The chicken and the egg

I was riffing with someone about an idea last week and I told him he had the, "chicken and an egg problem." It seemed like he knew what I meant, and I thought I knew what I meant, but I’ve since decided it’s worth a few paragraphs.

The quick background is that chicken and egg is a cliche for a (false) conundrum: which came first? [it’s false because the egg came first… the only thing a chicken can come out of is a chicken egg, while something that’s not quite a chicken yet could lay a real chicken egg… sorry to digress].

When a business is described as a chicken and egg problem business, we’re going back to the cliff. The only reason people want to use it is that other people are already using it! In other words, no one wants to go first.

  • No student would take the SAT unless they knew that colleges were requiring it. And no college would require it unless they knew students would take it.
  • No cool person wants to go to a nightclub unless they know that a lot of cool people will be there. But of course, cool people don’t want to go unless they know that the other cool people are coming.
  • A fax machine with no one to fax to isn’t worth buying.

There are countless innovations that would make our world a better place (and would make you a wealthy marketer). The problem with almost all of them is that getting from here to there is almost impossible. That doesn’t mean you shouldn’t try, but it does mean you should count on failing. Sure, every once in a while an eBay happens. But for every business that solves the chicken/egg problem, there are thousands that fail (insert dead chicken/broken egg joke here).

In almost every case I can think of, the problem isn’t solved by fixing a big industry. It’s just too hard to get all the big players to change at once. Instead, the problem is solved in a tiny industry (college admissions a hundred years ago) and then the industry grows around it. So, if you’ve got a breakthrough for the big guys, watch out.