The bowling pin strategy

A huge challenge for user-generated websites is overcoming the chicken-and-egg problem: attracting users and contributors when you are starting with zero content. One way to approach this challenge is to use what Geoffrey Moore calls the bowling pin strategy: find a niche where the chicken-and-egg problem is more easily overcome and then find ways to hop from that niche to other niches and eventually to the broader market.

Facebook executed the bowling pin strategy brilliantly by starting at Harvard and then spreading out to other colleges and eventually the general public. If Facebook started out with, say, 1000 users spread randomly across the world, it wouldn’t have been very useful to anyone. But having the first 1000 users at Harvard made it extremely useful to Harvard students. Those students in turn had friends at other colleges, allowing Facebook to hop from one school to another.

Yelp also used a bowling pin strategy by focusing first on getting critical mass in one location – San Francisco – and then expanding out from there. They also focused on activities that (at the time) social networking users favored: dining out, clubbing and shopping. Contrast this to their direct competitors that were started around the same time, were equally well funded, yet have been far less successful.

How do you identify a good initial niche? First, it has to be a true community – people who have shared interests and frequently interact with one another. They should also have a particularly strong need for your product to be willing to put up with an initial lack of content. Stack Overflow chose programmers as their first niche, presumably because that’s a community where the Stack Overflow founders were influential and where the competing websites weren’t satisfying demand. Quora chose technology investors and entrepreneurs, presumably also because that’s where the founders were influential and well connected. Both of these niches tend to be very active online and are likely to have have many other interests, hence the spillover potential into other niches is high. (Stack Overflow’s cooking site is growing nicely – many of the initial users are programmers who crossed over).

Location based services like Foursquare started out focused primarily on dense cities like New York City where users are more likely to serendipitously bump into friends or use tips to discover new things. Facebook has such massive scale that it is able to roll out its LBS product (Places) to 500M users at once and not bother with a niche strategy. Presumably certain groups are more likely to use Facebook check-ins than others, but with Facebook’s scale they can let the users figure this out instead of having to plan it deliberately. That said, history suggests that big companies who rely on this “carpet bombing strategy” are often upended by focused startups who take over one niche at a time.

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Jonathan Ruff

The successful examples are countless. In fact, I've rarely seen the opposite of the bowling pin strategy work (at the moment I can't even think of one). eBay and Craigslist are two other classic bowling pins. Craigslist of course took a decade to gradually roll itself out to a large sample base.

The bowling pin approach also provides a critical element: being able to test the product with a small (typically forgiving) group and evolving / refining the product rather than perhaps making a major mistake with a large group (likely less passionate about the product and less forgiving).

Google has learned to use an element of this in their search algorithm testing by constantly testing small batches of users with changes.
http://twitter.com/calvinchengx Calvin Cheng

thanks! this piece of article reminds me (and my team) on what we really need to do in our project.

http://www.cdixon.org chris dixon

thanks! hope you got your money's worth!

http://stevecheney.posterous.com/ steve cheney

This strategy of creating a localized niche is even more important for network effect driven startups that need users to unlock value.

One thing that’s really interesting re foursquare vs facebook places is FB’s built-in network effect – when FB users begins using places, they can play actively with their hundreds of friends right away.

A new 4sq user, on the other hand, has zero friends on sign-up, and the value of the service (as a social tool / friend-finder) doesn’t unlock until the user imports from Twitter, FB etc (a step a lot of normal people won’t take, and even when they do they will have a much smaller friend base).

I think this is one reason 4sq is intent on moving toward tips and recommendations—these are independent activities that can sustain a user’s interest by turning the entire 4sq base of user generated content into a network effect driven engine for recommendations etc.

http://www.nabbr.com MattMinoff

Totally agree re: tips and recommendations. Having a history of check-ins, a solitary use case, is the main reason I use 4sq.
http://www.cdixon.org chris dixon

agree, 4sq should probably focus more on “standalone” uses to counter FB's larger scale.

http://sheynkman.tumblr.com Kirill Sheynkman

Very nice post, Chris. I've been recommending something like this to quite a few startups — find a “microcosm” of your market, prove that you can scale the revenue model there and then extrapolate. A couple of cautionary points, though…
1. If you can scale the revenue model does not mean you can scale the technology. Facebook did. GoCrossCampus didn't.
2. Make sure you have a representative microcosm. One of my favorite services in NYC is FreshDirect. I don't think they can scale to other locations because no other place (in the US) has comparable urban density and propensity to “order” things vs. going to the store.
And, always remember, “microcosm” does not mean geography — any demographic can work, but then the question of “does this translate to others” becomes as relevant as “does this scale.”

Maria Thomas

Interesting that Fresh Direct — after a rough few years — is currently seeking $75 million to expand to the 25 largest food markets in the country “in as short a time as possible.”

http://boss.blogs.nytimes.com/2010/08/17/freshd…

http://sheynkman.tumblr.com Kirill Sheynkman

I sure hope FreshDirect does well. I love the company and have been a loyal user and follower for years. More power to them. I just felt that delivering to single-family homes in LA is a different business that apartments in Manhattan. But, I guess they got their routine down in the Hamptons.
baba12

they are over priced and this economy, outside of maybe 4 places in the country most other places are not really rolling in good times.
Fresh Direct's competition is the ever growing popular green farmers markets. If Fresh Direct were to say they are going to lower costs and lower their carbon foot print as part of their growth strategy then it may work in the niche market bowling pin approach.
As of now they are just using a old delivery system with a technology addon of using the internet to order.
If you remember there was a company named Webvan that tried to expand in many markets and failed.
We don't need Fresh Directs as much as we need more green markets and cooperatives for getting better produce at lower prices with a carbon foot print that is lower, transporting in not so eco friendly trucks with refrigeration units is not the best green thing to do..

http://www.cdixon.org chris dixon

thanks- great points. #2 is a key risk for a lot of startups.

http://www.nabbr.com MattMinoff

Would you apply the same approach to market making startups like building an ad network?

http://www.cdixon.org chris dixon

Absolutely. It applies to any network effects business with clusters in the network.

Aviah Laor

Hmmm. Crossing the Chasm should really be revised. Moore focused on the a difficulties to penetrate conservative market, mainly assuming that both industry leaders and customers are conservative.

This is NOT the case anymore. Industry leaders have startup mentality, and they have no problem to innovate or steal innovation and catch-up in months.

It's a new challenge. On the other side of the chasm everybody is ready to pick and roll the bowling pin effect. Unlike Moore's assumption, they are not trying to block it anymore.

So you have to be years ahead, and it's hard to maintain a service that is years ahead – crossing the chasm claims that you need a niche that desperately needs it now.

FB faced the old chasm. Conservative players that moved slowly, so it worked (and they did have a superior product).
But this reality changed.

http://www.cdixon.org chris dixon

Agree – wish he'd also revise the book with more of a B2C focus…

Eatai

Chris, your blog is like solid gold. I can't get enough.

http://www.cdixon.org chris dixon

thanks

http://twitter.com/mayanks mayanks

Not that I don't agree with your strategy over here, and reading your earlier tweets earlier I was sensing that the article is going towards foursquare vs facebook. And sure enough it did. But I have to tell you that the conclusion made is not in the same spirit of the examples it follows from.

Facebook, craiglist, yelp and even google for that matter started by solving some basic problem. Executing the bowling pin strategy (if at all they did consciously) helped them remain focused on the problem and iterate it until it was ready for the rest of them.

It's not the same with foursquare. I don't know who will win Foursquare or Facebook, but the analogy just doesn't hold water.

That apart, I think the bowling pin strategy is quite apt to me personally. At our startup http://www.revu.in , we are going through that chicken-and-egg phase. Hopefully this strategy will help us out. Thanks for sharing it

Zaid Farooqui

“Facebook, craiglist, yelp and even google for that matter started by solving some basic problem”

Only in hindsight.

http://twitter.com/mayanks mayanks

precisely my point.

http://twitter.com/paul_houle paul_houle

Note that an alternative strategy is to make yourself independent of one leg of a two-sided market… Piggyback on somebody else's success on one of the legs, then you've got what it takes to attract the other leg… And pretty soon you're standing on both legs, and you've succeeded despite “impossible” competition. This is how web 3.0 will succeed where web 2.0 has failed.

http://www.cdixon.org chris dixon

agree. we did that at siteadvisor by using automation to seed one side of the “market” – so that we launced on day 1 with a solid set of rated websites.

http://twitter.com/sayemislam sayemislam

Stocktwits is a great example of this strategy, I think. They've attacked a powerful niche, and now the IR depts of many companies, as well as major financial outlets, are being connected to their platform.

It's only a matter of time before they expand on to foreign markets as the rest of the world gets up to speed w/ real-time info.

http://www.cdixon.org chris dixon

agree – they've done a great job.

Laurent Boncenne

there's also the contrary.
to my knowledge, a French company called “Cityvox” has been doing what yelp just started doing 12 years ago !
Being a Parisian, cityvox has been my go to site when it comes to getting reviews for a place, for more than 6 years.
From what I remember, cityvox rolled out new cities little by little, expanding as it became more mainstream. Didn't really help lately.

While the bowling pin strategy is definitely something that works, it can blow your expansion, and that's really not what you're looking for…

http://www.cdixon.org chris dixon

Not sure what you mean. If the rolled out city by city isn't that bowling pin strategy?

Laurent Boncenne

It's exactly what it is. I was just trying to imply that there's a limit to it.
If executed properly, you will expand greatly. But if you look at it, you've got those 3 sites who do pretty much the exact same thing :

Yelp, Qype and Cityvox. Different design, same features more or less.
You can apply the “bowling pin strategy” but at some point, you'll need a 100% of strikes ratio. At one point, you need to go all out, big time. that, I believe would be the end of your bowling pin strategy.
It's more of a careful deployment strategy (think war strategies in a way), yelp has done it very well and I think frousquare did it even better. Cityvox did well and now is a little bit on hold somehow…
once you've got your strategic positions, it's time to go all out, shoot and take some names. It will be interesting to see foursquare do it =)

amolsarva

Sometimes people make a product and “wait for traction” which is kind of contradicts the Moore approach. Photobucket didn't count on Myspace when they started.

They get surprised by who is using their thing.

But you don't have to know where your Harvard will be when you start is the point. You are likely to be wrong actually initially. But pay close attention for your adopter-advocate group…

http://www.cdixon.org chris dixon

yeah i'm not suggesting it's always deliberate. most like zuckerberg just created something he thought was cool for Harvard without explicitly thinking about the bowling pin strategy (at first).

amolsarva

It's actually kind of hard to tear yourself away from what you thought you were doing and re-orient on the real bowling pins.

Sent on the go from my Peek
————————————-

David Hammer

One quick addendum to your point about Facebook and harvard people (as one of the first 25 people on Facebook): Harvard students were particularly well-chosen (as opposed to most other colleges) because of the degree to which they are obsessive networkers and self-promoters. The fit was astonishingly good.

http://www.cdixon.org chris dixon

ha, true.
http://disqus.com/ Ro Gupta

Good point, David, and I think it speaks to a broader best practice of the bowling pin strategy which is to pick a segment that is not only intrinsically passionate but extrinsically connected as well.

Put more crudely — pick a 'slutty niche.'

Harvard students like to network and self-promote. SF foodies like to travel and/or are transplants themselves.

i.e. Try for the 1 pin, not the 7 or 10.
Or maybe the 2 or 3 if everyone's gunning for 1.

http://twitter.com/harscoat harscoat

1 important thing for a startup with the beachhead/bowling pin approach, is that it allows it to say “we are the leader in [beachhead niche market]“. And then sthg like the “superstar effect” kicks-in http://www.fourhourworkweek.com/blog/2010/07/27…
“The Superstar Corollary – Being the best in a field makes you disproportionately impressive to the outside world. This effect holds even if the field is not crowded, competitive, or well-known.”
kram

I only remember it as the “domino effect” from 3 start-ups ago, and it doesn't always apply to user generated content – for us it was enterprise software.

http://www.cdixon.org chris dixon

Yeah in face Crossing the Chasm talks mostly about enterprise startups. It was less about network effects and more about word of mouth.

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per

Great post.

We used the same strategy at Blurb.com and I'm planning the same for my new stealth venture.
http://www.victusspiritus.com/ Mark Essel

This is precisely the strategy I'm using with garagedollar.com. So far the site has failed to gain much adoption after advertising in Google Adwords, Facebook, and internet Radio (Targetspot) to a 10 mile radius around my home.

But I'm confident if I can fan the flames of even a couple hundred subscribers and regular visitors I can grow out an interest/location/time relevance platform. Still stuck on a compelling enough application to induce adoption by strangers. I've gotta sell it to individual yard sale goers, one at a time, sale to sale.

Going with a strong map app next where users are free to add their yard/moving sales directly to the map as pins. The ideas is something like a craigsmap for events.
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http://twitter.com/cloudpollen Neil

So simple yet we never think about how apps can influence groups rather than the masses initially, definitely something to think about tonight, targeting small groups first.
http://12monthstolaunch.com Veronika Sonsev

Very interesting post, although Stack Overflow going from programmer questions to cooking questions seems like a leap. I wonder why they picked cooking as their next market?

http://spolsky.myopenid.com/ Joel Spolsky

We didn't — our community did. There are actually a couple of dozen new markets, chosen democratically by the core Stack Overflow audience as the topics they were most interested in participating in. See http://area51.stackexchange.com/

http://12monthstolaunch.com Veronika Sonsev

Thanks Joel. That's a smart way to pick adjacent markets.

Stephanie

Also, I've found a surprising number of web engineers/developers are fantastic cooks, and take it very seriously. This is a surprising and clever cross-over – the kind that no one would expect but is obvious in retrospect.

Alex

I wish I would had read this article before I tried my first community driven project. *doh*
http://twitter.com/LawPivot Law Pivot Inc.

That seems right. My company Law Pivot (http://www.lawpivot.com), started in the SF Bay Area with local lawyers and tech companies/startups as users of the site and we're slowly growing into other areas of California. It helps us establish a solid user base in one area to have an easier time expanding into other areas.
http://bitsofgenius.net Joseph Cohen

As usual, great post.

Seems like Envato (http://envato.com) used this strategy. They operate digital design blogs and now run huge creative goods marketplaces (http://themeforest.com).
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http://twitter.com/lawrencecoburn lawrence coburn

Man, if I had a dollar for every time someone suggested this for my previous company, I'd have like $35.

The counter argument is that there is unlimited shelf space on the Internet. And there are companies that have gone wildly horizontal with great success – Wikipedia comes to mind. Starting horizontal is hard though, no question about it.
http://mansilla.com Neil Mansilla

Chris, did your team apply the bowling-pin/niche targeting at Hunch, including any ways that may have been less obvious/visible?
http://javierrincon.posterous.com/ Javier Rincón

I am a great believer in this approach, its curious that when explained to most people they say, no, I don´t want to go niche with my product, I want to mass market. Handfull of wasted marketing money and possible startup failure.

As crossing the chasm says, solving the problem for an specific core of users not only gives you great credibility within that circle, but allows you to then move on to through the intersection to the next area of users. Thus expanding your total area and continuing your path to massification.

The problem is that many startups want to solve everybody's problem, without realising that this will kill them. Start focused, gain traction in a concentrated community and then move on and conquer.

Great post Chris
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http://www.whatsnewonthenet.com NuNet

Well what you have said does make sense. But Facebook and Foursquare had come up with ideas that could work in a niche market, atleast geographically, to begin with. What if you have an idea that is meant to work on a mass-based market?
http://twitter.com/hi5at5 Jonathan Lee

great post chris. i'm in the process of starting something new with a few of my friends and we were just talking about this. finding a niche or concentrating efforts in a local area can definitely help overcome the chicken-and-egg problem.

i was talking to my friends about how exactly to identify a good initial niche so i'm glad you covered that in your post. you gave me a lot to think about. thanks for your insight!
http://twitter.com/hi5at5 Jonathan Lee

great post chris. i'm in the process of starting something new with a few of my friends and we were just talking about this. finding a niche or concentrating efforts in a local area can definitely help overcome the chicken-and-egg problem.

i was talking to my friends about how exactly to identify a good initial niche so i'm glad you covered that in your post. you gave me a lot to think about. thanks for your insight!
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http://twitter.com/zsalloum Ziad Salloum

Can you suggest to me a niche for my http://www.SimpleConnexion.com ?
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Lyric

Sorry, I don’t understand.
Can you explain by giving an example?
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Usama

Start from small keeping the bigger picture in mind. Ok got it. That’s a great strategy and that is the only one that works.
Thanks.

Chris Dixon