Entrepreneur

If you build it, they won’t come (unless…)

(Editor’s note: Jason Cohen is an angel investor and the founder of Smart Bear Software. This story originally appeared on his blog.)

Ask a technical founder about his startup, and he’ll proudly describe his stunning software — simple, compelling, useful, fun. Then he’ll describe his cutting-edge platform — cloud-based, scalable, distributed version control, continuous integration, one-click-deploy. Maybe you’ll even get a wobbly demo.”Great,” I always exclaim, sharing the thrill of modern software development, “so how will people find out about this brilliant website?”

Four uncomfortable seconds later, a smile breaks across the founder’s face. “Here it comes,” I think, “there is a strategy after all!”

Except the “strategy” is a tirade of drivel I’ve heard so many times I can lip-sync as the words spew out the founder’s mouth:

  • “We’re going to A/B-test AdWords campaigns until we discover our hook.”
  • “We’re going to A/B-test our landing pages until the right message appears.”
  • “We’re better than everyone else at SEO.”
  • “A friend of mine knows how to get popular on Twitter.”
  • “We’re going to get reviews on blogs.”
  • “We’re going to start with our own network and grow it from there.”
  • “We’re going to use an affiliate program so our customers sell it for us.”
  • “We’re putting a ‘Retweet’ button inside the product to encourage viral growth.”

The obvious problem is that every new startup on Earth says exactly these things. Nowadays the “strategy” above sounds the same as:

  • “We’ll have a website so people can read about us.”
  • “We’ll have an email address so people can communicate with us without picking up the phone.”

Yes, you’re going to do those things, but since millions of other people are doing that too, you’re still invisible. Visibility-fail. Anyone-gives-a-crap-fail.

So what can you do to rise above the cacophony that is the Internet? Here are a few ideas.

Infection built-in, not bolt-on – WhenBusy is a bootstrapped startup that lets people schedule meetings with you in currently-available time-slots without you having to share your calendar [disclosure: I'm an advisor].

Instead of trading emails with lists of available time-slots when trying to set a meeting, founder Josh Baer just sends the link to his page (pictured at right) and the other person uses the product to schedule a meeting. This is the viral step: Having trialed the tool, the stranger might use it herself, then more people find out about it, and so forth.

Note that at no point did I say “a button lets people ‘like’ this on Facebook.” I know of no companies who have “gone viral” because of buttons. Buttons are good — why not use them? — but they don’t make your product intrinsically viral like WhenBusy.

Which is OK — not all products need to be viral! But if it’s not viral you still need a killer method of finding customers, and if it is supposed to be viral it better be encoded in the DNA of the application, not bolted on as an afterthought.

Frightening honesty – Balsamiq Mockups is a ludicrously popular wire-framing tool. The software is good — don’t get me wrong — but what sets Peldi (the founder) apart isn’t prescient feature selection or bug-free releases, it’s his startling transparency. He published revenue figures even when they were still pathetic, He pledged loudly and eagerly to give away lots of free copies to non-profits, and he revealed all his (remarkably effective) marketing strategies, even though it meant competitors would learn them too.

He didn’t just have an “authentic voice,” he made public promises. That’s compelling.

In a world where everyone and their brother is “joining the conversation,” you have to truly bare your soul if you want to compete on the transparency front. It’s not for everyone, and I’m not suggesting it ought to be, but there’s no sense in half-assing it.

Making Oprah cry – The number one mistake founders make when trying to generate press is talking about what the company does rather than telling a compelling story.

Does Twitter get press when it helps Iranians fight an illegitimate government or when it creates a new internal IT process to increase up-time? Does Apple win the hearts of millions because of their obsession with design or because of their development APIs?

Without a powerful narrative, your chances of getting big press and enthusiastic users who spread the word for you approach zero as a limit.

With Smart Bear, it took me five years to figure out (a) I needed a story and (b) what the story was. It’s hard. But one story beats a pile of AdWords A/B tests.

Advertising → [transmogrification] → Revenue – Yeah, yeah, nowadays marketing is about “relationships” and “authority” and other things which cost time but not money. It’s all I hear about anymore.

But don’t be so quick to throw out the idea of spending money to make money. Advertising isn’t dead; you can still buy eyeballs. I’m not talking about “triage” strategies like buying AdWords linking to a page of ads, I’m just pointing out that most companies on Earth don’t depend on “joining the conversation” to acquire customers.

It sounds simple: The average cost of acquiring a customer is $C (advertising, sales, support, doing demos) and the lifetime revenue you get from that customer is $R, so if C < R you have a business. C can be driven down with cheaper ads, better lead quality, a more efficient conversion rate, and straightforward trials with minimal tech support.

Of course it’s not that simple, and many business plans I’ve seen (unintentionally) omit many of the true costs of acquisition.

Have some more ideas on ways to reach customers that aren’t the same as everyone else? Share ‘em in the comments below.


VentureBeat is studying mobile marketing automation. Chime in, and we’ll share the data.