Traction Book Notes

A great book for any entrepreneur or growth hacker that wants to understand how to get traction for their startup. It briefly explains each of the 19 traction channels, and how to take advantage of them using the “Bullseyes Framework”.

Author: Justin Mares, Gabriel Weinberg

Date Finished: 05/10/2014

Here’s a link to the Amazon page.

Traction Definition

Traction is a sign that your company is taking off.

You can always get more traction. The whole point of a startup is to grow rapidly. Getting traction means moving your growth curve up and to the right as best you can.

In other words, traction is growth. The pursuit of traction is what defines a startup.

The 19 Traction Channels

We discovered that startups get traction through nineteen different channels. Many successful startups experimented with multiple channels (search engine marketing, business development, etc.) until they found one that worked.

We call these customer acquisition channels traction channels. These are marketing and distribution channels through which your startup can get traction: real users and customers.

When going through these traction channels try your best not to dismiss them as irrelevant for your company. Each traction channel has worked for startups of all kinds and in all different stages. Get one channel working that your competitors dismiss, and you can grow rapidly while they languish.

  1. Viral Marketing: Viral marketing consists of growing your userbase by encouraging your users to refer other users.
  2. Public Relations (PR): Public relations (PR) is the art of getting your name out there via traditional media outlets like newspapers, magazines and TV.
  3. Unconventional PR: Unconventional PR involves doing something exceptional (like publicity stunts) to draw media attention. This channel can also work by repeatedly going above and beyond for your customers.
  4. Search Engine Marketing: Search engine marketing (SEM) allows companies to advertise to consumerssearching on Google and other search engines.
  5. Social and Display Ads: Ads on popular sites like reddit, YouTube, Facebook, Twitter and hundreds of other niche sites can be a powerful and scalable way to reach new customers.
  6. Offline Ads: Offline ads include TV spots, radio commercials, billboards, infomercials, newspaper and magazine ads, as well as flyers and other local advertisements. These ads reach demographics that are harder to target online, like seniors, less tech-savvy consumers and commuters. Few startups use this channel, which means there’s less competition for many of these audiences.
  7. Search Engine Optimization: Search engine optimization (SEO) is the process of making sure your website shows up for key search results.
  8. Content Marketing: Many startups have blogs. However, most don’t use their blogs to get traction.
  9. Email Marketing: Email marketing is one of the best ways to convert prospects while retaining and monetizing existing ones.
  10. Engineering as Marketing: Using engineering resources to acquire customers is an underutilized way to get traction. Successful companies have built micro-sites, developed widgets, and created free tools that drive thousands of leads each month.
  11. Targeting Blogs: Popular startups like Codecademy, Mint, and reddit all got their start by targeting blogs.
  12. Business Development: Business development (BD) is the process of creating strategic relationships that benefit both your startup and your partner.
  13. Sales: Sales is primarily focused on creating processes to directly exchange product for dollars.
  14. Affiliate Programs: Companies like Hostgator, GoDaddy and Sprout Social have robust affiliate programs that have allowed them to reach hundreds of thousands of customers in a cost-effective way.
  15. Existing Platforms: Focusing on existing platforms means focusing your growth efforts on a mega-platform like Facebook, Twitter, or an App Store and getting some of their hundreds of millions of users to use your product.
  16. Trade Shows: Trade shows are a chance for companies in specific industries to show off their latest products.
  17. Offline Events: Sponsoring or running offline events – from small meetups to large conferences – can be a primary way you get traction.
  18. Speaking Engagements: Eric Ries, author of the bestselling book The Lean Startup, told us how he used speaking engagements to hit the bestseller list within a week of the book’s launch, how he landed these talks, and why he chose to use this channel to generate awareness and book sales.
  19. Community Building: Companies like Zappos, Wikipedia, and Stack Exchange have all grown by forming passionate communities around their products.

The Bullseye Framework

With so many channels to consider, figuring out which one to focus on is tough. That’s why we’ve created a simple framework called Bullseye that will help you find the channel that will get you traction.

As Peter Thiel put it:

[quote]Poor distribution—not product—is the number one cause of failure. If you can get even a single distribution channel to work, you have great business. If you try for several but don’t nail one, you’re finished. So it’s worth thinking really hard about finding the single best distribution channel.[/quote]

We use a Bullseye metaphor in our framework because you’re aiming for the Bullseye—the one traction channel that will unlock your next growth stage. Using Bullseye to find your channel is a five-step process: brainstorm, rank, prioritize, test, and focus on what works.

Rinse, repeat.

Step 1: Brainstorm

The goal in brainstorming is to come up with reasonable ways you might use each traction channel. If you were to advertise offline, where would be the best place to do it? If you were to give a speech, who would be the ideal audience?

Everyone approaches traction channels with biases. This first step is meant to help you systematically counteract your channel biases. That is, it is important that you not dismiss any traction channel in this step. You should be able to think of at least one idea for every channel – that’s brainstorming!

In terms of research to feed your brainstorm, you should get much more specific to your company. You should know what marketing strategies have worked in your industry, as well as the history of companies in your space. It’s especially important to understand how similar companies acquired customers over time, and how unsuccessful companies wasted their marketing dollars.

An easy way to organize your brainstorm is with a spreadsheet. Each column contains an idea of how you might use a particular channel. You can have many ideas per channel.

Some other suggested columns to help round out your thinking:

  • How probable does it seem that this idea could work (1–5)?
  • What is the expected cost to acquire a customer through this idea?
  • How many customers can you expect to acquire at that cost (before saturation)?
  • What is the timeframe needed to run tests?

Of course you won’t know the right answers to all these questions, but you can make educated guesses.

Step 2: Rank

The ranking step helps you organize your brainstorming efforts. It also helps you start to think a bit more critically about the traction channels in aggregate.

Place each of the traction channels into one of three columns, with each column representing a concentric circle in the Bullseye:

  • Column A (Inner Circle): which traction channels seem most promising right now?
  • Column B (Potential): which traction channels seem like theycould possibly work?
  • Column C (Long-shot): which traction channels seem like long-shots?

Step 3: Prioritize

Now identify your inner circle: the three traction channels that seem most promising. If you already have three channels in Column A, you’re done! If you have more than three, then you need to get rid of some and vice-versa.

We want you to have more than one channel in your inner circle because we don’t want you to waste valuable time finding your successful traction channel by testing channels sequentially when you can do so equally well in parallel.

You can run multiple experiments at the same time since tests take some time to run after they’ve been set up. Yet doing too many things in parallel leads to errors from lack of focus, which means the number needs to be somewhat low.

Step 4: Test

The testing step is where you put your ideas into the real world. The goal of this step is to find out which of the traction channels in your inner circle is worth focusing on.

You will make that decision based on results from a series of relatively cheap tests. These tests should be designed to answer the following questions.

  • Roughly how much will it cost to acquire customers through this channel?
  • How many customers do you think are available through this channel?
  • Are the customers that you are getting through this channel the ones that you want right now?

When testing, you are replacing your educated guesses with real answers.

Keep in mind that, when testing, you are not trying to get a lot of traction with a channel just yet. Instead, you are simply trying to determine if it’s a channel that could work for your startup. Your main consideration at this point is speed to get data and prove out your assumptions.

You want to design smaller scale tests that don’t require much upfront cost or effort. For example, run four Facebook ads vs. forty. You should be able to get a rough idea of a channel’s effectiveness with just a few hundred dollars.

Step 5: Focusing

If all goes well, one of the traction channels you tested in your inner circle produced promising results. In that case, you should start directing your traction efforts and resources towards that most promising channel.

At any stage in a startup’s lifecycle, one traction channel dominates in terms of customer acquisition. That is why we suggest focusing on one at a time, and only after you’ve identified a channel that seems like it could actually work.

The goal of this focusing step is quite simple: to wring every bit of traction out of the traction channel. To do so, you will be continually experimenting to find out exactly how to optimize growth in your chosen channel. As you dive deeper into it, you will uncover effective tactics and do everything you can to scale them until they are no longer effective due to saturation or rising costs.

Repeating the Process

If, unfortunately, no channel seems promising after testing, the whole process should be repeated. The good news is you now have data from all the tests you just did, which will inform you as to what types of things are, and are not, resonating with customers. Look at the messaging you’ve been using, or dig deeper to see at what point each channel failed to deliver customers.

The 50% Rule

If you’re starting a company, chances are you can build a product. Almost every failed startup has a product. What failed startups don’t have are enough customers.

Having a product your early customers love but no clear way to get more traction is frustrating. To address this frustration, spend your time building product and testing traction channels – in parallel.

Building something people want is required for traction, but isn’t enough. There are many situations where you could build something people want, but still not end up with a viable business.

Traction and product development are of equal importance and should each get about half of your attention. This is what we call the 50% rule: spend 50% of your time on product and 50% on traction.

Moving the Needle

Your traction strategy should always be focused on moving the needle for your company. By moving the needle, we mean focusing on marketing activities that result in a measurable, significant impact on your company. It should be something that advances your user acquisition goals in a meaningful way, not something that would be just a blip even if it worked.

From the perspective of getting traction, you can think about working on a product in three phases:

  • Phase I – making something people want
  • Phase II – marketing something people want
  • Phase III – scaling your business

Phase I is very product focused and involves pursuing initial traction while also building your initial product as we discussed above. This often means getting traction in ways that don’t scale – giving talks, writing guest posts, emailing people you have relationships with, attending conferences and doing whatever you can to get in front of customers.

As Paul Graham said in his essay “Do Things that Don’t Scale:”

[quote]Actually startups take off because the founders make them take off… The most common unscalable thing founders have to do at the start is to recruit users manually. Nearly all startups have to. You can’t wait for users to come to you. You have to go out and get them.[/quote]

If you’ve made it to phase II, you have a product that resonates with customers – initial traction – and therefore doesn’t require sweeping product changes. In other words, in phase II you have established product/market fit and now are fine-tuning your positioning and marketing messages.

In phase III, you have an established business model, significant position in the market, and are focused on scaling both to further dominate the market and to profit.

At different product phases, moving the needle means different things. In phase I, it’s getting those first few customers. In phase II, it is getting enough customers where you’re knocking on the door of sustainability. And, in phase III, your focus is on increasing your earnings, scaling your marketing channels, and creating a truly sustainable business.

Some traction channels will move the needle early on, but will fail to work later. Others are hard to get working in phase I, but are major sources of traction in the later phases (PR is a good example). On the other hand, some channels will be great in phase I but useless in phases II and III because they simply don’t have the volume required to move the needle.

When you’re just starting out, small things can move the needle interms of traction. A single tweet from a wellespected individual or a speech to a few hundred people at a meetup can result in a meaningful jump in users.

As your company grows, smaller things like that will be difficult to notice.

Moving the needle in the later stages requires larger and larger numbers. If you want to add 100,000 new customers, with conversion rates between 1–5%, you’re looking at reaching 2–10 million people – those are huge numbers! That’s why traction channels like community building and viral marketing can be so powerful: they scale with the size of your userbase and potential market.

Startup growth happens in spurts. Initially, growth is usually slow. Then, it spikes as a useful traction channel is unlocked. Eventually it flattens out again as a channel gets saturated and becomes less effective. Then, you unlock another strategy and you get another spike.

To Pivot or Not to Pivot

A lot of startup success hinges on choosing a great market at the right time.

If you are considering a pivot, the first thing to look for is evidence of real product engagement, even if it is only a few dedicated customers. If you have such engagement, you might be giving up too soon. You should examine these bright spots to see how they might be expanded. Why do these customers take to your product so well? Is there some thread that unites them? Are they early adopters in a huge market or are they outliers? The answers to these questions may reveal some promise that is not immediately evident in your core metrics.

The Law of Shitty Click-Throughs

Andrew Chen, a startup advisor on growth, coined the Law of Shitty Click-Throughs: “Over time, all marketing strategies result in shitty click-through rates.”

What this means is that over time, all marketing channels become saturated. As more companies discover an effective strategy, it becomes crowded and expensive or ignored by consumers, thus becoming much less effective.

To combat this reality you should consistently conduct small experiments.

Constantly running small traction tests will allow you to stay ahead of competitors pursuing the same channels. As Andrew puts it:

[quote]“The … solution to solving the Law of Shitty Click-Throughs, even momentarily, is to discover the next untapped marketing [strategy]… If you can make these [strategy] work with a strong product behind it, then great. Chances are, you’ll enjoy a few months if not a few years of strong marketing performance before they too slowly succumb.”[/quote]

Inner Circle Tests

When trying to figure out what traction channel to focus on using Bullseye, you run cheap tests on the traction channels in your inner circle. The goal of these tests is to validate or invalidate assumptions you have about strategies in these traction channels. For example:

  • How much does it cost to acquire customers through this channel strategy?
  • How many customers are available through this channel strategy?
  • How well do these customers convert?
  • How long does it take to acquire a customer?

These are the assumptions to plug into your model (usually a spreadsheet) that will determine which channel and strategies to focus on.

Once you know your assumptions, devise specific tests to validate them as cheaply as possible. These first tests in a channel are often very cheap: for instance, if you spend just $250 on AdWords, you’ll get a rough idea of how well the search engine marketing channel works for your business.

Optimization Through A/B Testing

After you’ve run cheap tests, validated assumptions, and found a traction channel that is working, your goal is optimize your use of that channel. A/B testing (also known as split testing) is a tactic that helps you do just that.

Making A/B testing a habit (even if you just run 1 test a week) will improve your efficiency in a traction channel by 2–3x. There are many tools to help you do this type of testing, such as Optimizely, Visual Website Optimizer, and Unbounce. These tools allow you to test optimizations without making complex changes to your code.

Online Tools

We highly recommend embracing the use of online tools to help you understand and assess the efficacy of all your traction efforts.

For example, the questions below seem like they are difficult or might require a lot of research to answer:

  • How many prospective customers landed on my website?
  • What are the demographics of my best and worst customers?
  • Are customers who interact with my support team more likely to stay customers longer?

However, they are quite straightforward if you’re using the right online tools. In fact, a basic analytics tool like Clicky, Google Analytics or Mixpanel can help you answer all three of these questions. These tools tell you who is coming to your site, at what frequency, and, perhaps most importantly, when and where they are leaving your site.

Quantify Your Results

We recommend using a spreadsheet to help you rank and prioritize your traction channels.

At a minimum, include the columns of cost to acquire a customer and lifetime value of a customer within a given traction channel. Since these metrics are universal, you can use them to easily make comparisons across channels. In general, we encourage you to be as quantitative as possible, even if it is initially just guesstimating.

You can assess what can move the needle with some simple calculations. For example, how many customers do you think a given traction channel strategy could deliver? How many new customers do you need to really move the needle?

Quantifying the number of users you might add becomes even more important in phase II and phase III when you already have product- market fit. In that case most channels will give you some users, and so they are all tempting to some degree. The operative question then is, “Does this channel have enough users to be meaningful?” A back-of-the-envelope calculation can go a long way!

Your Traction Goal

You should always have a traction goal you’re working towards. This could be 1,000 paying customers, 100 new daily users, or 10% of your market.

The right goal is highly dependent on your business. It should be chosen carefully and align with your company strategy. If you reach this goal, what will change significantly?

Defining Milestones

The path to reaching your traction goal with the fewest numberof steps is your Critical Path. It helps to literally draw this path out, enumerating the intermediate steps (milestones) to get to your traction goal. These milestones need not be traction related, but should be absolutely necessary to reach your goal.

In your company, your milestones will be different, but the point is to be critical and strategic in deciding what to include. That’s why it is called the Critical Path. For example, you may think to reach your traction goal you will need to hire three people, add features A, B and C to your product, and engage in marketing activities X, Y, and Z. These are the milestones you need to do to get where you want to go.

Next, order your milestones by which need to be done first, second and so forth. For example, in Bullseye you want to run small tests to validate assumptions about a traction channel before focusing on it.

In your product, you may need to build feature A before B because B depends on A. In other words, you’re identifying dependencies. You should also strive to figure out the shortest path.

The order of your absolutely necessary milestones is your Critical Path. Once you’ve defined your critical path, it’s easy to determine the direction to go in – just follow the path! In particular, work on the first step(s) and nothing else. After these first steps are complete, re-assess your critical path using the market knowledge you just learned from achieving that milestone.

This method helps you decide what not to do. Everything you do should be assessed against your Critical Path. Every activity is either on path or not. If it is not on the path, don’t do it!

Employee and Department Critical Paths

Pieces of your company have their own critical paths, from departments (marketing, engineering) down to individual people. The sum of these paths is your company’s Critical Path.

It’s important to continually define these sub-critical paths down to the individual level for the same reason as it is important to define the whole company Critical Path. Doing so forces your people to work towards the right goals in the most efficient way possible.

Defining Traction Sub-goals

The importance of choosing the right traction goal cannot be overstated. Are you going for growth or profitability, or something in between? If you need to raise money in X months, what traction do you need to show to do so? These are the types of questions that help you determine the right traction goal.

Once defined, you can work backwards and set clear quantitative and time-based traction sub-goals, like reaching 1,000 customers by next quarter or hitting 20% monthly growth.

Doing so allows you to benchmark your traction progress and see definitively what’s working and what’s not. It also makes it easier to evaluate what will move the needle for a given timeframe, since you have a concrete goal for how much the needle has to move.

Another benefit of setting clear sub-goals is the accountability it provides. By placing traction activities on the same calendar as product development and other company milestones, you ensure that enough of your time will be spent on traction.

Critical Path is a high-level framework that helps you decide where to allocate your time and energy to get traction faster. Your traction goal dictates your company direction. That’s because building product, getting funding and everything else your company does is in the pursuit of traction. Remember, traction trumps everything.

Get Good Mentors

Without a doubt, good mentors help you stay on your critical path. Mentors are more operationally removed from your company, and so can give you a more objective perspective when you’re re-assessing your traction goal. Additionally, the simple act of preparing to meet with your mentor(s) on a regular basis is a forcing function that compels you to think more critically.

Viral Marketing

Viral marketing is the process of getting your existing users to refer others to your product.

In the context of startups, going viral means that every user you acquire brings in at least one other user: that new user then invites another user, and so on. This creates true exponential growth.

Viral Loops

A viral loop in its most basic form is a three-step process:

  1. A user is exposed to your product.
  2. That user tells a set of potential users about your product.
  3. These potential users are exposed to your product and become users themselves.

The process then begins again with these new users. It’s called a loop because it repeats over and over again; as your users refer other users, those users refer others, and so on.

The oldest form of virality occurs when your product is so remarkable that people naturally tell others about it – pure word of mouth.

Inherent virality occurs when you can only get value from a product by inviting other users.

Other products grow by encouraging collaboration. In this case, the product is still valuable on its own but becomes more so as you invite others. This type of viral loop can take longer to spread if your users don’t need to immediately collaborate, but once they do strong network effects kick-in as the service becomes a central tool around which collaboration occurs.

Another common case is to embed virality into communications from the product.

Products can also incentivize their users to move through their viral loops and tell others about the product.

You can combine these types to make viral loops work for your product. It is instructive to think about how each of these types could possibly apply.

Viral Math

The two key factors that drive viral growth are the viral coefficient and the viral cycle time.

The Viral Coefficient (K)

The viral coefficient, or K, is number of additional users you can get for each user you bring in.

The viral coefficient formula is:

K = i * conversion percentage

where K is the viral coefficient, i is the number of invites sent per user, and conversion percentage is the percentage of users who sign up after receiving an invitation. For example, if your users send out an average of 3 invites and 2 of those people usually convert to new users, your viral coefficient would be:

K = 3 * (2/3) = 2

Any viral coefficient above 1 will result exponential growth, meaning that each new user brings in more than one additional user, creating true exponential growth. Any viral coefficient over 0.5 helps your efforts to grow considerably.

There are two variables that impact your viral coefficient. The first is the number of invites (i) that each user sends out. If you can increase the average number of invites that each user sends out, say from 1 invite per user to 2, you will double your viral coefficient. To push this number up as high as you can, consider including features that encourage sharing such as posting to social networks.

The second variable is the conversion percentage. The best signup flows reduce friction by making things simpler, such as cutting out pages or sign up fields. For example, the conversion steps for a standard web application often involve clicking on a link and filling out a form to create an account. In that case, you could break the conversion percentage into two percentages.

K = i*conversion percentage = i * click-through percentage * signup percentage

When you break out conversion percentage in this way, you can determine the weakest part of your equation and focus on it. Your click- through percentage may be great, but your signup percentage may be sub-par. This makes it clear what to focus on – the area where you can make the biggest positive impact.

Viral Cycle Time

Viral cycle time is a measure of how long it takes a user to go through your viral loop. For example, if it takes an average of 3 days for invites to convert into users, your viral cycle time is 3 days.

Shortening your viral cycle time drastically increases the rate at which you go viral, and is one of the first things you should focus on improving if using this channel. To shorten it, create urgency or incentivize users to move through your viral loops. Additionally, make every step in your funnel as simple as possible to increase the number of users that complete it.

Viral Strategy

To pursue this traction channel effectively, you need to measure your viral coefficient and viral cycle time from the start. Consider those measurements your baseline. Then, you need to get your viral coefficient up and viral cycle time down to levels that yield enough new users to produce steady growth for your business.

We suggest running as many A/B tests as you can. Best practice suggests focusing for weeks at a time on one major area (say your signup conversion rate), trying everything you can think of to improve that metric, and then moving onto another metric that needs improvement as you run out of ideas.

Goals and Compromises

It is important to articulate your company’s primary goals when formulating your viral strategy. Is it to grow the total number of users? Grow revenue? Profits?

Loop Design

Once you have determined your goals and calculated baseline numbers, you will want to map out every aspect of your viral loop. How many steps are in the loop? What are all the ways people can enter into the loop (landing pages, ads, invites)?

Draw a map of the entire process and try cutting out unnecessary steps (extra sign up pages, unnecessary forms or fields to fill out, etc.) and increase areas or mechanisms where users can send out invitations. Doing so will improve your viral equation by increasing your invites sent and your conversion percentage.

There are numerous viral mechanics you can build into your product, but to be really successful users need to like and repeatedly use the product.

Viral Tactics

Distribution Mechanisms

The most common viral distribution mechanisms are email and social media platforms. However, new mechanisms are constantly opening up in the form of new consumer applications. You should be looking out for (and experimenting with) such new mechanisms if you’re focused on viral as one of your primary traction channels.

The ideal thing is to pick something that’s not too old (email address books/invites) and not too new as to require too much integration, but rather, in the middle.

How do you give users value, and how are they communicating or sharing already? In an enterprise, people collaborate over wikis. Buyers and sellers of collectibles transact over eBay. Understanding how people are already doing things today gives you a leg up in understanding how you might help them do that better.

You just want to help people do what they already want to do. After you understand how they are already sharing, collaborating or communicating, figure out how your product can make that better.

And then work out the flow of how a new user can spread your product to another set of new users, who then continue propagating it. Then optimize.

Effective Invitations

A non-user’s first exposure to a product often occurs when a current user sends an invitation. The non-user will then have to decide what to do with the invitation or whether it’s worth her time to even open it. Your goal in designing these invitations is to get potential users to engage with the invite and follow the link (or take the next step) that the invitation contains.

Invitations that work best are short and succinct.

Effective Conversion Pages

Conversion pages work best when they use the same messaging as the invitations that preceded them. For example, if in the invitation you say so-and-so referred you to this product, you can put the exact same message on the conversion page. It really helps in both cases (invitations and conversions) to think about the psychology of the new user. You will want to run tests to help you find out why people are deciding to use your product. Understanding exactly why people are clicking on your links and signing up (e.g. curiosity, obligation, etc.) will help you think of better ways to improve your viral loop. Surveys, sites like usertesting.com and asking users directly are great ways to uncover this psychology.

Viral Pockets

With all viral (or near-viral) growth, there will be subgroups of users growing far more rapidly than your total userbase. We call these subgroups viral pockets. Figure out if you have viral pockets by calculating your viral coefficient on distinct subsets of your users, such as those from a particular country, age group, or other trait.

Once you find a viral pocket, you may want to cater to this group by optimizing text in their native language or some other way that will improve their experience.

Seeding

Since most viral loops are not self-sustaining, you need a constant stream of new users entering your viral loop. This process is called seeding. When seeding new users for your viral loop, you’re looking for people in your target audience who have not been exposed to your product. SEO and online ads (covered in later chapters) are good, inexpensive candidates for seeding.

Testing Virality

The best way to figure out the right kind of loop to build is simple: copy those who have done it before.

Copy someone else’s viral loop until yours starts to work in a similar way. Copying someone else’s loop down to the detail is important, including text copy, etc. These are the things that drive performance.

Make it something that the user wants to do, because it creates value from them. Skype with no contacts is useless – so by helping people import their address books and invite people, you’re doing them a service.

Public Relations (PR)

Public relations (PR) traditionally refers to a company’s public messaging of all kinds.

Most sites make their money from advertisements, so they want to drive as many page views as possible. If you have a fascinating story with broad appeal, media outlets now want to hear from you because you will drive visits and make them more money.

It’s better to start smaller when targeting big media outlets. For them, the direct approach is rarely the best approach. Instead, you approach obliquely. So, you find the blogs that TechCrunch reads and gets stories ideas from. Chances are it will be easier to get that blog’s attention. You pitch there, which leads The New York Times to email you or do a story about you based on the information [they’ve seen] on the news radar.

Tech startups frequently get exposure this way: sites like TechCrunch and Lifehacker often pick up stories from smaller forums like Hacker News and reddit. In turn, The New York Times often picks up content from TechCrunch and wraps it into a larger narrative they’re telling.

How to Pitch for PR

Though media outlets are increasingly on the lookout for good stories, there are still challenges to getting exposure. Tens of thousands of companies are clamoring for media coverage.

What gets a reporter’s attention? Milestones: raising money, launching a new product, breaking a usage barrier, a PR stunt, big partnership or a special industry report. Each of these events is interesting and note- worthy enough to potentially generate some coverage.

Pitch Templates

Below is an email pitch Jason Baptiste sent to TechCrunch just before launching PadPressed, his startup that helps blogs look better on iPads. It’s a solid example of a good pitch – short, to the point, contains clear contact information, and links to a product demo. He even mentions he’s happy to do a product giveaway, which makes this pitch even more attractive.

Subject: Exclusive for TC: Launching PadPressed – make any blog feel like a native iPad app

Hey Mike,

Launching PadPressed tomorrow at noon EST and TC gets free reign on an exclusive before then. PadPressed makes any blog look and behave like a native iPad app. We’re talking accelerometer aware column resizing, swipe to advance articles, touch navigation, home screen icon support, and more. We’ve built some pretty cool tech to make this happen smoothly, and it works with your existing layout (iPad layout only activated when the blog is accessed from an iPad). Okay, I’ll shut up now and you can check out the demo links/feature pages below, which are much more interesting than my pitch.

PS – Would also be happy to do giveaways to TC readers. Thanks again and feel free to reach out if you have any more questions (Skype, phone, etc. listed below).

Video Demo: http://vimeo.com/13487300Live demo site (if you’re on an iPad): jasonlbaptiste.comFeature overviews: http://vimeo.com/13487300LiveMy contact info: j@jasonlbaptiste.com , Phone: 772.801.1058, Twitter: @jasonlbaptiste, Skype: jasonlbaptiste–jlb 772.801.1058

When pitching to any media outlet, it’s your job to create an angle that makes your story compelling. If you can craft a narrative (e.g. how we just doubled our userbase through x, y, and z) and present it well, you greatly increase your chances of getting a story.

A good angle makes people react emotionally. If it’s not interesting enough to elicit an emotion, you don’t have a story worth pitching. Furthermore, your story should provoke a feeling in readers that makes them want to share it with others. You want readers to do something after reading your piece, not just feel satisfied.

PR Tactics

After coverage in small blogs, you’re in a good position to start pitching larger and more influential media. Follow influencers in your industry and reach out to the blogs they often link to. Those blogs are likely the starting points for much of the news that filters up to the larger outlets.

Have a goal in mind when you choose where to focus your pitching efforts.

Starting Out

As we discussed earlier, the best way to get PR is to start small. A good first step is using a service like Help A Reporter Out (HARO), where reporters request sources for articles they are working on. While you won’t be the centerpiece of the article, assisting a reporter this way will get you a mention in the piece and help establish your credibility. Plus, you can put the logo of another publication on your site or deck.

You can also use Twitter to reach reporters online. Almost all reporters have Twitter accounts and you’d be surprised at how few followers many of them have. This limited audience can work to your advantage: you have a better chance of standing out when you contact them. Staying in contact with them over Twitter then gives you a leg up when you eventually reach out to them with your more formal pitch.

Amplifying

Once you have a solid story, you want to draw as much attention to it as you can. Here are a few ways to do it:

  • Submit a small story to community sites (like Digg, reddit, Hacker News, etc.) with larger audiences.
  • Share it on social networks to drive awareness, which you can further amplify with social ads (see chapter 10).
  • Email it to influencers in your industry for comment. Some of them will share it with their audience.
  • Ping blogs in your space and show that you have a story that’s getting some buzz. These writers may then want to jump in themselves to cover you.

Once your story has been established as a popular news item, drag it out as long as you can. Email blogs that covered the story (as well as ones that didn’t) and offer an interview that adds to the original story. “How We Did This” follow-up interviews are popular.

Unconventional PR

There are two different types of Unconventional PR. You’re probably familiar with the first type: the publicity stunt.

A publicity stunt is anything that is engineered to get media coverage.

The second type of Unconventional PR is customer appreciation: small, scalable actions (like sending cookies or hand-written notes to customers) that increase goodwill and word of mouth.

Small gestures like these turn your customers into evangelists, which leads to an increase in organic growth. And they add to your unique image and story, both key elements in building a strong brand.

Publicity Stunts

When done right, publicity stunts can propel a startup from anonymity to national recognition in an instant.

DuckDuckGo (Gabriel’s search engine) bought a billboard in Google’s backyard highlighting its privacy focus. They then used the billboard to get national press stories in USA Today, Wired, and many other media outlets. The reactions from this stunt alone doubled their userbase at the time.

Viral Videos

Dollar Shave Club, a subscription shaving startup, got similar attention for their launch video titled “Our Blades are F**king Great.” It also has millions of views on YouTube and was the main source of the 12,000+ customers they acquired within two days of launching. The video was also shared 31,000+ times on Facebook, received over 9,500 comments, 12,000+ Likes, and more than 16,000 Tweets.

The company benefitted in other ways as well. Though Dollar Shave Club has been around for just a short while, at the time of this writ- ing in 2013 it already ranks as the third result for the Google search “shave.” This ranking is largely thanks to the 1,500+ sites that linked to their video. The video led to features in Forbes, The Wall Street Journal, and Wired.

Customer Appreciation

On the other end of the unconventional PR spectrum is the more sustainable, systematic form of this traction channel. Customer appreciation is a simple way of saying “be awesome to your customers.”

Gifts

We talked with Alexis Ohanian, founder of reddit and Hipmunk, about how he’s made customers fall in love with his companies. Shortly after Alexis launched Hipmunk, a travel booking site, he sent out luggage tags and a handwritten note to the first several hundred people who mentioned the site on Twitter.

These tags were functional, cute, and led to many Tweets and pictures from customers excited to have a chipmunk as a travel companion.

Hipmunk also gave out other free swag (t-shirts, stickers, handwritten notes) to show their customers appreciation.

Contests and Giveaways

Holding a contest is a great way to get some word of mouth without spending much money or engineering a large PR stunt. Shopify.com, a popular ecommerce platform, is famous for their annual Build A Business competition (and its six-figure prize). Last year, the contest drove 1,900 new customers and more than $3.5 million in sales on their platform.

Customer Support

Good customer support is so rare that, if you simply try to make your users happy, they are likely to spread the news of your great product.

Cost and Impact

Unconventional PR tactics can have incredible returns on investment. Dollar Shave Club acquired over 12,000 customers with a short video that cost $5,000. Hipmunk received thousands of Facebook Likes from a chipmunk-drawing contest that cost them $500.

Success in this channel is unpredictable. You should have a defined process for brainstorming and selecting ideas, but also understand that not every idea will work and prepare for that reality.

Search Engine Marketing (SEM)

Search engine marketing (SEM) refers to placing advertisements on search engines like Google, where online marketers spend over $100 million each day on Google’s AdWords platform.

Paid search advertising (also known as pay-per-click, or just PPC) involves buying ads for keyword searches.

SEM works well for companies looking to sell directly to their target customer. You are capturing people that are actively searching for solutions. The scale of search engines is so vast that this channel works for any product phase.

Starting with SEM

The basic SEM process is to find high-potential keywords, group them into ad groups, and then test different ad copy and landing pages within each ad group. As data flows in, you remove under-performing ads and landing pages and make tweaks to better performing ads and landing pages to keep improving results.

Keep in mind that SEM is more expensive for more competitive keywords. As such, you will want to limit yourself to keywords with profitable conversion rates.

After you have keywords you want to target, it’s time to run experiments on the AdWords platform. You should not expect your campaigns to be profitable right away. However, if you can run a campaign that breaks even after a short period of time, then SEM could be an excellent channel to focus on.

Running a Campaign

A campaign is a collection of ads designed to achieve one high-level goal, like selling shoes. You first create different ad groups. For example, if you’re an ecommerce store, you might create an ad group for each product type (e.g. sneakers, loafers, etc.). You then select keywords you want your ad groups to appear for (e.g. “Nike sneakers” for sneakers).

After you’ve determined the ad groups and keywords you are targeting, create your first ad. When you write an ad, the title should be catchy, memorable, and relevant to the keywords you’ve paired with it. You will also want to include the keyword at least once in the body of your ad. Finally, you will want to conclude with a prominent call to action (e.g. Check out discounted Nike Sneakers!).

Once you set up your ads, you should use the Google Analytics URL Builder tool to create unique URLs (web addresses) that point to your landing pages. These URLs will enable you to track which ads are converting, not just the ones that are receiving the most clicks.

Begin testing just four ads. Four ads will give you a good baseline for the performance of SEM as a whole, while still allowing you to test different messaging, demographics, and landing pages.

Quality Score

Each of your ads and ad groups as well as your whole AdWords account have a quality score associated with it. This score is a measure of how well customers are responding to your ads. It includes many factors including CTR and how long people stay on your site after seeing your ad.

A high quality score can get you better ad placements and better ad pricing. The quality score is Google’s way of rewarding advertisers for high quality advertisements.

Display Advertising

Most display advertising is run by ad networks that aggregate advertising inventory across thousands of sites (blogs, community sites, etc.) and sell that space to advertisers. For advertisers, they can buy ads on multiple sites through a single service. At the same time, sites can monetize their content by working with just one platform.

Large Ad Networks

The largest display ad networks are Google’s Display Network (also known as the content network), Advertising.com (owned by AOL), TribalFusion, ValueClick, and Adblade. Each of these networks has access to sites that in aggregate receive hundreds of millions of unique monthly visitors. They have targeting capabilities that allow you to reach specific types of demographics, and offer a variety of ad formats like text, image, interactive, and video.

You want to test your ads with different site demographics, different markets, and different product positioning.

Niche Ad Networks

Niche ad networks focus on smaller sites that fit certain audience demographics, like dog lovers or Apple fanatics. One such network is The Deck, which targets the niche audience of Web creatives and enforces a rule of only one ad per page. As an advertiser, you know exactly the audience you’re reaching.

Another network, BuySell Ads, offers advertisers a self-service platform for buying ads directly from publishers. In addition to buying and selling display advertising, BuySell Ads allows advertisers to purchase space on mobile websites, Twitter accounts, mobile apps, email newsletters, and RSS feeds. With their flexibility and low starting cost, BuySell Ads is an easy way to start testing this traction channel.

Direct Ads

The last approach to display advertising is one of the simplest: go directly to site owners and ask to place an ad on their site for a fixed price. This works well when you want to reach the audience of a small site that isn’t even running ads.

This approach only requires a few emails and a couple hundred dollars.

Getting Started

To get started in display advertising, first understand the types of ads that work in your industry. Tools like MixRank and Adbeat show you the ads your competitors are running and where they place them. Alexa and Quantcast can help you determine who visits the sites that feature your competitors’ ads. Then you can determine whether a site’s audience is the right fit for you.

Social Ads

Social ads work especially well for demand generation, i.e. generating interest from new potential customers. People who see these ads may not have any intention of purchasing now – they may not even be familiar with the company or its products. That’s ok. The goal of social ads is often awareness-oriented, not conversion-oriented. A purchase takes place further down the line.

In the social context, what we’re talking about is ‘indirect response’. You’re still focused on a sale, an install, a signup, or whatever, but the methodology to get there is different.

Instead of looking at every click and how it converts, indirect response says ‘let’s create an environment within the social context that’s geared toward the specific product or service you’re trying to offer, build affinity there, build loyalty there, and then migrate that audience toward some conversion element we want to occur at a later point in time.

Users visit social media sites for entertainment and interaction, not to see ads. An effective social ad strategy takes advantage of these features without being intrusive or spammy. Social ads give companies the opportunity to start a conversation about their products with mem- bers their target audiences. One way startups can do this is by creating compelling content. Instead of directing users to a landing page, have your ad explain why you have developed a particular product, explain your broader mission, or have some purpose other than completing a sale.

If you have a piece of content that has high organic reach, when you put paid [advertising] behind that piece of content the magic happens. As more and more people see it, more and more people engage with it – because it’s a better piece of content… Paid is fundamentally only as good as the content you put behind it. And content is only as good as how many people actually see it.

You should only employ social advertising dollars when you’ve understood that a fire is starting around your message and you want to put more oil on it.

Companies that succeed on social sites create compelling content.

Creating engaging social experiences is another way to succeed on social sites.

As you can see, social advertising often goes hand-in-hand with content marketing. If you’ve invested time and energy creating a great piece of content, spending a little bit of money to ensure that content gets wide distribution makes sense.

This tactic also works well with content distribution networks like Outbrain and Sharethrough. Each of these ad networks promotes your content on popular partner sites like Forbes, Thought Catalog, Vice, Gothamist and hundreds more. These native ad platforms make your content look like any other piece of (native) content on the target site. Since these sites have large audiences, using a native ad platform to target them can drive lots of engagement in just a short period of time.

Offline Ads

Offline ads can be easy to test. For as little as $300, you can put out a radio ad in a market you’re targeting and see how it performs. Billboards are the same way: you can buy space on one for a few hundred bucks a month, or rent one in a more prime location for many thousands.

Demographics

The demographics of each advertising medium are the most important factor to consider when making an offline ads purchase. Some questions you’ll want answered are:

  • What are the basic demographics (e.g. location, gender, race, age distribution) of the audience for this medium?
  • What are the economic demographics of the audience (e.g. income, occupation breakdown, etc.)?
  • How well does this advertising demographic match up with my target customer demographic?

You should be able to answer many of these questions by asking for an audience prospectus (sometimes called an ad kit) from whatever company is selling the ad inventory.

Cost

In general, the cost of an offline ad depends on its reach.

To run cheap tests you look for remnant advertising. Remnant advertising is ad space that is currently being unused. For example, publications accept almost any price when selling empty inventory near print deadlines: after all, it is a complete loss for them if they don’t sell that space.

Buying remnant ad inventory can work across most offline mediums, not just in print. If you’re not sensitive to location or timing, you can get substantial discounts by committing to buy remnant inventory. This can be a cheap and effective strategy to reach millions of people if you have a mass-market product.

Once you’ve established that offline ads are effective, you can save money by signing a longer advertising contract. With an up-front commitment, advertisers will give you a substantial discount.

Tracking

Offline ads are much harder to track as compared to online ads that have tracking built-in. Successful offline tracking involves the use of tools like URL shorteners, unique web addresses and promotional codes to measure effectiveness.

For direct response ads you can provide unique coupon codes.

Print advertising encompasses magazines, newspapers, the yellow pages, flyers, direct mail, and local directories. Print advertising is appealing because it works with just about any budget and allows for precise audience targeting.

Magazines

There are nearly 7,000 different magazines in the US, ranging from commercial publications with millions of subscribers to small trade publications with hundreds of readers.

There are three general magazine categories: consumer publications that appeal to the larger population (these are the ones you see on newsstands and in grocery stores), trade publications covering a particular industry or business, and local magazines that you’ll see for free along sidewalks and near grocery stores.

You need to understand the reader demographics, circulation, and publication frequency of any magazine you’re considering. To get this information, just ask the magazine for their ad kit (also known as a media package, media kit, or press kit). Or, use the magazine hand-book produced by the Marketing Publishers Association to find magazines that appeal to your target market.

Newspapers

Newspapers share many characteristics with magazines. They are published on both a national and local scale, their pricing is largely based on the circulation of a given paper, and they allow you to choose the type of ad you want in the paper.

They also have unique differences, one of the most important being that the newspaper demographic slants heavily towards the over-30 demographic. Many young people still buy magazines. Not many young people still buy newspapers. Thus, if you’re selling a product geared towards twenty-somethings, you are throwing your money away if you advertise in a newspaper.

However, there are some ad campaigns that are uniquely suited for a newspaper setting. A few examples are time sensitive offers (like for events or sales), awareness campaigns (often as part of a larger marketing effort across multiple channels), and widely publicized announcements (like for product launches).

Direct Mail

Direct mail entails any printed advertising message (ads, letters, catalogs, etc.) delivered to a specific group of consumers through the postal system.

You can build up a list of customers on your own or buy a list from a mailing organization. Simply do a web search for “direct mail lists” to find companies selling such information. Beware that buying lists can be perceived as spammy, and can be a complete waste of money if they are untargeted.

You can buy lists grouped by demographic, geography, or both.

Local Print Ads

Local print ads include buying space in local publications (church bulletin, community newsletter, coupon booklet, etc.), flyers, directories, or calendars. These print ads are a good way to test print advertising because of their modest cost: just a few hundred dollars can expose you to thousands of people in a targeted area. Ads in the yellow pages are similarly inexpensive.

Unorthodox strategies like hanging flyers in areas where your potential customers visit can be a surprisingly effective way to get some early traction for your company.

Billboard Advertising

If you want to buy space on a billboard, you’ll probably contact one of three companies: Lamar, Clear Channel, or CBS Outdoor. They are the power players in this $5.8 billion industry. If you want to get a sense of what is available in a given area, go to the websites of the above companies and contact a local representative. They will give you PDFs of local available billboards, showcasing their locations and audience.

The cost of billboard space depends on the size of the ad, where it is located, the number of impressions your ad can provide and the type of billboard it is. Every billboard has an advertising score, known as a GRP score (Gross Ratings Points), based on the above factors. The number of potential impressions is based on the number of people in an area that could see the billboard: a full score means that a given billboard should reach 100% of the driving population during a month.

The major downside of billboard advertising is that it is difficult for people to take immediate action on what they see. It is dangerous for someone to visit a website, call a number, or buy a product while driving on a highway.

However, billboards are extremely effective for building awareness around events – concerts, conferences, or other activities coming to an area.

Radio Advertising

Radio ads are priced on a Cost-per-point basis (CPP), where each point represents what it will cost to reach 1% of the radio station’s listeners. The higher the CPP, the more it will cost you to run an ad on a station.

This cost also depends on which market you’re advertising in, when your commercials run, and how many ads you’ve bought with that station. To give you an idea of what a radio ad costs, an ad running on a station for a week is often $500–1,500 in a local market, and up to $4,000–8,000 in a larger market like Chicago.

In addition to purchasing ad time, consider the cost of creating your ad. A simple 30-second voice spot can run you $300–500, whereas a professionally recorded ad (sound studio, special effects, etc.) can cost 3–10x as much. The best radio spots are entertaining and talk about an upcoming event or special promotion. Talk with a sales rep to be sure your ad is directly relevant to the radio station’s audience.

TV Advertising

TV advertisements are often used as branding mechanisms.

Quality is critical for TV ads. Production costs for actors, video equipment, editing, sound, sound effects, and shooting can run tens of thousands of dollars. In fact, some of the higher-end commercials you’ll see can cost upwards of $200,000.

Fortunately, there are ways for you to reduce the costs of creating a TV ad. Using animation as opposed to live actors is a lot cheaper. If you do use live actors, you can recruit local film students to perform for you. Finally, just keeping the commercial as simple as possible will go a long way toward reducing costs (fewer shots, sets, actors, etc.).

Buying TV ads is a rather opaque process that involves a lot of negotiation, as there are no rate cards in the industry like those in print advertising. Thus, for larger media buys, you will likely want to hire a media buyer or agency to handle the many sellers out there and to ensure that you get a quality spot at a fair price.

Infomercials

Infomercials are basically long-form TV advertisements.

Traditionally, products in the following categories have used infomercials to gain serious traction:

  • Workout equipment or programs
  • Body care products
  • Household products (kitchen, cleaning)
  • Vacuum cleaners
  • Health products (e.g. juicers)
  • Work from home businesses

Infomercials can cost anywhere between $50,000–500,000 to make. They can be 2 minute infomercial shorts or the more traditional 28 minute episodes. These ads are almost always direct response: advertisers want people to see it, then visit a website or call in to take advantage of a special offer. The best infomercial marketers will often test their messaging, calls to action, and bonuses by running radio ads in advance, seeing what works well, and then incorporating those bonuses and messages into their commercial.

Search Engine Optimization (SEO)

Search engine optimization (SEO) is the process of improving your ranking in search engines in order to get more people to your site.

At its base, SEO is starting with a content strategy and finding a way to attract relevant visitors through search engines. You have to intelligently design this kind of [content] and make sure search engines can find and rank that content.

SEO allows you to amplify all of the good things you’re already doing in other traction channels (PR, non-traditional PR, content marketing) and use them to bring in more customers from search engines. Though competitive, SEO can scale well at any phase, and often at low cost.

Two SEO Strategies

In SEO, there are two high-level approaches to choose from: fat-head and long-tail strategies. Both refer to different parts of the Search Demand Curve.

A fat-head strategy involves trying to rank for search terms that directly describe your company.

On the other hand, a long-tail strategy involves trying to rank for more specific terms with lower search volumes.

Your ability to rank on the first page should be a deciding factor in deciding whether to pursue a particular SEO strategy at all.

Fat-head SEO Strategy

The best way to determine if a fat-head SEO strategy is worthwhile is to research what terms people use to find products in your industry, then see if the search volumes are large enough to make it a worthwhile growth opportunity.

You want to find terms that have enough volume so that it would be meaningful if you captured ten percent of the searches for that term. You don’t want to spend resources ranking for a term that only gets 200 searches per month.

Optimizing your site to rank for certain key terms is great if your customers are searching for what you have to offer. If, however, your product is so new that there’s no search demand for it yet, a fat-head SEO strategy will not be as effective. This is the difference between fulfilling and creating demand.

What works is finding the topics and the people that will be customers and building content to attract them, rather than just finding the keywords that work in Google.

Fat-head SEO Tactics

If you find keywords with good volume, test them by buying Google ads for your chosen keywords. If these ads convert, you have an indication that SEO could be a strong growth channel for such keywords. In other words, there is no point wasting time on terms that don’t yield traction.

Once you’ve chosen some fat-head keywords with decent search volumes and that convert well, take steps to narrow your list of targeted keywords to just a few. First, go over to Google Trends to see how your keywords have been doing. Have these terms been searched more or less often in the last year? Are they being searched in the geographic areas where you’re seeking customers? You can also use Google Trends to compare keywords to one another and see which have higher relative search volumes.

The next step in selecting keywords is determining the difficulty of ranking highly for them.

Long-Tail SEO Strategy

The majority of searches conducted through search engines are “long- tail” searches. Essentially, long-tail searches are sets of keywords that are highly specific.

Because it is difficult to rank highly for competitive terms, a popular SEO strategy for early stage startups is to focus on the long-tail. With this approach, you bundle long-tail keywords together to reach a meaningful number of customers.

Long-Tail SEO Tactics

Long-tail SEO boils down to producing a lot of quality content.

You can implement this tactic by designing a standard landing page with some basic content and a simple layout structure. Then use oDesk or Elance to find freelancers willing to churn out targeted articles for long-tail topics that your audience is interested in.

One tactic that startups have succeeded with (especially if your product involves geography in any way) is to choose several keywords and target them with geographically modified content. For example, if you want to reach individuals searching for “foreclosed homes,” creating landing pages for targeting terms based on geography would work well. This means generating landing pages for searches like “recently foreclosed homes in Queens, New York City.” These pages would rank more highly than a more generic landing page targeting only “recently foreclosed homes.”

Automation

Another way to approach long-tail SEO is to use content that naturally flows from your business. To evaluate whether you could use this tactic, ask yourself: what data do we collect or generate that other people may find useful?

Sometimes this data is hidden behind a login screen and all you need to do is expose it to search engines. Other times you may need to be more creative about aggregating data in a useful manner.

Content Marketing

Creating Strong Content

The most common hurdle in content marketing is writers block. To overcome it, simply write about the problems facing your target customers. Presumably, you know more about the industry you’re working in than your potential customers. This means that you should be able to provide insight on subjects they care about.

Every single industry has issues people struggle with.

If what you’re writing isn’t useful to people, it doesn’t matter how hard you try to spread your content on Twitter. It just won’t spread.

Growing Your Blog

In the early days, it’s unlikely that your blog will see much traffic, regardless of content quality.

Fortunately, there are ways to build momentum faster.

One of the best methods of growing your audience is guest posting. This tactic is especially powerful in the early days when you essentially have no audience to work with yourself.

As you move forward, monitor social mentions and use analytics to determine which types of posts are getting attention and which are not. Many bloggers are surprised at which posts do well. That is a good reason to keep a regular content schedule: it can be hard to anticipate what exactly will resonate with your audience.

Blogs with Benefits

Quick: name three venture capitalists or ask your startup friends to do so. Many people will mention Fred Wilson, Brad Feld or Mark Suster. Why? Because they have popular blogs. They’re also great venture capitalists in the same way your product has to be great to succeed. But there are plenty of other great venture capitalists that do not have similar brand recognition.

One of the best things about this traction channel is how it positions you as a leader in your space.

Recognition as a primary voice in an industry leads to opportunities to speak at major conferences, give press quotes to journalists, and influence industry direction. It also means your content is shared many more times than it would be otherwise.

Having a strong company blog can positively impact at least eight other traction channels – SEO, PR, email marketing, targeting blogs, community building, offline events, existing platforms and business development. When it works, it drives in customers like magic.

Email Marketing

If you’re running a real business, [email] is still the most effective way to universally reach people who have expressed interest in your product or site. For that, it really can’t be beat.

Email marketing is a personal traction channel. Messages from your company sit next to email updates from friends and family. As such, email marketing works best when it is personalized. Email can be tailored to customer actions so that every communication is relevant to their interests.

Email can be used at all stages of the customer lifecycle: to acquire customers, build familiarity with prospects, move customers through your funnel, and retain the customers you already have.

Email Marketing for Finding Customers

There are many legitimate ways to acquire customers using email. We urge you to build an email list of prospective customers through your other marketing efforts. This is useful (whether you end up focusing on this channel or not) because a list of interested prospects is an asset you can draw on for years.

Traction channels such as SEO or content marketing can help you build your email lists. At the bottom of your blog posts and landing pages, simply ask for an email address.

Another popular approach to building an email list is creating a short, free course related to your area of expertise. These mini-courses are meant to educate potential customers about your problem space and product. At the end of the course you have a call to action, which depends on your product needs. You could ask users to purchase your product, start a free trial, or share something with their friends.

If you do not want to find customers through an email list you have built yourself, consider advertising on email newsletters complementary to your product, or via other channels (SEM, social and display ads). Many email newsletters accept advertisers, and if not you can reach out directly.

Email Marketing for Engaging Customers

Email marketing is a great way to improve initial customer engagement. A popular approach is to create a sequence of emails that slowly exposes your new users to the key features in your product. Instead of throwing everything at them right away, you can email them five days after they’ve signed up and say, “Hey, did you know we have this feature?”

Use targeted emails to reach specific customers who haven’t activated. These are lifecycle emails, where the email cycle begins when a customer signs up for your product and ends when the customer becomes active (i.e. the “lifecycle” of the customer).

With lifecycle messaging, you create the ideal experience for your users when they sign up for your trial. You then create all of the paths they can go down when they fail to go through the ideal experience. And you have emails in place to catch them and help them get back on that [ideal] path.

Give them little nudges to make sure they use the product successfully. For these emails, you should determine the steps absolutely necessary to get value from your product. Then, create lifecycle emails to make sure users complete those steps. For those who fail to complete step one, create a message that automatically emails them when they’ve dropped off. Repeat this at every step where users could quit, and you will see a major uptick in the number of users finishing the activation process.

With tools like Vero and Customer.io, you can create email messages like these tailored to specific groups of users. For example, you can use these tools to send an email to users who have not activated their account within three days of signing up for a free trial.

Email Marketing for Retaining Customers

Lifecycle messaging is often used for customer retention as well. For many businesses, email marketing is the most effective channel to bring users back to their site.

Your retention emails will depend on the type of product you have. For example, if you have a social networking product, you could send a simple email to users who haven’t signed in for two weeks.More business-oriented products usually focus on reminders, reports, and information about how you’ve been using (and getting value) from the product.

Email marketing is one of the best channels to surprise and delight your customers. Any sort of communication telling your customers how well they’re doing is likely to go over well. Patrick McKenzie calls this the “you are so awesome” email.

Some companies send emails that show previous engagement with the product. For example, photo sites will send you pictures you took a year ago. These emails achieve both goals: they often make you feel good on an emotional level, and also invite you to come back and upload more pictures.

Email Marketing for Revenue

A common way to drive revenue through email marketing is doing lifecycle campaigns aimed at upselling customers.

Email retargeting is another tool you can use for revenue. For example, if one of your users abandoned a shopping cart, send them a targeted email a day or two later with a special offer for whatever item they left in the cart. Targeted emails will always convert better than an email asking for a sale out of the blue.

For feature-based freemium products, emails that explain a premium feature a customer is missing out on can have high conversion rate. If you have a subscription product, ask them to upgrade to annual billing, which guarantees they will not cancel within the next year.

Similarly, if you run a scaled pricing business (e.g. you pay $9/month for 5 users, $20/month for 10 users, and so on), you can set up special emails for users nearing their plan limits and ask them to upgrade. For example, when you’re about to run out of Skype credits, Skype will email you asking you to re-up or upgrade to a subscription service.

Email Marketing for Referrals

Due to the personal nature of email, it is excellent for generating customer referrals.

Groupon generates referrals by giving users an incentive to tell their friends about discounts. Unless a certain number of people have purchased a Groupon, the discount is not valid.

This kind of referral program was a major growth driver for Dropbox as well. In order to get more free space, users send referral emails asking their friends to check out Dropbox. If a friend signs up, both users get extra free space.

Tactics

Deliverability is a key factor in email. For many technical reasons, your email messages may not be reaching their intended recipients.

As with other traction channels, testing is essential to maximize this channel’s impact. Effective email campaigns A/B test every aspect: subjects, formats, images, timing and more.

Timing is especially relevant to get higher open rates: many marketers suggest sending emails between 9 a.m.–12 p.m. in your customer’s time zone or scheduling emails to reach them at the time they registered for your email list (e.g. for users who signed up for your list at 8 p.m., email them at 8 p.m.). This is another variable you should test yourself, as its efficacy varies depending on the product.

One of email’s strengths is that it’s a way to get feedback from your customers. Don’t send any email that comes from a “Noreply” email address (e.g. noreply@facebook. com). Instead, use that opportunity to send the automated email from a personal address and allow the recipient to reply with questions or problems they have. This can be great for support, feature requests and for selling existing customers.

Engineering as Marketing

Your team’s engineering skills can get your startup traction directly by building tools and resources that reach more people. We call this traction channel engineering as marketing. You make useful tools like calculators, widgets, and educational micro-sites to get your company in front of potential customers. These tools generate leads and expand your customer base.

Building noteworthy tools that your target audience finds useful is a solid way to gain traction that also pays dividends down the road by helping build your SEO. A simple roadmap to executing this technical strategy includes:

  • Providing something of true value for free, with no strings attached.
  • Making that offering extremely relevant to your core business.
  • Demonstrating that value as quickly as possible.

When you build valuable tools for prospective customers, you get more leads, a stronger brand, and increased awareness while also solving a problem for the individuals you want to target.

Since it is considerably harder to build a very popular application, fewer people do it: so, the “free apps” channel is usually less saturated.

The best companies to use this apps-powered model are software companies. In this case, they can launch complementary apps – or subsets – for free. This not only creates value that draws people in, it also educates people on what the main product does.

Companies have a hard time using engineering resources for anything but product development. Any technical focus on something other than product seems wasted since engineering time is so expensive. As a result, most founders and product managers use all their engineering resources to build new features for a product that’s struggling to acquire users. Don’t make the same mistake. Instead, consider using some of that engineering time to build a tool that moves the needle for your business.

Tactics

Annual Promotions

One way to boost your efforts in this traction channel is to take advantage of cyclical behavior. Take Codecademy’s Code Year micro-site, which launched at the beginning of 2012. Many people claim to want to learn how to code, but don’t follow through. Code Year addressed that issue by asking users to enter their email address to receive a free lesson about programming each week during 2012. Over 450,000 in- dividuals signed up on CodeYear.com, nearly doubling Codecademy’s userbase at the time.

Micro-Sites

One tactic to really maximize impact is to put your tools on their own website. This simple technique does two things. First, it makes them much easier to share. Second, you can do well with SEO by picking a name that people search often so your tool is more naturally discoverable.

Widgets

Chris Fralic (former Head of business development at Delicious and Half.com) tells us that creating a Delicious bookmark widget more than tripled the adoption of their social bookmarking product.

Targeting Blogs

Targeting blogs your customers read is one of the most effective ways to get your first wave of customers. However, this traction channel can be difficult to scale in phase II and III due to the limited number of relevant high-traffic blogs. That’s ok. Not all traction channels are infinitely scalable. In fact, using tactics that don’t scale is one of the best ways to get your first users. Paul Graham put it like this:

[quote]The need to do something unscalably laborious to get started is so nearly universal that it might be a good idea to stop thinking of startup ideas as scalars. Instead we should try thinking of them as pairs of what you’re going to build, plus the unscalable thing(s) you’re going to do initially to get the company going.[/quote]

Finding Blogs

It can be difficult to uncover the smaller blogs that cover your niche. Here are several tools you can use to find all the influential bloggers in your space:

  • Search Engines – Simply search for things like “top blogs for x” or “best x blogs.”
  • YouTube – Doing a simple search for your product keywords on YouTube shows you the most popular videos in your industry. These videos are often associated with influencers that have blogs, and you use references to their videos as an icebreaker to start building a relationship with them. This tactic can be applied to other video sharing sites, such as Vimeo and Dailymotion.
  • Delicious – Delicious allows you to use keywords to find links that others have saved, which can unearth new blogs.
  • Twitter – Using Twitter search is another easy way to find blogs in a niche. You can also use tools like Followerwonk and Klout to determine the top Twitter accounts in your industry.
  • Social Mention – Social Mention helps you determine the sites that have the most frequent mentions for your keywords.
  • Talk to people – The most effective way to figure out what your target audience is really reading online is by asking directly!

Case Study: Mint

They launched their simple money management site in 2007, and – less than two years later – Intuit acquired them for $170 million. In between, Mint was able to acquire over 1.5 million users, 20,000 of whom signed up before they even launched. Within six months of Mint’s launch, they had over one million users.

Noah Kagan, founder of AppSumo and Mint’s director of marketing, drove many of their early marketing efforts.

To hit those numbers, Noah created a quant-based marketing spreadsheet.

His spreadsheet listed traction channels Mint planned to mine for potential users. Then, Noah ran the numbers in terms of traffic, clickthrough rates (CTR), and conversions (actually signing up for their product in this case), and calculated the number of expected users from each channel strategy.

Next, he confirmed the channels Mint would focus on by running tests that seemed promising. To test blogs, he contacted a few that were representative of different customer segments, and got them to write articles about Mint.

This series of tests revealed that targeting blogs was the channel to focus on since they were getting great conversion rates and they could reach enough people to attain their goal. Noah then created a long list of blogs to target, and set about contacting those blogs about guest posts, coverage, and placing Mint badges on their sites. Through this focusing process, Noah uncovered tactics that further improved their traction through this channel: VIP access and sponsoring.

VIP Access

Mint did something that few startups had done before them to increase awareness and build excitement for their launch: they asked people on their pre-launch waiting list to recommend Mint to their friends in return for priority product access.

As part of the signup process, users could embed an “I want Mint” badge on their personal blogs, Facebook, or other websites. Users that drove signups through these badges were rewarded with VIP access before other invites were sent out.

The key to the success of these badges was to make them easy to share and embed. Many users were happy to place the small badge on their website in order to get early access to a product they wanted. Mint had 600 blogs display the badge and 50,000 users signed up through them. This tactic also gave Mint an SEO boost from the hundreds of new links pointing to mint.com.

Sponsoring

Mint used a second innovative tactic to acquire users through this channel: sponsoring blogs. Each sponsored blog would put a small Mint advertisement on their site for a period of time. Noah tracked each advertisement to see which blogs were most effective and how many people signed up. Not only did this approach contribute over 10,000 preegistrations for the product, but it also allowed the Mint team to understand the kind of user most interested in their product.

Link-Sharing Communities

Sharing links is at the heart of many large communities on the web (e.g. reddit, Hacker News, Inbound.org and Digg). In addition, there are hundreds of niche communities and forums that encourage and reward the sharing of links.

When launching, link-sharing communities can be an effective tool to generate traffic, feedback, and buzz.

Quora, reddit, Codecademy, and Gumroad saw success from initial postings on Hacker News because their products were a good fit for users of that site.

Business Development (BD)

Business development is like sales with one key distinction: it is primarily focused on exchanging value through partnerships, whereas sales primarily focuses on exchanging dollars for a product.

With sales, you’re selling directly to a customer. With business development, you’re partnering to reach customers in a way that benefits both parties.

Types of Partnerships

Here are the major types of business development partnerships:

Standard Partnerships

In a standard partnership, two companies work together to make one or both of their products better by leveraging the unique capabilities of the other. One prominent example is the Apple/Nike partnership that resulted in the Nike+ shoe that communicates with your iPod or iPhone to track your runs and play music.

Joint Ventures

In a joint venture, two companies work together to create an entirely new product offering. These types of deals are complex and often require large investments, long periods of time, and (sometimes) equity exchanges.

Licensing

Licensing works well when one company has a strong brand an upstart wants to use in a new product or service.

Distribution Deals

In these deals, one party provides a product or service to the other in return for access to potential customers. Groupon’s core business is structured like this: they work with a restaurant or store to offer a discount to Groupon’s mailing list.

Supply Partners

These types of partnerships help you secure key inputs which are essential for certain products.

Strategic Business Development

Business development can drive some amazing outcomes for your startup. However, getting traction from this channel requires something that few companies do well: strategic thinking.

For business development to work, you must have a clear understanding of your company objectives. What metrics do you need to hit in order to maximize your chances of success? How can partnerships help you get there? Good BD deals align with your company and product strategy and are focused on critical product and distribution milestones. These deals should help you hit your key metrics, whether growth, revenue, or productelated.

Picking the Right Partners

Understanding a partner’s goals is key to creating a mutually beneficial relationship.

You need to understand why a potential partner should want to work with you. What are their incentives? Just as you evaluate potential partnerships in terms of your core metrics, they will be doing the same. You should also seek out forward-thinking partners. Often that means finding an advocate inside a large company or working with a company that has done deals with startups in the past.

Creating a BD Pipeline

Not every partnership will end up working. Thus, it makes sense to build a pipeline of deals.

Create an exhaustive list of all of your possible [partners]. Don’t ever list Condé Nast without listing every single other publisher you can think of. Make a very simple spreadsheet: Company, Partner Type (Publisher, Carrier, Reseller, etc.), Contact person/email, Size, Relevance, Ease of Use, and then a subjective priority score. That list should be exhaustive.

There’s no reason why any company shouldn’t have 50 potential business development partners in their pipeline, maybe 100, and be actively working the phones, inboxes, and pounding the pavement to get the deals you need to get – be it for distribution, revenue, PR, or just to outflank a competitor. The latter is totally underutilized. If you go in and impress the top 50 folks in your space, it makes it that much harder for a competitor to get a deal done – because you’re seen as the category leader.”

Once you have a list of potential partners, send it to your investors, friends, and advisors for warm introductions.

Chris Fralic suggests putting potential partners into buckets based on attributes. For example, you might categorize based on revenue numbers, distribution reach, or inventory capabilities. Then, at the end of this process, choose 10–20 partners to focus your business development efforts on.

Rather than saying “I want to go after XYZ brand”, say “we want to go after Internet retailers that are between 50 and 250 on the IR [Internet Retailer] 500 – because that puts them in this kind of revenue range – and have a director of ecommerce.”

The BD Process

Once you have a few partners you’re targeting, the real action starts. You start approaching potential partners with a value-focused proposition that outlines why they should work with you. Often these are larger companies.

What do you have that they (big companies) need? You’re more focused than they are. You have an idea and you’re solving a problem. You’ve developed content or technology and you have a focus. That is very difficult to do at a big corporation.

To approach these deals, you want to first identify the right contact at your target company. Some companies will have a business development department that handles partnerships, but – depending on the deal – it could be someone like a product director or C-level executive you want to engage with.

Once identified, you want to try to get a warm introduction to that person. With each introduction, you should provide the mutual contact with an overview of your proposal that can easily be forwarded. Then, be sure to follow up and set timelines for next steps.

After the proposal stage comes a negotiation of a terms sheet. The key terms will usually be the lifetime of the deal, exclusivity, how payments work (if any), the level of commitment between partners, any guarantees in the deal, and revenue sharing agreements.

Make the negotiation and term sheet as simple as possible – often just one page. The simpler you can make it to work together (and the fewer lawyers that need to get involved), the easier partnering will be.

Once a deal is completed, obviously you want to maintain a positive relationship with the new partner. It’s also important to understand the driving factors that got the deal accomplished.

Business Development 2.0

Business development has historically been a high-touch process that includes a lot of personal interactions. Reaching out to partners, understanding their needs, and negotiating terms are all part of a traditional business deal. However, businesses recently have been moving to more low-touch business development. Low-touch BD utilizes tools like APIs, feeds, crawling technology and embed codes to reach new distribution channels and grow your influence. These methods allow you to standardize your value proposition and get more deals done.

Nevertheless, it still makes sense to land a few traditional deals first, and then transition to low-touch partnerships.

Just building a great API does not mean people will come and use it. Landing those first few partners through traditional means ensures that someone is getting value from working with your startup. Later, once you have more demand, you can start to standardize and simplify the partnership and integration process.

Sales

Sales is the process of generating leads, qualifying them, and converting them into paying customers. This channel is particularly useful for products that require interpersonal interaction before a purchase (often enterprise and expensive ones). That’s because hand-holding prospects can be necessary to turn prospects into real customers. One effective way to do that is via sales.

Scaling this traction channel requires you to design and implement a repeatable sales model.

Closing First Customers

For consumer products, your first customers will likely come through channels other than sales – SEO, SEM, targeting blogs and the like. When targeting bigger businesses, however, closing those first few critical customers can be significantly more challenging.

Early Conversations

The early conversations are all about exploring the prospect’s problem and pain points.

Talking to prospects about their problems is not only a necessary sales tactic, but also a product development one.

When it comes to structuring your sales conversations, we suggest using the approach developed by Neil Rackham as outlined in his book, SPIN Selling. It is a four-part question framework to use when talking to prospects, based on a decade spent researching 35,000 sales calls:

  1. Situation questions. These questions help you learn about a prospect’s buying situation. Typical questions may include ‘How many employees do you have?’ and ‘How is your organization structured?’
    Only ask one or two of these questions per conversation since the more situation questions a salesperson asks the less likely they are to close a sale. That’s because people feel like they’re giving you information without getting anything in return. This is especially true of executive decision-makers who are likely more pressed for time. Make sure you ask just enough situation questions to determine if you’re talking to a likely candidate for a sale.
  2. Problem questions. These are questions that clarify the buyer’s pain points. Are you happy with your current solution? What problems do you face with it?
    Like situation questions, these questions should be used sparingly. You want to quickly define the problem they’re facing so you can focus on the implications of this problem and how your solution helps.
  3. Implication questions. These questions are meant to make a prospect aware of the implications that stem from the problem they’re facing. These questions are based on information you uncovered while asking your problem questions. Questions could include –Does this problem hurt your productivity? How many people does this issue impact, and in what ways? What customer or employee turnover are you experiencing because of this problem?
    These questions should make your prospect feel a problem is larger and more urgent than he or she may have initially thought. For example, your prospect may see hard-to-use internal software as just an annoyance, a necessary cost of doing business. Implication questions can help shed light on the problems caused by this hard-to-use software: does it lead to employee overtime because they struggle to accomplish things efficiently? Does it decrease overall quality of work? Does it impact employee turnover?
    Each of the questions helps frame the issue as a larger one in your prospect’s mind. Then, you transition to the final set of questions.
  4. Need-payoff questions. These questions focus attention on your solution and get buyers to think about the benefits of addressing the problem. Such questions should stem from the implication questions you asked earlier, and can include: How do you feel this solution would help you? What type of impact would this have on you if we were to implement this within the next few months? Whose life would improve if this problem was solved, and how?

The SPIN (Situation, Problem, Implication, Need-payoff) question model is a natural progression. First you clarify that the prospect is a potential customer and break the ice (situation questions). Then, you get them talking about the problem (problem questions). Next, you uncover all the implications of this problem (implication questions). Finally, you focus on how your solution addresses these implications and will solve their problem (need-payoff questions).

Cold Calling

Tactically, setting daily or weekly targets for outbound calls can help you get through the process. You’ll be able to push yourself through some of those uncomfortable feelings (mainly stemming from rejections) with a concrete goal to work toward.

When making cold calls, be judicious about the people you contact. Cold calling junior employees is just as difficult mentally as calling more senior employees, but has a much lower success probability because they have less decision making authority and industry knowledge. Your first interaction should be with employees who have some power, but aren’t too high up.

Ordinarily, it’s somebody who is one level or two levels up in the organization; they’ve got enough perspective on the problem and on the organization to understand what’s going to be involved in bringing change to the organization. As we work with them they may take us up the hierarchy to sell to more senior folks.

We don’t tend to start at the top unless we are calling on a very small business, in which case you’ve got to call on the CEO or one of the key execs because no one else can make any decisions.

Once you understand the potential first customer’s problem and you think your solution can help solve it, you can start to focus conversations on closing the customer. Specifically, Todd recommends getting answers for five specific areas he calls PNAME:

  • Process – How does the company buy solutions like yours?
  • Need – How badly does this company need a solution like the one you’re offering?
  • Authority – What individuals have the authority to make the purchase happen?
  • Money – Do they have the funds to buy what you’re selling? How much does not solving the problem cost them?
  • Estimated Timing – What are the budget and decision time- lines for a purchase?

Send a follow-up email documenting what you talked about including the problems your prospect faces and the next steps.

Close emails with a direct question such as “will you agree to this closing timeline?”

Good First Customers

You’ll want your first customers to have a problem they’re actively looking to pay to solve. Unfortunately, many enterprise entrepreneurs do not put enough thought into deciding on their first customer. Identifying the wrong first customer can lead to wasted time and squandered resources.

You also want your first customers to be somewhat progressive and willing to work with you closely. As you’re still developing your product, you want their involvement in helping you craft the best solution.

As such, getting the right first enterprise customer is crucial, as it will inform many decisions about the importance of different features.

Forming this strong relationship is also crucial because you want to use your first few customers as references and case studies to give your startup some measure of credibility when you start designing your sales funnel.

Designing a Sales Funnel

With a sales funnel you start with many prospects, qualify the ones that make good customers, and sell a certain number of them on your solution.

Generating Leads

The first goal is to drive leads into the top of the funnel. Usually, this means using other traction channels to make people aware of your product. While cold calling or emailing can be an effective way to reach your first customers, it’s less effective when trying to build a repeatable sales model.

Qualifying Leads

The next stage in a sales funnel is lead qualification. Here, you want to determine how ready a prospect is to buy, and if they’re a prospect in which you should invest additional resources.

Mark Suster suggests a simple approach to bucket leads into three categories: A’s, B’s and C’s:

[quote]I define “A deals” as those that have a realistic shot of closing in the next 3 months, “B deals” as those that you forecast to close within 3–12 months and “C deals” as those that are unlikely to close within the next 12 months. “A deals” should get much of the salesperson’s time (say 66–75% of time), “B deals” should get the balance as each sales rep needs to build their pipeline and bigger deals take time. And the key to scaling is that “C deals” should get no time from sales. They should be owned by marketing.[/quote]

In many organizations, marketing is in charge of generating leads and doing basic lead qualification. Then, the sales team further qualifies and eventually closes the leads. It is part of the marketing department’s job to make sure the sales team gets the information they need to just focus on qualified leads.

Closing Leads

Once you’ve qualified your leads, the final step is to create a purchase timeline and convert prospects to paying customers.

An agreement at this stage might look like this: “We’ll build this feature within two weeks. After two weeks, if you like the feature we’ve built and it meets your needs, you’ll buy from us. Yes or no?” Getting a yes or no answer allows you to focus your time on deals that are likely to close without wasting time on prospects that aren’t prepared to buy.

Closing leads can happen in a variety of ways. For some products, it can be done completely by an inside sales team (meaning salespeople that don’t travel). This team usually calls qualified leads, does a webinar or product demo, and has an ongoing email sequence that ends with a purchase request. In other cases, you may need a field sales team that actually visits prospective customers for some part of the process – it all depends on the complexity and length of your sales cycle.

Sales Funnel Strategy

Remember that, no matter how good your sales team, the customer is the one who decides to buy your product. It is crucial to keep the customer in mind as you design your sales funnel, meaning you should make their decision to buy an easy one.

You want to recognize that your prospect has a series of issues and questions they will want resolved before they make a buying decision. These are things like ‘Am I sure that this is the best product?’, ‘Am I sure that this will work for my situation?’, ‘Will I get a good return on investment?’, ‘Will this integrate with a system I have working in place today?’ and so on.

Once you know what that buyer’s questions are, you want to design your process to effectively address all of their questions and recognize what kinds of things need to be handled. Ideally, as many of these questions you can handle on your website, the better. Your job, once you have their email, is to answer all of their buying questions and then create a trigger that gives them a strong reason to buy.

You can track when prospects drop out of your funnel. The points in your funnel where many prospects drop off are called blockages. Prospects will fall out of your funnel due to sales complexity; you want to make purchasing your product as simple as possible. Some ways you can minimize blockages are through:

  • Removing need for IT installs with SaaS (Software as a Service)
  • Free trials (including through open source software)
  • Channel partners (resellers of your products)
  • Demo videos
  • FAQs
  • Reference customers (such as testimonials or case studies)
  • Email campaigns (where you educate prospective customers)
  • Webinars or personal demos
  • Easy installation and ease of use
  • Low introductory price (less than $250/month for SMB, $10,000 for enterprises)
  • Eliminating committee decision making

Affiliate Programs

An affiliate program is an arrangement where you pay people or companies for performing certain actions (like making a sale or getting a qualified lead). Companies like Amazon, Zappos, eBay, Orbitz, and Netflix use affiliate programs to drive significant portions of their revenue. In fact, affiliate programs are the main traction channel for many e-commerce stores, info products and membership programs.

Common Affiliate Programs

Affiliate programs are frequently found in retail, information products, and lead generation.

Retail

Retail affiliate programs facilitate the purchase of tangible products and account for more than $2 billion annually.

Sites like Commission Junction (CJ), Pepperjam, and Linkshare all have strong networks of affiliates who make a living promoting others’ products. The list of companies who take advantage of these networks contains the most recognizable names in the retail industry: Wal-Mart, Apple, Starbucks, The North Face, Home Depot, Verizon, Best Buy, and many others.

The affiliates that join these programs vary widely, but generally fall into the following major categories:

  • Coupon/Deal sites. These sites (e.g. RetailMeNot, Coupon- Cabin, BradsDeals, Slickdeals) offer discounts to visitors and take a cut of any sale that occurs.
  • Loyalty programs. Companies like Upromise and Ebates have reward programs that offer cash back on purchases made through their partner networks. They earn money based on the amount their members spend through retail affiliate programs. For example, if 1,000 members buy gift certificates to Olive Garden, Upromise will get a percentage, of every dollar spent. Then, they pay part of what they earn back to their members.
  • Aggregators. These sites (e.g. Nextag, PriceGrabber) aggregate products from retailers. They often add information to product listings, like additional ratings or price comparisons.
  • Email lists. Many affiliates have large email lists they will recommend products to, and take a cut when subscribers make purchases.
  • Vertical sites. There are hundreds of thousands of sites (including individual blogs) that have amassed significant audiences geared towards a vertical (e.g. parenting, sports, electronics, etc.).

Information Products

By far the largest affiliate network for information products is Clickbank, where affiliate commissions often reach 75%. ClickBank has over 100,000 affiliates and millions of products.

Lead Generation

Lead generation is a $26 billion dollar industry. Insurance companies, law firms and mortgage brokers all pay hefty commissions to get customer leads. Depending on the industry, a lead may include a working email address, home address, or a phone number. It may also include more qualifying information like a credit score.

Affiliate programs are popular with financial services and insurance companies because the value of each customer is so high. Think of how much you spend on auto or health insurance annually: that should give you a sense of why a lead is so valuable. In fact, insurance companies are top Google AdWords spenders, often paying $50–100 for a single click!

These companies often create their own affiliate programs or go through popular lead-gen networks like Affiliate.com, Clickbooth, Neverblue and Adknowledge.

Affiliate Program Strategy

Your ability to use affiliate programs effectively depends how much you are willing to pay out to acquire a customer. After all, with this channel you are paying out of pocket for the lead or sale.

Using Affiliate Networks

We recommend going through an existing affiliate network – something like Commission Junction, Pepperjam, ShareASale, or a more specific networks targeted at your type of product. Using a network makes it easier to recruit affiliates (because so many are already signed up on these sites) and therefore allows you to start using this traction channel immediately. Otherwise, you’d have to first recruit affiliates on your own, which takes time and money.

Setting up an affiliate program on an existing affiliate network is relatively easy, though it requires an up-front cost. In the case of Commission Junction, that cost is over $2,000. If you successfully recruit high-performing affiliates already on the site, their sales will quickly cover the initial fee.

Affiliate Program Tactics

The first place to look for potential affiliates is your own customer base. They are easy to recruit and work with because they are already familiar with and (hopefully) like your brand.

After getting customers involved in your affiliate program, you will want to contact content creators, including bloggers, publishers, social media influencers and email list curators. Monetizing blogs can be difficult, so these content creators often seek other ways to make money.

The best way to reach an important blogger is by building a relationship: help the content creator where you can, write guest posts, provide free access to your product, etc. In turn, they’ll happily promote you if you have a truly great product.

Compensation

Well-established affiliate programs like those run by Amazon or Netflix have figured out exactly how much to pay their affiliates for each lead. As a startup, you are going to be less sure of your underlying business and should start with a simple approach. The simplest approaches are to pay a flat fee for a conversion (e.g. $5 for a customer that purchases something) or pay a percentage of a conversion that occurs (e.g. 5% of the price a customer pays).

More established affiliate programs get more complex by segmenting products and rewarding top affiliates. eBay gives coupon codes to their affiliates for product categories they want to push. Tiered payout programs are also popular among larger programs. In this structure, affiliates get paid a percentage (or flat fee) of each transaction. The percentage is based on the number of sales you make – if you drive more transactions, your rate goes up, and you make more money.

Major Affiliate Networks

Here are the top affiliate networks, as well as a list of software tools that can help you build your own referral program without a substantial engineering investment.

  • Commission Junction – CJ has many of the largest Internet retailers on their platform. They are also somewhat pricey: it costs upwards of $2,000 to sell your product through their network. This high cost, combined with the fact that they curate both affiliates and publishers for performance, creates a high level of quality in their network.
  • ClickBank – The leading platform for anyone selling digital products online (courses, ebooks, digital media).ClickBank is relatively cheap to start with, as you only need to pay $50 to list a product on their platform.
  • Affiliate.com – Affiliate.com promises a very strict affiliate approval process, which they claim means higher quality traffic for their advertisers.
  • Pepperjam – The Pepperjam Exchange encompasses multiple channels (mobile, social, offline retail, print, etc.). They promote their customer support and transparency as selling points for their network, which costs $1,000 to join.
  • ShareASale – This affiliate network has over 2,500 merchants and allows advertisers to be flexible in determining commission structures. It costs about $500 to get started.
  • Adknowledge – They offer traditional ad buying services in addition to affiliate campaigns. They also work in mobile, search, social media and display advertising, giving advertisers access to affiliate and CPC outlets through one platform.
  • Linkshare – They play in both the affiliate and lead generation spaces. They help companies find affiliates and build lead gen programs for them. Companies like Macy’s, Avon, and Champion use them to manage affiliate programs.
  • MobAff – A mobile affiliate network that companies can use for both CPC and CPA. Mobaff utilizes SMS, push notifications, click to call, mobile display and mobile search to drive conversions for their advertisers.
  • Neverblue – Neverblue is targeted toward advertisers that spend more than $20,000 per month. They also work with their advertising partners on their advertisements and campaigns. They count Groupon, eHarmony, and Vistaprint are some of their clients.
  • Clickbooth – Clickbooth uses search, email, and many websites to promote brands like DirecTV, Dish Network, and QuiBids.
  • WhaleShark Media – This media company owns some of the most popular coupon sites in the world, including RetailMeNot and Deals2Buy.com. Companies can partner with them to drive coupon-based affiliate transactions through their sites, which often appear near the top of Google for any “term + coupon” search.

Existing Platforms

Existing platforms are websites, apps or networks with huge numbers of users – sometimes in the hundreds of millions – that you can potentially leverage to get traction. Major platforms include the Apple and Android App Stores, Mozilla and Chrome browser extensions, social platforms like Facebook, Twitter, and Pinterest, as well as newer platforms that are growing rapidly (Tumblr, Snapchat, etc.).

Some of the most successful startups grew by making bets on emerging platforms that were not yet saturated and where barriers to discovery were low.

Betting on new platforms means you’ll likely fail if the platform fails, but it also dramatically lowers the distribution risks described above.

App Stores

The most efficient way for an app to get discovered in the App Stores is through the top app rankings and featured listings sections.

These rankings group apps by category, country, popularity and editors’ choice.

Mark Johnson, founder of Focused Apps LLC, wrote about how app promotions usually work:

  1. Ads get the [app] somewhere into the charts
  2. Now it’s in the charts, more people see it
  3. So it gets more organic downloads
  4. Which makes it go a bit higher up in the charts
  5. Now even more people see it and it gets more organic downloads
  6. People like it and start telling their friends to get it too
  7. It goes up higher in the charts
  8. Repeat from 5

Companies use a myriad of tactics to get into the charts initially. They buy ads from places like AdMob, buy installs from companies like Tapjoy, cross-promote their apps (through cross-promotion networks or other apps they own), or even buy their way to the top of the charts through services like FreeAppADay.

Other traction channels can also drive adoption of your mobile app: the PR and targeting blogs channels can work well. While none of these tactics are enough on their own, they can help you get the ball rolling towards a ranking or feature.

Social Platforms

Even though keeping up with the evolution of social platforms can be challenging, they remain one of the best ways to rapidly acquire large numbers of users. In fact, it makes sense to focus on platforms that are just taking off.

Social platforms that haven’t fully matured also haven’t built all of the features they’ll eventually need; you might be able to fill in one of those gaps. They also are less saturated, as larger brands are often slower to target up and coming sites.

YouTube got its initial traction by filling gaps in the MySpace platform. In the mid-2000s MySpace was the most visited social networking site in the world. Video sharing on the web wasn’t user friendly – it was difficult to upload videos and put them on other sites.

MySpace didn’t have a native video hosting solution. YouTube provided one that was simple: you could upload and embed a video in MySpace in a matter of minutes.

Even better for YouTube, MySpace users were directed back to YouTube when they clicked on the embedded videos. This exposed many MySpace users to all of the great features and content available on YouTube, and was responsible for YouTube’s rapid early growth.

Every major platform has similar stories. Bit.ly fulfilled the need to share shortened links on Twitter and saw most of their adoption from such users. Imgur built their image-hosting solution for reddit users, and has seen an explosion in usage as a result. This pattern repeats itself time and time again.

Add-ons and Extensions

Browser extensions (in Chrome) and add-ons (in Firefox) are apps you can download for your web browser. The most popular browser extension is Adblock Plus, which blocks ads on major websites. Other popular extensions help you download YouTube videos, save bookmarks across computers, and save your passwords.

There’s a reason add-ons are such a popular way to spur growth. Web users visit dozens of different sites every day; to establish yours as a site they consistently visit can be difficult. An add-on allows users to get value from your product without consistently returning to your site.

Other Platforms

There are thousands of other large sites and marketplaces that you can target to get users. First, figure out where your potential customers hang out online. Then, create a strategy to target users these existing platforms. Sites like Amazon, eBay, Craigslist, Tumblr, GitHub, and Behance have all helped startups build traction.

Trade Shows

Trade shows are a chance for companies to show off their products in person. These events are often exclusive to industry insiders, and are designed to foster interactions between vendors and their prospects.

Early on, you can use this traction channel to build interest in (and demand for) what you’re building. As you get more established, you can use trade shows as an opportunity to make a major announce- ment, sell big clients, seal a partnership or as an integral part of your sales funnel.

Picking Trade Shows

Almost every industry has large number of trade shows: the tough part is deciding which ones to attend. The best way to decide whether to attend an event is to visit as a guest and do a walkthrough the year before. Attending as a guest allows you get a feel for an event without straining your budget.

If this isn’t possible, the next best option is to get the opinions of people who have attended previous events – how crowded was it? How high was the quality of attendees? Would you go again? These are important questions that will help you decide if an event is right for your startup.

Brad Feld, a partner at Foundry Group, suggests following these steps when deciding which events to pick:

  1. Set your goals for attending trade shows this year. For example, are you trying to get press, lure investors, land major customers, work out significant partnerships, or something else? Your goals should drive your decisions about which events to attend and how to approach them.
  2. Write down all events in your industry.
  3. Next, evaluate each event in the context of your goals. In particular, think about the type of interactions you want and whether these interactions take place at each event. For example, if you need to have long conversations with prospects to do customer development, seek out an event with an intimate atmosphere. If your goal is to interact with as many potential customers as possible, a crowded event would be a better fit.
  4. Figure out how much you can spend per year and allocate this budget by quarter. This allows you to align events on your schedule with your budget while also giving you flexibility to reallocate in later quarters if company goals change.
  5. Finally, work backwards to see if attending a particular event makes sense given your quarterly budget. For example, let’s say you are attending Traction Trade Show and your goal is to increase sales. When you receive the attendee list from the conference organizer (ask for it if it is not provided), you see that 10,000 people are going. However, only 30% of those people fit the profile of a potential customer, so your total number of people to target is 3,000 people.
    If it will cost you $10,000 to attend this trade show and the price of your product is $5,000, it may make sense for you to attend. That is, your trip will be profitable around the third sale with these numbers, so then the decision comes down to what other opportunities you have right now. However, if you are selling a $50 product, you probably won’t sell enough to make attending this trade show worth your while.

Preparing for Trade Shows

Your preparation for a trade show will determine how successful you will be. This is one of the few times during the year where nearly everyone in your industry is in one place; you’ll want to be at your best.

To prepare, make a list of key attendees you want to meet at the trade show. Then, schedule meetings with them before you attend the event.

Trade shows are a rare chance to get face time with:

  • Editors of online and offline magazines. Often overlooked, editors are your key to real press.
  • Bloggers you like, especially if you wish they’d write about you.
  • Existing customers.
  • Potential customers currently trialing your stuff.
  • Your vendors.
  • Your competition.
  • Potential partners.

Proactively set meetings. Call/email everyone you can find. It’s easy to use email titles which will be obviously non-spam such as ‘At [Trade Show X]: Can we chat for 5 minutes?’ I try to get at least 5 meetings per day. Organizing dinner and/or drinks after the show is good too.

If PR is one of your goals, reach out to media that will be in attendance. Media members attend trade shows specifically to see what’s going on in an industry – give them something to write about! This could be a new product, feature or deal with a big customer.

Successful trade shows come down to the relationships you build and the impression you make on journalists, prospective customers and potential partners.

The other secret conference trick that is orchestrated by the true Zen masters is to schedule a dinner and invite other people. It’s a great way to get to know people intimately. Start by booking a few easy-to-land friends who are interesting. Work hard to bag a “brand name” person who others will want to meet. All it takes is one. Then the rest of your invites can mention that person’s name on the guest list (name others, too … obviously) and you will be able to draw in some other people you’d like to meet.

Another similar strategy is with customers. If you invite 3–4 customers and 3–4 prospects to a dinner with 2–3 employees and some other interesting guests you’ll be doing well.

Trade Show Tactics

First, determine where you want to be located on the show floor. If your goal is to reach many attendees (as opposed to targeting a few high-value prospects), you need visibility. That means you want a booth in a well-trafficked location and a marketing plan to get people to take notice. If your strategy is dependent on talking to just a few key partners, a great booth location (and the added cost that comes with it) doesn’t make as much sense. In fact, you may want to be situated in a very particular place (say next to a specific company).

No matter what your location, you will want to put together an impressive display. Having a big banner that says what you do, nice-looking booth materials (tables, backdrops, etc.), business cards, and a compelling demo are the basics. If that seems like a lot to put together, there are many vendors that help companies create trade show materials.

Giveaways (t-shirts, pens, etc.) are also a way of getting some buzz and inbound traffic at a trade show. Coffee mugs and stress balls are tried and true, but you can get even more creative with more unique items (yo-yos, coconuts, cigar lighters) to stand out during the show.

When you do engage a person, each of the materials you give out should have a specific call to action (CTA). For example, if someone picked up a business card at your booth, it should have a compelling offer (e.g. download a free industry guide), along with a unique link to that download (e.g. http://yoursite.com/tradeshow). Make sure this page is mobile optimized, as most of your visitors will be accessing the page from a mobile device. Having a CTA lets you track how many people from the show went to your unique page and adds a few people to your email list.

Outside The Booth

There’s more to a trade show than the trade show floor. In many cases, one of your primary goals will be building relationships. Getting to know potential customers and partners in a social setting can get you more traction than you’d expect.

We already talked about hosting dinners. One step beyond dinners is throwing a party near the show center. Like dinners, these are a great way to loosen up and chat with others at the event. You could co-sponsor these with other startups to keep costs reasonable.

Offline Events

In phase I, offline events give you the opportunity to engage directly with potential customers about their problems. Such events are especially important when your target customers do not respond well to online advertising or do not have a natural place to congregate online. Attracting these customers to one location or going to a place where they meet in person can be the most effective way to reach them.

Offline events are particularly effective for startups with long sales cycles, as is often the case with enterprise software.

Conferences

Conferences are the biggest and most popular type of offline event. Each year hundreds of startupelated conferences and thousands of business conferences are held worldwide.

You can benefit from a conference in any startup phase. In phase I, where smaller groups of people can move the needle, attending meet-ups and events is a prime way to do so. Startups in phase II can take advantage of larger tech conferences like TechCrunch Disrupt, Launch Conference, and SXSW to build on their existing traction.

Any niche where the market is online and easily reachable have the potential to benefit from meetups and other offline events, because everyone wants to go to a conference. Any niche where you have recognizable names you can go after would also be good.

Meetups and Smaller-Scale Events

Instead of a conference, you may choose to connect with a target group of customers at a meetup.

Small meetup groups are more effective than you may expect, especially in the early stages.

Great meetups can create lasting community connections.

You can start your own meetup, join an existing one, or even sponsor an event where your prospective customers will be. Meetup.com is the most popular site for doing so.

Party!

Believe it or not, throwing a party can be an effective way to get some traction.

Offline Event Tactics

Starting Out

A day-long mini-conference could be a great way for a smaller startup to get traction. It can also be an easy and cheap way to test if there’s any interest among your audience for a larger event.

For example, you can select a topic relevant to your product and invite the founders of three local companies to come give short talks on the subject. You could also feature these founders on a panel about a particular topic. You might even take the unconference approach and have attendees suggest topics for roundtable discussion, and then allow them to vote on which discussions will take place.

A local university lecture hall is a good place to hold an event like this. Often, universities are willing to open their facilities if it’s for an educational purpose and if some of their faculty or students can attend. This type of mini-conference can be done for less than $500.

Scaling Up

If your first event is a success, consider scaling up to larger events. The logistics of planning a larger event will take a lot more effort because you need more of everything (speakers, food, space, etc.). Sponsors may be interested in helping you cover the cost of the event.

Keeping attendee quality as high as possible is crucial so that those who attend the conference will learn a great deal from both the speakers and from other audience members. The best way to do this is to make the ticket price relatively high, so that individuals with successful businesses are more likely to attend than those just starting out.

The structure of an event also plays a critical role in whether the experience works for you and the attendees.

Speaking Engagements

It’s relatively easy to get started in this channel – simply start by giving free talks to small groups of potential customers or partners. Speaking at small events can improve your speaking ability, give you some early traction, and spread your story or message. It’s also good for personal growth if you’ve never done it before: Mark Zuckerberg has talked about how improving at public speaking has vastly improved his management ability. Therefore, we recommend trying to give at least one talk even if you choose not to pursue this traction channel.

This channel works well wherever there are a group of people in a room that – if you pitched them right – would move the needle for your business. This happens to occur more with enterprise and B2B businesses because they’re often at expensive conferences.

How to Land Speaking Engagements

You have to get the attention of event organizers to land speaking engagements. Event organizers need to fill time at their events. If you have a good idea for a talk and see an event that aligns with an area of your expertise, simply pitch your talk to the event organizers. If your ideas are solid, they will want you. This process becomes even easier as you become a recognized expert.

Pitching Talks

To determine where you want to speak, make a list of the events in your industry. Different kinds of events have different crowds and different expectations of speakers. There are a few types of events you should be aware of:

  • Premier events are well regarded and attended national or international shows. Often, there will only be a few of these per year in an industry. These events will require much longer lead times to submit a proposal, often six to twelve months.
  • Regional events bring together industry players within a day’s drive. Depending on the event, expect to land a speaking engagement roughly two to four months before the show.
  • Local events draw city residents around a particular topic. Like regional shows, lead times can vary but are usually one to three months before the show.

Organizers consider timing, topic, and credibility when selecting a speaker. By establishing yourself as an expert on an appropriate topic and submitting proposals far in advance, you maximize your chances of securing one of the best speaking engagements at the target show.

Landing speaking engagements is far easier if you have expert credentials. After all, if you don’t “earn the right” to be on stage, the audience won’t give you the attention you deserve. For example, if you run a popular blog, it becomes much easier for organizers and attendees to find and recognize your expertise.

Building Your Speaking Reputation

In addition to industry experience, conference organizers will want to see that you are a decent speaker. If you’re not well known as a speaker, they’ll be hesitant to book you (even for free)

Getting valuable early speaking experience is not difficult. Start by speaking for free at co-working spaces, nonprofits, and smaller conferences or events. Use these smaller scale appearances to refine your talks and build your speaking reputation.

The world of event organizers is relatively small and they pay special attention to who is speaking at events. As a result, you’ll find your number of engagements growing organically.

To become a speaker you have to speak once. If you speak and you’re good, people in the audience will ask you to speak at other events. That’s just how it happens.

If you do a good job at smaller events, leverage them into talks at larger events by asking for referrals and using past gigs as social proof.

Speaking Tactics

When you start a talk, the audience is usually thinking about two questions – why are you important enough to be the one giving a talk? What value can you offer me? These questions will be burning in their minds until you address them, so answer them immediately.

Once you’ve captured the audience’s attention, keep it with a compelling story. All successful talks tell a story: otherwise, the audience loses interest. Your story is about what your startup is doing, why you’re doing it, and specifically how you got to where you are.

Of course, we have only so many compelling stories. That’s why give the same one or two core talks, only slightly modifying each to fit the audience. Never do custom talks and always reuses the slides, so the two speeches are solid.

Giving a limited number of talks is helpful in another way: it gives you more practice per talk, which helps you identify spots that may not be clicking with the audience.

The more practiced and comfortable you are, the better your talks will be and the more you can improve them.

Advanced Tactics

Leveraging Your Talks

Record your speaking engagements. If you’re at an event of 250 people and you have given your best speech ever, you’ve still only reached 250 people. However, if you can record your best speech ever, you can post clips, thereby exposing your story to thousands of people who would never have seen it otherwise. Among this group will be conference organizers who will book you for future events.

Leveraging social media to reach people outside of the conference is a similar tactic. Rand Fishkin of Moz tweets his slides before every presentation, which lets his followers find out what he’ll be talking about. Then, when he posts a video of his talk, there is already some buzz and interest in hearing what he talked about.

Give the audience a call-to-action at the end of presentations. This is a simple request of the audience – something like asking them to sign up to a mailing list or to check out a link where they can see the slides. This tactic tells whether or not members of the audience found the information engaging enough to act on it.

Reusing Slides

What if one conference asks for a twenty-minute presentation and another asks for sixty? It’s time consuming to prepare a whole new talk: it’s more efficient to tailor your existing slides to a specific audience or event.

The best talks I’ve ever seen are where each slide is essentially a 7 minute story with a beginning, middle, and end. Once you get good at that, and you have these canned slides, you can change a 60 minute talk to a 20 minute talk just by taking slides out.

Building Relationships

As we mentioned early on, the main driver for being a speaker in the first place is to build relationships. At most conferences there is a speaker’s dinner, where presenters get to meet each other and network. If there isn’t one scheduled, take the liberty of scheduling one. Often, this can be the most valuable part of a conference – you get to meet other individuals doing cool things.

Similar to trade shows, you can also do preparation ahead of time based upon who is likely to attend the event where you are speaking. Get a list of attendees from event organizers and reach out to people you would like meet. Tell them exactly when and where they are speaking and suggest to meet up afterwards. Now that they’ve heard you talk they’ll be more receptive to your pitch.

Community Building

Community building involves investing in the connections among your users, fostering those relationships and helping them bring more people into your startup’s circle.

How to Build a Community

Build an Initial Audience

Every individual we interviewed emphasized how helpful it was to have an existing audience to jumpstart their community-building efforts. For example, Wikipedia began with a small group of users from the Nupedia user group (an earlier online encyclopedia project).

Establish Your Mission

People want to feel like they’re part of something bigger than themselves: that’s why you need to have a mission if you want to build an awesome community. A powerful mission gives your community a shared sense of purpose and motivates them to contribute.

Foster Cross-connections

It’s critical to foster connections among your community (through forums, events, user groups, etc.). By encouraging your users to connect around your startup, they feel more cohesive as a community and can come up with ideas that you may not think of yourself.

People who care enough about your startup’s mission to discuss with others are your coveted evangelists. They are the people you want to support in every possible way.

Communicate with your Audience

Community members love to hear from other members. But, they would also love to hear from you. You will want to connect with your evangelists and let them know that you value them.

Sending emails and gifts is great, but nothing beats personal interaction. It’s just easier to form a lasting relationship with someone you’re sharing a laugh or a drink with. In that way, community building works nicely with other channels like offline events and speaking engagements. These occasions present great opportunities for users to connect with you and with each other.

Be Transparent

Being open with your community is the best way to get them to buy into your mission.

Ensure Quality

The meaning of quality depends on the service the startup provides. For Yelp, it might be the accuracy of its reviews; Wikipedia, the usefulness of its articles; reddit, the relevance of its links and comments.

Every founder we talked to emphasized the importance of maintaining community quality. Wikipedia developed strict guidelines for everything from the types of articles to include on the site to how conflicts of interest should be handled. Reddit developed a karma system based on voting that determines what links and comments are displayed prominently.

Unfortunately, a common occurrence is that the quality of communities starts out strong but gets diluted over time as evangelists either leave or get drowned out by newer community members. This decline in the overall quality of the community causes more good people to leave, which creates a downward spiral from which many communities don’t recover. To prevent this negative cycle, it is important to focus on quality early on and set standards that can be maintained as the community grows.

Community Benefits

Building Assets

Many communities are a valuable asset for the managing company or organization. Consider Wikipedia: their goal is to compile the world’s knowledge in one place. To reach this goal, they’ve built the largest group of knowledge contributors and editors ever assembled.

Product Development

Like building an asset, your users can also help you develop your actual product. Not only does this kind of community improve your product, but they will love you for giving them the chance to help.

Perhaps this community type is best illustrated by the open source movement. For software companies, their code is the product. Some companies open source their code, making it freely available for anyone to use, modify, or improve.