Note to readers: Hello world is a program developers run to check if a newly installed programming language is working alright. Startups and tech companies are continuously launching new software to run the real world. This column will attempt to be the “Hello World” for the real world.
What do Beijing-based Xiaomi — one of the youngest companies that became part of the Fortune 500 list — and Copy.ai, a startup from Memphis, have in common?
Xiaomi was founded in 2010. Copy.ai was founded four months ago. Xiaomi is a global smartphone maker valued at nearly $87 billion. Copy.ai is a service that lets you create marketing copy in a jiffy, with a little help from artificial intelligence. Xiaomi has close to 20,000 employees across the world. Copy.ai has only a handful.
Chalk and cheese right?
Let’s get to know these companies a little better. Xiaomi received more than 300,000 pre-orders in just 34 hours, even before it had an actual device in the market. Copy.ai went from $0 in revenues to $50,000 monthly recurring revenue with over 1000 paying customers in just four months. In both cases, customers are banging on the doors to buy the wares. That is, both have been extremely successful with early customers.
The common thread between these companies is a playbook that’s behind several modern and successful startups: Xiaomi was built in public. And Copy.ai is being built in public. For the uninitiated, building in public means that the startup shares a lot of details about how it is being built in a public forum. In most cases, it’s done by the founders. For Xiaomi, it was Lei Jun. At Copy.ai, it’s Paul Yacoubian, an angel investor turned founder.
How does building in public help? Building in public can create a virtuous cycle. That is, your early customers are likely people who are watching you build in public. They get curious when you talk about the momentum you have. They want to check out what this is about. And when they get a great experience with the product, they feel like spreading the word. This, in classical marketing terms, generates word of mouth.
In both cases, the companies have had some help from the underlying shift in technology. In Xiaomi’s case, it caught the feature phone to smartphone wave. In Copy.ai’s case, it’s caught on to the GPT3 wave. Readers of this column will be familiar with GPT3. But again, for the uninitiated, GPT3 is a powerful language model. Given a set of words, it can write sentences and paragraphs on its own. When people experience new technology through you and are amazed by it, they feel like sharing it with the whole world. Thus, generating word of mouth.
To be sure, in both cases, the window of opportunity is short. Because competition has or will soon have access to everything that you have. You have to be agile and you have to build and deliver product features that your users want fast. Xiaomi kept in touch with its users on a bulletin board system (BBS). Small two- to three-member teams would work round the clock through the week to build features that had received the highest number of votes from users. Every Friday, known as Orange Friday, Xiaomi would ship a new version of MIUI. The urgency around product delivery in effect helped Xiaomi create a deeper bond with its users. Copy.ai connects with its users through the company founder’s Twitter and ships fast using No-code tools.
There’s also a larger trend called ‘participatory consumption,’ (a term used by one of Xiaomi’s co-founders) at play here. We live in an era of participatory consumption, where users of a product not only want to buy and use the products but want to help create the product itself. Sort of like how IKEAs decision to ship flat-packed furniture to make logistics easier lead to the birth of the IKEA effect. Users who feel part of creating your product will be your loyalists. All in all, building in public may yet be the most powerful marketing idea of our times. In fact, it’s not just a marketing idea. It is the peg on which whole companies can be built.