"The Power of Trust and Innovation: Substack and Figma's Success Stories"

"The Power of Trust and Innovation: Substack and Figma's Success Stories"

Introduction:

In today's digital landscape, where attention is a scarce resource, businesses must adapt their strategies to capture and retain users. Substack, a subscription newsletter platform, and Figma, a collaborative design tool, have both found success by focusing on differentiation and building trust with their users. This article explores the unique approaches taken by these companies and how they have revolutionized their respective industries.

The Shift in Valuing Attention:

The rise of social media platforms created a shift in how we value attention. Initially abundant, attention quickly became scarce. Rather than blaming algorithms or moderation efforts, Substack recognized that the problem lay in how businesses optimized for users' time rather than their money. By changing the business model to prioritize user payment, Substack aimed to fix the state of media. This shift was supported by the growing willingness of individuals to pay for niche content, such as podcasts, YouTube shows, and in-depth reporting.

Competitive Advantage Strategy:

Substack understood that new products compete on two dimensions: differentiation or cost. For ad-driven media publications, distribution cost becomes a crucial lever for success. Substack bet on the rise of media businesses competing on differentiation rather than cost. To maximize value creation, they initially built the product exclusively for one person, Bill Bishop. This narrow focus allowed them to discover and develop features that might have been overlooked otherwise. One such example was the inclusion of group subscriptions in the first version of the product.

Building Trust and Selling Trust:

Substack's approach was not to sell a better product but to sell trust. Their product lacked any writer lock-in, emphasizing the value of platform neutrality. This trust became the critical value proposition for Substack, making readers more likely to subscribe to multiple Substack publications. By prioritizing trust and fostering a sense of community, Substack established a strong foundation for sustainable growth.

Dylan Field's Insights on Figma's Journey:

Dylan Field, the co-founder of Figma, shared his insights on the company's journey towards success. Initially encouraged to apply for the Thiel Fellowship, Field realized that WebGL would be the future of creative tools. Despite warnings from Aviary, a company that had experimented with WebGL, Field believed in the potential of this technology. He reached out to designers through social media and leveraged their feedback to refine Figma's early product.

The Eliminate, Raise, Reduce, Create Framework:

To understand Figma's position in the market and differentiate itself, Field and his team used the "Eliminate, Raise, Reduce, Create" framework. Initially planning to build a community for designers, they realized the need to prioritize generating revenue before focusing on community building. This approach ensured that Figma provided a valuable tool that designers could rely on while also creating a space for collaboration and networking.

Actionable Advice:

• 1. Launch earlier than expected: By launching early, you can generate excitement around your vision and gather valuable feedback from users. This feedback can help you refine your product and attract top talent to your team more efficiently. However, ensure that your product is ready to satisfy users' needs before launching.

• 2. Prioritize trust and community building: Building trust with your users is crucial for long-term success. Establishing a sense of community and fostering connections among users can help create a loyal user base that is more likely to engage and support your product or service.

• 3. Adapt to changing needs: As seen with Figma during the pandemic, people are constantly looking for spaces to gather and collaborate. Stay attuned to your users' evolving needs and adapt your product or service to meet those demands. This flexibility will ensure that your business remains relevant and continues to grow.

Conclusion:

Substack and Figma have demonstrated the power of differentiation, trust, and adaptability in building successful businesses. By understanding the value of attention and offering unique solutions, these companies have carved out their niches in their respective industries. By incorporating actionable advice such as launching earlier, prioritizing trust and community, and adapting to changing needs, entrepreneurs can emulate their success stories and thrive in the competitive digital landscape.