Too many people are working on catch-22 businesses and they don’t even realize it.In 2011, we had this interesting idea of what would be the next Groupon. Groupon was a force in the world because, sure, it gave people a deep discount, but it was also a source of entertainment — the surprise of the daily email, and the things you would buy and experience that you might not try otherwise.But that deep discount was problematic — a race to the bottom for many companies. So we figured, instead of focusing on discounts, what about the entertainment part of the equation?How could we entertain potential shoppers and still lead them to purchases with a company? We also saw the popularity Zynga and Facebook gaming were having.So we created Cityposh, our new take on Advergaming.We created a site with all of our own games that borrowed from popular game mechanics. We had our own versions of Bejeweled, Hangman, Sudoku, etc. But our games were also easily skinned with whatever logos, product images, taglines a brand wanted.For example, our Bejewelled, instead of jewels, had pictures of whatever the advertiser wanted you to match. If GAP were a client of ours, the pictures would be of new sweaters for 2018, or images of their logo, etc.And then companies could even offer prizes to the top players of these games. They didn’t have to give much to really help stoke the competition. Posters, some small coupons, t-shirts, swag.We had people playing these games an average of 2 hours a day. That was crazy.But here was a huge problem with the concept.Advertisers wanted to see we had a huge audience playing our games before they would commit money to using us. They wanted to buy that audience.The audience however wanted to see we had some awesome brands and fun stuff to win before they wanted to start playing.You see the dilemma.Catch-22 is now a popular expression from the 1961 book of the same name by Joseph Heller. “Catch-22” was a rule by the fictional military portrayed in the book, in which a pilot wasn’t allowed to fly if they were crazy. So to stop flying, the pilot would have to fill out an application to get removed from duty. But the act of filling out the application was a sign they weren’t crazy, so they had to keep flying.Today, catch-22 is used in our vernacular to describe these circular logic problems where people get stuck.Just like we were with Cityposh. We couldn’t get advertisers without the audience, and we couldn’t get the audience without the advertisers.Reddit was in a similar spot, building a news site of user submitted content. Who wants to join a site where there isn’t already a bunch of activity?In a class Steve Huffman, one of the founders of Reddit, taught on Udacity, Steve mentions how he built a UI to submit URLs and add a username to the submission. That’s weird. Normal submission sites just use the username you’re logged in with. But this UI was just for Steve and Alexis, the two founders, so they could keep adding new usernames to the submissions and have them instantly registered.Steve and Alexis seeded Reddit with tons of fake users who were just them.Reddit, now the 4th largest website in the US, owes a lot to Steve and Alexis figuring out how to circumvent the catch-22 of their business. They made their site feel lively when new people showed up even though much of that activity was just the two of them.A lot of new businesses are catch-22 businesses. They think building a great platform where people will review restaurants, or submit news, or post photos is all it takes. But they don’t realize how hard it is to convince people to participate without a bunch of people already participating.At Cityposh to get past our catch-22, our first contests were these huge brands, but we were the ones buying the gift certificates and loading up the brand images from their online catalogs. We never misled people where these things were coming from. But it solved our problem of our site looking small early on.Many businesses who aren’t these user generated sites have their own catch-22s and don’t realize it too.Some new user comes to your site. You’ve spent a great deal of time building the most beautiful marketing site. Great demos and pictures, but people aren’t signing up.Because there’s zero social proof on your site letting anyone know you’ve been trusted. There aren’t any testimonials or case studies.I’ve been solving that problem for years by giving away my stuff for free to the biggest clients I could find.Throw Lean Startup out the window. Don’t charge right away. Charge a little later. Get the first one or two in the door for free so you at least have someone doing something with your work to talk about.With my first startups we had this relationship with O’Reilly Media. They didn’t pay us anything. We gave them the tools for nothing. But they gave us carte blanche to feature their logos, projects, results, case studies anywhere we pleased.It was a huge testimonial to point other clients to, who we could then charge.Don’t forget that even after you build the fancy new product or business of yours, you probably have a catch-22 to solve.P.S. You should follow me on YouTube: youtube.com/nathankontny where I share more about how we run our business, do product design, market ourselves, and just get through life. And if you need a zero-learning-curve system to track leads and manage follow-ups, try Highrise.Your product isn’t done when you think it’s done was originally published in Signal v. 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