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I recently read an article at the Harvard Business review that very much proves why Demand Media didn't last. It's called "Three Rules for Making a Company Gre
by JacobJans 13y ago
I recently read an article at the Harvard Business review that very much proves why Demand Media didn't last.
It's called "Three Rules for Making a Company Great."
The first rule is:
1. Better before cheaper
Demand Media severely violated rule number 1. They were all about cheaper before better. Their entire business model seemed to be about producing as much low quality content as possible. No wonder Google wanted to penalize them.
Think about this: If Demand has built their empire on producing super-high-quality articles, they would have had Google as an ally, instead of a threat. Google would have done what it takes to make sure they stuck around. Because Google wants high quality content. Instead, they abused Google's search engine, generating as much content as they could -- with very little focus on quality.
It is fortunate that many companies today are focusing on quality first. The fate of Demand Media is a good lesson for us all.
If we want to build something that lasts, we'll have a much easier time if we're building something that people actually want to stick around.
Who thinks the "content" produced by Demand Media is worth fighting for?
Their investors. Anyone else? I highly doubt it.
http://hbr.org/2013/04/three-rules-for-making-a-company-truly-great/ http://hbr.org/2013/04/three-rules-for-making-a-company-trul...
- driverdan 13y agoExcept that rule is often bullshit. There are many successful companies that have been built upon cheaper rather than better, eg Walmart.
- defen 13y agoWalmart did (does?) logistics and supplier negotiations better than anyone in the business. That is their advantage, not that their merchandise is sometimes low-quality.
- driverdan 13y agoUsing that logic you could say that Demand Media did better SEO than everyone else until Google changed their algos.
- defen 13y agoAFAIK Walmart's advantage in those areas could not be completely nullified by a single upstream provider's changes.
- ddebernardy 13y agoChina?
- JacobJans 13y agoYes, of course there are successful companies that don't follow the rules. However, according to the study, the most successful companies DO follow the rules. Of course, success depends on how you define it. For example, if you invested $1 in Walmart stock five years ago, and $1 in Family Dollar, guess which investment would give you greater return? The company that doesn't compete on price. They win. By a lot. Isn't it odd that in the discount retail market, the company that doesn't compete on price gives investors a better return? Very odd indeed. Read the article, in goes into more detail addressing what you brought up.
- derleth 13y ago> There are many successful companies that have been built upon cheaper rather than better, eg Walmart. In addition to what everyone else said, Walmart owns a market other companies don't seem to want: Poor people. Both Costco and Target go after a much richer clientele, and KMart, which is otherwise very similar, is dying. Walmart is the go-to one-stop shopping experience for people working one or more minimum wage jobs. Related to this is the fact Walmart builds stores where other companies don't. As a result, Walmart owns some very rural markets nobody else is touching. Edited to add: My point: Given the above, for Walmart, 'cheaper' is a necessary element for success. They're chasing a market that straight-up can't afford 'better'.