Startup Plan for Online Community – “Yummy Yummy”
I. Purpose of the community and Intended Audience China is a country with a splendid long dining culture. Chinese people always care about the quality especially the flavor of food. On many important days, families dine together in restaurants and friends also choose to get together in such places. With improving economic status, people today go out to eat more often than ever, especially the young generation, who have already become one of the most important consumption crowds. This has greatly promoted the development of restaurant business almost all over the country. However, at the mean time, an interesting phenomenon has also been noted. With more choices of restaurants available, it seems harder for people to think of where to go, partly due to the people’s quick-changing preference of flavors. People simply do not want to go to the same places all the time when they know there are a lot of other choices available. However, on the other hand, such information is not always easy to find. Sometimes even with a bunch of information on hand, people still feel hard to decide where to go because they have no idea which of these restaurants might be better or meets their respective criteria best since those restaurants are new to them. While today the most common way to look for such kind of information is through asking friends and families, an online community with explicit information about restaurants may be really valuable to these people. The content of the community should include at least two parts. One is objective information about a restaurant, such as location, name, type of food, price range, way of contact, transportation, internal environment or even pictures of the dishes etc. The other part could be some comments or feedbacks from people who have been there such as “suitable for dating but not family get-together”, “extremely cozy”, “excellent service”, “must try steaks” and etc so as to give newcomers a more comprehensive picture. The primary purposes of the community are: 1. To provide a space for people share and aggregate all relevant information about different restaurants all over the country (by cities and regions);2. To provide a better resource and reference for interested people to find such information;3. A “derivative purpose” of this community might be to help promoting restaurant business Intended audience: n People who enjoy trying all kinds of gourmet food in different restaurants;n People who have to eat out often due to some reasons (e.g. working hours constraint)n People who enjoy finding new restaurants, especially good or fancy distinctive restaurants n People who are looking for restaurant information for certain purpose;n Anyone who is interested in getting an idea of different restaurants in a particular city (e.g. gastrologist, media such as food network/food channel etc)Presumably, the primary audience for the community, especially during early days, is more like to be the first three types who are also the most likely contributors of the community. As the information in the community is getting more plentiful, it is more likely to attract people to stop by and take a look. Stakeholders of the community:There are at least four possible groups of stakeholders throughout the different growing stages of the community.1. Site manager or site administrator, refers to people who establish and managed the community. Needless to say, they are just like executives in a corporation, who are critical stakeholders ever since the community is established.2. Members of the community. This is also true for any community of similar type. Members are the sources of information which could attract more members on a continuous basis, thus maintains the sustainability of the whole community3. Restaurants. It could be a valuable source of cheap or even free advertising for restaurants, especially new restaurants that are expecting to get the word out by word of mouth. 4. Other third parties such as advertisers. This group is more likely to emerge when the community has grown into a more mature stage. II. Value of the Community and Network Effects At a first glance, it seems that more people join the community, the better it is likely to be. While such a statement makes some sense, it is not quite true with a second thought. The value of this community lies primarily on the quantity and quality of the information aggregated. Only with more information available, the probability to satisfy more people is higher; in addition the higher the quality of the information, the more likely people will come back in future. In this sense, the value of the community, in my opinion, depends greatly on the presence of relevant high-quality information rather than the presence of people only. Just to put it in another way, imagine two situations. One is that the community has great number of members while very few actually input and contribute and therefore has little relevant information; and the other is that the community has relatively small number of members but all participated and contribute actively and contains a great deal of various information. Obvious enough, the second situation is more like to survive and attract people gradually and eventually succeed. On the other hand however, information all comes from members’ contribution. So in other words, if more people contribute in a sensible way, more valuable the whole community is likely to be. This is why I have argued that the first false statement still makes some sense and this is also where the number of people does count and come into play. In terms of the technological features, there doesn’t seem to be much challenge. Apart from all fundamental responsibilities such as site administration and equipment maintenance, the site administrator might also pay attention to the information storage and retrieval. Being the most valuable asset of the community, the information needs to be kept safely with proper backup. Also in order to help people navigate through the community and find the desired information, some features should be considered such as proper labeling and grouping and the use of a search engine, none of which requires hard technological support. From what has been discussed above, such a community does have network effects, which to be more precise; I would call it “conditional network effects”.
Just a quick refresh, the theory of network externalities was developed for products for which the utility that a person derives from consumption of the product increases with the number of other users consuming the product. (Katz & Shapiro, Farrell & Saloner 1985). Typically there are two types of online communities that have externalities: the first is a community where a user derives utility from the content produced by other users, and the other type is a community where users derive utility from the interaction with other users (Chen, Konstan, Resnick 2008 draft).
Accordingly, “Yummy Yummy” would belong to the first type where users benefit from the content produced by other users. By saying “conditional”, what I actually mean is the possible discrepancy between the number of people and the quantity of information contributed. With some people just “take” and seldom “give”, the positive correlation between number of people and information is not always guaranteed. However, it is true that with the number of people increasing, there will be greater probability that the number of contributors also increase, and as a result, bring the community much more information.
It is relatively hard to assess the minimum community size to achieve the critical mass, which also corresponds to the argument above that the size of the community is not the most important key factor. As an extreme example, even if there is only one person, as long as he has quantities of good information, the community is still likely to attract new comers and survive. This of course is never true in real life and therefore more people are by any means good, as it increases the probability for the community to gather as much information as possible at early stage.
III. Steps and Options During The Early Stage
Nothing to surprise, the most useful and effective marketing strategy for this community is still word-of-mouth. This is related to what has been discussed in the previous part about the value of the community. Word of mouth – typically from friends are usually taken as the most valuable reference by most people. The basic idea of “Yummy Yummy” is to try to enlarge such an effect to a great extent through web with an attempt to boost word-of-mouth marketing. And this is where the core value of this community comes from.
Therefore, in order to get the word out and attract the right people to the community, especially during the early stage, following options and steps should be considered:
Ø Using personal social network, try to get as many friends as possible into the community at the very beginning. Special attention should be focused on those who belong to any of the first three types of intended audience as mentioned above – or in other words, who are more likely to contribute and have higher loyalty. Here the social network should not be restricted to the first tier – which refers to the direct friends of founders, but also more extensions, i.e. friends’ friends. Social network effect sometimes is just too huge to imagine. Again, there doesn’t seem to have a specific critical mass, just the more the better.
Ø Start outreaching with restaurants businesses and try to link the URL of the community with restaurants’ websites if possible. Without anywhere else to go, one of the most likely places that people may go to search for dining information will be websites of restaurants. Therefore, if this community could be linked directly with those, the probability for food-searchers to find it will be higher and these people may also bring in more of their friends as part of their social network as well. Similarly, there could also be physical flyers or posters at the restaurants if applicable,
Ø Try to find the most popular online BBS forums with the main topic related to gourmet food and make some connection of the pages. Needless to say, members of those communities are very likely to be attracted by this one. Another possible strategy related to these existing BBS forums is that try to register for an account and post entries where appropriate – just a free simple way of advertising.
Ø Send out mass emails to certain email groups if appropriate by try not to spam too much. Again, if one could get the appropriate email group list, this could be a very effective yet costless way of getting the word out. In order to avoid spamming, one suggestion might be to start from those around you. For example, if an email is sent from a SI student to SI all, even though I am not interested in the topic at all, I won’t feel very frustrated and very likely I will still glance over the title and body. So making the title of the email clear and precise and start sending it to small groups may help to some extent.
Ø With funds available, consider distributing small simple flyers at certain public areas with higher passenger volume. This may be an auxiliary step.
A few things that should pay attention to at this time:
Ø During the very early stage, it is the quality rather than the quantity of the members that matters. In other words, try to get those who are willing to contribute and do not worry too much about the absolute number of members at this time.
Ø Avoid mass advertising in those expensive media such as TV and some newspapers at early days. Without a stony ground, such advertisements will only be a waste of money
Ø As mentioned before, avoid pure spamming or causing such effect. In general, avoid any actions that might cause negative effect or impression to even a small number of people.
While attracting the right people seems the most important task at the first stage, how to maintain these people, make them contribute as much as possible and cultivate their deep loyalty is also crucial and should never be neglected.
And one way to retain these people is through early commitment approaches. Different from expectation approaches, the early commitment approaches attempt to increase expected utility of early adopters. The expected extra utility later (as compared to the utilities late adopters will get) can compensate for the negative utility that one might get during the start up phase.
In the case of “Yummy Yummy”, there will be much less information available for early joiners to browse -- which is so called “negative utility” -- while they are expected to contribute as much as possible. To compensate for such “negative utility”, some design features that can provide early joiners with many less tangible benefits may be considered.
There are actually many intangible benefits that early joiners can expect to have. For example, they are likely to be well known and have higher status once the community gets large. Corresponding design feature could be a rating mechanism among members in terms of the information quality together with a hierarchy where people get different titles and/or preferential attachment through credits/points received from others’ ratings. It may also occur through explicit status markers. To achieve such, the date a user joined the community may be displayed alongside each post or we could simply use sequential number to assign users IDs.
The community may also make some future commitments to the early joiners. For example, once grown into certain size and the percentage of people in the community who actually contribute decrease to a certain level (which also means the absolute number of members gets huge), the community could consider charging a one-time registration fee or etc. However, any kind of late charges will be waived for early joiners as a benefit. Another example would be once the community becomes more successful, there is great possibility of cooperation between the community and those restaurants. Then one idea is to negotiate membership discounts with restaurants for community members holding membership cards. The card may be purchased by members at a reasonable price (so providing one more method of fundraising) but those early joiners and senior members will get one for free. Monetary incentives are not guaranteed since they are greatly dependent with the development status of the community, but they should definitely be taken into consideration even at the early stage and be made known to its members, because they are very likely to work just as well as the stock options that are provided to its employees by a corporation.
IV. Summary
To sum up, the main purpose of establishing this community (“Yummy Yummy”) is to facilitate information sharing and searching by people who are enthusiastic in dining in restaurants, people who like gourmet food or any people who are just interested in finding such kind of information. There believed to be some network effects, though the critical mass is not clear, but what actually counts, especially during the early stage is the quantity and quality of information rather than the number of people only. In other words, a small number of passionate contributors would be much better than a large group of visitors.
There are multiple ways to attract people during early startup days and word-of mouth is by any means the most important and effective method to get the word out.
Since these early joiners play such an important role in the hard days of the community, more design features should be considered and incorporated so as to provide both tangible and intangible benefits to them. To achieve this, early commitment might be one possible approach. To retain these people and try to make them contribute as much as possible is one of the most crucial factors of success for this community.
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