In my twenties I was a bouncer at two dance clubs in the Netherlands, called "Jet-Set" and "La Conga" (you can probably guess what era this was from the picture to the right). I remember that we loved it when a line started to form outside. People came up with very creative offers to be able to skip the line (if we ever meet in person I'll share some examples...) . All these people waiting to get in was great advertising. You don't need to spread flyers around when you have a line. People will spread the word to their friends (even more so today with texting and social networks). All people that matter in your audience will know about the hottest club in town in a heartbeat.
This typically happened on Fridays and even more on Saturdays. We opened around 11:30 p.m. and would have a line by midnight. It would stay like that till about 2 a.m. (in the Netherlands clubs were open till at least 4 a.m.). This 'pattern' of scarcity repeated itself every week and helped grow the brand over time. The difficulty of getting in made people want to get in even more, talk to those that have been there or brag to others that they got in. People would show up earlier for a better chance to get in. Or go somewhere else first and just come to us from 2 to 4 a.m. This way the customers were spreading out better to align with club's capacity (we hoped they did not spend all their money before 2 a.m.).
Now let's look at Ello, the new social network that presented itself this year as the new kid on the block. They are the latest social canvas to try to take on Twitter, Facebook and all the others that are trading your privacy and desire for an ad free experience for the need to be profitable.
Ello does not. Ello is clean and without advertising (for now).
Ello is invite only.
How does the Ello example fit your startup marketing strategy?
Let's give this some thought. There is no scarcity (it's the cloud right?). Ello does not impose any barrier for entry on its new members that implies a higher quality group "to get in" (unless the quality is being patient). This is artificial scarcity. This is like the bouncer creating a line outside while the club is still empty inside. Does that work?
When a club (or restaurant for that matter) creates a line you can have a great effect over time. If people walk away today because they don't feel like standing in line, there is a good chance they'll come back next week a bit earlier. And they will have told some of their friends to do the same. A low risk, high reward marketing tactic that might cost you some customers the first few weeks, but it will often pay off.
But Ello has only one opening night. And it caters to an audience that's used to instant gratification. An audience that has many options. In this digital world, creating artificial scarcity through barriers of entry might have reverse effects. Ello was pretty cool when it launched. The buzz last month got many people trying to sign up. But then they got stopped by the bouncer at the door. Without any explanation they were asked to go back in line, with no prediction of when they could hope to get in. So this will lead to one of two things...folks forget about it (like I heard some of my friends have), or they start writing about it and create more buzz (like this blog post).
Social networks can be better if they don't have advertising and protect your privacy. But the single highest value is created by the network effect of the amount of members in the network. Ello is delaying the value creation by limiting who they let become members. But then on the other hand, this exclusive membership might create enough buzz to offset slowing down the early growth.
One other big difference between Ello's waiting line and the one outside our club is that the public does not see Ello's line. Maybe Ello can show on their sign up page how many people are waiting to get in, so that people get a sense if it's worth waiting for or worth coming back for. Or to show how long it might take to get in.
I don't have a crystal ball, and Ello's launch can prove to be very successful as their startup marketing plan, but I think when brands try to create buzz and desire by creating scarcity they have to be careful of it not to be too artificial. In today's world of abundant choice many people will walk on and you can lose the momentum.
So in startup marketing, if you want to make things special, unique, and desired by many, remember the story about how Maxim's opened in Paris, was mostly about mystique and mystery, not so much about just making it hard to get in. Maxim pretended to be open and the bouncers did not let anyone in the first two weeks, but behind the glass the people dining and having a good time were just actors. It does not work like that anymore, but it was a good example where "having to wait" was not the only factor to create the buzz. It was part of it. But not all of it.