500Startups: Growth And Distribution | Marvin Liao

Last updated on January 23rd, 2024

Natasha Hoke
Natasha Hoke

What do you think the most important thing is in order for a startup to succeed? Customers and growth. Find out how to make your sales and marketing stand out from the competition.

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*Key Takeaways:

  • The most important thing is getting customers and growing.
  • Having a great product is important, but that’s half the battle. The second part you really need to think about is how do you distribute well, how do you get customers and acquire them cheaply?
  • You never want to be too dependent on just one channel.
  • Take 70% of your budget, and you put it into things that you know will work for sure. Take 20% your budget, and put it into the next potentially growing channels, and then you take the last 10% of your budget, and put it into new things that could work.
Transcript ----------

This talk is about growth…

What do you think is the most important thing in regards to a successful startup?

Who thinks the most important thing in a successful startup, is a great product in technology?

It’s a trick question… The most important thing is getting customers and growing.

Anyone who comes to me says ‘we’ve grown organically’. That it says, you have no idea what you’re doing and you will not be able to grow systematically. Do not say that to professional investors, because we if we give you money, we want to understand whether you know how to use that money properly, not just to build your product, but you find scalable ways to grow.

One of the best ways to start, is thinking about** when you’re bringing customers into the funnel is acquisition, activation, retention, revenue and referral.** It’s a great way to think about your customer funnel, and figuring out where the drop-off actually is.

The other thing to think about, is distribution and marketing. There are so many channels and platforms where you can reach over a hundred million on just one platform. If you look at the app store, there are some apps that have over a billion people with your app. That’s incredible power that you actually have, by leveraging these platforms.

How do you stand out with all this competition?

The reality is, having a great product is important, but that’s half the battle. The second part you really need to think about is how do you distribute well, how do you get customers and acquire them cheaply? This is also incredibly challenging when you think about these distribution channels and partnerships.

The reality is that you never want to be too dependent on just one channel. The 8020 rule, is that most of your growth is gonna come from just one channel.

Take 70% of your budget, and you put it into things that you know will work for sure. Take 20% your budget, and put it into the next potentially growing channels, and then you take the last 10% of your budget, and put it into new things that could work. This allows you to diversify your channel portfolio.

This allows you to figure out where you’re actually growing on the channels that work, but also allows you to experiment into new future channels. So, you’re never dependent on just one channel.

All of these awesome analytical tools exist, that now, you can actually buy off-the-shelf. You have Google Analytics which is free, to funnel measurement like KISSmetrics. There’s AB testing tools that you can get off the shelf, that you don’t have to go and purchase now. So, the great thing is, that there’s so many tools that are available now to find out what’s working and what is not working.

Last of all, to quote my boss:

“….to be honest, design and marketing aren’t just equally important as engineering… designers, product managers and (technical, analytical) marketers are usually WAY MORE IMPORTANT than coders.”

Sales and marketing is arguably the most important thing to grow your startup. Do not ignore it. Don’t assume that just having a great product will work and that customers will just come. It does not work.

End

Also read this, it’s related to distribution and is very cool: The long click i.e. how to keep people on the page and rank higher on google.

Natasha Hoke
Natasha Hoke

Natasha Hoke was Upscope's head of marketing.