Highlights

Preface: Traction Trumps Everything

  • After much brainstorming and experimenting, I eventually hit upon a good idea. I built a karma widget that would display links to your social media profiles and how many followers you had on each service. People would embed it on their sites and at the bottom there would be a link back to DuckDuckGo that said “new search engine.” (Location 82)
  • I made two large traction mistakes here. First, I failed to have a concrete traction goal. In retrospect, to move the needle for my traction goals at the time, I needed more like five thousand new visitors a day, not fifty. Search engine optimization was not going to get me there. (Location 87)
  • Second, I was biased by my previous experience. Just because my last company got traction in this way didn’t mean it was right for every company. (Location 89)
  • That framework is Bullseye, a simple three-step process for getting traction. Bullseye works for startups of all kinds: consumer or enterprise focused, large or small. (Location 106)

CHAPTER ONE Traction Channels

  • Traction is a sign that your company is taking off. It’s obvious in your core metrics: If you have a mobile app, your download rate is growing rapidly. If you’re running a subscription service, your monthly revenue is skyrocketing. If you’re an organic bakery, your number of transactions is increasing every week. (Location 115)
  • Traction is basically quantitative evidence of customer demand. (Location 119)
  • Traction is growth. The pursuit of traction is what defines a startup. (Location 126)
  • We uncovered two broad themes through our research. First, most founders consider using only traction channels with which they’re already familiar, or those they think they should be using because of their type of product or company. This means that far too many startups focus on the same channels and ignore other promising ways to get traction. (Location 130)
  • Second, it’s hard to predict the traction channel that will work best. You can make educated guesses, but until you start running tests, it’s difficult to tell which channel is the best one for you right now. (Location 133)

CHAPTER TWO Traction Thinking

THE 50 PERCENT RULE

  • Having a product or service that your early customers love, but having no clear way to get more traction is a major problem. To solve this problem, spend your time constructing your product or service and testing traction channels in parallel. (Location 227)
  • Traction and product development are of equal importance and should each get about half of your attention. This is what we call the 50 percent rule: spend 50 percent of your time on product and 50 percent on traction. (Location 228)
  • To be clear, splitting your time evenly between product and traction will certainly slow down product development. However, it counterintuitively won’t slow the time to get your product successfully to market. In fact, it will speed it up! That’s because pursuing product development and traction in parallel has a couple of key benefits. (Location 247)
  • First, it helps you build the right product because you can incorporate knowledge from your traction efforts. (Location 249)
  • Through traction development you get a steady stream of cold customers. It is through these people that you can really find out whether the market is taking to your product or not, and if not, what features are missing or which parts of the experience are broken. (Location 252)
  • You can think of your initial investment in traction as pouring water into a leaky bucket. (Location 253)
  • At first your bucket will be very leaky because your product is not yet a full solution to customer needs and problems. In other words, your product is not as sticky as it could be, and many customers will not want to engage with it yet. As a consequence, much of the money you are spending on traction will leak out of your bucket. (Location 254)
  • This is exactly where most founders go wrong. They think because this money is leaking out that it is money wasted. Oppositely, this process is telling you where the real leaks are in your bucket (product). (Location 257)
  • you have to define what traction means for your company. You need to set a traction goal. At the earliest stages, this traction goal is usually to get enough traction to either raise funding or become profitable. In any case, you should figure out what this goal means in terms of hard numbers. How many customers do you need and at what growth rate? (Location 279)
  • From the perspective of getting traction, you can think about working on a product or service in three phases: Phase I—making something people want Phase II—marketing something people want Phase III—scaling your business (Location 287)
  • In the leaky bucket metaphor, phase I is when your bucket (product) has the most leaks. It really doesn’t hold water. There is no reason to scale up your efforts now, but it is still important to send a small amount of water through the bucket so you can see where the holes are and plug them. (Location 290)
  • As you hone your product, you are effectively plugging leaks. Once you have crossed over to phase II, you have product-market fit and customers are sticking around. (Location 294)
  • In phase III, you have an established business model and significant position in the market, and are focused on scaling both to further dominate the market and to profit. (Location 296)
  • moving the needle means different things as you grow. In phase I, it’s getting those first customers that prove your product can get traction. In phase II, it is getting enough customers that 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. (Location 298)
  • So if you have only a hundred customers, but have been growing 10 percent a month for six months, that’s attractive to investors. With sustainable growth, you look like a good bet to succeed in the long run. With investing, always remember that traction trumps everything. (Location 336)

CHAPTER THREE Bullseye

THE OUTER RING: WHAT’S POSSIBLE

  • The first step in Bullseye is brainstorming every single traction channel. (Location 381)
  • 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? Imagine what success would look like in each channel, and write it down in your outer ring. (Location 381)
  • For each channel, you should identify one decent channel strategy that has a chance of moving the needle. For example, social ads is a traction channel. Specifically running ads on reddit, Twitter, or Facebook is a channel strategy within social ads. Through brainstorming, identify the best channel strategy you can think of in each of the nineteen traction channels. (Location 385)

THE MIDDLE RING: WHAT’S PROBABLE

  • The second step in Bullseye is running cheap traction tests in the channels that seem most promising. Go around your outer ring and promote your best traction channel ideas to your middle ring. (Location 392)
  • For each traction channel in your middle ring, now construct a cheap traction test you can run to determine if the idea really is good or not. These tests should be designed to roughly answer the following three questions: How much will it cost to acquire customers through this channel? How many customers are available through this channel? Are the customers that you are getting through this channel the kind of customers that you want right now? (Location 398)
  • Some founders mess up this step by prematurely scaling their marketing efforts. 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 move the needle for your startup. (Location 404)
  • You should be able to get a rough idea of a channel’s effectiveness with at most a thousand dollars and a month of time. Often, it will be cheaper and shorter. (Location 409)

THE INNER RING: WHAT’S WORKING

  • The third and final step in Bullseye is to focus solely on the channel that will move the needle for your startup: your core channel. (Location 410)
  • The goal of this focusing step is quite simple: to wring every bit of traction out of your core channel. To do so, you will be continually experimenting to find out exactly how to optimize growth in this traction 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. (Location 415)
  • Look at the messaging you’ve been using, or dig deeper to see at what point each channel failed to deliver customers. If you go through the process several times and no traction channel seems promising, then your product may require more tweaking. Your bucket is still too leaky. (Location 431)
  • We heard stories like this over and over again when talking to successful startup founders. They would research many channels, try a few in parallel, and focus on the most promising until it stopped working. Bullseye is designed to systemize this successful process. Use it! (Location 452)

CHAPTER FOUR Traction Testing

  • In this chapter, we cover how to approach testing. (Location 478)

MIDDLE RING TESTS

  • The goal of middle ring tests is to find a promising channel strategy to focus on. A channel strategy is a particular way to acquire customers within a channel. (Location 479)
  • For example, offline ads is a traction channel, and billboards, transit ads, and magazine ads are all channel strategies within offline ads. When you’re just starting out testing a channel, you will pick one channel strategy to pursue—the most promising one you came up with when brainstorming. (Location 480)
  • In particular, your tests should be designed to answer these questions: How much does it cost to acquire each customer through this channel strategy? (Location 482)
  • How many customers are available through this channel strategy? Are the customers you are getting through this channel the ones you want right now? (Location 484)
  • These first channel strategy tests are often very cheap and short. 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. (Location 489)
  • In general in phase I, you shouldn’t be spending more than a thousand dollars and a month’s time on a middle ring test, and often significantly less. (Location 491)
  • Middle ring tests arm you with data that you can use to compare channel strategies. If all goes well, you hit the Bullseye and can move on to inner ring testing. (Location 493)

INNER RING TESTS

  • Inner ring tests are designed to do two things. First, to optimize your chosen channel strategy to make it the best it can be. Second, to uncover better channel strategies within this traction channel. (Location 495)
  • Making A/B testing a habit (even if you run just one test a week) will improve your efficiency in a traction channel by two or three times. (Location 509)
  • In addition to optimization testing, you should also be testing additional channel strategies within your core channel. These resemble middle ring tests in that they should initially be cheap and fast and answer the same basic questions as middle ring tests. (Location 512)
  • We recommend using a spreadsheet to help you rank and prioritize your traction channel strategies. The questions you are answering from tests all have numeric answers, and so a spreadsheet is a natural tool to use. At a minimum, include the columns of how many customers are available, conversion rate, cost to acquire a customer, and lifetime value of a customer for a given strategy. (Location 558)
  • The operative question then is, “Does this channel have enough customers to be meaningful?” (Location 568)

CHAPTER FIVE Critical Path

DEFINING YOUR TRACTION GOAL

  • You should always have an explicit traction goal you’re working toward. This could be one thousand paying customers, one hundred new daily customers, or 10 percent of your market. (Location 582)
  • The right goal is highly dependent on your business. It should be chosen carefully and align with your company strategy. You want a goal where hitting the mark would change things significantly for your company’s outcome. (Location 584)
  • Before this traction goal, DuckDuckGo had a traction goal of 100 million searches a month, which took it to about a break-even point. Getting to breakeven was the company significance for that traction goal. (Location 592)

DEFINING YOUR CRITICAL PATH

  • The path to reaching your traction goal with the fewest number of steps is your Critical Path. You should literally enumerate the intermediate steps (milestones) to get to your traction goal. These milestones need not be traction related, but they should be absolutely necessary to reach your goal. (Location 601)
  • In DuckDuckGo’s case, the traction goal was to get to 100 million searches a month. The team believed the milestones they needed to hit included a faster site, a more compelling mobile offering, and more broadcast TV coverage (from the publicity traction channel). (Location 604)
  • Even though product features like images and auto-suggest were continually requested, they believed they were not absolutely necessary milestones in their Critical Path to reach that traction goal. (Location 606)
  • The reasoning for why these particular features weren’t necessary initially was that even at 100 million searches a month, DuckDuckGo’s user base was motivated enough by other features to be forgiving of missing these particular ones. However, to get to the next traction goal the company had to get more mainstream adoption, and this next set of users is much less forgiving. (Location 608)
  • The best way to make sure you’re not squandering your resources is to keep reevaluating whether what you’re doing is on your Critical Path. (Location 619)
  • In other words, Critical Path is a framework to help you decide what not to do. Everything you decide to 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! (Location 620)

OVERCOMING YOUR TRACTION BIASES

  • here are the nineteen channels: Targeting Blogs Publicity Unconventional PR Search Engine Marketing (SEM) Social and Display Ads Offline Ads Search Engine Optimization (SEO) Content Marketing Email Marketing Viral Marketing Engineering as Marketing Business Development (BD) Sales Affiliate Programs Existing Platforms Trade Shows Offline Events Speaking Engagements Community Building (Location 625)
  • Out of sight, out of mind. Startups generally don’t think of things like speaking engagements because they are usually out of their field of vision. (Location 638)
  • Some founders refuse to seriously consider channels they view negatively, like sales or affiliate marketing. Just because you hate talking on the phone doesn’t mean your customers do. (Location 640)
  • Bias against schlep—things that seem annoying and time-consuming. Channels like business development and trade shows often fall into this category. (Location 641)

CHAPTER SIX Targeting Blogs

  • Many personal bloggers have strong readerships, but don’t make money from their writing. Noah offered them a way to show off a cool new service and make some money doing it. He simply sent them a message with “Can I send you $500?” as the subject and told them a bit about the product and what Mint was trying to do. Most were happy to share a useful product with their audiences and make some money in the process. (Location 701)

TARGETING BLOG TACTICS

  • 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: (Location 716)
  • Search Engines—Simply search for things like “top blogs for x” or “best x blogs.” (Location 718)
  • 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 who have blogs, and you can use references to their videos as icebreakers to start building relationships with them. This tactic can be applied to other video sharing sites, such as Vimeo and Dailymotion. (Location 719)
  • Delicious—Delicious allows you to use keywords to find links that others have saved, which can unearth new blogs. (Location 722)
  • Social Mention—Social Mention helps you determine the sites that have the most frequent mentions for your keywords. (Location 725)
  • Talk to People—The most effective way to figure out what your target audience is really reading online is by asking them directly! (Location 726)

CHAPTER SEVEN Publicity

  • This means you no longer have to pitch CNN directly if you want to get on TV. Instead, you can pitch smaller sites (ones that are easier to get coverage from) whose content is often picked up by larger media outlets. If you tell your story right, you can create buzz around your company and capture the attention of larger sources. Next thing you know, you can put “As seen on CNN” on your Web site. (Location 770)
  • In other words, stories and other content now filter up the media chain, rather than down. (Location 773)
  • The smaller sites legitimize the newsworthiness of the story for the sites with bigger audiences. (Location 776)
  • Tech startups frequently get exposure this way. Sites like TechCrunch and Lifehacker often pick up stories from smaller forums like Hacker News and subreddits. In turn, The New York Times often picks up content from TechCrunch and wraps it into a larger narrative they’re telling. (Location 777)
  • What gets a reporter’s attention? Milestones: raising money, launching a new product, breaking a usage barrier, a PR stunt, a big partnership, or a special industry report. Each of these events is interesting and noteworthy enough to potentially generate some coverage. (Location 788)
  • Jason advises bundling smaller announcements together into one big announcement whenever possible. Breaking a usage barrier is great. Releasing a new version is noteworthy. But releasing a new version and breaking a usage barrier in the process is even more attractive to the press. (Location 790)
  • 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 rein 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/13487300 (Location 795)
  • good press angle makes people react emotionally. If it’s not interesting enough to elicit emotion, you don’t have a story worth pitching. Furthermore, your story should ideally provoke a specific feeling in readers that makes them want to share the story with others. As Ryan said, “satisfaction is a nonviral emotion”—you want readers to do something after reading your piece, not just feel satisfied. (Location 808)
  • Ryan offered this template email he’s used to pitch reporters successfully: Subject: Quick question Hey [name], I wanted to shoot you a note because I loved your post on [similar topic that did a lot of traffic]. I was going to give the following to our publicist, but I thought I would go to you with the exclusive because I read and really enjoy your stuff. My [company built a user base of 25,000 paying customers in two months without advertising / book blows the lid off an enormous XYZ scandal]. And I did it completely off the radar. This means you would be the first to have it. I can write up any details you’d need to make it great. Do you think this might be a good fit? If so, should I draft something around [their average] words and send it to you, or do you prefer a different process? If not, I totally understand, and thanks for reading this much. All the best, [Your Name] (Location 817)
  • As we discussed earlier, the best way to get early publicity 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. (Location 827)

CHAPTER EIGHT Unconventional PR

  • The second type of unconventional PR is customer appreciation: smaller, more scalable actions (like holding contests or sending handwritten notes to customers) that both increase goodwill as well as generate press coverage. Small gestures like these turn your customers into evangelists, which leads to an increase in organic growth. They also add to your unique image and story, both key elements in building a strong brand. (Location 878)

CUSTOMER APPRECIATION

  • Common ways to do customer appreciation well are through gifts, contests, and amazing customer support. (Location 970)

CHAPTER NINE Search Engine Marketing (SEM)

  • SEM works well for companies looking to sell directly to their target customer. You are capturing people who are actively searching for solutions. (Location 981)
  • One of the things I want to really emphasize here is just how compelling SEM is as a way to get early customer data in a fairly controlled, predictable manner. (Location 997)
  • It informs a whole bunch of things that are really important in terms of the basic [metrics]: conversion rate of your landing pages, how well email captures are working . . . if you’re selling a product, what the average cost per customer is and what their lifetime value might be. (Location 999)

SEM STRATEGY

  • 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 underperforming ads and landing pages and make tweaks to better-performing ads and landing pages to keep improving results. (Location 1019)
  • 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 (as Inflection did after a few weeks), then SEM could be an excellent channel for you to focus on. (Location 1033)
  • 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. (Location 1040)
  • Matthew told us that someone just starting out in this channel should begin testing just four ads. Four ads will give you a good baseline for the performance of SEM as a whole, while (Location 1042)
  • Several sources have mentioned that an average CTR for an AdWords campaign is around 2 percent, and that Google assigns a low quality score to ads with CTRs below 1.5 percent. (Location 1065)
  • If any of your keywords are getting such low CTRs, rewrite those ads, test them on a different audience, or ditch them altogether. Inflection makes it a priority (Location 1067)

SEM TACTICS

  • However, we suggest everyone run some SEM tests because they are straightforward, are cheap to do, and can give you quick insights into your business. (Location 1090)
  • Use search engine ads to test product positioning and messaging (even before you fully build it!). Do not expect your early SEM ad tests to be profitable. If you can run an ad campaign that gets close to breakeven after a few weeks, then SEM could be the traction channel for you to focus on. A test ad campaign can be as little as four ads that you use to experiment. (Location 1092)
  • Measure conversions so you can test SEM variables against profitability. Areas you should be testing include keywords, ad copy, demographic targeting, landing pages, and CPC bids. Cost per acquisition (CPA) is how much it costs you to acquire a customer, and that is ultimately what you need to be testing against. (Location 1094)
  • Use longer keywords. Known as long-tail keywords, they are often less competitive because they have lower search volumes. As such, they are cheaper and so can be more profitable—you just may have to aggregate a lot of them to get the volume you need to move the needle. (Location 1097)

CHAPTER TEN Social and Display Ads

  • Social ads are changing rapidly and are being used for a range of campaigns including both branding and direct response. One application that is unique to social ads and where they have performed exceptionally well is when they are used to build an audience, engage with that audience over time, and eventually convert them into customers. (Location 1108)

DISPLAY ADS

  • Another network, BuySellAds, offers advertisers a self-service platform for buying ads directly from publishers. In addition to buying and selling display advertising, BuySellAds allows advertisers to purchase space on mobile Web sites, Twitter accounts, mobile apps, email newsletters, and RSS feeds. With its flexibility and low starting cost, BuySellAds is an easy way to start testing this traction channel. (Location 1125)
  • 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. (Location 1130)

SOCIAL ADS

  • 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. (Location 1139)
  • 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.” (Location 1141)
  • Social media connections filled out the consultation (lead-generation) form at a 179% higher rate than the typical customer. Sales? They were 217% more likely to make their first payment. (Location 1149)
  • 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. (Location 1158)
  • 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. (Location 1162)
  • 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. (Location 1166)
  • In one case, after spending just $15 on Twitter ads, they received hundreds of organic retweets, tens of Facebook likes, and two submissions to reddit and Hacker News. (Location 1168)

Major Social Sites

  • one of the most effective approaches on Twitter is to turn on paid advertising around real-time events that your audience cares about (e.g., sportswear ads during major sporting events). (Location 1180)
  • In fact, Gabriel once ran a test campaign that targeted only his wife! (He targeted her by her alma mater, zip code, and interest affinities, using a picture of their son to see how long it would take for her to notice. Not very long.) (Location 1184)
  • reddit—With more than 5 billion monthly page views and a thriving platform of more than 175 million monthly uniques, reddit is one of the most popular content sites in the world. (Location 1199)
  • The most successful reddit advertisements are controversial or funny. (Location 1201)
  • Smart advertisers target communities (there are more than half a million) that are relevant for their product and engage with all the commenters on their ad. As a platform for online communities, the reddit network is vast. Targeting a community of bacon lovers or gay gamers? There are reddit communities for that (r/bacon and r/gaymers, respectively). (Location 1203)
  • On their platform, brands can create ads that show before a video is played (known as pre-roll) and create banner advertisements on top of videos. (Location 1207)
  • Social ads and display advertising follow similar principles. Namely, you want to understand your audience, experiment with your message, and reach people in a memorable way. (Location 1210)
  • They can make sense at any product phase, as they allow for very small or very large ad buys. (Location 1211)
  • The best way to build a presence and engage your audience on social sites is to concentrate on creating less content, but making it highly shareable. (Location 1218)

CHAPTER ELEVEN Offline Ads

  • 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. (Location 1263)

CHAPTER TWELVE Search Engine Optimization (SEO)

  • In SEO, there are two high-level strategies to choose from: fat head and long tail. Let us first explain these strange names. (Location 1378)
  • A fat-head strategy involves trying to rank for search terms that directly describe your company. For example, a toy company that specializes in wooden toys might try to rank for “wooden toys.” These are all fat-head keywords. (Location 1384)
  • On the other hand, a long-tail strategy involves trying to rank for more specific terms with lower search volumes. That same toy company might try to rank for searches in that long tail like “poisonous chemicals in wooden toy blocks” or “wood puzzles for 3 year olds.” Again, even though these searches have lower volumes, in the aggregate they account for the majority of all searches. (Location 1386)
  • To determine if a fat-head SEO strategy is worthwhile, first research what terms people use to find products in your industry, and then see if the search volumes are large enough to move the needle. (Location 1393)
  • You want to find terms that have enough volume such that if you captured 10 percent of the searches for a given term then it would be meaningful. You don’t want to spend resources ranking for a fat-head term that gets only two hundred searches per month. (Location 1396)
  • You can further test keywords by buying SEM ads against them. If these ads convert well, then you have an indication that SEO could be a strong growth channel using these keywords. (Location 1408)
  • If you proceed with a long-tail SEO strategy, its success will boil down to your being able to produce significant amounts of quality content. (Location 1431)
  • For ten to twenty dollars per search term, you can pay someone to write an article that you won’t be embarrassed to put on your Web site. (Location 1437)
  • 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? (Location 1451)
  • SEO comes down to two things: content and links. (Location 1461)
  • Getting links is often more difficult because it involves people outside of your company. Here are some ways to build links: (Location 1462)
  • Publicity—when you are covered by online publications, reporters will link to your Web site. (Location 1464)
  • Product—with some products, you can produce Web pages as part of your product that people naturally want to share. A great example is LinkedIn profile pages. (Location 1465)
  • Widgets—giving site owners useful things to add to their sites, which also contain links back to yours. (Location 1467)
  • There is a difference between creating amazing content that spreads like wildfire and hiring freelancers to write boilerplate articles for long-tail keywords. Both are valid strategies (and can work well in tandem), but there is a big difference in quality. The high-quality content is useful in natural link building, especially for fat-head strategies. (Location 1469)
  • Rand suggests using infographics, slideshows, images, and original research to drive links, as these are all things people naturally share. (Location 1471)

CHAPTER THIRTEEN Content Marketing

  • The Unbounce team relied heavily on social media to drive readers to their blog. After every post they wrote, they’d ping influencers on Twitter asking for feedback. They also engaged with their target customers by writing useful answers on targeted forums like Quora. Though actions like these may not scale, they’re okay when getting started because you’re building toward a point where your content will spread on its own. That’s exactly what happened with Unbounce, and eventually its content started spreading more organically. (Location 1523)
  • Unbounce further capitalized on its blog traffic by giving away free infographics and e-books to grow its email list. (Location 1527)
  • meant that when it finally opened up its product beta, Unbounce could email its list and launch successfully. (Location 1528)
  • Because OkCupid was a free online dating site, it couldn’t afford to pay much to acquire customers—in fact, it never did any sort of paid advertising. This meant that traction channels without per-user acquisition costs (e.g., publicity, content marketing, SEO, viral marketing) needed to drive all of its growth. (Location 1536)
  • The most common hurdle in content marketing is writer’s block. To overcome it, simply write about the problems facing your target customers. (Location 1543)
  • In the early days, it’s unlikely that your blog will see much traffic, regardless of content quality. Even Unbounce was receiving less than eight hundred monthly visits after six months of consistently putting out good content. (Location 1555)
  • Fortunately, there are ways to build momentum faster. Unbounce engaged in any online forum where conversations were taking place about online marketing, and did its best to contribute. (Location 1558)
  • was particularly successful reaching out to influential people on Twitter. It would simply follow marketing mini-celebrities and ask them for feedback on recent posts. (Location 1559)
  • Having a strong company blog can positively impact at least eight other traction channels—SEO, publicity, email marketing, targeting blogs, community building, offline events, existing platforms, and business development. (Location 1574)
  • If you blog, dedicate at least six months to it. A company blog can take a significant amount of time to start taking off. (Location 1580)
  • Do things that don’t scale early on. Reaching out to individuals to share posts, for instance, is okay, because you’re building toward a point where your content will spread on its own. (Location 1581)
  • Contacting influential industry leaders (on Twitter, etc.), doing guest posts, writing about recent news events, and creating shareable infographics are all great ways to increase the rate of growth of your audience. (Location 1582)

CHAPTER FOURTEEN 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. (Location 1595)
  • 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 put a call to action, such as asking people to purchase your product, start a free trial, or share something with their friends. (Location 1607)

EMAIL MARKETING FOR ENGAGING CUSTOMERS

  • “Activating” a customer means getting them to engage with your product enough that they are an active customer. (Location 1613)
  • [Y]ou 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. (Location 1619)
  • For these emails, you should determine the steps absolutely necessary to get value from your product. (Location 1624)
  • For those who fail to complete step one, create a message that automatically emails them when they’ve dropped off. (Location 1625)
  • Repeat this at every step where people could quit, and you will see a major uptick in the number of people finishing the activation process. (Location 1627)
  • You can also use initial emails to get customer feedback. Colin sends each new Customer.io signup an automated, personal email thirty minutes after they sign up. Here’s the email: Subject: Help getting started? Hey {{ customer.first_name }}, I’m Colin, CEO of Customer.io. I wanted to reach out to see if you need any help getting started. Cheers, Colin (Location 1629)

EMAIL MARKETING FOR RETAINING CUSTOMERS

  • Email marketing is also one of the best channels to surprise and delight your customers. Brennan Dunn of Planscope (a project planning tool for freelancers) sends a weekly email to his customers telling them how much they made that week. Who wouldn’t want to get an email like that? Any sort of communication telling your customers how well they’re doing is likely to go over well. (Location 1647)
  • Patrick McKenzie, whom we interviewed for SEO, calls this the “you are so awesome” email. (Location 1649)

EMAIL MARKETING FOR REVENUE

  • A common way to drive revenue through email marketing is sending a series of emails aimed at upselling customers. As an example, WP Engine, a WordPress hosting company, uses such a campaign to get customers on one of their premium plans. They’ve built a WordPress blog speed tester tool (at speed.wpengine.com) where interested prospects can enter their site URL and email address to get a free report about their site’s performance. (Location 1655)
  • Over the course of a month, WP Engine will then send that prospect an email course about WordPress speed and scalability—three quick ways to improve your site speed, why hosting is important for business, etc. Near the end of this mini-course, WP Engine will make a pitch to sign up for its premium WordPress hosting service. (Location 1658)
  • This seven-email sequence leads to a better conversion rate than driving potential people to a sales landing page. In fact, many companies like WP Engine now use advertising to drive leads to a landing page where they ask for an email rather than a sale. They then will use email marketing to sell a prospect over the course of a month or so. (Location 1660)
  • Email retargeting is another tool you can use for revenue. For example, if one of your customers abandoned a shopping cart, send her a targeted email a day or two later with a special offer for whatever item she left in the cart. Targeted emails will always convert better than an email asking for a sale out of the blue. (Location 1665)

EMAIL MARKETING FOR REFERRALS

  • In order to get more free space, users send referral emails asking their friends to check out Dropbox. (Location 1678)
  • If a friend signs up, both people get extra free space. (Location 1679)

EMAIL MARKETING TACTICS

  • Last, an effective email sequence will be meaningless if you don’t have great email copy. Copywriting is an art on its own, but we suggest checking out some of the resources and information that Copy Hackers provides. (Location 1692)

CHAPTER FIFTEEN Viral Marketing

  • In the context of startups, literally “going viral” means that every user you acquire brings in at least one other user. (Location 1707)
  • Viral marketing strategy begins and ends with viral loops. A viral loop in its most basic form is a three-step process: A customer is exposed to your product or service. That customers tells a set of potential customers about your product or service. These potential customers are exposed to your product or service, and some portion become customers themselves. (Location 1721)
  • The two key factors that drive viral growth are the viral coefficient and the viral cycle time. The viral coefficient, or K, is the number of additional customers you can get for each customer 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 customers who sign up after receiving an invitation. For example, if your customers send out an average of three invites and two of those people usually convert to new customers, your viral coefficient would be: K = 3 * (2/3) = 2 (Location 1756)
  • Any viral coefficient above 1 will result in 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. (Location 1764)
  • 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 (Location 1771)
  • 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 subpar. This makes it clear what to focus on—the area where you can make the biggest positive impact. (Location 1774)
  • 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. (Location 1781)
  • 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 on to another metric that needs improvement as you run out of ideas. (Location 1787)
  • As you come up with your initial strategy for viral loops, create a simple dashboard of what needs to go up to be viral. Understand how new users end up helping you acquire more new users and do a lot of A/B tests (several per week) to try and improve the metrics. (Location 1794)
  • First focus on changes that, if they worked, would result in a 5–10x improvement in a key metric. (Location 1824)
  • Once you’ve made big changes, then optimize the smaller stuff. (Location 1825)
  • With all viral (or near-viral) growth, there will be subgroups of customers growing far more rapidly than your total customer base. We call these subgroups “viral pockets.” (Location 1827)

CHAPTER SIXTEEN Engineering as Marketing

  • You make useful tools like calculators, widgets, and educational microsites to get your company in front of potential customers. (Location 1861)
  • To really maximize impact, put your microsites and tools on their own domains. 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. (Location 1921)
  • 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. (Location 1946)
  • Since it is considerably harder to build a very popular application, fewer people do it: so the “free apps” channel is usually less saturated. (Location 1953)

CHAPTER SEVENTEEN Business Development (BD)

  • 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. (Location 1971)
  • If you go in and impress the top fifty 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. (Location 2032)

CHAPTER EIGHTEEN Sales

  • Sometimes hand-holding prospects can be necessary to turn them into real customers. One effective way to do that is via sales. (Location 2105)
  • When it comes to structuring your initial 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: (Location 2127)
  • Situation questions. These questions help you learn about a prospect’s buying situation. Typical questions include How many employees do you have? and How is your organization structured? Ask only one or two of these questions per conversation, because the more situation questions a salesperson asks, the less likely he or she is 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. (Location 2130)
  • Make sure you ask just enough situation questions to determine if you’re talking to a likely candidate for a sale. (Location 2134)
  • 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. (Location 2135)
  • 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? (Location 2139)
  • These questions should make your prospect feel the problem is larger and more urgent than he or she may have initially thought. (Location 2143)
  • 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? (Location 2148)
  • Sean Murphy suggests that your first interaction should be with employees who have some power, but aren’t too high up: (Location 2162)
  • I’m in favor of gaining traction through some kind of marketing channel first, then using sales as a conversion tool to close [those leads] into business. It’s very, very expensive to use cold calling, and really not that effective by comparison with using marketing to get some kind of qualified prospect and then using sales to close that prospect. (Location 2197)
  • The next stage in a sales funnel is lead qualification. (Location 2200)
  • Mark Suster, two-time entrepreneur and partner at Upfront Ventures, suggests a simple approach to bucket leads into three categories: A’s, B’s, and C’s: I define “A deals” as those that have a realistic shot of closing in the next three months, “B deals” as those that you forecast to close within three to twelve months, and “C deals” as those that are unlikely to close within the next twelve months. “A deals” should get much of the salesperson’s time (say 66 to 75 percent 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. (Location 2206)
  • Marketing’s job in working with salespeople is twofold: To arm—which means to give the reps all of the sales collateral they’ll need to effectively win sales campaigns. This includes presentations, ROI calculators, competitive analyses, and so forth. To aim—which means helping sales reps figure out which target customers to focus on. It’s about helping weed out the nonserious leads from the urgent ones. (Location 2215)
  • Once you’ve qualified your leads, the final step is to create a purchase time line and convert prospects to paying customers. (Location 2220)
  • An agreement at this stage might look like this: “We’ll set up a pilot system for you within two weeks. After two weeks, if you like the system we’ve built and it meets your needs, you’ll buy from us. Yes or no?” (Location 2222)

CHAPTER NINETEEN Affiliate Programs

  • affiliate programs are the core traction channel for many e-commerce stores, information products, and membership programs. (Location 2283)
  • By far the largest affiliate network for information products is ClickBank, where affiliate commissions often reach 75 percent. ClickBank has more than 100,000 affiliates and millions of products. (Location 2311)
  • We recommend going through an existing affiliate network—something like Commission Junction, Pepperjam, ShareASale, or more specific networks targeted at your type of product. (Location 2321)
  • 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 look for other ways to make money. (Location 2334)
  • There’s really no guarantee that if you spend $10,000 on Google AdWords you’ll make more than that. If you were to compare affiliate marketing and PPC, the advertiser assumes the risk in PPC. If you set up poorly written and poorly thought out campaigns on AdWords, you’re going to have to pay for the click whether or not your ads suck, or whether or not they’re converting well. With affiliate marketing, you get to define what the transaction or the conversion is, and you also have tools available to mitigate low quality. (Location 2379)

CHAPTER TWENTY Existing Platforms

  • Mark Johnson, founder of Focused Apps LLC, wrote about how app promotions usually work: Ads get the [app] somewhere into the charts. Now it’s in the charts, more people see it. So it gets more organic downloads. Which makes it go a bit higher up in the charts. Now even more people see it and it gets more organic downloads. People like it and start telling their friends to get it too. It goes up higher in the charts. Repeat from 5. (Location 2412)
  • 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. (Location 2441)
  • 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. (Location 2499)
  • Create a feature specifically to fill a gap for that platform’s users. Large companies have been built on the back of each major social platform by filling gaps with features that the platform was not providing itself. (Location 2504)

CHAPTER TWENTY-ONE Trade Shows

  • Write down all events in your industry. (Location 2524)
  • 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?” (Location 2554)
  • Another similar strategy is with customers. If you invite three to four customers and three to four prospects to a dinner with two or three employees and some other interesting guests you’ll be doing well. Potential customers always prefer to talk to existing reference customers than to talk to just your sales reps. (Location 2564)

CHAPTER TWENTY-TWO Offline Events

  • Conferences are the biggest and most popular type of offline event. (Location 2621)
  • People need to think about doing things that don’t scale. Early on when you’re trying to get those first one thousand customers, you have to do things that don’t scale. You have to take more risks. (Location 2710)
  • You can still build a business without being creative. If you don’t have creativity, you need money. You need one or the other. (Location 2713)

CHAPTER TWENTY-THREE Speaking Engagements

  • We recommend trying to give at least one talk even if you choose not to pursue this traction channel. (Location 2726)
  • 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. (Location 2762)
  • Once you’ve captured the audience’s attention, keep it with a gripping story. All successful talks tell a story. (Location 2765)
  • Your story is about what your startup is doing, why you’re doing it, and specifically how you got to where you are or where things are going. (Location 2766)
  • On top of asking his audience to tweet and text, Dan also gives the audience a call to action at the end of his 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 his slides. This tactic tells him whether or not members of the audience found the information engaging enough to act on it. (Location 2785)
  • The best talks I’ve ever seen are where each slide is essentially a seven-minute story with a beginning, middle, and end. Once you get good at that, and you have these canned slides, you can change a sixty-minute talk to a twenty-minute talk just by taking slides out. (Location 2791)
  • Speaking engagements are one of the few traction channels that can quickly cement your place in an industry. If you give the right talk at the right time to the right people, it can make you a respected industry leader overnight. (Location 2799)
  • Remember that you are doing organizers a favor by presenting. Event organizers need to fill time at their events. (Location 2801)

CHAPTER TWENTY-FOUR Community Building

  • when a company’s underlying value is in bringing people together, and where people matter in the system, that’s where this community stuff can really take off. (Location 2889)

APPENDIX: MIDDLE RING TESTS

  • Below are some basic middle ring traction tests to get you started in each traction channel. These tests are designed for phase I startups. As explained earlier, middle ring tests in phase I should cost less than a thousand dollars and take less than one month of time. (Location 2931)
  • Targeting Blogs—Contact ten niche blogs and try to get them to review your product. To make it really easy for them, offer to walk them through the product (in person if you can find local bloggers or connect with them at events). You can also make the offer even more enticing by giving them the opportunity to give something away to their audience (discounts, T-shirt contest, etc.). Alternatively, you could find blogs that don’t run advertisements and ask several if you could run an advertisement on them for $100/month. (Location 2934)
  • Unconventional PR—Host a contest around your product. This contest could be as simple as a cash giveaway for creative product usage or as complicated as a game constructed around your product. Once it’s set up, try a bit of both paid media (e.g., Twitter ads) and earned media (e.g., local press and blogs) to promote your contest. (Location 2941)
  • Search Engine Marketing—Try four ads in Bing Ads (often cheaper than Google AdWords). These ads should be on keywords you’re highly confident will convert into long-term customers. (Location 2946)
  • You want to figure out in the best-case conversion scenario whether SEM could work. Make sure before you turn them on that you have everything set up correctly to actually detect conversions (and not just clicks to your site). (Location 2948)
  • Social and Display Ads—Try a Facebook or Twitter ad campaign. Use their targeting capabilities to target two niche audiences that you think would really convert well. You can get very specific here, and you should. (Location 2950)
  • For Facebook, advertise against complementary affinity groups. (Location 2953)
  • Make sure you try a few different images in your ads, as the image can have a major effect on performance. (Location 2954)
  • Offline Ads—Advertise on a niche podcast. With these advertisements, the host usually reads your copy directly to his listeners. It needs to be niche enough where you think the audience would really like your offer, but still small enough where it is reasonably priced (as podcast ads can get expensive for larger audiences). Alternatively, run a few ads in local papers. (Location 2955)
  • Search Engine Optimization—Test a long-tail SEO strategy by making some content-rich pages. Perhaps your product can naturally produce data for these pages, or maybe you have enough data from making and researching your product. Link to these new pages right from your home page (e.g., on the footer), as that will give them the highest rankings. (Location 2958)
  • Content Marketing—Start a company blog and write one blog post a week for a month. Promote your posts on Twitter and on link-sharing sites (e.g., reddit). If you see any significant audience growth and conversion, double down and commit to a few more months. Turn on comments for your posts and engage with any commenters. (Location 2963)
  • Email Marketing—Contact ten email newsletters in your niche and advertise on at least two of them where it makes sense financially. If they don’t usually run advertisements in their emails, ask to sponsor the list for a week or month. (Location 2967)
  • Alternatively, develop a seven-email mini-course, where you teach something relevant to your product. (Location 2968)
  • Make a landing page for the course and drive some traffic to it. At the end of the mini-course, upsell prospective customers to becoming real customers of your product. (Location 2969)
  • Engineering as Marketing—Make a simple, free tool tangentially relevant to your company; for example, a calculator of some kind that would be useful to prospective customers. Put it on its own domain and name it something that people would search for. Collect contact information in exchange for using the tool. Reach out to anyone who uses your tool with a personal email about your main product. (Location 2973)
  • Existing Platforms—Identify the most relevant niche platform where your audience hangs out online (e.g., Craigslist, Tumblr, etc.). Research the best practices for promoting products on that platform and then do so with your product. Try some paid tools or advertising if available for the platform. Alternatively, make a simple browser extension and try to get featured. (Location 2985)