6 ms·

A Customer Acquisition Playbook for Consumer Startups

130 points by jcs87 6y ago

justiceforsaas 6y ago
I've spent the last 2 years researching what acquisition channels work consistently for founders [1] by reading over 500 founder interviews. I PURPOSELY avoid unicorn/"big corp" case studies/interviews (like the ones mentioned in the article) because of 2 main reasons: 1) They are almost useless to new founders. These companies were in their "early days" 6-10 years ago, back when MySpace was still a thing. Although you may learn some "timeless lessons" from them, you'll learn WAY MORE by reading from someone who's currently 2 steps ahead of you vs 100. 2) The curse of knowledge. In general, a photographer who spent 1 year learning how to take good pictures will prob. teach you in a more understandable/actionable way than someone who spent 10 years doing that. The reason is simple: They still remember how it was like to be in your position (beginning) vs. someone who's now focused on TOTALLY different things and forgot the beginner's mentality. [1] https://firstpayingusers.com https://firstpayingusers.com
- briefcomment 6y ago
  Thank you, your list is great. It would be great if some of the items had a sentence or two with details. For example, I’m not sure exactly “Marketplaces and Existing Platforms” entails.
  - justiceforsaas 6y ago
    Glad you liked it. Working on this as we speak. To be honest I didn't expect people to sign up lol, but since I'm seeing some interest in this, I'll spend some time and do an enhanced version & release it within the next 2-3 days & update everyone who signed up.
    - Kareem71 6y ago
      Signed up, think this research could be pretty valuable
- darrenpergf 6y ago
  2) is also well-documented: https://en.wikipedia.org/wiki/Curse_of_knowledge https://en.wikipedia.org/wiki/Curse_of_knowledge
- barkingcat 6y ago
  While your reasoning might be true for your (1) case, in (2) ... "a violinist who spent 1 year learning how to play" absolutely will not be able to teach you vs someone who spent 10 years. It takes about 2 years to sound not like a dying cat on the violin (you can ask anyone), and about 3-5 years to sound "ok". Vibrato itself take about 5-6 years to develop. Intonation (whether you are playing the right note) takes about 2 years to get a sense of, and 3-6 years to say "ok I know when I'm off", and about 15 years (ie more than your 10 year example) to say "ok I know how to improve". At 10 years, a violin player is just getting over being a beginner into a moderate level. Relying on a 1 year old violin player to teach you to play is begging for injuries (yes - playing the violin is an unnatural position and there are ways you can permanently injure yourself - imagine not being able to type ever again because your hands hurt) and possibly permanent burnout from the whole "learning to play music" enterprise. No. In violin learning make sure you find someone who at least has gotten past the initial hurdles themselves to mentor you. I can understand if you use some example like writing or journalism or photography to explain the "curse of knowledge" but violin playing isn't one of those things. I play the violin on an amateur level, and am about 7 years into my journey. I am only now at a level where I am able to give some tips without having to indemnify myself from permanently disabling people who ask me to teach them.
  - justiceforsaas 6y ago
    Yeah, my point was to demonstrate the whole "curse of knowledge" principle, and something like "photography" would be more suitable. Edited the comment. This is why I love HN, you guys tear apart every single thing ;))
    - barkingcat 6y ago
      Sorry didn't mean to tear into you! It's just that violin really is a pretty difficult instrument. When people say it's difficult, it doesn't mean impossible. It means that goals are attainable through slow, steady, practice, investment (both time and money), and ultimately, drive, passion, and not expecting too much of yourself. Being easy on myself is how I was able to get through 7 years of sounding bad. I had to sound unbearably bad in order to get here. and I am planning to sound bad for the foreseeable future until I get to my goals. That's the way of fret-less stringed instruments, and probably a lot of other things in life as well.
- kinkrtyavimoodh 6y ago
  Thank you Darko for the research and I understand I should not complain about something I am getting for free, but I was rubbed the wrong way with the way you chose to distribute this—I was first asked for an email id, then sent an email with another link (I was expecting a PDF in the mail or at least a link to the content), this link then went to a page from where I could get another download link for the content, which turned out to be barely 1.5 pages. I presume this was all done for analytics and for potentially harvesting email addresses to make a subscriber list. Your privacy policy states—"We only ask for personal information when we truly need it to provide a service to you." I am pretty sure there was no need to collect my email for linking me to a file that exists on your server for free distribution. I am not trying to pick on you, but every time we have a post here on HN about FB or companies doing any sorts of analytics, we have lots of righteous indignation about how server-side analytics is enough and this and that. And yet, here you are, an individual (not a megacorp that needs to show quarterly growth) who effectively did something similar. Anyway, after all this, I finally got a 2 page PDF with a small bulleted list with just the number of founders who vouched for every channel. The channel was just mentioned in a few words, so it wasn't always clear what the channel meant. The PDF was so small I first thought you were only distributing the table of contents as a teaser.
  - justiceforsaas 6y ago
    Hey man, I just included the link so people can see I'm not BSing and that I really spent a lot of time doing research into this. I didn't expect people to sign up & analyze my report. I'll release an enhanced report tomorrow or so and update everyone who signed up. If you want just reply to the email where I sent the PDF and I'll send you the enhanced version. This research is more oriented towards founders who are currently working on their startups/businesses. I plan to release further information on each of these acquisition channels and that's why I asked for an email. Plus, I think it's fair to ask for an email if you're distributing something that took 2 years to summarize.
    - sjg007 6y ago
      Maybe just be upfront on the number of pages in the report and what you will get later?
trhway 6y ago
strange, the post doesn't mention how in the beginning Airbnb was spamming the short-term rental posters on Craigslist https://www.businessinsider.com/airbnb-harvested-craigslist-to-grow-its-listings-says-competitor-2011-5 https://www.businessinsider.com/airbnb-harvested-craigslist-... "[...]he placed a vacation rental on Craigslist [...] Hours later, he had an email from a young lady who said that Airbnb was a great site, and that he should list his rental on it. She included a direct link in case he wanted to check it out for himself." If i remember correctly similar strategy of leaching off of competitor worked for FB when they got AOL IM friends lists.
- jrott 6y ago
  It was an interesting article in a lot of ways but it definitely didn’t mention any of the more black hat tactics that companies have used for marketing.
- justiceforsaas 6y ago
  That's the problem with writing on a "first-class" publication. They won't allow you to cover the "dirty stuff" (what? posting on a stupid classifieds website? Let's talk about the beauty of SEO/AdWords/beautiful viral growth graphs...)
pedalpete 6y ago
I feel like this isn't a good article for "startups", as it completely misses the big equation of "who are your early adopters, and where are they?". Rather than looking at different channels, if you first understand the target segment, and when I say target, I mean REALLY refined early target, then you will understand where they are. Speak to them there, let them guide you to where others like them are. Looking at channels first feels a bit more like a spray-and-pray technique. I was really surprised the other day when a VC couldn't grasp the idea that we knew exactly who our target customer is, and we are able to reach them with very little cost. They couldn't grasp the idea that we had a very focused customer compared to the rest of the market (because we're focused on early adopters), and that we knew this customer so well that we knew where to find them, where it doesn't seem other people in our market are. At the same time, we're also defining a new category, so we're somewhat distanced from the rest of the market anyway.
- justiceforsaas 6y ago
  Can you be more concrete? This all sounds good on an abstract level, but that's where it stops. 1) What approach did you take to "truly understand" your target segment (there are 100s of them) 2) How were you able to reach them to "very little cost" due to "really understanding them"? I really like the abstract idea of "understanding your target segment so well that you're able to detect where they are", but seen no one so far provide concrete examples on how they did it.
  - pedalpete 6y ago
    You may be over complicating things. Or maybe I'm oversimplifying. For us, it's pretty simple to talk about our product because we're helping improve sleep. It's such a common problem in today's society, and the existing "solutions", focus on comfort, other physiological changes (cool pads, weighted blankets), ear plugs, eye masks, etc etc. We're using neuro-feedback to alter your sleep state. It's pretty magical. If you want to find out more, check out https://soundmind.co https://soundmind.co So, we talk to people and not only about their sleep, but about how it affects their life, what do they do about it, what do they try, what works for them, what doesn't. From here, we were able to build comprehensive user personas, and those personas describe where our users are. It was also super interesting for us to find that almost nobody talks to their doctors about sleep, very few people we spoke to had been to a sleep lab+. When you say there are 100s of target segments, yes, you're right, but you don't care about those. I think you care about two things. 1) can you create a customer persona or two, which are large enough to be viable to get the business started 2) is there a common thing that they do, or place where they congregate to reach them? Don't make a checklist of all the places they could be or all the possible segments, just talk to people, and look for the commonality, let them self-suggest. That's my 2 cents anyway.
westurner 6y ago
> For consumer companies, there are only three growth “lanes” that comprise the majority of new customer acquisition: > 1. Performance marketing (e.g. Facebook and Google ads) > 2. Virality (e.g. word-of-mouth, referrals, invites) > 3. Content (e.g. SEO, YouTube) > There are two additional lanes (sales and partnerships) which we won't cover in this post because they are rarely effective in consumer businesses. And there are other tactics to boost customer acquisition (e.g PR, brand marketing), but the lanes outlined above are the only reliable paths for long-term and sustainable business growth. Marketing calls those "channels". I don't think they're exclusive categories: a startup's YouTube videos could be supporting a viral marketing campaign, for example; ads aren't the only strategy for (targeted) social media marketing; if the "ask" / desired behavior upon receiving the message is to share the brand, is that "viral"? What about Super Bowel commercials? Traditional marketing: press releases, (linked-citation-free) news wires, quasi-paid interviews, "news program" appearances, product placement. "Growth hacking": https://en.wikipedia.org/wiki/Growth_hacking https://en.wikipedia.org/wiki/Growth_hacking

130 points by jcs87 6y ago

I've spent the last 2 years researching what acquisition channels work consistently for founders [1] by reading over 500 founder interviews. I PURPOSELY avoid unicorn/"big corp" case studies/interviews (like the ones mentioned in the article) because of 2 main reasons: 1) They are almost useless to new founders. These companies were in their "early days" 6-10 years ago, back when MySpace was still a thing. Although you may learn some "timeless lessons" from them, you'll learn WAY MORE by reading from someone who's currently 2 steps ahead of you vs 100. 2) The curse of knowledge. In general, a photographer who spent 1 year learning how to take good pictures will prob. teach you in a more understandable/actionable way than someone who spent 10 years doing that. The reason is simple: They still remember how it was like to be in your position (beginning) vs. someone who's now focused on TOTALLY different things and forgot the beginner's mentality. [1] https://firstpayingusers.com https://firstpayingusers.com

briefcomment 6y ago
Thank you, your list is great. It would be great if some of the items had a sentence or two with details. For example, I’m not sure exactly “Marketplaces and Existing Platforms” entails.
- justiceforsaas 6y ago
  Glad you liked it. Working on this as we speak. To be honest I didn't expect people to sign up lol, but since I'm seeing some interest in this, I'll spend some time and do an enhanced version & release it within the next 2-3 days & update everyone who signed up.
  - Kareem71 6y ago
    Signed up, think this research could be pretty valuable
darrenpergf 6y ago
2) is also well-documented: https://en.wikipedia.org/wiki/Curse_of_knowledge https://en.wikipedia.org/wiki/Curse_of_knowledge
barkingcat 6y ago
While your reasoning might be true for your (1) case, in (2) ... "a violinist who spent 1 year learning how to play" absolutely will not be able to teach you vs someone who spent 10 years. It takes about 2 years to sound not like a dying cat on the violin (you can ask anyone), and about 3-5 years to sound "ok". Vibrato itself take about 5-6 years to develop. Intonation (whether you are playing the right note) takes about 2 years to get a sense of, and 3-6 years to say "ok I know when I'm off", and about 15 years (ie more than your 10 year example) to say "ok I know how to improve". At 10 years, a violin player is just getting over being a beginner into a moderate level. Relying on a 1 year old violin player to teach you to play is begging for injuries (yes - playing the violin is an unnatural position and there are ways you can permanently injure yourself - imagine not being able to type ever again because your hands hurt) and possibly permanent burnout from the whole "learning to play music" enterprise. No. In violin learning make sure you find someone who at least has gotten past the initial hurdles themselves to mentor you. I can understand if you use some example like writing or journalism or photography to explain the "curse of knowledge" but violin playing isn't one of those things. I play the violin on an amateur level, and am about 7 years into my journey. I am only now at a level where I am able to give some tips without having to indemnify myself from permanently disabling people who ask me to teach them.
- justiceforsaas 6y ago
  Yeah, my point was to demonstrate the whole "curse of knowledge" principle, and something like "photography" would be more suitable. Edited the comment. This is why I love HN, you guys tear apart every single thing ;))
  - barkingcat 6y ago
    Sorry didn't mean to tear into you! It's just that violin really is a pretty difficult instrument. When people say it's difficult, it doesn't mean impossible. It means that goals are attainable through slow, steady, practice, investment (both time and money), and ultimately, drive, passion, and not expecting too much of yourself. Being easy on myself is how I was able to get through 7 years of sounding bad. I had to sound unbearably bad in order to get here. and I am planning to sound bad for the foreseeable future until I get to my goals. That's the way of fret-less stringed instruments, and probably a lot of other things in life as well.
kinkrtyavimoodh 6y ago
Thank you Darko for the research and I understand I should not complain about something I am getting for free, but I was rubbed the wrong way with the way you chose to distribute this—I was first asked for an email id, then sent an email with another link (I was expecting a PDF in the mail or at least a link to the content), this link then went to a page from where I could get another download link for the content, which turned out to be barely 1.5 pages. I presume this was all done for analytics and for potentially harvesting email addresses to make a subscriber list. Your privacy policy states—"We only ask for personal information when we truly need it to provide a service to you." I am pretty sure there was no need to collect my email for linking me to a file that exists on your server for free distribution. I am not trying to pick on you, but every time we have a post here on HN about FB or companies doing any sorts of analytics, we have lots of righteous indignation about how server-side analytics is enough and this and that. And yet, here you are, an individual (not a megacorp that needs to show quarterly growth) who effectively did something similar. Anyway, after all this, I finally got a 2 page PDF with a small bulleted list with just the number of founders who vouched for every channel. The channel was just mentioned in a few words, so it wasn't always clear what the channel meant. The PDF was so small I first thought you were only distributing the table of contents as a teaser.
- justiceforsaas 6y ago
  Hey man, I just included the link so people can see I'm not BSing and that I really spent a lot of time doing research into this. I didn't expect people to sign up & analyze my report. I'll release an enhanced report tomorrow or so and update everyone who signed up. If you want just reply to the email where I sent the PDF and I'll send you the enhanced version. This research is more oriented towards founders who are currently working on their startups/businesses. I plan to release further information on each of these acquisition channels and that's why I asked for an email. Plus, I think it's fair to ask for an email if you're distributing something that took 2 years to summarize.
  - sjg007 6y ago
    Maybe just be upfront on the number of pages in the report and what you will get later?

trhway 6y ago

strange, the post doesn't mention how in the beginning Airbnb was spamming the short-term rental posters on Craigslist https://www.businessinsider.com/airbnb-harvested-craigslist-to-grow-its-listings-says-competitor-2011-5 https://www.businessinsider.com/airbnb-harvested-craigslist-... "[...]he placed a vacation rental on Craigslist [...] Hours later, he had an email from a young lady who said that Airbnb was a great site, and that he should list his rental on it. She included a direct link in case he wanted to check it out for himself." If i remember correctly similar strategy of leaching off of competitor worked for FB when they got AOL IM friends lists.

jrott 6y ago
It was an interesting article in a lot of ways but it definitely didn’t mention any of the more black hat tactics that companies have used for marketing.
justiceforsaas 6y ago
That's the problem with writing on a "first-class" publication. They won't allow you to cover the "dirty stuff" (what? posting on a stupid classifieds website? Let's talk about the beauty of SEO/AdWords/beautiful viral growth graphs...)

pedalpete 6y ago

I feel like this isn't a good article for "startups", as it completely misses the big equation of "who are your early adopters, and where are they?". Rather than looking at different channels, if you first understand the target segment, and when I say target, I mean REALLY refined early target, then you will understand where they are. Speak to them there, let them guide you to where others like them are. Looking at channels first feels a bit more like a spray-and-pray technique. I was really surprised the other day when a VC couldn't grasp the idea that we knew exactly who our target customer is, and we are able to reach them with very little cost. They couldn't grasp the idea that we had a very focused customer compared to the rest of the market (because we're focused on early adopters), and that we knew this customer so well that we knew where to find them, where it doesn't seem other people in our market are. At the same time, we're also defining a new category, so we're somewhat distanced from the rest of the market anyway.

justiceforsaas 6y ago
Can you be more concrete? This all sounds good on an abstract level, but that's where it stops. 1) What approach did you take to "truly understand" your target segment (there are 100s of them) 2) How were you able to reach them to "very little cost" due to "really understanding them"? I really like the abstract idea of "understanding your target segment so well that you're able to detect where they are", but seen no one so far provide concrete examples on how they did it.
- pedalpete 6y ago
  You may be over complicating things. Or maybe I'm oversimplifying. For us, it's pretty simple to talk about our product because we're helping improve sleep. It's such a common problem in today's society, and the existing "solutions", focus on comfort, other physiological changes (cool pads, weighted blankets), ear plugs, eye masks, etc etc. We're using neuro-feedback to alter your sleep state. It's pretty magical. If you want to find out more, check out https://soundmind.co https://soundmind.co So, we talk to people and not only about their sleep, but about how it affects their life, what do they do about it, what do they try, what works for them, what doesn't. From here, we were able to build comprehensive user personas, and those personas describe where our users are. It was also super interesting for us to find that almost nobody talks to their doctors about sleep, very few people we spoke to had been to a sleep lab+. When you say there are 100s of target segments, yes, you're right, but you don't care about those. I think you care about two things. 1) can you create a customer persona or two, which are large enough to be viable to get the business started 2) is there a common thing that they do, or place where they congregate to reach them? Don't make a checklist of all the places they could be or all the possible segments, just talk to people, and look for the commonality, let them self-suggest. That's my 2 cents anyway.

westurner 6y ago

> For consumer companies, there are only three growth “lanes” that comprise the majority of new customer acquisition: > 1. Performance marketing (e.g. Facebook and Google ads) > 2. Virality (e.g. word-of-mouth, referrals, invites) > 3. Content (e.g. SEO, YouTube) > There are two additional lanes (sales and partnerships) which we won't cover in this post because they are rarely effective in consumer businesses. And there are other tactics to boost customer acquisition (e.g PR, brand marketing), but the lanes outlined above are the only reliable paths for long-term and sustainable business growth. Marketing calls those "channels". I don't think they're exclusive categories: a startup's YouTube videos could be supporting a viral marketing campaign, for example; ads aren't the only strategy for (targeted) social media marketing; if the "ask" / desired behavior upon receiving the message is to share the brand, is that "viral"? What about Super Bowel commercials? Traditional marketing: press releases, (linked-citation-free) news wires, quasi-paid interviews, "news program" appearances, product placement. "Growth hacking": https://en.wikipedia.org/wiki/Growth_hacking https://en.wikipedia.org/wiki/Growth_hacking