Become the next 1 billion dollars secret of internet company: Change interface and interaction

Editor's note: Original author Nir Eyal, a lecturer at Stanford Business School, is a nirandfar.com blogger who focuses on the intersection of psychology, technology and business. You can @nireyal on Twitter and click to view all of his previous articles on Techrunch.

Some entrepreneurs accidentally make their own company into a 1 billion dollar company, but perhaps they do not know the secret lies. But as Peter Thiel told his students at Stanford's class, "The secrets that people don't know or want to talk about usually give you a good idea of what you should focus on." ”

Just as Thiel has been investing in Facebook, Linkedin and several other companies that have exploded over the past decade, the secret is that people can't or won't disclose it. The truth behind the Thiel is that not only big companies can seize 1 billion of billions of dollars, it's not just the rich second-generation who can start them. In fact, the people who are most likely to create the next tech enterprise are those who are energetic and have a big dream, a keen mind and a valuable secret.

Thiel says there are two kinds of secrets: Secrets about nature and secrets about humans. Thiel that the secret of nature is mysterious and mysterious, and lacks the possibility of real change in our life, but the secret of human is quick and practical, it can help people understand the way of human activities, is to create user habits and competitive advantages of the means. And the cost of finding this type of secrecy is relatively cheap, and it is the foundation of a big business.

Once, only big companies found secret resources that produced huge amounts of value. Throughout the 20th century, such as General Electric, DuPont, Chrysler and IBM are focusing on finding the best form of tangible goods and the best industrial design. These companies find that secrets require huge r&d investments to find ways to create the best, cheapest and most efficient products.

But in the present, the software is constantly eating away at the world. A group of emerging companies, such as Airbnb, Dropbox and Square, have developed secrets not from industrial design but from interaction and system design. These companies have changed the old paradigm by designing interfaces to create new user behavior.

Interface changes make user behavior simple, when the effort required to complete an action cost reduction, the user's usage rate will be blowout. Companies with a long history have seized the opportunity to discover the secret of their behavior because they have changed the interactive interface. Apple and Microsoft have successfully turned the Black-and-white computer into a graphical user interface that the mainstream users accept. Google simplifies the search interface and eliminates the ads and hard to use search engines like rivals Yahoo. In each case, the new interface makes the action simple and discovers the amazing truth about how the user behaves.

More recently, Instagram and Pinterest have been examples of changing user interfaces to gain huge capital by discerning user behavior. Pinterest creates a rich canvas image, reduces the user's mental costs, and exposes the nature of the addiction to online icons. The Instagram interface changes the combination of camera and smartphone. Instagram uses its low tech filters to make the low quality photos taken on the phone look so beautiful, making it easy to take good pictures on the phone and quickly attracting a large number of self-portraits. Pinterest and Instagram have created great value with small teams, simplifying user interaction rather than having any difficult technological innovations.

Instagram and Pinterest have another key feature in addition to the huge capital gains from discovering user behavior through the discovery of changes in the interface. They all gained similar valuations when they ruled their markets through a network effect. The network effect is defined as a system in which each additional user on the network increases the value of all other users, and the network effect is a common feature of the exploding technology companies recorded over the past 10 years.

Industry giants in the 20th century can build competitive tools in several ways, such as owning intellectual property, building brands, and deriving from scale-cost advantages and network effects. Today, most young companies can only rely on the last-network effect. The innovation that led to the change of interface has made old competitive means ineffective. The production of automobiles and turbines, which require a large investment industry, is the market advantage of each sale. Each transaction deals with fixed-cost patent protection, brand building and product manufacturing costs, making it difficult for new competitors to compete with old incumbents.

Today, consumer-networking startups don't have the advantage of having to quickly create fixed users and build a network effect on competitors, which is their only hope. Software products do not provide the scale cost advantage, the patent system is a mess, not a start-up company to control, and premature brand spending is stupid. It is only after the network effect has assembled a large number of solid user groups that it makes sense to advertise the brand.

Although we are in an era of insight into new user behavior, there are fewer ways to build long-term business benefits. The secret to creating big businesses today is the need for a network-effect plan. Without the network effect strategy, the secret will not be long-term value.

Via TC

Source: http://www.leiphone.com/0625-the-next-secrets-of-the-web.html