Brian Ma's Blog (@zealoustiger)

Weekly insights from an Entreprenuer: To spend one year as a tiger is better than to live forever as sheep

Category Archives: Entrepreneurship

Traffic Acquisition for engineers and non-marketers

Many engineers (including myself) have never had to think about traffic acquisition or marketing at our previous positions because it was always the thing that someone else did.  However, at a startup, especially when you’re early, you’re going to have to figure out your “traffic acquisition strategy” yourself.  For B2C startups, traffic is the one clear metric that validates whether a startup solves a big enough problem to be a viable business which is why so many people (VCs, press, etc) care so much about it. (and why you should too)

Before getting into the ‘how’, I want to first debunk a few myths about traffic acquisition:

  1. “Build it and they will come” – This is almost always never true.  No matter how great an idea or product is, if no one hears about it, no one will use it.  I’m definitely not trying to say don’t focus 100% on the product, but you really need to think through how to build the product in such a way that people will want to naturally talk about/share it or your core audience will just never grow.
  2. All it takes is Word of Mouth – This is a tricky one.  Many sites have grown to millions of users by WOM (Word of mouth) alone so this is clearly a legit strategy for traffic acquisition right?  Wrong. The thing most people forget in the startup context is at the end of the day, you’re trying to build a business that returns multiples in dollars invested for investors (if you’re funded) and so there is one really important variable that makes this strategy work or not work – the frequency of each WOM event.  I’ll write about this in detail in a future article, but the gist is, if it takes 3-6 months for someone to mention you to another person, it’s just not going to be fast enough to grow your user base to 1 million, let alone the 10’s of millions of users that you need to become a viable consumer business in time for a profitable exit.

With those myths aside, here are the ways you can get traffic.  Any great product needs to kick-ass with at least one of these strategies to take off.  I’m planning to spend the next few weeks going into detail about each one of these, but will lay an overview of the strategies first here.  In order of cost-effectiveness:

1) SEO

Usually this is the strategy that ends up working the best for early bootstrapped startups because it’s the one that’s closest to what an engineer/product person can just hack up without any ‘real’ marketing skills.  What people generally don’t realize about SEO is it’s really just a way to HARVEST demand, not generate it, so you really need to be keen about if your product is solving that need that people already have and are searching for versus a need that they didn’t know they had.  SEO has a relatively long lead time (takes a while to see the ROI), but is a renewable source of traffic that when implemented correctly can really get you good returning traffic, for not a lot of time/dollars invested.

2) Viral loops

First, don’t get viral loops mixed up with viral videos – it’s not that.  A viral loop is a very well thought out, engineered, tested and optimized process of facilitating a user of your site to invite/tell some other user about your site such that the ‘viral coefficient’ ends up being great than 1.  I’m in no way an expert on this topic, but will write a more detailed article about this phenomenon in the weeks to come.  In the meantime, the here’s the best thought leader on this topic that I know: Andrew Chen’s Blog

3) PR/Social

PR is an art.  It is also a significant time and cost investment.  There’s really two key pieces of doing great PR: 1) Understanding the press and building great relationships with them  2) Having something really interesting to say (a story angle).  Lots of engineers when they first see ‘real PR’ in action at a startup are often amazed at how impactful and complex the operation is.  Although an extremely effective strategy, compared to the first two strategies mentioned, PR is relatively more costly and not a renewable or sticky source of traffic.

I lumped Social and community building into this category as well because it is so closely tied to PR.  Social strategies like having a social presence (facebook, twitter, forums, etc) is really about building a community so that users engage with your brand and eventually come to use your site/product.  It is an extremely heavy time commitment – usually better used for building brand value rather than for building traffic.

4) Distribution

There are site’s whose main success can be attributed to some type of distribution deal.  (paypal on ebay comes to mind)  By far the longest lead time of any strategy, but probably the most worthwhile depending on the exact deal.  Obviously the amount of business development investment here is immense (many deals can fall apart overnight), so this is one of those high risk/high rewards type of strategies.

5) Buy it – SEM and paid marketing

This one is super straightforward.  As all marketers know, there are thousands of options out there when it comes to paid marketing – everything from Google Adwords, to Microsoft Adcenter, to industry specific ad networks, to… display ads, video ads, radio ads, mobile ads, preloaded apps, etc, etc.  Even though the possibilities are endless, really you’re looking for one very specific thing there.  Cost of user acquisition <= Life time value of user.  If you end up finding the marketing channel that satisfies that constraint, then you’ve got yourself a renewable traffic source that you should probably dump all your money towards.  :)  Now finding that channel is the hard part – and that’s why marketers get paid the big bucks.

6) Buy it – Acquisition

Very rarely, you’ll come across an opportunity to acquire/merge with another business that has a complementary or competing product with a decent sized user base.  This is so rare in early startups that I’m going to delay writing about it until I get through all the other articles I want to write about, but you can imagine what needs to happen when this situation occurs – lots of due diligence to see whether the products align enough, user base sticky enough, team awesome enough, etc to get to a reasonable price for both parties involved.  It’s a very involved process that unless there’s a super clear win-win situation, I’d advocate focusing on the million other things that matter more in building your early startup.

What do you think?  Did I miss anything?  Could’ve gone into more detail about something?  Let me know in the comments below.

Secrets to Productivity

Life is busy, there is always more work to be done no matter who you are or what you do.  So how do you keep yourself productive and happy?  After more than a year and a half of being out on my own and having to motivate and discipline myself, I’ve realized something very important: I actually do more work than I give myself credit for.

Time flies.  I remember weeks and months when I look back and feel like I’ve accomplished nothing.  You never finish everything that you want to do – and that can get very discouraging very quickly.  Here’s my secret to combating this:  Write everything down.

time-flies-clock-10-11-2006

This is nothing more than the time-tested-teacher-approved todo list.  Here’s what I do differently.  It’s so simple anyone can do it:

  • Write down EVERYTHING – Make a list of all the things you need/want to do.  Not matter how small.  Keep this list in a place that you can reference anytime and all the time.  It doesn’t need to be complicated.  I just use iCal.  Right from the get-go you’ll feel a huge sense of freedom and security since don’t have to keep everything in your head.
  • Make a DIVIDER – This is the core of the secret.  Everyday when you wake up, look at your list.  Now choose the TWO things you really want to accomplish today, put them at the top and draw a line below them.  Don’t be greedy, two is the magic number.  It’s reasonable and achievable.  There usually are good days where you can accomplish more than those two depending on how big those things are, but if you finish two things everyday, you should feel good about yourself.
  • CELEBRATE your successes – we’re so hard on ourselves a lot of times.  Every week take just 30 seconds to look back on the list and review what you’ve done.  Now pick the item that you’re most proud of and take 30 more seconds to sit and embrace that sense of joy for having done what you set out to do.  A great side effect of this is it always helps me answer the “How was your week” question I get every time I see my friends.  Two birds with one stone – awesome.

Hope that helps some of you recapture those precious minutes.  Life is short, make sure you make something out of yours.

The soul of the lazy desires, and gets nothing,
But the desires of the diligent shall be fully satisfied.

Business People, you don’t need them…

… until you launch.

(Disclaimer: All of this advice is from my personal experience running Eggsprout and probably won’t apply as much to larger VC funded companies)

Pre Launch
If you’re a software startup, which I’m guessing most of you are, you know that before you have a live product what really matters is… getting a live product.  Nothing else matters.  Don’t hire marketing people (you have nothing to market).  Don’t hire business developers (you have no business).  Don’t hire PR managers (you have no news), accountants, lawyers, customer reps, etc.  You get the point.  There may be occasional times when you need to do some legal stuff, some marketing stuff, or other business type things, but it’s so little, you should do it yourself.  You’ll learn something.

Post Launch
This is where it gets interesting – after you have a live product, you can’t go without business people for several reasons:  1) You’ll get feedback from customers  2) Businesses will reach out to you for partnerships  3) You’ll realize you’ve got a lot of things wrong.

#1 and #2 are pretty self-explanatory.  People will now start to talk to you and find you interesting.  You need someone with their head in the space and some business savvy to talk back.  #3 is a little bit less obvious – and I’ve only learned it through living it.  You probably got a lot of things right with your launch, but once you start talking to other people and hear their needs, you’ll realize you’ve done a lot wrong.  And by wrong, I mean, you’ve prioritized something that’s not so useful, or deprioritized something someone really needs, or missed or didn’t see an opportunity.  You’ll have a lot of ‘Why didn’t I think of that?’ moments.  Every startup goes through the same things.

handshake

Eggsprout
After we launched Eggsprout, I’ve done no coding and no project management.  Our team has reshifted our responsibilities to allow me more time to be the ‘business person’ – do biz dev, sales, marketing, customer support, investor relations, public relations, etc.  And boy is it important.  I can’t even count the number of times I’ve come back with new insight into our customers or opportunities and refocused or reprioritized things for the team.

So for all you techies out there who believe business people are pretty much useless (I used to be one of them) – make sure you have someone or can hire someone that can pick up that role after you have a product.  You don’t want to run a startup that’s isolated from the world and wonder to yourself why your traffic isn’t picking up.  Biz people are important.  :)

Free is Powerful

Free stuff sells.  I was just at Denny’s free grand slam breakfast today and even though I’m not a big fan of standing in lines for giant breakfast with over the top calories – I went.  How can you say no to free?  (The wait time was actually much shorter than I expected and they were very fast in terms of service.  Props to you Denny’s)

dennys

In business, free is good.  When we approach recruiters with the concept of Eggsprout, they’re always amazed at our concept of free job posts and free resumes.  On the big job boards – they go for hundreds of dollars a piece for job posts and thousands a month for resumes.  That’s a big contrast from free.  And it sells – because we make it such a no brainer.  What do you have to lose for trying us?  Just 5 minutes of your time.

My suggestion – in whatever business you’re trying to build, always offer a low-cost option.  It could just be a free trial, a basic package, or even a free place for people to connect with you and your brand (like a forum or blog).  Structures like these allow you to obtain new customers quickly at a very low cost.  You’re thinking this is pretty obvious stuff – and it is – but I really didn’t understand the power of free until I found myself dropping my plans today to spend the 10 minutes driving and 15 minutes standing in line just to get my little piece of the grand slam deal.  It’s powerful.

Want to get better than free?  Pay people to use your product.  It sounds strange, but that’s exactly what Google Adsense and Microsoft Live Search rev share does.  That’ll be a post for another time.

Running a Startup: Time management

Startups are time consuming.  At least 10 hour days, 7 days a week.  Not because you have to, but because you want to.  At this rate, even the greatest of the greats will burn out.  So how do you prevent yourself and your team from burning out?  Here’s a couple strategies we’ve tried, maybe some of them will help you:

time

4 hour sprints: Creative people (developers, designers, etc) need time alone to get things done.  Sure, teamwork and discussions are necessary, but studies have shown that context switches and interruptions – even in the form of someone asking a quick question – actually do a lot of harm to productivity.  That’s why every day, we have 2 large blocks of time periods around 3 to 4 hours each where everyone puts on headphones and just works on their part.  It works like a charm.  A lot gets done.

Eat together: We also cook together, but just eating together works too.  A lot of really good things happen when you eat together – you learn about each others quirks, you have extra time to discuss stuff, you get everyone comfortable with contributing, you can talk about stuff completely unrelated to work, etc.  Teams that eat together, stay together.

Play: Wii’s, Xbox’s, guitar hero, super smash, etc are a must.  No better way to relieve the stress and take your head off that annoying bug than kicking each other’s butt in an epic game.  Ah, so many stories to tell.

Work from home: Find people that work well by themselves and can motivate themselves even when not at ‘work’.  Working at home is one of the best things ever – you’re more relaxed, you dramatically lower the chance of someone interrupting you, and you’re on your own schedule.  This also has the strange benefit of making it so ‘work’ never ends.  :)

We’ve played around a ton with how we work as a team and have settled on something that combines the 4 of the above items.  We work together and meet 2 to 3 days a week.  Usually M, W, F, where a typical day contains of: cook breakfast, work 4 hours, cook/eat lunch, smash, work 4 hours, go home, shower, work 4 hours.  All the rest of the days (weekends included), we work by ourselves at home and stay on IM for any immediate needs.  Works really well for us, but I’m sure every team is different.

It takes a long time to find that “team rhythm” but once you’ve found it, it’s a great feeling.  Cause things get done.

Why do a startup?

Because you’re frustrated with some problem or inefficiency and you think you know how to solve it.  You see other people suffering and it pains you.  You need to solve it.  And you need to solve it now.

Too many people are into the “startup thing” for the wrong reasons.  Money, power, impact, influence, social status, ‘coolness’, etc.  Focus on the problems, solve it, and all those ‘other’ things will come. If you’re in it for the wrong reasons, you’ll find yourself (and your team) burning out very quickly.

startup

Forget about the money.  If you’re solving the right problems well, that will come.  Hopefully.

5 tests: Are you a startup guy/gal?

Startup people are rare.  Actually, I take that back.  People that dabble in startups (side project here and there) – plenty.  People that are willing to risk everything and go at it full force – rare.  So what is it that makes someone a “startup junkie”?  Here’s what I’ve gathered from observing successful startupers:

You want to change the world – This one is pretty obvious.  You want to have an impact and you want to help people.  You see things that are inefficient or problems that people just overlook and it frustrates you to no end.  There’s a constant bell that rings inside your head everywhere that you go, whatever situation you’re in.  “There has to be a better way”.

You’re stubborn – People think you’re crazy.  Even worse, they think your idea is horrible.  But despite all that, you don’t listen.  You believe in yourself and your idea so much that you tune them out.  Maybe they’re right, maybe they’re wrong, but it doesn’t matter to you.  No one’s going to sway you because you’ve made up your mind.  Lets just hope they’re wrong.

You embrace failure – Failure doesn’t irk you, because you know failure like the back of your hand.  You know you will fail.  You’ve stopped fearing it and now just expect it.  Your job is not to not fail, but to not fail so much.  And when you do fail you know how to respond – by learning.  Each failure only builds you up.  And when you fail, you’ll know – cause there is no one else to blame.

You’re financially stable – Lets talk practical.  Everyone who throws themselves at a startup venture first calculates their risk.  And $$ is a big part of that.  Financial stability doesn’t mean you have millions of dollars.  It just means you can support yourself for a while (at least a year) even if some disaster happens.  Though hard to control since it really depends on your environment, (age, family, relationships, connection to money, savings, market, economy, etc) there are definitely little things you can do to make yourself less risk adverse.

Thought of being a drop in a bucket of water drains you – It actually physically drains your soul.  You’re tired from all the energy you spend pulling down the red tape only to get your project approved 6 months later when you don’t care anymore.  You’re tired of politics.  You’re tired of not making an impact.  Don’t get me wrong – there are a ton of awesome large corporation people – you’re just not one of them.  The comfy couch is not you.

puppycouch

Do you fit these criterias?  If so, you are one in a bazillion.  Get off your couch and do something.  Live the dream.  Fix the world.

How to get Smarter… read.

This seemed so obvious, I don’t know why it took me so long to realize it.  Influential people read.  It makes them smarter.  In fact, that’s what we’ve been taught to do since we were young.  Warren Buffet is a machine at digesting business/economic news and company reports – that’s why he’s so good at investing.  Bill Gates takes weeks off of work to read about new technologies – how else does he see trends and develop better things?  If someone has taken time out of their life to put their life experiences into a book, or a blog, or a news article, it’s worth your time to learn from them.

read

Ok, so I think reading undisputedly benefits us, so what should you read?  Everyone may be different, so instead of me telling you, let me just show you a sample of what I read:

Industry News – Everyone is part of an industry and everyone needs to stay up to date with the latest news in their area of expertise.  For me, it’s technology and the web.  So here’s a sample of what I tune into:

  • Techflash (John Cook’s tech news specific to Seattle)
  • TechCrunch (if you’re a techie and not reading this, you’re not a techie)
  • Mashable

Even narrower industry news – Everyone works in a niche.  When I was at Zillow, it was Real Estate.  Now at EggSprout, it’s HR and Recruiting.  If you’re running a startup, you better know what’s happening in your niche.  I like to seperate these between the official sources, and the individual sources.

Venture Capital – When you’re running a startup, you better be pretty in tune with the VC business whether you want to take in money or not

Other Startups – Better be staying on top of other startups if you wanna be successful at your own.  Celebrate their successes, learn from their failures.  It’s all about being part of the community.

Mentors and Heroes – Everyone has someone they look up to.  Or people they find interesting – I’ve found that my list changes over time, but here’s a couple I read:

Friends – I have a bunch of personal friends that I like to follow.  A bunch are on twitter, but a bunch also blog.  This category is probably where you get your most variety – your friends probably are passionate about many things that are not in your area of expertise.  You can learn a lot from your friends.

  • Hsu-Ken (has the most random entertaining posts)
  • Drew Meyers (brings deep insight into the world of microfinance, something I know nothing about)
  • Chris Chu (brings me stories from the far reaches of the galaxies)
  • Mr. CFO (Director of Finance at Zillow, must know something about the world right?)
  • Spencer (The real Zillow CFO.  Keeps on showing up on TV.  If I read his blog, I might learn something from osmosis.)

Hobbie: Real Estate – Everyone has hobbies.  Real estate is one of mine.  That’s why I like to read about stuff that’s happening there once in a while.

  • Downtown Bellevue (most amazing comprehensive coverage of Bellevue)
  • Seattle Bubble (Bubble, what bubble?)
  • Incolo (Friends startup.  Great content – and helping them with link love :)

Other Media Sources

  • Podcasts (I workout, have a bunch of great content updated daily on my Iphone)
  • TV (I eat, and like to multitask by watching the news.  It saves time)
  • Books (rare, but every so often, I run into some book some friend recommends)

Phew!  That’s quite a bit of reading.  And a ton of these sources get updated extremely frequently.  Talk about information overload!  I’ve learned to set a time limit for myself per day or I can easily get lost in the sea of information, but I do usually manage to get through all those everyday.  Read lots, learn lots, you’ll be glad you did.

Happy reading.