January 28, 2013

My Future Marketing Blog Posts

Focus is the most precious asset for any startup CEO.  As much as I love blogging about startup marketing, it just isn’t a very good use of my time these days.   So for the foreseeable future, I’ll be taking a hiatus from blogging on Startup-Marketing.com.   The most important thing you should have taken away from Startup-Marketing.com is that startup marketers need to focus on doing what’s important at any given stage in a startup.  My short post on The Startup Pyramid gives a good breakdown of the marketing priorities that matter most for startups.  It’s worth re-reading if you’ve read it before.

Now Blogging at blog.qualaroo.com

If you do everything right in the early stages and you’re lucky, startup marketing eventually just becomes marketing.  Established companies have many of the same challenges as startups.  They still need to stay on top of who loves their product, why they love it and how to get many more of the right people into a must-have experience.  The effective emerging tactics for connecting with the right people and onramping them to your product experience are the same for startups and established companies.

At blog.qualaroo.com I’ll be exploring observations and lessons learned in a way that is hopefully useful to all marketers, not just startup marketers.  My most recent post explores why online marketing keeps getting harder every year and what you can do to keep up.  Below is a brief excerpt followed by a link to the full post.

The Online Marketing Arms Race

Online marketing was pretty easy when I first started doing it in 1996.  It wasn’t rocket science that you should test ads for response rates and measure conversions.  But surprisingly a lot of people weren’t following this process.  Considering that there was less than $20 per year competing for the attention of each US Internet user, this little edge made it easy to profitably acquire lots of customers online.

Dollars spent advertising to each USA web user

Marketing is Getting Harder

But in the last few years, online marketing has gotten much harder. Marketers now pile in more than $140 per user in advertising each year.  To compete, today’s online marketers must seek READ FULL ARTICLE 

 

January 11, 2013

Are Marketers Now Required to be Engineers Too?

As much as I hate to admit it, online marketers with engineering backgrounds often have a significant advantage over non-engineering marketers.  They are simply much more capable of “getting stuff done.” The rest of us waste a lot of time and creative energy figuring how to get the obvious stuff done.

Not only are engineering marketers more capable of getting the essentials done, they can use their reserve of time and creative energy to be scrappy about building marketing experiments.  And of course the experiments they build on their own can be much more interesting than us non-engineers.

One way I have worked around my engineering deficiencies has been to hire the skills onto the marketing team.  For example, in my last long-term VP Marketing role I hired a front-end designer/engineer to design and code landing pages and a dedicated DBA to build reports and run ad hoc queries.

Tools are Leveling the Playing Field

Fortunately the playing field has begun to level in recent years so that non-engineering marketers can be much less dependent on engineering help.  For example, I now use KISSmetrics to build my own reports and run ad hoc queries.  And because it is so easy, I spend a lot more time digging into things like event-to-goal correlations.  This helps me know the events I should be promoting to website visitors in a given lifecycle stage. In the past, I was just seeking visibility into the marketing campaigns and landing pages that were and weren’t working.  KISSmetrics allows me to get much deeper and identify additional levers to improve results.

I’m also no longer dependent on front-end design and development help.  Not only can I build extremely effective landing pages with Unbounce, I can also very easily set up and manage A/B tests. This takes me beyond the stuff I even bothered asking for in the past.  For A/B testing landing pages, I previously had to replicate every ad to point to different landing pages.  It doubled the amount of time it took to set up any new ad campaign.  Now with Unbounce it is all automatic.

Even more empowering, I can actually manage all the content and design updates for our entire website using Optimizely.  This proved to be very useful a few months ago when Qualaroo lacked a front-end developer.  Despite limited HTML skills and no design talent, I was able to make all the necessary changes and still keep the key design templates that were custom created by a talented designer.  Finally, Optimizely made it a no brainer to retain the old version and run it as an A/B test.

What’s Next?

I’m very excited about the range of tools that will emerge over the next few years to further empower marketers.  Eventually I see a time where an individual marketer will have the ability to identify and control all of the most powerful levers for driving growth, even from deep within their website.

An important step that is also taking place is automation of the marketing programs that work.  All of this will continue to free up more time for creative marketers to build marketing experiments that truly push the envelope on results.

November 2, 2012

Pioneers Festival in Vienna Austria

This week’s Pioneers Festival in Austria was a great surprise (I wasn’t sure what to expect).  It’s very hard to make time for events, but I’m really glad I did for this one.  Stepping back from day to day execution helps with perspective on my startup – especially when it’s with a bunch of other startups in a 300 year old castle in Vienna Austria!

Forbes compared Startup Pioneers very favorably to Le Web:

Pioneers Festival is what LeWeb used to be and by the talk at the event from investors, start ups and journalists, it’s surpassed LeWeb in terms of quality of speakers, venue, networking and topic matter you can sink your teeth into.

Fortunately for everyone who couldn’t attend, Startup Festival provided professionally produced videos of all the speakers.  I highly recommend checking out this video of Alexander Osterwalder‘s presentation.  Here’s the recording of my presentation. Skip the first minute or two of crowd pumping up exercises…

Finally, if you just want the slides from my presentation, here they are:


November 2, 2012

New Book on Startup Marketing

I recently worked with Hyperink to publish a collection of the most enduring articles from my blog. We carefully curated and compiled the articles that will remain relevant to startups into the future.

This book builds on the original goal when I began blogging about startup marketing. At that time I couldn’t find books that offered useful guidance for a resource-constrained startup striving to achieve hyper growth. I knew I had many valuable lessons to share that I learned growing two startups to IPO filings and taking several more startups to market that are now worth billions of dollars collectively.

The book won’t give you a single silver bullet that makes success easy. Growing a startup is hard and the odds are stacked against all entrepreneurs. But this book will help you understand key growth principles and prioritize efforts needed to build a foundation that supports long-term sustainable growth. And when necessary, it will help founders hire the right kind of person to lead their growth efforts.

What makes a startup scalable? Why is product/market fit so important? What defines a “must have” product? What 3 common optimization failures can lead to a startup’s downfall? What’s the best business model for a startup’s goals? You’ll find the answers to these and other questions all in the book.

It is now available on Hyperink, which provides DRM-free copies in PDF, EPUB, and MOBI formats; Kindle; and Nook .

October 5, 2012

The Risks of Growth Hacking and How to Build Authentic Sustainable Growth

It has been a couple years since I wrote the first post on growth hacking.  The term didn’t gain much popularity until Andrew Chen wrote this post back in April of this year.

Online Marketing Redefined

Some people love the term “growth hacker” and some hate it. The term is not important. What is important is that people are tuning into the fact that traditional marketing techniques are often not very effective for driving growth in online businesses.

When I first started advising startups on growth a few years ago, most startup founders asked for help with driving awareness.  I wrote this blog post in response: Awareness Building is a Waste of Startup Resources.

Occasionally I’d connect with the in-house marketing person at a startup and see a plan that looked like a template from a Marketing 101 text book.  That’s not surprising since most marketing job descriptions for startups also looked like they came out of a Marketing 101 text book.

Today people are realizing that the best startups have approached growth in a very different way.  There are now over 450 active openings for growth hackers listed on SimplyHired.com alone. Two years ago, most of these job descriptions would have been for traditional marketers. It’s very exciting to see this revolutionary change in the way online startups think about growth.  And it’s not surprising that more established online businesses are beginning to adopt these approaches as well.

Evolving Definition of Growth Hacker

I recommend that people don’t get caught up on the term “growth hacker” or even a specific definition for it.  Focus instead on the concepts behind it. The fastest growing companies on the Internet have a growth focus rather than a marketing focus.  Try to understand how businesses like Facebook, Twitter, Dropbox, Linkedin, Eventbrite and Groupon are driving growth and you’ll begin to understand the meaning of “growth hacker.”

I also recommend that you Google the term “growth hacker” and read the articles. Not everybody agrees on the exact definition, but most of the articles contain gold. The alternative is to read 1000s of pages in marketing text books, which will give you very few insights about how to drive growth in an online business.

Stay Authentic to Value Delivered

The best growth hackers are constantly testing and tweaking new growth hacks.  During this process it is easy to lose sight of the big picture.  When this happens, growth eventually falls off a cliff.

Sustainable growth programs are built on a core understanding of the value of your solution in the minds of your most passionate customers.  Your drive to develop growth hacks should be based on a burning desire to get this “must have” experience into the hands of more and more of the right customers.  Growth hacks built from this frame of mind are the ones that build large sustainable businesses.

Fully grasping your must have experience isn’t easy.  The presentation below is a step-by-step guide for uncovering your must have experience and calibrating your messaging and flows to that experience.  The process should put you in the right frame of mind to build sustainable growth programs.

July 30, 2012

Creating an Unforgettable Name

One of the requirements when we acquired KISSinsights was that we change the name.  As much as we loved the KISSinsights’ name, a new name would gives us the flexibility to extend beyond collecting insights.

Having been through naming exercises several times, I realized it would be an opinionated, emotional process.  All startups want a name that will help success, or at the very least won’t stand in the way it.  And unlike most startup decisions that are temporary and iterative, naming is a lot harder to reverse.

So we began our renaming exercise with some trepidation.  Like most companies, we were tempted to go with a cookie cutter name. Finalists included SnapTabs and BuzzBits.

Our VP of Product, Jason Meresman, suggested Qualaroo.  My initial reaction was “We can’t have a name like that!”  It went against my conservative nature to blend in…  Then I realized that blending in is the last thing a product should want to do.

Jason laid out a compelling case for Qualaroo.

  • It’s unique
  • It’s fun to say
  • Qual can mean qualified, quality, qualitative
  • Roo can connect to a memorable kangaroo image

Of course, like all important decisions we wanted to get input from some customers and peers.  We shared several potential names and asked for feedback and/or suggestions.  Most people had the same reaction that I initially had. They gravitated to names that sounded “ordinary.”  A few people sent persuasive support for Qualaroo, but they were in the minority.

Qualaroo logo small

So we were left with the decision to go with a safe, cookie cutter name or something more distinctive.  Not surprisingly, we chose Qualaroo.  It seems to strike the right balance of whimsical and serious.  And most importantly, tests show that people really remember it.

We also decided to make the free version much better (custom questions, 3X more responses per survey, full targeting functionality), so expect to see the Qualaroo kangaroo hopping up on a lot more websites…

Pop up with Qualaroo

If you are going through a naming exercise, I recommend that you fight the urge to blend in.  Here are a few resources on naming that were useful for us:

June 15, 2012

Our Path to Acquiring KISSinsights

Yesterday TechCrunch covered our acquisition of KISSinsights.  This acquisition may seem a little out of left field, but we’ve actually been moving in this direction for a while. I figured other entrepreneurs would benefit from understanding the path that we’ve been following.

The path started with CatchFree.com.  The idea for CatchFree was to capitalize on the fact that the freemium business model was creating many very strong businesses, but the economics of these apps constrained their ability to pay to accelerate adoption.  Our leap of faith was that by organizing freemium apps around detailed user ratings, we’d be able to create a very popular resource for consumers and small businesses.

Since launching at TechCrunch Disrupt last year the site has attracted over 1.8 million users and collected detailed ratings for over 1000 apps.  But surprisingly, app publishers were more interested in the structured insights we uncovered than the traffic we were sending.

If you read my previous post, I mentioned a service we were developing called MustHaveScore.  It was an attempt to productize our process for collecting detailed ratings for the products listed on CatchFree and package the insights in a way that they’d be even more useful for app publishers.  The response was very strong.  Tomer Dvir, CEO at Soluto, recently told me that insights have enlightened everything from their messaging to their product road map. And others were enthusiastic too.  In fact, we soon realized that our “concierge MVP” approach was going to overwhelm us.  By concierge MVP, I mean that we were manually categorizing write-in answers to how people used an app.  Now that we’ve validated demand for this product we are working on a more automated way to provide it.  We’ll also come up with a price point that makes it a viable offering.  In the meantime, we’ve moved MustHaveScore into a private Beta.

Through the execution of MustHaveScore we found that many people were looking for a more elegant way to collect feedback from their users.  They also wanted the flexibility to ask their own questions.  It became clear that what they really wanted was KISSinsights, so we approached our friends at KISSmetrics about buying it.  Fortunately for us KISSmetrics wanted to put all of their focus on their hot analytics business and we were able to reach an agreement to acquire KISSinsights.

What is KISSinsights?

If you’re not familiar with KISSinsights, it’s absolutely awesome.  It essentially pioneered the microsurveying category, making it possible to ask website users questions as they are making decisions, the crucial point at which they are likely to remember their motivation for making the decisions. This is a really powerful way to learn how to improve conversions and engagement. Of course it can be used for more general surveying, but this flexibility to intelligently target users on a website is what really makes it special.

And as an advisor to KISSmetrics, I’ve been helping with the product since it’s inception so I really understand it.  It evolved out of the Survey.io project that KISSmetrics and I launched in 2009.

Heat Seeking Missile

Our business will continue to evolve for the foreseeable future.  Josh Kopelman referred to this process when he wrote about entrepreneurs that are “heat seeking missiles.”  I highly recommend his blog post on the subject if you haven’t read it.  One of the areas we’ve been exploring is helping companies take action on “actionable insights.”  Our longer term vision has also evolved, but I’ll save that for another blog post.

If you’re a KISSinsights customer or have ever used it, I would love the opportunity to talk with you about it.  Please send me an email to ellisatcatchfreedotcom so we can schedule a quick 15 minute call.

March 15, 2012

Key to Sustaining Rapid Growth

 

After helping to bring several startups to market including Dropbox, LogMeIn and Lookout, I found that the key to sustaining rapid growth is understanding your “must have” experience and then aligning the entire business around that experience. This includes aligning the product roadmap, funnel optimization, and messaging.

Process for Uncovering Your Must Have Experience

With each new startup, I immediately started working to uncover the “must have” experience before I formed preconceptions about how and why a product would be useful.  This involved a rigorous process for identifying the most passionate users and then getting their unstructured feedback about how they were getting value.  With each new cohort of users that I engaged, I began to get more structured feedback to converge on a signal of the “must have” experience.   Once I had a clear signal, I could work with the team to start aligning the business around the “must have” experience.

I also found that it was important to monitor this “must have” experience over time.  Each new product update can change it.  Shifts in the competitive landscape can also affect it. For an experience to be a “must have” it should be both valuable and unique.  The emergence of a new competitor can instantly turn your “must have” experience into a “nice-to-have” experience.

MustHaveScore Makes it Much Easier

Working with the team of engineers at CatchFree, we’ve been able to not only productize the approach but also improve it.  The result is MustHaveScore.com. Our feedback widget requires no customization and intelligently evolves as more users provide feedback.  The user input is simple and requires less than a minute of their time. While the backend data processing is complex, the output is simple and easy to understand. We provide a comparative overview of all use cases that shows the relative popularity and passion around each use case, and then we segment user feedback to give you the context to understand why the use case is a “must have.”

Given my background with freemium, it’s not surprising that we decided to offer the most valuable analysis for free (everything described in the previous paragraph).  Over time we plan to offer additional premium services to help with positioning, targeting and eventually customer acquisition.

This is not a pivot.  MustHaveScore is part of our broader goal of helping people get more value out of innovative technology solutions.  After we help you identify your must have use cases, we want to eventually work with you (optionally) to help expose these use cases to prospective customers.

Not a Replacement for Customer Development

This toolset is really for transitioning to growth and then maintaining a strong growth rate after you have achieved product/market fit.  It is not a replacement for early stage customer development, which is all about “getting out of the building” to reach product/market fit.  In the early days, it is essential to meet face-to-face with existing and prospective customers.  There a couple key reasons why early stage startups must meet face-to-face with existing and prospective customers:

  1. They help you form insights that you could never get through structured, automated feedback.
  2. A startup generally doesn’t have enough users to automate the customer feedback function via surveys.

And even when you do have enough users to automate it, face-to-face interviews should always complement surveys. My best epiphanies that led to big boosts in growth have always followed concentrated face-to-face engagements with customers.

Benefits for Early Users

We’ve been slowly rolling out MustHaveScore over the last couple months and now have about 50 companies on the service. This slow rollout has been mutually beneficial since early companies have gotten hands on help interpreting and acting on the data, and we’ve gotten direct feedback to help us improve the service.

Note: MustHaveScore.com is now in private beta while we focus on our recent acquisition of KISSinsights.

March 2, 2012

Chasing Problems?

The best startups generally begin by trying to address a really important problem worth solving. If they can nail the solution to this important problem, they have a great chance of building a successful startup.

How Solving Problems Can Lead to Failure

Surprisingly, founders’ instincts to solve problems can also cause us to fail. Many startups miss success signals because they are too busy solving problems. Our instincts tell us to be responsive to customer feedback – especially negative feedback. These problems are so actionable that we feel good solving them. But over time a startup that chases problem after problem creates a bloated, fragmented solution that isn’t really needed by anyone.

Find the “Must Have” Use Cases – Ignore Most Problems

Ultimately the goal of any startup should be to create a “must have” product experience. The signal that tells you that you have created a “must have” product is your true north to build a successful business. You should understand everything you can about the “must have” experience so you can cultivate and protect it. Who considers it a must have, how are they using it, why do they love it, why did they need it, where do they come from…?

It feels totally counterintuitive to pursue these positive signals while ignoring most of the feedback about problems. But in my experience, this is the right thing to do. In fact, this is the most important thing that I learned in the years that I focused on helping to take startups to market such as Dropbox, Lookout and Xobni. To reiterate, the positive signal is much more important than the ongoing flow of new problems.

Problems Worth Solving

So which problems are worth solving? Essentially any problem that stands in the way of delivering the “must have” experience once it has been identified.

Problems worth solving include:

  • Usability issues that prevent reaching the must have experience
  • Confusing value proposition about the must have experience
  • Targeting the wrong users (AKA users who don’t need the must have experience)

But start by focusing the majority of your energy trying to create at least one must have use case. If you can’t find any positive signal about someone considering it a must have, then go back and revisit the original problem you were trying to solve. You might need to find one that is even more important to solve.

I recognize that my recommendation to ignore most problems is controversial.  Please comment whether you agree or disagree.  Hopefully we can get some good debate in the comments.

Update: Just to clarify, I’m referring to the data that deserves your focus.  I don’t mean to imply that you should be unresponsive to the customers that make suggestions.  It is very important to give great customer support.  Just don’t promise to change your product/business based on every reported problem.

December 29, 2011

Great Guidance on Pricing from Zoosk CEO

There is a way to think about that. The model that I have in mind is a graph where the X-axis is the price and the Y-axis is the revenue. At a price point of zero, you make zero money. A ridiculous price or a very high price point, again you make zero money because no one buys your product. This curve starts from zero and then goes up and then comes down. There is a peak, the revenue maximizing price point. Theoretically it is there whether you know it or not. It depends on your product and your demographics, etc., but if everything else is fixed, there is a revenue-maximizing price point. If you actually know the revenue-maximizing price point, you can do say, okay, that’s the top of the peak. However, I prefer to make 10 percent less money but have 20 percent more customers. You want to stay a little bit to the left side of the peak. It is around 90 percent of the revenue maximization point. The way I think about it is a little bit different. I don’t look at it as a continuous thing. I would try to pinpoint the revenue-maximizing price point and then find the nearest round number right before. If my revenue maximizing price point is somewhere between $20 and $30, I would shoot for $19.95. I can tell you that there is at least 20 to 30 percent additional profit you can get by optimizing your product packaging and your product pricing. If you can figure it out, you can go from a company
Shah,Tarang; Shah,Sheetal (2011-11-16). Venture Capitalists at Work: How VCs Identify and Build Billion-Dollar Successes (p. 64). Apress. Kindle Edition.

A lot of people have asked me about how to determine optimal pricing for a product or service.  This morning I read the following statement from Alex Mehr, the founder/CEO of Zoosk, and thought it was the best explanation I’d ever seen.  It’s a great articulation of the theory behind the process I’ve used for years.

Alex Mehr, the founder/CEO of Zoosk on pricing: “There is a way to think about that. The model that I have in mind is a graph where the X-axis is the price and the Y-axis is the revenue. At a price point of zero, you make zero money. A ridiculous price or a very high price point, again you make zero money because no one buys your product. This curve starts from zero and then goes up and then comes down. There is a peak, the revenue maximizing price point. Theoretically it is there whether you know it or not. It depends on your product and your demographics, etc., but if everything else is fixed, there is a revenue-maximizing price point. If you actually know the revenue-maximizing price point, you can do say, okay, that’s the top of the peak.

However, I prefer to make 10 percent less money but have 20 percent more customers. You want to stay a little bit to the left side of the peak. It is around 90 percent of the revenue maximization point. The way I think about it is a little bit different. I don’t look at it as a continuous thing.

I would try to pinpoint the revenue-maximizing price point and then find the nearest round number right before. If my revenue maximizing price point is somewhere between $20 and $30, I would shoot for $19.95. I can tell you that there is at least 20 to 30 percent additional profit you can get by optimizing your product packaging and your product pricing. If you can figure it out, you can go from a company.”

Shah,Tarang; Shah,Sheetal (2011-11-16). Venture Capitalists at Work: How VCs Identify and Build Billion-Dollar Successes (p. 64). Apress. Kindle Edition.