Book - Traction: how any startup can achieve explosive customer growth

  • Metadata:
    • author: Gabriel Weinberg, Justin Mares
    • title: Traction: how any startup can achieve explosive customer growth

Unprocessed highlights and reading notes (turn them into separate notes when revisiting the topic):

  • There are roughly 19 categories of traction channels for startups
  • In startups, traction trumps everything
  • Traction and product development are equally important for startups
  • In startups, traction and product should be built in parallel
    • product risk and market risk
  • When exploring traction channels, look at the customer portion that is most engaged
  • Choose startup traction channels using the bullseye process
  • Underutilized traction channelsXXX
  • Over time, all marketing strategies result in shitty click-through rates
  • You should always have an explicit traction goal you’re working towards

  • Traction is powerful. Technical, market, and team risks are easier to address with traction. Fund-raising, hiring, press, partnerships, and acquisitions all become much easier. In other words, traction trumps everything.
  • Traction is powerful. Technical, market, and team risks are easier to address with traction. Fund-raising, hiring, press, partnerships, and acquisitions all become much easier. In other words, traction trumps everything.
  • Traction is basically quantitative evidence of customer demand.
  • we discovered that startups get traction through nineteen different channels.
  • 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.
  • 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.
  • 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.
  • In contrast, waiting until you launch a product to embark on traction development usually results in one or more additional product development cycles as you adjust to real market feedback. That’s why doing traction and product development in parallel may slow down product development in the short run, but in the long run it’s the opposite.
  • 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.
  • 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.
  • Put half your efforts into getting traction.
  • Set your growth goals.
  • 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.
  • 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. Everyone starts off with biases.
  • 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.
  • 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?
  • 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.
  • When we looked at companies really taking off, they were usually employing underutilized channels and channel strategies.
  • 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).
  • For example, offline ads is a traction channel, and billboards, transit ads, and magazine ads are all channel strategies within offline ads.
  • 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.
  • In its most basic form, A/B testing is a science experiment with a control group (A) and an experimental group (B). A/B testing is often called split testing because for the best results you split people randomly into one of the two groups, and then measure what they do.
  • Andrew Chen, a startup adviser on growth, coined the Law of Shitty Click-Throughs: “Over time, all marketing strategies result in shitty click-through rates.” (“Click-through rate” refers to the response rate of a marketing campaign.) What this means is that over time, all marketing channels become saturated.
  • It is likely that your first channel strategy ideas are commonplace and have already succumbed somewhat to the Law of Shitty Click-Throughs. To combat this reality you should consistently brainstorm new channel strategies and conduct small experiments.
  • 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.
  • 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.
  • 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 always have an explicit traction goal you’re working toward.
  • 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.
  • 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!
  • A major function of this book is simply helping you overcome your biases against particular traction channels by educating you about them.
  • 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.
  • 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.
  • Targeting blogs prospective customers read is one of the most effective ways to get your first wave of customers.
  • 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,
  • Run tests on a variety of smaller blogs.
  • 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.
  • Notes: 1) Is targetting uni courses similar here?
  • 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.
  • Notes: 1) Ryan holiday
  • 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.
  • As Ryan said, “satisfaction is a nonviral emotion”—you want readers to do something after reading your piece, not just feel satisfied.
  • 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.
  • Help A Reporter Out (HARO),
  • Staying in contact with reporters over Twitter gives you a leg up when you eventually reach out to them with your more formal pitch.
  • 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.
  • 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.
  • 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.
  • 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.
  • Search engine marketing (SEM) refers to placing advertisements on search engines like Google,
  • Google’s AdWords is the main platform
  • if you can run a campaign that breaks even after a short period of time (as Inflection did after a few weeks), then SEM could be an excellent channel for you to focus on.
  • 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.
  • 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.
  • 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.
  • TARGETS Use search engine ads to test product positioning and messaging (even before you fully build it!).
  • 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.
  • 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.
  • 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.
  • The goal of social ads is often awareness oriented, not conversion oriented.
  • “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.”
  • People visit social media sites for entertainment and interaction, not to see ads. An effective social ad strategy takes advantage of this reality.
  • 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.
  • 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.
  • In general, the cost of an offline ad depends on its reach.
  • Remnant advertising is ad space that is currently being unused.
  • Think of those “We buy ugly houses” billboards or any of the repetitive billboards that you see all over the place: they are likely using this approach.
  • Many young people still buy magazines. Not many young people still buy newspapers offline.
  • Run cheap tests by first targeting local markets.
  • Notes: 1) Most of the chapter does not apply to me, however local magazines could be promising
  • If you’re new to SEO, we recommend starting with the Moz Beginner’s Guide to SEO to learn the fundamentals.
  • fat head and long tail. Let us first explain these strange names. Consider all the searches that people make, sorted by the number of times that search is made. At the top are one- and two-word searches like “Dishwashers,” “Braves,” and “Facebook.” They make up about 30 percent of all searches. The other 70 percent are longer searches that don’t get searched as much, but in the aggregate add up to the majority of searches made.
  • Fat-head Strategy
  • 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.
  • Sometimes you cannot find any good terms because your product category is so new that there is no search demand for it yet.
  • Because it is difficult to rank high for competitive (fat-head) terms, a popular SEO strategy for early-stage startups is to focus on the long tail.
  • 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.
  • Then use oDesk or Elance to find freelancers willing to churn out targeted articles for long-tail topics that your audience is interested in.
  • 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. The high-quality content is useful in natural link building, especially for fat-head strategies.
  • Rand suggests using infographics, slideshows, images, and original research to drive links, as these are all things people naturally share. Since the end goal is to get links, you’ll want to specifically target people who will link back to you. This
  • Open Site Explorer can tell you how many links you are getting and where they are coming from. You can also look at your competitors’ link profiles to get ideas of other places to target for link building.
  • The most common hurdle in content marketing is writer’s block. To overcome it, simply write about the problems facing your target customers.
  • 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.
  • 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.
  • 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.
  • Many companies require an email address for people to access premium content, such as videos or white papers.
  • Another popular approach to building an email list is creating a short, free course related to your area of expertise.
  • In addition to your own email list, consider advertising on email newsletters complementary to your product.
  • With these targeted emails, Dropbox has increased the chance that you will return to the product and become an active user. 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.
  • Subject: Help getting started? Hey , I’m Colin, CEO of Customer.io. I wanted to reach out to see if you need any help getting started. Cheers, Colin
  • Any sort of communication telling your customers how well they’re doing is likely to go over well. Patrick McKenzie, whom we interviewed for SEO, calls this the “you are so awesome” email.
  • Notes: 1) Look how many exercises you completed!
  • many companies like WP Engine now use advertising to drive leads to a landing page where they ask for an email rather than a sale. They then will use email marketing to sell a prospect over the course of a month or so.
  • 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). Intead, use that opportunity to send the automated email from a personal address and allow the recipient to reply with questions
  • As a result, companies can go viral faster than ever before. Dropbox, Instagram, Snapchat, and Pinterest are great examples: they all leveraged virality through these super-platforms to acquire tens of millions of users in just a few years.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • To pursue this traction channel effectively, you need to measure your viral coefficient and viral cycle time from the start.
  • 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.
  • For example, you may be taking off in Indonesia while not doing as well in Australia. Once you find a viral pocket, you may want to cater to this group by optimizing text in their native language or some other way that will improve their experience.
  • 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.
  • You make useful tools like calculators, widgets, and educational microsites to get your company in front of potential customers.
  • Marketing Grader is so powerful for HubSpot because it precisely serves the needs of its target audience.
  • resources on marketing becomes much stronger when you think about the resulting tools as assets. These tools have the potential to become a continual source of leads that make up the majority of your traction.
  • CONCLUSION Engineering as marketing creates lasting assets that can serve as the engine for your growth.
  • 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.
  • Joint ventures—In a joint venture, two companies work together to create an entirely new product offering.
  • 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.
  • Distribution deals—In these deals, one party provides a product or service to the other in return for access to potential customers.
  • 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.
  • Once you have a list of potential partners, send it to your investors, friends, and advisers for warm introductions.
  • 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
  • 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.
  • The most important thing is to find out who is in charge of the metric you’ve targeted.
  • 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.
  • 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.
  • Notes: 1) Integrating with the APIs of others is a modern form of business development
  • 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. Scaling this traction channel requires you to design and implement a repeatable sales model, which we cover in this chapter.
  • “Here is what we are doing: do you know somebody we should talk to that makes sense?”
  • Situation questions. These questions help you learn about a prospect’s buying situation.
  • 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.
  • Problem questions. These are questions that clarify the buyer’s pain points.
  • 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
  • These questions should make your prospect feel the problem is larger and more urgent than he or she may have initially thought.
  • 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
  • The SPIN (Situation, Problem, Implication, Need-payoff) question model is a natural progression.
  • Ordinarily, it’s somebody who is one level or two levels up in the organization; they’ve got enough perspective on the problem and on the organization to understand what’s going to be involved in bringing change to the organization. As we work with them they may take us up the hierarchy to sell to more senior folks. We don’t tend to start at the top unless we are calling on a very small business, in which case you’ve got to call on the CEO or one of the key execs because no one else can make any decisions.
  • Notes: 1) Phd and postcocs might be easier than professor
  • 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.
  • 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.
  • 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,
  • Mark has this to say about marketing and sales working together: 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.
  • 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?,”
  • 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.
  • Some large retailers like Amazon and eBay run their own affiliate programs, but this is rare. These programs involve recruiting, managing, and paying thousands of affiliates, which is too complex and expensive for most companies to manage themselves. It is much more convenient for online retailers to go through existing retail affiliate networks.
  • The most efficient way for an app to get discovered in the app stores is through the top app rankings and featured listings sections.
  • The most efficient way for an app to get discovered in the app stores is through the top app rankings and featured listings sections.
  • 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.
  • Notes: 1) The challenge is to get into the charts on the first place
  • but really the base experience has to be excellent to get consistently high rankings.
  • Every major platform has similar stories. Bitly fulfilled the need to share shortened links on Twitter and saw most of its adoption from such use. Imgur built its image-hosting solution for reddit users, and has seen an explosion in usage as a result. This pattern repeats itself time and time again.
  • Notes: 1) Filling in gaps of larger platforms seems to work well
  • 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.
  • The important takeaway is that it is a good idea to focus on new and untapped platforms to generate growth.
  • 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.
  • The best way to decide whether to exhibit at an event is to visit as a guest and do a walkthrough the year before.
  • The best way to decide whether to exhibit at an event is to visit as a guest and do a walkthrough the year before.
  • Sponsoring or running offline events—from small meetups to large conferences—can be a primary way to get traction.
  • Such events are especially important when your target customers do not respond well to online advertising and do not have a natural place to congregate online.
  • You can benefit from a conference in any startup phase. In phase I, where smaller groups of people can move the needle, attending meetups and events is a prime way to do so.
  • 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.
  • 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.
  • You can start your own meetup, join an existing one, or even sponsor an event where your prospective customers will be. Meetup.com is the most popular site for doing so.
  • You can start your own meetup, join an existing one, or even sponsor an event where your prospective customers will be. Meetup.com is the most popular site for doing so.
  • 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.
  • Rob also made a few key points about creating a great event. 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.
  • One of the reasons offline events are effective is that so few startups are doing them.
  • 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: Mark Zuckerberg has talked about how improving at public speaking has vastly improved his management ability.
  • You have to get the attention of event organizers to land speaking engagements. Event
  • Steve Barsh, a serial entrepreneur and former CEO of PackLate, has successfully pitched conference organizers to present many times. 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.
  • Community building involves investing in the connections among your customers, fostering those relationships and helping them bring more people into your startup’s circle. We interviewed the founders of reddit,
  • Community building involves investing in the connections among your customers, fostering those relationships and helping them bring more people into your startup’s circle.
  • Every individual we interviewed emphasized how helpful it was to have an existing audience to jump-start their community-building efforts.
  • 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.
  • Community members love to hear from other members. But they would also love to hear from you.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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
  • 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
  • make the offer even more enticing by giving them the opportunity to give something away to their audience
  • 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.
  • Unconventional PR—Host a contest around your product.
  • 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.
  • 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.
  • 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.
  • podcast. With these advertisements, the host usually reads your copy directly to his listeners.
  • Offline Ads—Advertise on a niche podcast. With these advertisements, the host usually reads your copy directly to his listeners.
  • Search Engine Optimization—Test a long-tail SEO strategy by making some content-rich pages.
  • 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).
  • Email Marketing—Contact ten email newsletters in your niche and advertise on at least two of them where it makes sense financially.
  • 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
  • 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.
  • 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.
  • 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
  • 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.
  • Affiliate Programs—Register your product at the most relevant major affiliate network
  • 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.
  • 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.
  • Offline Events—Put together a one-day mini-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.
  • Traction is basically quantitative evidence of customer demand.
  • we discovered that startups get traction through nineteen different channels.
  • 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.
  • 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.
  • 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.
  • In contrast, waiting until you launch a product to embark on traction development usually results in one or more additional product development cycles as you adjust to real market feedback. That’s why doing traction and product development in parallel may slow down product development in the short run, but in the long run it’s the opposite.
  • 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.
  • 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.
  • Put half your efforts into getting traction.
  • Set your growth goals.
  • 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.
  • 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. Everyone starts off with biases.
  • 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.
  • 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?
  • 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.
  • When we looked at companies really taking off, they were usually employing underutilized channels and channel strategies.
  • 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).
  • For example, offline ads is a traction channel, and billboards, transit ads, and magazine ads are all channel strategies within offline ads.
  • 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.
  • In its most basic form, A/B testing is a science experiment with a control group (A) and an experimental group (B). A/B testing is often called split testing because for the best results you split people randomly into one of the two groups, and then measure what they do.
  • Andrew Chen, a startup adviser on growth, coined the Law of Shitty Click-Throughs: “Over time, all marketing strategies result in shitty click-through rates.” (“Click-through rate” refers to the response rate of a marketing campaign.) What this means is that over time, all marketing channels become saturated.
  • It is likely that your first channel strategy ideas are commonplace and have already succumbed somewhat to the Law of Shitty Click-Throughs. To combat this reality you should consistently brainstorm new channel strategies and conduct small experiments.
  • 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.
  • 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.
  • 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 always have an explicit traction goal you’re working toward.
  • 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.
  • 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!
  • A major function of this book is simply helping you overcome your biases against particular traction channels by educating you about them.
  • 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.
  • 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.
  • Targeting blogs prospective customers read is one of the most effective ways to get your first wave of customers.
  • 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,
  • Run tests on a variety of smaller blogs.
  • 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.
  • Notes: 1) Is targetting uni courses similar here?
  • 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.
  • Notes: 1) Ryan holiday
  • 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.
  • As Ryan said, “satisfaction is a nonviral emotion”—you want readers to do something after reading your piece, not just feel satisfied.
  • 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.
  • Help A Reporter Out (HARO),
  • Staying in contact with reporters over Twitter gives you a leg up when you eventually reach out to them with your more formal pitch.
  • 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.
  • 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.
  • 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.
  • 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.
  • Search engine marketing (SEM) refers to placing advertisements on search engines like Google,
  • Google’s AdWords is the main platform
  • if you can run a campaign that breaks even after a short period of time (as Inflection did after a few weeks), then SEM could be an excellent channel for you to focus on.
  • 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.
  • 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.
  • 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.
  • TARGETS Use search engine ads to test product positioning and messaging (even before you fully build it!).
  • 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.
  • 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.
  • 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.
  • The goal of social ads is often awareness oriented, not conversion oriented.
  • “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.”
  • People visit social media sites for entertainment and interaction, not to see ads. An effective social ad strategy takes advantage of this reality.
  • 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.
  • 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.
  • In general, the cost of an offline ad depends on its reach.
  • Remnant advertising is ad space that is currently being unused.
  • Think of those “We buy ugly houses” billboards or any of the repetitive billboards that you see all over the place: they are likely using this approach.
  • Many young people still buy magazines. Not many young people still buy newspapers offline.
  • Run cheap tests by first targeting local markets.
  • Notes: 1) Most of the chapter does not apply to me, however local magazines could be promising
  • If you’re new to SEO, we recommend starting with the Moz Beginner’s Guide to SEO to learn the fundamentals.
  • fat head and long tail. Let us first explain these strange names. Consider all the searches that people make, sorted by the number of times that search is made. At the top are one- and two-word searches like “Dishwashers,” “Braves,” and “Facebook.” They make up about 30 percent of all searches. The other 70 percent are longer searches that don’t get searched as much, but in the aggregate add up to the majority of searches made.
  • Fat-head Strategy
  • 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.
  • Sometimes you cannot find any good terms because your product category is so new that there is no search demand for it yet.
  • Because it is difficult to rank high for competitive (fat-head) terms, a popular SEO strategy for early-stage startups is to focus on the long tail.
  • 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.
  • Then use oDesk or Elance to find freelancers willing to churn out targeted articles for long-tail topics that your audience is interested in.
  • 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. The high-quality content is useful in natural link building, especially for fat-head strategies.
  • Rand suggests using infographics, slideshows, images, and original research to drive links, as these are all things people naturally share. Since the end goal is to get links, you’ll want to specifically target people who will link back to you. This
  • Open Site Explorer can tell you how many links you are getting and where they are coming from. You can also look at your competitors’ link profiles to get ideas of other places to target for link building.
  • The most common hurdle in content marketing is writer’s block. To overcome it, simply write about the problems facing your target customers.
  • 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.
  • 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.
  • 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.
  • Many companies require an email address for people to access premium content, such as videos or white papers.
  • Another popular approach to building an email list is creating a short, free course related to your area of expertise.
  • In addition to your own email list, consider advertising on email newsletters complementary to your product.
  • With these targeted emails, Dropbox has increased the chance that you will return to the product and become an active user. 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.
  • Subject: Help getting started? Hey , I’m Colin, CEO of Customer.io. I wanted to reach out to see if you need any help getting started. Cheers, Colin
  • Any sort of communication telling your customers how well they’re doing is likely to go over well. Patrick McKenzie, whom we interviewed for SEO, calls this the “you are so awesome” email.
  • Notes: 1) Look how many exercises you completed!
  • many companies like WP Engine now use advertising to drive leads to a landing page where they ask for an email rather than a sale. They then will use email marketing to sell a prospect over the course of a month or so.
  • 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). Intead, use that opportunity to send the automated email from a personal address and allow the recipient to reply with questions
  • As a result, companies can go viral faster than ever before. Dropbox, Instagram, Snapchat, and Pinterest are great examples: they all leveraged virality through these super-platforms to acquire tens of millions of users in just a few years.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • To pursue this traction channel effectively, you need to measure your viral coefficient and viral cycle time from the start.
  • 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.
  • For example, you may be taking off in Indonesia while not doing as well in Australia. Once you find a viral pocket, you may want to cater to this group by optimizing text in their native language or some other way that will improve their experience.
  • 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.
  • You make useful tools like calculators, widgets, and educational microsites to get your company in front of potential customers.
  • Marketing Grader is so powerful for HubSpot because it precisely serves the needs of its target audience.
  • resources on marketing becomes much stronger when you think about the resulting tools as assets. These tools have the potential to become a continual source of leads that make up the majority of your traction.
  • CONCLUSION Engineering as marketing creates lasting assets that can serve as the engine for your growth.
  • 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.
  • Joint ventures—In a joint venture, two companies work together to create an entirely new product offering.
  • 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.
  • Distribution deals—In these deals, one party provides a product or service to the other in return for access to potential customers.
  • 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.
  • Once you have a list of potential partners, send it to your investors, friends, and advisers for warm introductions.
  • 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
  • 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.
  • The most important thing is to find out who is in charge of the metric you’ve targeted.
  • 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.
  • 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.
  • Notes: 1) Integrating with the APIs of others is a modern form of business development
  • 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. Scaling this traction channel requires you to design and implement a repeatable sales model, which we cover in this chapter.
  • “Here is what we are doing: do you know somebody we should talk to that makes sense?”
  • Situation questions. These questions help you learn about a prospect’s buying situation.
  • 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.
  • Problem questions. These are questions that clarify the buyer’s pain points.
  • 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
  • These questions should make your prospect feel the problem is larger and more urgent than he or she may have initially thought.
  • 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
  • The SPIN (Situation, Problem, Implication, Need-payoff) question model is a natural progression.
  • Ordinarily, it’s somebody who is one level or two levels up in the organization; they’ve got enough perspective on the problem and on the organization to understand what’s going to be involved in bringing change to the organization. As we work with them they may take us up the hierarchy to sell to more senior folks. We don’t tend to start at the top unless we are calling on a very small business, in which case you’ve got to call on the CEO or one of the key execs because no one else can make any decisions.
  • Notes: 1) Phd and postcocs might be easier than professor
  • 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.
  • 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.
  • 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,
  • Mark has this to say about marketing and sales working together: 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.
  • 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?,”
  • 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.
  • Some large retailers like Amazon and eBay run their own affiliate programs, but this is rare. These programs involve recruiting, managing, and paying thousands of affiliates, which is too complex and expensive for most companies to manage themselves. It is much more convenient for online retailers to go through existing retail affiliate networks.
  • The most efficient way for an app to get discovered in the app stores is through the top app rankings and featured listings sections.
  • The most efficient way for an app to get discovered in the app stores is through the top app rankings and featured listings sections.
  • 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.
  • Notes: 1) The challenge is to get into the charts on the first place
  • but really the base experience has to be excellent to get consistently high rankings.
  • Every major platform has similar stories. Bitly fulfilled the need to share shortened links on Twitter and saw most of its adoption from such use. Imgur built its image-hosting solution for reddit users, and has seen an explosion in usage as a result. This pattern repeats itself time and time again.
  • Notes: 1) Filling in gaps of larger platforms seems to work well
  • 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.
  • The important takeaway is that it is a good idea to focus on new and untapped platforms to generate growth.
  • 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.
  • The best way to decide whether to exhibit at an event is to visit as a guest and do a walkthrough the year before.
  • The best way to decide whether to exhibit at an event is to visit as a guest and do a walkthrough the year before.
  • Sponsoring or running offline events—from small meetups to large conferences—can be a primary way to get traction.
  • Such events are especially important when your target customers do not respond well to online advertising and do not have a natural place to congregate online.
  • You can benefit from a conference in any startup phase. In phase I, where smaller groups of people can move the needle, attending meetups and events is a prime way to do so.
  • 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.
  • 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.
  • You can start your own meetup, join an existing one, or even sponsor an event where your prospective customers will be. Meetup.com is the most popular site for doing so.
  • You can start your own meetup, join an existing one, or even sponsor an event where your prospective customers will be. Meetup.com is the most popular site for doing so.
  • 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.
  • Rob also made a few key points about creating a great event. 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.
  • One of the reasons offline events are effective is that so few startups are doing them.
  • 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: Mark Zuckerberg has talked about how improving at public speaking has vastly improved his management ability.
  • You have to get the attention of event organizers to land speaking engagements. Event
  • Steve Barsh, a serial entrepreneur and former CEO of PackLate, has successfully pitched conference organizers to present many times. 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.
  • Community building involves investing in the connections among your customers, fostering those relationships and helping them bring more people into your startup’s circle. We interviewed the founders of reddit,
  • Community building involves investing in the connections among your customers, fostering those relationships and helping them bring more people into your startup’s circle.
  • Every individual we interviewed emphasized how helpful it was to have an existing audience to jump-start their community-building efforts.
  • 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.
  • Community members love to hear from other members. But they would also love to hear from you.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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.
  • 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
  • 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
  • make the offer even more enticing by giving them the opportunity to give something away to their audience
  • 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.
  • Unconventional PR—Host a contest around your product.
  • 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.
  • 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.
  • 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.
  • podcast. With these advertisements, the host usually reads your copy directly to his listeners.
  • Offline Ads—Advertise on a niche podcast. With these advertisements, the host usually reads your copy directly to his listeners.
  • Search Engine Optimization—Test a long-tail SEO strategy by making some content-rich pages.
  • 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).
  • Email Marketing—Contact ten email newsletters in your niche and advertise on at least two of them where it makes sense financially.
  • 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
  • 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.
  • 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.
  • 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
  • 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.
  • Affiliate Programs—Register your product at the most relevant major affiliate network
  • 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.
  • 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.
  • Offline Events—Put together a one-day mini-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.