Companies and Cash Flow, or, Why Assume They’re Dumber Than You?
In discussing the launch of Square today on Twitter, someone brought up an argument that I’ve heard from a myriad of different people about a myriad of different services: “It’s gonna fail, they have no revenue stream.”
My reaction to this is one of irrational anger. The question seems to me to make some faulty assumptions, most heinous of which is the assumption that the people who came up with the damned idea for the company in the first place never asked themselves that very question.
The fact of the matter is is that if a technology or service is good enough, someone will pay for it. Armchair business managing is pointless- you have no real perspective on what it takes for any business that you perceive as “set for failure” to actually do so.
I’m reminded of the start of the radio broadcasting industry; people then asked, “Who will pay for a message to no one in particular?”
Ultimately, what we as users of cool technology should do is just that: use them. Who cares if I have no clue how they’re generating revenue? They have a lot more at stake than I do; they’ll figure it out.
This entry was posted by cwknight on 12/01/2009 at 12:57, and is filed under Culture, Observation. Follow any responses to this post through RSS 2.0. Both comments and pings are currently closed.
I’m inclined to agree with your reaction, I don’t think people understand the power of social media yet. It’s a new business model and people keep thinking the old lines of thinking instead of leveraging the new model.
For example I read a great article on copyblogger (http://www.copyblogger.com/robert-greene-50-cent/) today on how 50 Cent leveraged his site to communicate with his fans and regain his street cred and continue to push albums.
Did his twitter by itself make money? No. Did it allow him to engage his fans and help deliver exactly what they wanted allowing them to feel good about shelling over their cash for his product? Yes.
And note what I just did right there? I took something that I saw and related to it, and shared it. Now copyblogger will get another click or two, 50 Cent may get some followers because of the article and /free/ press that he’s getting. Bam. Everyone just made more money.
The power of social media is a big beast that will be tamed and understood eventually, but for now it’s misunderstood and confusing to everyone who isn’t using it effectively.