Quora: They won the battle for entry, but can they win the war for revenues??
Even as a late entrant to a network effect heavy business, Adam D’Angelo was able to amass an impressively large and high quality crowd based answering platform… but can he turn it into a revenue generating business?
The desire to harness the vast array of individual experiences and knowledge in an online platform is not a new one – in fact the internet is littered with a graveyard of dead and dying sites attempting to do this very thing: Ask Jeeves, Aardvark, Curiosity, Yahoo Answers, Ask.com to name a few.
Of course, there have also been a number of highly successful platforms (i.e. Reddit, Wikipedia) – but one of the most impressive growth stories comes from Quora. Even as a late entrant to a crowded space that benefits greatly from network effects, the company was able to emerge as an incredibly popular site (averaging over 340 million visits per month[1]) with a reputation for having the highest quality.
So, how did founder Adam D’Angelo do it?
As with any venture, it was a combination of luck, skill, and a thoughtful approach to “hacking” a crowd of questioners and answerers. In 2009, D’Angelo, already a big personality in Silicon Valley lore from his role as CTO of Facebook, left the social media behemoth to create a Q&A service to beat them all. His predecessors suffered from stale, inaccurate, sometimes inappropriate and mostly low-quality content. D’Angelo designed his site to address these issues:
- Users had to sign up with their real names (reducing the effects of anonymity)
- The most helpful answers would be upvoted ensuring the best and most evergreen content rather than the most recent content was at the top
- Answerers had their own platform page allowing those who were the most helpful to potentially amass their own followings (appealing to people’s egos and embedding additional virality in the site)
While these measures were helpful, they probably weren’t enough to ensure high quality outcomes and certainly didn’t help to overcome the lack of content and users. So, D’Angelo made some other choices to catapult growth and train the crowd from the outset:
- Leveraged his reputation and background to amass a ton of earned media
- Decided to initially focus the question site on where his own knowledge and network was supreme: the startup and technology space. This focus also helped to lower the hurdle on the amount of content necessary for the site to be “helpful” at the outset.
- Corralled his heavy hitting impressive Silicon Valley friends (I.e. Mark Zuckerberg, Marc Andreesen, etc.) to participate heavily in the early questions and answers. This helped set the tone for the level of depth and expertise required to answer questions, gave legitimacy to the site, and got everyday users excited about the potential to interface directly with these legends (it is rumored that Zuck’s decision to buy Instagram came from a Quora post)
- Used his own team, already deep in expertise in the technology space, to answer many of the early questions, ensuring the delivery of high quality content at the outset
- Allowed the focus of the site to evolve organically away from startups focus as additional users joined
- Invested heavily in SEO and were then greatly benefited when Google released it’s “Phantom” update which downplayed weak “how to” sites and led to a 120% increase in Quora’s organic search visits.[2]
These initial decisions were implemented over a number of years and led to the site amassing a deep set of high quality content and users (Fortune 500 CEOs and Obama are occasional contributors). This created a pull factor for a mass following of everyday users who followed the lead on quality. Certainly, it’s an ongoing challenge to keep the standards for answers high, but there is no question that Quora continues to be a legitimate resource for expertise in the Q&A universe.
Despite this powerful network and high degree of value creation, a solid monetization plan still remains a challenge for the company. Even as late as 2014 (and with an $80mm seed round in hand), the company had made no effort to earn money from the platform.[3] As pressures for revenues mounted, they began exploring value capture opportunities. The company piloted an ad-based business model, but users found the ads disruptive and answerers felt resentment that their free contributions were making the site money. More recently, they have begun allowing advertisers to create their own sponsored posts as their primary source of revenue.
While the team were very innovative at building and training their crowd, it remains to be seen if this will be a successful monetization strategy or if the Q&A crowd sources space will continue to churn out loser after loser.
[1] https://wisdom.zirra.com/2017/05/09/is-quora-worth-1-8-billion/
[2] https://www.similarweb.com/blog/who-has-the-best-answers
[3] https://www.quora.com/What-is-the-business-model-of-Quora-How-are-they-making-money
Other Sources
- http://www.businessinsider.com/what-i-learned-from-being-cto-of-facebook-why-i-started-quora-and-this-is-why-gen-y-kicks-ass-at-entrepreneurship-2010-9
- https://www.quora.com/How-did-Quora-suddenly-start-getting-many-more-users-around-the-beginning-of-2011-and-is-it-primarily-due-to-SEO
- https://www.quora.com/How-did-Quora-get-initial-traction
- https://www.quora.com/What-is-the-business-model-of-Quora-How-are-they-making-money
- https://www.similarweb.com/blog/who-has-the-best-answers
- https://www.quora.com/What-are-the-differences-between-Quora-Reddit-and-Yahoo-Answers
Very interesting post, Liza! I think this highlights a very effective extrinsic motivator, which we have not discussed much to date in class: the opportunity to speak on a level footing with/ rub shoulders with respected/ famous individuals. The example of early posts from Zuckerberg and Andreesen and how they got the flywheel spinning for the site is very compelling. It is interesting to think about the counterfactual — if D’Angelo did not have such access/ such a powerful network, would Quora be among the graveyard of other dead Q&A sites. Their other innovations (e.g., the upvoting) maybe could have carried them through.
Also interesting is their effort to navigate monetization — it seems like a recurring theme across posts is how do you cash in without angering all of your contributors? Trick journey to navigate!
Hi Liza! Thanks for your great post. I am wondering your opinion about how the ad will threaten the neutrality of the answer? Do you think in someday Quora will use the data to target marketing, upvote an endorsed answer, etc? I remember when I access Wikipedia and they give us a link for donation, it was the way they keep their independence through a small frequent donation rather than depend on ads, institution, government, or big philanthropy.
Thanks for the great article, Liza! I did not know that Quora has many authority figures in the platform like former President Obama. It is also very interesting to see a sequence of choices the founder made to make the platform successful, as you laid out. In Japan, Yahoo! Answers is by far the most popular website on this type of platform, having almost 200 million questions and 500 million answers so far. However, as the platform expands, the quality of questions and answers got worsen – some of them were very biased and offensive, and such participations disincentivise high quality users to be engaged in the platform. I wonder how Quora tries to address this problem?
Hi Liza, thanks for an interesting post! I think some additional ways of value capture for Quora to consider might include 1) testing whether some customers are interested in paying for high-quality answers and Quora gets a commission from it, 2) help matching one-on-one knowledge consultation and Quora earns a service fee or commission, 3) monetizing the large amount of data by helping companies do customer analysis and target marketing.
I am not sure how the “sponsored post” works? Will there be some advertorials embedded in the answers? If so, I may worry about the neutrality and credibility of the platform.
As a frequent user of StackOverflow (the software engineer’s version of Quora), I am wondering if Quora could serve targeted “job posting” ads and evolve into a talent acquisition platform similar to StackOverflow? For potential employers, Quora is a compelling platform for them to identify high-potential talents. For potential job seekers, they could readily use Quora’s reputation system to boost their professional credentials, while being incentivized to contribute even more high-quality content.
This is such an interesting case. The question of whether Quora’s reported 2017 valuation of $1.8 billion is justified is a real head-scratcher. On one hand, they’ve grown a valuable repository of knowledge; their 200+ million unique visitors per month is no joke; they’ve finally rolled out native in-feed ads, which IMO are small-footprint and non-disruptive; and it looks like they’ve begun to pursue avenues of growth more aggressively (there’s some 50 open jobs on their careers page). But, on the other hand, I somewhat doubt whether the vast majority of Quora’s visitors are remotely engaged with the platform. While I know there’s a community of devoted contributors, when I use the platform, I’m personally looking to quickly find the information I’m looking for and then move on with my day somewhere else, limiting my time on Quora to a few moments—and I imagine this is true for many other visitors as well. The potential rewards for providing a top answer (the satisfaction of being a know-it all, I suppose?) don’t make the work seem like any less of a chore. While there is definitely a lot of value created by the platform, I totally agree that capturing a greater share of it will be tough.