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Matthew Effect

About Matthew effect

What do you think about Matthew effect? How much do you know about Matthew effect? About Matthew effect, I brought it to you, hoping to help you.

in 1973, Morton, an American researcher in the history of science, summed up a social psychological phenomenon with this sentence:? More and more honors are given to the scientific contributions made by scientists with considerable reputation, while those unknown scientists are not recognized for their achievements. ? Morton named this social psychological phenomenon? Matthew effect? . Matthew effect reveals a growing demand principle of personal and enterprise resources, which is related to personal success and happiness, so it is an important law affecting enterprise development and personal success.

social psychologists believe that? Matthew effect? It is a social psychological phenomenon with both negative and positive effects.

Its negative effects are as follows:

Celebrities and unknown people have achieved the same results. The former is often praised by superiors, interviewed by reporters, consulted and visited one after another, and all kinds of laurels are floating one after another. As a result, some of them often take credit for their lack of clear self-awareness and rational attitude, and stumble on the road of life; The latter, on the other hand, is neglected, and even suffers criticism and jealousy.

Its positive effects are:

First, it can prevent society from prematurely recognizing those immature achievements or accepting seemingly correct achievements; Second,? Matthew effect? Produced by? Additional honor? And? Honor for life? Such phenomena have great attraction to the anonymous, prompting the anonymous to struggle, and this kind of struggle must have obvious achievements beyond the past of celebrities in order to obtain the desired honor.

 ? Matthew effect? It exists widely in society. Especially in the economic field, there is a widespread phenomenon: the strong are always strong, and the weak are always weak, or the winners take all. Taking the economic field as an example, there are two different views on the development trend between regions in the world: one is solow growth model's? Convergence hypothesis? . This hypothesis holds that due to the law of diminishing returns of capital, when there is diminishing returns of capital in developed areas, capital will flow to underdeveloped areas where there is no diminishing returns. As a result, the growth rate of developed areas will slow down, while the growth rate of underdeveloped areas will accelerate, which will eventually lead to the convergence of the two types of areas.

Another view is that when factors such as system and human resources are taken into account at the same time, another result will often appear.

That is, the development between developed and underdeveloped regions often presents? Different development? Yes? Matthew effect? . Talents from backward areas will flow to developed areas, resources from backward areas will flow to developed areas cheaply, and the system in backward areas is usually not as reasonable as that in developed areas, so the cycle will be repeated and the regional differences will become bigger and bigger. And the gap between the rich and the poor in society will also arise? Matthew effect? . In the frenzy of stock market and property market, it is always the banker who earns the most and the retail investor who loses the most. Therefore, without adjustment, the money of the general public will gather in the hands of a few people through this form, further aggravating the polarization between the rich and the poor. In addition, because the rich usually enjoy better education and development opportunities, while the poor lack development opportunities for economic reasons, this will also lead to the richer the rich and the poorer the poor? Matthew effect? .

how does Matthew effect affect the success rate of entrepreneurship

timing, timing or timing! Does success only take time?

to discuss the timing of starting a business, we can't help but mention Bill Gross's analysis on the factors of success in starting a business released by TED last month. If you are starting a business or planning to start a business, this video with only a short time of 6 minutes and 41 seconds is absolutely not to be missed.

Bill founded IdeaLab 21 years ago, during which he served more than 111 companies. He analyzed the more than 111 companies he served, plus more than 111 external companies * * * as samples, and analyzed the influence of different factors on the success rate of start-ups according to five factors: ideas and creativity, team and execution, business model, financing and timing.

finally, Bill came to a conclusion that surprised himself: for start-ups, the most important factor affecting the success of entrepreneurship is timing, with the influence reaching 42%, nearly half.

I think so about Bill Gross's analysis.

1. The timing of starting a business is very important, which is the key content in the business model. It is meaningless to discuss business models without the big market environment and the opportunity to start a business. Therefore, from this perspective, timing is one of the important components of business model. Business model itself is a systematic project, which contains many factors, and it is of little significance to look at individual components;

2. The uniqueness of creativity is also an important part of business model. Entrepreneurship itself is the process of discovering new markets and designing business models with original new ideas, so similar to timing, the uniqueness of creativity is also an important part of business model. To sum up, the influence of business model on the success rate of start-ups should be at least the sum of two or three of the five factors;

3. The impact of financing is greatly underestimated. It is true that the success or failure of financing is the result of the comprehensive action of various factors, that is, all the advantages and disadvantages of a company have direct or indirect influence on its ability to obtain financing. However, in the process of looking for external cases of 111 start-up companies, limited by the availability of data and information, the cases that Bill can find and choose are more companies that have already obtained financing, and too many start-up companies have vanished without waiting for financing. Since most of Bill's samples are projects that have been financed, the existence of samples is obvious? Survivor bias? (survivor-bias), so the impact of financing is greatly underestimated.

why is the timing of starting a business important? MatthewEffect at work

Matthew effect means that the stronger the strong, the weaker the weak, which comes from the Bible "New Testament? A fable in Matthew:? If you have anything, you should double it and call him redundant; No, even what he has to take away? .

Matthew effect exists in almost all industries, especially TMT industry. Because TMT industry is a winner-take-all industry, the scale benefit is much higher than that of traditional industries. To be a traditional industry, such as opening a restaurant, it is necessary to increase the number of storefronts to increase sales. It takes a period of time for each new store to break even, and consumers need to constantly adopt early adopters and change their tastes, so the concentration of the catering market cannot be too high. For most Internet and mobile Internet companies, if all aspects are OK, when the number of users doubles, it is enough to increase the server and bandwidth. What's more, in the TMT industry, the leading enterprises have carved up the sub-sectors in the blink of an eye, and the phenomenon that new entrants and laggards can't even find a place to stand.

In the early stage of starting a business, Matthew effect determines life and death

Most people know Matthew effect and scale effect, and they all know that Matthew effect is very obvious in the middle and late stage of industry development. However, most entrepreneurs may not know that it is the early stage of entrepreneurship and industry development that should pay the most attention to Matthew effect and need to seize the opportunity to strive for the upper reaches! Because after the B round of financing, the ranking of the industry has come out, and the scale effect will automatically play a role. In the early stage of industry development, entrepreneurs need to take the initiative to make good use of Matthew effect, seize the four key resources of entrepreneurial success, squeeze into the first echelon and grab a good position.

When the gunfire started at the market, everyone started running at about the same time, so run, brother! If you don't have enough sense of crisis, you are still taking your time and step by step. Maybe in a few months, you will suddenly find that your leading opponent has already left behind, and you will miss this wave of opportunities forever.

Great enterprises are always born out of great trends. If start-ups step on the right track when starting a business, they will face an almost blank market. Because of the company's bright prospects, it is easier to attract outstanding talents to join, gain the support of strategic partners and outstanding investors and gain the recognition of early seed users. Therefore, one step ahead, there is a chance to lead step by step; If you lag behind one step, you may lag behind step by step. No matter how hard you try, you will still miss the opportunity.

To start a business is to go your own way and let others have no choice

It's now or never. Because of the leading role of Matthew effect in the early stage of the industry, entrepreneurs have only two choices: either step by step or miss the opportunity; Either take the initiative and go your own way, leaving others with no choice.

after the market starts, as a responsible entrepreneur, you need to actively analyze the key elements necessary for the success of starting a business, namely, people, money, customers/users and industry resources, and quickly seize resources.

1, people. Everything is done by people, and in the early days of the company's development, talents are particularly critical. The best talents in the industry are extremely limited. If you take one more, there will be one less competitor. After the talents arrive in your bowl, as long as your company's prospects, culture and working environment are not much worse than others, it will not be easy for competitors to dig people from you again. In addition, reliable people often appreciate and recognize each other, and an awesome person may bring you more awesome people. As long as you occupy the commanding heights of talents in the industry, partners and investors will naturally lean towards you.

2. Wealth: especially the money of wisdom. Looking around, China seems to be full of hot money, but there is not much money for wisdom. How to find wisdom money? In fact, it is very simple, to perceive the' wisdom' when investing, and to ask the post-investment service to get a glimpse. We will provide continuous and meticulous assistance in strategic adjustment, actual operation, follow-up financing and other aspects for every project invested by AA. Although not every fund explicitly declares not to invest in competitors like our AA investment, for most funds, after investing in a project, the threshold for reinvesting in other projects in the same industry will be greatly improved, so the investment of mainstream VC is also a scarce resource and needs to be locked in the first time;

3. Customer/user: The customer wins the world. Customers, especially early seed customers, are scarce resources. So, identify the seed customers and try to turn them into your supporters and die-hard fans in the fastest and most effective way;

4. Important strategic partners: such as industry cooperation resources, upstream and downstream suppliers and customers. It doesn't make much sense to blindly emphasize how many resources you have. The key is to distinguish which are the key resources and to truly lock them in the first place.

If you want to go your own way, you should lead the trend, not follow the trend.

Being sensitive and grasping the timing means that you need to be proactive, and find opportunities early and take active actions when others haven't seen or seen them clearly. However, we often see projects that follow the trend in hindsight, as if they will be left behind by the times and have no chance of success if they don't chase hot spots. Although knowing that only a few enterprises can finally reap the fruits of success, there are still countless entrepreneurs who follow the trend like moths to a flame. Applying the recent popular obsession, chasing hot spots is obsession: always forcing yourself to entangle in the hot wind direction, often following the trend, clearly knowing that you are not lucky, and afraid of being severely left behind by the tide of the times, or even having trouble sleeping and worrying all day. Isn't this obsession?

To start a business, do you want to be a few who lead the trend or a majority who follow the trend? Everyone knows that we should be in the minority, but in fact? Looking back, we can find that thousands or even tens of thousands of companies competed in TMT segments everywhere, including: SP business, blog websites, classified information websites, outdoor advertising, videos, games, e-commerce, group buying, mobile social networking, internet finance, after-car service, O2O, and intelligent hardware? The list continues to grow.

in those overcrowded industries, what is impressive is the story of group buying: after Groupon became famous in one fell swoop, China started immediately? Hundred Regiments Battle? And then quickly evolved into? Thousand regiments war? During the peak period, the number of group buying websites exceeded 5,111, and it quietly returned to the middle of last year. Hundred Regiments Battle? There are only 178 surviving group buying websites. At the same time, the turnover of the top 5 group buying websites has accounted for more than 99% of the overall market, and how long the players after the fifth place can survive is still a question. It took only four years before and after the group buying industry started to complete a cycle.

the recent internet finance is also quite dramatic: Rong 361? According to the published data, as of June 2114, the total number of P2P platforms in China is close to 1,211, and the total number of borrowers and investors is 631,111, with an average of only 1,611 borrowers and 371 investors per platform. Recently, the data released by Li Caifan shows that at present, the number of online financial lending platforms in China has exceeded 2,611, but only over 11 have obtained the B round of financing. When the best time for starting a business has passed, there are still many new companies pouring in, and we have recently received many business plans for new P2P projects.

It is true that people are social animals, and it is human nature to follow the trend and follow the crowd. It takes wisdom and strong self-confidence to find a new way and not take the usual road. But starting a business is a narrow escape. In order to strive for that low survival rate, entrepreneurs must fight against the inherent weaknesses of human nature. To lead the trend, you need to give a unique answer to the judgment of the key trend, resolutely run counter to the public, and stick to the day when everyone will analyze how your strategy is correct after the event.

find your own way: how to predict ahead of time and seize the opportunity to start a business?

Paying attention to social needs and predicting industry trends in advance is a technical activity, and it is necessary to be sensitive, pay attention to market changes, and keep track of key industries. Specifically, possible paths include:

1. Looking for unsatisfied needs and corresponding solutions. From the customer/user's point of view, and find a feasible way to solve the pain points of users, you will have the opportunity to create a new market and lead the trend. If others haven't discovered this opportunity, then it is king to rush all-in and make a fortune at the same time. During the period from Angel Period to Round A, we don't do any publicity for the projects invested by AA, the purpose is to avoid unnecessary competition, and to rush to the forefront of the industry for the invested enterprises;

2. Look at the general trend, predict the outlet, and get ready in advance. The ideal state is naturally to enter when the industry is about to start rapid growth and there is no competition, not too early or too late. But that requires luck, ordinary.