The website is here: http://www.khanacademy.org/

Sal Khan at Gel 2010 from Gel Conference on Vimeo.

Like any start-up, Mint.com’s big challenge was to establish credibility in the marketplace. To get folks to trust them enough to do business with a totally new company, and in Mint’s case, to enter their guarded financial information. How did they do it? Jason mentions two key things:

* Great Design. “Design has given us the credibility we need to overcome the downsides of being the new kid on the block. It isn’t easy to convince people to give their credit card numbers to a company with a dot.com in its name, let alone all of their online banking passwords. Design matters.”
* Get the Media to Tell Your Story. “We abandoned all paid search and concentrated 100% on PR and organic search.”

These are great lessons for anyone launching an online start-up, and I couldn’t agree more with Mint’s approach. In fact, we’ve applied the exact tactics in our start-ups, and it really starts with hiring a great graphic designer to make your product or service come to life. Without good design, you create a huge (and unnecessary) risk that your initial customer prospects, media, etc., will question whether you’ve got what it takes to succeed. If you look like the shaky new kid on the block, you’re probably never going to get anyone to take you seriously and you’ll have a very difficult time building the momentum needed to succeed. Bad design is the kiss of death for an online start-up.

Building Credibility in Your Start-up—Lessons from Mint.com

My favorite part happens just before the first minute mark. That’s when guy #3 joins the group. Before him, it was just a crazy dancing guy and then maybe one other crazy guy. But it’s guy #3 who made it a movement.

Initiators are rare indeed, but it’s scary to be the leader. Guy #3 is rare too, but it’s a lot less scary and just as important. Guy #49 is irrelevant. No bravery points for being part of the mob.

We need more guy #3s.

Nintendo has dropped out of this race. The Wii has few bells and whistles and much less processing power than its “competitors,” and it features less impressive graphics. It’s really well suited for just one thing: playing games. But this turns out to be an asset. The Wii’s simplicity means that Nintendo can make money selling consoles, while Sony is reportedly losing more than two hundred and forty dollars on each PlayStation 3 it sells—even though they are selling for almost six hundred dollars. Similarly, because Nintendo is not trying to rule the entire industry, it’s been able to focus on its core competence, which is making entertaining, innovative games…

Nintendo’s success is not an anomaly, either. The business landscape of the past couple of decades is replete with companies that have flourished as third wheels, and with companies that have struggled to make money despite being No. 1 in their industries. (Today, would you rather be Honda or G.M.?) And while it’s true that in many industries there is a correlation between market share and profitability, one doesn’t necessarily lead to the other.

A recent survey of the evidence on market share by J. Scott Armstrong and Kesten C. Green found that companies that adopt what they call “competitor-oriented objectives” actually end up hurting their own profitability. In other words, the more a company focusses on beating its competitors, rather than on the bottom line, the worse it is likely to do. And a study of the performance of twenty major American companies over four decades found that the ones putting more emphasis on market share than on profit ended up with lower returns on investment; of the six companies that defined their goal exclusively as market share, four eventually went out of business.

Markets today are so big—the global video-game market is now close to thirty billion dollars—that companies can profit even when they’re not on top, as long as they aren’t desperately trying to get there. The key is to play to your strengths while recognizing your limitations.”