Mario Sundar’s Top of Mind

As I was reading that "Transformers 2", the much reviled movie (critically at least) made $112M on their opening weekend, I couldn't help but think back on Seth Godin's excellent post earlier today on the paradox of the middle of the market.

This is obviously a movie that caters to that audience precisely:

The paradox is that it's almost impossible to make a product or service for this segment, because they want the tried, the true and the boring.

The New York Times seconds this assertion:

People complain about Hollywood’s tendency to be unadventurous with its big-money titles, but the moviegoing masses clearly get the most excited when they are not being surprised. In other words, the multiplex really rocks when movies are served up the McDonalds way: predictably and comfortably.

However, with movies it's easy getting away by targeting solely this juicy middle of the market, because they want the tried, true and boring sequels, because of the brand recall factor. Plus, they are a big enough cross-section of your audience base that if they approve of the movie you cross a $100M on the opening weekend.

However, with most mainstream brands (in politics, products and services) it's a challenge getting there. Godin goes on to explain the phenomenon:

The middle of the market is a paradox because of the inherent contradiction between the ease of reaching the nerds and the geeks and the need to reach the middle. The solution, if there is one, is to enter a market to the enthusiastic cheers of those in search of the new, but to build a product/service that appeals to those in the middle. After the initial wave of enthusiasm, you hunker down and ignore those that first embraced you, obsessing instead on the needs and networks of the middle. It's a difficult balancing act, but it's the only one that works.

Ultimately, you end up disappointing the hard core that first found you, but because of their initial enthusiasm (and more important, because you designed your work for the masses in the first place), your product crosses the chasm and reaches a larger group. The formula starts with a service or product that's purple enough to spread, but not so hyper-fashionable that it merely entertains the insiders.

I think this relates equally well to brands. Take for e.g. the brand called Obama. He too started niche, catering to his rabid group of followers or "the base". In Obama's case his core supporters were obviously those on the extreme left. But soon during the elections itself he started "obsessing about the needs of the middle", and at some point after the election resulted in disappointing that hard core base. But by that time his brand had crossed over the chasm and had seeped into the nation's consciousness.

What other brands do you recall performing a similar feat? There are tons out there. Leave a comment.

Is it any surprise that the 18th most connected venture capitalist also founded the world's largest online business networking site! :) BTW, I do work at that company and consider working with Reid, one of the many perks LinkedIn has to offer.

If you're wondering how TechCrunch came up with the #s, check out the rationale below or feel free to skim through 52 pages of analysis embedded above.

If this is true, then who are the most connected venture firms and angel investors today? Vijay Dondeti, a graduate student in bioinformatics, applied the analysis in the Hochberg paper to about 2,700 investors in CrunchBase who participated in over 3,300 startup funding rounds between 2006 and 2008. He scored each investor based on how well connected they are to other investors as well as how well-connected their co-investors are to other investors. “In summary,” says Dondeti, “to get a high score, you need to co-invest often with others that also co-invest often.”

And, why do you think being a networked venture capitalist is important, besides the obvious? Better Returns.

The more co-investors a venture firm has, the better its network. The better its network, the better its overall returns. The correlation between the size of a venture firm’s network and its returns may have something to do with better access to deal flow, talent, advisers, potential customers, and potential exits.

Read more here.