The Value of a User and the Ongoing Battle for Eyeballs

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Web startups are anything but rare nowadays.  Technological advances continue to drive down startup costs to the point where nearly anyone can participate in the internet ecosystem.  As a result, online businesses are in a constant battle with one another, competing not necessarily for customers, but simply for eyeballs.  We are witnessing the battle for attention, and it has been met with massive criticism.

Many skeptics criticize a website that has millions of users and lacks a definitive business model.  What most of these skeptics fail to grasp is that web businesses, for the most part, are not the “conventional” business and should not be treated as so.  The web has simply created a different playing field where web services have to first prove themselves valuable and credible in order to retain a significant user base.  The revenue model comes second.

The Battle for Eyeballs

Startup web firms today face a TON of competition.  For the end user/customer, this is a great thing.  As users, we are able to utilize the most effective web tools at the lowest (most often free) cost possible.  For the companies themselves, this is really the start of the battle…the battle for eyeballs.

How do you separate yourself in a sea of competition?  How do you compete with the field for attention?  What do you offer that others don’t?  Why should anyone choose you?

Ultimately, it’s the web firms who effectively answer these critical questions that stand a good chance at winning the initial battle.  But again, this is just the beginning.  You have only gotten their attention.  The firms must now convert these eyeballs into regular users.

The Value of a User

With today’s maturing web, the business landscape has been altered in a big way.  A firm’s market is now global while the number of their competitors will continue to rise.  Effective marketing techniques have changed dramatically while customer satisfaction has become the fundamental ingredient for success.  To a large degree, this brand new internet ecosystem has democratized businesses, giving the consumer one powerful and influential voice.

Due to the shifting landscape, web firms are now forced to adopt a totally new set of values (as compared to traditional business at least).  Most importantly, firms must now understand and appreciate the power of a dedicated userbase.  Instead of focusing solely on monetization options, the internet ecosystem has taught businesses to focus first on maximizing user value.  Even if this results in operating at an initial loss!  We have seen this strategy employed by Facebook, Twitter, Google, and many others.

It’s very simple, the businesses who create the most value ultimately wins.  This has been true and will remain true in any business; past, present, or future.  What has changed, however, are the rules for achieving this result.

Businesses must never forget the value of a user.  Not only are they a statistic, they are your biggest asset and most powerful marketing tool.  It’s easy to get caught up in monetization, but without a proven community of users, why even bother?  Unless your an invested VC, web firms should be worrying about one thing, and one thing only: How can we maximize user value?

  • Kevin,

    Another great post!

    We are experiencing the challenge you describe. Maintaining value through benefiting the viewer. Current information, helpful hints, exposure to new ideas, etc. are ways we have been able to unwittingly keep our viewers.

    The challenge is to keep the information flow current, interesting, helpful and valuable - all the time.

    Monetizing the effort follows.

    The challenge is to keep providing help to grow the recurring source of eyeballs and be patient. For those of us who are used to immediate results, the second and emerging challenge is to remain patient.

    Thanks.

    Bob Jones
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