Lesson: Consumer Growth with Jim Scheinman

Step #8 Focus: Control your destiny

One of the companies that I was fortunate to with very early on is a company called Tango. It's still a private company and we have about 200 million people who have downloaded or used the product.

In the very beginning, we had a decision to make with a team of less than ten people. Do we go forward with the partnership deals that were proposing to pay us a lot of money? To build for them a feature or product that we were either going to build for them or build for ourselves to go out to consumers.

And it’s kind of an extreme example of going after a revenue model versus going after a product. I always tell my companies that, "If you can control your own destiny, that's the right way to go." In other words if you don't have to rely on a third party, whether that be a partnership that's paying you or a partnership that's promising to give you free distribution or even frankly a platform like a Facebook or a LinkedIn or Twitter and you can build this product on your own where you could tell the world, "Hey, this is a great product and come and see it."

If you get a customer and that customer loves what you do and then can bring in another customer for you or ideally two or three other customers, you now have viral growth. You've attracted one person. They've invited four people and you have a product that sells itself. That’s what happened with Tango. So we never spent any money on advertising. We decided that we were just going to go for it on our own and control our own destiny and we built a product that was direct to consumer. We decided not to build product for the headset manufacturers.

The reason is because, with the few engineers we had we could do either/or. We either were going to spend all the time building the product for the Samsungs and the Motorolas of the world or we were going to build a product that could be distributed on the new platforms like the Apple Store, the App Store, or the Android App Store.

We went for the latter and that was the right choice because now we have 200 million customers and we control our own destiny. Those partnership deals are actually still there and we could do those deals and we could get paid a lot more money if we chose to. But, we don't even need to do those deals for our own distribution because there's so much traction on our own. Every day, there's hundreds of thousands of new customers that come in for free, if you will, for Tango. That's how you build billion dollar businesses.