Product Hunt: The Internet's Destiny Machine and The 3 Economies of the Internet

Product Hunt: The Internet's Destiny Machine and The 3 Economies of the Internet

In today's digital age, launching a new product without utilizing platforms like Product Hunt seems almost unthinkable. Product Hunt has become the internet's destiny machine, offering an opportunity for new products to gain users and attention at no added cost. The platform has even resulted in significant valuation changes for many startups. However, Product Hunt didn't start off as the powerhouse it is today. It went through various transformations and strategies to become the community-driven platform it is now.

Product Hunt's journey began with Ship, a tool that allowed startups to build an audience before their official launch. This marked Product Hunt's first attempt at generating subscription revenue and remains a part of the platform today. By utilizing Ship, Product Hunt was able to attract tens of thousands of visitors, experiencing a 75% month-over-month growth. This approach of starting with a community and then building the product around it was a unique and successful strategy.

One key turning point for Product Hunt was the meeting between Ryan Hoover, Product Hunt's founder, and Naval Ravikant, the CEO of AngelList. Ravikant, known for his dedication to helping new ventures, resonated with Hoover's mission. Shortly after their meeting, Ravikant became an investor in Product Hunt. This partnership not only provided financial support but also brought valuable expertise and guidance to the table.

What set Product Hunt apart from other online communities was its warm and genuine atmosphere. Unlike platforms like Hacker News or Reddit, Product Hunt fostered a community built on affection and support rather than snark and sarcasm. Ryan Hoover's leadership played a significant role in creating this environment. He was regarded as a master of community-building and was genuinely likable, even at a large scale.

However, despite Product Hunt's success in building a thriving community, it faced a challenge – it wasn't making money. Hoover had made a strategic choice to prioritize growth over revenue generation, a playbook commonly used by consumer hits. In hindsight, he admits that dedicating a portion of resources towards revenue generation would have been a wise decision.

To address the revenue issue, Product Hunt explored various avenues, including partnerships with companies like General Electric and the integration of podcasts and book reviews. Unfortunately, these initiatives didn't have a significant impact. In late 2016, Hoover faced a tough decision – either pursue a Series B funding round on unfavorable terms or form a new alliance with AngelList.

Ultimately, Product Hunt's revenue model shifted towards advertising, with the majority of its revenue coming from sponsored products and job postings. In 2020, the company was close to profitability, forecasting $3.3 million in revenue, with $2.9 million coming from advertising. Ship and Founder Club subscriptions also contributed $400K to the revenue.

Looking ahead, Product Hunt can continue to grow by making strategic changes. One suggestion is to streamline the platform by shutting down or transforming its least used corners. By focusing on the areas that drive the most engagement and value, Product Hunt can clear room for new growth opportunities.

Another potential avenue for growth is leveraging early traction data to provide additional distribution for promising projects. By incorporating data such as the number of email sign-ups, Product Hunt can identify and support projects with high potential, giving them an extra boost in visibility and user acquisition.

Additionally, Product Hunt should consider establishing an incubator to support founders in the early stages of their ventures. Many founders need help even before they have a concrete idea or product. By front-running the existing maker flow, Product Hunt can provide valuable resources and guidance to entrepreneurs and potentially discover groundbreaking ideas.

In the grand scheme of the internet, Product Hunt's success story aligns with the concept of the three economies: the Knowledge Economy, the Access Economy, and the Commerce Economy. The Knowledge Economy, which we have been a part of for the past two decades, focuses on organizing and sharing information. Platforms like Google and Twitter have revolutionized the way we access knowledge and engage in conversations.

However, the proliferation of knowledge has led to a new challenge – filtering and identifying qualified individuals. The Access Economy, often overlooked, plays a crucial role in matching qualified individuals with the right opportunities. It provides a framework for evaluating and identifying talent, bridging the gap between knowledge and access.

Ultimately, the goal is to reach the Commerce Economy, where money flows seamlessly across borders and smart contracts replace traditional middlemen. To achieve this, we need the Knowledge Economy to organize information, the Access Economy to organize people and their talents, and finally, the Commerce Economy to distribute resources and wealth.

In conclusion, Product Hunt's journey showcases the power of community-building and the importance of adapting revenue strategies to sustain growth. By focusing on key revenue streams such as advertising and exploring new growth opportunities, Product Hunt can continue to thrive as the internet's destiny machine. Additionally, leveraging early traction data and establishing an incubator can drive further innovation and support founders in their entrepreneurial journey.

Three actionable advice for Product Hunt's future success:

• 1. Streamline the platform by shutting down or transforming least used areas to focus on high-value engagement.

• 2. Leverage early traction data to provide additional distribution and support for promising projects.

• 3. Establish an incubator to support founders in the early stages of their ventures and discover groundbreaking ideas.