Why ChatGPT will be the next big growth channel - Part I (AI column)
I saw something interesting. interview Bryan Balfour on the future of distribution channels and analysis of the cyclical model of such platforms. Brian is the founder and CEO of the company. Reforge An educational platform that has historically specialized in teaching product and user growth. The company has recently moved to develop its own products, including Reforge Insights. Prior to founding Reforge, Balfort served as VP Growth at HubSpot and oversaw the rise and fall of all major distribution channels, including Facebook, Google Ads, SEO and the Apple App Store.
I liked his thoughts on the cyclical model that all major distribution platforms follow: Phase 0: Market conditions Consensus is formed on a new huge category (social networks, mobile devices, AI chat platforms)
- No clear leader - usually 5-7 Major players are fighting a fierce battle. High stakes because competition usually results in monopolies or duopolies Phase 1: Definition of the moat and opening of the platform One of the players defines his "moat". (moat) - something that will provide security and help to achieve escape speed (speed when competitors can no longer catch up with the leader) To quickly accumulate this advantage, ecosystem assistance is needed. (Third-party developers of content, applications, businesses) Creating a platform for third parties with incentives: developers add use cases and engagement, in exchange for new forms of distribution Phase 2: Use of advantage The period of the “gold rush” when developers massively come to the platform Rapid growth of both the platform and early adopters through valuable distribution Phase 3: Closing the Control and Monetization Platform The platform begins to restrict access for reasons of monetization, growth or preventing its own destruction. Restrictions can be different: complete shutdown of functions, development of own applications to absorb popular use cases, artificial suppression of organic distribution to force paid mechanism n
In the podcast, Brian gives historical examples 1. Facebook (2007-2012) * (banned social network) Fighted MySpace and Friendster, defined network effects as his “moat”, launched the Canvas platform for developers, providing access to notification channels and tape. Then gradually took a percentage of revenue, suppressed organic channels and absorbed major use cases into its own applications. You can read more about this in the book.Facebook: The Inside Story"which I'm talking about." told 2. Google A long-running battle with Yahoo, AltaVista, has defined data as a “moat,” spurring web developers to optimize for their search algorithms. Over time, it increased the share of advertising and absorbed high-value use cases. (travel, search for restaurants). 3. LinkedIn I went through this cycle twice – first with corporate pages, then with personal profiles, where I first stimulated content creation, then introduced advertising formats and reduced organic distribution.
Bryan notes that cycles are getting shorter, which means a smaller window of opportunity to participate in the game. Companies can't shy away from participating - this is the prisoner's dilemma: if you don't play, your competitors will use the new platform and customer expectations will change. By the way, in continuation I'm telling Brian's hypotheses about the next major distribution channel. (spoiler is ChatGPT).
#AI #Data #Management #History #Software