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It may feel like the Googles and the Facebooks are self-sustaining juggernauts, but customer happiness and retention is exactly the incentive machinery you are

It may feel like the Googles and the Facebooks are self-sustaining juggernauts, but customer happiness and retention is exactly the incentive machinery you are missing. Except we're not their customers.

william42 15y ago
Yeah, but if we leave, then the advertisers(their "real customers") will too, so it works out the same.
- danilocampos 15y ago
  It really doesn't. Advertisers have committed budgets and have switching costs that are often much, much higher than those of end users. It would take a sustained, double-digit-percentage loss of users to impact Google's bottom line. One user fucked over out of 1,000, even if they never return, is pretty easy to paper over. Which is why there's no phone number a user can call if they're in trouble. They don't really matter, so it's not worth the cost to address their issue. AdWords advertisers, on the other hand, they can get a human on the phone whenever they want. Because if they have an issue, it's honest-to-god cash money that stops flowing into Google's coffers. They're the real customers.
magicalist 15y ago
You can substitute "user", but as william42 pointed out, the distinction means little. Feel free to bring up to anyone here relying on VC that their users aren't their customers, and be amazed once again at how little insight that provides. If you want to contribute some signal instead of noise, you could say they have two sets of customers with sometimes opposed motivations. But that isn't uncommon (and if it isn't another set of customers, it's your suppliers or the hours in the day or something else). As I said, everyone plays the balance game.
- CamperBob 15y ago
  The distinction is very important: a customer is someone who pays you money. To Google and Facebook, users are just parameters to be optimized.
  - danilocampos 15y ago
    Concur: To lose a customer is to lose some chunk of revenue. To lose a user is to lose some chunk of page views to be sold. A very important distinction. You can offset shed users by adjusting the product to generate more page views, as publishers well know. Lose too many customers, though, and that's a lot of money that's simply not hitting your pocket anymore. With that in mind, I'm pretty sure Netflix would not email me asking to know about the quality of a given streamed movie if I were merely a user. And the way I know that is that YouTube has never once checked in on me to see how my streaming experience went.
    - magicalist 15y ago
      if you wrote out your first paragraph in an actual formula, you would realize what you're missing here. You can't always generate more page views, so gaining or retaining users would then become what you want to maximize (as publishers wish they could). Lose advertisers, get more users or make the ads more effective and earn more. Make a product that users and advertisers like, and you maybe get more of both. Finding the sweet spot remains hard. Ignoring these dynamics is not helpful. Your point about adwords customers getting someone on the phone is important, because not all adwords customers can. Preferential treatment for large customers is not at all unusual, and I don't think anyone would argue that it is bad. They just want a phone number they can call too. Netflix and Youtube have completely different streaming models (namely youtube's is not adaptive), but I do see a "report a bug" link on there. But this ignores my point, which was not that google customer service is awesome, just that there definitely is a feedback loop ("there is zero incentive machinery"), and that "product not a customer" still misses the point as much as it ever has.
    - nmridul 15y ago
      I disagree with it. If I am conducting a free for all art exhibition (no selling of arts, just for people to see), then the visitors are not my customers. They are just viewers. I could have advertisers or sponsors for that program and someone could even be paying me based on the number of visitors. That does not make the visitors my customers. On a side note- even if I lose my staff, I lose some chunk or revenue, that does not make my staff my customer.
sossles 15y ago
We are customers, but the currency is attention, not money.

william42 15y ago

Yeah, but if we leave, then the advertisers(their "real customers") will too, so it works out the same.

danilocampos 15y ago
It really doesn't. Advertisers have committed budgets and have switching costs that are often much, much higher than those of end users. It would take a sustained, double-digit-percentage loss of users to impact Google's bottom line. One user fucked over out of 1,000, even if they never return, is pretty easy to paper over. Which is why there's no phone number a user can call if they're in trouble. They don't really matter, so it's not worth the cost to address their issue. AdWords advertisers, on the other hand, they can get a human on the phone whenever they want. Because if they have an issue, it's honest-to-god cash money that stops flowing into Google's coffers. They're the real customers.

magicalist 15y ago

You can substitute "user", but as william42 pointed out, the distinction means little. Feel free to bring up to anyone here relying on VC that their users aren't their customers, and be amazed once again at how little insight that provides. If you want to contribute some signal instead of noise, you could say they have two sets of customers with sometimes opposed motivations. But that isn't uncommon (and if it isn't another set of customers, it's your suppliers or the hours in the day or something else). As I said, everyone plays the balance game.

CamperBob 15y ago
The distinction is very important: a customer is someone who pays you money. To Google and Facebook, users are just parameters to be optimized.
- danilocampos 15y ago
  Concur: To lose a customer is to lose some chunk of revenue. To lose a user is to lose some chunk of page views to be sold. A very important distinction. You can offset shed users by adjusting the product to generate more page views, as publishers well know. Lose too many customers, though, and that's a lot of money that's simply not hitting your pocket anymore. With that in mind, I'm pretty sure Netflix would not email me asking to know about the quality of a given streamed movie if I were merely a user. And the way I know that is that YouTube has never once checked in on me to see how my streaming experience went.
  - magicalist 15y ago
    if you wrote out your first paragraph in an actual formula, you would realize what you're missing here. You can't always generate more page views, so gaining or retaining users would then become what you want to maximize (as publishers wish they could). Lose advertisers, get more users or make the ads more effective and earn more. Make a product that users and advertisers like, and you maybe get more of both. Finding the sweet spot remains hard. Ignoring these dynamics is not helpful. Your point about adwords customers getting someone on the phone is important, because not all adwords customers can. Preferential treatment for large customers is not at all unusual, and I don't think anyone would argue that it is bad. They just want a phone number they can call too. Netflix and Youtube have completely different streaming models (namely youtube's is not adaptive), but I do see a "report a bug" link on there. But this ignores my point, which was not that google customer service is awesome, just that there definitely is a feedback loop ("there is zero incentive machinery"), and that "product not a customer" still misses the point as much as it ever has.
  - nmridul 15y ago
    I disagree with it. If I am conducting a free for all art exhibition (no selling of arts, just for people to see), then the visitors are not my customers. They are just viewers. I could have advertisers or sponsors for that program and someone could even be paying me based on the number of visitors. That does not make the visitors my customers. On a side note- even if I lose my staff, I lose some chunk or revenue, that does not make my staff my customer.

sossles 15y ago

We are customers, but the currency is attention, not money.