Hmmm. What the article describes as "The Elevator Effect" is basically traffic spikes due to effective PR. Alone such spikes are worthless. Without a product people actually get value from (ie: what enables organic growth), the spike just drops off to where it was before the spike (cuil anybody?). I don't think the author thinks that you just need PR driven spikes, but what he's discussing isn't anywhere near as nice as viral growth.
When we launch new versions of Miro, we tend to get covered on all the big sites and see really big traffic spikes. Our user base typically doubles after one of these spikes and then stays relatively flat. This means that people like using our product, but don't help spread it. Next month we'll have over a million users, so I'm not complaining. Nonetheless, if these users spread our product to friends in addition to just using it, we'd be a LOT better off. Clearly, this is going to be a point of focus for us.
I think my point was mostly to debunk the notion that you should just sit and wait for your traffic to grow slowly. There is a fast lane out there that you can take. But you are absolutely correct: it presupposes having a real product that people will use.
The more subtle point is that once you get a spike of traffic, you can leverage it to get a bigger spike of traffic, and hopefully continue to surf the wave. So spikes can create bigger spikes. That's not so obvious.
I think what you describe in the article is taking the stairs. It's going to take a lot more steps like those in order for you to get where you want to go. Taking the elevator is something more like convincing users to send email to everyone in their address book or landing a gigantic customer early.
Very good point, I have seen similar things with other startups. The good news is that the traffic jumps, but it is also true that if you do not have virality built into your system, you plateau after a jump like this.
The key is to jump on opportunities, but it cannot be a strategy because sometimes it works and sometimes (most times) is does not, not everybody wins the lottery.
Building virality into the system works though, so it can be a real strategy: figuring out the roadblock in the acquisition of new users, and then removing them, or even better find something that would really benefit your users within their own ecosystem that you can offer at no cost (you do not want a system that digs a hole in your finances as you get more customers, unless you are backed by a VC who thinks this is a great way to do business).
What I didn't discuss in this blog post: the validity of Mark Cuban's idea. As a big proponent of entrepreneurs, I think it was a great idea even if Mark never writes any check.
At a minimum, he managed to get many people to question themselves and think for a second: "what if I started my own venture?". That in itself is a major achievement in these times of economic gloom.
Getting a check from an investor is always nice, but this is not a validation by the market that your idea is good. Meanwhile advertising your business on a blog, specially with all the conditions attached and no guarantee that you will get anything seems only useful for PR purposes, but in the end it does not really help unless you are in the first few who posted.
I think Mark Cuban's idea is a good one for his own PR, but I doubt that it will help much in the end.
Overall this is one issue I have with the concept of Open Funding, trying to make you believe that competitions are a good model, when what it is really is a waste of time and energy for entrepreneurs who do not need this type of distraction when starting a business.
Competitions are lotteries, with one winner taking it all, and playing the lottery is not a good business strategy. Worse, once you won the lottery, you still do not have market validation from real customers, just the blessing of a selection committee that has their own criteria (hype, cool, vision, or whatever).
How about competing for cash from customers? At least when you win, you know you have something and chances are there will be more customers after the first one.
When we launch new versions of Miro, we tend to get covered on all the big sites and see really big traffic spikes. Our user base typically doubles after one of these spikes and then stays relatively flat. This means that people like using our product, but don't help spread it. Next month we'll have over a million users, so I'm not complaining. Nonetheless, if these users spread our product to friends in addition to just using it, we'd be a LOT better off. Clearly, this is going to be a point of focus for us.