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PRODUCT.|PHILOSOPHY.|LIFE.

The new barrier to entry

A couple of months ago, I was in Jakarta to talk to some of our customers to understand how they perceived various brands in the online travel space. One of the people I spoke to made a point that I found very interesting. She was, in general, wary of making large denomination payments online for transactions as there was a possibility of being cheated out of her money. However, she was very comfortable making such payments online for brands that had famous celebrity ambassadors in their advertisements. Her point was that, if the brand was spending so much money on signing the famous celebrity ambassador for an advertisement, they wouldn't cheat her out of her money.

Before the widespread Internet and cloud infrastructure like Amazon Web Services, the barrier to entry for creating a product like this was high in terms of capital. There was nobody offering many of the services that we take for granted today and those that had the idea to do so had to raise and invest capital upfront in order to build the service and put it in front of users.

In the past eight to ten years, this has been a lot simpler and capital investment as a barrier to entry has pretty much been abolished for many business ideas.

While this allows everyone and their mother to set up businesses on the Internet, the barriers to entry have shifted to a different dimension.

The barrier to entry today is trust.

While getting famous celebrities to endorse your product is one capital intensive way to establish trust, that usually comes in the later stages when you already have a decent chunk of users and you are now looking to scale to the larger mass of audience.

However, the need to establish trust in the early stages of your product is still very critical. And in order to do so, you have to give a compelling reason to the users to pick your product (new and unheard of) over someone else that is established and trusted. Depending on the type of your product, this can be anything from significantly lower prices to an innovative new way of addressing the user's need.

This is true not just for products, but also for content.

Everyone and their mother can write and publish articles (and even books) on the Internet today. The users have such a wide variety of options to choose from that they default to the authors (and publishers) they have heard of and trust.

And increasingly, one of the ways to establish that trust is turning out to be podcasts. It is at least an order of magnitude more effort to produce and publish a podcast as compared to publishing a blog post. And as a result, there are far fewer people doing it.

But those who do it are signaling to the market that they are committed to put in the effort it takes to create and publish meaningful content. And in doing so, they are establishing trust in the audience for the content that they do publish. And this translates to everything that they do, including the blog posts and the books that they write.

I have seen Scott Adams, Christopher Penn, James Altucher, Chris Guillebeau and many others whom I used to read regularly make this transition in the last year or two to have podcasts dominate the share of the content they publish.

Another reason for me to think of podcasting as my year-long project for 2019.

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