Last week we launched a new series about our journey to $100K a month. Now let’s
go back to where it all began…
In May of 2011, I was talking on the phone with a fairly well-known VC. We had been introduced through mutual friends, and I was telling him about my plans for Groove.
Why on earth would you want to enter this space? You’ll be fighting an uphill battle against huge players. Zendesk, Desk.com, plus an overcrowded market of smaller companies.”
That was true. There was no doubt that we’d have a long road ahead of us if we were going to become competitive. We’d be far from the only new kids on the block.
But, I explained, that was exactly why I wanted to build customer support software. Businesses were no longer relying on email to do support, and the success of the incumbents proved that a market for a solution exists. Plus, I’ve always loved going after competitive markets — I see a competitive frenzy as proof that there’s big demand for a great solution.
The problem with the crowded customer support software market was that none of the solutions seemed all that great to me.
That doesn’t mean there weren’t great products available; it just means that there wasn’t one that was perfect for me. And if I was in that boat, I suspected others were too.
At my last company, BantamLive, we looked at a dozen options for support software, and ultimately chose Zendesk, a product that many people love. But as I — a career-long product guy with no customer support experience — used it, I found it clunky, and, well, enterprise-y. As naive as it may be, I’ve always thought that business software shouldn’t feel like business software. Why can’t I get the Apple experience at work?
If you’re reading this, you’re probably a hustler, and you know exactly what I mean when I say that the product I wanted didn’t exist, so I knew I had to build it.
As soon as my check from the acquisition cleared, I put $250,000 into a business checking account, tapped a team of developers and designers, and got to work.
Groove was born.
Takeaway: Don’t let competition deter you. Competition means that there’s demand in the marketplace. Just because there are solutions out there, doesn’t mean they’re right for everyone. You can create a profitable company serving a small niche in a competitive market.
The 5 Early Wins that Kept Us Alive
During those initial months of product development, we had some wins, as well as a few losses. Some of them were our own doing, and others happened organically.
It didn’t take very long to get to (what, in hindsight was) a crude beta product, and a small group of non-paying users. A few things helped us get there:
1. Our PR Strategy (and our full outreach list)
We were fortunate to get picked up early by The Next Web. This brought us a few hundred email signups from folks who were interested in joining our private beta.
How did we get picked up by a major tech blog? We laid out a PR plan and ended up emailing about 40 outlets. See the full list here, and feel free to use it for your own outreach — note that some of these may be outdated.
The thing is, PR plans have a funny way of shriveling up and dying when you expose them to reality, and we only got one response, which came from TNW — though, to be fair, they were our first pitch, and we were excited to get covered.
Still no love from TechCrunch, which at the time, we naively looked at — as so many do — as the pinnacle of startup PR success.
Takeaway: There’s more to PR than pitching TechCrunch. Too many startups see TechCrunch as a success metric, but there are hundreds of great press outlets.
2. Twitter Buzz (and the value of Twitter traffic)
After the TNW piece went live, Twitter — which hadn’t been an influence on us until that point — exploded. People Tweeted links to the post (and to Groove), and while Twitter traffic didn’t convert nearly as well as some other channels, we did get a handful of free trial signups, which led to more Tweets, which led to more signups, and on and on. We didn’t track this at the time (doh!), but I suspect those that found us on Twitter were more engaged in social media; thus more likely to Tweet about us. I can’t prove it, but my gut says this was very high-value traffic for us.
Takeaway: Twitter is no longer optional. I’ll admit, I don’t personally like using Twitter. But as a business, you must go to where your customers are. When the TNW piece brought us Twitter buzz, we realized how valuable that traffic was, and the platform is now a big part of our strategy.
3. A Viral Sign-Up Form (and how we hacked beta invites)
After testing a couple of approaches, we settled on a signup flow that required users to invite three friends in order to gain access to our beta.
While the number of initial subscribers (non-invitees) dropped when we did this, we got about 30% more subscribers per day after invitees responded to their friends’ posts on Facebook and Twitter.
— Matthew Willcock (@matthewpjw)
Takeaway: Customer Acquisition doesn’t have to happen one user at a time. Think about how you can leverage one user or subscriber, and double or triple the impact.
4. Blogging (and an evolving content strategy)
To say we were “blogging” back then would be a massive overstatement, but we did write a few pieces that got shared quite a bit, and brought us some new users. Funnily enough, the piece that brought in the most new users was about how we had just gotten a whole bunch of users. It even made it to #1 on Hackers News for a half a day! Can you tell I was excited? 🙂
We built our early blogging strategy off of studying what worked on the blogs that we read ourselves, and came up with a 44-point checklist for what we thought would work. To an extent, it did work, but not enough to justify the resources needed to stay on course, so now we use a modified approach. And yes, we’ll be sharing it.
Takeaway: Start blogging, ASAP. Think about what content your target customers would find valuable, and give them lots of it, for free. For early stage startups, it’s one of the most cost effective ways to establish your brand and build an audience.
5. Design, Design, Design (the mantra that saved us)
We’ve always focused hard on design; it’s been the driving force behind our product since the beginning, and the biggest differentiator we have from our competitors. As Tom Tunguz says so eloquently, good design is telepathic, and that was, is, and always will be our goal.
Nearly all of the positive early feedback related to our design and user interface. People were more forgiving of our buggy product because the beautiful UI was a pleasure to use, and that kept us alive for months.
Takeaway: Don’t compromise on what makes people love you. For us, it was design. For you, it might be price, speed, service or one of a thousand other possible differentiators. Protect that part of your business with everything you’ve got, because it will be what saves you when everything else is going wrong.
Like almost every growing startup, we had our share of early fails too.
Next week I’ll go into detail about the three biggest mistakes we made, each of which cost us dearly in the two most important currencies we have: time and money.
- Burning through $50k on design for nothing.
- Letting outside distractions set us back six months.
- Adding feature after feature until our app was on its deathbed.
We’ll be releasing a new post each week. To get each post emailed to you as soon as it’s published, sign up for the $100K mailing list below.
See you next week. Have something you want to learn more about? Let me know in the comments below or hit me up on Twitter.