Growth and Monetization
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Building your startup’s customer advisory board
A customer advisory board (CAB) can be an invaluable resource for startups, but many founders struggle with putting together the right group of advisors and how to incentivize them. At our TechCrunch Early Stage event, Saam Motamedi, a general partner at Greylock Partners, talked about how he thinks about putting together the right CAB.
“We encourage all of our early-stage companies to put this in place,” Motamedi said. The goal here is to speed up the process to get to product/market fit since your CAB will provide you with regular feedback.
“The idea here is [that] you have this feedback loop from customers back to your product where you build, you go get feedback, you iterate — and the tighter this feedback loop is, the faster you’ll get to product-market fit. And you want to do things structurally to make this feedback loop tighter, starting with a CAB.”
Motamedi said a CAB should consist of about three to six customers. These should be “luminaries or forward thinkers” in the market you are serving. “You add them to the CAB — you might give them small advisory grants — and they become stakeholders and give you feedback as you work through the early stages of product development.”
Image Credits: Greylock Partners
As for the people who you put on the CAB, Motamedi suggests first setting the right expectations for the board.
“There are three components. Number one, the most valuable thing you can get from these customer advisors is their time. So the first piece is you want them to commit to a monthly cadence, that could be 60 minutes, it could be 90 minutes, where you’re going to say, ‘Hey, I’m going to come to the meeting, I’m going to bring two of my teammates, we’re going to show you the latest product demo, and you’re going to drill us with feedback. We’re going to do that once a month.’ […] And then piece two is this notion of customer days, you could do quarterly, you could also do twice a year.
“The idea is you want to bring the customers together. Because if you and I are both CIOs at Fortune 500 companies and we independently react to a product, that’s one thing, but if we sit in a room together, we all look at the product together, there’s going to be interesting data amongst us as customers and the founder is going to learn a lot from that.[…] And I think the third piece is just an expectation that as the company progresses and product maturity increases, that folks on the CAB are going to be advocates and evangelists for the company with their customer networks.”
Motamedi recommends outlining those expectations in a short document.
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Ann Miura-Ko’s framework for building a startup
As an early-stage investor, Floodgate’s Ann Miura-Ko looks for two breakthroughs in order to invest in a startup: The first happens in the value-seeking stage of a startup’s journey and the second occurs in its growth-seeking phase.
“There are really two stages to building a company,” Miura-Ko said at the TechCrunch Early Stage virtual event earlier this week. “One is what we call value-seeking mode, and this is where you’re really trying to figure out what the company actually looks like, including what’s the product? Who are you selling to? How do you price it? All of these things are still being discovered in the value-seeking mode.”
After founders have answered those questions, they can move into growth-seeking mode, she said. That’s the point when startups are trying to attract as many customers as possible.
Throughout these two distinct stages, Miura-Ko says she looks for the two breakthroughs: the inflection insight and product-market fit.
Inflection insights
The idea of an inflection insight, Miura-Ko said, is a relatively new framework Floodgate is exploring. Often times, she said founders need to ride some massive, exponential curves that allow their businesses to grow sustainably and scale.
These inflections have two parts to it: cause and impact. The causes are generally either technological (cloud, 5G), regulatory (GDPR, AV regulation) or societal (belief or behavior shifts). On the impact side, products and distribution may become cheaper or faster, while also presenting new use cases or customers, she said.
“Or even more interesting, you have something that was impossible that now is possible,” she said. “And that is an exponential impact that you could ride on.”
But simply finding that inflection insight doesn’t mean you should create a business. What founders must do next is determine if the insight is right and nonconsensus.
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Creating a robust churn-reversal system
Julian Shapiro is the founder of BellCurve.com, a growth marketing team that trains startups in advanced growth, helps hire senior growth marketers and finds vetted growth agencies. He also writes at Julian.com.
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We’ve aggregated many of the world’s best growth marketers into one community. Twice a month, we ask them to share their most effective growth tactics, and we compile them into this Growth Report.
This is how you stay up-to-date on growth marketing tactics — with advice that’s hard to find elsewhere.
Our community consists of startup founders and heads of growth. You can participate by joining Demand Curve’s marketing training program or its Slack group.
Without further ado, on to our community’s advice.
Creating a robust churn-reversal system
Insights from Matthew Morley of Savvy
Generally, it’s far more efficient to keep a current client than it is to close a new one. You’ll want a system to help you identify which users are at risk of churning. This way, you can proactively reach out to them before they leave.
Start by identifying your high-value customers at risk of churning:
Who is:
- Spending within the top 10% of time using your app?
- Has a substantial number of seats of your product?
- Or, say, has a company size of at least 50 people — reflecting their upselling potential?
But also:
- Is using the product 30% less in a given month
- Has submitted at least one non-trivial support ticket in the last month
- And has their subscription renew in less than 90 days
And so on.
You can stitch this information together from multiple sources like Stripe, Mixpanel, Crunchbase and Intercom. Then, set up an alert to notify your team once someone falls into these buckets.
Then reach out with something personal to win back their enthusiasm. It can be high leverage to get them on the phone to uncover what’s keeping them around.
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TikTok is a marketer’s shiny new toy, but how do you optimize campaigns?
Tiffany Ou is the general manager, Americas at Nativex, where she leads go-to-market strategies for leading game and app developers.
TikTok is a rising star in the social media category. Since its launch three years ago, the company has secured 800 million active users worldwide. That makes TikTok ninth in terms of social network sites, ahead of LinkedIn, Twitter, Pinterest and Snapchat. As more people start using the platform and remain engaged, it goes without saying that TikTok is an increasingly desirable destination for marketers.
But outside the sheer numbers, is there any real sustenance to the platform from a marketing perspective, or is this just a temporary fad brands are flocking to? Here’s a look into what makes TikTok unique through a marketer’s lens, and a few things the platform can improve on to make it a permanent option for brands looking to explore mobile.
Better user experiences lead to more unique advertising
Digital advertising is only as effective as a platform’s user experience — that fact presents a unique differentiator for TikTok. Being in 2020, where content creators continue to blossom, TikTok provides an opportunity for literally anyone to reach millions of people with their content. It is a “platform for the people,” as the algorithm sends user content to groups of 5-10 people, and based on the engagement, it will continue sending it out to the masses. What’s interesting here is that it resembles an early era of Instagram, where all content was user-generated.
Additionally, unlike other leading social media channels, a user is focused on one piece of content at a time. TikTok videos take up the entire screen, which leads to more engagement and genuine interest from the viewer. That said, creative plays an incredibly important role in every campaign you run on the platform, especially when trying to grab the user amid a mass of alternative entertainment options. The TikTok audience is hyperfocused on viewing organic, visually stimulating content that could be the next big meme or viral sensation.
Creative is the key
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Clockwise CEO Matt Martin: How we closed an $18M Series B during a pandemic
Matt Martin is CEO and co-founder of Clockwise, a San Francisco-based software company.
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It all started with an email from a customer: “Do you know why Bain Capital Ventures is reaching out to me about Clockwise?”
That email would mark the beginning of a journey toward closing $18 million in new funding that will dramatically accelerate my company, Clockwise . It would require getting to know a partner in lockdown, long nights assembling a pitch deck and many bleary-eyed Zoom calls with some of the best VCs in the world.
Here’s how Ajay Agarwal from Bain Capital Ventures and I established trust online, how I made high-stakes decisions in extreme economic uncertainty and how we were able to turn the pandemic’s constraints into opportunities.
Let’s start at the beginning.
Building momentum: 2016 to 2020
Clockwise was founded in late fall of 2016. We realized that, as personal as time is, our schedules inside modern work environments are intertwined by a network of calendar events and attendees. People schedule meetings without considering the preferences of colleagues by simply hunting for any available “white space” (read: time to do real work). The net effect is that our most valuable resource, time, is easy to take and almost impossible to protect.
More than two years later, in June of 2019, we launched Clockwise to the public. After years of experimentation and refinement, we delivered to the world an intelligent calendar assistant that frees up your time so you can focus on what matters. Workers soon confirmed our hunch that they’re hungry for a tool that gives them more productive hours in their day. Our rapid user growth carried throughout 2019.
By January of 2020, we were on fire. Since January 1, our user base has grown by more than 90%, expanding at a clip of well over 5% week-over-week. As people sought remote tools during shelter-in-place, our rate of growth accelerated even further.
Our growth, incredible team, top-tier existing investors (Accel and Greylock) and strong cash position meant we didn’t need to raise additional capital until the fall of 2020. While COVID-19 certainly sent shock waves through the community, I was in regular communication with a few highly engaged investors who still seemed eager to invest in the future of productivity. I felt cautiously confident more capital could wait.
But, you know, best-laid plans.
Establishing trust while sheltering in place
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Long-term profitability is the only growth metric that matters
Joe Yakuel is the founder and CEO of WITHIN, the world’s first performance branding company.
Your company’s one metric that matters (OMTM) shouldn’t be return on investment (ROI), return on ad spend (ROAS), net promoter score (NPS), brand affinity or one of the other sophisticated-sounding acronyms marketers use to gauge success.
Your company’s one metric that matters should be long-term profitability.
Put another way, your business should be singularly focused on how much money it can return to its owners, investors and shareholders. Sounds obvious, right?
You’d be surprised: A majority of Fortune 500 and Silicon Valley startup marketing budgets aren’t optimized for long-term profitability.
Instead, budgets are often optimized for secondary or upper-funnel metrics. Besides tracking ROI, ROAS, NPS and brand affinity, many marketers monitor key performance indicators (KPI) like net revenue, customer acquisition cost (CAC), cost per thousand (CPM) and brand recall — none of which directly correlate with long-term profitability.
In fact, many brands’ marketing departments frequently omit the word “profit” all together from the line items and KPIs in their monthly performance reports.
A good way to think about the futility of the KPI status quo is the following fictional scenario, which reflects the marketing and advertising playbooks of a shockingly large segment of American businesses: Main Street Shoes spends $100 on a Facebook ad campaign to promote a new line of sneakers to Jack and Andrew. As a result of the retailer’s Facebook ad campaign, Jack and Andrew each spend $100 to buy new sneakers.
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Gauging growth in the most challenging environment in decades
Michael Whitmire, CPA, is co-founder and chief executive officer at Los Angeles-based FloQast, Inc., a developer of accounting close management software.
Traditionally, measuring business success requires a greater understanding of your company’s go-to-market lifecycle, how customers engage with your product and the macro-dynamics of your market. But in the most challenging environment in decades, those metrics are out the window.
Enterprise application and SaaS companies are changing their approach to measuring performance and preparing to grow when the economy begins to recover. While there are no blanket rules or guidance that applies to every business, company leaders need to focus on a few critical metrics to understand their performance and maximize their opportunities. This includes understanding their burn rate, the overall real market opportunity, how much cash they have on hand and their access to capital. Analyzing the health of the company through these lenses will help leaders make the right decisions on how to move forward.
Play the game with the hand you were dealt. Earlier this year, our company closed a $40 million Series C round of funding, which left us in a strong cash position as we entered the market slowdown in March. Nonetheless, as the impact of COVID-19 became apparent, one of our board members suggested that we quickly develop a business plan that assumed we were running out of money. This would enable us to get on top of the tough decisions we might need to make on our resource allocation and the size of our staff.
While I understood the logic of his exercise, it is important that companies develop and execute against plans that reflect their actual situation. The reality is, we did raise the money, so we revised our plan to balance ultra-conservative forecasting (and as a trained accountant, this is no stretch for me!) with new ideas for how to best utilize our resources based on the market situation.
Burn rate matters, but not at the expense of your culture and your talent. For most companies, talent is both their most important resource and their largest expense. Therefore, it’s usually the first area that goes under the knife in order to reduce the monthly spend and optimize efficiency. Fortunately, heading into the pandemic, we had not yet ramped up hiring to support our rapid growth, so were spared from having to make enormously difficult decisions. We knew, however, that we would not hit our 2020 forecast, which required us to make new projections and reevaluate how we were deploying our talent.
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The best investment every digital brand can make during the COVID-19 pandemic
Steve Tan
Contributor
Contributor
Steve Tan is a Singapore-based serial entrepreneur and full-stack digital marketer with over 14 years of hands-on experience who is also the CEO and founder of Super Tan Brothers Pte. Ltd, which operates e-commerce, software, logistics, marketing, educational and investment companies around the globe.
Intuitively, stores that sell online should be making a killing during the COVID-19 pandemic. After all, everyone is stuck at home — and understandably more willing to shop online instead of at a traditional retailer to avoid putting themselves and others at medical risk. But the truth is, most smaller online stores have seen better days.
The primary challenge is that smaller shops often don’t have the logistics networks that companies like Amazon do. Consequently, they’re seeing substantially delayed delivery timelines, especially if they ship internationally. Customers obviously aren’t thrilled about that reality. And in many cases, they’re requesting refunds at a staggering rate.
I saw this play out firsthand in April. At that point, my stores were down 20% or in some cases even 30% in revenue. Needless to say, my team was freaking out. But there’s one thing we did that helped us increase our revenue over 200% since the pandemic, decrease refund requests and even strengthen our existing customer relationships.
We implemented a 24-hour live chat in all of our stores. Here’s why it worked for us and why every digital brand should be doing it too.
Avoid the common ‘unreachability’ frustration
When I started my first online store in 2006, challenges that bogged my team down often meant that my team’s first priority became resolving those challenges so that we could serve our customers faster. But admittedly, when these challenges came up, it became more difficult to balance communicating with our customers and resolving the issues that prevented us from fulfilling their orders quickly.
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How startups can leverage elastic services for cost optimization
Joey Lei is director of service management at Synoptek, a global systems integrator and managed services provider. Prior to joining Synoptek, he was a lead product manager for Dell EMC’s Data Protection Division and was a founding product manager for Dell EMC PowerProtect Data Manager, Dell EMC’s newest generation data protection and data management solution.
Due to COVID-19, business continuity has been put to the test for many companies in the manufacturing, agriculture, transport, hospitality, energy and retail sectors. Cost reduction is the primary focus of companies in these sectors due to massive losses in revenue caused by this pandemic. The other side of the crisis is, however, significantly different.
Companies in industries such as medical, government and financial services, as well as cloud-native tech startups that are providing essential services, have experienced a considerable increase in their operational demands — leading to rising operational costs. Irrespective of the industry your company belongs to, and whether your company is experiencing reduced or increased operations, cost optimization is a reality for all companies to ensure a sustained existence.
One of the most reliable measures for cost optimization at this stage is to leverage elastic services designed to grow or shrink according to demand, such as cloud and managed services. A modern product with a cloud-native architecture can auto-scale cloud consumption to mitigate lost operational demand. What may not have been obvious to startup leaders is a strategy often employed by incumbent, mature enterprises — achieving cost optimization by leveraging managed services providers (MSPs). MSPs enable organizations to repurpose full-time staff members from impacted operations to more strategic product lines or initiatives.
Why companies need cost optimization in the long run
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We throw away 80% of our content ideas, and you should too
Amanda Milligan is the marketing director at Fractl, a prominent growth marketing agency that’s helped Fortune 500 companies and boutique businesses alike earn quality media coverage, backlinks, awareness and authority.
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We’ve talked a bit publicly about our ideation process, but to be honest, it’s constantly evolving. With every piece of content we create and promote, we gain a better understanding of what works and what doesn’t.
But part of that process has always been allowing for the creative freedom to come up with ideas and then — and most importantly — kill your darlings if they don’t meet the criteria for a good idea.
It’s not always easy; creativity is personal. But culling the list of ideas is necessary for a successful content plan.
So how do you know which ones to cut?
Ask yourself these questions.
Is the idea packed with emotion?
Make a list of all the emotions associated with your idea. If you can’t think of any, it means the idea may need some tweaking, or you need to explore it in more depth.
Even helpful how-to content is tied to emotion. Take, for example, “Give Your Kids the Gift of Automotive Repair Skills While You’re Home Together,” a genius piece of content by Car and Driver.
There’s the emotional component of it being in the context of COVID-19, yes, but it’s more than that. It’s about spending quality time with your children and teaching them crucial skills. Related emotions include love, pride, empowerment, accountability, parental responsibility and more.
And the content creators were smart enough to call out the emotional component, like they did here:
Image Credits: Fractl (opens in a new window)
The post garnered nearly 5,000 engagements on Facebook, which to me indicates it hit the sweet spot of being helpful while also tapping into our emotions.
Fractl did a study back in 2013 that explored which type of emotions were the most prevalent in viral images, and, as it turns out, positive emotions had more representation than negative ones. Most prevalent of all? Surprise. People enjoy being astonished, delighted and unexpectedly joyful. Do any of your content ideas fit this bill?
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