4 Marketing Channels You’re Not Using (But Should Be)

If you’re a startup, chances are your company already has its own Facebook page, Twitter handle, Pinterest page and maybe even a company blog. But if you’re putting work into creating original content, you really need to be on as many marketing channels as possible to drive traffic to your site. The thought of using LinkedIn forums, webinars and podcasts might put you to sleep, but if you’re a startup, you NEED to go after customers wherever they are.

Here are a few useful places for distributing content that you might be neglecting….

Podcasts

“Podcasts are dead. Does anyone even listen to them?” That’s what 500 Partner Christine Tsai told me when I first suggested recording founder interviews. She gave me the go-ahead to produce a 500 Startups show, but I could tell she was skeptical (and maybe even laughing at me behind my back). 50k+ downloads later, who’s laughing now?

 

nicki

 

Honestly though, podcasts do seem like kind of a lame channel to most people. Why? Well, they’re not as flashy as Facebook, require you to listen the sound of your own voice (hell!) every week, and most people have no clue how to get started. Remember: 99.9% of people in office jobs get BORED during the day. Take advantage of that and give them something to listen to while they work!

 

bored

 

A regular podcast is a great opportunity for you to show that you’re an expert at something. Does your company make an app about health? Do a weekly 15-minute show with fitness tips and nutrition news. Do you run a B2B, IT-focused startup? Record “This week in IT” and become the company that CTO’s – i.e., people who will actually buy your product – go to for news, info and reviews.

Once you become an expert, people will feel a look more comfortable spending $$$ on whatever it is you’re selling.

Ideal for: Pretty much anyone – just make sure you have good mics, an interesting topic, and someone with a decent voice.

Quora

We all waste time reading dumb stuff on Quora. Whether it’s a post about McDonald’s french fries or what it’s like working at Apple, it’s easy to lose 20 minutes minutes reading user-submitted answers on all different types of topics.

What you may not realize is that A LOT of the content on Quora is just marketing in disguise. And thanks to the “post anonymously” feature, sometimes it’s very, very sneaky marketing. I’m certain that big companies post questions like “How would you compare product x vs. product y,” in hopes of getting good reviews for their latest gadget.

 

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If you want to be less stealthy, you can ask marketing or product people at your company to answer questions about your product, industry, or even specific vertical markets that you’re targeting. For example, if your software startup wants to make a big push in the health sector, you could have your team answer questions about regulations and compliance issues that affect doctors. Quora is also a great tool for answering questions about product features or your company’s culture.

Ideal for: B2B startups, recruiting

LinkedIn Groups

Many LinkedIn groups are like a networking event held at a creepy dive bar where everyone in attendance is a used-car salesman. Shady as they are, some of the niche groups are a great place for you to find high-level marketing, sales, and tech people at large companies. In other words, the people who will actually decide whether or not a business purchases your product.

 

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Spend some time looking for groups that are important to your industry, then feed the members useful content. Post stuff like Ebooks, stats, articles and blog posts that will people do their job better. After posting regularly for a month or so, reach out to group members who are your ideal customers and ask them to try your product. Just don’t be creepy about it.

Ideal for: B2B startups, vertical marketing

Webinars

Having trouble sleeping at night? Just say the word “webinar” to yourself ten times – I guarantee you’ll pass out pretty quickly. Yeah, webinars aren’t exactly known for being exciting, but that doesn’t mean they’re not effective. All you have to do is look at a company like Hubspot – the king of webinars – to see why. They constantly host useful marketing webinars that generate a TON of leads.

There’s 1 BIG reason Hubspot’s so great at it: 99% of their webinars AREN’T about Hubspot at all – they’re about making you better at marketing or sales. If you want a quick primer on how to host an effective webinar, just sign up for a few of theirs to see how they do it.

 

rupaul

 

Even if you aren’t a B2B company, webinars for user training and engagement are a fantastic way to keep your customers excited and buying more. Having an “expert tips”  series is also a great strategy for figuring out who your biggest evangelists are, too. Make them feel special, and they’ll tell all their friends about how great your product is.

Ideal for: B2B startups, content marketing, vertical marketing, finding (and cultivating) your “power users”

I’ll go into more detail about using each of these marketing channels (and more) in the near future, so check back for blog posts with step-by-step tips and instructions. For now, think about how your company can use less popular channels like the ones above to get more leads, engagement, users and MONEY!

What’s a marketing channel that you think more startups should use? Post a comment below or tell me on Twitter.

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We’re Hiring a Director of Global Community Development – Join the 500 Family!

If your core skill sets include writing, research, & content development AND you’re addicted to early-stage tech AND you do everything to get the job done, you may be just the person we’re looking for…

 

rainbow

 

500 Startups is hiring a full-time Director of Global Community Development. In this role, you’ll lead content & marketing for our startup conferences & GeeksOnaPlanetours. If you have the experience & skills we’re looking for, CHECK IT OUT.

 

FULL JOB POSTING HERE

 

Good luck to all who apply!

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Slide Templates: How to Talk to Investors about Marketing and Growth

This post is part of the ongoing Distribution Tuesday series. Every week the 500 Distribution Team highlights actionable resources for marketing your startup. Get even more tips by following @500Distribution on Twitter and subscribing to our email newsletter.

When you’re fundraising, it can be really daunting trying to navigate the always changing market conditions, new platforms like AngelList and the typically brutal funding cycles. While every business is different, one thing is usually certain: if you can’t articulate how you’ll grow your business, you’re not likely to get the money to do just that. Thankfully, 500 is here to help.

Previously we covered some of the main DO’s and DONT’s in “How to Talk to Investors about Marketing and Growth“. To continue that discussion, we’re releasing slide templates for talking about marketing within your pitch deck. Since every business is very different, we don’t recommend using these verbatim; instead use them as inspiration for talking about how you know your shit, at least with respect to marketing and growth.

Covering your Acquisition Sources

You’ve been testing a lot of different acquisition sources like a good founder, right? Here’s your chance to show off everything you’ve learned AND your ability to track where your users/customers/dollars are coming from. Also be sure to highlight what channelsdon’t work so investors know you’re ready to focus on the right channels.

500-Distro-Slides-1

 


 

Talking Paid Acquisition

For startups that grow through a CPL (cost per lead) model a table like the below is typically helpful. It shows the performance on a per-channel basis and helps investors extrapolate the costs involved in scaling your business.

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Getting Social

Social channels for most statups don’t really move the needle. However, they do help validate there is consumer or other interests in your business. I usually recommend not going overboard with multiple slides on your social media prowess. But if you have a huge audience, show it off by channel breakdown and  an aggregate audience number. It’s also a good idea to show off a piece of “social media flare” like a posting that had very high engagement/virality.

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Paid Acquisition for Subscription Models

If you’re a subscription-based business, your ability to grow and acquire ROI positive customers is key. You’ll want a simple slide that ideally shows your subscriber growth increasing while your acquisition cost is decreasing. Your acquisition costs will rise as you scale, so it’s important to show they’re manageable in those early days.

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Showing Off Your Peeps

Here’s the slide that always got me the most “ohs” and “ahs” while pitching. I took a simple DIY map from Batch GEO to create a state-by-state breakdown of where my customers were. It’s good to know this data as a founder, and  – most importantly – investors love to see that you know it.  Think of some ways you uniquely visualize who your customers\users\members are and other valuable insights about them.

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What’s Next and Use of Proceeds

When you get to end of your marketing-related discussions on the pitch deck, it’s important to address what’s next. How are you going to use the money raised? More importantly, how are you going to use their money to make more money/users/fame? Here are 3 recommended sections to think about and potentially address.

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We hope these templates are helpful as you think about talking to investors. We know every business is unique, but almost everyone can benefit from better communicating how they’re going to grow. Good luck, and happy funding+growing.

download

(PowerPoint Version)

download

(Keynote Version)

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Top 3 Trends for 500’s Fall Accelerator Applicants

After spending several days talking to companies from all around the world, interviews for 500 Startups’ accelerator Batch 007 are over! Overall, this group had not just the highest number of applicants, but also the highest average quality of any batch. Founders are getting smarter about proving assumptions and building businesses based on real-world problems. Most demonstrated traction, and a good portion were already generating revenue, even if modest.

 

From the 130+ interviews, we noticed several underlying trends that were quite interesting. The trends fell into 3 areas: startup categories, founder relationships, and what founders actually thought of 500 Startups.

 

Unsexy B2B Startups Are Hot

 

We tend to invest in specific categories like consumer commerce, education tech, family tech, SMB/B2B tools, data & productivity, financial services, payments, ticketing, fashion tech, food tech, health tech, and entertainment. So it comes as no surprise that those types of startups tend to apply to our accelerator program.

 

Such “unsexy” startups were a common trend. Out of the companies we met, ~60% were B2B plays ranging from business research to real estate investing. This is contrary to the latest Silicon Valley meme that founders only build premium services for themselves (see this and this).

 

We’re interested in startups that solve real world, non-Silicon-Valley-bubble problems. Of course, we sometimes invest in premium services and consumer startups too. But the trend continues to show that 500 finds unsexy to be very sexy. It’s easy to get early traction with a product that solves #techpeopleproblems, but getting early traction with a non-Valley product typically conveys higher scalability potential.

 

Strong Founder Relationships

 

We always ask applicants how well the founders know each other. Founder breakups are one of the biggest causes of startup failure, so a good foundation is critical to a company’s success. Teammates with a long history – like founders who’ve worked on products together, longtime friends, spouses, or even siblings –  are better at navigating the ups and downs, extreme pressure, disagreements, and constant rejection that are a daily part of startup life.

 

If co-founders have known each other for a while, they’ve probably been through tough times already – and will probably be able to make it through the difficult times ahead. If co-founders have only known each other for 6 months, they really don’t know how their partner will handle the crazy emotions that come with running a startup.

 

One trend we noticed was very close founder relationships. There were quite a few married founders, which we thought was a good sign; some of our portfolio companies with successful exits were run by married founders, including Wildfire Interactive, Khush, Moonfruit, and Viki.

 

We noticed that married founders typically had a better dynamic during interviews. One person would state a point, then the other would expand or support their point even further. This is in contrast to some non-married, short-term founders that sometimes contradicted each other, or weren’t as in-sync as founders who knew each other well.

 

During our 15-minute interviews, we wanted to see a passionate, in-sync team that’s able to handle the stress of running a startup.

 

500 Startups’ Reputation

 

We also asked startups what they wanted to get out of our accelerator program. Their answers told us two things: 1) why people think joining 500 Startups is valuable and 2) what the founders who applied needed help with.

 

It’s wasn’t surprising to learn that only a few startups applied to our program because they needed funding. The majority were looking for help with specific areas of their startup that they thought could be improved.

 

We emphasize 3 areas of startup expertise: design, data, and distribution. In the last 6 months, we hired 3 distribution hackers-in-residence (Sean Percival, Andrei Marinescu, and myself) and launched the 500 Startups Distribution Program. This strategy was validated by the percentage of interviewees who mentioned applying to 500 Startups for our distribution expertise. This was actually the #1 thing founders said they wanted to get out of our accelerator program.

 

The second thing people mentioned was our network. With over 200 mentors and 1,000 founders spanning every startup category and area of expertise, it’s obvious why someone would want to be part of the 500 family.

 

Conclusion

We met with a ton of talented, passionate, successful founders, so choosing startups to enter this fall’s accelerator program was extremely difficult. Hopefully this gives you some insight into what our selection process is like and what you’re up against when you apply. If you didn’t make it in this time, keep your head up; we’ve had more than a few startups get rejected multiple times before joining the 500 family. Keep hustling!

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Distribution Metrics for Dummies – The Science of Profitability

This post is part of the ongoing Distribution Tuesday series. Every week the 500 Distribution Team highlights actionable resources for marketing your startup. Get even more tips by following @500Distribution on Twitter and subscribing to our email newsletter.

Distribution hacking is a numbers game. The ultimate goal: acquiring new customers for less than the amount they’re worth as a customer. This means your CPA (cost per acquisition aka cost per conversion) needs to be lower than your LTV (lifetime value). There are many factors that go into the calculation of CPA and LTV. Understanding how these factors can impact CPA and LTV is critical to doing distribution hacking.

 

snowwhite

 

Internal vs. External Metrics

 

Distribution metrics can be broken down into two categories:

 

 

    1. Internal: Measurements of actions on your website or app. An example would be conversion rate, which is the measurement of the number of users that land on your website or app compared to the number of users that actually convert.

 

    1. External: Measurements of actions outside of your website or app. Depending on what advertising platform you’re using, external metrics could include CPC (cost per click), CTR (click through rate), and more.

 

 

Thinking back to the ultimate goal of distribution hacking, CPA and LTV are our key metrics. CPA is actually a formula that takes into account both internal and external metrics.

 

CPA is cost per acquisition – how much will it cost to acquire one new customer. A customer is defined as a user who has converted to whatever the conversion goal is for your business. This could be a new registration, newsletter opt-in, purchase, etc depending on what is valuable for your business.

 

Everything Relates

 

Here’s an example of how a prospect might go from viewing an advertisement to converting into a customer:

 

CPA Flow

It’s important to note that during each step of this funnel, a change in performance (for example, increasing click through rate) will have a direct impact on your CPA. Let’s take a look at how all the metrics break down.

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There are a couple ways to calculate CPA. The simplest version of CPA is:

 

CPA = Ad Spend / Conversions

 

Since there’s a lot of information missing from this formula, I like to think about CPA in terms of the cost of bringing someone to our website in relation to the conversion rate:

 

CPA = CPC (cost per click) / CR (conversion rate)

 

Thinking about CPA in this fashion gives us two distinct metrics we can work to improve. These metrics break down as follows:

 

CPC = Ad Spend / Ad Clicks

 

CR = Conversions / Landing page views

 

The full formula looks like:

 

CPA = (Ad Spend / Ad Clicks) / (Conversions / Landing Page Views)

 

The formula, this time using actual numbers:

 

CPA => ($100 in Ad Spend / 100 Ad Clicks) / (5 Conversions / 100 Landing Page Views) = $20 CPA

 

In this example, we spent $100 to get 100 clicks, meaning we have $1 CPC. We were able to convert 5 of the 100 people who came to our landing page, giving us a 5% conversion rate. Then we divided the $1 CPC by 5% CR, which left us with a $20 CPA.

 

Now that we have the basic numbers figured out we can improve our overall CPA by improving either our CPC or CR.

 

For example, if we were able to double our ad CTR by using more appealing images/copy – and double the amount of clicks we get for the same ad spend – we would cut our CPC and CPA in half (assuming the same conversion rate of 5%)! Let’s look how this works:

 

CPA => ($100 / 200) / (10 / 200) = $10 CPA

 

In the previous example we were able to cut our CPC from $1 to $0.50. By assuming the conversion rate stays the same, we were able to convert 5% of 200 clicks rather than 5% of 100 giving us 10 conversions for the same $100.

 

Let’s take this even further – if we’re able to double our conversion rate through rigorous landing page split testing, we would be cutting our CPA in half again:

 

CPA => ($100 / 200) / (20 / 200) = $5 CPA

 

In this example, our conversion rate went from 5% to 10% and our CPC stays at $0.50.

 

Let’s take a look at one more example. Let’s say we were able to find a cheaper acquisition source and our ad spend was only $50 for 200 clicks, meaning our CPC has been cut in half again (now $0.25 CPC). Here’s how that formula would look:

 

CPA => ($50 / 200) / (20 / 200) = $2.50 CPA

 

As you can see, all the metrics are intertwined and impact each other. Figure out where your formula is underperforming and focus on improving those weak points – whether your CPC is too high or your conversion rate is too low.

 

What about LTV?

 

What we haven’t discussed is how LTV affects our numbers. LTV provides a ceiling for acquisition cost. By improving LTV, you have more flexibility with how much you can pay for acquisitions. To keep things simple, the following examples have all per-customer business expenses built in to the LTV calculations:

 

 

    • If our LTV is $20, our CPA ceiling is $20 (except in special cases, as outlined in the example below). The maximum we are willing to pay for an acquisition is $20, therefore we are breaking even on them.

 

    • If we are in a phase of our business where growth is more important than profitability, we may be willing to pay a CPA that is higher than our LTV. In this case we are either playing the land-grab game with competitors or we assume we will be able to increase the LTV of our customers over time.

 

    • We should try to get our CPA as low as possible so we actually profit on our acquisitions. It is best to shoot for at least 100% ROI on ad spend. This means if our LTV is $20, we should aim for a $10 CPA.

 

 

LTV calculation is difficult, especially when a startup hasn’t been around very long. However, in order to properly set goals for distribution, we must have an LTV ceiling. The simplest version of the LTV formula is:

 

LTV = Expected Life (time) x ARPU x Margin

 

The Kissmetrics blog posted a great resource for understanding how to calculate LTV

 

Improving LTV

 

As mentioned previously, increasing our LTV allows us to spend more money on each customer acquisition. Having a higher CPA while still remaining profitable means the ability to have greater scale in our acquisition efforts. Since we are able to pay more per acquisition, we can outbid our competition for ads and even try more expensive acquisition channels. More options = more scale!

 

explosion

 

Here are some general strategies to improve our LTV:

 

 

    • Lower our per customer expenses – this one is pretty obvious. If we are able to lower our cost to service each customer then each customer has a higher value to our business.

 

    • Improve retention – Increasing our retention rate extends the average life of each of our customers, meaning they will be paying us more over time. Here are some easy tactics to improve our customer retention:

        • Drip/trigger emails – use re-engagement emails to upsell our users

 

    • Upsell – Upselling our users with a targeted sales approach will increase the average value of each customer.

 

    • Segment users – to maximize our LTV, we need to fully understand the different types of customers we have. We should be segmenting our users and upselling them accordingly.

 

 

Conclusion

Acronyms are our friend! Just kidding, but they are necessary since there are so many different terms needed to describe our metrics. Understanding how each of these metrics affects each other is critical to understanding how to improve them and ultimately acquiring users profitably (CPA < LTV). Focus on the weak points in your formula for the easiest way to bring down your CPA.

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How to Get Users to Take Action with Effective Form Design

This post is part of the ongoing Distribution Tuesday series. Every week the 500 Distribution Team highlights actionable resources for marketing your startup. Get even more tips by following @500Distribution on Twitter and subscribing to our email newsletter.

Forms are ubiquitous; they stand between the user and the action they want—or you want them—to take. A well-designed form can make the difference between happy customers who complete your desired action disproportionately and frustrated users who bail from your site in droves. To successfully design an effective form, you must consider three key elements: structure, elements, and interaction. This post addresses these considerations at a high level. For a more in-depth overview, I highly recommend Luke Wroblewski’s excellent Web Form Design.

 

Structure

 

The principles of form design can be summarized as: 1) minimize pain for the user, 2) create a path to completion, 3) consider the context, and 4) communicate consistently. In other words, nobody likes filling out forms; make yours as straightforward as possible. Make it easy for users to understand what they’re being asked for and how to get through the process by tailoring the form to your exact needs and audience, and using clear, consistent language throughout.

 

In organizing your form, give careful consideration to what inputs to include. Focus on only the key questions, prioritize them appropriately, and think about what you have to ask the user for now vs. later. Use natural language in your prompts, but keep it succinct. Organize different types of information accordingly e.g., personal info vs. payment info, and group them together by clearly delineating different sections in your design. Netflix has always been very disciplined about having a registration form that is as short and straightforward as possible.

 

netflix

 

Strive for a clear path to completion by setting proper expectations. Make it easy for the user to understand how many steps your form contains and which step they are currently on. If your form supports variable-length or non-linear flows, use a breadcrumb trail that shows the high-level tasks instead of the number of steps. Use titles and other descriptors that match users’ expectations, and avoid unnecessary links or content that may increase form abandonment.

 

Elements

 

The placement of labels relative to their input fields can have a significant impact on how quickly and easily a user can complete your form. To minimize completion time, top-align labels as Netflix does, if you can spare the vertical space. If you’re constrained on vertical space, you may want to right-align your labels, or even place them within the input fields, an increasingly common practice adopted by Path (as seen below), Twitter and many other companies.

 

path

 

In considering input fields, it’s important to first make sure that you’re using the right types e.g., a radio button for a simple yes/no choice and a dropdown for selecting one of many options. Open text fields should be long enough to allow users to answer the question effectively, and optional fields should be avoided if possible. If all your fields are required, there is no need to mark each one as such; if your form also includes one or two optional fields, make sure to indicate they are not required. For questions for which there are multiple ways to correctly format the answer, make sure to support flexible inputs or clearly define the required syntax e.g., in asking users for a phone number: (xxx) xxx-xxxx vs. xxx-xxx-xxxx.

 

If your form needs to support secondary actions e.g., Cancel, in addition to primary actions e.g., Continue/Save, a strong emphasis must be given to the latter by the use of color, size, button vs. link, or other visual cues. Placement is equally important. Ideally, you want to left-align action buttons with input fields, placing primary and secondary actions next to each other to minimize the amount of visual scanning necessary for a user to understand what’s going on. You can also save users from having to check those annoying Terms of Service (ToS) boxes by having the action button cover both the ToS agreement and form completion, as we did at Hulu.

 

hulu

 

Error and success messaging represent another key element of forms. Error messages should be very visible on the page, preferably placed in close proximity to the input field in question, which itself should be highlighted so as to make it easy for the user to locate the problem. Make sure you’re using clear, succinct language and that error messages are actionable. On the flip side, use success messages to notify users that they’ve accomplished the goal, avoiding dead-end messaging by providing actionable next steps following completion of the task at hand.

 

Interaction

 

You can help users avoid frustration and move through a form more quickly by using inline validation to confirm or suggest valid answers, as Evernote does on their registration form, below. Avoid unnecessary inputs by using smart defaults to pre-populate information e.g., shipping option, or duplicate fields that have already been submitted e.g., billing address being the same as the shipping address.

 

evernote

 

Gradual engagement is an effective way to avoid overwhelming users and helping them to focus on the order in which you want them to provide you with information. This can be achieved through the use of inline additions and overlays, such as the commonly used calendar in travel reservation interfaces such as Kayak’s.

 

kayak

 

Summary

Forms are an integral part of most action-based online behaviors. Taking a carefully considered approach to the structure, elements, and interaction of your form will help increase your conversion rates and the happiness of your customers, making it more likely that they’ll return to your site.

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