Startup Marketing Blog – By Sean Ellis

Steve Blank’s SLL Keynote – It’s a “Must Watch”

Watch live video from Startup Lessons Learned on Justin.tv

Some of my favorite quote are:

Role of the Entrepreneur

• Your job as an entrepreneur in a startup is to search for a repeatable and scalable business model. When you find it, your job is to build a company around that business model.
• Search for a business model rather than write a business plan. Biz model is how a company makes money.
• Customer and agile development is how you search for a business model.
• You fail if you stay a startup – goal is to become a large company.  Search is bringing order out of chaos, pivoting all the time.
• Goal is not to becoming the world’s most fun startup. Goal is to become a valuable company.
• No business plan survives first contact with the customer.

Differences Between Startups and Established Companies

• Startups search and pivot; companies execute.
• Very different skills needed to execute a business model compared to those needed to search for a business model.
• Customer development = hypothesis testing, minimum feature sets and pivoting.  Product management is very different than customer development.
• You need to brainwash and deprogram product managers if you want them to perform customer development.
• Key startup numbers are not: balance sheet, income statements and cashflow.  They are cash, viral coefficient, customer acquisition cost, burn rate, average transaction size…

Want more Steve?  Check out his blog.

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Early Detection is Key

Following the Startup Lessons Learned conference, I had the Founder/CEO of a startup tell me that she finally ran the Survey.io customer development survey. She was thrilled to discover that more than 40% of her users considered her product to be a “must have.” She had avoided running the survey earlier for fear of a disappointing number. But now that she has run it, she can confidently start planning the steps needed to scale her business (see Startup Pyramid post).

Her fear is common among many startup founders. We have so much invested in the vision (especially emotionally), that we dread an inconvenient truth standing in the way of our dream.

The fear reminds me of one of my personal life missions. Over the last five years I’ve strongly encouraged my friends to get physical exams – especially entrepreneurs consumed by their startups. I know how hard it is to make time.  At perhaps the most intense period of scaling LogMeIn I was putting off a routine physical exam. I felt healthy, so why worry? But I gave up half of a day anyway and finally got a complete checkup. It turned out that I had the very early stages of bladder cancer. A simple procedure removed the cancer and I haven’t had any signs since. But if I had waited just a few more months, my doctor explained that the prognosis would have been a lot scarier. If you haven’t had a physical exam recently, please make the time. It could save your life.

And on a much lighter note, if you haven’t run the customer development survey on Survey.io, just do it (it’s free). If too few people consider your product a “must have”, you’ll want to pivot/course correct as early as possible.

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Sneak Preview: KISSmetrics

I’m really looking forward to the Startup Lessons Learned Conference this Friday. If you haven’t bought your ticket yet, use the code SEANELLIS and save 20%

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My Presentation at Lean Startup Circle in SF

Sean Ellis at Lean Startup Circle Meeting from David Binetti on Vimeo.

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Bringing Your Product to Market

I’ve just completed a hectic week of marketing workshops with startups in the UK and Ireland.  There were insightful contributions from most of the attendees – the collective marketing discoveries of startups that conduct metrics driven experiments is amazing. 

In Ireland we went deep in an all day session that included war stories from the founders and marketers that grew two very successful Irish companies - Hostelworld.com and Paddy Power.   Hostelworld.com offers useful insights into an effective way to bring a “network effects” startup to market.  I’ll try to get permission from the team to write a case study.  Both companies provided additional validation to the recommendations in this post - http://startup-marketing.com/the-startup-pyramid/.

In other news, part 2 of my Venture Hacks interview is now live (bringing your product to market) – http://venturehacks.com/articles/sean-ellis-interview-2 .  Nivi and I discuss what to do after getting to product/market fit.  I’ve blogged about most of this stuff before, but there are a few additional details that Nivi was able to extract through his insightful questions.

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Audio Interview on Venture Hacks

I recently sat down with Nivi from Venture Hacks and discussed what it takes to build a successful startup.  The full conversation is available here.  There have also been some great thought provoking questions that I’ve answered in the comments section following the Venture Hacks post.  Please jump in and join the conversation over at Venture Hacks.

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More on CEO’s Role in Driving Growth

I just wanted to highlight a reply to a comment on my post Founders Make the Best Startup Marketing Leaders :

“In hindsight, probably one of the most important points of the blog post is that CEOs must take an active role in driving customer growth whether or not they have an interest in marketing. Nearly all of the risk and upside in a startup is in your ability to gain customer traction and then drive scalable customer growth. The CEO should not abdicate this responsibility to the marketer.”

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My Slides from Steve Blank’s Berkeley-Columbia Executive MBA Class

I spent a fun evening with Steve Blank’s class. Here are the slides from my guest lecture. There are a few additions to the slides I presented at Seedcamp last month in London. Slide 14 is new and there are major edits to slide 2.

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Quick Thoughts from TC50: SeatGeek

My favorite startup from the third session at TC50 was SeatGeek.  Overall SeatGeek appears to have a strong value proposition – “buy event tickets at the right time and save substantially over the peak price.”  It’s very similar to farecast, but for event tickets (sports, concerts, etc.).  The product, market and business all seem to work/fit since SeatGeek is already profitable.  The big question for a startup that reaches profitability and overcomes these big challenges is: Can it scale?

Based on their stated metrics, net proceeds from the average transaction to them is around $50 (10% of $500).  Once they’ve acquired a user, lifetime value could be substantial (if we assume 10 transactions over their lifetime, lifetime value would be pushing $500).  Within that allowable acquisition cost, there should be many scalable marketing opportunities. 

I may have missed it, but I didn’t hear them address the specific way they would market the business.  My assumption is that they would market primarily through search (both SEO and SEM).  Given the breadth of events, there should be several keywords to test in order to find profitable, scalable customer acquisition channels.  They also have strong alternative monetization ideas to further improve their allowable acquisition cost and/or profit per customer.

One potential competitor is FanSnap, which is a price comparison engine on tickets across sites.  I believe the primary improvement SeatGeek brings is a price predictor, since according to SeatGeek prices often drop.

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Quick Thoughts from TC50: ToyBots

It’s a bit strange that I’ve picked another “kids targeted” startup from the second batch of  startups as my favorite – kids are a notoriously difficult market to acquire online.  But in the case of ToyBots, I believe they are targeting a fantastic opportunity. It is likely that connected toys will be the next generation in toys and I love their example of having grandma read a story to the grandkids through the toy. 

I believe Webkinz laid out a good marketing roadmap for this type of startup.  My kids couldn’t walk into a Justice (previously called Limited Too) without asking for another Webkinz.  I didn’t mind buying a stuffed animal, but am a little more hesitant to offer the kids my credit card for online purchases.  From a business perspective, I was intrigued when my kids ripped off the virtual currency and threw the toy into the corner – never to be played with again.

ToyBots can create a tighter link between toys and a web experience than Webkinz, but leverage the same types of marketing channels. My recommendation would be to link the licensing to the marketing opportunities.  The toy makers already have great distribution, but very few subscription opportunities.  ToyBots can improve the ongoing engagement with kids for each toy manufacturer – increasing monetization opportunities and possibly creating a direct customer acquisition opportunity for manufactures to cross promote new toys.

It’s difficult to know how much progress they’ve achieved, but announced partnerships suggest that this isn’t a half baked idea.

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