Kibu, We Hardly Knew Ye

Inside the cult of Kibu is an article published in an edition of Industry Standard back in 2000. I had never heard of Kibu until I first came across the company in a marketing class several years ago, then I promptly forgot about it until it popped up again in another marketing class. Now if an article appears twice in two different marketing class, there must be some marketing lessons we can take away from what happened to Kibu.

Without going into too much detail, Kibu is one of hundreds of dot.com companies that folded when the dot.com bubble burst in the later part of 2000. Kibu was founded on the concept of being a "digital hangout" for teen girls. Multiple channels on its website would be run by a "Face" and given names like Face of Fashion, Face of Advice and Face of Horoscopes. Like most of the dot.com companies during that time, Kibu was striving to drive traffic to its website, but had no business plan on how to generate revenue, let alone profit.

So what is marketing and what lessons can we learn from Kibu? Marketing can be thought of as everything that is done to get a product into the hands of the customer, and getting them to pay for it. One of the challenges during the dot.com boom was figuring out how to generate revenues and profits. For companies like Kibu that produces online contents instead of selling a physical product, the challenge is even more difficult because contents had always been free online. Even now more than 10 years later, the business strategy of charging for online contents have only achieved limited success in a few rare instances, while most content sites gravitate towards the online advertising business strategy for generating revenues.

The first mover advantage also proved to be non-existence for most of the dot.com companies since the idea and technology for online ad placement was not mature yet. In addition, other companies were not ready to devote significant portions of their advertising budget to online ads 10 years ago during the dot.com boom, even if the technology existed to place them.

Lastly, reading about Kibu made me think of the herd mentality that often drives human behavior. The herd mentality can also lead to irrational exuberance and bubbles as seen in the dot.com bubble and the recent financial crisis caused by the real estates bubble. In the field of marketing, the use of social media and instant communications provide the perfect vehicle to take advantage of this herd mentality. A quick search turned up two books already written about herd marketing. More on herd marketing in the future.

http://www.amazon.co.uk/Herd-Change-Behaviour-Harnessing-Nature/dp/0470060360

http://www.amazon.com/Nature-Marketing-Swarm-well-Herd/dp/0230203361