The Ultimate Startup Marketing Strategy

A great resource for your Startup Marketing Strategy.

28 marketing lessons for rapid startup growth from digital marketer, Marcus Taylor. Learn from the wins of Hubspot, Intercom, Leadformly, AirBnB & More.

Two fundamental truths exist when marketing a startup. One is that a great product alone is not enough to succeed. The other is that no amount of marketing will make a crap product gain a mass audience.
“Nothing kills a bad company faster than good marketing”
Successful startup marketing requires that you have both a great product and great marketing. For that reason, I’ve focused this guide on both customer acquisition and improving your product-market fit.

What’s in this guide?

I’ve split this guide into four parts. Feel free to skip to the section that you’re currently working on. If you have any specific questions, you can go straight to the comments and I’ll do my best to answer them.

Chapter 1. The Foundations of Startup Marketing
Chapter 2. Paid Media Marketing for Startups
Chapter 3. Earned Media Marketing for Startups
Chapter 4. Owned Media Marketing for Startups
Summary & Comments


Source: The Ultimate Startup Marketing Strategy for Explosive Growth

Chapter 1: The Foundations of Startup Marketing


For early-stage startups, feedback is more important than customers. The faster you can resolve customer objections, and improve the product to match market demand, the more likely you are to win over the long run.

In this chapter we’re going to look at seven essential aspects of laying the foundations for an aggressive marketing strategy.

  • Growth hacking – building marketing into your product
  • Conversion rate optimisation
  • Using Facebook ads to understand your audience
  • Customer feedback loops
  • The diffusion of innovation & targeting early adopters
  • Fine-tuning your messaging
  • Differentiation

#1 Viral Marketing & Growth Hacking: Building Marketing Into Your Product

“Marketing is for companies with sucky products”FRED WILSON, VC

I disagree with Fred Wilson’s quote, yet I can’t dispute that the most successful startup marketing strategies are those that embed marketing into their product.

Dropbox, Hotmail, Eventbrite, Mailbox, and Snapchat famously acquired millions of users with almost no money spent on marketing. Their secret? Building virality into their product.

A startup’s ability to go viral depends on two variables: time, and the ‘viral coefficient’ i.e. the number of new users each user generates.

Below is a graph to illustrate startup growth at different rates based on varying viral coefficients. Imagine that the Y-axis represents your number of user signups, and the X-axis represents time.

Viral coefficients

If your viral coefficient is 1.0 (each user generates one new user), you will achieve linear growth, assuming you retain your users. If you have a viral coefficient above 1.1, you will achieve exponential growth as illustrated by all of the lines above the lower green line.

How do you embed marketing into your product?
Every startup is unique, so I won’t discuss tactical methods in great detail. There are two broad strategies I’d recommend, though: The first is to build a product worth recommending. If every single user recommends two new users, you have exponential growth.

The easiest method of measuring a user’s likelihood to recommend your startup is by using the Net Promote Score, a simple test where you ask users “on a scale of 1-10, how likely are you to recommend our product to a friend?” If the aggregate score is above 9.0, you will likely achieve exponential growth.

The second strategy is to align your ‘growth hack’ with the channel(s) that your ideal customers use to learn about your product. Brian Halligan from Hubspot put it best when he said:

“To be successful, you must match the way you market your products with the way your prospects learn about and shop for your products.” – Brian Halligan, Hubspot

In the context of growth hacking, it’s no good if your growth hack generates enormous exposure for your brand on Facebook – when 99% of your best-fit customers coming from reading B2B whitepapers. If that were the case, a better approach would be to produce user-generated content that could be used to scale producing high-quality whitepapers.

It may be less sexy than the growth hacking case studies covered by TechCrunch, but it’ll work.

#2 Conversion Rate Optimisation: Increase your signups with split-test experiments

Conversion rate optimisation (CRO) is the science behind understanding why your visitors are not ‘converting’ into customers, and then improving your messaging or value proposition to increase this rate of conversions. Contrary to popular belief, it does not start with running A/B experiments; it starts with understanding your visitors and their objections.

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How to identify customer objections:
The fastest way to understand why potential customers are not converting is to ask them. Below are several tools and techniques that I’d recommend.

  • Install Intercom – a great tool that allows you to talk in real time with website visitors.
  • Ask visitors to fill out a survey using Survey Monkey. Usually, you’ll need to incentivise this with some kind of giveaway.
  • Ask for feedback in a forum your customers participate on.
  • Commission some user tests from UserTesting.com.
  • Invite someone you know (a customer) to lunch / Skype.

Following this, hopefully you will have a good idea of what is preventing your visitors from converting. Now it’s time to make changes to your landing page to counter these objections.

The first thing I’d recommend is focusing on the areas with the most leverage. Focus on your headlines, call to actions, and lead capture forms. Use tools like Leadformly, which will give you a high-converting form without having to spend months split testing different variations.

The following model by WiderFunnel is also a fantastic starting point for understanding how to improve the likelihood of a conversion. Whenever I am presented with a CRO project, I like to consider how we could improve each point. For example, can we reduce the navigation to minimise distractions? Could we increase the urgency by having a countdown timer or a “Only X left” next to our call-to-actions? In 2012, I managed to quadruple a website’s conversion rate from 2.5% to 10% using these methods.

Lift conversion rate optimisation

Once you have your mockups designed, I recommend using Visual Website Optimizer to test them against your existing landing page. VWO has a great user interface, making it very easy to quickly test variations of your website without needing to make backend coding changes.

Visual Website Optimizer

Conversion rate optimisation is not something you do once. You should strive to constantly tweak and improve your landing pages to make incremental improvements.

At the same time, always remember the model below. Incremental tweaks will always hit a limit. There’s often far more opportunity in being bold and testing something very different.

Iteration vs. new versions

#3 Facebook Advertising: Finding your perfect audience using segmentation

Most people think of Facebook Ads as an acquisition channel for driving signups. The truth is that it’s also one of the best customer research tools we have available to us.

Let me explain. There is no limit to how finely you can segment a Facebook advert. If you wanted, you could run an identical adverts to 500 different demographic and psychographic audience segments. Using conversion tracking, you can see which demographics and psychographics then have the highest conversion rate on your service.

Here are a few examples. I work with many music startups, and I’ve found time and time again that guitarists are typically more likely to sign up to a music service than a drummer or a bassist. For one of our clients, FanDistro, we found that 23 year old Canadians are approximately 3x more likely to convert than 21 year olds. We know that musicians in New Zealand are more likely to convert than Australians.

Facebook Ads are, in my opinion, the best way to quickly and affordably verify who your audience are, and what your cost-per-acquisition is for different demographic groups.

#4 Installing a Customer Feedback Loop

It’s worth reiterating that the most important asset for most startups is to be told what needs improving, and have an agile system for making those improvements. Anyone who’s read Eric Ries’ book The Lean Startup will understand this as the ‘Iteration Cycle’.

The iteration cycle

A simple ‘give us feedback’ form is not enough. Most people will not go out of their way to give you feedback. Use incentives, meet your users, and study user behavior data to understand where people fall off in your funnel, and more importantly – why?

#5 Diffusion of Innovation: Targeting Early Adopters

Many inexperienced marketers make the mistake of targeting the mass market too soon. The reason this rarely works is because the majority of people resist change, and are not receptive to products / services that are not already recommended by early adopters.

Law of diffusion

I learned this lesson through A/B testing. Two years ago, while running an experiment to see whether additional social proof increased signup rates, I found that by simply adding the number of likes and users already signed up next to the signup button, had a dramatic impact on increasing the website’s signup rate.

If you want to own the majority market share, your initial launch strategy and messaging must appeal to innovators and early adopters. Once you have a number of case studies, testimonials, and respected innovators singing your praises, then it’s time to approach the majority. The laggards will follow.

#6 Why, What, How: Fine-Tuning Your Messaging for Conversion

If you haven’t read Simon Sinek’s book ‘Start With Why’, I’d strongly recommend putting it on order.

The gist of the book is that, if you want to inspire someone to take action, you must begin by explaining why you do what you do. Not what or how.

Apple is a great example of a company that sells “why”. Apple challenges the status quo with everything they do – MacBooks, iTunes and iPads are just how they do that. Dell don’t have a why – they just sell reasonably good computers. While Apple talk about pushing humanity forward and challenging the status quo, Dell talk about the size of their processors and RAM. Is it any wonder why people queue for hours to get the latest product, while Dell receive nowhere near the level of advocacy, despite their products being very similar.

In the example below, Leadformly’s headline is ‘Capture & convert up to 300% more leads’. This doesn’t tell visitors anything about what or how the product works, but it gives a compelling ‘why’, followed by a subheading that explains what the product is and how it works.

Screen Shot 2016-06-03 at 09.47.10

Does your messaging communicate why your startup exists? Do you know your why? If not, this is an important step that I would not advise skipping over.

#7 Differentiation in your marketing

Various studies predict we see between 1,000 – 5,000 advertisements per day depending on where we live. How do you compete and stand out with your marketing in such a saturated space?

The answer is by being the shepherd, not a sheep.

Our brain categorises similar pieces of information together, a process known as Gestalt. Because of this, the more of a similar thing we see, the less impact each additional thing has. When Lady Gaga wore a dress made of meat it made headlines all over the World. When others copied her quirkiness, hardly anyone talked. This pattern has repeated itself millions of times over.

This is not about first-mover advantage; this is about observing what everyone else is, and being the opposite. Apply this from the most macro aspect of your strategy down to the micro, and you’ll be amazed at how significant this is.

Now that we’ve covered off the foundations of messaging and preparing your product for a successful marketing strategy, let’s move on to customer acquisition. I’ve split the section on customer acquisition into three chapters, paid media, earned media, and owned media.

Chapter 2: Paid Media Marketing for Startups


There’s a school of thought that says startups should spend as little as possible on marketing. I disagree. I believe that marketing should focus on positive ROI (return on investment). If a paid media channel can profitably drive qualified users for your startup, it’d be foolish to refuse it on the basis that it’s paid for. Another reason for using paid media is to establish a cost-per-acquisition, as this will act as a benchmark to compare all other marketing activity.

Paid media channels fall into three broad categories: display, search, and affiliate marketing. Below are some of the main online channels I’d recommend looking into, along with some tips on each.

#8 Facebook Advertising

We’ve already discussed Facebook Ads from a research perspective, but let’s consider it now as a channel for acquiring users.

While it’s possible to write a guide of this length on Facebook Ads alone, I’ll quickly summarise some of my recommendations based on a considerable amount of Facebook Ad campaigns that I’ve worked on.

  • Use page promoted posts targeting people in the news feed. These ads have the highest click-through and engagement rates.
  • Test as many advert variations as possible. The weirder, brighter, and more unique your ad is, the better. When everyone else zigs, zag.
  • Don’t create ads using the Facebook Ad Manager (it’s awful). Either use the power editor, or a dedicated tool like Qwaya. This will make segmentation much easier.
  • Use conversion tracking – by installing the conversion pixel you enable oCPM for conversion bidding. This basically means that Facebook will algorithmically optimise your budget for more conversions.
  • Use fine segmentation – If you use Qwaya, you can split your ad campaign into tens or hundreds of individual ads each targeting a specific segment of your audience. This enables you to quickly see which ad segments perform well and which don’t, so you can move your budget to the segments that are most profitable.

I’ve written about Facebook Ads in more depth here.

#9 Google Adwords (Search)

If your product solves an issue that people search for, there’s a high likelihood that Google AdWords will be a great acquisition channel for you. For example, if your startup helps people find the cheapest gig tickets, you may want to bid on terms like ‘cheap gig ticket’, ‘London gig tickets’, and ‘Gaslight Anthem London Roundhouse tickets’.

Google Adwords

#10 Google Adwords (Display)

Similarly to above, Google enable you to purchase banner adverts through their display network. You can specify which websites your banner ad appears on, or bid to appear on websites related to certain keywords.

Display network

An example of Nikon using Google Display Network to run adverts on Billboard.com.

#11 Reddit Advertising

Reddit is often overlooked as a paid marketing channel. I have to admit, the results I’ve had in the past are extremely varied, but it’s very cheap and always worth testing.

Reddit advertising works by running ads at the top of any subreddit of your choice. For example, for a music client, we may advertise in the subreddits ‘WeAretheMusicMakers’, ‘Music’, and ‘Guitar’. Each subreddit has a very distinct community, so it pays to get involved in each one for a bit of time first before running ads.

One specific reason why I’m a fan of Reddit Advertising is because Reddit seems to attract the early adopter types. It’s a great place for getting honest feedback and targeting people who are likely to be receptive regardless of what stage your product’s at.

#12 Google Remarketing

Google Remarketing goes one step beyond the standard display advertising mentioned above. Essentially, when someone visits your website a cookie is dropped on their computer. When they visit other websites, an ad will appear encouraging them to come back to your website.

You can get very smart with this by running different remarketing ads for different stages of your signup funnel. For example, if they visited the signup page but didn’t complete the form, you could run an ad with an incentive to finish signing up.

Remarketing

Google Remarketing is generally very effective as the people you’re advertising to are qualified and already aware of your product. The trick is to get the frequency right and not be overly annoying!

#13 Facebook Exchange

Facebook Exchange works in a very similar to Google Remarketing, but using Facebook Ads instead. In other words, someone visits your website and bounces. When they go to Facebook they’ll find your ads encouraging them to come back.

To use Facebook Exchange you’ll need to use one of their partners. I’ve tested a handful of them and recommend AdRoll.

#14 StumbleUpon Advertising

While the quality of visitors from StumbleUpon is generally quite low, the cost per click is exceptionally low also, enabling you to buy a large amount of traffic for a low cost.

I’ve yet to see astounding results from StumbleUpon ads, except for travel related content. StumbleUpon is very visual social network where inspirational and stimulating content seems to spread virally. If you’re a luxury travel operator, this is a gold mine. If you a SAAS company promoting an app, it may be a little bit trickier.

#15 Twitter Advertising

Twitter Ads can be very effective, but the reason I haven’t recommended them sooner is due to the budget limitations. Currently, the minimum budget for a Twitter Ad campaign is £5,000/month, which is outside of most startup’s budget. If you do have this sort of budget to invest, then Twitter Ads do tend to be pretty effective when done right.

My advice would be to promote an amazing piece of content rather than directly promoting your services. View Twitter as a 1:many platform where, if you run your ads correctly, you can launch your content to a large audience who will introduce your content to an even larger audience.

If your campaign dies after being promoted to the initial audience, start again.

#16 Content Discovery Platforms

There are a number of content discovery platforms that promote your content alongside articles on major news sites such as the New York Times and The Guardian.

I’ve tested a handful of these, including Outbrain, Zemanta, nRelate and Taboola. For driving backlinks and launching content they’re a powerful tool, although they can get quite expensive depending on the quality of your content.

Outbrain

#17 LinkedIn Advertising

While my personal experiences with LinkedIn advertising has not been particularly positive, I know of a few startups (particularly in the financial services industry) that have achieved great results by running targeted ads to people by their job title and sector.

In my opinion, the problem with LinkedIn Ads is banner blindness. The adverts don’t stand out, and appear in the same spot on every page, causing users to become ‘blind’ to them.

#18 Video Pre-Roll Advertising

If your startup has produced a compelling promo video, pre-roll advertising could be a powerful paid marketing channel for you. Using TubeMogul, you can pay for your video to appear as an advert before video content on major video networks, such as 4od, and YouTube.

One interesting ‘trick’ with pre-roll advertising is that you do not pay if your ad is skipped within the first five seconds (which most people do skip). The trick, then, is to go down one of two routes. The first route is to get the message out about your service within the first five seconds of the video hoping that people skip so that you can expose your message to a huge number of people without paying too much.

The second option is to make the first five seconds ambiguous and weird enough to intrigue people to watch the rest of the video. Here’s the best example I’ve seen of this tactic being put into practice.

#19 Affiliate marketing

If your startup benefits from offering a high margin product and has a good conversion rate, then you may benefit from offering an affiliate programme through a network such as Affiliate Window or ClickBank.

I wouldn’t advise diving into affiliate marketing until you’ve already established your brand and found other marketing channels. Consider it more of an accelerant rather than a base fuel for your online marketing strategy.

Chapter 3:Earned Media Marketing for Startups


Earned media can be thought of as any form of publicity generated by your advocates (customers, fans, partners). In my opinion, earned media is the most valuable, cost-effective, credible, and sustainable form of online marketing. It’s also the hardest to create and measure.

The reason earned media is so effective is because people trust their friend’s recommendations. Conversely, our trust in virtually all other forms of paid & owned media advertising is declining.

Trust in advertising

So how can you leverage this shift in trust to drive more sales / signups?

#20 Do Something Remarkable

The secret sauce of the PR industry is that remarkable things get remarked upon. If you want to earn word of mouth and have the press, your customers, and whoever else talking about your startup, you must give them something remarkable.

Now, this doesn’t necessarily mean you have to build a full-scale dragon skeleton on a beach in Dorset, or fly jetpacks around New York City, but if you want to cause a ripple, you’ll need to do something beyond the norm. Perhaps your startup is remarkable in itself?

As much as I’d love to say “do X”, there is no simple answer here, because quite often it’s the things that haven’t been done before that are work the best. My best advice is to read Edward De Bono’s book on Lateral Thinking (he pioneered the word ‘lateral thinking’), get some post-it notes and blast out as many ideas as you can conjure up. Then go for the idea that’s most promising.

#21 Build Exceptional Resources

I struggle to go a week without mentioning Moz.com’s weather report tool. It’s an incredibly useful resource for the SEO industry and generates enormous amounts of publicity for Moz.

Moz weather report

Sometimes you don’t need to reinvent the wheel – you just need to ask yourself “what would our customers find useful?” and build something exceptional.

#22 Meet Your Influencers

How valuable would it be to your startup if you met Robert Scoble, Jack Dorsey, or some TechCrunch journalist? A large aspect of your success in PR and marketing does revolve around who you know, so it’s important to learn what affects the size and quality of your personal network.

Meeting anyone starts with being in the same space as them, either geographically or virtually. Last January I was speaking at Midem, a music conference in the South of France. While over there I met Robert Scoble, Mark Hoppus from Blink 182, and a number of interesting people who’ve become invaluable contacts. I don’t say this to boast, but to make the point that it was incredibly predictable and well publicised that these people would be at Midem on the specified dates – all I had to do was show up. The hardest part in meeting the people you need to meet is booking the ticket and showing up.

“80% of success is showing up” – Woody Allen

#23 Search Engine Optimisation (SEO)

Over 500 million people search in Google every day. Regardless of what some startup celebrities may proclaim, SEO is not something you should ignore.

The strength of search marketing is that, if you have a product that people are looking for, your site can appear at the perfect moment – when they’re searching for it.

This differs to Facebook, LinkedIn, and YouTube advertising, where you’re relying on distraction to pull people away from what they were doing to visit your website. With Google, you’re helping them find what they were looking for in the first place.

Organic search marketing is a broad field in itself, so I won’t go into much depth at all here. However, I will impart a few pieces of advice from my experience working at an SEO agency for several years, and overseeing hundreds of campaigns.

  • Don’t think you’re saving money by hiring a cheap SEO. Rankings go both ways, and if you get someone crap, they’ll cost you a lot more than you think. Be prepared to pay a decent price for good SEO services.
  • Focus on what’s best for the users – when in doubt, ask yourself “is this best for our users?” – if the answer is yes, there’s a very good chance that it’s also best for search engines.
  • Nothing is guaranteed. Anyone who guarantees results is most likely selling snake oil.
  • It takes time. I advise most of our clients not to expect any increase in SEO traffic for at least 3 months. Of course, sometimes we see increases in as little as a week, but SEO typically takes a long time to grow.

Chapter 4: Owned Media Marketing for Startups


Owned media relates to any marketing channel owned by your startup. In the online world, this refers to any websites and social media profiles that you operate.

There’s a great deal of crossover between owned and earned media, and I like to think of owned media being the ‘platform’ for increasing the success of your earned campaigns.

Imagine you created a great story on how your startup just broke a World Record. Without a platform to publish the story on, you’re best hope is to send out a press release and cross your fingers that at least one journalist will publish the story.

If you have a blog with a steady audience of 5,000 visitors per day, you can post your story to that audience, and rest assured that at the very least, 35,000 people will have been exposed to the story by next week. Hopefully, that initial audience will have ‘launched’ your story creating organic growth.

#24 Building a Blog That Converts

Building a blog that converts is hard. Most companies fail because they blog about what they want their customers to read, rather than writing about what their customers want to read.

There are a small number of companies who understand this. Buffer, for example, are a company that offer social media automation software. Instead of going on about their services, their blog contains insights on everything from happiness to writing tips. They write what their customers want to read.

My advice when building a blog is this: if you want to create a truly successful blog, you must be willing to commit at least 100 great articles. After you’ve written 100 articles you’ll not only have a good understanding of what works, but each article will be driving a little bit of traffic, a few links, and a few signups each day. From there, the results will compound.

If you’re ready to kick start your blog, check out our study on the best web hosting companies to get started with.

#25 Email Marketing

Five years ago, email marketing was about building your mailing list and sending newsletters or autoresponder campaigns out.

Those days are long gone. Traditional email marketing is rapidly being replaced by marketing automation, which is software that gives you the ability to trigger personalised messages based on different rules. For example, if someone signs up for a free trial but doesn’t actually use a certain feature within a certain amount of time, you can trigger an automated email inviting them to check it out.

Marketing is ultimately a pursuit to send the right message to the right people at the right time. Marketing automation is about as close as we can get to scaling this.

There are lots of great email marketing tools that now offer marketing automation. I personally love ActiveCampaign, which has one of the best interfaces for building marketing automation campaigns that I’ve seen.

ActiveCampaign

The next step is to know what makes a good email. This isn’t just about writing clickable subject lines and crafting beautiful HTML templates, it’s about understanding what your audience wants to receive in their inbox. I can’t tell you the answer here, but I urge that you consider “would I want to receive this email?”

Be sure to experiment with different frequencies of emailing, days of the week, and types. Comparing the open and click through rates over time is the only sure way to know what works and what doesn’t.

#26 Video: Leveraging the second largest search engine in the World

We rarely think of YouTube as a search engine, but with over 50,000,000 searches made on YouTube every day, that’s effectively what it is. Using YouTube Traffic Estimator, we can see exactly how many searches are made for different queries every month.

Let’s say your startup offers time management solutions. A quick search on YouTube for videos on productivity reveals that many 3-minute videos have over 50,000 views – some have over 1,000,000.

YouTube Productivity Videos

The benefit of incorporating video into your search strategy is that YouTube, and other video hosting sites, are considerably less competitive than Google. Interestingly, Google are also featuring more and more videos in their universal search results, making it a powerful method of ranking in Google in itself.

video search results

#27 Content Marketing: Infographics, Videos, Case Studies, White Papers, and more

When it comes to digital marketing, I like to think about what will work in two years time. I don’t believe content marketing will be the future, but I do think that content-based online PR will be.

I think the overlap between creating exceptional content and relationship-based PR will be what the best digital marketers will focus on a few years from now.

I won’t focus on the relationship-based part here, as I’ve already covered that in some depth in the section on meeting influencers. Let’s instead focus on what makes content exceptional.

The first step in producing exceptional content is to define exceptional. For example, in the music industry I know that infographics, on average, out-perform every other format of content by roughly 198% (number of backlinks & social shares). I know that content relating to piracy, royalties, and music industry challenges is more likely to be shared than content relating to artist news or the live industry. I know this because I measure what works extensively.

Content marketing in the music industry

You too should know, with confidence, what works in your niche.

On producing content of exceptional quality, my rule of thumb is to spend more than 40 hours producing it. Anything that takes less time is easily probably easy to replicate. That doesn’t mean you shouldn’t create it, it just means it probably won’t generate amazing results.

Don’t start your content strategy with what can we create? Start with what would be amazing? You’ll find a way to create it.

For specific tips on content marketing, I wrote a post for Moz offering 97 tips on content marketing.

#28 Building a Presence on Twitter, Facebook, Google+, and other social networks

Like email marketing, social networks provide a great opportunity to launch content and drive potential customers to your service, but there’s far more to it than broadcasting your agenda. Social networks provide a great opportunity to gather feedback, build relationships, and add credibility to your service.

While a guide on social media is far beyond the scope of this guide, here are a few important points to consider in your social strategy.

Know why you’re using it
Because of the ever increasing number of social networks, and the endless possibilities of what you can do within social media, it’s important to know why you’re using social media from the outset.

You can have multiple reasons. Quantity is not the issue, clarity is.

Ultimately, retweets, likes, +1s and shares are meaningless. Your core business goals are what matter: user signups, retention, revenue, customer lifetime value, user satisfaction etc. Social media becomes valuable when you connect the two together. When you use Twitter to leverage PR opportunities, Facebook to increase the quantity of monetisable eyeballs, or Google+ to increase search rankings, that’s when social media has a tangible value.

Know what works
I spend a lot of time in the entertainment industry understanding what content is the most shareable. While it’s good to confirm these things with data, often it just takes a few hours of research to understand what people talk about in your niche. So many companies publish crap that no one in their right mind would have a conversation about – don’t fall into that trap. Start by knowing what sparks conversations in your niche.

Lead with content
We manage a decent number of social media strategies at Venture Harbour, and if I can sum up what differentiates the clients who are successful using social media from those who are less so, it’s having a content-centric strategy.

What I mean by this is that by having a regular stream of interesting content being created and shared within your social networks, the amount and depth of engagement seems to naturally grow and compound. It stops you from using social media for the sake of using social media, and instead focus on using it as a means to a more valuable end.

Posted in Digital

And the country that does the most good for the planet.  Ireland…..Good on you. 

The Good Country Index measures how much each of 125 countries contributes to the planet. #Ireland

Source: Guess which country does the most good for the planet?

Posted in Digital

A Guide to Prepare Your Series A Fundraising – Techstars

Source: A Guide to Prepare Your Series A Fundraising – Techstars

The following is based on a sort of “internal guide” that I frequently share with portfolio companies I am involved with. It is a collection of various sources of information and best practices that should help the founders to prepare for their Series A fundraising.

It is most applicable to companies and their (first time) founders in Europe that have previously raised some (small) seed money from Angels or Micro VC funds such as ourselves, Point Nine Capital. That said, it contains various general notes that could help you in any fundraising situation. 

Please note that it describes the ideal scenario which hardly any company reaches, so you might deviate from it in one or more points. As usual, the exception proves the rule.

The post is structured in three parts:

  1. Preliminary remarks regarding prerequisites (to raising a Series A)
  2. Input and inspiration for fundraising material
  3. Description of how the (ideal) fundraising process could look like

Prerequisites

1. Make sure you are on track to generate 80 – 100K EUR/USD per month in net revenue by the time you go out on the market to start raising your A round. Certainly, do not start fundraising before hitting 1M EUR/USD in annual (net) revenue run rate.

In case you are not (yet) monetizing your product, lack of revenues might be compensated by exponential growth of active users which, usually, can only be achieved by some sort of virality (likely the case when Zenly snatched up over 22m USD from Benchmark Capital or, when Brainly raised its 9M USD Series A). Note that all following points are geared towards revenue generating companies.

2. Ideally, you are on track to grow 3x YoY (on a year-to-date and/or month-over-month basis, for instance, March 2017 is approximately 3x March 2016) on the most relevant KPIs like GMV, net revenue and/or bookings (also see this simple “compound growth calculator” template). Don’t forget, this translates into an average growth of approximately +10% month-over-month for 12 consecutive months!

3. As a rule of thumb, the faster and the more consistent (read: predictable) you grow, the higher the “multiple” on your monthly (net) revenues and/or yearly revenue run rate (as well as GMV for any marketplace business) and thus the higher your potential (pre-money) valuation for your Series A.

4. The basis for #1 to #3 above should be, of course, healthy unit economics (CACs vs. CLTV or CAC vs. net revenue per booking). Investors won’t honor unsustainable, expensive revenue growth.

5. Make sure to nail the explanation of market size. Define the total addressable market as well as the opportunity and find as much backup information (official, up to date research papers etc.) about it and do your own well-founded bottom up calculation to be able to support your reasoning (in your pitch deck; more on that below).

6. Have a financial plan ready on a monthly basis for the next 18–24 months that defines how much money you need for what. It should also include monthly actuals (which are even more important to investors than the outlook).

You can use your existing KPI dashboard and also use it to forecast the next 24 months (forecasting cost, your burn rate, is especially important). There are various templates for KPI dashboards for different business models. There’s a comprehensive KPI dashboard for SaaS and for marketplace businesses from yours truly or this marketplace KPI dashboard template from our friends over at VersionOne (great job Angela Tran Kingyens!) as well as this version from Willy of French Daphni.

7. Please also consider our SaaS and Marketplace Fundraising Frameworks to benchmark your stage vs. your Series A plans and prepare yourself for your fundraising.

Fundraising Material

Long/Shortlist:

1. Use this comprehensive list of European Investors from Techstars to compile a shortlist of approximately 50 suitable investors.

2. Use this template for a shortlist. There are many different versions out there: You may also try this version from our friend Jean from Kima.

Rank the investors based on “quality” and perceived “fit” to your case as follows (and yes, you should get familiar with what the different investors are up to):

A = Dream Partner*
B = Nice but not the best fit
C = Could serve as a back up and/or to fill up a round (e.g. when they do smaller tickets, cannot be a lead etc.)

Dream Partner does not necessarily mean the investor who pays the highest price; the optimal outcome is to maximize and balance several variables at a time: 1) the price an investor is willing to pay, 2) the qualityand brand of said investor (what can she or he bring to the table other than the $$$?) and 3) the time it takes to get firm commitments and close the round.

3. “Priority”, as mentioned in the shortlist template (#2), means in which chronological order you approach the investors. You want to make sure that the amount of outstanding feedback is never higher than 10–20 because:

a) anything above that is hard to handle;

b) you won’t be able to provide a good experience to your prospective investors;

c) you do not want to blindly fire a “shotgun shot” into the dark and leave the impression that you approached ANY possible investors out there – remember that fundraising is like dating, potential investors want to feel “special”;

d) you shouldn’t approach your “dream partners” at first because you want to gather feedback from “B candidates” before approaching potential “A candidates”. That way, you can still work on your pitch to refine the presentation and storyline if necessary (…and I’m very well aware of the fact that this advice is not going to make me very popular among later stage VCs). 😉

Pitch Deck

1. For the pitch deck preparation: Nail the story and content of the slides first, then take care of design afterwards.

In case your own design-skills are limited (like mine), ask a professional designer to polish the slides: Either someone internal (your own in-house designer) or use a service like SketchDeckThe Presentation Designer or Unicornpitch.

Important: Never (!) outsource the preparation of the pitch itself, this is purely meant for design purposes only.

2. Our dearest Michael WolfePortfolio Advisor at Point Nine and co-founder of our portfolio company Gladly, dedicated an entire medium post on “What should be in my fundraising slides? The art of the startup pitch”.

3. Scott Sage recently published a handy guide to preparing a fundraising deck in “Fundraising? Why you shouldn’t just copy Sequoia’s Pitch Deck Template”.

4. The founder of Crew wrote a detailed guide on storytelling and shared the company’s pitch deck in his article titled “How we built our investor presentation and raised $2 million”.

5. A while ago, Nico shared a simple but efficient pitch deck template.

6. Of course, Jean also has one.

7. Mathilde Collin of Front shared her Series A Deck for Front’s last USD 10M round and wrote an excellent blog post about it.

8. Here is a useful collection of various early stage pitch decks from successful tech companies such as AirBnB, Intercom or WeWork.

9. Reid Hoffman published LinkedIn’s Series B Pitch Deck to Greylock and added some very useful comments and advice to every slide.

10. This might be an obvious one, but try to engage with fellow entrepreneurs that went through the same process and operate a similar business model. If you run a B2B SaaS startup, try to get a glimpse at the deck of another B2B SaaS company that has successfully raised their Series A already.

It’s obviously easier if you have access through a common investor that you share. Members of the Point Nine Family frequently share their decks in order to push each other forward and learn from one another.

Process

If you can tick off all of the above points, this is the process:

1. Prepare a draft of your fundraising deck with no more than 20 slides; the fewer slides, the better! Unnecessary to mention that it is highly advised to use a cloud-solution like Google Slides, PreziBunkrHaikuDeck or Canva to facilitate collaboration, annotations and sharing.

2. Together with your existing investors, board members, advisors and mentors, do as many sessions as necessary to refine the deck and equity story. Do a “dry run” of the pitch in front of them and let them play the devil’s advocate. Take their feedback seriously.

3. Prepare a draft shortlist of (max. 50) potential Series A investors that you would like to approach. Again, consider using a solution like Google Spreadsheets for easier collaboration as several different people will continuously contribute to it.

4. Together with all relevant stakeholders (investors, advisors, key employees etc.) do a session to define who is approaching which potential new investor from the shortlist. Try to reference your preferred partners through common connections from their existing portfolio companies, etc.

5. Formulate a short, introductory “teaser” text to be copied & pasted into an email to forward your deck to the shortlisted, prospective investors. Remember the concept of “double opt in” for introduction requests.

Consider using a service like docsendpitchXO or attach.io for sharing the deck. It allows you to keep the pitch deck always updated, even if already shared, keeps you in control over who can see it, does not clutter the recipient’s inbox, and you get valuable viewer-analytics on every slide, which can help you to improve the deck “on the fly”.

6. Avoid common pitfalls when approaching investors described in this – not too serious – presentation about “The VC Game”.

7. Once introduced to a prospective investor, you proceed with a first call or meeting to walk her or him through the deck.

8. First Round recently shared their extensive experience from raising $18bn in follow-on funding for their portfolio companies. It’s a long read, but more than worth it and it contains valuable advice on how to run a fundraising process end-to-end.

9. Last but not least, do not forget to factor in sufficient time to close your financing round. Make sure to not stand with your back against the wall by the time you expect first offers. Start the process early enough (at least five to six months) before running out of money.

Following the above steps shall put you in an ideal position and maximize the outcome of your Series A fundraising process, while minimizing the fundraising effort itself.

After all, the main purpose of launching your startup is not to continuously raise VC money and entertain prospective investors, but to eventually build a large, self-sustainable, profitable business that generates money.

Venture Capital is just a means to an end and should never be the main reason for creating a company.

Posted in Digital

Getting Pitch Perfect: Lessons From Techstars

Your pitch is an asset to you and your startup. I’m not just referring to the digital asset of an audio recording or video. It’s an intellectual asset that is critical during the fundraising period. Not only is it critical in order to have crisp, powerful statements in regards to any and all investor questions, but the process you have to follow to truly understand and communicate the vision of your business is an invaluable one. I wish we wouldn’t have put it off until now.

A lot of entrepreneurs and investors criticize startup accelerators for how much time they make founders allocate to developing their pitch. I can see where their distaste comes from, however, I found that we created the most compelling aspects of our pitch by spending time on it daily while at Techstars Boulder.

We finally found — through iteration — a way to put to words what we were feeling, and the vision we had for our company.

Our mentors were incredibly helpful during this process. We spent multiple sessions with many mentors, going over little things like which words to use where, and where to throw in little pauses. For the first time ever, we got extremely nit picky about developing our presentation. Little details like this were exhausting, but made all the difference in my confidence and delivery when Demo Day arrived.

Of course, it never hurts to have the founder and former CEO of a $2 billion technology company from your same industry introduce you before you pitch.

I’ve embedded the video footage of our pitch from Demo Day as a resource to you. It’s certainly not perfect, but hopefully it will give you some good ideas for your own pitch. We watched over 100 other startup pitches, extracting things we liked from each as we developed our pitch. I want others who are crafting their own pitches to see our pitch as another data point. Following the video, I’ve provided what I believe to be (1) the “essentials” of pitching, (2) a great way to structure a pitch, and (3) the “DOs & DON’Ts of pitching (in part two).

AncestorCloud Techstars Demo Day 2016 from Wesley Eames on Vimeo.

THE ESSENTIALS

The content of your pitch is actually secondary. What investors really want to feel and see during your pitch is natural, unwavering passion for what you are doing. The bad news is, passion can’t be faked. You either possess the passion for what you’re doing, or you don’t. It either keeps you up at night, or it doesn’t.

You won’t be able to hide it if you’re not completely consumed by the thing your company does.

An investor once told me his favorite thing about a pitch is when he thinks he knows exactly where it’s headed, but is then surprised by something the entrepreneur says or does. He said, “You are truly excited about something you normally don’t care about, and you want to give the person your money because they just changed you, or convinced you to change your mindset.” What this investor is saying is, you have to be very deliberate about your presentation. Instead of relying on industry facts and jargon, tell a compelling and surprising story. Give your audience a reason to have more excitement and optimism about your industry and venture than they had before they met you.

Our brains use two different systems of thinking, and yes, investors’ brains are just like yours and mine (although they sometimes seem fundamentally different). The two systems are intricately explained in Daniel Kahneman’s book Thinking Fast and Slow. System 1 is your fast, intuitive and automatic mode of thinking. System 2 on the other hand, is your slow, methodical, analytical mode of thinking. As Kahneman explains, “The idea is that System 1 is really the one that is the more influential; it is guiding System 2, it is steering System 2 to a very large extent.”

Think of the systems as two separate little people living inside the investor’s brain. System 1 is the watchdog, always on high alert. He’s the fun one of the brain, and is always looking for something exciting or interesting. He doesn’t have the ability to analyze complicated information, but leaves that work to the boring System 2. He doesn’t think things through, but reacts to things on the fly. His job is to make snap judgements, not think slowly through problems. His ultimate purpose is to guide System 2, and awake him in the event that there is important information to be analyzed. System 2, on the other hand, is always in the background sleeping. He only wants to be awoken if there is highly important information to analyze. He’s the ornery, but intelligent occupant of the brain.

Most entrepreneurs pitch to System 2 by stuffing their pitch full of logical facts and numbers. Little do they know, System 2 is asleep, and System 1 isn’t paying attention or alerting System 2 because the information doesn’t seem exciting or interesting. In order for you to communicate with System 2, you first have to grab the attention of System 1. 

The two best ways to appeal to System 1 are fear and greed.

In the first few minutes of your pitch you need to either get the investor fearing that if they don’t invest they’ll “miss out,” or experiencing a hit of dopamine at the thought of making loads of money.

Once you get them experiencing those feelings of fear of “missing out” or greed, System 1 will tell System 2 to wake up and pay attention. Only at that point can you rely on logical data.

STRUCTURE

As I mentioned, we don’t have all the answers. The suggested structure that follows is simply one way to structure your pitch, but it is one that was rigorously developed over weeks and weeks of consistent effort at Techstars Boulder. I’ve found that this structure works extremely well for most situations:

Hook20 seconds to make me pay attention. What can you say to grab my attention? What storylines could you use (Hero’s journey? Origin story? Customer story? Awesome traction? Industry trend?)?

Problem descriptionup to 40 seconds, no industry jargon, simple/crisp, make it bleed.

Solution descriptionclear statement of how you solve the problem and what is different/unique.

Demo (what might you want to show, what situation may you want to demo)up to 1 min demo / product walk.

Business model how do or will you make money

Go to market strategywhich customers will you target and how will you reach them?

Tractionwhat traction has your company achieved? Revenue, customers, etc.

Opportunitywhat is the bigger opportunity here and why will investors get excited?

Teamwhat is your background and why are you the team to do this?

The ask/closewhat do you want the audience to do (invest? Buy? Tell friends? Find you for a meeting?)

This was originally published on Medium.

Wesley Eames Wesley Eames Wesley Eames is the Co-founder and CEO of AncestorCloud (Boulder ’16), a genealogy marketplace connecting family researchers with experts around the globe. He is also the creator of Cousin App, and was previously an Advisory Board Member at Global Family Reunion and the Marketing Manager at Faulkner Media Group. @wesleyeames

 

Posted in Digital

How to Pitch Your Company

Michael Seibel, Y Combinator ycombinator-logo-fb889e2ePartner, on pitching your company to investors.

It is much easier to talk to an investor if they understand what your company does. As a founder you’ll have to pitch your startup countless times. To be effective, your pitch has to be clear and concise.

In this post I’ve condensed the pitch creation process to answering seven questions. If you can answer all seven questions succinctly you’ll be well ahead of the curve.

The Seven Questions

1. What do you do?
Start with the name of your company and what it does. For example “Socialcam is a mobile app that makes it easy to take videos and share them with friends and family.” There’s no need to set up the problem, you can just get to the point.

Too many people spend too much energy trying to make their idea sound impressive. It’s ok to keep it simple. Actually, it’s preferable. You want to explain what you do in the simplest language possible. This needs to be predigested. Your elevator pitch should be like baby food.

If you’re having trouble communicating your product simply, walking me through the user path can be an effective tactic. For example, “We’re Google. We build a website with a box in it. You can type any question into that box and we’ll show you websites that answer that question.”

Walking me through the user path helps avoid explanations like, “We’re Google. We organize the world’s information by indexing the web.” With that description I’m lost.

Your goal when answering this question should not be to have me understand your whole business but rather make me interested enough to ask follow-up questions.

2. How big is the market?
There are two ways to get market size. If you’re entering a pre-existing space (like small business banking) you can research it. If you’re creating a new product or space (like Slack), you can estimate the number of customers that would want your product and approximate how much you could charge them.

For example: Bellabeat makes an activity tracker for women. There are X women between 14 and 45 in the US. The lifecycle of our activity tracker is two years. Our market opportunity in the US is Y.

When you’re estimating market size and what % you could own, there are two methods: top down and bottom up. With the top down approach you determine the total market and estimate your potential share of it. With bottom up you figure out where comparable products are sold, how many of them are sold, and what % of those sales you could take. I prefer the bottom up method because it helps you avoid a common top down pitfall, which is not narrowing down the customer enough. In the example above that could mean assuming all women are in your market – no matter their age or nationality.

3. What’s your progress?
What I’m trying to understand here is how fast you produce work. What is the ratio between what you’ve done and how long you’ve been working on it?

I want to feel impressed with how much you’ve done in the period of time you’ve had to do it. This can apply to a company that’s one week old or ten years old.

I also tend to value product development and customers first and other things such as fundraising or biz dev deals a distant second.

4. What’s your unique insight?
This is similar to “What problem are you solving?” but the bar is higher. What I really want to understand is what you know about the problem that everyone else doesn’t. This is usually derived from multiple conversations with customers, deep analysis of current products in the space, and often personal experience.

For example: Gmail. A unique insight was that the email inbox is a personal database of communication and documents. Why would a user ever want to delete anything in their personal database? Gmail gave people enough storage so they would never have to delete a conversation. It’s not that people needed email. It already existed. And it’s not that people needed better email. That’s too vague. A unique insight is specific and doesn’t contain complicated language.

Between your market and your unique insight, you have two opportunities to teach me something. A startup’s unique insight often gives me more of an aha moment than the explanation of what the company does.

It’s worth noting that passion doesn’t help here. Saying a bad unique insight forcefully makes you look worse, not better. For example, “Dude, email today is fucking broken.”

5. What’s your business model?
There are two types of startups, those that know how they’ll make money and those that haven’t figured it out yet. By and large, if you’re in the second category you’re going to either make money by growing big and turning on advertising or you’re going to copy the predominant business model in your space. A small subset of companies in the second category will propose a new business model that makes sense given how you product changes the market–freemium is a good example of this.

One mistake I often used to make at Justin.tv was offering a potpourri of business models (virtual goods, product placement, chat ads, contests, etc..). I was embarrassed to say Justin.tv would monetize with advertising when clearly that was the only answer. Own the simple business model.

6. Who’s on your team?
I’m only interested in a few things: How many founders? Is there a technical co-founder? How long have they known each other? Is everyone working full time? What is the equity split among the founders (hopefully equal or close to equal)?

If there’s an extremely relevant credential I also want to hear that. For example: You’re building a rocket company and you used to be the rocket scientist for SpaceX. Basically, if you’re focusing on a deeply complex or regulated space, having the expertise in house to plausibly tackle those problems is important.

You don’t need to mention your GPA or that you once worked at Google.

7. What do you want?
There’s no need to dance around the ask. If you want me to invest, ask. If you have a question, ask. Though to be clear, “What do you think?” is a bad question. “Do I have a good idea?” is another bad question.

Make it easy for me to help you. I want to help you.

Improving Your Answers
Once you have answers to each of the seven questions your challenge is to make the answers as clear as possible. To do that you need to eliminate jargon, acronyms, marketing speak, and any ambiguous terms such as “platform”. Basically, make it sound dumber than you think it should.

One tactic you can try is what I call “The Email Test”. Write up a two sentence explanation of what your startup does then email it to a smart friend. Ask them to explain it back to you in different words. If they ask any clarifying questions, you need to revise your pitch. It’s important to do this over email because you can’t add explanations as you would in conversation.

One thing we do during the YC batch that most people don’t realize is we help companies with their two sentence pitch. The answer to the question “what do you do”? We work on it every group office hours for the entire batch. It’s the linchpin of a good demo day presentation. If that’s locked, writing a good demo day presentation is easy.

The real thing to remember when editing your answers is that you don’t need to sound cool. You need to be clear. Don’t try to have pizzazz. You don’t want pizzazz.

Conclusion
I’m much more interested in progress than genius ideas. Most good ideas don’t look like good ideas the first time you see them so your ability to show progress in your work and intellect in how you answer these questions are two very positive signals. Once I understand what you’re working on it’s all about making me believe that it’s plausible that you can succeed.

Posted in Digital

A simple way to develop and pitch your next company

I work on lots of new ideas for companies. I have developed the following tool that helps me (and it seems many others) to quickly develop and evaluate these ideas.
In the simplest form, it helps create an elevator pitch, (e.g. for www.gist.com – We focus on relationship centric professionals like sales, PR and recruiters (C) and, save them time (V) as they prepare for meetings, by creating dynamic full-contact dossiers (F) and charge them a monthly service fee (B). It is not critical for this to be the marketing pitch, but it helps.

CVFB

To get started on finding the “MVC” (minimum viable company), you need to start with the “smallest idea that is big enough” (a few customers, 1 value, 1 key feature and a clear biz model).
You need to identify real people you know (we built Gist for me and 2 sales guys, thx Kendall and Brandt) who can validate the idea, value, key features and their willingness to pay (which should be very high). As you find representative people, you can abstract key attributes of them to start to generalize into “personas” which becomes your real target customer. And from here you can start looking for the best beta users (more on that here)
You can then compare different parts of the model to see how well the idea works. A few examples;
C–V – does your target customer value what you are doing (e.g. saving time, qualifying leads, increasing revenue…) and how much (scale of 1-10)? Is the value a real pain or just nice to have? How do they solve this pain now? How would they quantify value?
V–B – is the value your delivering correlated to the business model? If you save someone time, do you charge more depending on the amount of time you are saving? Work hard to correlate these things by changing one of the other. This ends up relating to ROI (return on investment).
F–B – are the features you are building organized to support the different price points?
C–B – does your customer usually buy in the model you are proposing? What other services/products do they buy that are similar to yours and is the model similar for these products? How much do they pay for related services?
F–V – are the features you are building aligned with the value and in similar priority order? If your value is saving time, do you consider each feature on how much time it can save the end user?
If you can’t make an idea work on a just a few users, just a few features, a pretty clear value prop and a clear business value, it’s probably not such a good idea. I know one tool does not solve all the issues in considering a new idea, but this is the best one I have found. Please suggest others and/or other ways this could be improved. Good luck on your next idea.

http://tamccann.com/developing-your-next-company-with-one-simple-tool/

By T.A. McCann

Posted in Cool stuff

Business Models | Dave Parker

Dave Parker has put together the best Business Models line-up you will ever see.

Source: Business Models | Dave Parker

One of many insights from his blog: https://dkparker.com

Business Models

Your Idea is Unique – But Your Business Model Isn’t!

After years of pursuing my own ideas and helping other product startups with their ideas, I’ve become more and more convinced that though the startup business idea is/may be unique, the startup business model is seldom unique.b2b_vs_b2c_

I’ve outlined the business models below and will fill in with more detailed posts for each model over time.

Your business model is defined by who pays you for the service or product you provide. For example, Facebook’s product benefits the consumer, but their primary business now is advertising. So they are in the B2B category for Advertising. Also, Search was moved from B2C to B2B to answer the “who pays” question.

Remember, at launch you get one business model. At scale you can choose multiple models, but you have to survive long enough to get to scale before you get the luxury of having multiple business models.

The target companies here are tech or Internet product startups, not services startups. If you have a service business, only one model below fits your business.

You won’t find SaaS listed below as business models. SaaS is a delivery mode, just like boxed software was a physical delivery. It tends to be used interchangeably with subscription, for B2B or B2C.

Business to Business (B2B) Model – Nine Startup Business Models post.

  1. B2B Commerce – Example Grainger
    1. Grainger is a wholesale supply company with a $15B market cap. This ordering site shifted the expense of ordering from their counter to the customer.
  2. Subscription – Example Salesforce.com – detailed post
    1. There are so many great examples now of B2B subscriptions; I wanted to highlight one of the frontrunners in Salesforce. One of the things they did that was masterful was recruited sales people directly (cheap for 5 users or less) who would then expense it back to their company.
  3. Search – Example Google
    1. Google’s model on search wasn’t original (at least according to Yahoo’s lawsuit). The Pay Per Click (PPC) model was the monetization option for search results.
  4. Advertising – Example Facebook
    1. Facebook delivers consumer eyeballs for advertisers. You’ll need at least 1M uniques a month to your site to monetize this way however.
  5. Productize a Service – Example MOZ – detailed post
    1. Services business (Consulting) usually generates 35%+ Gross Margin. Given that pull of profit $, very few companies make the shift from services company to product company.
  6. Marketplace – Example Alibaba
    1. Nearly everyone has used eBay or similar. Alibaba’s IPO and global presence is what people know it for in 2015. But this marketplace was founded in 1999.
  7. Transaction Fees – Example Square
    1. Square launched with a replacement for credit cards like PayPal and take a percentage of every transaction as their payment. They’ve since expanded into Point of Sales (POS) services.
  8. Lead Generation – Example Mint
    1. Consumers are the product to whom Lead Generation companies are selling. They are a business that sells other businesses (consumer) leads. They are paid for the lead, not a transaction. Sometimes this is a great customer experience like Mint, but with others, like Insurance, it’s a bad customer experience.
  9. Combination – Example Uber
    1. Uber is a business that created a marketplace that innovated around transaction fees (the driver doesn’t control the price like an eBay seller).

I’ve listed a few other business models that don’t make the list, given the criteria of viable models at launch – vs. scale.

  1. Big Data – Example PatientsLikeMe
    1. This is a great business model but will require capital to get to a scale point where you will have enough data to monetize the data. I’d also include the sensor market or Internet of Things (IoT) market in this category.
  2. Panels – Example Toluna
    1. Surveys of precise groups that can be used as market research is a unique business model, that again requires a level of scale.
  3. Multi-sided Marketplaces – Example Etsy
    1. Like the general marketplace model, you have to build product first into the model. In a multisided marketplace you’ve increased your complexity which will again require time.
  4. Nonprofit – Example Startup Weekend
    1. I have to give a head nod here to UP Global, the parent of Startup Weekend and Startup Next.  The company is a 501(c)(3) that doesn’t make money through its events, but rather through sponsorships. I’ve moved  this off the list because it’s not a business model used by tech companies.

Business to Consumer (B2C) Models – 10 B2C Startup Business Models.

I want to give credit here for a two-part post in TechCrunch Tear Down by Steven Carpenter that was the best resource for B2C in 2010, post here that details some of the metrics and models. I’ve updated the models based on the funded companies research.

Also, note that New Media as a category isn’t really a business model because it no one is paying at least until they get to a scale model. However it’s also the most compelling model if you have the market traction.

  1. New Media – Example Twitter
    1. This model is actually the “no model required” model. If you have a business that acquires users via virality or K-factor, you don’t really need to start with a business model. But for the rest of us mortals, you’ll need to choose one model from the list that follows.
  2. Gaming – Example King
    1. When the app store launched, the model for games was the $0.99-$4.99 per download. This model was quickly replaced with in-app sales. Likely the world’s best business model – sell virtual stuff for real money!
  3. B2C Commerce – Example Amazon
    1. Amazon may not have been first, but it’s clearly the biggest e-commerce site on the web. They now sell some of their own products, but its start was in books, a product that was the same, regardless of where you purchased the product.
  4. Subscription – Example Netflix
    1. Netflix cracked the code on subscription for consumers. No freemium, just subscribe.
  5. Subscription – Freemium/Premium Example Spotify
    1. Spotify is a great example of free to paid version of subscriptions. The reason freemium subscription isn’t listed in B2B is that, usually, Business customers won’t purchase a de-featured product.
  6. Marketplace – Example eBay
    1. Ah, eBay! You have sellers (they came first) and buyers; they find each other and transact on your website. It’s a brilliant and really hard business – because you have to build both sides of the market at the same time.
  7. Transaction Fees – Example AirBnB
    1. I love AirBnB, they created underutilized inventory – vacant rooms and your house – and made it easy to book and transact over the web. For creating a market, they charge a transaction fee.
  8. Lead Generation – Example Groupon
    1. This one is super close to Mint, listed as B2B above, but the benefit is more tangible to the consumer vs. the business in this circumstance.
  9. Hardware – Example Jawbone
    1. Hardware is the classic example of retail pricing less cost of goods sold. It’s great to see sites like Kickstarter (transaction fee) helping launch more hardware companies by providing pre-paid purchases.
  10. Rental – Example Chegg
    1. Chegg was a great idea of taking something that was ridiculously expensive in the physical (text books) and making them available as a rental.

What about B2B2C or B2G?

Business to Business to Consumer (B2B2C) is the model that LinkedIn uses now at SCALE. That isn’t the model they started with, however. They started with the New Media model and, with a significant base of customers, started to monetize by selling access (subscriptions) to recruiters.

Business to Government (B2G) is where a business sells to government. A dot-com survivor, Onvia is an example of this type of business.

 

Posted in Digital

25 insights from Seth Godin’s Startup School — Being Remarkable

seth-godin-startup-schoolI’ve posted many things from Seth Godin as he is one of my absolute favorite mentors. This podcast has extraordinary insight into Seth’s thoughts about startups.

Source: 25 insights from Seth Godin’s Startup School — Being Remarkable

Posted in Digital

Here’s How to Visually Map a Content Strategy 

When it comes to building a content strategy to guide your brand, seeing is believing, so creating a visual roadmap can help mightily.

Source: Here’s How to Visually Map a Content Strategy – YouMoz – Moz

Posted in Digital

What Social Marketers Need to Know From Mary Meeker’s Internet Trends Report 2016 

Mary Meeker’s annual KPCB Internet Trends Report is a legendary and much-anticipated document for every person in business. This year’s report gave an intricate overview of the global economy before delving into more specific topics relevant to us as marketers. http://www.slideshare.net/kleinerperkins/2016-internet-trends-report/   Here are the must-know tidbits from this year’s Report for digital marketers, and how you can incorporate these learnings into your own strategy. Internet User Growth Is Slowing Down The number of new Internet users worldwide is diminishing. We’re all on the Internet, and birth rates are going down globally, so this slow-down makes sense. Why It Matters: With a smaller pool of new Internet users now and, according to the forecasts cited in this report, in the future, you will have to find novel ways to reach a relatively stagnant audience on the Internet — an especially staggering challenge in the midst of so much incoming noise from so many sources.

Source: What Social Marketers Need to Know From Mary Meeker’s Internet Trends Report 2016 | Simply Measured

Posted in Digital
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    Hey I'm Brian Ackerman, I am Tech entrepreneur, Co-founder and Digital Marketer with a passion for Startups living and working in Seattle WA..
    Organizer at #startupweekend.               
    Seattle WA, USA @BMAckerman

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