Reason #6 Why Your Consumer Startup Will Succeed: Growth

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This post is the sixth in a series of ten posts about the 10 key reasons your consumer startup will succeed.

I speak with hundreds of aspiring consumer entrepreneurs and review thousands of executive summaries and pitches each year. From all this activity, certain patterns emerge that remain consistent with successful consumer startups. In this series of 10 blog posts, I will list the top 10 reasons consumer startups succeed. Note that all seem necessary, but none on their own are sufficient.

#6 Growth

Growth is the lifeblood of the business for early-stage consumer startups. Viral marketing, or unlocking the potential of your product to sell itself and acquire new customers for little or no cost, is critical to the success of hyper-growth consumer companies. Yet it’s very hard to do in a sustainable way. That’s why at Maven we spend so much time focused on growth and why we have recruited a Growth Hacker Hall of Fame to join us as mentors.

You can find plenty of information available on the basics of growth metrics and definitions. In general, the five key elements of the growth funnel are acquisition, activation, retention, referral, and revenue. At the earliest stages, we focus our companies on two main priorities: acquisition (top line growth) and retention (engagement). If you can acquire massive numbers of new customers, and they stick around and engage with your product, you will have the chance to optimize your activation flow and referral methods to add fuel to the fire. Make no mistake– we care deeply about building companies with a sustainable revenue model, we just don’t focus on that in the early stages. There’s a right time to “turn on” the revenue for the type of consumer startups we help to build, and we’ll discuss that in a later post.

These three steps are the foundation to finding successful, sustainable growth strategies for your business:

  1. Track everything: true successful growth marketers are very data-driven. Growth hacking is not a trick. If you “trick” someone to use your product, it’s likely they won’t stick around. Setup the proper analytics, identify your key metrics, and be diligent in reviewing the data.
  2. Study what’s proven, but still be creative: there is no silver bullet. There is no “one growth tip that works for every business.” Thankfully, though, there is now a lot of content– from online blog posts to workshops and conferences– sharing what has been successful at other startups. Start with those proven strategies! Adapt them to your business and test the results. But, you will have to innovate to remain successful. Think creatively about new growth vehicles and channels which are special to your specific business.
  3. Focus on what’s working: once you’ve established a solid base of core active users, study them. Reach out and talk to them. You may see new customers sign up and quickly leave, and the tendency can be to try and recruit them back, working to fix their issues. This can be a big waste of time. Rather, focus on what’s working. Find out what your core base loves, and make the product even better for them. They will use it more, and are more likely to tell their friends, helping to unlock new viral growth channels.

Your goal in following these steps is organic, viral growth. However, sometimes you might need to kick start viral growth with some paid marketing. Be careful with this; one of the dangers of paid marketing is getting hooked. Spending money to acquire customers can be addicting, and like any addiction, it can be deadly to the health of your business.

Reason #5 Why Your Consumer Startup Will Succeed: Language/Market Fit

by  

This post is the fifth in a series of ten posts about the 10 key reasons your consumer startup will succeed.

I speak with hundreds of aspiring consumer entrepreneurs and review thousands of executive summaries and pitches each year. From all this activity, certain patterns emerge that remain consistent with successful consumer startups. In this series of 10 blog posts, I will list the top 10 reasons consumer startups succeed. Note that all seem necessary, but none on their own are sufficient.

#5 Language/Market Fit

Language/market fit is just as important as product/market fit for early stage consumer startups, and it’s the most under-appreciated source of early success. Why then are so few founders spending any time on it? Because most founders don’t understand how important it is, often don’t have the right skills for success with it, and it’s really hard to do.

Language/market fit is how one describes what a company does and why it exists or needs to exist. Clearly and succinctly articulating a company’s vision worth fighting for will be one of the hardest yet most rewarding things for a startup founding team to do. Founders who don’t spend sufficient time getting this right from the start will see the repercussions later, from lackluster media interviews to poor candidate screening in the recruiting process. It’s important for everyone in the company — from the CEO to the developers to the recruiters and investors — to use the same language and be “singing from the same song sheet”. When done well, it will inspire the team, customers, and future investors.

Here’s how you can be intentional and thoughtful in every aspect of the language used to describe your company:

  • Company name: It all starts with what you call your company and product. Strive for a name that elicits an emotional response from your early adopters. Avoid overly descriptive names and ones that are hard to spell. Some of my favorite company names of startups that I’ve worked with are Snap (an early search engine), Bebo (one of the largest social networks), and Tango (a massive communications platform). Naming a company is hard to do and may take months. Take your time and be patient; you’ll know it when you see it.
  • Company description: Can you describe your company in one sentence that both communicates what you do and inspires and leaves a lasting positive impression with the listener? If you can’t do that in a sentence, keep working on it! You will use this language in everything you do including your App Store description and your PR and marketing. Once you get it right, you won’t have to think about it every time — just keep reusing the same language and reinforcing your language/market fit.  It simplifies a founder’s life in ways unimaginable.
  • Product features: The terms used to describe actions and features within your product need to be thoughtful and reflect your language/market fit. While it may seem trivial to the outsider, great consumer companies like Facebook spend significant time thinking through the names of key features such as the ‘like’ button. Everything reinforces their core language and vision worth fighting for.
  • “Users”: This is a personal pet peeve. Your “users” are the most important part of your company. Don’t call them users! Hopefully they’re not just “using” you and you’re not just “using” them. You’re trying to create a personal and lasting relationship with your customers. Treat them with respect. How can you help them become a part of your community? For example, we love how the members of one our portfolio companies, Shots, are calling themselves “Shotties.” Often the best terms for an early customer base come organically, but the founding team can influence this as well.

Language/market fit is something that you need to struggle with, especially if you’re more comfortable as a computer programmer than a marketing executive or if English is your second language. We work closely with our startups on this from the very start, and we often suggest they work with specialized marketing and PR professionals we know are great at developing marketing language. If you take the time to get this right early on, you will benefit for years to come.