When you start writing you realize that shorter posts take a lot more time than longer ones. As Mark Twain said
“I didn’t have time to write a short letter, so I wrote a long one instead.”
This is largely because putting a stream of conscious thoughts together is easy with some examples, but putting together a thoughtful, concise post requires organization, planning and a level of introspection that’s very hard.
Here are some hacks that work well when you want to write shorter, but more effectively.
More examples work better than descriptive narratives. Examples have a positive effect in reinforcing a statement. although if you don’t choose a good example, the words become superfluous. Instead of explaining the point, giving an example works better.
Remove sentences that give a lot of context with links and references that point to where you can read more.
Think how will someone tweet this if they were listening to you instead of reading it.
Of these the tweet seems to work the best. If someone were reading an entire essay or paragraph and had only 1 to 3 tweets to summarize your content, what would they say.
I love the approach, analytics and data associated with segmentation. The act of taking large numbers and breaking them down into manageable smaller parts fascinates me.
Yesterday, I had a chance to talk to a friend about segmenting startups. There were 5 ways we tried to segment them and finally figured out that 3 made sense and the rest were not useful or actionable.
Here are the 3 categories of segmentation we came up with.
Segment by stage of company. (Idea stage, Prototype, stage, Traction, Growing, Scaling)
Segment by growth rate (slow growth, medium growth, fast growth and rapid growth)
Segment by category (eCommerce vs. SaaS vs. Media, etc.)
Segment by location (where they are based)
Segment by type of funding (Bootstrapped, Angel, VC, etc.)
Segmenting by market opportunity (large existing market, vs, disruptive new company)
Segmenting by stage of company: This is the easiest to understand. Most companies call themselves in various stages based on their funding stage as well, so we figured #5 and #1 were fairly close. There were enough differences when a larger company was bootstrapped, so they were “Growing” and “Bootstrapped” but those are fair and few between.
Segmenting by growth rate: We wondered if this was similar to stage of funding as well, but there are enough differences. A slower growth “Startup” would be going through multiple rounds of seed and early stage funding, so we felt this was useful segmentation.
Segmenting by category: This is the one that most startups use as well besides stage. Companies call themselves as an eCommerce company, Consumer Internet, B2B startup, etc. Most startups use this as a way to segment themselves besides stage.
Segmenting by location:Companies tend to email me and segment themselves from “silicon valley” vs. “New York”, vs “Bangalore” for example. Not sure where we could use this, but this is one other way we could segment them. I suspect after you do a first level filter, this might be a follow on segmentation.
Segmenting by type of funding: Compared to 7 years ago, startups are taking longer to get to VC series A for some companies, but others are still taking less time. Some end up bootstrapping for longer, and still others go from accelerator to accelerator, trying to raise seed round, post seed rounds, bridge rounds and still trying to get ready for a series A raise. I dont think this is going to help us action them in a particular way, so this, albeit interesting is not very useful.
Segmenting by market opportunity:
There are other ways to segment startups, including the type of founder (hacker, vs. sales person, etc.) and founders background (serial entrepreneur, first time founder, etc.)
I wonder if there’s anything we missed. I’d love your input.
One of the things I have been very focused on over the last 2 weeks is email “open rates”. Since this blog now has 100K+ subscribers, it is a very important metric to me. I dont get too many metrics beyond the open rate since the WordPress hosting that I use provides only that metric.
Email open rate research suggests that open rates vary from 15% to 25% with the average being 22%. The open rate for this blog had hovered around 17% (that’s low) and now after a few tweaks has inched up to 19%.
The best days for open rates for this blog have been Thursday and between the hours of 7 am Pacific (730 pm India time) to 9 am Pacific (10 pm India).
There are 3 changes I made which have progressively yielded better open rates.
Writing more effective headings / Subject lines of the right length. This is the #1 thing I am focusing on. On an ongoing basis, I spend 23-28 minutes a day writing a blog post. In the first few months, I’d spend 95% of that time writing the blog post and less than 2% of the time writing up the heading or Subject line. Now I am spending 15% of the time coming up with the right heading. The other experiment I am conducting is taking my old blog posts and ReTweeting them with new headlines to understand how to write catchy and effective Subject lines.
Moving from inline images to featured images. WordPress has an option called “featured image”. If you choose that, it appears as an image at the top of the post, instead of inline. While most email clients filter images and the use has to explicitly download them, images are very important for people reading blog posts on my site. So the best compromise is to not have inline images but instead have it featured. That way it does not appear on the email body but definitely appears on the blog post. If you can do 2 images, then your open rates increase even further.
Consistent time of publishing.This is pretty obvious, but if you setup a routine to send emails and publish posts, you will get a higher open rate. So, even if you write your blog posts at a time that’s not your usual time, publishing it “later” helps ensure the open rates are higher.
If you have a few early customers for your SaaS application, the next question typically is to get to $1000, then $10K and then $100K in MRR (Monthly Recurring Revenue) – which most people will call serious traction.
The biggest criteria I have found in looking at the 3 SaaS companies I have invested in is price of the product determines the customer acquisition technique.
There are 3 bands of pricing for SaaS products. I am going to look at monthly prices for all the products.
The first band is if your product is an individual purchase on a person’s credit card. Typically most people get uncomfortable at more than $99 per month. The sales cycle could be anywhere from 2 to 6 weeks.
The second band is when a department purchases your product for use, or if your product is highly specialized for a role which makes it between $99 to $499 per month. The sales cycle is typically between 2 to 10 weeks is my experience.
Finally, the last band at $499 to $999, is when you typically need approval from your manager. In many cases a “corporate wide” approval may also be required at > $999 per month. In most cases the sales cycle is greater than 6 weeks and for products > $999 per month might take 3 months or more.
These are when you are selling to an enterprise B2B market. For those targeting SMB markets, the bar is lower for the amount of money, because you typically find the owner approving most purchases over $299.
If you have a few ( say 10) customers for your product and are making between $1000 (for $99/month product) to $5000 ($499/ month product) and are trying to get to traction – $10K and then $100K per month, there are only 2-3 techniques each that work.
For lower cost products, SEO and Search advertising are predominantly the only viable models.
For more expensive products, since the sales cycle is typically longer, you will need to “start” your customer acquisition with one technique (Content Marketing, with Social Engagement) and will probably “engage” the customer (cold emails, inside sales engagement after signup) via phone and likely have a face to face meeting for products that cost > $25K per year.
What does not work for early stage, pre-traction companies?
Events, especially those that feature a lot of companies and several large organizations in your space, dont work at all.
There are 2 techniques that many people claim work to your “brand” front and center with customers, but does not drive leads – blogging and podcasting.
While both are largely easy to do and require much less investment than other techniques, they might be used in conjunction with other mechanisms, but will not drive much in terms of signups, even if you have a “freemium” plan.
What I have also noticed is that engaging potential customers via webinar (where you get 20-30 participants) and they can ask questions and learn about the problems you solve work much better than even search marketing and touch-less signup.
Personal branding is becoming more important for individuals in the Gig economy. It is important since it ensures “inbound” leads for freelancers, opportunities for individuals at larger companies and also makes it easy for entrepreneurs to raise money or hire people.
Let me outline what personal branding is:
To me personal branding is creating enough value for the set of people who you are trying to influence or persuade. Those “influencers” know about your work in a certain area, domain and would consider you to be the preeminent expert in that area. The “recall” for your name associated in that area, should hence, should be significant.
Let me also outline what personal branding is not:
I believe personal branding is not about blowing your own horn, bombarding people with messages and content that’s not unique or differentiated.
The best way to create a personal brand is to create compelling content. Or so I thought.
The “community” or influencers who you are trying to influence are equally if not more important.
The 2X2 Matrix above shows the 4 types of personal brands according to me. If you have good content and build a great community you are perceived as a leader. That’s where you should aim to be.
Initially you wont have either, and so the question becomes where do you start?
The nuanced question is – where do I start if I have limited time – say 30 minutes a day?
My experience states you are better off building a community and not spending time initially creating content.
You can curate great content from others – in the form of an email newsletter, or frequent (2-3 posts and links on the topic) daily.
Spend time reading about the space you want to build your personal brand before you have an opinion or a point of view.
Learn about the different people, their points of view and the pros and cons before you start to write and speak about the topic. Engage with people on twitter, by asking questions, connecting with them and learning about their point of view first. Then spend time building relationships.
I wanted to also put my money where my advice goes. So, for the next 3 months I am mentoring 2 of my friends Marc and Nancy to build their personal brand using my suggestions and strategies. They are not known as experts in their space. They are trying to build their niche – Nancy as an angel investor – her niche is to be determined and Marc in the SaaS space – his niche within SaaS is also TBD.
Over the next 3 months I will report once a couple of weeks on their progress, the tactics they are using and the methods they have followed.
The measure of their success will be determined by 3 specific goals they have set out for themselves.
Both want to be invited to speak at a major event (which is yet to be determined) as an expert on the space they chose.
They want to be interviewed by either a podcaster or a blogger on their thoughts on the space.
Nearly 30% of Americans actively listen to podcasts weekly, and over 17% globally, according to Pew Research. There are over 200K podcasts available and over 20K publish weekly. In the area of business and technology alone there are over 20K podcasts.
Ravi, Lakshmi and I started a podcast, India Startup Chat 3 months ago to explore the world of voice media.
The main reason we got started was to understand this new medium and try to engage with the startup community in India and outside.
I have been asked by a few listeners if podcasting is a good marketing tactic to adopt to generate awareness and engage with B2B customers.
After having done 10 episodes, I am not sure I know the answer yet, but I can tell you it is likely not going to generate a lot of leads as much as it will keep your brand front and center of your already existing users.
The way I think about podcasting is to use it as yet another means of creating engagement with users but with a medium that is used at a different time than traditional blog reading or catching up on news or social networks. It tends to be heard mostly in the afternoon after lunch for us.
Given than fewer than 10% of Indian Internet users ever listen to podcasts, while over 60% of them read blog posts and over 80% of them check Facebook daily, you want to allocate time appropriately towards various techniques for generating awareness for your company.
For B2B companies, I would say the priority would be much lower. Business and technology podcasts have 29% fewer listeners and 50% fewer plays than general interest podcasts.
From my anecdotal data gathering from 20+ listeners of our podcast, I can tell you most of our American users listen to our podcast on the soundcloud app, while over 70% of Indian audience listens to it streaming on Facebook, because that’s where we show up first – on their news feed.
Our audience is between 300-800 per episode, so, I am not sure we have reached any form of critical mass, but we have some data to work with.
Most of our listeners (over 80%) found out about our podcast since they were friends of Ravi, Lakshmi or I on Facebook or if a friend “Liked” an episode and it showed up on their news feed.
Most people (over 60%) listen to our podcast on their desktop (not surprising, given it is in India, at work) and I suspect that will start to change and move to more mobile in a few months / next year.
Since the number if iPhone users is relatively small in India (compared to Android phones), I think even if we optimize our ITunes podcast search optimization, we wont get too many (few, but negligible) new users.
What I did learn is that if we had the name podcast on the name of our show, it might likely get more listeners from searching on Google.
If you are considering podcasting for your startup, as a marketing mechanism, I will outline over the next few days what you need to consider, how you should set it up and go about marketing the podcast first to get your customers to listen.
Let me know if there are specific areas that interest you more than others.
Still, there are many companies (such as #Slack, Cloudera) that have done a great job in getting many customers to share their screen shots online and also blog / tweet about their usage of the product.
What makes enterprise customers want to share why they are working with a product or using it?
The 3 main reasons seem to be
a) Perception that the solution is associated with being leading edge, innovative or cool
b) Acceptance by peers and industry experts that the use of that product is a “safe choice” and
c) Incentives provided by the startup to talk about the usage of the product which leads to others in the peer group acknowledging the company as a thought leader.
If those are the 3 most important reasons why customers do share their usage of your SaaS product with others, how do you go about helping create a perception that being associated with your product or company is cool, safe or innovative?
I have seen many good SaaS company entrepreneurs starting to form an influencer advisory list, which is a private group of very interested, engaged and empowered influential community members – potential investors, industry analysts and a few potential customers.
This list of influencers is formed even before the product is ready and their inputs are sought before your product is ready or your messaging is clear. When these folks have the opportunity to shape your message and positioning in the market, they have more “vested” in your company and are likely to share your news and information.
Typically the influencer advisory list has between 7-10 folks and getting them to know each other (if they already dont) is a great idea. They can network and learn from each other and also help understand the other people’s perspectives.
In return for their time, some folks have given some of their folks the opportunity to invest early, still others have offered advisory shares and others have just paid for the regular meetups.
As exciting as it sounds, when a business development or partner sales representative from a large company in your domain calls you, it tends to, in most cases, generate more work than get customers in the short term for a startup.
The first part of partnering with a large company is to understand when you are ready to “sell with” or “sell through” the larger company.
In theory, partnering sounds awesome. The large company has a huge installed based, they may not have a product competitive to the one you posses and your solution fills a gap they may have in their portfolio.
In practice the mechanics of the partnership, the logistics, elapsed time and commercial terms are the things that wear you down.
First realize that they are multiple “players” within the large company – if it is a large technology company, they are very much engineering driven – so the internal engineering teams have a preference to build not buy or partner. While the product management teams might have a more outside-in view, it is also likely they will prefer to build internally (“I dont think the product will take too long to build” OR “We can build what that startup built in 3 months with 3 resources”).
Then you have the marketing teams, which tend to be consumed (in larger companies) with the current quarter’s lead generation or to focus on helping their sales team’s quarterly goals. While they would like to partner, it is with the intent to have their message be more “cool”, “relevant” or “credible” with potential customers or analysts / press etc.
The sales teams would like to partner if it helps them get the deal done. If they do not get credit for the deal, (or quota relief), no amount of convincing will get them to partner with your startup.
I am going to skip over the other incidental teams such as Finance, Legal and Services team, since they tend to get involved in the back end of most partnership opportunities and rarely lead.
That leaves you with the Business Development team – who reached out to you in the first place. In most large technology companies, they are chartered with “inorganic” growth – or the ability to generate revenue either by having other companies sell their products or helping revenues grow by selling other products the company does not build itself.
In larger technology companies, most BD organizations report either to the Sales team or the Marketing team. In less than 10% of the companies they might report directly to the CEO (via the Corporate Development organization or Finance in even rarer cases).
Most business development professionals are well meaning, have an outside in market perspective and are keen to make deals happen, but, in most companies, they tend to execute deals and influence the strategy, not come up with it.
Meaning, they can make the deal happen if the product or sales teams desire, or they can say no to a deal, but they rarely initiate the deal. There are exceptions.
So, what should you do when a Business development person reaches out to you to partner?
First, ask them to help you understand the dynamics of their organization and their process.
Typically, they will have a 3 or 5 step process.
Step 1: Layout the market scenario, including product fit, competitive roadmap, etc. and get buy in from Engineering and the product teams. Obtain an executive champion
Step 2: Layout the Go to market plans, with help from the marketing and sales teams. Secure the executive champion for post integration.
Step 3: Detail the financial impact – the investment to be made, the potential revenue impact, the opportunity. Secure the budget needed for the various teams for the deal.
Step 4: Get buy-in to start negotiations with your startup. This includes discussion with their legal team on the framework of the agreement, discussions with your startup on the roles, responsibilities and work each team needs to do to be successful. This includes defining success with milestones at each stage.
Step 5: Final contract completion and roadmap for the partnership with the outline of the announcements, etc.
This entire 5 step process usually takes months if not 2 quarters on average.
Yesterday, I had an entrepreneur reach out to me to ask me a few questions about his #napkinStage idea. He was doing customer development, he said and before he’d get to far into the development of the product, he wanted to talk to customers.
One thing that he mentioned to did not surprise me as much, but was indicative of the state of the challenges faced by all entrepreneurs.
I have sent over 110 emails (20-30 were warm introductions, rest were cold).
“I have been trying to get to talk to potential users on the phone so I can ask more open-ended questions”, he said. “I have gotten 2 people willing to talk on the phone”. The rest have been reluctant to phone and prefer to email or message.
Yesterday I was reading the survey results by attentiv (the graph shows the # of mobile phone users who use various capabilities on the phone with some level of frequency.
Turns out, the entrepreneur was facing the problem that 90% of marketers face. We just dont like to talk any more.
I would have not been surprised about this if this was only that they did not want to talk to strangers.
That’s not the case though.
In the customer development hierarchy (or Maslow’s hierarchy applied to customer development), while the pre-purchase may be the pinnacle of the customer development outcomes, the customer calls are the hardest.
I have seen many of the entrepreneurs at our accelerator give up on the “Talk to actual customers on the phone” portion of the customer development sprint.
This is for both B2B and B2C companies.
Most customers are comfortable with online surveys, many are willing (even at the expense of getting spammed) to even provide their email to be notified when a product gets launched. While pledging on Kickstarter and pre-paying revenue are the ultimate goals and more indicative of traction, the customer call still is the holy grail that every accelerator program asks their participants to do.
I think that will have to change over the next few years. If messaging is what most of the customers prefer, I suspect entrepreneurs will start to focus on getting potential users to “join their public #Slack channel”.
Open discussions are much more simpler and easier to manage using Twitter or Slack, compared to phone calls, which require a lot of commitment in terms of time, attention and focus.
Most people are losing the stamina and energy it takes to have a long conversation on the phone.
Yesterday we talked about the changing nature of the sales person’s role at the #napkinStage of a startup. While many people still prefer the “closer” to the pipeline builder, I think if you have a great product that customers can try, use and then buy you dont need to “close”. Customers will “buy” or “close” themselves. Enterprise and SMB software use to be “sold” not “bought” – that’s now changed. Only if you have a poor quality product or an expensive one, do you need to “force” people to buy.
Today I am going to talk about the role of Marketing folks in the #NapkinStage of a startup. While many startups may not hire a marketing person early, I think the role of the “marketer” is being performed by someone who is responsible for “getting traction”.
10 years ago, the Marketing person at a startup was focused on building analyst relations, attending and participating at events and building a “brand”. They spent a lot of time with agencies building the right creatives, making sure they had good “brochures”, giveaways and promotional content.
The marketing person’s role is now more like an early stage product manager – I call them opportunity managers than product managers actually.
If you have a good product, then it sells itself in a 15 min demo (or a 3 min video). Yesterday, one of our companies (Beagel) told me about how they have a 70% conversion to paid customers in less than 30 min, so this is not a rarity.
The role if marketing manager is now focused a lot more on metrics like Customer LifeTime Value (LTV), CAC (Customer Acquisition Costs) and CTR (Click Through Rate), then results of “Brand surveys”, or “generated leads” and analyst reviews. They are becoming more data driven.
Attending events, writing whitepapers and delivering webinars is being replaced by creative copy writing – SEO, engaging on social media (Twitter, etc.).
With this change it is becoming obvious that most marketing is now focused on measurable outcomes associated with revenues, business and product than purely brand.
Surprisingly, even at larger companies (such as Microsoft), I am finding that most Marketing folks are coming to learn about these techniques of “Lean marketing” from the startups at our accelerator.
Tomorrow I will talk about the changing role of the #NapkinStage development team and how they are becoming more Customer service organizations than product engineering.