Business and Startups - Useful Notes, Links and Articles
Ongoing list of articles on business/startups.
Posted by JB Uy on December 03, 2013 at 05:53 PM UTC
Edited on December 20, 2013 at 06:15 PM UTC
Walks you through an example doing research on various sites (ie. twitter, quora)
From Zero to 10,000 Clients in Two Years Using Channel Partner
To win in some categories, you often need to win the longtail, says Rampell. That’s where channel partners come in, powering up distribution to reach the customers who would never find you otherwise, and who are too expensive to reach through conventional sales and marketing models.
Dropbox depends of word of mouth, but their deal with Samsung to be installed on phones is huge.
So Rampell and his team made a list. Who were the partners that could deliver them the hottest new leads? Companies on common ground.
Best deals are beneficial to both sides.
There are roughly two types of channel partnerships. They can be plotted on a spectrum: the easiest to get being referral partnerships, and the most difficult being full integrations. Integrations, of course, have the best chance of being bi-directional
Striking a deal with Download.com didn’t just represent more revenue either. It had the potential to enhance the defensibility of TrialPay’s business. “If we could get integrated into Download.com, we’d prevent any of our competitors from doing the same. It would become a competitive advantage for us,” says Rampell.
1. Retention is critical.
No amount of new users can help you if they don’t stick around. That’s why I put fixing retention first when prioritizing growth strategies.
2. Prepare for traffic.
Just like how acquiring more users is useless if you can’t keep them, increasing website traffic is useless if you can’t convert visitors. Preparing for traffic means focusing on giving visitors a better experience when they first visit your website, with the goal optimizing your conversion rate.
- Includes: crafting new value props., headlines, CTAs
- Goal is to convert
3. Acquire all users.
Holding off on lead generation and user acquisition and choosing to focus on retention and CRO means that less of your traffic goes to waste, making user acquisition significantly easier.
Talks about a lot of issues that we're also facing trying to market Notedock.
However, almost all of them have no idea that they want Slack. How could they? They’ve never heard of it. And only a vanishingly small number will have imagined it on their own. They think they want something different (if they think they want anything at all). They definitely are not looking for Slack. (But then no-one was looking for Post-it notes or GUIs either.)
So, we should be working carefully from both the product end and the market end:
- Doing a better and better job of providing what people want (whether they know it or not)
- Communicating the above more and more effectively (so that they know they want it)
Our position is different than the one many new companies find themselves in: we are not battling it out in a large, well-defined market with clear incumbents (which is why we can’t get away with “ Other group chat products are poisonous. Slack is toasted.”). Despite the fact that there are a handful of direct competitors and a muddled history of superficially similar tools, we are setting out to define a new market. And that means we can’t limit ourselves to tweaking the product; we need to tweak the market too.
We are unlikely to be able to sell “a group chat system” very well: there are just not enough people shopping for group chat system (and, as pointed out elsewhere, our current fax machine works fine).
What we are selling is not the software product — the set of all the features, in their specific implementation — because there are just not many buyers for this software product. (People buy “software” to address a need they already know they have or perform some specific task they need to perform, whether that is tracking sales contacts or editing video.)
Be open to pivoting, or be prepared to fail
RED FLAG #1: If you can’t boil down what your product (or your book) is about in one (hopefully enticing) sentence, you need to seriously think about what problem you’re solving.
RED FLAG #2: If people glaze over when you describe the problem, you’re probably not solving one of much value.
Don’t be afraid to pivot when all signs point to a better opportunity. It’s almost always the best decision you could possibly make for your product
There’s a lot of stuff out there today — some very, very good products. My feeling is that if you think you’re competing with the other products that exist, you’re missing out on the biggest open market, which is people that aren’t using a product at all. I’m thinking about the people today who don’t use any of those things, they just need something a little better than they have today, and they’ve cobbled together a little system. How can we help them level up?
57 Startup Lessons I’ve Learned The Hard Way
Work on a problem that has an immediately useful solution, but has enormous potential for growth.
Build a product people want to buy in spite of rough edges, not because there are no rough edges. The former is pleasant and highly paid, the latter is unpleasant and takes forever.
Inbound is easier than outbound. If possible, build the product in a way where customers reach out to you and ask to pay.
When finding people to sell a product to, don't go to people who already have a solution to the problem it solves. They'll need your offering to do at least what their existing solution does to even consider.
Instead, go to people who don't even use anything like it to solve a problem. Sell to underserved markets.
Ie. For Draft, Nate didn't go after professional writers who already have an alternative solution, he went to people just starting that didn't even know they needed it in the first place.
Instead of focusing on trying to sell more stuff to people who have plenty of that stuff, I focused on the people who don’t yet have these tools or experiences.
Good discussion and comments here: https://news.ycombinator.com/item?id=7043468
SimpleCrew’s Sales Strategies for Startups - http://www.simplecrew.com/blog/sales/
- Anatomy of a sale:
- 1) Ask Questions
- build trust, show understanding, uncover pain points, reveal buying process
- tell your story
- 2) Sell the company
- press pieces, social proof, case studies/success stories
- 3) Sell the product
- relate features to pain points
- 4) Ask for the close
- Be assumptive; make next steps clear
- 4b) Handle objections
- Dig for real objections
- answer with a question
- Use emotion (no math, logic, ROI)
- 1) Ask Questions
- General sales advice:
- Ask questions
- observe "buying questions"
- ie. "Is it available on android?", "where are you located?"
- they indicate engagement and excitement in the product.
- Spend time trying to find people who are already convinced, rather than trying to convince people
- Touch points:
- need to balance reminding vs annoying them.
- Depth of relationship vs Time/Energy/Cost:
- self service < email < phone call < in person
Ways to monetize:
1) People want to look professional:
- Windows: They don't want to open up 'Windows Home Basic' in a meeting, but 'Windows Business'
- Slideshare: don't want ads to show around their slide deck
- Flickr: some people just want to have the 'Pro' badge show
2) People want to belong to a group, part of something bigger:
- Memberships for exclusive perks
- Being a 'backer' on KickStarter
3) To experience and discover new things:
- In-app discoveries (unlock new things)
4) People hate to lose things:
- ie. when Yahoo shut down Delicious, Pinboard.in came in save bookmarks
- Paying for more space (GMail)
5) People love to complete a set when possible:
- For the sake of completeness
- ie. Fonts, people might only need 2, but when the whole set has 16 variations, they buy them all
6) Ability to control privacy:
- Removing things from public view
- Ability to password protect
7) Speed things up:
- ie. downloads: limits download speed, allow parallel downloads
- faster processing
8) Exclusivity, letting people in first:
- Steam: let people pay to play unfinished games, to be first to try them
- Early access to new features
9) Right to tweak/control
- Provide premium paid features to change specific settings
10) Let user personalize experience:
- change branding, appearance.
11) People pay for convenience:
- remove hassle and a bunch of work
12) Add time pressure:
- gradually rising fees (the earlier you join, the cheaper it is)
- Limited time deals
13) People want to limit negative feelings:
- Link product to charity
- ie. Itunes: buying instead of torrenting --> emphasize that they "did the right thing"
14) To brag/show off:
- "I am rich app": people bought a $1000 app just to show that they could buy it (it did nothing).
- Trying to impress friends
15) People like to get insights:
- Pay to get better understanding and insights
16) Let people communicate and connect:
- Limit the # of messages they can send; pay for ability to send more
17) People want to get notified:
- Get notifications and alerts for certain things
Smart digital revenue models combine a selection of these 17 techniques
“Take a human desire, preferably one that has been around for a really long time…Identify that desire and use modern technology to take out steps.” - Evan Williams
This isn’t to say that customers are wrong, or that their opinions aren’t valuable. I’m simply saying that they are often viewing a problem through their own lens, rather than the lens of your entire market.
Product person’s idea of improving a spoon — a fork.
Product people understand the difference there — and will give you better advice based on their experience (which likely includes many failures they can warn you of).
- "...startups need product/market fit, not growth. Growth comes as a result of having achieved fit, and a growth team is built to optimize the curve."
- Growth doesn't matter if you aren't retaining users.
- "Try to start optimizing growth too early, and you may not have the product in place to become a long-term success."
PG on startup ideas
- Ideas have little value, more valuable is the execution (see Sivers' idea multiplier table)
Actually, startup ideas are not million dollar ideas, and here's an experiment you can try to prove it: just try to sell one.
- Most startups end up nothing like the original idea. The value of the initial idea is taking you through the process of finding out it's broken, in order to come up with the real idea.
- Approach ideas as questions rather than assertions.
- Redefine a problem, don't tackle it head on. (Dont take on Microsoft's OS directly, change the way people use apps instead.)
- Look at what people want: make it cheaper, easier to use
Redefining the problem is a particularly juicy heuristic when you have competitors, because it's so hard for rigid-minded people to follow. You can work in plain sight and they don't realize the danger. Don't worry about us. We're just working on search. Do one thing and do it well, that's our motto.
On getting bought:
- Look at big companies and see what they should be doing, and do it. Chances you can do it faster.
- Have multiple potential acquirers, otherwise 1 can just take their time, or might build their own solution.
Depth: “Great products, services, ideas, causes — they all have depth. Lots of features, lots of functionality. Maybe not at first, but it’s part of the plan. Great entrepreneurs anticipate what people will need as they come up the power curve.”
Intelligence: You want people to discover your product and say, “Ah, somebody understood my pain better than I have and has articulated it for me better than I ever could.” He gives the example of the MyKey function on the Ford Mustang. The car goes 0 to 60 in 4.4 seconds, but inevitably his son would end up driving it. MyKey lets you program the car’s top speed, enabling concerned parents everywhere to set it at a sane 55 mph. Ford understood this need. Completeness: “Your product is not what people download and install. It’s the documentation, the online support, the string of enhancements to come. That’s the totality of your product, not just the executable code. Great products are designed completely.” Empowerment: “Make people feel more creative, more productive. Give them peace of mind,” Kawasaki says. “You should be able to explain your product and why it’s lovable in three words. It’s a mantra not a mission statement. Nike uses ‘authentic athletic performance.’ Target uses ‘democratized design.’” Developing this kind of sticky tagline for your audience makes your product or service accessible, easy, and tells them how it will extend their capabilities.
Do a pre-mortem, not a post-mortem
Now, to reach critical mass with your product — and that’s the goal in this hyper-growth obsessed market — it’s not about top-tier journalists blessing your efforts. “The world has been inverted. Now you succeed because lonelyboy15 embraced your product. And he told his 20 friends who told their 20 friends. This is how the big successes have happened.”
So what you need to do is plant many seeds. Put your prototype or your product out there. Cover the earth with it, because you don’t know who your lonelyboy15 will be. You don’t know who that one person will be who will make your product a success.
Sell a dream:
You can also meet your customers on a grander scale by selling a dream that you know they share with you. “Steve Jobs didn’t get up on stage and say, ‘This is the iPhone, it’s $188-worth of parts put together by a large company in China.’ He talked about creativity, productivity, coolness, connection, hundreds of thousands of apps. He was selling a dream, not a phone.
The more people you can respond to that fast, the more seeds you have planted,” Kawasaki says. He also recommends diversifying the channels that allow you to be responsive. Use Twitter, Facebook, email and more in combination to reach different, overlapping audiences. “This is core to your existence as an enchanter,” he adds. “And you have to do it all the time. It’s core, not context.”
Enchant the influencers:
You have to ask yourself, ‘Who is really the influencer?’ I have a nine-year-old daughter, and I will do anything to make her happy. So if you truly wanted to influence me, you’d start by making her happy.”