What I learned in 18 Months as an Email Marketer (Part 2)

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Advertising to Sell Vs. Advertising to Learn

It’s quite common for a small company in ramen profitability to start treating every conversation with customers as a sales opportunity. That’s the right attitude, anyway. As I’ve mentioned here in the past, every interaction is a a kind of sale. Either you are selling yourself to an investor, the media, or a partner, or you are selling your product to a customer. But just as you should always refine your pitch based on how well it has actually worked, you should do the same with your advertising. In fact, you can use advertising as a very cheap and effective form of research.

Shopping your Brand, and Testing Assumptions

Shopping your brand is sort of like focus-grouping, only you do it in the wild, and you use real customers as the focus group. The idea is to get a good sense of whether your target market is who you think it is, and if so, what that group responds to best.

You may run into some surprises doing this. The people you are most willing to buy your products may not always be the ones you’d expect. A classic industry example is women’s underwear: Victoria’s Secret has long known that male customers will spend more money, faster, than women buying the same products, and will be less interested in discounts and sales. And the reasoning is simple: men feel uncomfortable shopping for intimate items, and also don’t want to be caught looking cheap while doing it.

By the same token, though women may take longer than men to make purchases online, they also buy more electronics than men do, and consume more online media, and spend more time on social networks, taking the majority share in Facebook, Twitter, and Pinterest.

Catering to a demographic doesn’t have to mean talking down to that demographic either. You don’t see Apple making stereotypical “lady Iphones,” but their products are possibly more popular with women than with men. I can guarantee: Apple tests their taglines and slogans on women as much as they do on men. If you were selling a sleekly designed, high end electronics toy to the top of the market, would you care what women thought of your marketing?

Assumption testing can prove that your products are appealing to people you never considered potential customers, and for reasons you haven’t even thought of.

Case in Point:

Cedric Maloux, our CEO, created an app for IOS last year, and as soon as he had a working app, he “shopped” it using a number of targeted ads on Facebook. And since Facebook allows you to segment your market and target your ads to people based on sex, he decided that he wanted to know which taglines would work more with women, and which with men.

Because the nature of the app was targeted at a hobby that is overwhelmingly popular with men, he was surprised to find that women responded to the ads too. Not as much as men did, but there were key taglines that women responded to. There were ways of representing the app that appealed to women even more than they did to men. And by using the “advertise for research” approach, he was able to zero in on marketing that worked across these different segments.

And it isn’t just gender, either. There are loads of assumptions you probably make about your customers, and which you can test very effectively for little cost.

Agile Marketing: How it works

Agile methodologies don’t work every step of the way. There’s no set of iterations you can take in coming up with your products that will take you from no idea what to do, to a completed project. You need to be inspired first- and without that, there is no testing to do; no basis of comparison between a non-process and a good process. The same is true of agile marketing. It relies best on a seed of inspired thinking about your customers and your product, followed by rigorous and ego-free examination of what really works. I’ve done tons of marketing material that I loved, and only a small minority of it ever worked well. That makes marketing and coding not so different at all.

Start with Simple Questions

Like, what’s the first thing my customers see? Does it work? Does it work for the market I’m targeting? Could something else work better? Where am I losing customers?

 If your company already has a logo, then you probably have a slogan and associated taglines too.  There’s plenty of advice available about how to write them, and it isn’t actually that hard. I mentioned recently that a tagline or a slogan is more like a static element for a website. It’s fertile ground for A/B testing, and that’s what you should be doing- all the time, and not just for the homepage, but also landing pages for any campaign you run.

You can start with broad assumptions about your customers. Segment them into “likely,” and “unlikely” customer groups, and run a couple of different versions of ads and associated landing pages for each group. Create ads targeting both groups, and show them to both groups too. If your likely customers respond to the ads that target them, then you know you’re right about your market and your strategy. But if your unlikely customers respond more than you anticipated, you can continue to segment them, dialing in the specific messaging and the specific part of that market cohort that *is* responding to your marketing. You may find you’re sitting on a potential client base you never considered. And if your likely customers respond to your ads for your unlikely customers just as much as the ones targeted at them, then this may tell you that your messaging to these customers is not as effective as you thought it might be. You may have more opportunities to sell to this group with a different approach.

Set Clear Goals

Using a system like OKRs, set objectives that involve clear answers to your simple initial questions. For instance, a question like “Is my purchase page losing sales because of the design?” can be associated with an objective like: “improve purchase page performance by 25%,” with key results being simple items like: “define the most effective call to action,” and “reduce distracting elements that cause users to bounce or navigate away.” Now follow the formula: testing incoming hits on the purchase page while cycling through these changes. You may find that something as simple as a stronger call to action can raise your conversion rate from 0.20% to 0.25%, and in terms of an online store, that’s can be an enormous increase in revenue.

Shocking how often this works.

Shocking how often this works.

You may well be shocked to realize the difference a single element makes in your overall revenue when it iterates itself over thousands of hits on a landing page or a homepage every day. There, a tagline that works just 1 time in 1000 more than another can mean the difference between life and death.

But you want to be doing this testing now- not when thousands of page views are already in play. That’s why small ad-buys on facebook or other platforms can give you the intelligence you need to get ahead of these questions- before you realize you don’t have it right.

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What I learned in 18 Months as an Email Marketer (Part 1)

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When I took my first marketing job, I assumed that writing was writing, no matter what you were writing about. So I sat down, strapped in, and learned as much as I could about what it takes to write email copy, landing pages, and sales campaigns. Easy, I thought. Turns out, it’s nothing like normal writing at all. Here’s what I learned.

The Call To Action

“Don’t talk about what you want. Talk about what your customer is going to do.”

Last week we talked here about selling without selling. I’m going to reiterated the 7 principles that are mentioned in that post. These are the 7 elements that should be represented in some way, in every communication with a customer.

Trust: In you and the product. Let the customer do what they would normally do.
Understanding: Be as simple and clear as possible. The customer is not smarter than you.
Emotions: Use humor, use evocative words, show love and caring. Show passion.
What to do: Buy, sign up, click, share, read on
When to do it: Now? Later? Soon?
What I get out of it: Speak about effects of the product, not the features.
When it will happen: Examples, case studies, quotes, and testimonials

Last week we talked about the first 3. Now we’re going to talk about the middle two: what to do, and when to do it.

All of your marketing copy, the copy that is designed to lead a customer from contact with your website or marketing materials all the way to a purchase, has to inspire an action on the part of your customer- to draw the customer inexorably toward a purchase, a sign up, a click, a share, or any action that you want a customer to take.

What it Does

Your calls to action should always be just enough to inspire the viewer to take the next step he/she is comfortable with, and no more, engaging each user to the maximum of their comfort, without scaring them away by pushing them to a sale or action they aren’t ready for. This feeds back to trust: you should never be in the position of asking a customer to do anything he or she doesn’t understand.

If you think of your website or marketing approach as a pinball machine, your customer is the ball. Your marketing emails, landing pages, and homepage are all those little widgets and bumpers that keep the ball moving, and your copy is gravity. When the ball finally ends up falling into the hole, that’s a sale. Here’s the trick: pinball isn’t fun if the slope is too steep, and gravity is too strong. A satisfying sales experience, or any intended customer outcome, is one that feels natural, and rich for the customer. As the customer “bounces,” from one element of your online presence to the other, they should constantly be only in danger of heading towards a sale, never getting there unless they’re ready.

If you think of the customer as the ball, then you shouldn’t worry too much if they don’t go directly to a sale every time. The longer they bounce around and absorb what you do, and who you are, the more likely they are to eventually decide to buy. And the longer they take making the decision, the clearer it will be when they do buy that the product is right for them.

There’s rarely a reason to push: a customer will only ever buy when they are ready to buy, and not before. If you have a lot of hits on your purchase page, but few conversions, then you have probably already realized this: when confronted with a decision to buy, nobody is going to do it earlier than they expected, without a very good reason (that’s where discounts and promotions come in, but that’s another story).

What It Looks Like

Last month, I edited the StartupYard Homepage and a few other landing pages for copy. Our CEO Cedric Maloux had done the layout and the basic copy. Here’s what we started with:

What Are You Working On…?

Data

We’re looking for the craziest, most ambitious projects out there, having to do with the manipulation of large clusters of Data.

Search

Have you invented a new search algorithm to complete, or compete with, the big boys? We want to hear about it.

Analytics

Do you have a new, unique way of making sense out of Data? We have x TB of data for you to play with.

This copy is good, but ask yourself: what are you being asked to do? The first line has an open question. That’s a good challenge to go further. Now we get an explanation, under the Data header, of what we’re looking for: “the craziest, most ambitious projects.” Well that’s nice, but what does it mean? Why are you being told all this?

And in the next header under Search, we explain what we want. Nobody wants to know what we want, unless it involves giving them money. And since we actually do want to give you money, why not come out and make that part clear? The site visitor is not sure who this information is for: does it apply to them? Will they find something they are looking for? They are not being given a direction to go in, only information to absorb. That’s only half of what they need. Here’s the copy with calls to action.

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Now we have some strong direction. The visitor is being shown what we want, and being pushed to engage to their level of comfort. We have a call to connect in the second column, a challenge in the first, and an invitation in the third column. That’s three ways we’re inviting the user to go further right now. We don’t care how they do that: they can email us, they can read the rest of the homepage, or they can go right to the application. We make it clear here that they’re free to choose. They can seek their own level of comfort with the process.

While it seems superficial, these calls to action have powerful subconscious effects. In Blink, bestselling economics and sociology writer Malcolm Gladwell discusses widely known psycho-social experiments in which individuals are “primed,” with certain words before being placed in a social situation. For example, a person who is told to read a list of words including “patience,” “serenity,” and “calm,” is overwhelmingly more likely to wait patiently for her turn than a person who is told to read words like “aggressive,” “confront” and “fight.”

The words that an individual hears or reads has an enormous impact on how that person behaves in the short period afterwards. Words that prime for activity and exhort action will engender better results virtually all of the time.

Open for Business

Have you ever stood outside a shop or a restaurant, and not been completely sure that they were open, so you didn’t go in? Ever passed a restaurant because it looked closed, only to see someone come out and only then realize it’s open? We all have.

Now, think about those lit-up signs on shop windows; “Come in, We’re Open.” You might think you’re not affected by this kind of thing, but you are. Your confidence, inspired by this tiny little call to action, will empower you to stride directly to the front door and open it. No questions asked.

A homepage is no different. These kinds of calls to action are just a little tiny nudge saying: “We are here for you. This is about you. It’s not a blog, it’s not PR, and it’s not about us, it’s about you.”

A Good Call to Action is not Manipulative.

Sometimes marketers go a little nuts when they figure out that a call to action can be such a powerful thing. What would you do, for example, if I could promise you that I could increase your open rate on emails by 100% in one day? Would you want that?*

*This is a classic call to action, by the way: of course you want to increase your open rate by 100%. You are supposed to say yes.

What they can forget is that no matter how powerful a call to action, you can never sell someone who doesn’t want to be sold. Calls to action are nudges, not shoves.**

**And this is a classic trust-building rejoinder: I am telling you I understand your problem and I understand that the solution is not as easy as some say. I’m showing you that what I’m offering is better than the competition, and that I care about what’s best for you.

If I nudge you, you’ll scoot forward in the direction you want to go. If I shove you, you’ll go in the direction I wanted for a moment, and then start resisting me.

This is no different from the store analogy from earlier.

What kind of salesman do you trust? The one who waits for you to look around, then approaches you quietly and asks if you want help? Or the one who approaches you as you walk through the door and asks you what you’re looking for? The first salesman wants to help you. The second salesman wants to control you.

The first one gives you a choice: tell him what you are looking for, or say no, you don’t need help. Either way, you do what you want. The second makes a demand: tell me what you’re looking for, or break all trust, and lie, saying you are “just looking.” Either way, you are forced to choose between two options you may not like.

You may buy from the second salesman if you know exactly what you want, but you wouldn’t buy from him if you weren’t sure. You haven’t been given the space to establish comfort with his offerings, before he is pushing on you to tell him what you want to buy. And if he is very good, and manages to get you to make a purchase before you’re ready, you would never, ever return to that store. Your embarrassment would be too great. You’d associate him, and that product you bought, with an experience you’d rather forget. This is not a win for anyone.

Online marketing is no different. People know when they are being invited, and when they are being pursued. And they don’t like being pursued in that context.

Do you get those emails from click-bait websites, with some video and a headline that says: “Drop Everything Right Now and Watch This or You Will Be Sorry,” or something to that effect? We’ve all been there. Or maybe you see those chain letters on Facebook, that manipulate you into sharing some overly sweet piece of human misery, that turns out wasn’t true in the first place?

Yes, they work. Once. And while you can get a lot of traffic from a sensational headline, and a big email open rate from a grabby subject line, that’s all you’ll get: traffic. Because people know when they are being manipulated, and they don’t like it.

This kind of marketing is for ad-driven spam sites, not for an honest product site that is actually offering people something they need. So don’t be a manipulative bastard. It doesn’t work anyway.

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Focus on Copywriting: Sell without Selling

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This is part of our series exploring the skills, resources and experience Founders need when entering and working in an accelerator.

While most startups can’t afford an in-house copywriter, most companies also can’t afford not to have someone focus on copywriting, at least some of the time.

Why you Should Focus on Copywriting

“Language ties together the worlds of reality and possibility”

Last year, Jason Cohen wrote about developing his “story,” the many years of selling Smart Bear, a successful code-review tool. I’ll quote part of the text here (with permission), and encourage you to read the entirety.

At first when someone asked what my company’s tool suite was, I would say:

“Smart Bear makes data-mining tools for version control systems”.

It’s a description so esoteric that, although accurate, not even a hardcore geek would have any idea what it is, much less why it’s useful. Years later, when it was clear that code review software became our sole focus, I got better at describing it:

You know how Word has “track changes” where you can make modifications and comments and show them to someone else? We do that for software developers, integrating with their tools instead of Word and working within their standard practices.

Better, yes, and for a while I thought I nailed it, but still no press. Eventually (thanks to helpful journalists) I realized I was still just describing what it is rather than why anyone cares. I left it up to the reader to figure out why they should get excited.

Eventually I developed stories like the following, each tuned to a certain category of listener. Here’s the one for the journalists:

It’s always fun to tell a journalist like you that we enable software developers to review each other’s code because your reaction is always: “Wait a minute, you’re seriously telling me they don’t do this already?” The idea of editing and review is so embedded in your industry you can’t imagine life without it, and you’re right! You know better than anyone how another set of eyeballs finds important problems.

Of course two heads are better than one, but developers traditionally work in isolation, mainly because there’s a dearth of tools which help teams bridge the social gap of an ocean, integrate with incumbent tools, and are lightweight enough to still be fun and relevant.

That’s what we do: Bring the benefits of peer review to software development.

Now the reason for excitement is clear: We’re transforming how software is created, applying the age old techniques of peer review to an industry that needs it but where it’s traditionally too hard to do.

– See more at Cohen’s own Smart Bear Blog

Part of the conundrum of good copywriting is that it is virtually impossible to test. A homepage layout can be dissected into precise quanta of effectiveness: how many visitors, how many clicks, how many page views; the flow of traffic is orderly and can be controlled. You can A/B test adwords and landing pages and see “what works,” but you’ll only ever be finding out what doesn’t fail as much- not how well you could be doing. There’s no A/B test for a truly novel approach; one that builds momentum for your site and your products, because two novel approaches will not be binary in nature. They will not be comparable at all.

Because copy doesn’t work like code, but a lot of web entrepreneurs assume it does. If the copy “doesn’t work,” it’s the fault of the copy, not what the copy supports (ie: the product, or the company).

Build Your “Story,” And Your Voice

Copywriting, done well, can increase a site’s conversion rate enormously. It can entice new customers and woo old ones to stick around. But most early startups stick with their old copywriting for too long.

You can’t test  copy like you can a layout or a button or a piece of code: it’s too complex- there are too many emotions, too many subtle cultural cues, and too many ways in which people read; all of them different.* And even more, it’s reactive- your copy has to evolve with time, coming to acknowledge your existing customers and community, and what your products mean to them, along with attracting new customers. Jason Cohen’s “story,” as it evolved above was changed to acknowledge whom he was talking to about his products, and what they need to really understand about them. He went from a programmer with an idea, to a trustworthy person with a solid background in helping people with his products. And his story showed that.

                        ________________________________________________

*Our CEO Cedric Maloux disagrees with me on this point. 

Cedric: I used to have 4 different homepages. All similar, except for one headline. And I was measuring which one was leading to more sales in real time. The software would show one or the other and measure the reactions. This is A/B testing at it’s best- you can test a headline, but you can’t test all the copy. 
 
Cedric makes a fair point here. Headlines, tag lines and slogans often work more like static features of a website than the rest of the copy does. Because they don’t take on all of the same responsibilities as normal marketing copy, you can and should treat them as testable. These are the elements of your copy that stand up best to focus-grouping and testing, because their purposes are more unique- namely to attract clicks and push a visitor to go further.

                        _______________________________________________

This is not to say that you should never speak in technical jargon, but that you should always know whom you’re talking to, how much they know, and how hard they’re listening. Your copy needs to evolve to reflect the culture of your company and your customers.

But in the data-driven world of online marketing, these organic, real, contextually rich evolutions are rarely allowed to happen. It’s rare in this world to see something closer to the corporate ad-agency driven model, in which a creative and an account executive sell campaigns to a client, who then uses the creative output to tell a new story. More often it’s the case that the better is the enemy of the good: that founders and CEOs are unwilling to try anything that smacks of the entirely new, because it can’t be reliably tested, and requires a great deal of faith. Even though truly original great ideas have, necessarily, never been tried before.

 In the current startup ecosystem, ambitions for zero-cost growth have become dangerously intertwined with risk-aversity: companies shrink from the prospect of *losing* small levels of growth, in a gambit for gaining more. And not a small number of companies have played the same tune for too long- failing to pivot their messaging until their revenue has shrunk enough for it to be too late, and changes will only appear desperate and cynical (which they will be).

This is a shame in some respects, as the quality of language on a website is just as important in conveying impressions of honesty, competence, and skill as a quality design is. Perhaps even more so, as web design becomes increasingly automated and pre-packaged. Copy cannot be automated or prepackaged. It always has to be unique. Language ties together the worlds of reality and possibility. It is the medium in which you make your ideas real for your customers: in which you construct the reality of your products, and a future world in which your customers use them. That’s a vitally important thing to focus on.

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The pen is mightier.

Write Honestly: Sell Without Selling

I had a great sales manager once you who taught me what he called the “7 Things” that you have to keep in mind when you talk to a customer. It was based on a simple principle: when you talk to customers, you are always selling something. 

Before we go all Glengarry Glen Ross here, this is not the same as the old adage: “Always be Closing.”

The important thing is to remember what your relationship to a customer is, and to be very honest about that fact. You will never sell someone something they don’t want to buy. And even if you do manage it once, they will never buy twice, so you shouldn’t sugar coat or lie about your products, ever. You don’t need to. Just follow these “7 Things.”

Trust: In you and the product. Let the customer do what they would normally do.

Understanding: Be as simple and clear as possible. The customer is not smarter than you.

Emotions: Use humor, use evocative words, show love and caring. Show passion.

What to do: Buy, sign up, share…

When to do it: Now?

What I get out of it: Speak about effects of the product, not the features.

When it will happen: Examples, case studies, quotes, and testimonials

The list is a simple one to follow, and you should look for every point to be covered in some way in your communications with customers (eg: on your homepage, landing pages, email contacts, and other sales material).

Most important of the above is trust. My sales manager would say this: “If I asked you to show me 4 fingers, what would you do?” I held up 4 fingers on one hand. He said, “Exactly. Now, if I held up 2 fingers on each hand, you would think I was being a smartass.” This is to say, that trust is established by doing what the customer expects, and by showing that you understand the customer well. You have thought this through, and you understand what the customer needs.

Then you can access emotions. Emotions can be descriptive words, or appeals to imagination. But emotions must be appealed to after trust and understanding are established. Customers are looking for an emotional connection to anything they buy. If they feel they’re dealing with a real person, who wants and cares about their business, then they will be more than ready to come back and buy again.

What the Customer Gets Out of It

Surprisingly, this is an element of a lot of online copywriting that gets completely lost. Companies don’t talk about what their products mean to people. They just talk about what their products do and are. That’s a major problem.

While you might describe your product idea as: “A non-SQL back-end solution for tracking PPC traffic ROI,” I might describe that same idea as: “A tool that helps online businesses figure out whether their web ad dollars are being spent wisely.” While my version tells you practically nothing important about how the product works, it does tell you what the product does. It speaks about effects rather than features of the product. It focuses on what is important to a client, an investor, or a customer: what the product accomplishes.

This is important especially for non B2B products, but generally any time in which the client is significantly different, as an entity, from your company. And even if you’re an IT company selling IT resources to be used by IT people, the person actually in charge of buying those products or services is probably not the one who will be using them.

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Your copywriter has to concern him or herself with these distinctions: how product copywriting (such as product instructions, help menus, drop downs, and user messages), and marketing copywriting, such as homepages, campaign pages, and marketing communications, are fundamentally different, and meant often for fundamentally different people. I can’t tell you how many times I’ve seen the same mistakes made: websites for complex and expensive products that use a product copywriting style, right on the homepage. You might as well add a light-box on the homepage that pops up and says: “If you haven’t already committed to buying this product, don’t bother going forward.” The person who is viewing your homepage may not be a customer, and treating them like a customer (with product copywriting), is often a big mistake.

Because before a person is your customer, you need to establish trust. And that means giving that person a way of understanding who you are, and what you do, and of liking you. If you haven’t done that, then the customer is taking a risk in buying from you. And most sales, you’ll lose that customer.

If it’s work for the buyer to figure out what your product is, then it’s going to be nearly impossible to sell to them. And unless you’re in the enviable position of a product company that has its client-base beating down its door to buy the latest release, then you need to think about this. A lot of the time, the person your product is meant for, and the person your product will be used by, are two totally different people. And you need to assume the worst.

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How do you Start an Internet Business?

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As Internet professionals we get asked the same question over and over. “I have an idea for an internet company. How do I start?”

It’s simpler than it seems

My answer invariably is as follow:

“Start building… Make a mockup and show it to people around you. Listen to the feedback, throw away your first version and do it again with all the knowledge you have gained from future users. Do that over and over. Stop until they convince you or you convince yourself it’s a bad idea. In that case, kill it and wait for the next idea.”

You read it right: make a mockup and show it to people. This is the only possible first step you can take if you want to turn your internet idea into a business. Don’t think your first step is to write a business plan. That’s the last thing you should do. Right now you have no business even less a product. What you need to know now is if your idea is a product/service people will want. Have you already figured out what they will pay you for? The best way to start is to put your idea there in front of them and listen to what they say as they discover your mocked up service.

In case you feel that you are not a UX designer, that’s OK. You don’t have to be. You just need to be able to put your idea into some kind of wireframe without design. It’s actually not that hard to create a mockup, either it is for a website or for a mobile app. There are a few great tools if you just Google “Wireframing Tools”. I personally use Keynotopia.com – It’s a set of templates for PowerPoint and Keynote. Their homepage says:

“… testing app ideas in 30 minutes or less.”

And… it’s true. If you know how to use PowerPoint, you can create a mockup. I’m not related to them and have no interest if you buy their product. I’m just a happy customer and I use them all the time. They are always my first point of call when I have an idea (well, after the mind map but for that I just use a good old pen and paper).

Once you have your mockup ready, this is when you either have to build your site or app yourself, pay people in cash or equities to build it, or find someone who can finance the idea in exchange for some equities in the company that would be incorporated around the idea.

It gets better

If you are going to need investors, good news; your mockups are your best friends again. Show them your idea! Either they will want the app/service or they will not. The rest are financial details for them. These details are important of course, but now you have the interest of an investor. What’s important is that you can go from having an idea, all the way to raising seed funding with just mockups and a clear monetisation strategy. All it took was to iterate on mockups following users interviews.

That’s how you start an internet business. By creating a mockup of the idea.

Once you have the fund, you need to recruit developers and designers and manage them. Sites like 99designs.com and odesk.com‎ or Freelancer.com are your best bet.

It’s mockup time Baby!

Once again, the first thing they will want to see is what your idea is. Well… How convenient! You happen to have mockups available so they can instantly understand your idea and transform it into reality.

Source: Keynotopia.com

Source: Keynotopia.com

Once the product is developed you will need to become an online marketing wizard, and hope people will talk about it and refer new users every day. But that’s not how you start. That’s how you grow, and the topic of another blog post.

You can also apply to an accelerator like StartupYard. Not only will you receive funding to start developing your first version but you will also be exposed to hundreds of professionals and specialists who will become your mentors during the 3 months program and who will help you develop your idea and be exposed to even more people. And guess what? One of the first things you will do at StartupYard is create a mockup and show it to people to refine and refine again your idea until it’s perfect.

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Make your Pitch “Real” From Day One

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 This is one in a series of posts about the skills, tools and prep work Founders need for success in an accelerator. 
 

What a Pitch Really Is

Raising money is a deeply complex issue for a startup. We won’t reinvent the wheel here and now and tell you whether you’re even ready to try doing it. But we will talk about your “pitch.”

Founders often enter the pitch under the false assumption that investors are looking for someone like them. Someone who feels like a peer, whose job it is to convince them. Paul Graham of Y Combinator wrote about this recently

“When people hurt themselves lifting heavy things, it’s usually because they try to lift with their back. The right way to lift heavy things is to let your legs do the work. Inexperienced founders make the same mistake when trying to convince investors. They try to convince with their pitch. Most would be better off if they let their startup do the work—if they started by understanding why their startup is worth investing in, then simply explained this well to investors.” – Paul Graham (Full Article here)

But your pitch is more than just a magical set of keywords that unlocks a golden elevator, filled with swimsuit models holding champagne flutes and suitcases full of money. The secret handshake theory of business is only attractive to those who aren’t sure who their customers are: investors or actual potential clients.

No, your pitch might be closer to your “identity,” as an early stage startup. Your pitch is not just your idea. That bears repeating. Your pitch is not just your idea: it is a demonstration of why you are a good bet. It’s also the first and consequently most important way that people will know you. VCs, angels, accelerators and even potential employees know you by your pitch. And avoiding the biggest mistakes, can be as key as making the best sounding pitch.

A Pitch is Creating a New Reality

One in which your product is real, and one in which it is something that customers need, and will pay for. This is why your pitch is not your idea. Your idea is plastic, and can change, but the reality you are pitching has to be real. Your product solves real problems.

And your pitch starts from day one. You should come up with a pitch that makes sense before going any further, because if you can’t sell your product, there may be little point in building it. This  ice-cream shotgun is still genius, by the way, but the pitch didn’t work out, so I’m waiting for the market to present a need before investing.

Ok... maybe not.

Ok… maybe not.

What’s in the Pitch

This is a “positioning template” first suggested by Geoffrey Moore in Crossing the Chasm, a modern day “bible” for technology marketing. See if the pitch you have at the top of your head addresses each of these points in a meaningful way:

For (target customers)
Who (have the following problem)
Our product is a (describe the product or solution)
That provides (cite the breakthrough capability)
Unlike (reference competition),
Our product/solution (describe the key point of competitive differentiation)

In this post we’re primarily concerned with the first half of this template.

Create the Problem

All products and innovations address problems, and this is the For, and Who, and Unlike, of your pitch. A person/company/institution with an issue/need/lack/goal.

When entering your pitch, you should have in mind a typical customer who has a common enough problem. This works for anything- you just need to be creative. You are not inventing the need, but you are formulating its basis.

Nobody needed an electric typewriter in 1924 when IBM obtained patents that would later be used in its first commercial models. But there were key deficiencies in the design of manual typewriters, that caused common, known problems. Problems that could be solved. IBM identified those deficiencies, and attempted to eliminate them.

There was no work not being done because of these deficiencies; nobody was sitting around waiting for the automatic typewriter, but companies and individuals still invested in the new technology, not because they were aware of how automatic typewriters would revolutionize business, but because it solved problems they knew they already had.

Here’s a pitch for the electric typwriter, in this frame (freely invented by me):

There are over 50 million typists, secretaries, students and amateur writers in America all grappling with the same issues. Current typewriters on the market have frequent jams, rust easily, cause pain in the fingers due to the difficulty of depressing keys, and create type which is often uneven, and illegible. Our new automatic typewriter solves all of those problems, using revolutionary new technology that prevents jamming, ensures even spacing, and is easy on the fingers. It produces clear, legible, even type, at a speed before totally unprecedented, allowing typists to work more productively, more quickly, and more happily. Better yet, it is cheaper to manufacture than a manual typewriter, accepting universally interchangeable parts.

You’ll find every element of the above template present. Who the product is for (and size of the market), what their problems are, what the competition offers, what our product is, and how it solves all of those problems, along with a litany of killer features, and even a case for profitability. It presents the investor with a world that is broken (typing sucks and it’s expensive), and then presents the solution (typing made easier and cheaper).

That is the sort of pitch that grew IBM’s revenue by a factor of 20 in 20 years, and its profits by a factor of 7 in the same time period. All based on solving basic deficiencies in its marketplace.

Not all products are as glamorous to you and I as the automatic typewriter. But think about the executives who funded its development in 1925. They didn’t touch typewriters. They had secretaries who did that, and they dictated letters or scratched notes on paper. Typewriters were manual labor, and beneath their pay grades.

It was a dark and stormy paperjam.

It was a dark and stormy paper jam.

Give the Solution

These people had to be convinced that a problem existed, and that others, office managers, schools, and institutions of government, would buy the solution, before they invested in buying the patents and funding its development as a commercial product. The pitch provides the investor with a reason why the product is needed, the evidence that there is a market for it, the evidence that the market will accept it, and the evidence that this will be a profitable venture.

And this kind of pitch can be given in 30 seconds, or in 30 minutes. If it makes the problem and the solution real, it can win an investment.

So however tedious the problems that you’re solving are, if you believe there’s a market for the solutions you offer, you have to make those problems real to investors. Presenting a killer solution, even when the status quo still works, is the key to making the problem real for an investor. Make that investor see the current state of affairs as a net loss, instead of a zero sum.

[ssba]

AirCharts.co – StartupYard’s Company of the Week

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“It is much easier to be disappointed in the first month than the second year.” This is the opinion of Aircharts.co’s founders from Moravian New Jersey. They made U-turn and pivoted in first month of the company. Meet Aircharts.co, in-page analytics, the solution for analysts to immediately get the metrics on his/her website.

Image

Lukas Haraga and Jiri Otahal after their pivot.

How did you three guys get together?

LH: I was trying to get a part-time developer for one of my previous projects so I put an ad on the VUT Brno portal. Jirka was actualy the only guy who had responded :-). We met in a restaurant and I realized he is someone I’d like to work with on a long-term basis. And he proved it was a good bet. It was quite the same with Michal who I met when he was on the high school. After a while I came with HowDoI Tutorials idea and brought both guys to work on it.

JO: Apparently nobody but me saw a potential in Luky when his ad appeared in our school portal :-).

MP: I met Lukas on 2010. I was studying second year on the high school and I was bored. I needed some activity and my classmate Kristian Holub gave me a contact to Lukas who was looking for someone to cooperate with on his project. Later, as we started to work on HowDoI Tutorials I met Jiri.

How did you come up with the idea of your in-page analytics?

LH: The first weeks in the StartupYard were quite busy. We met tons of mentors and they were giving us various feedback. We started to realize that HowDoI Tutorials is a nice technology but not nice enough to sell it in a ways we wanted. Milos Endrle, one of the mentors, was the one who wasn’t so passionate about the HowDoI Tutorials so we started to brainstorm how to make it more attractive. Our thoughts went to the analytics – if you’ll show the tutorials, the customer would want to see the stats anyway. And then the bulb just light up and idea of the Aircharts was born.

You pivoted so soon. Why?

LH: According to the previous answer we started to pitch HowDoI Tutorials and Aircharts as well. The feedback we were getting was “Aircharts positive” – we realized the potential of the Aircharts is bigger than HowDoI Tutorials. It wasn’t an easy decision but we are convinced it was the right one.

Where do you see yourselves in 2 years from now?

LH: Standing in front of the StartupYard 2015 teams and giving them “lessons learned” :-). Besides this we want to bring a fresh air to the analytics world – make what GPS did with the paper maps navigation industry and set new way how all web analytics data will be provided to the users… using aircharts.

JO: I just hope I won’t think about this question anymore 🙂

MP: I believe Airchars will be successful, the Internet business is growing and analysis is more and more necessary. I hope at least I will graduate from college :-).

What do you do in your free time?

LH: I am a scout leader so I love nature, hiking, camping. I also try to keep my body in shape by playing badminton at least once a week. But in summer it is my small convertible car what makes me really happy :-).

JO: I like to play football, play with my camera and a lot of time I spend with my girlfriend.

MP: I spend my free time by developing, bicycling, watching TV shows and with my girlfriend :-). I like the mountain biking as well.

Works.io – StartupYard’s Company of the Week

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Do you know artists who are not fond of technology? Yeah, there’re many. We met two guys a few months ago who want to turn artists’ unappreciation of technology into ‘like’. The Canadian and the Swiss are building ‘LinkedIn + IMDB’ for contemporary artists, enabling them to keep portfolios and CVs up-to-date with ease. Works.io.

How did you two guys get together?

AH: We first met when we were trying to take over the world – on a hilltop in a Budapest park, playing “Risk”. Actually, Patrick won.

How did you come up with the idea for Works.io? 

PU: Abe’s wife is an artist and I am a gallery owner –  it was just about scratching our own itches, or even more urgent, a wife’s itch.

Where do you see yourselves in 2 years from now? 

AH: Only a few of months ago, I never would have imagined that I would move to Prague with my family, and be working full time on my own startup. I have no idea where I’ll be in 2 years, and actually like it that way 🙂

PU: Running a successful Gallery that naturally implements works.io into the daily business – since it became the standard for contemporary art.

Who are your favourite artists and why? 

AH: Marina Abramovic, because she does more than create art, she also inspires and enables other creators. (check out this new initiative: http://www.marinaabramovicinstitute.org/ ). Yoko Ono, because she is just so honest in her life and work. She is also accessible; just ask her a question and she’ll answer it. Every friday. (check answers here)

PU: just check www.works.io

 

StartitUp – StartupYard’s Company of the Week

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One month down in Spring 2013 StartupYard program and some projects have great traction. Look at StartitUp.co and Ed with Yitao, co-founders. StartitUp.co is a step-by-step startup guide with action items based on the Lean Startup, Growth Hacking, and startup secrets from experts. The mission of StartitUp is to create a virtual incubator/accelerator that helps startups build, grow, and excel.

How did you two guys get together?

YS: Ed was managing my brother at Groupon.  He mentioned that Ed was looking for a co-founder to work on some cool projects, and the two of us should meet.  So we met in a coffeeshop and talked for 3 hours one night.

How did you come up with the idea of your guide? 

EL: We were working on a project just before this, and while we were brainstorming on what we needed to do next. I had all my bookmarks and notes out, and I realized that it’d be great if there was a guide that had all the best information organized in a way that startups could just follow and get the best results.

Where do you see yourselves in 2 years from now? 

EL: Doing startup education and helping startups succeed. Making a bunch of money while I’m at it.

YS: Running the technical arm a profitable enterprise.

What do you do in your free time? 

EL: Watch movies, play computer games, read novels, and work.

YS: I play basketball and video games when I’m by myself.  I also like to cook with my wife.

 

Hlidacky.cz – StartupYard’s Company of the Week

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You know the websites, but who are the people behind? We want you to get you to know who are the StartupYard Spring 2013 teams. Who’s gonna be the first? Petr Sigut and David Hrachovy and Hlidacky.cz/Jellysit.com.

Hlidacky.cz provides caring parents with a seamless, reliable and trustworthy babysitting service by enabling them to choose a profiled and recommended babysitter, book online within a minute, leave their kids in safe hands, relax.

You two are young, no kids in sight – how did you come up with the idea of Hlidacky?

PS: One morning I just realized that if my interest in girls will continue in the same way, statistically speaking I am going to have a kid one day. And I’m really bad at taking care of them and I do not want my future wife just locked up at home and tired of taking care of the kids. So my perfect future? Some super hot girl + me + many kids + awesome babysitting service, so she got time for me. That’s why I am building Hlidacky.cz:). Moreover, the babysitters are a cool segment, definitely more interesting than making something for programers for example:)

Trustworthiness of your service is obviously a huge issue. How are you going to tackle it?

PS: We are designing a tool for parents to find a reliable babysitter as fast and simple as possible. This is a challenge for us since we know that children are the most precious thing in parents’ life. Thus, we would like to offer maxium trust to parents we are capable of.

We do background checks for example – we meet babysitters personally, check their ID and talk to them to make sure they are safe and reliable. To make it more scalable we are thinking of a third party service to do the verification for us.

Parents usually want good references before they hire a babysitter so we show reviews on the babysitter from existing parent users. If 10 parents say the babysitter is great, you can be pretty sure the babysitter will do a good job. On top of that, we can recommend you babysitters trusted by your friends, thanks to Facebook.

From the profile itself, parents can see how well a babysitter is suited for their kids.  Does she have pedagogical education? Can she manage small boys? Does she have exeperience with asthma? All these things can help parents choose a babysitter that works the best for them.

We are also experimenting with other possibilities – insurance for parents, a web camera so that they see what is happening at home and so on.

Who is your entrepreneurial guru and why?

PS: To be perfectly honest, I really do not have knowledge about famous startup entrepreneurs, I had to look up who Steve Blank was, since everybody was talking about him here:) Anyway, I really like how Time Ferris does business.

DH: I like Jen-Hsun Huang, Nvidia CEO, and Steve Jobs for their awesome presentation skills. I can spend hours watching them! Another man I like is Elon Musk, SpaceX CEO, Tesla Motors co-founder. Smart as Iron Man, doing cool things like manufacturing electric cars and planning trip to Mars.

Look at Hlidacky.cz presentation

Welcome 6 New Teams for 2013 Spring Program

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It’s been long. A long selection process, 6 weeks. But we’re proud now to announce 6 amazing teams. We accepted applications from 12 countries and selected 6 startups from 5 countries. The third cohort begins their 6-month acceleration program on March 11 in Prague.

Who are our StartupYard Spring 2013 heroes?

Hlidacky.cz
We help parents meet the most reliable babysitters. Hlidacky.cz operates in the Czech Republic now.
Co-founders: David Hrachovy, Petr Sigut and Vaclav Kuna (Czech Republic)
Web: www.hlidacky.cz

HowDoI Tutorials
Interactive tool for website owners to create tutorials and guides in a few minutes.
Co-founders: Lukas Haraga, Jiri Otahal and Michal Pustka (Czech Republic)

 

Web: www.howdoitutorials.com

StartitUp
Step-By-Step Startup Guide with action items that will help entrepreneurs get their startup from idea, to product, to traction, and to funding.
Co-founders: Edward Liu and Yitao Sun (USA)
Web: www.startitup.co

Travelatus
Event travel made easy. It helps visitors of concerts, festivals and conferences to plan their trips.
Co-founders: Valentin Dombrovsky, Vitaliy Korobkin and Denis Volkov (Russia)
Web: www.travelatus.com

works.io
The essential career tool for professional fine artists, keep portfolios and CVs up-to-date with ease.
Co-founders: Abe Han and Patrick Urwyler (Canada, Switzerland)
Web: www.works.io

Yummy Food Delivery
How to eat healthy at your desk. Its focus is B2B delivery.
Co-founders: Kristina Sediva and Tomas Netrval (Czech Republic)
Facebook page Yummy Food Delivery