Marketing · Growth

The dreaded "How will you get new users" question...

Matty Sallin System Financial, Inc.

February 19th, 2014

I'm building a B2C business, and whenever I talk to a potential partner, cofounder, or investor, they always ask, "How will you get new users?"

I am a product guy and I know that up and down, but I have no idea how to answer this question. Do they want to hear about off-the-wall, un-scalable stunts that will get attention among the early adopter crowd? Do they want to know what segment of the market you're going to advertise to, and through what publications/websites? Guerilla marketing tactics? Please help me better understand what makes for a good answer to this question.

Douglas Tarr Entrepreneur and Software Architect

February 19th, 2014

Here are some good answers:

"I have an email list of 10,000 enthusiastic early adopters of [my product].  I have been talking to them about it for months and they can't wait to see it!"

"We have discovered a hack in [big internet company]'s API that will allow us to get viral distribution"

"I have built 2 B2C companies before and have grown them to 10M uniques"

"I have a big bullhorn.  I am an influencer in [consumer space] with tens of thousands of real followers and when I say something, people listen."

Here are some less-good answers:
"We are going to buy PPC ads targeting [existing product]'s users."

"We are going to advertise on Facebook/Twitter."

"We are going to raise 3M to hire a VP Marketing and acquire customers."

"We are just going to build something awesome and people will come."

Helen Adeosun

February 19th, 2014

Hey Adam, 

My company SitterCycle.com gets this question a lot, I run a start up that envisions where we teach nannies to provide excellent care! If  you know a little about childcare you may make some assumptions about where my company would find it's nannies.

I think people are looking for a couple things when they as this, Guy Kawasaki has a great slideshare on this that I will find in a second: 
1) Is this person sane?
2) Is this person strategic?/Can they plan?
3) Are they flexible/ can they be specific and envision the world of possibility?
4) How do they plan on getting a sustainable customer base?

For SitterCycle , we are getting our early adopters, nannies here in Boston, Facebook, and among our earliest followers. We have also gone the guerilla route and gotten them off of care.com and craigslist in the childcare section. However for us this is a strategic way of showing that a ready market for our nanny training exists untapped in these spaces, especially with these companies that we hope to partner with when we have proven ourselves more. Then we plan to funnel folks back in by listing our certification on their profiles to raise parent awareness. I think people are looking to see if you can be scrappy, creative, and see the room for growth. Our next targets are agencies, parent orgs, more to come on that after people fall in love with our trainings and our company ;-)

Keiran Betteley

February 19th, 2014

Let me try that again without terribly incompetent incoming email formatting... 

---------

I think it's a fair question. 

It's one that lots of people don't think about until they're sinking like a stone having spent a pile of their own (or someone else's) money. 

Best way to think about it is this. 

How much do I need to spend to get each new customer and still be viable? 

Google Adwords is a good example because it's simple to explain and easy to understand. 

You say, my keywords are "blah, blah blah" and "tum te tum"

Average price per click for "blah blah blah" is £x, and there are y searches for it (i.e. enough)
Average price per click for "tum te tum" is £x1 and there are y searches for it (i.e. enough)

I expect a% of people who click on the link to contact me through my site (if this is the way you're doing it, if not, tell your story, above all it demonstrates you've thought about it from a customer's point of view and you understand the challenges ahead)
Then....
I expect to convert b% of those guys into a customer. 

You're then looking at a cost per potential customer. As long as your logic makes sense, then you can get them to challenge your logic at each step and you'll be confident to answer it. 

You can then say things like you expect a c% referral rate...etc. So for every happy customer, you expect them to attract 0.5 of another one. Or you have a referral reward system, or some sensible reason why your thing will go viral in the right community (it won't, unless you've got a great reason why it will).

You then look at other options that you're considering (bill posters, tv advertising, sponsoring meetups, whatever...etc) and use those to back up the fact you have a series of ideas as to how you're going to market the product and get people interested. Price them up in a similar way and use sensible logic to justify your cost per new customer. 

You'll generally come to one of two conclusions. 

a) The cost is sensible and you can absorb this and still make a profit. And you'll be able to explain this to an investor.

b) You need a new product...

Good luck...

Greg Fitzgerald Advisory Board Member at Cylance, Inc.

February 19th, 2014

Matty -   As a Chief Marketing Officer, board member and investor, they want to see that you know your audience (user profile) and how to get to them. Thus, it needs to be real for how that prospect becomes aware of a product/service, gets interested in it and subsequently buys it.  Some marketing tactics need to be specific and preferably with a realistic ability to reach the audience in both money and effort.     

For example, it will not go over well , saying "I have a widget that is targeting males from 18-35 who drink beer and I am going to advertise to them."     The first part is to identify the prospect,  add why they might need/want your widget, then to show steps to get them to be aware of what you have.   So here you might say this demographic is currently using X.  They use X because they its the only thing they know, I plan to offer another option for them with additional value.  By using testimonials of current users, word of mouth will help the credibility and grass roots market awareness.  Particular acquisition points are Y web sites, Z events/gatherings, etc.  To get to new users we will approach the market with the testimonials and invest in google adwords and then with targeted ads on Y sites driving them back to our web site, etc. 

Keiran Betteley

February 19th, 2014

I think it's a fair question. It's one that lots of people don't think about until they're sinking like a stone having spent a pile of their own (or someone else's) money. Best way to think about it is this. How much do I need to spend to get each new customer and still be viable? Google Adwords is a good example because it's simple to explain and easy to understand. You say, my keywords are "blah, blah blah" and "tum te tum" Average price per click for "blah blah blah" is x, and there are y searches for it (i.e. enough) Average price per click for "tum te tum" is x1 and there are y searches for it (i.e. enough) I expect a% of people who click on the link to contact me through my site (if this is the way you're doing it, if not, tell your story, above all it demonstrates you've thought about it from a customer's point of view and you understand the challenges ahead) Then.... I expect to convert b% of those guys into a customer. You're then looking at a cost per potential customer. As long as your logic makes sense, then you can get them to challenge your logic at each step and you'll be confident to answer it. You can then say things like you expect a c% referral rate...etc. So for every happy customer, you expect them to attract 0.5 of another one. Or you have a referral reward system, or some sensible reason why your thing will go viral in the right community (it won't, unless you've got a great reason why it will). You then look at other options that you're considering (bill posters, tv advertising, sponsoring meetups, whatever...etc) and use those to back up the fact you have a series of ideas as to how you're going to market the product and get people interested. Price them up in a similar way and use sensible logic to justify your cost per new customer. You'll generally come to one of two conclusions. a) The cost is sensible and you can absorb this and still make a profit. And you'll be able to explain this to an investor. b) You need a new product... Good luck... Keiran Betteley *Managing Partner* Mobile: +44 (0) 7885 997 874 Tel: +44 (0) 203 380 7144 The contents of this email remain the property of Carpela Ltd, any reproduction or reuse is unauthorised in the absence of written permission signed by one of the directors.

Anonymous

February 19th, 2014

One perspective I would add is that today, users are being bombarded by an ever-increasing number of products and services to try, especially here in SF!

Investors are eager to know how are you going to grab their attention, and integrate your offering into their daily workflow? This question can be answered many different ways, you can do what AirBnB or Stripe did and aggressively reach out to users by knocking on doors, installing apps directly on their laptop. You can go the marketing route and aim to be in constant contact or create a billboard effect like Lyft's mustaches. But above all, they want to see that you have a well-thought out strategy for doing so.

Austin Cornelio Co-Founder & Frontend Engineering Consultant

February 19th, 2014

Spend some time with this blog: http://steveblank.com/category/customer-development/

and also pick up a copy of Steve's book "The Startup Owner's Manual"

It's very useful in wrapping your head around challenges like this one.

Mark Neild Empowering quietly creative people to prosper through innovative yet authentic and engaging business models

February 19th, 2014

Matty KISS applies. If you have a good handle on your proposition, who your ideal customer is, how you reach them and evidence behind conversion metrics then that is a really good start. Sounds like you are a step ahead of most startups. That said if your product is highly innovative then how you get them to appreciate the benefits of an unintuitive product that may take a bit of explaining is really good to be able to explain, because web channels are not that easy to use without a several step education process. Most people who talk about going viral have little idea about exactly how to go about it. Mark