The Self-Promoting Product

Jan 24, 2009 by

Today, I would like to wish the Macintosh computer a happy 25th birthday!

What is amazing about the Macintosh is that it is in a sense a self-promoting product. Sure, Apple invests heavily in advertising. Nonetheless, Apple has benefited greatly from the advertisements that it has not paid for; those of the “Mac evangelists”. While Apple used to have a few paid employees who served as liasons between Apple and other firms in its value chain, Apple also had many unpaid helpers. Through encouraging the development of an enthusiastic user base, Apple was able to get substantial free advertising. Why would people bother? The answer is that there are network externalities in operating systems. Mac users were better off if more people became Mac users, as then they would have more software (and in the past, hardware accessories) available to them. Thus, Mac evangelism was not purely charity, but was instead motivated by users acting in their own self-interest. Why has there not been as much Windows evangelism? Simply, there has not needed to be. Given that Windows has had the dominant market share for the past several decades, users have not had to worry about the size of their networks.

The Mac is not the only self-promoting product I have encountered. Another is Skype. Skype, likewise, has a substantial network effect. People want their friends to join so that they can call them for free. Likewise, people promote craigslist, as the value of craigslist increases as the number of posts on it increases. If I can get all of my friends to use craigslist, and they can get all of their friends to use craigslist, it is more likely I will be able to find the stuff I want on craigslist.

From my observations, I conjecture that if one is creating a product, it is only likely that the user base will promote it if it is in the self-interest of the users to do so. These network externalities can be created deliberately. If Skype had not offered free Skype-to-Skype calling, users might have had less of an incentive to encourage their friends to join. (Paid Skype-to-phone calling does not require any network effect, and thus does not encourage evangelism.)

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