Reddit co-founder Steve Huffman (who also co-founded Hipmunk and is a 2011 Inc. 30 Under 30 honoree) is teaching a Udacity online course on Web application engineering.  In one of the instructional videos, Huffman reveals that many of Reddit's "users" in the early months were actually fake accounts, created by the founders.

Huffman goes on to say that these fake users were critical to building Reddit:

  • The appearance of activity created momentum with "tons of content" and made the site feel alive, rather than a "ghost town" empty website.
  • The articles set the tone for the site, in terms of the topics that were useful or interesting. The community Reddit built in the early days and that continues to this day was driven at least in part by the content the founders posted.

Within a few months, the site had gained enough momentum and a strong enough sense of community that the authors no longer needed to post articles under fake accounts.

Smoke and Mirrors

In the video, Huffman talks of willing Reddit into existence. An entrepreneur must have a vision of a better world he or she can create, but vision alone is not enough. He or she must also make his or her vision real and powerful to potential customers and investors. Otherwise, he or she will never gain the resources and momentum he or she requires to be successful.

In this context, a "smoke and mirrors" approach can sometimes be critical to willing a business model into existence. The forces of skepticism and inertia can be strong among investors and potential customers. To combat those forces, we need to create a compelling vision of the future and make it seem more real and inevitable than the status quo:

  • Create a compelling vision by showing customers and investors that there is an objectively better state of the world we can create, in which we serve customers better and are more richly and sustainably rewarded for doing it.
  • Make it real by showing (through prototypes, pilot programs, small-scale tests, etc.) how this better world tastes and feels (in a very visceral sense), and why it is compelling and rewarding.
  • Make it inevitable by painting a very clear path from vision to reality and bulldozing through (or routing around) obstacles with clear conviction and determination. Also, by rallying and motivating the resources needed to make it happen.

Important Note: By "Smoke and Mirrors," we are not suggesting entrepreneurs do anything unethical or illegal. As you will see in the example below, we are talking about ethical actions to gain traction in building a new business model. In the Reddit example above, our view is that the founders' actions were not misleading to their early customers, nor unethical.

Willing a New Model Into Existence

In one recent engagement, we convinced a client that it needed to guarantee its customers 24-hour turnaround on purchase requests. This was vital to addressing a major reason for customer dissatisfaction and moving to a higher spot on customers' approved vendor list.

However, we also needed to convince the client that 24-hour turnaround was achievable, when the status quo for most requests was 72 hours. To do so, we launched a pilot program to address key bottlenecks and resource gaps. For a select set of customers, we simplified the entire process, from the level of information needed to fulfill the request to the level of judgment and process needed to approve or deny the request. The pilot results were very positive; customers were happier with a quick denial than with a drawn-out, back-and-forth approval.

Not bad for a model that we created out of thin air.

We then made 24-hour turnarounds inevitable, through the simple technique of "burning our boats behind us." We moved employees from their current teams to new "SWAT" teams and built into those individuals' performance goals and incentives a significant bias toward quick decisions. We gave them no choice but to make decisions quickly.

We also placed the SWAT teams in charge of the entire purchase request process and helped them revamp it so that they could make good decisions quickly. We allowed them to have an above-average "reject rate," because we did not want them to make bad approvals (whereas we were fine with an overly restrictive approval process and high reject rates).

Along the way, we encountered all manner of doubt and inertia. We boiled our vision down to its essence and communicated it at every opportunity. When told "it can't be done," we responded (politely, of course!), "It must be done, and here's why. Either get on board or get out of our way." Where necessary, we borrowed or appropriated folks, taking them away from their day jobs (or simply redefining what their "day job" actually was) and asking for forgiveness instead of permission.

With the successful pilot in hand, we are adding more SWAT teams across the rest of the organization.

Note that at any point in time, senior executives could step in and stop or delay this whole operation. If they did so, they would see behind the curtain, see the "spit and baling wire" with which we were holding the whole operation together. Major processes and team structures are in flux, and we're learning as we go. However, the executives remain very supportive because we have made a compelling case (and continue to make the case) that the status quo is untenable.

In this way, we are faking it until we make it.

Have you willed your business into existence?  Share your thoughts with us at karlandbill@avondalestrategicpartners.com.