makes them so powerful and so essential at the start of a company.

1. Customer/User Community

Users provide product feedback, build word of mouth distribution, write reviews, become reference customers and form the basis of online support communities. Often, these communities are worth their weight in gold.

2. Platforms

The most platforms are app stores (iOS, Android and Facebook) which provide access to hundreds of millions of users. But relationship with these platforms don’t start and stop at the developer terms of service. The most effective startups build relationships with the managers of these platforms to understand how to align goals of the startup and the platform.

3. The Press

The press is a great way of focusing attention on a startup for a short period of time. Building an ongoing relationship with the press provides a startup with a megaphone at key times during the company’s life to trumpet success, drive awareness and build the brand.

Launching a product with the support of these ecosystems can provide orders of magnitude better leverage. Building these relationships isn’t easy, but the investment can pay off in spades.

Examples from the Redpoint portfolio:

User Ecosystem

ThredUp’s Facebook page where thousands of moms congregate
Expensify’s iTunes page with hundreds of customers reviews
ZenDesk’s reference customer page


Heroku’s add on Store
StorSimple’s distribution through Microsoft

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