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Traction

🔖How would I describe this book in 1 sentence?

A complete guide to elaborate on different ways of marketing your startup.

🗺️What was the role of this book in my journey?

This book was a pre-requisite to a growth-focused month for my ongoing projects (July 2021)

Traction helped to identify the marketing framework for two of the businesses — OB Trader and Scalifier. With its help, I managed to structure all the marketing channel ideas and strategies in one place with a clear vision of what to do next.

Later, I hope to get back to this summary with the case study of what actually worked 🙂

💡Key Insights

  1. A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.
  2. Almost every failed startup has a product. What failed startups don’t have is enough customers
  3. Many entrepreneurs who build great products simply don’t have a good distribution strategy. Even worse is when they insist that they don’t need one, or call their no distribution strategy a “viral marketing strategy.”
  4. Actually startups take off because the founders make them take off. . . . The most common unscalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them.
  5. Many entrepreneurs think that if you build a killer product, your customers will beat a path to your door. This line of thinking is a fallacy: that the best use of your time is always improving your product. In other words, “if you build it, they will come” is wrong.
  6. Not all traction channels are infinitely scalable. In fact, using tactics that don’t scale is one of the best ways to get your first customers.
  7. The news has fundamentally changed. Think of The New York Times. When they decide to publish an article about you, they are doing you a huge favor. After all, there are so many other people they could write about. There are a finite number of spots in the paper. Blogs are different, as they can publish an infinite number of articles and every article they publish is a chance for more traffic (which means more money in their pockets). In other words, when Business Insider writes about you, you are doing them the favor. — Ryan Holiday
  8. Blogs have an enormous influence over other blogs, making it possible to turn a post on a site with only a little traffic into posts on much bigger sites, if the latter happens to read the former. Blogs compete to get stories first, newspapers compete to “confirm” it, and then pundits compete for airtime to opine on it. The smaller sites legitimize the newsworthiness of the story for the sites with bigger audiences. — Ryan Holiday
  9. A good press angle makes people react emotionally. If it’s not interesting enough to elicit emotion, you don’t have a story worth pitching. Furthermore, your story should ideally provoke a specific feeling in readers that makes them want to share the story with others. As Ryan said, “satisfaction is a nonviral emotion”—you want readers to do something after reading your piece, not just feel satisfied.
  10. Good customer support is so rare that, if you simply try to make your customers happy, they are likely to spread the news of your awesome product on that basis alone
  11. People visit social media sites for entertainment and interaction, not to see ads. An effective social ad strategy takes advantage of this reality. Social ads give companies the opportunity to start a conversation about their products with members of their target audiences.
  12. With social platforms, the burden of success is on the advertiser as opposed to the platform. Content only goes anywhere if people care about it. . . . With social, it’s word of mouth on crack. You should only employ social advertising dollars when you’ve understood that a fire is starting around your message and you want to put more oil on it. Getting that spark started is based on what you’re trying to say: startups do the opposite of this all the time where they waste tens of thousands of dollars trying to push a message that nobody cares about.
  13. The most important thing to know about SEO is that the more high-quality links you have to a given site or page, the higher it will rank.
  14. There’s no shortcut to creating quality content. If what you’re writing isn’t useful, it doesn’t matter how hard you try to spread your content on Twitter. It just won’t spread.
  15. The secret to shareable content is showing readers they have a problem they didn’t know about, or at least couldn’t fully articulate. A solution is nice, but it’s not as good for drawing in readers as showing them they’ve been going about some aspect of their life all wrong
  16. Companies have a hard time using engineering resources for anything but product development. Any technical focus on something other than product seems wasted since engineering time is so expensive. As a result, most founders and product managers use all their engineering resources to build new features for a product or service that’s struggling to acquire customers. Don’t make the same mistake. Instead, consider using some of that engineering time to build a tool that moves the needle for your business.
  17. Talking to prospects about their problems is not only a necessary sales tactic, but also necessary for good product development.
  18. You get your first customers by picking up the phone
  19. One [problem] occurs when the prospect invites you in . . . [but] has no interest in buying what you have or will develop. They would like to learn a lot about this emerging technology area, or this problem area, or something like that. . . . The second situation that’s also a waste of time is when someone claims to be a “change agent.” He will tell you that your offering is going to have a huge impact; it’s going to transform all of General Motors, for example. Substitute your favorite lighthouse customer. Before you get started doing everything that he is telling you to do, you need to ask him, “Have you ever brought other technology into your company?” More often than not unfortunately he will say, “Well, no, but you know I’ve only been here six months, and this is what’s going to let me make a big difference here.” So the two typical problems are you end up giving away free consulting or you talk to somebody that in their own mind is this change agent, but they have no idea how to make it happen.
  20. Remember that, no matter how good your sales team, the customer is the one who decides to buy your product. It is crucial to keep the customer in mind as you design your sales funnel, meaning you should make their decision to buy as easy as possible.
  21. For startups that don’t have a lot of money, where you can’t just open a PPC [pay-per-click] account and start throwing darts, affiliate marketing seems to me to be a logical place to start. There’s really no guarantee that if you spend $10,000 on Google AdWords you’ll make more than that. If you were to compare affiliate marketing and PPC, the advertiser assumes the risk in PPC. If you set up poorly written and poorly thought out campaigns on AdWords, you’re going to have to pay for the click whether or not your ads suck, or whether or not they’re converting well. With affiliate marketing, you get to define what the transaction or the conversion is, and you also have tools available to mitigate low quality. For instance, if someone refers an e-commerce transaction to you but the credit card is declined, the affiliate commission is zero. If someone submits a lead form, but the lead doesn’t follow the rules you set out (a legitimate email address, a real postal address, etc.), you don’t have to pay for that. You don’t assume the risk. — Kris Jones
  22. To become a speaker you have to speak once. If you speak and you’re good, people in the audience will ask you to speak at other events. That’s just how it happens. I’ve never marketed myself as a speaker; it’s not in my bio or anything. What happens is, you speak at a conference, people see it or talk about it, and you get invited to other ones.— Dan Martell
  23. The best talks I’ve ever seen are where each slide is essentially a seven-minute story with a beginning, middle, and end. Once you get good at that, and you have these canned slides, you can change a sixty-minute talk to a twenty-minute talk just by taking slides out.
Insights

🦅Key Principles

  1. Put half your efforts into getting traction. Spend your time constructing your product or service and testing traction channels in parallel
  2. Set your growth goals
  3. Recruit your first users manually
  4. Learn what growth numbers potential investors respect
  5. Find your bright spots. If you are not getting enough traction, use the bright spots to pivot your strategy around
  6. Work through Bullseye. Maximize your chances of getting traction: brainstorm, prioritize, test, and then focus.
  7. Look for underutilized channels and strategies. Those channels are more likely to be the ones that will work best.
  8. Talk to founders a few steps ahead of you. 
  9. Hold on to your other channel ideas. Compile your brainstorming ideas for each traction channel in a spreadsheet with educated guesses that you can confirm through testing
  10. Run cheap tests to quickly validate assumptions and test new ideas. Look for customers where others aren’t looking. 
  11. Constantly optimize. Run A/B tests to optimize a traction channel strategy
  12. Keep it numerical. Quantify your marketing efforts
  13. Lay out your milestones. Determine your traction goal and define your Critical Path against that goal.
  14. Stay on the Critical Path. Assess every activity you do against your Critical Path and consistently reassess it.
  15. Actively work to overcome your traction channel biases
  16. Run tests on a variety of smaller blogs. See what type of audience resonates best with your product and messaging.
  17. Sponsor small blogs, especially personal blogs
  18. Offer something unique to your best targets. Build a special offer just for them and put together a draft guest post that they can run with.
  19. Focus on the right smaller sites. Press stories "filter up" the media chain: Forum/Smaller Blog → Major Blog → Major News Outlet
  20. Build real relationships with the specific reporters covering your startup’s market. Read what they write, comment, offer them industry expertise, and follow them on Twitter
  21. Have newsworthy milestones to share. Contact reporters only when you can package your milestones into a compelling emotional story. When you do make a pitch, keep it short and sweet!
  22. Do something big, cheap, fun, and original
  23. Be awesome to your customers and good things follow
  24. Prepare for failure. Success in this channel is unpredictable. You should have a defined process for brainstorming and selecting ideas, but also understand that not every idea will work
  25. Use search engine ads to test product positioning and messaging (even before you fully build it!)
  26. Do not expect your early SEM ad tests to be profitable. If you can run an ad campaign that gets close to breakeven after a few weeks, then SEM could be the traction channel for you to focus on.
  27. Start with an ad campaign with as little as four ads.
  28. Research keywords first
  29. Use longer "long-tail" keywords that are less competitive
  30. Write ad copy that is catchy, memorable, and relevant to keywords. Include a prominent CTA
  31. Use URL builder to craft unique URLs for each ad and landing page
  32. Measure conversions so you can test SEM variables against profitability. Areas you should be testing include keywords, ad copy, demographic targeting, landing pages, and CPC bids.
  33. Pay close attention to your ad quality scores. High quality scores get you better placement on the page and better pricing on your ads.
  34. Use advanced tactics and tools (GCN, Retargeting, Conversion Optimizer) when you confirm the validity of SEM as a viable traction channel for your business
  35. To get started in display advertising, first understand the types of ads that work in your industry. See what ads the competitors are running and who visits the sites that feature your competitors' ads
  36. Contact small sites directly for display ads. Ask them to run your ads for a small fee.
  37. Use social ads to build awareness of products and create demand
  38. People visit social media sites for entertainment and interaction, not to see ads. Create compelling social content. Create less content but make it highly shareable
  39. If you have a piece of content that has high organic reach, put paid advertising behind it
  40. Run cheap tests by first targeting local markets. 
  41. Seek out remnant ad inventory for the highest discounts
  42. Use unique codes or Web addresses to track the effectiveness of different offline ad campaigns. 
  43. Billboards are extremely effective for building awareness around events—concerts, conferences, or other activities coming to an area
  44. Find search terms that have enough search volume to move the needle for your company. 
  45. Generate long-tail landing pages by using cheap freelancers. Or, if your product can naturally produce good long-tail content, use it to create the landing pages yourself.
  46. Focus on how you will build links. The more high-quality links you have to a given site or page, the higher it will rank.
  47. Avoid “black-hat” SEO tactics that violate search engine guidelines, especially buying links.
  48. If you blog, dedicate at least six months to it. 
  49. Do things that don’t scale early on. Reach out to individuals, do guest posts, contact industry leaders, create shareable infographics.
  50. Produce in-depth posts you can’t find anywhere else. You need to create quality content to succeed in this traction channel.
  51. As you move forward, monitor social mentions and use analytics to determine which types of posts are getting attention and which are not
  52. Personalize your email marketing messages. Email marketing is a personal traction channel.
  53. Build an email list of prospective customers whether you end up focusing on this traction channel or not. 
  54. Set up a series of automated emails. 
  55. Use online tools to test and optimize email campaigns. These tools have built-in templates and A/B testing ability and will track open and click rates.
  56. Send marketing email from a personal email address instead of no-reply@ address
  57. Build a viral loop into the product. 
  58. Shorten viral cycle time. The shorter this time, the more loops will occur and the faster you will grow.
  59. Make every step in your funnel as simple as possible
  60. Look for viral pockets. You might already be viral in a subgroup of your customers. Find that subgroup and focus on it
  61. More than in any other channel, test, test, test. Successful viral strategy involves constant testing, measurement, and trying new things. It is a numbers and creativity game. No test is too small, as small changes can have big effects over time. Viral loops that work well often have extremely simple components (forms, copy, email, etc.).
  62. Create a stand-alone, low-friction site to engage potential customers. Make sure it naturally leads to your main offering
  63. Look internally for site and tool ideas. Perhaps you have already started creating something for yourself that could also be used by potential customers?
  64. Turn a popular blog post into a microsite
  65. Make the tools as simple as possible. Single-purpose tools that solve obvious pain points are best.
  66. Put your tools on their own domains and make them easy to find, particularly through search engines
  67. Pursue mutually beneficial partnerships.
  68. Focus on meeting your startup’s core metrics. 
  69. Create a pipeline of deals you’re constantly working on. For initial testing, you can reach out to a variety of potential partners to gauge interest
  70. Identify the right contact. Find out who is in charge for the metric you've targeted
  71. Get a warm introduction. With each introduction, provide the mutual contract with an overview of your proposal that can easily be forwarded
  72. Be sure to follow up and set timelines for the next step
  73. Make the negotiation and term sheet as simple as possible—ideally just one page
  74. Make it simple for partners to get on board
  75. Land a few traditional deals first, and then transition to low-touch partnerships.
  76. Don’t rule out cold calling
  77. When making cold calls, be judicious about the people you contact
  78. Build a repeatable sales model. 
  79. Make sure you target the right customer
  80. Get the buyer to commit to time lines. 
  81. Keep the customer’s perspective in mind. Talk to people who need your product and understand their common concerns. Address those concerns specifically on your Web site.
  82. Test using an existing affiliate network. It already has affiliates, so you can start using this traction channel immediately.
  83. Keep your payouts simple. Know how much you can spend to acquire a customer and keep it below that.
  84. The next place you should look for more affiliates is your customers. 
  85. Use sales channel to research and develop your product
  86. Figure out where your potential customers are hanging out online. 
  87. Create a feature specifically to fill a gap for that platform’s users. 
  88. Focus on new and untapped platforms. 
  89. Top mobile app rankings are the main factor of growth. Strive for your mobile app to get good reviews. Ask users to rate you.
  90. Schedule meetings and dinners ahead of time. Identify your top targets and find a way to engage them individually at the show.
  91. Investigate the efficacy of shows before committing. Attend shows this year you might want to exhibit at next year. Reach out to previous exhibitors.
  92. Have an inbound and outbound strategy for your booth. Do something proactive and creative.
  93. Determine the right place for your booth
  94. Make giveaways. Include a strong call to action on every item you give out.
  95. Put together impressive display
  96. Host dinners
  97. Launch at a conference. 
  98. Test this channel first. Attend a couple conferences or host a few smaller meetups or a one-day mini-conference.
  99. Throw a party. 
  100. Keep the quality of attendees high
  101. Remember that you are doing organizers a favor by presenting. Event organizers need to fill time at their events.
  102. Submit authoritative proposals far in advance. Organizers consider timing, topic, and credibility when selecting a speaker.
  103. Start giving free talks to small groups of potential customers of partners. Use these smaller-scale appearances to refine your talks and build your speaking reputation.
  104. Tell a story onstage. Without a story, the audience will lose interest.
  105. Focus on giving no more than 1-2 types of talks and refine them
  106. Record your speaking engagements
  107. Cultivate and empower evangelists. Foster cross-connection among them and among community members in general.
  108. Set high standards from the start. Focus on community quality early on and set strict standards that can be maintained as the community grows. You can build tools and processes into your community to help your community police itself.
  109. Bootstrap off an existing audience. Find initial evangelists by sharing your mission with complementary communities online and at offline events.
Principles

✍️Notes

1. Traction Channels

  • Let’s define traction. Traction is a sign that your company is taking off. It’s obvious in your core metrics: If you have a mobile app, your download rate is growing rapidly. If you’re running a subscription service, your monthly revenue is skyrocketing. If you’re an organic bakery, your number of transactions is increasing every week.
Traction is basically quantitative evidence of customer demand. So if you’re in enterprise software, [initial traction] may be two or three early customers who are paying a bit; if you’re in consumer software the bar might be as high as hundreds of thousands of users.
A startup is a company designed to grow fast. Being newly founded does not in itself make a company a startup. Nor is it necessary for a startup to work on technology, or take venture funding, or have some sort of “exit.” The only essential thing is growth. Everything else we associate with startups follows from growth.
  • Traction is growth. The pursuit of traction is what defines a startup.

Targeting Blogs

Popular startups like Codecademy, Mint, and reddit all got their start by targeting blogs. Noah Kagan, Mint’s former director of marketing, told us how he targeted niche blogs early on, and how this strategy allowed Mint to acquire forty thousand customers before launching.

Publicity

Publicity is the art of getting your name out there via traditional media outlets like newspapers, magazines, and TV. We interviewed Jason Kincaid, former TechCrunch writer, about pitching media outlets, how to form relationships with reporters, and what most startups do wrong when it comes to publicity. We also talked with Ryan Holiday, media strategist and bestselling author of Trust Me, I’m Lying, to learn how startups could leverage today’s rapidly changing media landscape to get traction.

Unconventional PR

Unconventional PR involves doing something exceptional like publicity stunts to draw media attention. This channel can also work by repeatedly going above and beyond for your customers. Alexis Ohanian told us some of the things he did to get people talking about reddit and Hipmunk, two startups he cofounded.

Search Engine Marketing

Search engine marketing (SEM) allows companies to advertise to consumers searching on Google and other search engines. We interviewed Matthew Monahan of Inflection, the company behind Archives.com (before its $100 million acquisition by Ancestry.com), to learn how Archives relied primarily on SEM for its growth.

Social and Display Ads

Ads on popular sites like reddit, YouTube, Facebook, Twitter, and hundreds of other niche sites can be a powerful and scalable way to reach new customers. We brought in Nikhil Sethi, founder of the social ad buying platform Adaptly, to talk with us about getting traction with social and display ads.

Content Marketing

Many startups have blogs. However, most don’t use their blogs to get traction. We talked with Unbounce founder Rick Perreault and OkCupid cofounder Sam Yagan to learn how their blogs transformed their businesses.

Email Marketing

Email marketing is one of the best ways to convert prospects while retaining and monetizing ads on popular sites like reddit, YouTube, Facebook, Twitter, and hundreds of other niche sites can be a powerful and scalable way to reach new customers. We brought in Nikhil Sethi, founder of the social ad buying platform Adaptly, to talk with us about getting traction with social and display ads.

Offline Ads

Offline ads include TV spots, radio commercials, billboards, infomercials, newspaper and magazine ads, as well as flyers and other local advertisements. These ads reach demographics that are harder to target online, like seniors, less tech-savvy consumers, and commuters. Few startups use this channel, which means there’s less competition for many of these audiences. We talked with Jason Cohen, founder of WP Engine and Smart Bear Software, about the offline ads he’s used to acquire customers.

Search Engine Optimization

Search engine optimization (SEO) is the process of making sure your Web site shows up for key search results. We interviewed Rand Fishkin of Moz (the market leader in SEO software) to talk about best practices for getting traction with SEO. Patrick McKenzie, founder of Appointment Reminder, also explained to us how he uses SEO to cheaply acquire lots of highly targeted traffic.

Engineering as Marketing

Using engineering resources to acquire customers is a significantly underutilized way to get traction. Successful companies have built microsites, developed widgets, and created free tools that drive thousands of leads each month. We asked Dharmesh Shah, founder of HubSpot, to discuss how engineering as marketing has driven HubSpot’s growth to tens of thousands of customers through tools like its Marketing Grader.

Viral Marketing

Viral marketing consists of growing your customer base by encouraging your customers to refer other customers. We interviewed Andrew Chen, a viral marketing expert and mentor at 500 Startups, for common viral techniques and the factors that have led to viral adoption in major startups. We also talked with Ashish Kundra of myZamana, who discussed using viral marketing to grow from 100,000 users to more than 4 million in less than a year.

Business Development

Business development (BD) is the process of creating strategic relationships that benefit both your startup and your partner. Paul English, cofounder and CEO of Kayak.com, walked us through the impact of Kayak’s early partnership with AOL. We also interviewed venture capitalist Chris Fralic, whose BD efforts at Half.com were a major factor in eBay’s $350 million acquisition of the company. We’ll show you how to structure deals, find strategic partners, build a business development pipeline, and approach potential partners.

Sales

Sales is focused primarily on creating processes to directly exchange product for dollars. We interviewed David Skok of Matrix Partners—someone who’s taken four different companies public—to get his perspective on how the best software companies are creating sustainable, scalable sales processes. We also take a look at how to find early customers and have winning sales conversations.

Affiliate Programs

Companies like HostGator, GoDaddy, and Sprout Social have robust affiliate programs that have allowed them to reach hundreds of thousands of customers in a cost-effective way. We interviewed Kristopher Jones, founder of the Pepperjam affiliate network, to learn how a startup can leverage this channel. We also talked with Maneesh Sethi to learn how affiliate marketers choose which products to promote, and some of the strategies they use to do so.

Existing Platforms

Focusing on existing platforms means focusing your growth efforts on a megaplatform like Facebook, Twitter, or the App Store, and getting some of their hundreds of millions of users to use your product. Alex Pachikov, on the founding team of Evernote, explained how their focus on Apple’s App Store generated millions of customers.

Trade Shows

Trade shows are a chance for companies in specific industries to show off their latest products. We interviewed Brian Riley of SureStop, an innovative bike brake startup, to learn how it sealed a partnership that led to more than twenty thousand sales from one trade show and its approach to getting traction at each event.

Offline Events

Sponsoring or running offline events—from small meetups to large conferences—can be a primary way to get traction. We spoke with Rob Walling, founder and organizer of MicroConf, to talk about how to run a fantastic event.

Speaking Engagements

Eric Ries, author of the bestselling book The Lean Startup, told us how he used speaking engagements to hit the bestseller list within a week of his book’s launch. We also interviewed Dan Martell, founder of Clarity, to learn how to leverage a speaking event, give an awesome talk, and grow your startup’s profile at such speaking gigs.

Community Building

Companies like Wikipedia and Stack Exchange have grown by forming passionate communities around their products. In our interview with Jeff Atwood of Stack Exchange, he detailed how he built the Stack Overflow community, which has created the largest repository of useful programming questions and answers in history.

2. Traction Thinking

  • How much time should you spend on getting traction? When should you start? How do you know if it’s working? How much traction do you need to get investors?

THE 50 PERCENT RULE

If you’re starting a company, chances are you can build a product. Almost every failed startup has a product. What failed startups don’t have is enough customers

The number one reason that we pass on entrepreneurs we’d otherwise like to back is they’re focusing on product to the exclusion of everything else. Many entrepreneurs who build great products simply don’t have a good distribution strategy. Even worse is when they insist that they don’t need one, or call [their] no distribution strategy a “viral marketing strategy.”
  • A common story goes like this: Founders build something people want by spending their time making tweaks based on what early customers say they want. Then, when they think they are ready, they launch and take stabs at getting more customers, only to become frustrated when customers aren’t flocking to them.
  • Having a product or service that your early customers love, but having no clear way to get more traction is a major problem. To solve this problem, spend your time constructing your product or service and testing traction channels in parallel.
  • Traction and product development are of equal importance and should each get about half of your attention. This is what we call the 50 percent rule: spend 50 percent of your time on product and 50 percent on traction.
  • Building something people want is certainly required for traction, but it isn’t enough. There are four common situations where you could build something people want, but still not end up with a viable business.
    • First, you could build something people want, but for which you just can’t figure out a viable business model. The money isn’t adding up. For example, people won’t pay, and selling advertising won’t cover the bills. There is just no real market.
    • Second, you could build something people want, but there are just not enough customers to reach profitability. It’s just too small a market, and there aren’t obvious ways to expand. This occurs often when startups aren’t ambitious enough and pick too narrow a niche.
    • Third, you could build something people want, but reaching them is cost prohibitive. You find yourself in a hard-to-reach market. An example is a relatively inexpensive product that requires a direct sales force to sell it. That combo just doesn’t work.
    • Finally, you could build something people want, but a lot of other companies build it too. In this situation you are in a hypercompetitive market where it is simply too hard to get customers.
  • This 50 percent rule is hard to follow because the pull to spend all of your attention on product is strong. After all, you probably got into your startup because you wanted to build a particular product or service. You had a vision. A lot of the traction activities are unknown and outside of both your comfort zone and this initial vision. That’s why there is a natural tendency to avoid them. Don’t.
  • To be clear, splitting your time evenly between product and traction will certainly slow down product development. However, it counterintuitively won’t slow the time to get your product successfully to market. In fact, it will speed it up! That’s because pursuing product development and traction in parallel has a couple of key benefits.
  • First, it helps you build the right product because you can incorporate knowledge from your traction efforts. If you’re following a good product development process, you’re already getting good feedback from early customers. However, these customers are generally too close to you. They often tell you what you want to hear.
  • You can think of your initial investment in traction as pouring water into a leaky bucket. At first your bucket will be very leaky because your product is not yet a full solution to customer needs and problems. In other words, your product is not as sticky as it could be, and many customers will not want to engage with it yet. As a consequence, much of the money you are spending on traction will leak out of your bucket.
  • This is exactly where most founders go wrong. They think because this money is leaking out that it is money wasted. Oppositely, this process is telling you where the real leaks are in your bucket (product). If you don’t interact with cold customers in this way, then you generally spend time on the wrong things in terms of product development.
  • These interactions also get you additional data, like what messaging is resonating with potential customers, what niche you might focus on first, what types of customers will be easiest to acquire, and what major distribution roadblocks you might run into.
  • The second key benefit to parallel product and traction development is that you get to experiment and test different traction channels before you launch anything. This means when your product is ready, you can grow rapidly

MOVING THE NEEDLE

  • Before you can set about getting traction, you have to define what traction means for your company. You need to set a traction goal. At the earliest stages, this traction goal is usually to get enough traction to either raise funding or become profitable. In any case, you should figure out what this goal means in terms of hard numbers. How many customers do you need and at what growth rate?
  • Your traction strategy should always be focused on moving the needle for your traction goal
  • From the perspective of getting traction, you can think about working on a product or service in three phases:
    • Phase I—making something people want
    • Phase II—marketing something people want
    • Phase III—scaling your business
A lot of would-be founders believe that startups either take off or don’t. You build something, make it available, and if you’ve made a better mousetrap, people beat a path to your door as promised. Or they don’t, in which case the market must not exist.
Actually startups take off because the founders make them take off. . . . The most common unscalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them.
  • Startup growth happens in spurts. Initially, growth is usually slow. Then it spikes as a useful traction channel strategy is unlocked. Eventually it flattens out again as this strategy gets saturated and becomes less effective. Then you unlock another strategy and you get another spike.

HOW MUCH TRACTION IS ENOUGH FOR INVESTORS?

It is a moving target. The entire ecosystem is getting far more efficient. Companies are accomplishing a lot more with a lot less.
Two years ago [November 2010] you could have gotten your daily deal startup funded pre-traction. Eighteen months ago you could not have gotten a daily deal startup funded no matter how much traction you had. Twelve months ago you could have gotten your mobile app company funded with ten thousand downloads. Today it’s probably going to take a few hundred thousand downloads and a strong rapid adoption rate for a real financing to take place.
The definition of traction keeps changing as the environment gets competitive. That’s why it is actually useful to look at AngelList and look at companies who just got funded; that will give you an idea of where the bar is right now.
  • When pursuing funding, first contact individuals who intimately understand what you’re working on. The better your prospective investors understand what you’re doing, the less traction they will need to see before they invest because they are more likely to extrapolate your little traction and believe it could grow into something big
  • With sustainable growth, you look like a good bet to succeed in the long run. With investing, always remember that traction trumps everything.

TO PIVOT OR NOT TO PIVOT

  • It’s important to wrap your head around the timescale. If you are just starting out, are you ready to potentially do this for the next decade? In retrospect, a lot of founders feel they picked their company idea too quickly, and they would have picked something they were more passionate about if they had realized it was such a long haul. A startup can be awesome if you believe in it: if not, it can get old quickly.
  • If you are considering a pivot, the first thing to look for is evidence of real product engagement, even if it is only a few dedicated customers. If you have such engagement, you might be giving up too soon. You should examine these bright spots to see how they might be expanded. Why do these customers take to your product so well? Is there some thread that unites them? Are they early adopters in a huge market or are they outliers?
  • Another factor to consider before you pivot: startup founders are usually forward thinking and as a result are often too early to market, which is another reason why it’s important to choose a startup idea you’re willing to stick with for many years. Granted, there is a big difference between being a few years too early and a decade too early. Hardly anyone can stick around for ten years with middling results. But being a year or two early can be a great thing. You can use this time to improve and refine your product. Then, when the market takes off, you have a head start on competitors just entering your space.
  • How can you tell whether you are just a bit early to market and should keep plugging away? Again, the best way to find out is by looking for evidence of product engagement. If you are a little early to a market there should be some early adopters out there already eating up what you have to offer

TARGETS

  • Put half your efforts into getting traction.
    • Pursue traction and product development in parallel, and spend equal time on both. Think of your product as a leaky bucket. Your early traction efforts are pointing you toward the holes worth plugging.
  • Set your growth goals. 
    • Focus on strategies and tactics that can plausibly move the needle for your company. Get some hard numbers.
  • Learn what growth numbers potential investors respect. 
    • How much traction is needed for investors is a moving target, but a sustainable customer growth rate is hard for investors to ignore. Potential investors who understand your business are likely to appreciate your traction and thus invest earlier. Traction trumps everything.
  • Find your bright spots. 
    • If you’re not seeing the traction you want, look for bright spots in your customer base, pockets of customers who are truly engaged with your product. See if you can figure out why it works for them and if you can expand from that base. If there are no bright spots, it may be a good time to pivot.

3. Bullseye

[You] probably won’t have a bunch of equally good distribution strategies. Engineers frequently fall victim to this because they do not understand distribution. Since they don’t know what works, and haven’t thought about it, they try some sales, BD, advertising, and viral marketing—everything but the kitchen sink. That is a really bad idea. It is very likely that one channel is optimal. Most businesses actually get zero distribution channels to work. Poor distribution—not product—is the number one cause of failure. If you can get even a single distribution channel to work, you have great business. If you try for several but don’t nail one, you’re finished. So it’s worth thinking really hard about finding the single best distribution channel.

THE OUTER RING: WHAT’S POSSIBLE

  • The first step in Bullseye is brainstorming every single traction channel. If you were to advertise offline, where would be the best place to do it? If you were to give a speech, who would be the ideal audience? Imagine what success would look like in each channel, and write it down in your outer ring.
  • It is important that you not dismiss any traction channel in this step. You should be able to think of at least one idea for every channel. In practice, a lot of founders mess up this step by not brainstorming long and deep enough to get useful ideas for each channel.
  • For each channel, you should identify one decent channel strategy that has a chance of moving the needle.
  • You should know what marketing strategies have worked in your industry, as well as the history of companies in your space. It’s especially important to understand how similar companies acquired customers over time, and how unsuccessful companies wasted their marketing dollars.

THE MIDDLE RING: WHAT’S PROBABLE

  • The second step in Bullseye is running cheap traction tests in the channels that seem most promising. Go around your outer ring and promote your best traction channel ideas to your middle ring.
  • You can run multiple experiments at the same time because tests take some time to run after they’ve been set up. Yet doing too many things in parallel leads to errors from lack of focus, which means the number needs to be somewhat low.
  • For each traction channel in your middle ring, now construct a cheap traction test you can run to determine if the idea really is good or not. These tests should be designed to roughly answer the following three questions:
    • How much will it cost to acquire customers through this channel?
    • How many customers are available through this channel?
    • Are the customers that you are getting through this channel the kind of customers that you want right now?
  • There isn’t a single method for testing each traction channel because every business is different.
  • Some founders mess up this step by prematurely scaling their marketing efforts. Keep in mind that, when testing, you are not trying to get a lot of traction with a channel just yet. Instead, you are simply trying to determine if it’s a channel that could move the needle for your startup. Your main consideration at this point is speed—to get data and to prove your assumptions.

THE INNER RING: WHAT’S WORKING

  • The third and final step in Bullseye is to focus solely on the channel that will move the needle for your startup: your core channel.
  • If all went well, one of the traction channels you tested in your middle ring produced promising results. In that case, you should start directing all your traction efforts and resources toward this most promising channel.
  • The goal of this focusing step is quite simple: to wring every bit of traction out of your core channel.
  • As you dive deeper into it, you will uncover effective tactics and do everything you can to scale them until they are no longer effective due to saturation or rising costs.
  • The way this step gets most often messed up by founders is by keeping around distracting marketing efforts in other traction channels.
  • This is additionally confusing because oftentimes focusing on your core channel involves channel strategies that utilize other traction channels. One channel is still dominant, but others feed into it.
  • If, unfortunately, no channel seems promising after testing, the whole process should be repeated. The good news is you now have data from all the tests you just did, which will inform you as to what types of things are, and are not, resonating with customers. Look at the messaging you’ve been using, or dig deeper to see at what point each channel failed to deliver customers. If you go through the process several times and no traction channel seems promising, then your product may require more tweaking. Your bucket is still too leaky.

WHY USE BULLSEYE?

  • Bullseye is designed to be a straightforward way to direct your traction focus and maximize your results. First and foremost, it forces you to take all the traction channels more seriously than you would otherwise. These steps systematically uncover strategies for getting traction that you wouldn’t have found using
  • When we looked at companies really taking off, they were usually employing underutilized channels and channel strategies. If everyone in your industry uses social ads to grow, you might be better off using another channel.
  • Mint's data spreadsheet
    Mint's data spreadsheet

COMPARISON TO LEAN

  • Bullseye works hand in hand with Lean or with any other product development framework. What Lean is to product development, Bullseye is to traction.
  • Many entrepreneurs think that if you build a killer product, your customers will beat a path to your door. This line of thinking is a fallacy: that the best use of your time is always improving your product. In other words, “if you build it, they will come” is wrong.
  • You are much more likely to develop a good distribution strategy with a good traction development methodology (like Bullseye) the same way you are much more likely to develop a good product with a good product development methodology (like Lean). Both help address major risks that face early-stage companies: market risk (that you can reach customers in a sustainable way) and product risk (that customers want what you’re building).

TARGETS

  • Work through Bullseye. Maximize your chances of getting traction: brainstorm, prioritize, test, and then focus. Do not overlook underutilized channels. In fact, those channels are more likely to be the ones that will work best.
  • Talk to founders a few steps ahead of you. Research how past and present companies in your space and adjacent spaces succeeded or failed at getting traction. The easiest way to do this is to go talk to startup founders who previously failed at what you’re trying to do.
  • Hold on to your other channel ideas.Compile your brainstorming ideas for each traction channel in a spreadsheet with educated guesses that you can confirm through testing. Even after you’ve chosen your core channel, you should keep these ideas around for future runs of Bullseye.

4. Traction Testing

  • Continuous testing is the key to getting traction with Bullseye.
  • When you find one worth your undivided attention, you test strategies and tactics within that core channel to wring the most traction from it

MIDDLE RING TESTS

  • The goal of middle ring tests is to find a promising channel strategy to focus on. A channel strategy is a particular way to acquire customers within a channel. For example, offline ads is a traction channel, and billboards, transit ads, and magazine ads are all channel strategies within offline ads. When you’re just starting out testing a channel, you will pick one channel strategy to pursue—the most promising one you came up with when brainstorming.
  • In particular, your tests should be designed to answer these questions:
    • How much does it cost to acquire each customer through this channel strategy?
    • How many customers are available through this channel strategy?
    • Are the customers you are getting through this channel the ones you want right now?
  • With limited resources, it’s almost impossible to optimize multiple channel strategies at once
  • Running ten social ads and testing everything about them (ad copy, landing pages, etc.) is a full-time endeavor. That is optimization, not testing. Rather, you should be running several cheap tests (perhaps two social ads with two landing pages) that give some indication of how successful a given channel strategy could be. In other words, you should not be getting too deep into tactics at this stage; stick to the strategy level.
  • These first channel strategy tests are often very cheap and short.

INNER RING TESTS

  • Inner ring tests are designed to do two things. First, to optimize your chosen channel strategy to make it the best it can be. Second, to uncover better channel strategies within this traction channel.
  • Really focusing on a traction channel takes significant time and resources. This time is valuable and should be used only after you have some indication that the chosen channel will likely work
  • In terms of optimization, each channel strategy has a set of things you can tweak. For example, for targeting blogs you can tweak which blogs to target, what type of content to push, and what the call to action is in this content. For search engine marketing, you can tweak keywords, ad copy, demographics, and landing pages.
  • You should be continually testing your chosen channel strategy in an effort to increase its effectiveness. A common approach is to use some form of A/B testing (also known as split testing).
  • Making A/B testing a habit (even if you run just one test a week) will improve your efficiency in a traction channel by two or three times. There are many tools to help you do this type of testing online, such as Optimizely, Visual Website Optimizer, and Unbounce. These tools allow you to test optimizations without making complex changes to your code.
  • In addition to optimization testing, you should also be testing additional channel strategies within your core channel. These resemble middle ring tests in that they should initially be cheap and fast and answer the same basic questions as middle ring tests. The goal here is to see if there is a better channel strategy you should be using within your core channel.
  • Over time, all marketing channels become saturated. As more companies discover an effective strategy, it becomes crowded and expensive or ignored by consumers, thus becoming much less effective. When banner ads first debuted, they were receiving click-through rates of over 75 percent! Once they became commonplace, click-through rates plummeted.
  • To combat this reality you should consistently brainstorm new channel strategies and conduct small experiments. Constantly running small traction tests will allow you to stay ahead of competitors pursuing the same channels
The . . . solution to solving the Law of Shitty Click-Throughs, even momentarily, is to discover the next untapped marketing [strategy]. . . . If you can make these [strategies] work with a strong product behind [them], then great. Chances are, you’ll enjoy a few months if not a few years of strong marketing performance before they too slowly succumb.
  • An untapped channel strategy may mean trying something different in an established venue, but it also could mean trying a venue no one else is using. For example, you might be able to take advantage of new marketing platforms while they are still in their infancy.
  • Another place to look for underutilized channel strategies is in using other traction channels to feed into your core traction channel. As we discussed previously, you do not want to focus separately on multiple traction channels. However, you can utilize other channels as part of your core channel strategy. For example, suppose your core channel is content marketing, centered around your company blog. To jump-start your blog you may target other blogs for guest posts (in the targeting blogs channel). You might also buy social ads to amplify your best posts on Twitter and Facebook (in the social and display ads channel). In both these cases, you are not solely focusing on these secondary channels to get growth; you are using them to feed into your content marketing strategy.
  • Once you have a core traction channel, it is often instructive to brainstorm the other eighteen traction channels in terms of how you might use them to support your core channel. Doing so could uncover some truly novel channel strategies that haven’t yet succumbed to the Law of Shitty Click-Throughs.

ONLINE TOOLS

  • As testing is central to getting traction, you should seek online tools to help you organize and execute your tests, even if they are offline tests
The faster you run high-quality experiments, the more likely you’ll find scalable, effective growth tactics. Determining the success of a customer acquisition idea is dependent on an effective tracking and reporting system, so don’t start testing until your tracking/reporting system has been implemented.
  • This “effective tracking and reporting system” can be as simple as a spreadsheet or as complex as an analytics tool that does cohort analysis, but it must exist.
  • For example, the questions below seem like they are difficult or might require a lot of research to answer:
    • How many prospective customers landed on my Web site?
    • What are the demographics of my best and worst customers?
    • Are customers who interact with my support team more likely to stay customers longer?
  • However, they are quite straightforward if you’re using the right online tools. In fact, a basic analytics tool like Clicky, Mixpanel, or Chartbeat can help you answer all three of these questions.
  • We recommend using a spreadsheet to help you rank and prioritize your traction channel strategies. The questions you are answering from tests all have numeric answers, and so a spreadsheet is a natural tool to use.
  • At a minimum, include the columns of how many customers are available, conversion rate, cost to acquire a customer, and lifetime value of a customer for a given strategy. Because these metrics are universal, you can use them to easily make comparisons across strategies
  • You should be thinking about only those traction channels and specific strategies that have a chance of moving the needle for your traction goal. You can assess what can move the needle with some simple calculations. How many new customers do you need to really move the needle?

TARGETS

  • Look for customers where others aren’t looking. Keep a lookout for the cutting-edge tactics that haven’t yet succumbed to the Law of Shitty Click-Throughs. Run cheap tests to quickly validate assumptions and test new ideas.
  • Constantly optimize. You should consistently run A/B tests in your efforts to optimize a traction channel strategy. There are many online tools that can help you test more easily and evaluate your use of various traction strategies and tactics.
  • Keep it numerical. Look for ways to quantify your marketing efforts, especially when deciding which traction strategies to pursue and comparing them within Bullseye. You should have an idea at all times of what numbers it will take to move the needle, and focus your traction efforts only on strategies that could possibly do so

5. Critical Path

  • Startups get pulled in a lot of different directions. There are always opportunities in front of you or on the horizon that you could focus on. There are always product or service revisions you could work on. There are always background tasks nagging at you. How do you decide what to work on?

DEFINING YOUR TRACTION GOAL

  • You should always have an explicit traction goal you’re working toward. This could be one thousand paying customers, one hundred new daily customers, or 10 percent of your market.
  • The right goal is highly dependent on your business. It should be chosen carefully and align with your company strategy. You want a goal where hitting the mark would change things significantly for your company’s outcome. Perhaps you’d be profitable, be able to raise money more easily, or become the market leader.
  • Are you going for growth or profitability, or something in between? If you need to raise money in X months, what traction do you need to show to do so? These are the types of questions that help you determine the right traction goal
  • Once that is defined, you can work backward and set clear quantitative and time-based traction subgoals, such as reaching one thousand customers by next quarter or hitting 20 percent monthly growth targets

DEFINING YOUR CRITICAL PATH

  • The path to reaching your traction goal with the fewest number of steps is your Critical Path. You should literally enumerate the intermediate steps (milestones) to get to your traction goal. These milestones need not be traction-related, but they should be absolutely necessary to reach your goal.
  • The point is to be critical and strategic in deciding what to include. That’s why it is called the Critical Path. For example, you may think that to reach your traction goal you will need to hire three people, add features A, B, and C to your product, and engage in marketing activities X, Y, and Z. These are the milestones you need to do to get where you want to go.
  • Do you really need feature C or marketing activity Y? This is where founders often mess up: by focusing their limited company resources on things off Critical Path. You are generally competing with companies with significantly more resources than you. You cannot afford to waste what little resources you have.
  • The best way to make sure you’re not squandering your resources is to keep reevaluating whether what you’re doing is on your Critical Path.
  • In other words, Critical Path is a framework to help you decide what not to do. Everything you decide to do should be assessed against your Critical Path. Every activity is either on path or not. If it is not on the path, don’t do it!

OVERCOMING YOUR TRACTION BIASES

  • Traction channel bias may be preventing you from getting traction. You can get a competitive advantage by acquiring customers in ways your competition isn’t.
  • There are three reasons why founders ignore potentially profitable traction channels:
    • Out of sight, out of mind. Startups generally don’t think of things like speaking engagements because they are usually out of their field of vision.
    • Some founders refuse to seriously consider channels they view negatively, like sales or affiliate marketing. Just because you hate talking on the phone doesn’t mean your customers do.
    • Bias against schlep—things that seem annoying and time-consuming. Channels like business development and trade shows often fall into this category.
I’ll bet you a lot of your competition will refuse to even try these channels. And if that’s true, that’s even more reason to go try those channels! It can almost be a competitive advantage (at least a temporary one) if you can acquire customers in channels that others cannot, or refuse to try. That’s more interesting than duking it out with AdWords competitors in positions one to three.
  • Traction is a tricky thing. Initial traction is unpredictable and can happen in many different ways—nineteen by our count. Because of this unpredictability, it makes sense to consider several channels in the pursuit of traction. In fact, every one of the channels listed above has been the channel for both enterprise and consumer startups to get initial traction.

TARGETS

  • Lay out your milestones. Determine your traction goal and define your Critical Path against that goal, working backward and enumerating the absolutely necessary milestones you need to achieve to get there.
  • Stay on the Critical Path. Assess every activity you do against your Critical Path and consistently reassess it. Building such assessment into your management processes is a good idea. Quantify traction subgoals and put them on a calendar so you can properly monitor your progress over time.
  • Actively work to overcome your traction channel biases. Being on the cutting edge of the right traction channel can make a huge difference in success. Which traction channels do you know most about? Which traction channels do you know least about? Mentors can help here.

6. Targeting Blogs

  • Targeting blogs prospective customers read is one of the most effective ways to get your first wave of customers. However, this traction channel can be difficult to scale in phases II and III due to the limited number of relevant high-traffic blogs
  • Not all traction channels are infinitely scalable. In fact, using tactics that don’t scale is one of the best ways to get your first customers.
The need to do something unscalably laborious to get started is so nearly universal that it might be a good idea to stop thinking of startup ideas as scalars. Instead we should try thinking of them as pairs of what you’re going to build, plus the unscalable thing(s) you’re going to do initially to get the company going.

Mint Case

  • We interviewed Noah Kagan, former head of marketing at Mint and founder of AppSumo, to learn how he used this channel to get significant initial traction for both startups by targeting blogs.
  • Mint’s story is impressive. It launched its simple money management site in 2007, and—less than two years later—Intuit acquired it for $170 million. In between, Mint was able to acquire more than 1.5 million customers, 20,000 of whom signed up before it even launched. Within six months of Mint’s launch, it had more than 1 million active users.
  • Mint’s phase I goal was to get 100,000 users within six months. To hit those numbers, Noah created a quant-based marketing spreadsheet like this:
  • Mint's data spreadsheet
    Mint's data spreadsheet
  • Next, he tested the channel strategies Mint might focus on by running tests on the ones that seemed promising. To test targeting blogs, he contacted a few that were representative of different customer segments and got them to write articles about Mint.
  • Noah additionally uncovered channel strategies that further improved Mint’s traction: VIP access and direct sponsoring.
  • Mint did something that few startups had done before to increase awareness and build excitement for its launch: it asked people on its prelaunch waiting list to recommend Mint to their friends in return for priority product access. As part of the signup process, users could embed an “I Want Mint” badge on their personal blogs, Facebook, or other Web sites. Users who drove signups through these badges were rewarded with VIP access before other invitations were sent out.
  • The key to the success of these badges was to make them easy to share and embed. Much as YouTube provides an embed code below each video on its site, Mint provided the code necessary to make embedding badges as simple as copying and pasting. Many users were happy to place the small badge on their Web site in order to get early access to a product they wanted. Mint had six hundred blogs display the badge and fifty thousand users signed up through them. This strategy also gave Mint an SEO boost from the hundreds of new links pointing to Mint.com.
  • Mint used a second innovative strategy to acquire customers through this traction channel: direct sponsoring of blogs. Each sponsored blog would place a small Mint advertisement on its site for a period of time. Noah tracked each advertisement to see which blogs were most effective and how many people signed up. Not only did this approach contribute more than ten thousand preregistrations for its product, but it also allowed the Mint team to understand the kind of customer most interested in its product.
  • Many personal bloggers have strong readerships, but don’t make money from their writing. Noah offered them a way to show off a cool new service and make some money doing it. He simply sent them a message with “Can I send you $500?” as the subject and told them a bit about the product and what Mint was trying to do. Most were happy to share a useful product with their audiences and make some money in the process.
  • To get traction, Noah pulled together free bundles for blogs and conferences, such as SXSW.
  • One of the first bundles AppSumo did was specifically for Lifehacker, a popular productivity blog. Rather than just trying to pitch Lifehacker on his new startup, Noah built a product bundle for them before reaching out. Lifehacker couldn’t turn down a bundle geared specifically toward its readers.

TARGETING BLOG TACTICS

  • It can be difficult to uncover the smaller blogs that cover your niche. Here are several tools you can use to find all the influential bloggers in your space:
    • Search Engines—Simply search for things like “top blogs for x” or “best x blogs.”
    • YouTube—Doing a simple search for your product keywords on YouTube shows you the most popular videos in your industry. These videos are often associated with influencers who have blogs, and you can use references to their videos as icebreakers to start building relationships with them. This tactic can be applied to other video sharing sites, such as Vimeo and Dailymotion.
    • Delicious—Delicious allows you to use keywords to find links that others have saved, which can unearth new blogs.
    • Twitter—Using Twitter search is another easy way to find blogs in a niche. You can also use tools like Followerwonk and Klout to determine the top Twitter accounts in your industry.
    • Social Mention—Social Mention helps you determine the sites that have the most frequent mentions for your keywords.
    • Talk to People—The most effective way to figure out what your target audience is really reading online is by asking them directly!
  • In addition to targeting blogs directly, you can also target the link-sharing communities that often link to them. Sharing links is at the heart of many large communities on the Web (e.g., reddit, Product Hunt, Hacker News, Inbound.org). In addition, there are hundreds of niche communities and forums that encourage and reward the sharing of links.
  • Quora, Codecademy, and Gumroad saw similar success from initial postings on Hacker News because their products were a good fit for users of that site.
  • The founders behind Filepicker.io—a file management tool for developers—also posted a basic demo there, looking for some feedback and early customers. Their submission was in the top spot for nearly three hours, during which they saw:
    • 10,000+ visits
    • 460 concurrent users
    • 500+ developer signups
    • 5,000+ files managed

TARGETS

  • Run tests on a variety of smaller blogs. See what type of audience resonates best with your product and messaging. There are a variety of tools you can use to uncover relevant blogs, including YouTube, Delicious, StumbleUpon, Twitter, search engines, Google Alerts, and Social Mention. You can also ask people!
  • Sponsor small blogs, especially personal blogs. Providing influential bloggers early access or offering early access in exchange for spreading the word are other effective strategies.
  • Offer something unique to your best targets. Build a special offer just for them and put together a draft guest post that they can run with.

7. Publicity

  • Public relations (PR) traditionally refers to a company’s public messaging of all kinds. In this chapter we focus on publicity from traditional media like news outlets, newspapers, and magazines.
  • Unconventional PR (like stunts and contests), content marketing, and targeting blogs are all related to publicity and can be magnified via this channel, but are covered individually in other chapters.
  • Starting out, an article in TechCrunch or a feature in The Huffington Post can boost your stature in the eyes of potential customers, investors, or partners. These mentions lead to larger features in news outlets like The Washington Post or The New York Times, which can move the needle for you in a matter of days.
  • Publicity also has secondary benefits like helping with fund-raising, recruiting, and partnerships.

PUBLICITY STRATEGY

  • Startup founders are often unsure about how to get press. The first step is to understand how Internet-driven media works.
The news has fundamentally changed. Think of The New York Times. When they decide to publish an article about you, they are doing you a huge favor. After all, there are so many other people they could write about. There are a finite number of spots in the paper. Blogs are different, as they can publish an infinite number of articles and every article they publish is a chance for more traffic (which means more money in their pockets). In other words, when Business Insider writes about you, you are doing them the favor. — Ryan Holiday
  • Most sites make their money from advertisements, so they want to drive as many page views as possible. If you have a fascinating story with broad appeal, media outlets now want to hear from you because you will drive visits and make them more money
  • There has also been a shift in how the top media outlets operate (CNN, The New York Times, the Today show). These organizations now scour smaller outlets for captivating stories they can present to a wider audience
It’s better to start smaller when targeting big media outlets. For them, the direct approach is rarely the best approach. Instead, you approach obliquely. So you find the blogs that TechCrunch reads and gets story ideas from. Chances are it will be easier to get that blog’s attention. You pitch there, which leads The New York Times to email you or do a story about you based on the information [they’ve seen] on their news radar. — Ryan Holiday
  • This means you no longer have to pitch CNN directly if you want to get on TV. Instead, you can pitch smaller sites (ones that are easier to get coverage from) whose content is often picked up by larger media outlets. If you tell your story right, you can create buzz around your company and capture the attention of larger sources.
  • In other words, stories and other content now filter up the media chain, rather than down.
Blogs have an enormous influence over other blogs, making it possible to turn a post on a site with only a little traffic into posts on much bigger sites, if the latter happens to read the former. Blogs compete to get stories first, newspapers compete to “confirm” it, and then pundits compete for airtime to opine on it. The smaller sites legitimize the newsworthiness of the story for the sites with bigger audiences. — Ryan Holiday
  • Tech startups frequently get exposure this way. Sites like TechCrunch and Lifehacker often pick up stories from smaller forums like Hacker News and subreddits. In turn, The New York Times often picks up content from TechCrunch and wraps it into a larger narrative they’re telling.
  • Tens of thousands of companies are clamoring for media coverage. Jason Kincaid, a former reporter at TechCrunch, told us that he personally got pitched more than fifty times every day.
  • What gets a reporter’s attention? Milestones: raising money, launching a new product, breaking a usage barrier, a PR stunt, a big partnership, or a special industry report. Each of these events is interesting and noteworthy enough to potentially generate some coverage.
  • Jason advises bundling smaller announcements together into one big announcement whenever possible. Breaking a usage barrier is great. Releasing a new version is noteworthy. But releasing a new version and breaking a usage barrier in the process is even more attractive to the press.
Email example
  • Below is an email pitch Jason Baptiste sent to TechCrunch just before launching PadPressed, his startup that helps blogs look better on iPads. It’s a solid example of a good pitch: short, to the point, contains clear contact information, and links to a product demo. He even mentions he’s happy to do a product giveaway, which makes this pitch even more enticing.

Subject: Exclusive for TC: Launching PadPressed—make any blog feel like a native iPad app

Hey Mike,

Launching PadPressed tomorrow at noon EST and TC gets free rein on an exclusive before then. PadPressed makes any blog look and behave like a native iPad app. We’re talking accelerometer aware column resizing, swipe to advance articles, touch navigation, home screen icon support, and more. We’ve built some pretty cool tech to make this happen smoothly, and it works with your existing layout (iPad layout only activated when the blog is accessed from an iPad). Okay, I’ll shut up now and you can check out the demo links/feature pages below, which are much more interesting than my pitch.

PS—Would also be happy to do giveaways to TC readers. Thanks again and feel free to reach out if you have any more questions (Skype, phone, etc. listed below).

Video Demo: http://vimeo.com/13487300

Live demo site (if you’re on an iPad): jasonlbaptiste.com

Feature overviews: http://padpressed.com/features

Email template

Ryan offered this template email he’s used to pitch reporters successfully:

Subject: Quick question

Hey [name],

I wanted to shoot you a note because I loved your post on [similar topic that did a lot of traffic]. I was going to give the following to our publicist, but I thought I would go to you with the exclusive because I read and really enjoy your stuff. My [company built a user base of 25,000 paying customers in two months without advertising / book blows the lid off an enormous XYZ scandal]. And I did it completely off the radar. This means you would be the first to have it. I can write up any details you’d need to make it great. Do you think this might be a good fit?

If so, should I draft something around [their average] words and send it to you, or do you prefer a different process? If not, I totally understand, and thanks for reading this much.

All the best,[Your Name]

  • Jason Kincaid warned against having your pitch come across as a “wall of text,” something busy reporters who receive hundreds of emails get tired of seeing. Be succinct and clear.
  • When pitching to any media outlet, it’s your job to also create an angle that makes your story compelling. If you can craft a narrative and present it well, you greatly increase your chances of getting a story written.
  • A good press angle makes people react emotionally. If it’s not interesting enough to elicit emotion, you don’t have a story worth pitching. Furthermore, your story should ideally provoke a specific feeling in readers that makes them want to share the story with others. As Ryan said, “satisfaction is a nonviral emotion”—you want readers to do something after reading your piece, not just feel satisfied.

PUBLICITY TACTICS

  • The best way to get early publicity is to start small. A good first step is using a service like Help A Reporter Out (HARO), where reporters request sources for articles they are working on. While you won’t be the centerpiece of the article, assisting a reporter in this way will get you a mention in the piece and help establish your credibility.
  • Another starting point is to offer reporters commentary on stories related to your industry. One of your many jobs as a startup founder is to stay on top of market trends. If you have a good feel for the pulse of your market, you can send reporters follow-up insights on specific stories. At the same time let them know that you are generally available as an industry source.
  • You can also use Twitter to reach reporters online. Almost all reporters have Twitter accounts, and you’d be surprised at how few followers many of them have. Just because they’re not actively seeking followers, however, doesn’t mean they don’t have influence. It just means you have a better chance of standing out when you tweet at them.
  • Staying in contact with reporters over Twitter gives you a leg up when you eventually reach out to them with your more formal pitch
  • Once you have a solid story, you want to draw as much attention to it as you can. Here are a few ways to do it:
    • Submit the story to link-sharing sites (reddit, Hacker News) with larger audiences.
    • Share it on social networks to drive awareness, which you can further amplify with social ads.
    • Email it to influencers in your industry for comment. Some of them will share it with their audiences.
    • Ping blogs in your space and tell them that you have a story that’s getting some buzz. These writers may then want to jump in themselves to cover you.
  • Once your story has been established as a popular news item, drag it out as long as you can. Email blogs that covered the story (as well as ones that didn’t) and offer an interview that adds to the original story. “How We Did This” follow-up interviews are popular.
  • In addition to driving traffic, publicity can have a substantial impact on your fund-raising efforts
PR has a huge impact on early-stage startups. . . . Funding is obviously very important. But funding is essentially gambling. You’re saying, “I think this unproven person deserves two million dollars of my money to build a business that may or may not succeed, and if it does succeed we need to find a buyer who will pay even more to take it off our hands.” There are so many things that can go wrong. When people gamble, but they don’t tell themselves they’re gambling (as investors do), they need information to justify their decisions, and they need social proof and examples and evidence that they’re doing the right thing. They already know if they want to invest in you or not, and they’re looking for confirmation that they made the right call. Press is one of the single most effective things for pushing people over the edge and confirming they did the right thing. — Ryan Holiday
  • As your startup grows you may choose to hire a PR firm or consultant to help you with this traction channel. This is especially true if you chose to focus on publicity as your core traction channel. A good PR firm can help you:
    • Figure out the best messaging and positioning to the press.
    • Unify your messaging to the press.
    • Do a lot of the legwork in setting up press engagements, especially bigger media tours and events.
    • Break into outlets that are traditionally harder to break into, like broadcast TV and radio, where relationships with reporters and producers are harder to form.
  • However, before making the choice to hire a PR firm, exercise caution. Many of the print reporters we talked to said they ignore almost all pitches from PR firms, but do listen to most founders. PR firms are also expensive: if you’re just testing this channel you can often do it faster and cheaper yourself.

TARGETS

  • Focus on the right smaller sites. Press stories often “filter up,” meaning major news outlets are often looking to major blogs for story ideas, which in turn are looking at smaller blogs and forums. That means if you can generate buzz on those sites, you can increase your chances of getting picked up by bigger publications.
  • Build real relationships with the specific reporters covering your startup’s market. Read what they write, comment, offer them industry expertise, and follow them on Twitter.
  • Have newsworthy milestones to share. Contact reporters only when you can package your milestones into a compelling emotional story. When you do make a pitch, keep it short and sweet!

8. Unconventional PR

  • PR stunts are not only amusing, but also a proven way to generate press coverage and buzz.
  • There are two different types of unconventional PR.
    • You’re probably familiar with the first type: the publicity stunt. A publicity stunt is anything that is engineered to get media coverage. Richard Branson made his press conferences as outlandish as possible (dressing like a woman, driving a tank through the streets) to get the media talking about whatever Virgin was launching. By creating a spectacle around every one of his product launches, Richard Branson turns uninteresting product launches into international headlines.
    • The second type of unconventional PR is customer appreciation: smaller, more scalable actions (like holding contests or sending handwritten notes to customers) that both increase goodwill as well as generate press coverage. Small gestures like these turn your customers into evangelists, which leads to an increase in organic growth.

PUBLICITY STUNTS

  • When done right, publicity stunts can propel a startup from anonymity to national recognition in an instant.

Half.com

  • Before their launch, the team at Half.com spent weeks brainstorming ways they could get on the national radar. Eventually, they came up with the unconventional idea to rename a town! And, in one of the most well-executed startup PR stunts, for one year the little town of Halfway, Oregon, was known as Half.com.
  • Founder Josh Kopelman launched Half.com on the Today show with the mayor of Halfway, Oregon. This stunt had everything traditional media loved in a piece: it was unique, surrounded the launch of a high-potential new startup, and told a story about how the company was creating jobs in a small town (they hired several residents).
  • Half.com received coverage from The New York Times, PBS, The Wall Street Journal, and hundreds of other publications as a result of this one PR stunt. It launched in late 1999, before the days of ubiquitous email and social media. Even without these sharing tools, this campaign received more than 40 millionimpressions and gave Half.com a strong customer base right out of the gate. Just six months later it was acquired for more than $300 million by eBay.

WePay

  • WePay, a Web payments startup, pulled another popular stunt at PayPal’s annual developer conference. Rather than marketing to PayPal’s customers traditionally, they placed a six-hundred-pound block of ice at the conference entrance.
  • At the time, PayPal had been criticized for freezing some of its customers’ accounts. With this little stunt, WePay shifted the press conversation to focus on these frozen accounts—at PayPal’s own conference! This stunt led to thousands of signups. It also put WePay on the map as a viable alternative to PayPal at a time when few people knew it existed.

DuckDuckGo

  • As another example, DuckDuckGo (Gabriel’s search engine) bought a billboard in Google’s backyard highlighting its privacy focus. It then used the billboard to get national press stories in USA Today, Wired, and many other media outlets. The reactions from this stunt alone doubled its user base at the time

Blendtec

  • Blendtec is a blender manufacturer located in southern Utah. In 2007, its team decided to create a series of videos called “Will It Blend?” In these videos, Blendtec’s CEO stood by one of its blenders and blended items like a rake, golf balls, and even an iPhone.
  • The series took off shortly after the videos were posted to YouTube. The iPhone video alone has received more than 8 million views, and the “Will It Blend?” series has become one of the one hundred most-viewed on YouTube. All for a company that makes blenders!

Dollar Shave Club

  • Dollar Shave Club, a subscription shaving startup, got similar attention for its launch video titled “Our Blades Are F**king Great.” It also has millions of views on YouTube and was the main source of the more than 12,000 customers it acquired within two days of launching. The video was also shared more than 31,000 times on Facebook, received over 9,500 comments, 12,000-plus likes, and more than 16,000 tweets.
  • The company benefited in other ways as well. Though Dollar Shave Club had been around for just a short while, it quickly ranked third for the Google search “shave.” This ranking is largely thanks to the 1,500-plus sites that linked to its video. The video also led to features in ForbesThe Wall Street Journal, and Wired.

Grasshopper.com rebranding

  • David Hauser told us the story of how he and his team rebranded their service as Grasshopper.com. Rather than issue a standard press release, they decided to send chocolate-covered grasshoppers to five thousand influential people! With each package they included a link to a short video about how entrepreneurs can change the world.
  • After launching the campaign, they received coverage from major news outlets such as Fox News and were the subject of tweets by Guy Kawasaki and Kevin Rose, entrepreneurs with millions of combined Twitter followers. For $65,000, Grasshopper became a well-known brand among entrepreneurs (its target audience). It received major media coverage, created a YouTube video that was viewed more than 200,000 times, was written up in more than 150 blog posts, and increased the number of visitors coming from Twitter and Facebook by over 3,000 percent.
  • As with Half.com’s PR stunt, this Grasshopper 5000 campaign was a result of prolonged brainstorming and careful planning. After its success, the team decided to continue to use unconventional PR as a core channel.

Grasshopper.com The New Dork

  • David and his team pulled off another successful stunt when they introduced “The New Dork” video. They noticed a lack of startup-themed viral videos and so parodied the popular Jay-Z and Alicia Keys song “Empire State of Mind” with a video called “The New Dork.”
  • This video received more than 1 million views and was mentioned by Ashton Kutcher, Mashable, and TechCrunch. The Grasshopper team made a conscious decision to include references to popular publications like Mashable in their video. When the video came out, they sent them a quick note about where in the video they made an appearance. This approach gave publications and individuals an incentive to show their audience how cool they were (by referencing themselves in the video) while giving Grasshopper additional exposure.

Chargify

  • David’s team at Chargify (another one of his startups) pulled off another successful stunt at the popular SXSW conference. Rather than pony up the $10,000 to $15,000 SXSW sponsors normally have to pay, they did something completely different and had a big green bull run around. For $3,000, they hired a stuntman to dress up as Chargify’s mascot and get people pumped about Chargify.
  • Before this conference, Chargify was a virtual unknown. After SXSW attendees saw a green bull giving people high fives, doing backflips, driving a Corvette, and ultimately getting kicked out of the convention center, the Chargify team left the conference with hundreds of customers and a significant jump in brand awareness.

CUSTOMER APPRECIATION

  • On the other end of the unconventional PR spectrum is the more sustainable, systematic form of this traction channel. Customer appreciation is a simple way of saying “be awesome to your customers.” The goal is still generating publicity. However, if you fail to get press coverage, you still have happy customers and a stronger, more relatable brand, which significantly increases word-of-mouth effects.

Hipmunk 1

  • We talked with Alexis Ohanian, founder of reddit and Hipmunk, about how he’s made customers fall in love with his companies. Shortly after Alexis launched Hipmunk, a travel booking site, he sent out luggage tags and a handwritten note to the first several hundred people who mentioned the site on Twitter.
  • These tags were functional, were cute, and led to many tweets and pictures from happy early customers excited to have a chipmunk as a travel companion. Hipmunk also gave out other free items (T-shirts, stickers, handwritten notes) to show its customers’ appreciation.

Reddit

  • Alexis did the same thing at reddit. In its early days, he handed out free T-shirts with the reddit alien on the front. He personally emailed users to thank them for spending time on the site and did everything he could to make early redditors feel appreciated for being part of the community. These stories became a central theme in reddit’s early press articles and had a pronounced effect on the brand.

Grasshoper.com

  • David Hauser took a similar approach at Grasshopper.com. Over the past several years, he’s sent customers Skittles, homemade cookies, Starbucks gift cards, books, and handwritten notes thanking them for their business. Doing these types of things has worked so well for Grasshopper that it has hired two full-time employees whose sole responsibility is to delight customers.

Shopify

  • Holding a contest is a great, repeatable way to generate publicity and get some word of mouth. Shopify.com, a popular e-commerce platform, is famous for its annual Build a Business competition (and its six-figure prize). Last year, the contest drove 1,900 new customers and more than $3.5 million in sales on its platform.

Dropbox

  • Dropbox used to hold a similar contest with its annual Dropquest competition. In Dropquest, users who successfully completed an intellectually challenging online scavenger hunt were rewarded with online recognition, Dropbox-themed items, and free Dropbox packages for life. In the first year of the competition, almost half a million people went through the quest.

Hipmunk 2

  • Hipmunk has run similar events, like its Mother’s Day Giveaway. For this promotion, company staff asked customers to tell them why they love their mothers more than Hipmunk. They received hundreds of submissions via Twitter and sent flowers and chocolates to the moms of the lucky winners. For $500, Hipmunk generated a lot of attention, increased its follower count, and made several customers (and their moms) Hipmunk fans for life.
  • Hipmunk has run other contests as well, including flying customers home for Thanksgiving and hiring a cartoonist to draw “chipmunked” versions of customers’ Facebook profile pictures. For this last promotion, Hipmunk received more than five hundred requests in less than an hour and was covered by Mashable and several other popular blogs. Its customers received funny Facebook profile pictures, and Hipmunk once again created a unique connection with its customers and increased its Facebook fans by over 350 percent

Zappos

  • Good customer support is so rare that, if you simply try to make your customers happy, they are likely to spread the news of your awesome product on that basis alone. Zappos is one of the best-known examples of a company that has incredible customer service.
  • Zappos focuses on creating the best customer experience possible, especially with its support team. In fact, Zappos classifies customer service as a marketing investment, which has interesting implications. For example, if the average time per phone call at Zappos is high, they do not view that as a negative. It might mean that the support team is taking the time necessary to do an outstanding job.
  • Zappos customer support personnel will help you however they can—whether that’s assisting with returns, ordering a pizza, or exchanging workout clothes for a deep fat fryer (real example). With policies like free next-day shipping and free returns, this focus on customer happiness has made Zappos famous among customers who rarely receive such treatment from large companies.
  • Unconventional PR tactics can have incredible returns on investment. Half.com spent $70,000 and made two hires to generate hundreds of articles and more than 40 million impressions. Dollar Shave Club acquired more than twelve thousand customers with a short video that cost $5,000. Hipmunk received thousands of Facebook likes from a chipmunk-drawing contest that cost the company $500. Blendtec increased its sales by over 500 percent after starting the Will It Blend? series.

TARGETS

  • Do something big, cheap, fun, and original.A publicity stunt is anything that is engineered to generate a large amount of media coverage. They are often hard to do consistently well, but just one well-executed stunt can move the needle for your company. Publicity stunts need to be creative and extraordinary to succeed. Some types that have been successful repeatedly are competitive stunts and viral videos.
  • Be awesome to your customers and good things follow. Common ways to do customer appreciation well are through gifts, contests, and amazing customer support. Excelling in this area is a way to do unconventional PR over a longer period of time.
  • Prepare for failure. Success in this channel is unpredictable. You should have a defined process for brainstorming and selecting ideas, but also understand that not every idea will work.

9. Search Engine Marketing (SEM)

  • Search engine marketing (SEM) refers to placing advertisements on search engines like Google, where online marketers spend more than $100 million each day on Google’s AdWords platform
  • Paid search advertising involves buying ads for keyword searches.
  • SEM works well for companies looking to sell directly to their target customer. You are capturing people who are actively searching for solutions.
  • Here is some basic SEM terminology you should understand before we dive in:
    • Click-Through Rate (CTR)—the percentage of ad impressions that result in clicks to your site. For example, if one hundred people see your ad and three of them click on it, you have a CTR of 3 percent (3/100).
    • Cost per Click (CPC)—the amount it costs to buy a click on an advertisement. CPC is the maximum amount you’re willing to pay to get a potential customer to your site.
    • Cost per Acquisition (CPA)—CPA is a measure of how much it costs you to acquire a customer, not just a click. For example, suppose you buy clicks at $1 and 10 percent of the people who hit your site after clicking on your ad make a purchase. This puts your CPA at $10:
    • CPA = $1/10% = $10.
    • You are paying $10 to acquire each customer. The 10 percent in this equation is known as the conversion percentage, which is the rate at which people “convert” by taking the action you want (in this case making a purchase).
    • For paid search in particular this measure is calculated with the following formula:
    • CPA = CPC / conversion percentage.

CASE STUDY: INFLECTION

  • One of the things I want to really emphasize here is just how compelling SEM is as a way to get early customer data in a fairly controlled, predictable manner. So even if you don’t expect to be profitable, you can decide to spend $5,000 (or $1,000, or $500) on an advertising campaign and get an early base of customers and users. It informs a whole bunch of things that are really important in terms of the basic [metrics]: conversion rate of your landing pages, how well email captures are working . . . if you’re selling a product, what the average cost per customer is and what their lifetime value might be. Having those baseline metrics is critical for informing your strategy moving forward and determining what you need to work on.
  • The Archives.com team used AdWords to drive traffic to landing pages before they made a big investment in building a product. Each landing page was written to test interest in a specific product approach. For example, one page tested “get access to census data” while another tested “get access to your family genealogy.” By measuring the CTR for each ad and conversions on the associated landing pages, they determined which product aspects were most compelling to their potential customers and what those people would actually pay for. Matthew explains further:
  • We just wanted to learn as much as we could for as little cost as possible. So we would test different keyword segments, we would test different concepts. For example, one of the early concepts we were trying to test was whether people wanted to trace their genealogy to find as many of their ancestors as possible. We had to ask ourselves, “Are we trying to build a product experience where you can find hundreds and hundreds of your ancestors, or are we trying to build a product experience where you can go as far back as possible, like trace your family tree all the way back to the 1200s? Or are people more motivated by finding out they’re related to a celebrity or some historical figure, and therefore should we focus more on those family trees and those lineages?”
  • Matthew’s approach exemplifies the benefits of building traction and developing your product in parallel. These tests gave the team a clear idea of the type of product their customers wanted. When they finally built their product, they built something they knew the market would want, not something they thought it would want.

SEM STRATEGY

  • The basic SEM process is to find high-potential keywords, group them into ad groups, and then test different ad copy and landing pages within each ad group. As data flows in, you remove underperforming ads and landing pages and make tweaks to better-performing ads and landing pages to keep improving results.
  • Google’s AdWords is the main platform for SEM because Google has the most search engine traffic. However, Bing Ads (with its ads running on Yahoo!, Bing, and DuckDuckGo) is also worth looking at.
  • Keyword research is the first core component of a strong SEM strategy. With Google’s Keyword Planner, you can discover the top keywords your target customers use to find products like yours. When you enter a term in this tool, it tells you how often your keyword (and similar terms) is searched. Other tools such as KeywordSpy, SEMrush, and SpyFu are valuable for discovering keywords your competition uses to attract customers.
  • You can further refine this keyword list by adding more qualifying terms to the end of each base term, creating what are known as “long-tail keywords.” For example, if you wanted to reach people searching for “census data,” you could make that a more targeted search term by adding “1990” to form “1990 census data” or even more long-tail like “1990 Philadelphia census data.” Long-tail keywords are less competitive and have lower search volumes, which make them ideal for testing on smaller groups of customers.
  • Keep in mind that SEM is more expensive for more competitive keywords. As such, you will want to limit yourself to keywords with profitable conversion rates.
  • After you have keywords you want to target, it’s time to run experiments on the AdWords platform. You should not expect your campaigns to be profitable right away. However, if you can run a campaign that breaks even after a short period of time, then SEM could be an excellent channel for you to focus on
  • A campaign is a collection of ads designed to achieve one high-level goal, like selling shoes. You first create different ad groups. For example, if you’re an e-commerce store, you might create an ad group for each product type (e.g., sneakers). You then select keywords you want your ad groups to appear for (e.g., “Nike sneakers”).
  • After you’ve determined the ad groups and keywords you are targeting, create your first ad. When you write an ad, the title should be catchy, memorable, and relevant to the keywords you’ve paired with it. You will also want to include the keyword at least once in the body of your ad. Finally, you will want to conclude with a prominent call to action (CTA) like “Check out discounted Nike sneakers!”
  • Once you set up your ads, you should use the Google Analytics URL Builder tool to create unique URLs (Web addresses) that point to your landing pages. These URLs will enable you to track which ads are converting, not just the ones that are receiving the most clicks.
  • Matthew told us that someone just starting out in this channel should begin testing just four ads. Four ads will give you a good baseline for the performance of SEM as a whole, while still allowing you to test different messaging, demographics, and landing pages.
  • Building a scalable SEM campaign can take a long time because there are so many variables to test—keywords, ad copy, demographic targeting, landing pages, CPC, and more. However, this complexity can actually work to your advantage. As you test and optimize every element of your SEM strategy, you may find opportunities for huge gains.
The fundamental concepts of keyword research, market discovery, running split tests, ad tests, controlling your budget, trying to get as close to breaking even as possible, focusing on learning . . . I think those things all still apply. They certainly still apply to us as we build out new keyword segments. That part of the advice doesn’t change, even though the dynamics are more competitive.

Quality Score

  • Each of your ads and ad groups as well as your whole AdWords account has a quality score associated with it. This score is a measure of how well customers are responding to your ads. It includes many factors, from CTR to how long people stay on your site after seeing your ad.
  • A high quality score can get you better ad placements and better ad pricing. The quality score is Google’s way of rewarding advertisers for high-quality advertisements.
  • Click-through rate has the biggest influence on quality score by a wide margin. Because your ad’s relevance to a particular keyword has the biggest impact on your CTR, you should tailor your ads to the keywords they’ll appear against, either manually or dynamically (for example by using AdWords’ Dynamic Keyword Insertion feature).
  • Several sources have mentioned that an average CTR for an AdWords campaign is around 2 percent, and that Google assigns a low quality score to ads with CTRs below 1.5 percent. If any of your keywords are getting such low CTRs, rewrite those ads, test them on a different audience, or ditch them altogether.

SEM TACTICS

  • Once you have a search engine marketing campaign up and running successfully, you may want to start exploring some more advanced tools and features.

Google Content Network

  • When you set up a campaign, you can choose to advertise on the Google search network (traditional paid SEM), the Google content network (ads on non-Google sites), or both. For beginners and for those just testing this traction channel, the content network can be difficult to navigate. Yet once you have established profitable campaigns, you should consider expanding them to the content network, which includes millions of non-Google sites that serve Google’s ads.

Retargeting

  • You should also consider luring people back to your site by retargeting through Google AdWords, or other sites like AdRoll or Perfect Audience. With retargeting, people who visit your site will see your ads elsewhere on the Internet. These ads often convert at a higher rate, as they are aimed at prospects who have already visited your site at least once.
  • For example, suppose you’re a shoe store and a customer put some Nikes in her cart, but didn’t complete the checkout process. With retargeting, you could show her an ad for that type of shoe. This personalization makes such ads particularly effective, often generating 3x to 10x higher CTRs.
  • However, be forewarned that it may feel a little creepy to certain people depending on what data you are using to retarget. People increasingly don’t like ads following them around the Internet, especially those that are a reflection of activities they consider personal or private.

Google Conversion Optimizer

  • Another advanced tool is Google’s Conversion Optimizer. It analyzes your conversion tracking data and automatically adjusts your ads to perform better. After you’ve been running a campaign for a while, using this tool can make your CPAs and keyword targeting better than you would be able to on your own. If you decide to use the Conversion Optimizer, know that it can take time for Google to build a robust prediction algorithm for your campaign.

Negative Keywords

  • You can use negative keywords to prevent your ads from showing for certain keywords. You specify words that you don’t want your ads to appear for: if you’re selling eyeglasses, you want to prevent your ads from showing to people who search “wine glasses” or “drinking glasses,” as those keywords will convert poorly. This technique can significantly improve your CTRs.

Run Scripts

  • One more advanced tactic is using programming scripts to automatically manage your ads. You might use scripts to set up new ads for certain keywords or to change existing ads. Scripts are especially helpful if you are managing a large number of ads or keywords

TARGETS

  • Use search engine ads to test product positioning and messaging (even before you fully build it!). Do not expect your early SEM ad tests to be profitable. If you can run an ad campaign that gets close to breakeven after a few weeks, then SEM could be the traction channel for you to focus on. A test ad campaign can be as little as four ads that you use to experiment.
  • Measure conversions so you can test SEM variables against profitability. Areas you should be testing include keywords, ad copy, demographic targeting, landing pages, and CPC bids. Cost per acquisition (CPA) is how much it costs you to acquire a customer, and that is ultimately what you need to be testing against.
  • Use longer keywords. Known as long-tail keywords, they are often less competitive because they have lower search volumes. As such, they are cheaper and so can be more profitable—you just may have to aggregate a lot of them to get the volume you need to move the needle.
  • Pay close attention to your ad quality scores. High quality scores get you better placement on the page and better pricing on your ads. The biggest factor in quality scores is CTR.

10. Social and Display Ads

  • Display ads are the banner ads that you see on Web sites all over the Internet. Social ads are the ads on social sites, like those in or near your Facebook and Twitter timelines.
  • Large display advertising campaigns are often used for branding and awareness, much like offline ads. Display advertising can also elicit a direct response, such as signing up for an email newsletter or buying a product.
  • Social ads are changing rapidly and are being used for a range of campaigns including both branding and direct response. One application that is unique to social ads and where they have performed exceptionally well is when they are used to build an audience, engage with that audience over time, and eventually convert them into customers.

DISPLAY ADS

  • Most display advertising is run by ad networks that aggregate advertising inventory across thousands of sites (blogs, communities, media outlets, etc.) and sell that space to advertisers.
  • The largest display ad networks are Google’s Display Network (also known as the Google content network), Advertising.com (owned by AOL), Tribal Fusion, Conversant, and Adblade
  • These networks are enormous. Google’s display network alone has more than 4 billion daily page views and 700 million monthly visitors, and reaches over 80 percent of the total online audience
The interesting thing about display advertising is that somebody doesn’t have to be directly related to whatever your product is to find out about it. For instance, if you’re selling some sort of weight-loss product, you don’t have to use terms in your display campaign about losing weight. You can use terms relating to nutrition or carbohydrates, because you know if someone starts to read about those things, they have an interest in maintaining or losing weight in some way.
  • Niche ad networks focus on smaller sites that fit certain audience demographics, such as dog lovers or Apple fanatics. One such network is The Deck, which targets the niche audience of Web creatives. As an advertiser, you know exactly the audience you’re reaching.
  • Another network, BuySellAds, offers advertisers a self-service platform for buying ads directly from publishers. In addition to buying and selling display advertising, BuySellAds allows advertisers to purchase space on mobile Web sites, Twitter accounts, mobile apps, email newsletters, and RSS feeds. With its flexibility and low starting cost, BuySellAds is an easy way to start testing this traction channel.
  • The last approach to display advertising is one of the simplest: go directly to site owners and ask to place an ad on their site for a fixed price. This works well when you want to reach the audience of a small site that isn’t even running ads
  • To get started in display advertising, first understand the types of ads that work in your industry. Tools like MixRank and Adbeat show you the ads your competitors are running and where they place them. Alexa and Quantcast can help you determine who visits the sites that feature your competitors’ ads. Then you can determine whether a site’s audience is the right fit for you.

SOCIAL ADS

  • Social ads work especially well for creating interest among potential new customers. People who see these ads may not have any intention of purchasing now—they may not even be familiar with the company or its products. That’s okay. The goal of social ads is often awareness oriented, not conversion oriented. A purchase takes place further down the line.
In the social context, what we’re talking about is “indirect response.” You’re still focused on a sale, an install, a signup, or whatever, but the methodology to get there is different. Instead of looking at every click and how it converts, indirect response says, “Let’s create an environment within the social context that’s geared toward the specific product or service you’re trying to offer, build affinity there, build loyalty there, and then migrate that audience toward some conversion element we want to occur at a later point in time.”
  • Building an audience through social ads is more valuable than you might suspect.
Social media connections filled out the consultation (lead-generation) form at a 179% higher rate than the typical customer. Sales? They were 217% more likely to make their first payment. For one particular problem area (people who partially fill out the sign-up form then quit), social media prospects went back and completed the form at a 680% higher clip than non–social media leads. They made their first payment at an astonishing 732% better rate.
  • People visit social media sites for entertainment and interaction, not to see ads. An effective social ad strategy takes advantage of this reality. Social ads give companies the opportunity to start a conversation about their products with members of their target audiences.
  • One way startups can do this is by creating compelling content. Instead of directing people to a conversion page, direct them to a piece of content that explains why you developed your product and your broader mission, or has some other purpose than immediately completing a sale
If you have a piece of content that has high organic reach, when you put paid [advertising] behind that piece of content the magic happens. As more and more people see it, more and more people engage with it—because it’s a better piece of content. . . . Paid is fundamentally only as good as the content you put behind it. And content is only as good as how many people actually see it.
Content only goes anywhere if people care about it. . . . With social, it’s word of mouth on crack. You should only employ social advertising dollars when you’ve understood that a fire is starting around your message and you want to put more oil on it. Getting that spark started is based on what you’re trying to say: startups do the opposite of this all the time where they waste tens of thousands of dollars trying to push a message that nobody cares about.
With social platforms, the burden of success is on the advertiser as opposed to the platform.
  • If you’ve invested time and energy creating a great piece of content, spending a little bit of money to ensure that content gets wide distribution makes sense. At Airbrake, one of the companies Justin ran growth for, they promoted some of their best content on Twitter and Facebook. In one case, after spending just $15 on Twitter ads, they received hundreds of organic retweets, tens of Facebook likes, and two submissions to reddit and Hacker News. In total, this $15 drove tens of thousands of visits to Airbrake’s site. Just a bit of paid promotion sparked a fire of organic engagement with the content, which was an interview with Stripe’s CTO.

Major Social Sites

Here are some well-known social sites where you could advertise.

LinkedIn

LinkedIn—LinkedIn’s social network is made up of more than 250 million business professionals. LinkedIn ads allow targeting by job title, company, industry, and other business demographics, all factors you can’t easily target elsewhere.

Twitter

Twitter—Twitter also has roughly 250 million users. Twitter’s ads come in the form of sponsored tweets that appear in users’ feeds. Nikhil mentioned that one of the most effective approaches on Twitter is to turn on paid advertising around real-time events that your audience cares about (e.g., sportswear ads during major sporting events).

Facebook

Facebook—Facebook has more than one billion active users on its social network. From an advertising perspective, Facebook offers companies the ability to buy targeted ads based on users’ interests, pages they like, or even people they’re connected with. This granular targeting allows you to target very small groups of people. In fact, Gabriel once ran a test campaign that targeted only his wife! (He targeted her by her alma mater, zip code, and interest affinities, using a picture of their son to see how long it would take for her to notice. Not very long.)

The platform also allows you to reach the larger network of people connected through your fans on Facebook. As Nikhil said:

When you buy a Facebook ad, you’re buying more than just a targeted fan; you’re buying the opportunity to access that fan’s social graph. With the proper incentives, fans will share and recommend your brand to their connections.

StumbleUpon

StumbleUpon—With more than 25 million “stumblers,” StumbleUpon has a large potential user base looking for new and engaging content. An interesting feature about this site is that ads don’t surround the content on StumbleUpon—they are part ofthe content. When people hit the “Stumble” button, they will be directed to a paid piece of content that looks just like any other site on the network.

The downside to traffic from StumbleUpon is that its users are difficult to engage—most users are likely to click off your page as quickly as they came to it. This means you have to make sure to engage these people right away. Blog posts, infographics, and video content can do well on the site.

Foursquare

Foursquare—With more than 45 million users, Foursquare is the largest location-based social network. Foursquare ads can work well if you wish to reach a targeted, local population. Foursquare’s ad platform is rapidly evolving but generally allows companies to send out ads hypertargeted at particular locations or to people who have visited those or similar locations.

Tumblr

Tumblr—Tumblr is all about helping its 100 million–plus users discover high-quality content. Its ad platform allows brands to create and promote sponsored posts, which Tumblr’s many users can reblog and engage with.

Reddit

reddit—With more than 5 billion monthly page views and a thriving platform of more than 175 million monthly uniques, reddit is one of the most popular content sites in the world. reddit ads can take the form of sponsored links that hover at the top of reddit’s pages or sponsored ads along the sidebar. The most successful reddit advertisements are controversial or funny. These types of ads encourage redditors (the official name of reddit users) to engage with them by leaving comments and upvoting/downvoting as if they were any other content on the site.

Smart advertisers target communities (there are more than half a million) that are relevant for their product and engage with all the commenters on their ad. As a platform for online communities, the reddit network is vast. Targeting a community of bacon lovers or gay gamers? There are reddit communities for that (r/bacon and r/gaymers, respectively).

YouTube

YouTube—With more than one billion monthly unique visitors watching more than four billion hours of video, YouTube is by far the world’s largest video site. On their platform, brands can create ads that show before a video is played (known as pre-roll) and create banner advertisements on top of videos.

Others

Others—There are plenty of other major sites you can target for social ads—BuzzFeed, Scribd, SlideShare, Pinterest, etc. Because these sites were established more recently, advertising on them and even newer ones can offer a unique window of opportunity for substantial growth.

TARGETS

  • Contact small sites directly for display ads. Ask them to run your ads for a small fee. This is an underutilized strategy in display ads, especially in phase I. Study your competitors’ ads to get good ideas for A/B tests to run on your ads.
  • Use social ads to build awareness of products and create demand. The goal with social ads should be to build an audience, engage with that audience over time, and eventually move them to convert to customers. This indirect response strategy usually leads to more conversions than a direct response strategy that tries to get people to convert immediately.
  • Create compelling social content. The best way to build a presence and engage your audience on social sites is to concentrate on creating less content, but making it highly shareable. When your content is getting naturally shared, that’s the time to promote it further with social ads.

11. Offline Ads

  • Even today, advertisers spend more on offline ads than they do on online. There are many kinds of offline ads—TV, radio, magazines, newspapers, yellow pages, billboards, and direct mail. All of these can be utilized at almost any scale, from local campaigns to national ones
  • The demographics of each advertising medium are the most important factor to consider when making an offline ads purchase. For example, ads in the classified section of a newspaper will appeal primarily to an older crowd that still buys newspapers. You’ll want to think about location, gender, race, age, income, and occupation—and how each matches up with your target audience.
  • One way to find the best offline places to advertise is to ask your target customers. What magazines do they read, or radio stations do they listen to? Where do they see ads they actually remember?

OFFLINE ADS STRATEGY

  • In general, the cost of an offline ad depends on its reach. A billboard in Times Square goes for much more than one in the middle of Ohio because more people see it. Most offline advertisements work similarly.
  • Thanks to the wide variety of offline media available, you can scale your ad buys according to your budget and product phase.
    • Not sure if magazine ads will be a good channel for you? Buy a small ad in a niche publication and give it a test.
    • Want to see if newspapers reach your audience effectively? Buy a few advertisements in a local paper.
    • For as little as $300, you can put out a radio ad in a market you’re targeting and see how it performs.
  • Once you’ve established that offline ads are effective, you can save money by signing a longer advertising contract. With an up-front commitment, advertisers will give you a substantial discount.
  • To get really cheap offline ads, look for remnant advertising. Remnant advertising is ad space that is currently being unused. For example, publications accept almost any price when selling empty inventory near print deadlines: after all, it is a complete loss for them if they don’t sell that space.
If dealing with national magazines, consider using a print or “remnant ad” buying agency such as Manhattan Media or Novus Media that specializes in negotiating discounted pricing of up to 90% off rate card. Feel free to negotiate still lower using them as a go-between.
  • Offline ads are much harder to track as compared with online ads that have tracking built in. Successful offline tracking involves the use of unique Web addresses and promotional codes to measure effectiveness. For example, we could create flyers that link to tractionbook.com/flyer. By tracking visits to that specific URL, we could approximate how many visits originated from our flyer campaign.
  • When people signed up, Jason included a section that asked new customers, “How did you hear about us?” This question was designed to measure the efficacy of the company’s online and offline campaigns.

PRINT ADVERTISING

  • Print advertising encompasses magazines, newspapers, the yellow pages, flyers, direct mail, and local directories.
  • Among the different categories of offline ads, print trails only TV in terms of overall spending.

Magazines and newspapers

  • There are three general magazine categories: consumer publications that appeal to the larger population (these are the ones you see on newsstands and in grocery stores), trade publications covering a particular industry or business, and local magazines that you’ll see for free along sidewalks and near grocery stores.
  • You need to understand the reader demographics, circulation, and publication frequency of any magazine you’re considering. To get this information, just ask the magazine for its ad kit (also known as a media package, media kit, or press kit).
  • No matter how well you’ve targeted your audience, your magazine ad will not get a good response unless it is well designed. A compelling magazine ad will have an attention-grabbing header, an eye-catching graphic, and a tagline or description of the product’s benefits.
  • There are some ad campaigns that are uniquely suited to a newspaper setting. A few examples are time-sensitive offers (as for events or sales), awareness campaigns (often as part of a larger marketing effort across multiple channels), and widely publicized announcements (as for product launches).

Direct mail

  • Direct mail entails any printed advertising message (ads, letters, or catalogs) delivered to a specific group of consumers through the postal system.
  • It may surprise you to learn how effectively you can target customers through direct mail. You can build up a list of customers on your own or buy a list from a mailing organization. Simply do a Web search for “direct mail lists” to find companies selling such information. Beware that buying lists can be perceived as spammy, and can be a complete waste of money if they are untargeted.
  • You can buy lists grouped by demographic, geography, or both. These lists often sell for about $100 for one thousand consumer names, and a bit more for business names and addresses.
  • Here are a few good tactics to use if you are interested in pursuing direct mail:
    • If doing a postal direct-response campaign, provide a self-addressed envelope to increase the number of recipients who respond.
    • Use handwritten envelopes and cards to increase the chances of someone opening and reading your mailing.
    • Have a clear action you want the recipient to take, such as visiting your Web site, coming into your store, buying a certain product, or signing up for an email list.
    • Investigate bulk mail with the postal service to get reduced pricing.

Local print ads

  • Local print ads include buying space in local flyers, directories, calendars, or publications such as church bulletins, community newsletters, or coupon booklets. These print ads are a good way to test print advertising because of their modest cost: just a few hundred dollars can expose you to thousands of people in a targeted area. Ads in the yellow pages are similarly inexpensive.
  • Unorthodox strategies like hanging flyers in areas where your potential customers visit can be a surprisingly effective way to get some early traction for your company. For example, InstaCab hired cyclists to bike around San Francisco and hand out business cards to people who were trying to hail taxis. These were well targeted (it’s a good bet that someone hailing a taxi would appreciate an easier way of getting around) and got the company some good buzz and customer adoption early on.

OUTDOOR ADVERTISING

  • If you want to buy space on a billboard, you’ll probably contact one of three companies: Lamar, Clear Channel, or Outfront Media. They are the power players in this $6 billion industry. If you want to get a sense of what is available in a given area, go to the Web sites of the above companies and contact a local representative. They will give you PDFs of local available billboards, showcasing their locations and audience.
  • What does all this cost? Gabriel’s billboard cost $7,000 for a month. Billboards in less prominent locations can cost anywhere between $300 and $2,500 per month. Ads in Times Square, on the other hand, can run you $30,000 to $100,000 per month.
  • The cost of billboard space depends on the size of the ad, where it is located, the number of impressions your ad can provide, and the type of billboard it is (e.g., digital). Every billboard has an advertising score, known as a GRP score (Gross Ratings Points), based on the above factors. The number of potential impressions is based on the number of people in an area who could see the billboard: a full score means that a given billboard should reach 100 percent of the driving population during a month.
  • The major downside of billboard advertising is that it is difficult for people to take immediate action on what they see. It is dangerous for someone to visit a Web site, call a number, or buy a product while driving on a highway.
  • Billboards are extremely effective for building awareness around events—concerts, conferences, or other activities coming to an area. In Las Vegas, for example, you’ll see billboards touting acts and musicians performing in the coming weeks.
  • Another advantage of billboards and transit media is that they are replaced only when there are new ads to go up. While a radio, TV, or print ad will run only once, there’s always a chance your billboard will stay up long past the dates you paid for.

RADIO AND TV ADVERTISING

  • Radio ads are priced on a cost-per-point (CPP) basis, where each point represents what it will cost to reach 1 percent of the radio station’s listeners. The higher the CPP, the more it will cost you to run an ad on a station. This cost also depends on which market you’re advertising in, when your commercials run, and how many ads you’ve bought with that station.
  • An ad running on a station for a week is often $500 to $1,500 in a local market and up to $4,000 to $8,000 in a larger market like Chicago
  • TV advertisements are often used as branding mechanisms. Most of us remember famous Nike, Apple, or Wendy’s commercials. When you consider that 90 percent of consumers watch TV, and the average adult watches twenty-six hours of TV per week, this is an offline channel that must be considered.
  • Quality is critical for TV ads. Production costs for actors, video equipment, editing, sound, sound effects, and shooting can run to tens of thousands of dollars. In fact, some of the higher-end commercials you’ll see can cost upward of $200,000 to make.
  • In addition to the cost of creating an ad, there is the (national average) $350,000 for actual airtime. These costs make national TV campaigns tough to swallow for many small startups
  • Local TV spots on one of the 1,300-plus TV stations in the United States can be an effective and reasonably priced way to make an impression. Prices for local commercials can range from $5 to $50 per one thousand viewers for a thirty-second time slot.
  • Buying TV ads is a rather opaque process that involves a lot of negotiation, as there are no rate cards in the industry like those in print advertising. Thus, for larger media buys, you will likely want to hire a media buyer or agency to handle the many sellers out there and to ensure that you get a quality spot at a fair price.

CONCLUSION

  • Clearly, there are lots of ways to take advantage of offline advertising. The branding potential, cost, impact, and flexibility of this channel make it a really strong one to consider when looking at how to get traction in later phases.
  • The best way to approach this channel is to understand that there is no guaranteed way to predict what will work. But, if you keep at it, you may end up with an effective offline advertising strategy.
One thing I learned at Smart Bear is that I have zero ability to predict what’s going to work. There’d be a magazine where I thought, “This is just some piddly magazine, surely no one reads this,” and sure enough it was cheap (due to small circulation) and it’d do terrifically! Our ROI on some of those were incredible. And you just couldn’t predict, whether on circulation size or media type, how it was going to go. And it changed over time—an ad might be good for a quarter, or a year, and then decay slowly until it wasn’t valuable anymore. It was unpredictable and decayed over time: so the only thing we were left with was trying everything and measuring what worked. — Jason Cohen

TARGETS

  • Run cheap tests by first targeting local markets. It is hard to predict what will work, so it is often useful to run several small offline ad tests in parallel. Each offline ad medium is testable locally. Then you can scale up to regional or national campaigns if warranted.
  • Seek out remnant ad inventory for the highest discounts. You can use remnant ads for both initial tests and scaling this channel. The downside is less targeting ability, both in terms of demographics and timing.
  • Use unique codes or Web addresses to track the effectiveness of different offline ad campaigns. Make sure before you set up tests or campaigns that you can trace conversions back to specific offline ads.

12. Search Engine Optimization (SEO)

  • Almost all Internet users turn to search engines for answers. Search engine optimization (SEO) is the process of improving your ranking in search engines in order to get more people to your site.
At its base, SEO is starting with a content strategy and finding a way to attract relevant visitors through search engines. You have to intelligently design this kind of [content] and make sure search engines can find and rank that content.
  • SEO allows you to amplify all of the good things you’re already doing in other traction channels (publicity, unconventional PR, content marketing) and use them to bring in more customers from search engines.

SEO STRATEGY

  • The most important thing to know about SEO is that the more high-quality links you have to a given site or page, the higher it will rank.
  • A fat-head strategy involves trying to rank for search terms that directly describe your company. For example, a toy company that specializes in wooden toys might try to rank for “wooden toys.” These are all fat-head keywords
  • On the other hand, a long-tail strategy involves trying to rank for more specific terms with lower search volumes. That same toy company might try to rank for searches in that long tail like “poisonous chemicals in wooden toy blocks” or “wood puzzles for 3 year olds.”
  • When determining which strategy to use, you should keep in mind that the percentage of clicks you get drops off dramatically as you rank lower on a search results page. Only about 10 percent of clicks occur beyond the first ten links, so you want to be as high up on the first page as possible. Your ability to rank high on the first page should be a deciding factor in deciding whether to pursue a particular SEO strategy.

Fat-head Strategy

  1. To determine if a fat-head SEO strategy is worthwhile, first research what terms people use to find products in your industry, and then see if the search volumes are large enough to move the needle.
    • Google currently provides a useful tool for this process called Keyword Planner (part of Google AdWords). You can type in search terms that describe your products and then see the search volumes for these terms.
    • You can also get keywords by looking at your competitors’ Web sites and seeing what words they use in their home page titles and headers.
  2. You want to find terms that have enough volume such that if you captured 10 percent of the searches for a given term then it would be meaningful. You don’t want to spend resources ranking for a fat-head term that gets only two hundred searches per month.
  3. The next step is determining the difficulty of ranking high for each term. Using tools like Open Site Explorer, examine the number of links competitors have for a given term. This will give you a rough idea of how difficult it will be to rank high.
  4. Next, take steps to narrow your list of targeted keywords to just a handful. Go over to Google Trends to see how your keywords have been doing. Have these terms been searched more or less often in the last year? Are they being searched in the geographic areas where you’re seeking customers?
    • You can further test keywords by buying SEM ads against them. If these ads convert well, then you have an indication that SEO could be a strong growth channel using these keywords.
  5. Orient your site around the terms you’ve chosen. If you are an accounting software site and “small business accounting software” is your main term, include that phrase in your page titles and home page.
  6. Finally, get other sites to link to your site, ideally using the exact terms you want to rank for. For example, an article may read something like “XYZ Company releases version of small business accounting software” (where an underline denotes the link). Exact matches give you a significant boost, and also links from higher-quality sites matter more

Long-Tail Strategy

  • The majority of searches conducted through search engines are “long-tail” searches. These are longer terms that are highly specific—things like “gluten free for arthritis” or “private search engine.” Individually, searches for these terms don’t amount to much: together, though, they make up 70 percent of all searches.
  • A second way to evaluate a long-tail strategy is to look at the analytics software you have on your site (such as Google Analytics or Clicky). These applications will tell you some of the search terms people are using to get to your site right now. If you are already naturally getting a significant amount of traffic from long-tail keywords, then this strategy might be a good idea
  • If you do not have any content that is drawing people to your site via long-tail keywords, you have two choices.
    • First, you could create some Web pages, and then after a few months check your analytics.
    • Second, you could look at competitors’ Web sites to determine whether they are getting meaningful long-tail SEO traffic. Here are signs that they are:
      • They have a lot of landing pages. You can see what types of pages they are producing by searching site:domain.com in a search engine. For example, if I wanted to see how many landing pages Moz has created targeting long-tail keywords, I could search site:moz.com and get a sense of how many landing pages they have.
      • Check out Alexa search rankings and look at the percentage of visitors your competitors are receiving from search. If you look across competitors and one site receives a lot more visitors from search than others, you can guess they are using some kind of SEO strategy.
  • If you proceed with a long-tail SEO strategy, its success will boil down to your being able to produce significant amounts of quality content.
You build a machine that takes money on one end and spits rankings out the other. For example, with Bingo Card Creator I pay money to a freelancer to write bingo cards with associated content about them that get slapped up on a page on the Web site. Because those bingo cards are far too niche for any educational publisher to target, I tend to rank very well for them. For ten to twenty dollars per search term, you can pay someone to write an article that you won’t be embarrassed to put on your Web site. For many SaaS [Software as a Service] startups, the lifetime value of a customer at the margin might be hundreds or thousands of dollars. So they [articles and landing pages] don’t need much traffic at all on an individual basis to aggregate into a meaningful number to the business. The reason my business works is fundamentally because this SEO strategy works phenomenally well.
  • In our interview, Patrick told us about his Owls of East Asia bingo cards. He uses a landing page that specifically discusses owls of East Asia and has a custom bingo card template just for this long-tail topic. This page has resulted in about $60 worth of business over three years. With a $3.50 content creation cost, it was an investment worth making.
  • You can implement this tactic by designing a standard landing page with some basic content and a simple layout structure
  • Another way to approach long-tail SEO is to use content that naturally flows from your business. To evaluate whether you could use this tactic, ask yourself: what data do we collect or generate that other people may find useful?
  • Large businesses have been built this way: Yelp, TripAdvisor, and Wikipedia have all gained most of their traffic by producing automated long-tail content.

SEO TACTICS

  • Whether you pursue a fat-head or long-tail strategy, SEO comes down to two things: content and links.
  • Getting links is often more difficult because it involves people outside of your company. Here are some ways to build links:
    • Publicity—when you are covered by online publications, reporters will link to your Web site.
    • Product—with some products, you can produce Web pages as part of your product that people naturally want to share. A great example is LinkedIn profile pages.
    • Content marketing—creating strong, relevant content that people want to read, and thus share.
    • Widgets—giving site owners useful things to add to their sites, which also contain links back to yours.
  • There is a difference between creating amazing content that spreads like wildfire and hiring freelancers to write boilerplate articles for long-tail keywords. Both are valid strategies (and can work well in tandem), but there is a big difference in quality
  • Rand suggests using infographics, slideshows, images, and original research to drive links, as these are all things people naturally share.
  • Open Site Explorer can tell you how many links you are getting and where they are coming from.
  • In SEO, there are a few big don’ts. The biggest: don’t buy links. Buying links is against search engine guidelines and companies get heavily penalized for doing so. Similarly, trying to trick search engines in any way can lead to serious ranking penalties.

TARGETS

  • Find search terms that have enough search volume to move the needle for your company. If you can’t find enough search volume, or can’t rank high for those terms, SEO won’t be a great strategy for your business. If you identify some terms that could work, you can further qualify them by running search ads against them to test whether they actually convert customers.
  • Generate long-tail landing pages by using cheap freelancers. Or, if your product can naturally produce good long-tail content, use it to create the landing pages yourself.
  • Focus on how you will build links. Whether you pursue a fat-head or long-tail strategy, SEO comes down to two things: content and links. Link building is often the more challenging of the two. Creating amazing content is one way to quickly build links.

13. Content Marketing

CASE STUDY: UNBOUNCE

  • As we discussed earlier, many startups fall into the product trap—building a product before thinking about distribution. Unbounce, a company that provides simple landing page creation software, successfully avoided this trap. Literally from day one, founder Rick Perreault began sketching out the product features for Unbounce on the company blog. Rick’s first hire was actually a full-time blogger! As he said:
If we had not started blogging at the beginning the way we did, Unbounce would not be here today. . . . Our content still drives customers. Something we wrote in January 2010 still drives customers today. Whereas if I had spent money on advertising in January, that’s it. That money is spent. If you invest in content, it gets picked up by Google. People find it, they share it, and it refers customers almost indefinitely. By the time we launched in the summer of 2010, we were doing twenty thousand unique visitors per month to the blog. . . . It was up and running for almost a year before we launched. Now our blog is our primary source of customer acquisition. People write about Unbounce. Other people tweet about our posts. . . . Our blog is the centerpiece of all our marketing.
  • This blog-from-the-beginning approach allowed Unbounce to launch with an email list over five thousand strong. This wasn’t your typical startup product launch.
  • The Unbounce team relied heavily on social media to drive readers to their blog. After every post they wrote, they’d ping influencers on Twitter asking for feedback. They also engaged with their target customers by writing useful answers on targeted forums like Quora. Though actions like these may not scale, they’re okay when getting started because you’re building toward a point where your content will spread on its own. That’s exactly what happened with Unbounce, and eventually its content started spreading more organically.
  • Unbounce further capitalized on its blog traffic by giving away free infographics and e-books to grow its email list. This meant that when it finally opened up its product beta, Unbounce could email its list and launch successfully.
  • Getting to this point wasn’t as easy as it might seem. Even with awesome biweekly posts about online marketing, it took six months for the Unbounce team to see significant results from their blog. However, once they captured this significant audience, they never looked back.

CASE STUDY: OKCUPID

  • OkCupid is one of the most popular online dating sites in the United States and was acquired by Match.com for a reported $50 million. OkCupid approached its blog differently from Unbounce, making it the core traction channel only after five years of being in business. Sam Yagan told us that once they launched the blog in 2009, growth increased rapidly.
  • Much like Unbounce, OkCupid’s blog was the focal point of all its marketing activities. Unlike Unbounce, the OkCupid team wrote longer posts with less frequency. Each of OkCupid’s posts took a month to write and drew on the data they had from studying the usage patterns of their members. They intentionally wrote controversial posts (e.g., “How Your Race Affects the Messages You Get”) to generate traffic and conversation.
  • Because OkCupid was a free online dating site, it couldn’t afford to pay much to acquire customers—in fact, it never did any sort of paid advertising. This meant that traction channels without per-user acquisition costs (e.g., publicity, content marketing, SEO, viral marketing) needed to drive all of its growth.
  • Interestingly, the OkCupid team received much more organic publicity after launching the blog than they did when working with PR firms. CNN, Rachael Ray, TheNew York Times, and many other media outlets were interested in the blog topics they covered.
  • Their blog also had major SEO benefits. When they launched it, they were nowhere near the top of search results for the term “online dating.” About a year later, they were the first result for that highly competitive term.

CONTENT MARKETING TACTICS

  • The most common hurdle in content marketing is writer’s block. To overcome it, simply write about the problems facing your target customers. Every single industry has issues people struggle with. In Unbounce’s case, they wrote posts about landing page optimization, PPC (pay-per-click) conversions, and so on. OkCupid’s posts, such as “Exactly What to Say in Your First Message,” addressed the concerns of online dating users in an entertaining way.
  • Unbounce found that infographics are shared about twenty times more often than a typical blog post and have a higher likelihood of getting picked up by other online publications. For example, in 2012 Unbounce released the “Noob Guide to Online Marketing.” This infographic drove tens of thousands of downloads and thousands of paying customers. One year later it was still shared on Twitter about once an hour.
  • Most marketers fail to realize that quality is no substitute for quantity. Both Rick and Sam made it a point to say there’s no shortcut to creating quality content. If what you’re writing isn’t useful, it doesn’t matter how hard you try to spread your content on Twitter. It just won’t spread.
  • The secret to shareable content is showing readers they have a problem they didn’t know about, or at least couldn’t fully articulate. A solution is nice, but it’s not as good for drawing in readers as showing them they’ve been going about some aspect of their life all wrong
  • Unbounce engaged in any online forum where conversations were taking place about online marketing, and did its best to contribute. It was particularly successful reaching out to influential people on Twitter. It would simply follow marketing mini-celebrities and ask them for feedback on recent posts.
  • One of the best methods of growing your audience is guest posting. This tactic is especially powerful in the early days when you essentially have no audience to work with yourself.
  • As you move forward, monitor social mentions and use analytics to determine which types of posts are getting attention and which are not. Many bloggers are surprised at which posts do well.

CONCLUSION

  • Quick: name three venture capitalists or ask your startup friends to do so. Many people will mention Fred Wilson, Brad Feld, or Mark Suster. Why? Because they have popular blogs.
  • One of the best things about this traction channel is how it positions you as a leader in your space.
  • Having a strong company blog can positively impact at least eight other traction channels—SEO, publicity, email marketing, targeting blogs, community building, offline events, existing platforms, and business development.
[Our blog] drives search. It drives word of mouth. The blog is top of the funnel. People find the blog, and it’s attached to our Web site. We don’t market the blog, per se, but we’re constantly—several times a week—releasing content that gets shared and drives people to the blog.

TARGETS

  • If you blog, dedicate at least six months to it. A company blog can take a significant amount of time to start taking off.
  • Do things that don’t scale early on.Reaching out to individuals to share posts, for instance, is okay, because you’re building toward a point where your content will spread on its own. Contacting influential industry leaders (on Twitter, etc.), doing guest posts, writing about recent news events, and creating shareable infographics are all great ways to increase the rate of growth of your audience.
  • Produce in-depth posts you can’t find anywhere else. You need to create quality content to succeed in this traction channel. There is no silver bullet, but a decent approach is to write about problems your target customers have. Another approach (not mutually exclusive) is to run experiments or use data from your company that leads to a surprising conclusion.

14. Email Marketing

  • Email marketing is a personal channel. Messages from your company sit next to email updates from friends and family. As such, email marketing works best when it is personalized. Email can be tailored to individual customer actions such that every email communication is relevant.
If you’re running a real business, [email] is still the most effective way to universally reach people who have expressed interest in your product or site. For that, it really can’t be beat. — Colin Nederkoorn
  • Email marketing can be used for all stages of the customer life cycle: building familiarity with prospects, acquiring customers, and retaining the customers you already have.

EMAIL MARKETING FOR FINDING CUSTOMERS

  • Traction channels such as SEO or content marketing can help you build your email lists. At the bottom of your blog posts and landing pages, simply ask for an email address. Many companies require an email address for people to access premium content, such as videos or white papers. In our interview with Rick Perreault of Unbounce, he stated that this tactic was the single biggest driver of its email list growth.
  • Another popular approach to building an email list is creating a short, free course related to your area of expertise. These mini-courses are meant to educate potential customers about your problem space and product. At the end of the course you put a call to action, such as asking people to purchase your product, start a free trial, or share something with their friends.

EMAIL MARKETING FOR ENGAGING CUSTOMERS

  • Customer activation is a critical and often-overlooked component of building a successful product. “Activating” a customer means getting them to engage with your product enough that they are an active customer. For Twitter, it specifically means sending out a tweet or following five people. For Dropbox, it means successfully installing the application and uploading at least one file.
  • Email marketing is a great way to improve your customer activation rates. A popular approach is to create a sequence of emails that slowly exposes your new customers to the key features in your product. Instead of throwing everything at them right away, you can email them five days after they’ve signed up and say, “Hey, did you know we have this feature?”
[Y]ou create the ideal experience for your users when they sign up for your trial. You then create all of the paths they can go down when they fail to go through the ideal experience. And you have emails in place to catch them and help them get back on that [ideal] path.
  • For these emails, you should determine the steps absolutely necessary to get value from your product. Then create targeted emails to make sure people complete those steps. For those who fail to complete step one, create a message that automatically emails them when they’ve dropped off. Repeat this at every step where people could quit, and you will see a major uptick in the number of people finishing the activation process
  • You can also use initial emails to get customer feedback. Colin sends each new Customer.io signup an automated, personal email thirty minutes after they sign up. Here’s the email:
    • Subject: Help getting started?

      Hey {{ customer.first_name }},

      I’m Colin, CEO of Customer.io. I wanted to reach out to see if you need any help getting started.

      Cheers,Colin

    • He mentioned that the email receives about a 17 percent reply rate, which is fantastic as far as automated emails go. It opens the channel of communication between Colin and his customers. Through these replies he’s learned a great deal about what wasn’t working in the product, which has led to many improvements.

EMAIL MARKETING FOR RETAINING CUSTOMERS

  • For many businesses, email marketing is the most effective channel to bring people back to their sites.
  • Take Twitter as an example. If you’re an active Twitter user, think of every email you’ve ever gotten from them about someone mentioning you in a tweet, a friend of yours who just signed up, or their weekly digest of popular tweets you may have missed. Each one of those emails is meant to keep you active on Twitter.
  • Your retention emails will depend on the type of product you have. For example, if you have a social networking product, you could send a simple email to customers who haven’t signed in for two weeks. Dating services often showcase profiles or mention unread messages. More business-oriented products usually focus on reminders, reports, and information about how you’ve been using and getting value from the product.
  • For infrequently used products, email marketing can be the primary form of customer engagement. Mint sends you a weekly financial summary that shows your expenses and income over the previous week.
  • Email marketing is also one of the best channels to surprise and delight your customers. Brennan Dunn of Planscope (a project planning tool for freelancers) sends a weekly email to his customers telling them how much they made that week. Who wouldn’t want to get an email like that?
  • Some companies send emails that showcase your previous engagement with the product. For example, photo sites will send you pictures you took a year ago. These emails achieve both goals: they often make you feel good on an emotional level, and also invite you to come back and upload more pictures.

EMAIL MARKETING FOR REVENUE

  • Patrick said his email subscribers were seventy times more likely to buy one of his courses than those from other traction channels (targeting blogs, SEO, and content marketing).
  • A common way to drive revenue through email marketing is sending a series of emails aimed at upselling customers.
  • WP Engine Example

    As an example, WP Engine, a WordPress hosting company, uses such a campaign to get customers on one of their premium plans. They’ve built a WordPress blog speed tester tool (at speed.wpengine.com) where interested prospects can enter their site URL and email address to get a free report about their site’s performance.

    Over the course of a month, WP Engine will then send that prospect an email course about WordPress speed and scalability—three quick ways to improve your site speed, why hosting is important for business, etc. Near the end of this mini-course, WP Engine will make a pitch to sign up for its premium WordPress hosting service.

    This seven-email sequence leads to a better conversion rate than driving potential people to a sales landing page.

  • Email retargeting is another tool you can use for revenue. For example, if one of your customers abandoned a shopping cart, send her a targeted email a day or two later with a special offer for whatever item she left in the cart.
  • For feature-based freemium products, emails that explain a premium feature a customer is missing out on can have high conversion rates.
  • Similarly, if you run a scaled pricing business (e.g., you pay $9/month for five users, $20/month for ten users, and so on), you can set up special emails for customers nearing their plan limits and ask them to upgrade.

EMAIL MARKETING FOR REFERRALS

  • Due to the personal nature of email, it is also excellent for generating customer referrals. If a friend emails you to tell you about a new product she is enjoying, you’re far more likely to try it than if you saw her mention it briefly on Facebook.
  • Some consumer apps, and even some B2B companies like Asana, will ask their customers to import their address books to share the site with their friends. This marketing tactic touches elements of both viral and email marketing and can be extremely effective. In fact, many of the viral products you know of (Hotmail, Facebook, LinkedIn) grew by cleverly using email marketing.

EMAIL MARKETING TACTICS

  • Deliverability is a key factor in email. For many technical reasons, your email messages may not be reaching their intended recipients. Most companies use an email-marketing provider like MailChimp or Constant Contact to send their emails. These companies help ensure deliverability.
  • As with other traction channels, testing is essential to maximize this channel’s impact. Effective email campaigns A/B test every aspect: subjects, formats, images, timing, and more.
  • Timing is especially relevant to get higher open rates: many marketers suggest sending emails between nine a.m. and twelve p.m. in your customer’s time zone or scheduling emails to reach them at the time they registered for your email list (e.g., for people who signed up for your list at eight p.m., email them at eight p.m.).
  • One of email’s strengths is that it’s a way to get feedback from your customers. One trick Colin told us about was not to send any email that comes from a “Noreply” email address (e.g., noreply@facebook.com). Instead, use that opportunity to send the automated email from a personal address and allow the recipient to reply with questions or problems they have. This can be great for support, for feature requests, and for upselling existing customers.
  • Last, an effective email sequence will be meaningless if you don’t have great email copy. Copywriting is an art on its own, but we suggest checking out some of the resources and information that Copy Hackers provides. An email campaign can easily go from a waste of time to wildly profitable just by tweaking a few words and headlines.

TARGETS

  • Personalize your email marketing messages. Email marketing is a personal traction channel. Messages come into your inbox along with email from your friends and family.
  • Build an email list of prospective customers whether you end up focusing on this traction channel or not. You can utilize email marketing at any step of your relationship with a customer, including customer acquisition, activation, retention, and revenue generation.
  • Set up a series of automated emails. Often called life cycle or drip sequences, this technique works best when the series of emails adapts to how people have interacted with your product.
  • Use online tools to test and optimize email campaigns. These tools have built-in templates and A/B testing ability and will track open and click rates.

15. Viral Marketing

  • Viral marketing is the process of getting your existing customers to refer others to your product.
  • In the context of startups, literally “going viral” means that every user you acquire brings in at least one other user. That new user then invites at least one other user, and so on. This creates true exponential growth

VIRAL MARKETING STRATEGY

  • Viral marketing strategy begins and ends with viral loops. A viral loop in its most basic form is a three-step process:
    • A customer is exposed to your product or service.
    • That customers tells a set of potential customers about your product or service.
    • These potential customers are exposed to your product or service, and some portion become customers themselves.
  • The oldest form of virality occurs when your product is so remarkable that people naturally tell others about it—pure word of mouth
  • Inherent virality occurs when you can get value from a product only by inviting other customers. For example, if your friends don’t have Skype, the application is worthless. Apps like Snapchat and WhatsApp also fall into this category. This type of virality comes with the advantage of “network effects,” where the value of the network increases as more people get on it. That is, the more people who are on Skype, the more valuable it becomes.
  • Other products grow by encouraging collaboration. In this case, the product is still valuable on its own, but becomes more so as you invite others. Google Docs is useful alone, but it is far more valuable when used collaboratively. This type of viral loop can take longer to spread if your customers don’t need to immediately collaborate. However, once they do, strong network effects kick in as the service becomes a central tool around which collaboration occurs.
  • Another common case is to embed virality into communications from the product. Hotmail put “Get a free email account with Hotmail. Sign up now” as a default signature, and Apple similarly appends “Sent from my iPhone.” As a result, every message sent spreads the word about the product.
  • Products can also incentivize their customers to move through their viral loops and tell others about the product. Dropbox gives you more space if you get friends to sign up. Airbnb, Uber, PayPal, and Gilt give you account credits for referring the product to friends.
  • Companies like reddit and YouTube have grown virally by using embedded buttons and widgets.
  • Another type of viral loop leverages social networks to attract new customers to a product or service. In this case, a user’s activities are broadcast to his social connections, often more than once. If you’ve spent any time on Facebook, we’re sure you’ve seen your friends liking articles on other sites, playing songs on Spotify, or pinning content on Pinterest.
  • It is instructive to think about how each of these types could possibly apply to your product or service. You can combine them as well. In fact, when you can get multiple forms working together, your viral loops will be that much stronger.

Viral coefficient

  • To fully appreciate the viral loop concept and to understand whether viral marketing can work for you, you have to do a tiny bit of math. This viral math helps you quickly identify how close you are to getting traction through viral marketing, as well as which areas you need to focus on. The two key factors that drive viral growth are the viral coefficient and the viral cycle time.
  • The viral coefficient, or K, is the number of additional customers you can get for each customer you bring in.
  • The viral coefficient formula is:
    • K = i * conversion percentage
  • where K is the viral coefficient, i is the number of invites sent per user, and conversion percentage is the percentage of customers who sign up after receiving an invitation. For example, if your customers send out an average of three invites and two of those people usually convert to new customers, your viral coefficient would be:
  • K = 3 * (2/3) = 2
  • Any viral coefficient above 1 will result in exponential growth, meaning that each new user brings in more than one additional user, creating true exponential growth. Any viral coefficient over 0.5 helps your efforts to grow considerably.
  • There are two variables that affect your viral coefficient.
    • The first is the number of invites (i) that each user sends out. If you can increase the average number of invites that each user sends out, say from one invite per user to two, you will double your viral coefficient. To push this number up as high as you can, consider including features that encourage sharing, such as posting to social networks.
    • The second variable is the conversion percentage. If your product is being shared but not generating new customers, you won’t go viral. As with invites, if you double your conversion percentage (by doing things like testing different signup flows), you double your viral coefficient. The best signup flows reduce friction by making things simpler, such as cutting out pages or signup fields. For example, the conversion steps for a standard Web application often involve clicking on a link and filling out a form to create an account. In that case, you could break the conversion percentage into two percentages.
    • K = i * conversion percentage = i * click-through percentage * signup percentage

  • Your click-through percentage may be great, but your signup percentage may be subpar.
  • Viral cycle time is a measure of how long it takes a user to go through your viral loop. For example, if it takes an average of three days for invites to convert into customers, your viral cycle time is three days.
  • Shortening your viral cycle time drastically increases the rate at which you go viral, and is one of the first things you should focus on improving if using this channel. To shorten it, create urgency or incentivize customers to move through your viral loops.
  • Additionally, make every step in your funnel as simple as possible to increase the number of people who complete it.

VIRAL MARKETING TACTICS

  • To pursue this traction channel effectively, you need to measure your viral coefficient and viral cycle time from the start. Consider those measurements your baseline. Then you need to get your viral coefficient up and viral cycle time down to levels that yield enough new customers to produce steady growth for your business.
  • We suggest running as many A/B tests as you can. Best practice suggests focusing for weeks at a time on one major area (say your signup conversion rate), trying everything you can think of to improve that metric, and then moving on to another metric that needs improvement as you run out of ideas
Even expert teams will take one or two engineers working two to three months, minimum, to implement and optimize a new viral channel to the point where it’s growing quickly without any ad spend. Once it gets going, though, it becomes easier to incrementally improve and grow the product. You need a strong strategy, and need to spend considerable time and resources to get something going. As you come up with your initial strategy for viral loops, create a simple dashboard of what needs to go up to be viral. Understand how new users end up helping you acquire more new users and do a lot of A/B tests (several per week) to try and improve the metrics. — Andrew Chen
  • The best way to approach this testing is to map out every aspect of your viral loop. How many steps are in the loop? What are all the ways people can enter into the loop (landing pages, ads, invites)?
  • Literally draw a map of the entire process and try cutting out unnecessary steps (extra signup pages, unnecessary forms or fields to fill out, etc.) and increase areas or mechanisms where customers can send out invitations. Doing so will improve your viral equation by increasing your invites sent and your conversion percentage.
  • There are numerous viral mechanics you can build into your product, but to be really successful people need to like and repeatedly use the product.
  • A nonuser’s first exposure to a product often occurs when a current user sends an invitation. The nonuser will then have to decide what to do with the invitation or whether it’s worth her time to even open it.
    • Your goal in designing these invitations is to get potential customers to engage with the invite and follow the link (or take the next step) that the invitation contains.
    • Invitations that work best are short and succinct. Sign up for the most viral services you can think of and you’ll see what we mean. Additionally, personal hooks really help.
  • The pages that prospective customers land on from invitations are called conversion pages. Conversion pages work best when they use the same messaging as the invitations that preceded them. For example, if in the invitation you say so-and-so referred you to this product, you can put the exact same message on the conversion page.
  • Understanding exactly why people are clicking on your links and signing up (e.g., curiosity, obligation, etc.) will help you think of better ways to improve your viral loop.
  • Here are some of the more common items to test and optimize:
    • Button vs. text links
    • Location of your call to actions
    • Size, color, and contrast of your action buttons
    • Page speed
    • Adding images
    • Headlines
    • Site copy
    • Testimonials
    • Signs of social proof (such as pictures of happy customers, case studies, press mentions, and statistics about product usage)
    • Number of form fields
    • Allowing users to test the product before signing up
    • Ease of signup (Facebook Connect, Twitter login, etc.)
    • Length of the signup process (the shorter you can make the process, the higher your conversion percentage will be)
  • First focus on changes that, if they worked, would result in a 5–10x improvement in a key metric. This could be something like an entirely new email auto-responder sequence, a new Web site design, or a new onboarding flow. Once you’ve made big changes, then optimize the smaller stuff.
  • Almost no optimization is too small to test: even changing one word in a headline can have a significant impact. Because viral growth compounds, a 1 percent improvement can make a big difference over the long term.
  • With all viral (or near-viral) growth, there will be subgroups of customers growing far more rapidly than your total customer base. We call these subgroups “viral pockets.” Figure out if you have viral pockets by calculating your viral coefficient on distinct subsets of your customers, such as those from a particular country, age group, or other trait.
  • Since most viral loops are not self-sustaining, you need a constant stream of new customers entering your viral loop. This process is called “seeding.” When seeding new customers for your viral loop, you’re looking for people in your target audience who have not been exposed to your product. SEO and online ads are good, inexpensive candidates for seeding

CONCLUSION

  • Because of the potential to acquire free customers, many startups try to go viral. Andrew mentioned that he sees companies making the same mistakes:
    • Products that aren’t inherently viral trying to add a bunch of viral features
    • Bad products that aren’t adding value trying to go viral
    • Not doing enough A/B tests to really find improvements (assume one to three out of every ten will yield positive results)
    • Not understanding how users are currently communicating/sharing, and bolting on “best practice” strategies (Just add Facebook “like” buttons!)
    • Not getting coaching/guidance from people who’ve already done it
    • Thinking about virality as a tactic rather than a deep part of a product strategy
  • The best way to figure out the right kind of loop to build is simple: copy those who have done it before.
The easiest way, for a beginner—copy someone else’s viral loop until yours starts to work in a similar way. Copying someone else’s loop down to the detail is important, including text copy, etc. These are the things that drive performance. Make it something that the user wants to do, because it creates value from them. Skype with no contacts is useless—so by helping people import their address books and invite people, you’re doing them a service.

TARGETS

  • Build a viral loop into the product. There are several types of viral loops, including word of mouth, inherent, collaborative, communicative, incentives, embedded, and social. Startups can combine and change types over time, but generally these loops need to be built into the product to work successfully.
  • Shorten viral cycle time. The shorter this time, the more loops will occur and the faster you will grow.
  • Look for viral pockets. You might already be viral in a subgroup of your customers. Find that subgroup and focus on it.
  • More than in any other channel, test, test, test. Successful viral strategy involves constant testing, measurement, and trying new things. It is a numbers and creativity game. No test is too small, as small changes can have big effects over time. Viral loops that work well often have extremely simple components (forms, copy, email, etc.).

16. Engineering as Marketing

  • Your team’s engineering skills can get your startup traction directly by building tools and resources that reach more people. We call this traction channel “engineering as marketing.” You make useful tools like calculators, widgets, and educational microsites to get your company in front of potential customers.

ENGINEERING AS MARKETING STRATEGY

HubSpot

  • HubSpot, a marketing automation software company, has reached tens of millions in revenue in a few short years. One key to its success is a free marketing review tool the company created called Marketing Grader. When you enter your site’s Web address into Marketing Grader, you get back a customized report about how well you’re doing with your online marketing (social media mentions, blog post shares, basic SEO). This tool is free and gives you valuable information.
The early story of [Marketing] Grader is interesting. There were only three people at HubSpot at the time. My cofounder and I would regularly “sell” (in the early days, a lot of those sales calls were with friends, and friends of friends). One of the initial steps in the sales process was for me to get a sense for how good a given company’s Web site was at inbound marketing. My cofounder [Brian Halligan] would constantly send me Web sites he wanted me to take a look at so we could determine if they were a good fit. After a few days of this, I got tired of going through the manual steps (look at Alexa, look at their page titles, check out their domain, etc.). So I built an application to automate that process for me. On a related note, I had also started angel investing at the time, and I used the same process to assess the marketing savviness of potential startups I was considering investing in. Once the app was built (it didn’t take more than a few days for the initial version), I thought it might be useful for other people, so I registered “websitegrader.com” and made the app available publicly. We eventually started collecting email addresses in the app, and kept iterating on it. — Dharmesh Shah
  • Since HubSpot launched Marketing Grader, more than 3 million sites have used it. Dharmesh said that it accounts for a large portion of the fifty thousand–plus leads HubSpot gets each month.
  • Marketing Grader is so powerful for HubSpot because it precisely serves the needs of its target audience. It’s a low-friction way to draw leads into the HubSpot sales funnel. Engineering as marketing is particularly effective for HubSpot because Marketing Grader complements its primary product so well.

Moz

  • Another company that nails engineering as marketing is Moz, the leader in SEO software. Two of its free SEO tools, Followerwonk and Open Site Explorer, have driven tens of thousands of leads for Moz. Like Marketing Grader, each solves a problem that an ideal Moz customer has.
    • Followerwonk allows people to analyze their Twitter followers and get tips on growing their audience.
    • Open Site Explorer allows people to see where sites are getting links, which is valuable competitive intelligence for any SEO campaign.
  • A key feature of these tools is their ease of use: prospects simply go to the site and enter a domain name or Twitter handle. Once someone uses the tools, companies can begin to engage these potential customers through other traction channels like sales and email marketing.

WP Engine

  • The hosting market is saturated with hundreds of hosting companies, yet WP Engine has cornered the market on high-end WordPress hosting. This is thanks in part to its free tool that checks how fast your WordPress site loads.
  • The WP Engine speed testing tool asks for only an email address in exchange for a detailed report about your site’s speed. It also gives you the option to opt in for a free mini-course about improving the speed of your blog. Once WP Engine has a user’s email, it sends her tips about improving her site speed and ends with a sales pitch.
  • Dharmesh mentioned that it helps him to think of these tools as marketing assets with ongoing returns, rather than ads that result in a one-time boost.
  • With advertising (outbound marketing), the traffic you get generally stops when you stop paying. With inbound marketing, even after you stop producing new content, the old content can still drive ongoing visitors and leads.

ENGINEERING AS MARKETING TACTICS

  • One way to boost your efforts in this traction channel is to take advantage of cyclical behavior.
  • Take Codecademy’s Code Year microsite, which launched at the beginning of 2012. Many people claim to want to learn how to code, but don’t follow through. Code Year addressed that issue by asking people to enter their email address to receive a free lesson about programming each week during 2012. More than 450,000 individuals signed up on CodeYear.com, nearly doubling Codecademy’s user base at the time.
  • Similarly, Patrick McKenzie from Bingo Card Creator makes holiday-themed microsites for Halloween, Christmas, and other holidays. Since they are tied to the holidays, Bingo Card Creator can use them year after year. In Codecademy’s case, you could actually sign up for Code Year at any point during the year and still receive a lesson each week.
  • In 2011, Gabriel built such a microsite, DontTrack.us, which showed how Google tracks your searches and why that can harm you. The site raised awareness about these practices and spread virally. At the same time, readers learned that DuckDuckGo does not track people or store their personal information.
  • To really maximize impact, put your microsites and tools on their own domains. This simple technique does two things. First, it makes them much easier to share. Second, you can do well with SEO by picking a name that people search often so your tool is more naturally discoverable.

CASE STUDY: RJMETRICS

  • We spoke with Robert Moore, founder of RJMetrics (an e-commerce analytics company) to learn how they’ve used this traction channel to drive the majority of their leads and sales. As an engineer himself, Robert said he’s been using his engineering skills to bring in customers since he founded the company.
  • For example, RJMetrics uses its own product to discover interesting trends on some of the most popular social media sites like Twitter, Tumblr, Instagram, and Pinterest. For example, one popular post was entitled “BuzzFeed Posts: What’s the Magic Number for ‘Best Of’ Lists?”
  • These posts produced big traffic spikes when they launched, and led to a lot of long-tail opportunities as people discovered the content over time. Robert mentioned that they’ve been approached multiple times by writers for major publications who want to cite them as a source

CONCLUSION

  • Engineering as marketing creates lasting assets that can serve as the engine for your growth.
  • Building noteworthy tools that your target audience finds useful is a solid way to gain traction that also pays dividends down the road by helping build your SEO. A simple roadmap to executing this technical strategy includes:
    • Providing something of true value for free, with no strings attached.
    • Making that offering extremely relevant to your core business.
    • Demonstrating that value as quickly as possible.
I’m a big believer in using an engineering approach to marketing. But I’m biased (being an engineer myself). And yes, there are many other marketing channels available, but creating applications has a unique investment/return profile. Since it is considerably harder to build a very popular application, fewer people do it: so the “free apps” channel is usually less saturated. The best companies to use this apps-powered model are software companies. In this case, they can launch complementary apps—or subsets—for free. This not only creates value that draws people in, it also educates people on what the main product does. — Dharmesh Shah
  • Companies have a hard time using engineering resources for anything but product development. Any technical focus on something other than product seems wasted since engineering time is so expensive. As a result, most founders and product managers use all their engineering resources to build new features for a product or service that’s struggling to acquire customers. Don’t make the same mistake. Instead, consider using some of that engineering time to build a tool that moves the needle for your business.

TARGETS

  • Create a stand-alone, low-friction site to engage potential customers. Make sure it naturally leads to your main offering. The case for spending engineering resources on marketing becomes much stronger when you think about these marketing tools as long-term assets that bring in new leads indefinitely after only a small amount of up-front investment.
  • Look internally for site and tool ideas. Perhaps you have already started creating something for yourself that could also be used by potential customers? Another approach is to turn a popular blog post into a microsite.
  • Make them as simple as possible. Single-purpose tools that solve obvious pain points are best. Put them on their own Web sites and make them easy to find, particularly through search engines.

17. Business Development (BD)

  • Business development is like sales with one key distinction: it is primarily focused on exchanging value through partnerships, whereas sales primarily focuses on exchanging dollars for a product. With sales, you’re selling directly to a customer. With business development, you’re partnering to reach customers in a way that benefits both parties.
  • Many companies get traction through business development. Even Google, a company whose early success is often attributed only to a superior product, got most of its initial traction from two key partnerships. In 1999, it partnered with Netscape to be the default search engine for the popular Netscape Navigator Web browser. Google also reached an agreement with Yahoo!, then (and still) one of the largest Web properties in existence, to power its online searches. These two deals were critical to Google’s eventual success as the world’s largest search engine.

BUSINESS DEVELOPMENT STRATEGY

  • Here are the major types of business development partnerships:
    • Standard partnerships—In a standard partnership, two companies work together to make one or both of their products better by leveraging the unique capabilities of the other. One prominent example is the Apple/Nike partnership that resulted in the Nike+ shoe that communicates with your iPod or iPhone to track your runs and play music.
    • Joint ventures—In a joint venture, two companies work together to create an entirely new product offering. These types of deals are complex and often require large investments, long periods of time, and (sometimes) equity exchanges. If you’ve ever bought a bottled Starbucks Frappuccino or Doubleshot Espresso, you’ve purchased a product that’s the result of the decade-long joint venture between Starbucks and Pepsi.
    • Licensing—Licensing works well when one company has a strong brand that an upstart wants to use in a new product or service. To use another Starbucks example, the company lent its brand to an ice cream manufacturer that wanted to create Starbucks-flavored ice cream. Other startups, such as Spotify and Grooveshark, are forced into licensing agreements by the nature of their business. They can’t use music content without first licensing it from the record labels that own it.
    • Distribution deals—In these deals, one party provides a product or service to the other in return for access to potential customers. Groupon’s core business is structured like this: it works with a restaurant or store to offer a discount to Groupon’s mailing list. Paul English, founder of Kayak, told us how a distribution deal with AOL was responsible for Kayak’s early traction. Through this partnership, Kayak used its search technology to power an AOL-owned travel search engine, which drove a lot of traffic right out of the gate.
    • Supply partnerships—These types of partnerships help you secure key inputs, which are essential for certain products. As we’ll see, Half.com formed several to ensure that it had enough books to sell when it launched its online bookstore. Other supply partnerships include Hulu’s relationship with channel partners and deals between suppliers and companies like Walmart.
  • Business development can drive some amazing outcomes for your startup. However, getting traction from this channel requires something that few companies do well: strategic thinking.
  • For business development to work well, you must have a clear understanding of your company objectives. What metrics do you need to hit in order to maximize your chances of success? How can partnerships help you get there?
  • This sounds simple and obvious, but in practice it is difficult. If a big company says it’ll work with you, but only in this other way that doesn’t strictly align with your traction goal, it is still extremely tempting. So tempting, in fact, that many startups will waste resources on these deals even though they are off their Critical Path. Business development requires discipline.
  • Understanding a partner’s goals is key to creating a mutually beneficial relationship. Startups are often focused on themselves and their needs without considering why a potential partner should make the deal
It’s research and learning and understanding your partner’s business before you start picking up the phone or sending emails. You need to understand what’s on their side of the table—what are their issues?
  • You need to understand why a potential partner should want to work with you. What are their incentives? Just as you evaluate potential partnerships in terms of your core metrics, they will be doing the same.
  • You should also seek out forward-thinking partners. Often that means finding an advocate inside a large company or working with a company that has done deals with startups in the past.
Create an exhaustive list of all of your possible [partners]. Don’t ever list Condé Nast without listing every single other publisher you can think of. Make a very simple spreadsheet: Company, Partner Type (Publisher, Carrier, Reseller, etc.), Contact Person/Email, Size, Relevance, Ease of Use, and then a subjective priority score. That list should be exhaustive. There’s no reason why any company shouldn’t have fifty potential business development partners in their pipeline, maybe one hundred, and be actively working the phones, inboxes, and pounding the pavement to get the deals you need to get—be it for distribution, revenue, PR, or just to outflank a competitor. The latter is totally underutilized. If you go in and impress the top fifty folks in your space, it makes it that much harder for a competitor to get a deal done—because you’re seen as the category leader.
  • Once you have a list of potential partners, send it to your investors, friends, and advisers for warm introductions.
  • Chris Fralic suggests putting potential partners into buckets based on attributes. For example, you might categorize based on revenue numbers, distribution reach, or inventory capabilities. Then, at the end of this process, choose ten to twenty partners to focus your business development efforts on.
People tend to get caught up on the names—“is this a known name”—and place more emphasis on that than what might be more important elements. So I’d encourage people to think about the attributes of your partner. So rather than saying “I want to go after XYZ brand,” say “We want to go after Internet retailers that are between 50 and 250 on the IR [Internet Retailer] 500—because that puts them in this kind of revenue range—and have a director of e-commerce.”

BUSINESS DEVELOPMENT TACTICS

  • Once you have a few partners you’re targeting, the real action starts. You start approaching potential partners with a value-focused proposition that outlines why they should work with you. Often these are larger companies.
  • What do you have that they [big companies] need? You’re more focused than they are. You have an idea and you’re solving a problem. You’ve developed content or technology and you have a focus. That is very difficult to do at a big corporation.
  • To approach these deals, you want to first identify the right contact at your target company. Some companies will have a business development department that handles partnerships, but—depending on the deal—it could be someone like a product director or C-level executive you want to engage with.
  • The most important thing is to find out who is in charge of the metric you’ve targeted. If you think your partnership will help your partner sell more T-shirts, be sure to talk to the person most in charge of selling more T-shirts. If your product will help your partner get more satisfied power users, be sure to talk to the person most charged with pleasing power users. Just because you’re offering a Web site widget doesn’t mean the Web site team is the ideal set of stakeholders.
  • Once she is identified, you want to try to get a warm introduction to that person. With each introduction, you should provide the mutual contact with an overview of your proposal that can easily be forwarded. Then be sure to follow up and set time lines for the next steps. Chris Fralic mentioned that it was key for him to get a meeting or phone call set up as quickly as possible—sometimes even on the same day.
  • After the proposal stage comes negotiation of a term sheet. The key terms will usually be the lifetime of the deal, exclusivity, how payments work (if any), the level of commitment between partners, any guarantees in the deal, and revenue sharing agreements.
  • Both Chris and Brenda suggest making the negotiation and term sheet as simple as possible—often just one page. The simpler you can make it to work together (and the fewer lawyers who need to get involved), the easier partnering will be.
  • Keeping it simple is especially good advice for technology partnerships. With engineering time so valuable, do as much as you can to make it easy for potential partners to work with you. For example, Delicious built The Washington Post a custom interface for its readers to post bookmarks. Rather than involving the Post’s IT resources, Delicious made it easy to get it set up and going.
  • Once a deal is completed, obviously you want to maintain a positive relationship with the new partner. It’s also important to understand the driving factors that got the deal accomplished. Chris suggests making a “how the deal was done” memo documenting how long it took to get to milestones, key contacts, sticking points, what interested the prospect enough to become a partner, and other factors that influenced the completion of the deal. These memos help companies determine what’s working in their process and what could be improved upon.
  • Business development has historically been a high-touch process that includes a lot of personal interactions. Reaching out to partners, understanding their needs, and negotiating terms are all part of a traditional business deal. However, businesses recently have been moving to more low-touch business development. Low-touch BD utilizes tools like application program interfaces (commonly known as APIs), feeds, crawling technology, and embed codes to reach new distribution channels and grow your influence. These methods allow you to standardize your value proposition and get more deals done.
  • Nevertheless, it still makes sense to land a few traditional deals first, and then transition to low-touch partnerships.
  • Just building a great API does not mean people will come and use it. Landing those first few partners through traditional means ensures that someone is getting value from working with your startup. Later, once you have more demand, you can start to standardize and simplify the partnership and integration process.

TARGETS

  • Pursue mutually beneficial partnerships. In a standard partnership, two companies work together to make one or both of their products better by leveraging the unique capabilities of the other. Other major types of BD deals include partnerships focused on joint ventures, licensing, distribution, and inventory. You need to understand why a potential partner might want to work with you. What are their incentives? Just as you are evaluating potential partnerships in terms of your core metrics, they will be doing the same.
  • Focus on meeting your startup’s core metrics. Good business development deals align with your company and product strategy and are focused on strategic product and distribution milestones. Avoid deals that don’t directly align with your traction goal.
  • Create a pipeline of deals you’re constantly working on. For initial testing, you can reach out to a variety of potential partners to gauge interest.

18. Sales

  • Sales is the process of generating leads, qualifying them, and converting them into paying customers.
  • This channel is particularly useful for enterprise and expensive products because often customers desire some form of interpersonal interaction before a purchase.

SALES STRATEGY

  • For consumer products, your first customers will likely come through channels other than sales—SEO, SEM, targeting blogs, and the like. When targeting bigger businesses, however, closing those first few critical customers can be significantly more challenging.
Most of the time [their first customer] is going to be somebody they know or we know. For the most part, our clients are going into a market that they understand with technology that they have developed. We help them make a list of every project they’ve worked on and everyone they’ve worked with. They reach out and say, “Here is what we are doing: do you know somebody we should talk to that makes sense?” People who’ve developed expertise by working in a field for a while are typically able to get an initial meeting—cup of coffee or lunch, these kinds of things. Sometimes we encourage them to shift to a different market because we find out that the technology has more applicability and offers more value there. One of the first things we help them with is what we call a lunch pitch. This is a single piece of paper that has five to ten bullets and perhaps a visual that helps them focus the conversation, making sure they understand the prospect’s problem. The early conversations are all about exploring the prospect’s problem and pain points. — Sean Murphy
  • Talking to prospects about their problems is not only a necessary sales tactic, but also necessary for good product development.
We went to our potential customers, insurance companies, and proposed to do a short free consulting study that would provide [an assessment] of their operation. We would spend approximately seven to ten man-days of effort understanding their operations, and at the end we would give them a high-level presentation benchmarking them as compared to their peers. In return, we asked for feedback on what would make the best system that would meet their needs. In the end, we were able to work with over forty insurance companies this way. We were honest about our motives at all times, and we made sure to provide quality output. — John Raguin

SPIN model

  • When it comes to structuring your initial sales conversations, we suggest using the approach developed by Neil Rackham as outlined in his book SPIN Selling. It is a four-part question framework to use when talking to prospects, based on a decade spent researching 35,000 sales calls:
    • Situation questions. These questions help you learn about a prospect’s buying situation. Typical questions include How many employees do you have? and How is your organization structured?
      • Ask only one or two of these questions per conversation, because the more situation questions a salesperson asks, the less likely he or she is to close a sale. That’s because people feel like they’re giving you information without getting anything in return. This is especially true of executive decision makers who are likely more pressed for time. Make sure you ask just enough situation questions to determine if you’re talking to a likely candidate for a sale.
    • Problem questions. These are questions that clarify the buyer’s pain points. Are you happy with your current solution? What problems do you face with it?
      • Like situation questions, these questions should be used sparingly. You want to quickly define the problem they’re facing so you can focus on the implications of this problem and how your solution helps.
    • Implication questions. These questions are meant to make a prospect aware of the implications that stem from the problem they’re facing. These questions are based on information you uncovered while asking your problem questions. Questions could include: Does this problem hurt your productivity? How many people does this issue impact, and in what ways? What customer or employee turnover are you experiencing because of this problem?
      • These questions should make your prospect feel the problem is larger and more urgent than he or she may have initially thought. For example, your prospect may see hard-to-use internal software as just an annoyance, a necessary cost of doing business. Implication questions can help shed light on the problems caused by this hard-to-use software: Does it lead to employee overtime because they struggle to accomplish things efficiently? Does it decrease overall quality of work? Does it impact employee turnover?
      • Each of the above questions helps frame the issue as a larger one in your prospect’s mind. Then you transition to the final set of questions.
    • Need-payoff questions. These questions focus attention on your solution and get buyers to think about the benefits of addressing the problem. Such questions should stem from the implication questions you asked earlier, and can include: How do you feel this solution would help you? What type of impact would this have on you if we were to implement this within the next few months? Whose life would improve if this problem was solved, and how?
  • The SPIN (Situation, Problem, Implication, Need-payoff) question model is a natural progression. First you clarify that the prospect is a potential customer and break the ice (situation questions). Then you get them talking about the problem (problem questions). Next, you uncover all the implications of this problem (implication questions). Finally, you focus on how your solution addresses these implications and will solve their problem (need-payoff questions).
You get your first customers by picking up the phone
  • Tactically, setting daily or weekly targets for outbound calls can help you get through the process. You’ll be able to push yourself through some of those uncomfortable feelings (mainly stemming from rejections) with a concrete goal to work toward.
  • When making cold calls, be judicious about the people you contact. Cold calling junior employees is just as difficult mentally as calling more senior employees, but has a much lower success probability because they have less decision-making authority and industry knowledge.
  • Once you understand the potential customer’s problem and you think your solution can help solve it, you can start to focus conversations on closing the customer. Specifically, Todd recommends getting answers for five specific areas:
    • Process—How does the company buy solutions like the one you’re offering?
    • Need—How badly does this company need a solution like yours?
    • Authority—Which individuals have the authority to make the purchase happen?
    • Money—Do they have the funds to buy what you’re selling? How much does not solving the problem cost them?
    • Estimated Timing—What are the budget and decision time lines for a purchase?
  • After a successful first call, Todd suggests sending a follow-up email documenting what you talked about, including the problems your prospect faces and the next steps. He also suggests closing emails with a direct question such as “Will you agree to this closing time line?”
  • Unfortunately, many enterprise entrepreneurs do not put enough thought into deciding on their first customer. Identifying the wrong first customer can lead to wasted time and squandered resources.
One [problem] occurs when the prospect invites you in . . . [but] has no interest in buying what you have or will develop. They would like to learn a lot about this emerging technology area, or this problem area, or something like that. . . . The second situation that’s also a waste of time is when someone claims to be a “change agent.” He will tell you that your offering is going to have a huge impact; it’s going to transform all of General Motors, for example. Substitute your favorite lighthouse customer. Before you get started doing everything that he is telling you to do, you need to ask him, “Have you ever brought other technology into your company?” More often than not unfortunately he will say, “Well, no, but you know I’ve only been here six months, and this is what’s going to let me make a big difference here.” So the two typical problems are you end up giving away free consulting or you talk to somebody that in their own mind is this change agent, but they have no idea how to make it happen.
  • You want your first customers to be somewhat progressive and willing to work with you closely. As you’re still developing your product, you want their active involvement in helping you craft the best solution. Forming a strong relationship is crucial because you want to use your first few customers as references and case studies to give your startup some measure of credibility when you start designing your sales funnel.

SALES TACTICS

  • Picture a funnel. As applied to sales, you start with many prospects at the top, qualify the ones that make good customers in the middle, and then sell a certain number of them on your solution at the bottom
  • The first goal is to drive leads into the top of the funnel. Usually, this means using other traction channels to make people aware of your product. While cold calling or emailing can be an effective way to reach your first customers, David believes it’s less effective when trying to build a repeatable sales model:
I’m in favor of gaining traction through some kind of marketing channel first, then using sales as a conversion tool to close [those leads] into business. It’s very, very expensive to use cold calling, and really not that effective by comparison with using marketing to get some kind of qualified prospect and then using sales to close that prospect.
  • The next stage in a sales funnel is lead qualification. Here, you want to determine how ready a prospect is to buy, and if they’re a prospect in which you should invest additional resources.
  • Mark Suster, two-time entrepreneur and partner at Upfront Ventures, suggests a simple approach to bucket leads into three categories: A’s, B’s, and C’s:
I define “A deals” as those that have a realistic shot of closing in the next three months, “B deals” as those that you forecast to close within three to twelve months, and “C deals” as those that are unlikely to close within the next twelve months. “A deals” should get much of the salesperson’s time (say 66 to 75 percent of time), “B deals” should get the balance as each sales rep needs to build their pipeline and bigger deals take time. And the key to scaling is that “C deals” should get no time from sales. They should be owned by marketing.
  • In many organizations, marketing is in charge of generating leads and doing basic lead qualification. Then the sales team further qualifies and eventually closes the leads.
Marketing’s job in working with salespeople is twofold: To arm—which means to give the reps all of the sales collateral they’ll need to effectively win sales campaigns. This includes presentations, ROI calculators, competitive analyses, and so forth. To aim—which means helping sales reps figure out which target customers to focus on. It’s about helping weed out the nonserious leads from the urgent ones.
  • Once you’ve qualified your leads, the final step is to create a purchase time line and convert prospects to paying customers. Todd recommends laying out exactly what you are going to do for the customer, setting up the timetable for it, and getting them to commit (with a “yes or no”) to whether or not they will buy.
  • Remember that, no matter how good your sales team, the customer is the one who decides to buy your product. It is crucial to keep the customer in mind as you design your sales funnel, meaning you should make their decision to buy as easy as possible.
You want to recognize that your prospect has a series of issues and questions they will want resolved before they make a buying decision. These are things like “Am I sure that this is the best product?,” “Am I sure that this will work for my situation?,” “Will I get a good return on investment?,” “Will this integrate with a system I have working in place today?,” and so on. A lot of companies design their sales cycles around how they think things should work. I believe very strongly in the notion that you have to design it from the customer standpoint inwards, as opposed to your standpoint outwards, which is the normal way I see people thinking about this stuff. Once you know what that buyer’s questions are, you want to design your process to effectively address all of their questions and recognize what kinds of things need to be handled. Ideally, as many of these questions you can handle on your Web site, the better. Your job, once you have their email, is to answer all of their buying questions and then create a trigger that gives them a strong reason to buy.
  • You want to make purchasing your product as simple as possible. Some ways you can minimize blockages:
    • Removing the need for IT installs with SaaS (Software as a Service)
    • Free trials (including through open source software)
    • Channel partners (resellers of your products)
    • Demo videos
    • FAQs
    • Reference customers (such as testimonials or case studies)
    • Email campaigns (where you educate prospective customers over time)
    • Webinars or personal demos
    • Easy installation and ease of use
    • Low introductory price (less than $250/month for SMB, $10,000 for enterprises)
    • Eliminating committee decision making

TARGETS

  • Don’t rule out cold calling. Good first customers have a burning need to address a problem, are interested in your approach to solving their problem, and are willing to work with you closely. Sometimes cold calling is the only way to find them.
  • Build a repeatable sales model. An effective sales funnel has prospects enter at the top, qualifies these leads, and closes them effectively. Map out your sales funnel, identify blockages, and remove them. Keep the buying process as simple as possible.
  • Get the buyer to commit to time lines. To close sales effectively, get an affirmative at each point that you are on track to close. Always know exactly what steps are left.
  • Keep the customer’s perspective in mind.Talk to people who need your product and understand their common concerns. Address those concerns specifically on your Web site.

19. Affiliate Programs

  • An affiliate program is an arrangement where you pay people or companies for performing certain actions like making a sale or getting a qualified lead
  • Companies like Amazon, Zappos, eBay, Orbitz, and Netflix use affiliate programs to drive significant portions of their revenue. In fact, affiliate programs are the core traction channel for many e-commerce stores, information products, and membership programs.

AFFILIATE PROGRAM STRATEGY

  • Affiliate programs are frequently found in retail, information products, and lead generation.
  • Retail affiliate programs facilitate the purchase of tangible products and account for more than $2 billion annually. Amazon, Target, and Walmart have the biggest programs and pay affiliates a percentage of each sale they make.
  • The affiliates that join these programs vary widely, but generally fall into the following major categories:
    • Coupon/deal sites. These sites—RetailMeNot, CouponCabin, Brad’s Deals, and Slickdeals to name a few—offer discounts to visitors and take a cut of any sale that occurs. For example, when you search for “Zappos discount,” RetailMeNot is likely to rank highly for that search term. When you visit the RetailMeNot page that comes up, you get coupon codes for Zappos. If you click through and buy something using a code, RetailMeNot gets a percentage.
    • Loyalty programs. Companies like Upromise and Ebates have reward programs that offer cash back on purchases made through their partner networks. They earn money based on the amount their members spend through retail affiliate programs. For example, if a thousand members buy gift certificates to Olive Garden, Upromise will get a percentage of every dollar spent. Then they pay part of what they earn back to their members.
    • Aggregators. Sites such as Nextag and PriceGrabber aggregate products from retailers. They often add information to product listings, like additional ratings or price comparisons.
    • Email lists. Many affiliates have large email lists to which they will recommend products. They then take a cut when subscribers make purchases.
    • Vertical sites. Hundreds of thousands of sites (including individual blogs) have amassed significant audiences geared toward a vertical, such as parenting, sports, or electronics.
  • By far the largest affiliate network for information products is ClickBank, where affiliate commissions often reach 75 percent. ClickBank has more than 100,000 affiliates and millions of products.
  • Lead generation is a $26 billion industry. Insurance companies, law firms, and mortgage brokers all pay hefty commissions to get customer leads.
  • insurance companies are top Google AdWords spenders, often paying $50 to $100 for a single click!

AFFILIATE PROGRAM TACTICS

  • Your ability to use affiliate programs effectively depends on how much you are willing to pay to acquire a customer. After all, with this channel you are paying out of pocket for the lead or sale.
  • We recommend going through an existing affiliate network—something like Commission Junction, Pepperjam, ShareASale, or more specific networks targeted at your type of product. Using a network makes it easier to recruit affiliates because so many are already signed up on these sites.
  • Setting up an affiliate program on one of these existing affiliate networks is relatively easy, though it does require an up-front cost. In the case of Commission Junction, that cost is more than $2,000. However, if you successfully recruit high-performing affiliates through the network, affiliate sales will quickly cover the initial fee.
  • The other option is to build your own affiliate program independent of an existing network. With such a program, you recruit partners from your customer base or people who have access to a group of customers you want to reach.
  • One benefit of this approach is you don’t have to pay your affiliates all in cash. Instead, you can use the features of your product as currency.
  • The first place to look for potential affiliates is your own customer base. They are easy to recruit and work with because they are already familiar with and have an affinity for your brand.
  • After getting customers involved in your affiliate program, you will want to contact content creators, including bloggers, publishers, social media influencers, and email list curators. Monetizing blogs can be difficult, so these content creators often look for other ways to make money.
  • Well-established affiliate programs like those run by Amazon or Netflix have figured out exactly how much to pay their affiliates for each lead. As a startup, you are going to be less sure of your underlying business and should start with a simple approach. The simplest approaches are to pay a flat fee for a conversion (e.g., $5 for a customer who purchases something) or to pay a percentage of a conversion that occurs (e.g., 5 percent of the price a customer pays).
  • More established affiliate programs get more complex by segmenting products and rewarding top affiliates. eBay gives seasonal coupon codes to its affiliates for product categories it wants to push. Tiered payout programs are also popular. In this structure, affiliates get paid a percentage (or flat fee) of each transaction. The percentage is based on the number of sales you make—if you drive more transactions, your rate goes up, and you make more money.

Major Affiliate Networks

Here are the top affiliate networks, as well as a list of software tools that can help you build your own referral program without a substantial engineering investment.

  • Commission Junction—CJ has many of the largest Internet retailers on its platform. It is also somewhat pricey: it costs upward of $2,000 to sell your product through its network. This high cost, combined with the fact that CJ curates both affiliates and publishers for performance, creates a high level of quality in its network.
  • ClickBank—The leading platform for anyone selling digital products online (courses, e-books, digital media). ClickBank is relatively cheap to start with, as you need to pay only $50 to list a product on its platform.
  • Affiliate.com—Affiliate.com promises a very strict affiliate approval process, which it claims means higher-quality traffic for its advertisers.
  • Pepperjam—Started by Kris Jones (whom we interviewed for this chapter), the Pepperjam Exchange encompasses multiple channels (mobile, social, offline retail, print, etc.). Pepperjam promotes its customer support and transparency as selling points for its network, which costs $1,000 to join.
  • ShareASale—This affiliate network has more than 2,500 merchants and allows advertisers to be flexible in determining commission structures. It costs about $500 to get started.
  • Adknowledge—Adknowledge offers traditional ad-buying services in addition to affiliate campaigns. It also works in mobile, search, social media, and display advertising, giving advertisers access to affiliate and CPC outlets through one platform.
  • LinkShare—LinkShare helps companies find affiliates and builds lead-gen programs for them. Companies like Macy’s, Avon, and Champion use them to manage affiliate programs.
  • MobAff—MobAff is a mobile affiliate network that utilizes SMS, push notifications, click to call, mobile display, and mobile search to drive conversions for its advertisers.
  • Neverblue—Neverblue is targeted toward advertisers that spend more than $20,000 per month. It also works with its advertising partners on their advertisements and campaigns. It counts Groupon, eHarmony, and Vistaprint as some of its clients.
  • Clickbooth—Clickbooth uses search, email, and many Web sites to promote brands like DirecTV, Dish Network, and QuiBids.
  • RetailMeNot, Inc. (formerly WhaleShark Media)—This media company owns some of the most popular coupon sites in the world, including RetailMeNot and Deals2Buy.com. Companies can partner with RetailMeNot to drive coupon-based affiliate transactions through its sites, which often appear near the top of Google for any “term + coupon” search.

CONCLUSION

Kris stressed that more startups should take advantage of this traction channel. As he put it:

For startups that don’t have a lot of money, where you can’t just open a PPC [pay-per-click] account and start throwing darts, affiliate marketing seems to me to be a logical place to start. There’s really no guarantee that if you spend $10,000 on Google AdWords you’ll make more than that. If you were to compare affiliate marketing and PPC, the advertiser assumes the risk in PPC. If you set up poorly written and poorly thought out campaigns on AdWords, you’re going to have to pay for the click whether or not your ads suck, or whether or not they’re converting well. With affiliate marketing, you get to define what the transaction or the conversion is, and you also have tools available to mitigate low quality. For instance, if someone refers an e-commerce transaction to you but the credit card is declined, the affiliate commission is zero. If someone submits a lead form, but the lead doesn’t follow the rules you set out (a legitimate email address, a real postal address, etc.), you don’t have to pay for that. You don’t assume the risk. — Kris Jones

TARGETS

  • Test using an existing affiliate network. It already has affiliates, so you can start using this traction channel immediately.
  • Keep your payouts simple. Know how much you can spend to acquire a customer and keep it below that. As you get deeper into this channel you can test more complicated payout programs.
  • The next place you should look for more affiliates is your customers. They already like you, and so there may be a lot of them willing to sell for you.

20. Existing Platforms

  • Existing platforms are Web sites, apps, or networks with huge numbers of users—sometimes in the hundreds of millions—that you can potentially leverage to get traction.
  • Major platforms include the Apple and Android app stores, Mozilla and Chrome browser extensions, social platforms like Facebook, Twitter, and Pinterest, as well as newer platforms that are growing rapidly (Tumblr, Snapchat, etc.).

EXISTING PLATFORMS STRATEGY: APP STORES

  • The most efficient way for an app to get discovered in the app stores is through the top app rankings and featured listings sections. These rankings group apps by category, country, popularity, and editors’ choice.
  • Mark Johnson, founder of Focused Apps LLC, wrote about how app promotions usually work:
    • Ads get the [app] somewhere into the charts.
    • Now it’s in the charts, more people see it.
    • So it gets more organic downloads.
    • Which makes it go a bit higher up in the charts.
    • Now even more people see it and it gets more organic downloads.
    • People like it and start telling their friends to get it too.
    • It goes up higher in the charts.
    • Repeat from 5.
  • Companies use many tactics to get into the charts initially. They buy ads from places like AdMob, buy installs from companies like Tapjoy, cross-promote their apps (through cross-promotion networks or other apps they own), or even buy their way to the top of the charts through services like FreeAppADay.
  • However, for top rankings to happen sustainably, you need to have a compelling app that is rated highly on a regular basis. Ratings matter a lot—they influence individual choices to download an app, editors choose apps to feature based on them, and they’re often mentioned in any press coverage. That’s why you see even top apps continually asking you to rate them.
  • There are some tricks you can use, like asking people to rate your app right after you give them something useful, but really the base experience has to be excellent to get consistently high rankings
  • Web users visit dozens of different sites every day; to establish yours as a site they consistently visit can be difficult. A browser add-on allows people to get value from your product without consistently returning to your site.
  • Evernote, a memory-enhancement and productivity tool, saw a huge jump in customers when it launched its browser extensions. In its “2010 Year in Review” blog post, Evernote said Web usage went up 205 percent thanks to these extensions—and this from a company with more than 6 million users at the time!

EXISTING PLATFORMS STRATEGY: SOCIAL SITES

  • The use of social sites is constantly shifting as people change where they communicate online. Newer social platforms like Snapchat and Vine are adding users at a dizzying pace, and we’re sure others will follow them soon.
  • It makes sense to focus on platforms that are just taking off.
  • Social platforms that haven’t fully matured also haven’t built all of the features they’ll eventually need; you might be able to fill in one of those gaps. They also are less saturated, as larger brands are often slower to target up-and-coming sites.
  • There are thousands of other large sites and marketplaces that you can target to get customers. First, figure out where your potential customers hang out online. Then create a strategy to target potential customers on these existing platforms. Sites like Amazon, eBay, Craigslist, Tumblr, GitHub, and Behance have all helped startups build traction.

YouTube

  • YouTube got its initial traction by filling gaps in the Myspace platform. In the mid-2000s Myspace was the most visited social networking site in the world. Video sharing on the Web wasn’t user friendly yet—it was difficult to upload videos and put them on other sites.
  • Myspace didn’t have a native video hosting solution. YouTube stepped in and provided one that was simple: you could upload and embed a video in Myspace in a matter of minutes. Even better for YouTube, Myspace users were directed back to YouTube when they clicked on the embedded videos. This exposed many Myspace users to all of the great features and content available on YouTube, and was responsible for YouTube’s rapid early growth.

AirBnb

  • Airbnb saw much of its early growth come through Craigslist. Customers who used Craigslist found that Airbnb was a much simpler and safer solution. With this knowledge, the company’s engineers developed a “Post to Craigslist” feature that would allow you to list your bed on Craigslist. Though this feature eventually was shut down, it drove tens of thousands of Craigslist users back to Airbnb to book a room.

PayPal

  • PayPal, the leading online payments platform, used a similar strategy when it targeted eBay users as its first customers. In the beginning, PayPal itself purchased goods from eBay and required that the sellers accept payment through PayPal. This worked so well that PayPal proved more popular than the payment system eBay itself was trying to implement! This single-minded focus allowed PayPal to acquire a large percentage of people within one of the few groups of buyers and sellers that dealt with online payments at the time.

CASE STUDY: EVERNOTE

Case study

Since its founding, Evernote has focused on existing platforms as its core traction channel. We talked with Alex Pachikov, on the founding team of Evernote. His company was recently valued at over one billion dollars.

Evernote has made it a priority to be on every new and existing platform. It benefits from the platform’s initial marketing push and increases its chances of getting featured. As Evernote’s CEO, Phil Libin, puts it:

We really killed ourselves in the first couple of years to always be in all of the App Store launches on day one. Whenever a new device or platform would come out, we would work day and night for months before that to make sure Evernote was there and supporting the new device or operating system in the App Store on the first day. . . .

When iPhone launched we were one of the very first iPhone apps, so we were promoted and had a lot of visibility. When iPad launched, we were there on day one, not just with a port of our iPhone client, which a lot of other companies did. . . . [We had] a completely new designed version for the iPad even though we’d never seen an iPad before—we stood in line with everyone else. Same thing with Android devices and the Kindle Fire.

Being first can open you up to the opportunity to benefit from the early marketing and promotion about the platform itself. As Alex said:

Every year there’s a new platform, new device, new something, and as somebody who’s starting a company you should consider if there’s something really cool you can do on an upcoming platform. Now obviously you can’t plan if a platform is going to be successful, but you can [make some] reasonable guesses based on past experiences with a company.

I think people see this as gambling. People take the “I will support this platform when it has a million users” type of approach. That’s a fine thing to do if you are EA or Adobe or something like that. And maybe for Evernote a year from now, that’s the right thing to do. But for a startup, you really aren’t in that position. When a platform is popular, it’s crowded. . . . A lot of people have cool apps and could do really, really well if they were to get this initial push, and that initial push is free if you do it early. But you risk that all that effort is a waste.

Evernote was one of the first apps available for Android. Because it had some very cool functionality, it was featured in the Android store for six weeks straight, at a time when it was far less crowded than it is now. This gave Evernote hundreds of thousands of new customers, all because it was early and focused its engineering efforts on being first on the platform. Similarly, when Verizon picked up Android phones, Evernote benefited from the national marketing push Verizon did to promote its Android launch.

This build-early strategy doesn’t work in every case, especially when the underlying platform flops. Evernote took the same approach with the Nokia, Windows, and BlackBerry smartphone platforms, none of which moved the needle. Nevertheless, Alex is very happy with the overall strategy: when it works—as with Android—it more than makes up for the failures.

In the last few years, Evernote’s strategy has been to expand beyond its pure note-taking app and release many different apps for specific verticals (Evernote Food for food notes, Evernote Hello for remembering people, etc.). Because getting promoted in app stores has been its most effective growth tactic, this strategy enables Evernote to get featured and ranked in categories where Evernote’s main app does not appear.

At Evernote, Alex mentioned that they think hard about what types of features or apps would stand out to editors:

You have to think ahead. What types of things would Apple or Google really like? What are things that, if we were to do, Apple or Google or Microsoft would be looking for? And is there a natural fit between what we do and what they would be looking for?

This thought process has led to apps like Evernote Peek. Peek was an app that allowed you to turn your media (notes, videos, or audio) into study material that you interacted with using the iPad Smart Cover. While now discontinued, it felt magical at the time because it took advantage of a new Apple technology. It was so cool that Apple itself showcased it in a commercial!

Peek was featured in Apple’s education category, and was the number-one educational app for over a month. This exposure led to more than 500,000 new Evernote users who experienced the product through Peek, and was one of the strongest growth drivers for the company during 2012.

Though Evernote has seen most of its growth come through mobile channels, its platform strategy works perfectly well on nonmobile platforms. The important takeaway is that it is a good idea to focus on new and untapped platforms to generate growth. Chris Dixon, a partner at Andreessen Horowitz and the founder of Hunch before its acquisition by eBay, had this to say about platform-based growth:

Some of the most successful startups grew by making bets on emerging platforms that were not yet saturated and where barriers to discovery were low. . . . Betting on new platforms means you’ll likely fail if the platform fails, but it also dramatically lowers the distribution risks described above. — Alex Pachikov
  • Being first can open you up to the opportunity to benefit from the early marketing and promotion about the platform itself. As Alex said:
Every year there’s a new platform, new device, new something, and as somebody who’s starting a company you should consider if there’s something really cool you can do on an upcoming platform. Now obviously you can’t plan if a platform is going to be successful, but you can [make some] reasonable guesses based on past experiences with a company. I think people see this as gambling. People take the “I will support this platform when it has a million users” type of approach. That’s a fine thing to do if you are EA or Adobe or something like that. And maybe for Evernote a year from now, that’s the right thing to do. But for a startup, you really aren’t in that position. When a platform is popular, it’s crowded. . . . A lot of people have cool apps and could do really, really well if they were to get this initial push, and that initial push is free if you do it early. But you risk that all that effort is a waste.
  • Evernote was one of the first apps available for Android. Because it had some very cool functionality, it was featured in the Android store for six weeks straight, at a time when it was far less crowded than it is now. This gave Evernote hundreds of thousands of new customers, all because it was early and focused its engineering efforts on being first on the platform. Similarly, when Verizon picked up Android phones, Evernote benefited from the national marketing push Verizon did to promote its Android launch.
Some of the most successful startups grew by making bets on emerging platforms that were not yet saturated and where barriers to discovery were low. . . . Betting on new platforms means you’ll likely fail if the platform fails, but it also dramatically lowers the distribution risks described above. — Alex Pachikov

TARGETS

  • Figure out where your potential customers are hanging out online. They could be on major platforms, on niche platforms, or on some combination thereof. Then embark on a strategy to target these existing platforms.
  • Create a feature specifically to fill a gap for that platform’s users. Large companies have been built on the back of each major social platform by filling gaps with features that the platform was not providing itself.
  • Focus on new and untapped platforms. Or try new aspects of major platforms because there is less competition there.

21. Trade Shows

  • Trade shows offer you the opportunity to showcase your products in person. These events are often exclusive to industry insiders, and are designed to foster interactions between vendors and their prospects.
  • Early on, you can use this traction channel to build interest in what you’re building. As you get more established, you can use trade shows as an opportunity to make a major announcement, sell big clients, seal a partnership, or as an integral part of your sales funnel.

TRADE SHOW STRATEGY

  • The best way to decide whether to exhibit at an event is to visit as a guest and do a walkthrough the year before. Attending as a guest allows you to get a feel for an event without straining your budget.
  • If this isn’t possible, the next best option is to get the opinions of people who have exhibited at previous shows: How crowded was it? How high was the quality of attendees? Would you go again?
  • Brad Feld, a partner at Foundry Group, suggests following these steps when deciding which events to pick:
    • Set your goals for attending trade shows this year. For example, are you trying to get press, lure investors, land major customers, work out significant partnerships, or something else? Your goals should drive your decisions about which events to attend and how to approach them.
    • Write down all events in your industry.
    • Next, evaluate each event in the context of your goals. In particular, think about the type of interactions you want and whether these interactions take place at each event. For example, if you need to have long conversations with prospects to do customer development, seek out an event with an intimate atmosphere. If your goal is to interact with as many potential customers as possible, a crowded event would be a better fit.
    • Figure out how much you can spend per year and allocate this budget by quarter. This allows you to align events on your schedule with your budget while also giving you flexibility to reallocate in later quarters if company goals change.
    • Finally, work backward to see if attending a particular event makes sense given your quarterly budget. For example, let’s say you are attending Traction Trade Show and your goal is to increase sales. When you receive the attendee list from the conference organizer (ask for it if it is not provided), you see that ten thousand people are going. However, you estimate that only 30 percent of those people fit the profile of a potential customer, so the total number of people you can realistically target is three thousand. If it will cost you $10,000 to attend this trade show and the price of your product is $5,000, it may make sense for you to attend. That is, your trip will be profitable around the third sale with these numbers. Then the decision comes down to what other traction opportunities you have right now. However, if you are selling a $50 product, you probably won’t sell enough to make attending this trade show worth your while.

TRADE SHOW TACTICS

  • Your preparation for a trade show will determine how successful you will be. This is one of the few times during the year when nearly everyone in your industry is in one place; you’ll want to be at your best.
  • To prepare, make a list of key attendees you want to meet at the trade show. Then schedule meetings with them before you attend the event. Brian sent well-researched emails explaining what SureStop did and how its technology could benefit the people he wanted to meet. He also attached a one-pager with more information about the company.
  • Jason Cohen put it this way:
    • Set up meetings. Yes, meetings! Trade shows are a rare chance to get face time with:
      • Editors of online and offline magazines. Often overlooked, editors are your key to real press. I’ve been published in every major programming magazine; almost all of that I can directly attribute to talking with editors at trade shows! It works.
      • Bloggers you like, especially if you wish they’d write about you.
      • Existing customers.
      • Potential customers currently trialing your stuff.
      • Your vendors.
      • Your competition.
      • Potential partners.
    • Proactively set meetings. Call/email everyone you can find. It’s easy to use email titles which will be obviously non-spam such as “At [Trade Show X]: Can we chat for 5 minutes?” I try to get at least five meetings per day. Organizing dinner and/or drinks after the show is good too.
  • If publicity is one of your goals, reach out to media that will be in attendance. Media members attend trade shows specifically to see what’s going on in an industry—give them something to write about! This could be a new product, feature, or deal with a big customer.
  • Successful trade shows come down to the relationships you build and the impression you make on journalists, prospective customers, and potential partners.
  • Mark Suster, partner at Upfront Ventures, suggests hosting dinners for such people to strengthen these relationships:
  • The other secret conference trick that is orchestrated by the true Zen masters is to schedule a dinner and invite other people. It’s a great way to get to know people intimately. Start by booking a few easy-to-land friends who are interesting. Work hard to bag a “brand name” person who others will want to meet. All it takes is one. Then the rest of your invites can mention that person’s name on the guest list (name others, too . . . obviously) and you will be able to draw in some other people you’d like to meet. Another similar strategy is with customers. If you invite three to four customers and three to four prospects to a dinner with two or three employees and some other interesting guests you’ll be doing well. Potential customers always prefer to talk to existing reference customers than to talk to just your sales reps. Final tip: picking a killer venue is one of the best ways to bag high-profile people. Everybody loves to eat somewhere hot. However, sometimes a dinner can be too expensive for an early-stage company. So why not go in on the dinner with two other companies? That way you’re all extending your networks and splitting the costs.
  • When planning your booth, first determine where you want to be located on the show floor. If your goal is to reach many attendees (as opposed to targeting a few high-value prospects), you need visibility. That means you want a booth in a well-trafficked location and a marketing plan to get people to take notice. If your strategy is dependent on talking to just a few key partners, a great booth location and the added cost that comes with it doesn’t make as much sense. In fact, you may want to be situated in a very particular place, such as next to a specific established company.
  • No matter what your location, you will want to put together an impressive display. Having a big banner that says what you do, nice-looking booth materials, business cards, and a compelling demo are the basics.
  • Giveaways are an important way of getting some buzz and inbound traffic at a trade show. Coffee mugs and stress balls are tried and true, but you can get even more creative with more unique items (yo-yos, coconuts, cigar cutters) to stand out during the show. A play on the name of your company or your core value proposition gets people talking about your booth. For example, DuckDuckGo could give out duck key chains or sunglasses to showcase that they don’t track your searches.
  • One thing was clear: it pays to have an outbound strategy. Only 28 percent of our conversations were walk-ups. This means that employing an outbound strategy allowed us to extract between three and four times as much value from the show as we would have otherwise.
  • A proactive and inexpensive method that requires no creativity is giving away as many bags with your company’s name on it as possible. Most attendees travel with armloads of pamphlets, catalogs, flyers, and giveaways. Stopping each to offer them a bag to put it in gets them talking to you but, more important, gets your name displayed all over the conference area.
  • Many companies also do something particularly engaging within their booths to get people to stay there long enough to experience their full pitch.
  • When you do engage a person, each of the materials you give out should have a specific call to action (CTA). For example, if someone picked up a business card at your booth, it should have an enticing offer (e.g., download a free industry guide), along with a unique link to that download. Make sure this page is mobile optimized, as most of your visitors will be accessing the page from a mobile device.
  • One step beyond hosting dinners is throwing a party near the show center. Like dinners, these are a great way to loosen up and chat with others at the event. You could cosponsor these with other startups to keep costs reasonable.

TARGETS

  • Schedule meetings and dinners ahead of time. Identify your top targets and find a way to engage them individually at the show.
  • Investigate the efficacy of shows before committing. Attend shows this year you might want to exhibit at next year. Reach out to previous exhibitors.
  • Have an inbound and outbound strategy for your booth. Do something proactive and creative. Include a strong call to action on every item you give out.

22. Offline Events

  • Sponsoring or running offline events—from small meetups to large conferences—can be a primary way to get traction. Twilio, a tool that makes it easy to add phone calls and text messaging to apps, attracts its customers by sponsoring hackathons, conferences, and meetups, large and small. Larger companies like Oracle and Box throw huge events to maintain their position as market leaders. Salesforce’s Dreamforce conference has more than 100,000 attendees!
  • Offline events are particularly effective for startups with long sales cycles, as is often the case with enterprise software.

OFFLINE EVENTS STRATEGY

  • Conferences are the biggest and most popular type of offline event. Each year hundreds of startup-related conferences and thousands of business conferences are held worldwide.
  • You can benefit from a conference in any startup phase.
Twitter

Twitter launched nine months before SXSW in 2007 and was seeing decent amounts of traction, on the order of several thousand users. Because many of its early users were headed to SXSW, Twitter saw the conference as an opportunity to accelerate its adoption. As Twitter cofounder Evan Williams said:

We did two things to take advantage of the emerging critical mass:

1. We created a Twitter visualizer and negotiated with the festival to put flat panel screens in the hallways. . . . We paid $11K for this and set up the TVs ourselves. (This was about the only money Twitter’s ever spent on marketing.)

2. We created an event-specific feature where you could text “join sxsw” to 40404. Then you would show up on the screens. And, if you weren’t already a Twitter user, you’d automatically be following a half dozen or so “ambassadors,” who were Twitter users also at SXSW. We advertised this on the screens in the hallways.

Thanks to this conference-specific marketing, Twitter jumped from twenty thousand tweets per day to more than sixty thousand by the end of the conference. Twitter also won the SXSW Web Award, leading to press coverage and even more awareness of its service.

Lean Startup

Eric Ries wanted to broaden the audience for the Lean Startup principles he was promoting on his blog. However, he was afraid his message would get lost at a large conference like SXSW. Instead, he organized his own conference and invited founders of successful companies to talk about how Lean principles worked in their startups.

First, Eric tested demand for his conference by asking his readers if they would be interested in such an event. After a resounding yes, he sold conference tickets through his site and other popular startup blogs.

Startup Lessons Learned began as a one-day conference in San Francisco with just a few speakers and panels focused on Lean Startup concepts. The short event was attractive to individuals who didn’t want to spend a lot on travel or take time off work. In addition, Eric avoided the extra cost and coordination headaches that come with arranging a multiday event: flying in speakers, hotel stays, and so on. He made the commitment to attend as simple as possible. The result was a strong turnout and a great conference experience.

While he didn’t want people to have to travel to attend, he still wanted people from out of the area to find out what was happening at the conference. To this end, Eric live-streamed the conference to meetup groups across the country. The people who attended those meetups or watched on individual live streams were instrumental in promoting his ideas to a larger audience and making his book a bestseller.

Enservio

Other companies have built traction by holding more lavish affairs. This was the case with Enservio, a company that sells expensive software to insurance companies. Enservio was struggling to reach top executives in the insurance industry through other traction channels.

To get traction through offline events, Enservio went all out to organize the Claims Innovation Summit. They held it at the Ritz-Carlton in beautiful Dove Mountain, Arizona, for multiple days. They made sure the event didn’t feel like a sales pitch for their services. Instead, they pulled in prominent figures from major consulting firms, respected individuals in the insurance industry, and founders of hot startups to come speak. They then used this group of speakers to attract the industry executives who were their prospective customers. Not only could the executives learn from the speakers, but they could network and vacation at the same time.

The event successfully attracted top decision makers and established Enservio as an industry leader overnight. It has now established this conference as an annual event in its industry.

Companies with customers who have shared interests, who have a kind of community or at least a need for one, I think that’s the type of company that will benefit most. I don’t know that HitTail would be a good example of a company that could throw a good conference. . . . Our customers are all over the board (real estate, doctors, startups, etc.), so throwing an SEO conference probably wouldn’t be all that helpful. Any niche where the market is online and easily reachable would be a good one, because everyone wants to go to a conference. Any niche where you have recognizable names you can go after would also be good.
  • Instead of a conference, you may choose to connect with a target group of customers at a meetup. For example, if you’re a small SEO software company, you might hold a meetup where you discuss the latest and greatest SEO tactics.
  • Small meetup groups are more effective than you might expect, especially in the early stages. Seth Godin used meetups when launching his book Linchpin. He organized Linchpin meetups in cities all across the country through his blog. In total, more than ten thousand people attended these events, where they connected over ideas that Seth wrote about as well as built relationships with one another.
  • Great meetups can create lasting community connections. The meetup groups that watched the live stream of the first Lean Startup conference continue to meet years afterward: more than twenty cities still have regular “Lean Startup Circle” meetups. These events allow practitioners to continue to connect over the ideas in Eric’s book. They’ve also helped keep his book on the bestseller list.
  • Believe it or not, throwing a party can also be an effective way to get some traction.

OFFLINE EVENT TACTICS

  • Although MicroConf has become a huge event, Rob suggested that a day-long mini-conference could be a great way for a smaller startup to get traction. It can also be an easy and cheap way to test if there’s any interest among your audience for a larger event.
  • For example, you can select a topic relevant to your product and invite the founders of three local companies to come give short talks on the subject. You could also feature these founders on a panel about a particular topic. You might even take the “unconference” approach and have attendees suggest topics for roundtable discussion, and then allow them to vote on which discussions will take place.
  • A local university lecture hall is a good place to hold an event like this. Often, universities are willing to open their facilities if it’s for an educational purpose and if some of their faculty or students are participating. This type of mini-conference can be done for less than $500.
  • If your first event is a success, consider scaling up to larger events. The logistics of planning a larger event will take a lot more effort because you need more of everything. Sponsors may be interested in helping you cover the cost of the event. For MicroConf, companies with products built for startups offset the cost of putting on the conference.
  • Keeping attendee quality as high as possible is crucial so that those who attend the conference will learn a great deal both from the speakers and from other audience members. Rob has found the best way to do this is to make the ticket price relatively high, so that individuals with successful businesses are more likely to attend than those just starting out.
People need to think about doing things that don’t scale. Early on when you’re trying to get those first one thousand customers, you have to do things that don’t scale. You have to take more risks.
You can still build a business without being creative. If you don’t have creativity, you need money. You need one or the other.

TARGETS

  • Launch at a conference. Conferences are the biggest and most popular type of offline event. Launching at a conference has been a successful phase I conference tactic. If there isn’t a conference that directly brings together your target customers, consider creating one.
  • Test this channel first. Attend a couple conferences or host a few smaller meetups or a one-day mini-conference.
  • Throw a party. Having meetups or parties, either alongside conferences or across many cities, is another successful strategy to attract and reward prospective customers.

23. Speaking Engagements

  • It’s relatively easy to get started in this channel. Start by giving free talks to small groups of potential customers or partners. Speaking at small events can improve your speaking ability, give you some early traction, and spread your story or message. It’s also good for personal growth if you’ve never done it before
  • We recommend trying to give at least one talk even if you choose not to pursue this traction channel.
Speaking is funny. You know to me, it’s the old-school concept that teaching sells. . . . Teaching is what content marketing is all about: webinars, blog posts, and the like. I look at [these] things as the future of good marketing. The opportunity to teach and be in front of a room for forty-five minutes introducing your company and your story to potential customers is time well spent. — Dan Martell
  • This channel works well wherever there is a group of people in a room that—if you pitched them right—would move the needle for your business. This happens to occur more with enterprise and B2B businesses because they’re often at expensive conferences

SPEAKING ENGAGEMENT STRATEGY

  • You have to get the attention of event organizers to land speaking engagements. Event organizers need to fill time at their events. If you have a good idea for a talk and see an event that aligns with an area of your expertise, simply pitch your talk to the event organizers. If your ideas are solid, they will want you. This process becomes even easier as you become a recognized expert.
  • Rather than pitch them directly on what he wants to talk about, he contacts them and asks them about the ideal topics they want to have speakers cover at an event. Once that is known, he then crafts the perfect pitch: one that hits on key points the organizers want to cover.
  • To determine where you want to speak, make a list of the events in your industry. Different kinds of events have different crowds and different expectations of speakers. There are a few types of events you should be aware of:
    • Premier events are well regarded and attended national or international shows. Often, there will be only a few of these per year in an industry. These events will require much longer lead times to submit a proposal, often six to twelve months.
    • Regional events bring together industry players within a day’s drive. Depending on the event, expect to land a speaking engagement roughly two to four months before the show.
    • Local events draw city residents around a particular topic. As with regional shows, lead times can vary but are usually one to three months before the event.
  • Organizers consider timing, topic, and credibility when selecting a speaker. By establishing yourself as an expert on an appropriate topic and submitting proposals far in advance, you maximize your chances of securing one of the best speaking engagements at the target show.
  • Landing speaking engagements is far easier if you have expert credentials. After all, if you don’t “earn the right” to be onstage, the audience won’t give you the attention you deserve.
  • In addition to industry experience, conference organizers will want to see that you are a decent speaker. If you’re not well known as a speaker, they’ll be hesitant to book you, even for free.
  • Getting valuable early speaking experience is not difficult. Start by speaking for free at coworking spaces, nonprofits, and smaller conferences or events. Use these smaller-scale appearances to refine your talks and build your speaking reputation.
To become a speaker you have to speak once. If you speak and you’re good, people in the audience will ask you to speak at other events. That’s just how it happens. I’ve never marketed myself as a speaker; it’s not in my bio or anything. What happens is, you speak at a conference, people see it or talk about it, and you get invited to other ones.— Dan Martell

SPEAKING ENGAGEMENT TACTICS

  • When you start a talk, the audience is usually thinking about two questions: Why are you important enough to be the one giving a talk? What value can you offer me?These questions will be burning in their minds until you address them, so answer them immediately. For this reason, Dan told us he does his own introductions and highlights how he started and sold his two previous companies (Flowtown and Spheric) for millions.
  • Once you’ve captured the audience’s attention, keep it with a gripping story. All successful talks tell a story. Your story is about what your startup is doing, why you're doing it, and specifically how you got to where you are or where things are going.
  • Of course, we have only so many captivating stories. That’s why Dan gives the same one or two core talks, only slightly modifying each to fit the audience. He never does custom talks and always reuses his slides, so his speaking engagements are always well rehearsed and received.
  • Giving a limited number of talks is helpful in another way: it gives you more practice per talk, which helps you identify spots that may not be clicking with the audience. The more practiced and comfortable you are, the better your talks will be and the more you can improve them.
  • Record your speaking engagements. If you’re at an event of 250 people and you’ve just given your best speech ever, you’ve still reached only 250 people. However, if you can record your best speech ever, then you can post clips, thereby exposing your story to thousands of people who would never have seen it otherwise.
  • Leveraging social media to reach people outside of the conference is a similar tactic. Rand Fishkin of Moz tweets his slides before every presentation, which lets his followers find out what he’ll be talking about. Then, when he posts a video of his talk, there is already some buzz and interest in watching and sharing it.
  • Dan Martell will even try to leverage social media during his talk. He asks for the audience’s “divided attention,” meaning he wants them to tweet and share good content from his presentation as he gives it. To facilitate this, he includes his Twitter handle on every slide and asks people to tweet at him if they really identified with something he said. This way, he can find out the content his audience enjoyed the most, while also growing his reach.
  • On top of asking his audience to tweet and text, Dan also gives the audience a call to action at the end of his presentations. This is a simple request of the audience—something like asking them to sign up to a mailing list or to check out a link where they can see his slides. This tactic tells him whether or not members of the audience found the information engaging enough to act on it.
  • What if one conference asks for a twenty-minute presentation and another asks for sixty? It’s time-consuming to prepare a whole new talk: it’s more efficient to tailor your existing slides to a specific audience or event.
The best talks I’ve ever seen are where each slide is essentially a seven-minute story with a beginning, middle, and end. Once you get good at that, and you have these canned slides, you can change a sixty-minute talk to a twenty-minute talk just by taking slides out.
  • The slides for your presentation are an important part of any talk you’ll give. Every slide in your presentation should be engaging.
  • At most conferences there is a speakers’ dinner, where presenters get to meet one another and network. If there isn’t one scheduled, Dan usually takes the liberty of scheduling one.
  • Similar to trade shows, you can also do preparation ahead of time based upon who is likely to attend the event where you are speaking. Get a list of attendees from event organizers and contact people you would like to meet. Tell them exactly when and where you are speaking, and suggest meeting up afterward. Now that they’ve heard you talk they’ll be much more receptive to your pitch.
  • Speaking engagements are one of the few traction channels that can quickly cement your place in an industry. If you give the right talk at the right time to the right people, it can make you a respected industry leader overnight.

TARGETS

  • Remember that you are doing organizers a favor by presenting. Event organizers needto fill time at their events.
  • Submit authoritative proposals far in advance. Organizers consider timing, topic, and credibility when selecting a speaker. By establishing yourself as an expert on the right topic and submitting proposals far in advance, you maximize your chances of securing one of the best speaking engagements at the target show.
  • Tell a story onstage. Without a story, the audience will lose interest. We suggest telling a story about why you’re doing what you’re doing, and specifically present insights only you can give through your unique position as a startup founder. Make it exciting!

24. Community Building

  • Community building involves investing in the connections among your customers, fostering those relationships and helping them bring more people into your startup’s circle.

COMMUNITY BUILDING STRATEGY

  • Every individual we interviewed emphasized how helpful it was to have an existing audience to jump-start their community-building efforts.
Stack overwflow

Stack Exchange is a network of high-quality question-and-answer sites, the most famous being Stack Overflow. Joel Spolsky and Jeff Atwood founded the company in 2008. Both were already Internet famous: Joel as the founder of Fog Creek Software, and Jeff as a writer at codinghorror.com.

Thanks to their well-trafficked blogs, Jeff and Joel presented their ideas for Stack Overflow to readers who gave them feedback before the site launched. They even had the community vote on the name for Stack Overflow, and received nearly seven thousand submissions!

While this illustrates the power of an existing audience, it is an atypical startup experience. Few startups manage to get seven thousand customers after six months, much less seven thousand votes on the name of a site that doesn’t even exist. However, having an audience is not a prerequisite for building a successful community.

Startup digest

Chris McCann started Startup Digest by emailing twenty-two friends in the Bay Area about local tech events. To grow the list more, Chris started giving twenty-second Startup Digest pitches at events he attended. His pitches proved effective: membership grew into the low thousands in a matter of months. Today there are more than 250,000 members of the Startup Digest community, and it all started with those twenty-two friends and bootstrapping off local startup meetups.

  • People want to feel like they’re part of something bigger than themselves. You need to have a mission if you want to build an awesome community.
We had a manifesto, and an idea of what we wanted to accomplish. And people bought into the vision because it was about them being awesome. . . . [It is] about creating something that helps everyone in material and specific ways. It helps you get better at your job, at something you love doing. There was an idealism that people bought into with Stack Exchange, and we were out there talking about it all that time. — Jeff Atwood
  • Being open with your community is the best way to get them to buy into your mission
  • From our interviews we also discovered that it’s critical to foster connections among your community (through forums, events, and user groups). When you encourage your customers to connect around your startup, they feel more cohesive as a community and can come up with ideas that you may not think of yourself.
  • Community members love to hear from other members. But they would also love to hear from you. You will want to connect with your evangelists and let them know that you value them.
  • In reddit’s early days, any individual who wrote about reddit would get an email from cofounder Alexis Ohanian thanking them. Alexis also sent shirts, stickers, and other gifts to early users. He went so far as to coordinate an open bar tour for redditors, where redditors connected and drank on reddit’s dime.
  • A challenge with community building as you scale is keeping its quality high. The meaning of quality depends on the service the startup provides.
  • Stack Overflow wanted to create the best question-and-answer site for developers—a community that truly helped developers get better at their jobs. Upon launch, Jeff established strict guidelines (decided on in tandem with the community) so that only practical, answerable questions would be allowed. Then he placed these guidelines on the Stack Overflow FAQ. Because these community guidelines were prominently featured on the site, users often policed the site on their own—even more aggressively than Jeff himself would have. Not only did this keep quality high, but it kept members of the community engaged and invested in the future of the site.
  • Unfortunately, a common occurrence is that the quality of communities starts out strong but gets diluted over time as evangelists either leave or get drowned out by newer community members. This decline in the overall quality of the community causes more good people to leave, which creates a downward spiral from which many communities don’t recover. To prevent this negative cycle, it is important to focus on quality early on and set standards that can be maintained as the community grows.
  • Other startups like Yelp and Codecademy have built core groups of customers to accomplish their company goals. Yelp would be nothing without restaurant reviews from its users; many of Codecademy’s programming lessons are user generated as well.
  • Like building an asset, your customers can also help you develop your actual product. Not only does this kind of community improve your product, but they will love you for giving them the chance to help.
  • For software companies, their code is the product. Some companies open-source their code, making it freely available for anyone to use, modify, or improve. Tom Preston-Werner, founder of popular code hosting site GitHub, points out that open-sourcing code generates free advertising and a lot of goodwill. GitHub is beloved by developers everywhere because it allows anyone working on an open source project to use GitHub free of charge. This drove a lot of its early adoption: when a developer wanted to work on a side project, GitHub was the first place that came to mind.
  • Another use of community is for hiring. Everyone working at Gabriel’s startup DuckDuckGo was a member of the DuckDuckGo community first.
  • Hires that come from your community already buy into your mission. These are people you really want on your team—community members who didn’t just believe in your mission, but also took the initiative to help you achieve it.
I think building a community can be your traction. This is no small thing: it can truly get to crazy proportions on its own. That being said, there are definitely products and services that don’t lend themselves to community building. If I were doing something with advertising and retargeting, it might be hard to build a community around that. There are some businesses that lend themselves to doing this very well. Companies whose core function is the connecting of people are best set up to take advantage of community. Whether that’s a trade show thing, an investment thing, whatever: when a company’s underlying value is in bringing people together, and where people matter in the system, that’s where this community stuff can really take off. — Chris McCann

TARGETS

  • Cultivate and empower evangelists. Foster cross-connection among them and among community members in general.
  • Set high standards from the start. Focus on community quality early on and set strict standards that can be maintained as the community grows. You can build tools and processes into your community to help your community police itself.
  • Bootstrap off an existing audience. Find initial evangelists by sharing your mission with complementary communities online and at offline events.

APPENDIX: MIDDLE RING TESTS

Below are some basic middle ring traction tests to get you started in each traction channel. These tests are designed for phase I startups. As explained earlier, middle ring tests in phase I should cost less than a thousand dollars and take less than one month of time. However, please keep in mind that these may not be the best tests for you to run. You might come up with better tests in your Bullseye process.

Targeting Blogs—Contact ten niche blogs and try to get them to review your product. To make it really easy for them, offer to walk them through the product (in person if you can find local bloggers or connect with them at events). You can also make the offer even more enticing by giving them the opportunity to give something away to their audience (discounts, T-shirt contest, etc.). Alternatively, you could find blogs that don’t run advertisements and ask several if you could run an advertisement on them for $100/month.

Publicity—Contact five relevant local reporters about your company and try to get them to write about you. Local stories are much easier to get written since there is already local interest. Offer to meet them in person to walk through the product. Their phone numbers might be listed on their publication Web sites. Otherwise, try reaching out on Twitter or at events you know they’ll be covering.

Unconventional PR—Host a contest around your product. This contest could be as simple as a cash giveaway for creative product usage or as complicated as a game constructed around your product. Once it’s set up, try a bit of both paid media (e.g., Twitter ads) and earned media (e.g., local press and blogs) to promote your contest. Alternatively, try a more creative approach with an infographic or video you think could go viral with your audience. If you have a large incumbent competitor, it could be explaining how they do something poorly in some way (and at the end how you do it better).

Search Engine Marketing—Try four ads in Bing Ads (often cheaper than Google AdWords). These ads should be on keywords you’re highly confident will convert into long-term customers. Try some of these keywords even if they seem relatively expensive compared with keywords you’re less confident about. You want to figure out in the best-case conversion scenario whether SEM could work. Make sure before you turn them on that you have everything set up correctly to actually detect conversions (and not just clicks to your site). If you can’t automate that, then you can ask new customers how they heard of you (manually if necessary).

Social and Display Ads—Try a Facebook or Twitter ad campaign. Use their targeting capabilities to target two niche audiences that you think would really convert well. You can get very specific here, and you should. On Twitter, advertise against Twitter handles you think are directly related to your product (like industry leaders, aggregators, or even competitors). For Facebook, advertise against complementary affinity groups. If there are local areas you have a hunch would work better, for example, certain cities, then restrict your ads further to those areas. Make sure you try a few different images in your ads, as the image can have a major effect on performance.

Offline Ads—Advertise on a niche podcast. With these advertisements, the host usually reads your copy directly to his listeners. It needs to be niche enough where you think the audience would really like your offer, but still small enough where it is reasonably priced (as podcast ads can get expensive for larger audiences). Alternatively, run a few ads in local papers.

Search Engine Optimization—Test a long-tail SEO strategy by making some content-rich pages. Perhaps your product can naturally produce data for these pages, or maybe you have enough data from making and researching your product. Link to these new pages right from your home page (e.g., on the footer), as that will give them the highest rankings. Let relevant people know about your content and see if they’ll repost it with a link back to the original source. Alternatively, test a fat-head SEO strategy by identifying promising fat-head keywords and then running search engine ads to see how effective the traffic may be. This is a very similar basic test to Search Engine Marketing itself, though the keywords may be different.

Content Marketing—Start a company blog and write one blog post a week for a month. Promote your posts on Twitter and on link-sharing sites (e.g., reddit). If you see any significant audience growth and conversion, double down and commit to a few more months. Turn on comments for your posts and engage with any commenters. Try to write controversial or surprising posts, ideally using new data you’ve researched. Alternatively, do a couple of guest posts on other blogs.

Email Marketing—Contact ten email newsletters in your niche and advertise on at least two of them where it makes sense financially. If they don’t usually run advertisements in their emails, ask to sponsor the list for a week or month. Alternatively, develop a seven-email mini-course, where you teach something relevant to your product. Make a landing page for the course and drive some traffic to it. At the end of the mini-course, upsell prospective customers to becoming real customers of your product.

Viral Marketing—Build a viral loop into your product and measure your viral coefficient and viral cycle time. See which step is the weakest in your viral loop (signup percentage, number of invites, click-through percentage). Run five tests to improve this weakest step and see how it affects your viral coefficient. If it gets near 0.5, then you might be on to something.

Engineering as Marketing—Make a simple, free tool tangentially relevant to your company; for example, a calculator of some kind that would be useful to prospective customers. Put it on its own domain and name it something that people would search for. Collect contact information in exchange for using the tool. Reach out to anyone who uses your tool with a personal email about your main product.

Business Development—Write down three types of companies that could be useful to yours in terms of partnerships. For example, are there companies with complementary products? Identify some smaller players and reach out to two in each category, six in total. Have conversations with as many as will have them to gauge interest. Try to strike at least one deal.

Sales—List twenty local, prospective customers. Try to get warm intros to as many as possible and meet with them in person to discuss your product. Use the SPIN approach we presented in the Sales chapter. Alternatively, reach out cold over email to one hundred prospective customers who you think have a high likelihood of converting into real customers.

Affiliate Programs—Register your product at the most relevant major affiliate network (there is a list at the end of the Affiliate Programs chapter). Recruit twenty affiliates from this program using a simple and attractive payout structure. Contact each affiliate personally to walk them through the product, which will greatly increase the chances they will sell effectively. Alternatively, contact existing customers you think might be well connected to prospective customers and strike affiliate deals with them.

Existing Platforms—Identify the most relevant niche platform where your audience hangs out online (e.g., Craigslist, Tumblr, etc.). Research the best practices for promoting products on that platform and then do so with your product. Try some paid tools or advertising if available for the platform. Alternatively, make a simple browser extension and try to get featured.

Trade Shows—Follow the procedure outlined in the Trade Shows chapter to list all the obviously relevant events over the next year. Dig deeper on the next few months to make sure smaller events are on your list. Ask your local startup community if anyone has been to these events. Exhibit at the one that seems most promising. Alternatively, go to a bigger event as an attendee.

Offline Events—Put together a one-day mini-conference. Pull together a few regional speakers to speak during the day. Host it at a university, and leverage its resources. You may need to make a professor one of the speakers to make it work. Alternatively, sponsor several local events and ask to speak for a few minutes about what you’re working on at the beginning of the events.

Speaking Engagements—Contact three local meetup group organizers relevant to your product and ask if you can speak at an upcoming event. Present your company in the context of your personal story. How did you come to be where you are today? How are you uniquely solving a problem with your product? What are your ambitious plans? Alternatively, pitch a talk at a regional conference.

Community Building—Join three online forums where your customers hang out and engage on at least twenty threads on each. Do this over a month so you don’t look spammy. Similarly, don’t just plug your product directly; truly engage as a useful member of the community. Include references to your product where appropriate and in your signature. Alternatively, start putting together your own community using an online forum tool.