Productizing Acquisition Channels: Part I of Learning From The Rise Social Networks
15 years ago when Microsoft, IBM, and the like ruled the earth, product management was mostly a “technical” function. Technical not in the sense of function (ie coding), but in the sense of its scope. Today, Product Managers have become the heart and soul of many technology companies . . . extending its tentacles through out the entire organization, owning P/L’s, running strategy session, and generally holding court for the rest of the company. Ask any person at a technology company, if you have an idea or concept, who do you grab first? Your favorite PM, ideally with an offer of coffee or lunch!
Things have changed rather quickly. And it all started with Hotmail and eventually culminated with social networks (friendster -> myspace -> facebook).
So what happened? Back in the day (the days of pascal, assembly language, and C w/o the “+” ) software delivery and marketing was distinct disciplines. You talked to the customer, you asked them what they want, you build what they want, and you throw it over the wall to the marketing and the sales guy. Brochures and presentation are produced (sometimes even a prototype), and off goes the sales person knocking down doors trying to make a sale. For the shrink wrap guys (MSFT), it was a little different but still the same old. The marketing guy figure out the print and TV ads, while a partner/sales guy try to get your box on the shelves of ComputerLand and bundled with the latest PS/2 (no, not playstation 2).
The Internet came along and changed EVERYTHING. Instantaneous distribution, usage, installation, and ACQUISITION. Word of Mouth changed to the Spread of the HyperLink. The wall between acquisition (which used to be a pure marketing/sales) function and product definition / management crashed down. . . But no one quite noticed (too busy searching for porn?
) until Hotmail came along and BUILT ACQUISITION DIRECTLY into the product. Hotmail didnt need a sales guy, it didnt need ComputerLand, it didnt anything but a group of developers and a very smart Product Manager (who understood marketing, sales, and acquisitions).
Friendster came along and added fuel to the fire. It added Vanity & Peer Pressure into the “product as an acquisition channel” equation. Potential Hotmail users simply noticed the link and signed up. Potential Friendster users were FORCED to signed up by their friends. Back in the days of Jobs & Woz, they wold call it the transition from simple word of mouth to evangelism. Your existing customers were REQUIRED to advocate your company/solution as part of getting the most out of their own investment in the product.
The geeks who knew how to productize the acquisition channel, skipped the rest of the company and reached directly into the minds of the customer . . . and became superstars for helping to build internet empires.
Today when I look at a new company or product idea, this is the first thing I looked for. Whether the company has productize (or the opportunity to productize) the customer acquisition channel. Whether the founders (or PM’s) understand the customer conversion funnel (from awareness to close), and built FUNCTIONALITIES to address each of the steps in order to drive potential customers towards usage, conversion, and retention. Its not always as simple as Hotmail or a social network; not all business models, fit so nicely into this framework. But all along the way, there are many many opportunities to use product features to shepherd potential customers towards an desired conversion event.
The shrink wrap machines are sitting pretty idle these days . . .





