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

Tag Archives: acquisition

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.