At ThinkLions, we know a thing or two about launching startups. Over the last decade, we’ve worked with over 500 startups, helping them bring innovative products to market and creating investor packages that have secured more than $50 million in seed and series funding. When it comes to our clients, there are three essential startup tips we offer them – and in this article, we will share them with you, too! 

Startup Tip #1: Don’t Obsess Over Funding

Ask any should-be entrepreneur what is holding them back from launching their business, and 80% of them will give you the same answer – a lack of funding. Of course, bringing a startup to the market will require some funding, but not nearly the amount that most people think. 

If you think every successful founder had tens of thousands of dollars in the bank or wealthy investors backing them on the day they hit the market, you’d be wrong. Some of today’s most successful businesses started their companies for hundreds, not thousands, of dollars. For example: 

• Mark Zuckerberg coded the initial version of Facebook in his dorm room. 
• Airbnb’s founders started with a simple landing page, not a full-blown platform. 
• Groupon’s founder started the business with a single group deal for a pizza restaurant and an email list. 
• Zappos began operations with a simple website and no inventory. 
• Dropbox started with an explainer video – not a sophisticated platform. 

Do You Need Funding Now?

The bigger your offering, the more funding you need. But no one said you had to start big! Today’s largest and most well-known startups don’t start with complex solutions, massive marketing strategies, and extensive inventories. Instead, they began with what they had, validated their solutions, earned their first revenue, and by the time they needed funding to scale their products, investors were already beating down their doors! 

Capital can’t replace creativity. Having access to too much money too early can backfire. Some startups receive millions of dollars in funding early on, and instead of helping them grow, it pushes them down the wrong path even quicker. For example, FAST received over $120 million in funding early on, and a year later, they were already closing their doors. In the beginning stages of your startup, more funding isn’t the answer to the obstacles you face. 

When Is Funding Necessary?

There is a caveat here, though. Some businesses do have enormous startup costs. For instance, before launching a nursing home, you will need a physical space, equipment, licenses, staff, and several other components just to begin operations. But suppose you’re launching a software startup. In that case, you don’t have to build out every feature to provide value to your customers and validate your solution – you only need a minimum viable product with the core features. And if you’re launching a physical product, you don’t need 10,000 units; you just need a few prototypes to get started.

Funding isn’t for the idea-stage startup. Instead, the most effective time to seek financing is after the experimentation stage – after you’ve put something on the market, validated that there is a market for it, and proven that customers are willing to pay for it. Once you have data proving what customers need and you’re in the position to scale the business, funding becomes easier to secure. 

How To Build Products Without Funding

There’s no doubt it would cost millions of dollars to build Facebook, considering what it is today. But it didn’t cost anything to create Facemash – the initial version of the platform. In the earliest stages, the goal isn’t to build a beautiful, complex product that solves every challenge your customers face. The real goal is to get something on the market to start collecting data and generating insights to help you decide whether you’re on the right track or should pivot your idea. 

There are many ways you can enter the market without overspending on product development. For example, you can: 

1. Validate ideas and generate revenue (pre-sell) using landing pages before building the product. 
2. Use open-source code to minimize the amount of custom coding. 
3. Use 3D printing to create prototypes of physical products. 
4. Integrate APIs from third parties to enhance functionality with little coding. 
5. Launch a crowdfunding campaign and earn revenue before building the product. 

These strategies allow you to get an initial product built and on the market quickly and without the typical expense of custom product development.

Startup Tip #2: Assume Your Assumptions Are Wrong

In the history of startups, there has never been an entrepreneur that launched a product that they thought no one would want. However, of all failed startups, 35% of them fail because there is no market need, according to studies by CBInsights. These businesses assumed that customers wanted one thing, launched it, and later found out that their assumptions were incorrect. And by the time they came to this realization, it was too late to recover. 

No matter how well you think you know what your customers want, it’s just an assumption until you validate it. A critical step in any startup journey is the market research stage, where you take the time to learn and understand everything about your customers. Ultimately, entrepreneurs don’t dictate what the market wants – the market dictates what they want. As an entrepreneur, you can make changes to your product and even decide to target a different market, but you can’t change what the market wants. You can’t change their experiences, backgrounds, or expectations – and you definitely can’t make them buy something they don’t want. 

It is dangerous to build products based on unvalidated assumptions. Having experience in an industry doesn’t mean you know what customers want. For example, construction workers are most likely to create a product based on the challenges individuals face while working in the construction industry. But just because YOU face a particular challenge and think it warrants a solution doesn’t mean everyone else in the industry seeks the same solution. 

No matter how many statistics you found on Google about your market, if you haven’t interviewed, surveyed, and engaged with them, then you don’t know anything about them. 

An Example of Bad Product-Market Fit

SchoolGennie is a good example of a business that failed due to a lack of product-market fit. The Company was supposed to improve child development by providing school-based management solutions. Initially, they launched their flagship product – an Electronic Records Portal that provided Competitive Edge Software and Cloud Software Services.

In 2013, the Company seemed to experience significant growth. But just a year later, they were already announcing their closing plans. Unfortunately, they failed to validate their idea and understand their market. Quickly, they found that schools weren’t interested in what they were offering. First, they lost money and time trying to delay the product’s release, hoping to perfect fit. Then, in a last-ditch effort, they tried to copy competitors and duplicate other solutions’ features. 

Ultimately, the product failed in the market. Since the company spent all of its money developing the initial platform, it didn’t have enough capital left to pivot into an idea better suited to its audience. 

How To Learn About Your Customers

Startups operate differently than established businesses or new small businesses. The goal of a startup is to experiment constantly, learn everything there is to know about its customers and continue to iterate on its offering until realizing the optimal product-market fit. 

When clients ask how to launch a startup, my first question is, “Have you asked your customers what they want?” More often than not, the answer is no. Or, they’ll link some report that shows an expert perspective of how the market will perform in upcoming years. Secondary research is necessary, but it’s not enough. Primary research is gold for new startups. When you develop systems and approaches to generate data and feedback from your customers, you’ll learn first-hand about their experiences, needs, and demands. 

Customer Research Techniques

There are three ways you can quickly generate data about your target audience: 

1. Customer Interviews: This qualitative research technique allows you to ask your target market about their situation, the challenges they experience, and their difficulty with current solutions. The benefit of customer interviews is getting right in front of your potential customers to figure out exactly what they are looking for and what inspires them to make purchases. However, customer interviews generate personal narratives, quotes, and anecdotes, and you may find it challenging to analyze answers and recognize patterns. 
2. Customer Surveys: As a quantitative approach, customer surveys allow you to quickly ask focused questions to many prospects. Since you are dealing with numbers, it is much easier to recognize patterns. However, surveys require large sample sizes to ensure statistically relevant answers. 
3. Experimentations: You can learn much about your customers by utilizing a minimum viable product (MVP), analyzing customer behaviors, and using the data to iterate your product. The benefit is you get accurate information and can even begin earning revenue. But unfortunately, developing an MVP will require a larger budget than customer interviews and surveys. 

Ultimately, you want to use all of these techniques and generate the most meaningful data. It’s important to note that research is not a one-time activity. Successful startups constantly engage with their customers and prospects through these techniques and never stop improving their products. 

Startup Tip #3: Marketing is Key

Even if you know everything about your market and have the perfect solution to their problems, it doesn’t guarantee startup success. It doesn’t even guarantee that you will receive a single purchase. Of course, you might get some traction from single promotions – such as having a viral Reddit post or posting a video on Instagram that gets shared a million times. But in the long-term, you’ll need an effective marketing strategy that introduces prospects to your products, generates leads, nurtures them, and converts them into paying customers. 

Furthermore, marketing isn’t a single event; it’s a strategy. Many entrepreneurs unwisely believe that a single marketing channel is enough or that a client will purchase just because they clicked an ad or received an email. It usually takes multiple touchpoints between when a prospect learns about a product and when they make a purchase. 

It’s a mistake to believe the old saying, “If you build it, they will come.” Actually, if you build it and don’t do anything else – they won’t come; they’ll just go to your competitors. One of the core parts of knowing how to launch a startup is knowing how to promote one. 

Understanding the Marketing Funnel

There are five steps to the marketing funnel, and a proper startup strategy will have the optimal techniques installed at each stage. These steps include: 

• Awareness: Awareness is the stage of the funnel where a prospect becomes aware of a brand and its products.
• Interest: In the interest stage, prospects learn more about the company and become interested in the products as a potential solution to their challenges. 
• Desire: When customers begin showcasing interest in buying a brand’s product, they enter the desire stage. Sometimes brands will push them into the action stage by offering special deals and discounts. 
• Action: This stage is defined by a customer taking action, such as making a purchase. In the action step, brands must ensure customer satisfaction to establish a positive reputation and build their retention rate. 
• Loyalty: The loyalty step is where customers showcase their devotion to a company by acting as brand ambassadors and referring the product to their peers. 

Choosing A Marketing Channel

There are dozens of marketing channels brands can adopt, including online channels like social media, search engine marketing, and online ads, and offline channels like billboards, magazine ads, and television commercials. 

Check out our video, “3 Digital Marketing Trends You Need To Know About” to learn about some of today’s most effective online marketing techniques. 

The Most Important Step For Launching A Startup

Not knowing how to launch a startup causes a delay for most new entrepreneurs. It’s the number one reason thousands of amazing concepts never make it to market. 

The most important step for launching a startup is just to LAUNCH. Don’t seek perfection; seek progress. You don’t have to hit the market with the prettiest product – you need to launch a product, get customers to it, collect their feedback, and continue iterating until you have the optimal product-market fit. Start with generating data (interviews and surveys), then launch a low-fidelity prototype or a first-version MVP. Talk to as many customers and prospects as possible, and ensure you understand what pains them, who influences them, and where they spend their money. 

The quicker you establish product-market fit, the more rapidly you will generate traction. Then, after validating your concept, you can seek investors to fund the product’s expansion. 
When you get to that point, ThinkLions is here for you. Contact us to speak to one of our expert consultants and learn how we can help you create world-class business plans and pitch decks that attract angel and VC investors.

The post Expert Tips: How To Launch A Startup appeared first on Startup Squared.

Without a process, everything is complicated. If you’ve watched a toddler trying to tie their shoe for the first time, you’ll see how impossible doing anything is without the proper process. However, launching a tech startup doesn’t have to take years. Veteran founders know how to bring new ideas to the market within months. In this article, I’ll show you how to launch a startup in 90 days or less. 

The Goal of Launch

Before I show you the process, let’s ensure we’re on the same page. Until we agree on the goal, the process doesn’t matter. 

First-time tech founders believe that before launching, you must build out every feature or function. But experienced founders know that they don’t even need to write a single line of code to enter the market and start earning revenue. 

The goal of launching your product is not to build the perfect product. Instead, the goal is to learn exactly what customers want, create it, and introduce it to the market. In other words, your goal shouldn’t be to take years to develop some ultra-complex solution that you think your market wants – it should be to get something simple on the market and learn what the market wants. 

Now that you understand the destination, let’s discuss the most appropriate route to get there. Specifically, I’ll give you a proven week-by-week schedule and explain what you need to do to build your product and get it in the customers’ hands. 

Note: For more information, check out the video, “How To Launch A Startup” below.

Week 1-2: Market Research

Let’s put this in context: you’ve recognized a market problem and have an idea of how to solve it. Great. Now what? 

Most people don’t know how to launch a tech startup. The majority of those with an idea will do nothing at all. They’ll keep thinking about it for years, and then one day, they find out that another brand brought their concept to the market. While they were thinking about building it, someone else was building it. 

A handful of those with an idea will move forward, but most will take the riskiest route possible. They’ll hop in and start building out every feature they can think of, spending thousands of dollars to create a product without validating that customers want to buy it. 

In the first two weeks, the most practical action you can take towards the progress of your tech startup is researching the market. Researching doesn’t mean just hopping on Google and searching for stats about your market and customers. Instead, during these two weeks, you’ll go out in the field, engage your audience, collect data, and validate whether a challenge exists that requires your solution. This process involves the following steps: 

1. Profile your ideal customer. 
2. Find customers to engage. 
3. Interview them. 
4. Conduct a competitive analysis. 
5. Assess the data and refine the concept. 

Profile your ideal customer

At the core of this How to Launch A Tech Startup guide are the customers. Start your research by understanding who your customers are. Ultimately, you want to build a profile of your customer – give them a name, a personality, and a face. When you create the profile, ask yourself the following questions: 

• Who are they? Look at your customer from a demographic and psychographic perspective. You should understand their lifestyles, from what they look like and where they work to how they spend their time and what things are important to them. 
• Where are they? Explain where your customer lives, where they spend their time, and who they spend their time with. Maybe they reside in a specific city, study at a particular university, or attend a certain nightclub every weekend. You need to know exactly where they are because that will give you valuable insight on how to reach them. 
• What are their challenges? In other words, in your customer profile, you should show that you understand the specific issues that your customer experiences. When you know their challenges, it makes it much easier to design a solution that directly solves their particular challenges. 
• Where do they search for information? Some customers may look in social media groups for product recommendations, while others may search on Google to find solutions to their challenges. For example, an elderly individual seeking a new medication may talk directly with their doctor, while a younger individual might turn to medical influencers. Creating a strategic marketing plan will prove impossible if you don’t know where your customers search for information.  
• Who do they trust? Likely, your customers won’t fully trust you as a new brand. However, if you can identify influencers and brands they trust, you can determine the potential partners you need to streamline brand trust in the market. 

Take all this information and organize it into a detailed profile of your customer. Furthermore, if you serve several customer segments, you’ll find it most impactful to create a separate persona for each customer type.

Find customers to engage

Now, you have all the preliminary information you need to understand precisely who your customers are. The next step is to find and engage with these customers. Before you knew who your customers were, finding them was like taking a shot in the dark. However, now that you have a detailed profile of who they are, where they are, and how they search for information – locating them should be a much easier task. 

Look at your contact list and determine whether anyone meets your created profile. Most entrepreneurs start businesses in industries where they are already active. If this is the case, you likely have peers with qualities that align with your customer persona. But if not, there are many other places you may look to find qualified prospects, like forums or social media groups. You may also find them offline in relevant meetup groups or social clubs. 

You can learn a substantial amount about these individuals by observing them as they interact. By following the questions they ask, you can quickly identify the problems they experience. By determining who they listen to or talk about, you may get more clarity on who influences them or whose information they trust the most. Still, you’ll learn the most about them when you begin engaging them in conversations and immersing yourself in their experiences.  

Interview prospects 

After identifying prospects, you’ll seek to learn more about their experiences by interviewing them directly. The goal is to determine whether they have a substantial challenge that warrants a solution and whether your proposed solution adequately addresses their challenges. 

Schedule an in-person or virtual interview with a dozen or so prospects. Create open-ended questions that allow you to understand the challenges in their journey, their existing solutions, and their perceived challenges with current solutions. Take notes as you conduct these interviews. Once you’ve completed your initial discussions, assess the data and see if you can find patterns in their responses. Then determine: 

• Is there a substantial challenge that they face? 
• Does your proposed solution effectively solve their problem?
• Are there features you can add to improve your solution? 

Entrepreneurs can learn two things by interviewing their prospects. First, they may discover that they have the perfect tech solution already, which will validate their initial assumptions. However, the most likely outcome is that they find weaknesses in their initial concept. Contrary to popular belief, this is a good thing. Finding flaws ahead of time allows you to fix them, severely reducing tech startup risks and improving your value proposition. 

Conduct a competitor analysis

Unfortunately, it’s not enough to just know what customers want; you also have to ensure that there aren’t other competitors in the market already solving those problems adequately. Entering a saturated market is complex, and there’s little potential for succeeding there.

For example, you might conclude that consumers want an e-commerce solution where they can find just about anything and have it shipped to their doorstep within three days. That would be a great insight for an entrepreneur. However, there’s already Amazon – and if your solution isn’t critically different or better than Amazon (which it probably isn’t), then it’s unlikely that customers will choose your solution over what’s already available to them. And even if your concept is better, what keeps Amazon from just building it themselves? 

Fortunately, you’ll find all these answers when you conduct a competitor analysis. The first step to competitor analysis is to identify all of your direct competitors. Next, you will analyze each of them and determine their positioning, strengths and weaknesses, effectiveness in solving customers’ problems, and how their solution compares to your prospective solution. Here are a few qualities you should seek to expose as you analyze each competitor: 

• What benefits do their products provide to customers? 
• What are customers saying about their products? 
• Do they have a clear value proposition? 
• What are their unfair advantages? 
• What do customers like and dislike about their products? 
• Which methods are they using to introduce their products to and reach customers? 
• Is their financial position strong? 
• Are there areas where they are weak that you can capitalize on? 

Assess the data and refine the concept

Market research aims to validate your concept and find areas where you can improve to maximize your potential. At this point in your journey, you should have significant data about your market, customers, and competitors. 

Assess this information and record any identified insights. For example, if you find that all your prospects mention a specific problem outside of your initial assumption, then maybe you should pivot your concept to address that particular challenge better. Or, if you find that competitors are doing one thing well, but failing in another area, maybe you should pivot your concept to address the areas where their weaknesses are most prevalent. 

Before you build anything, ensure that you are positioning your company correctly by conceptualizing the right products that solve a real challenge and doing it in a way that outperforms competitors. 

Week 3-4: Soft MVP Development

In only 14 days, you’ve generated valuable data and applied it to your tech startup idea. As a result, you know you’re building something that people will want. But unfortunately, that’s not enough. 

Unfortunately, need does not equate to action. For example, I need to buy a lawnmower. My lawn grows too fast, and the lawn service I hired rarely shows up when they are supposed to. However, I’m too lazy to mow my lawn every week. So would I actually buy a mower even though I need it? Probably not. Even if I was willing to purchase a lawnmower, there are 50 different brands out there, and with so much competition, it’s not a given that I will buy your lawnmower. 

Validating Assumptions

When learning how to launch a tech startup, you must also learn how to validate assumptions. Assuming that people will buy your product is risky. You won’t know if your market will buy your product until you give them the option to buy your product. 

We’re two weeks in, and we haven’t built anything yet. So how can we offer something for sale that we haven’t created yet? New and veteran entrepreneurs often differ in their market approach. New entrepreneurs build products, then sell them. On the contrary, experienced entrepreneurs sell products, then build them. 

In weeks 3 and 4, you should focus on building your soft minimum viable product. At this point, you aren’t developing the product yet. Instead, you’re offering the idea of the product as an experiment to test whether customers would purchase the product – if it existed. 

For startups launching a tech startup, there are two primary ways of testing customers’ purchase intent: crowdfunding platforms and landing pages. 

Soft MVP: Crowdfunding Campaign

Crowdfunding has become a trendy method of funding new product development. In 2021, the global crowdfunding market size was more than $114 billion. 

By definition, crowdfunding is the practice of funding a venture by raising capital from many people – generally, individuals seeking to pre-purchase the product. Numerous crowdfunding platforms exist, but Kickstarter and Indiegogo are the most popular ones today. 

In terms of building a soft MVP, crowdfunding platforms enable startups to produce designs or mockups of their products, describe details of the benefits, deliver visuals of the product, and allow people to pre-order their products before they physically exist. 

Pros and Cons of Crowdfunding

Launching a crowdfunding campaign can catapult your market introduction. However, this approach has both advantages and disadvantages. The benefits of crowdfunding include: 

• Millions of customers frequent the platforms, giving founders a broad audience of prospects. 
• Users are aware and excited about the fact that they are first adopters. 
• Enables founders to market and sell pre-developed products. 

However, there are also several disadvantages to launching your product using crowdfunding platforms. These disadvantages include: 

• Crowdfunding is geared towards a particular type of product – software rarely gains traction. 
• A successful campaign requires significant preparation and promotion to gain momentum and stand out against hundreds of other innovative products on the site. 
• Crowdfunding puts time pressure on the business. Customers expect companies to deliver products on the day they promised in the campaign. 

Crowdfunding serves as a minimum viable product because it enables you to experiment with the idea of your solution in the real market. If the campaign fails to generate traction, it is probably a strong indicator that your concept doesn’t resonate with the market.

However, if you succeed in meeting your fundraising goals, it can have a massive impact on your business. This benefit comes from accessing capital without giving away equity and receiving immediate brand awareness. Once customers receive the product, crowdfunding also provides social proof to make the product more attractive to other prospective buyers. 

Soft MVP: Landing Pages

For concepts that don’t fit the standard mold for crowdfunding, a more practical approach to launching a soft MVP is utilizing landing pages. Through this method, you will still create designs or models of your product, and you’ll still write up content explaining the solution’s benefits. However, you will promote your product independently using a landing page. Crowdfunding and landing pages share the same goal – generating brand awareness and validating interest in your product. However, you will do it without the motivated traffic that crowdfunding campaigns provide. 

How To Build a Landing Page MVP

Building a landing page today is much easier than it was in the past. There are numerous landing page builders like Unbounce and Leadpages, which also make it easy to monitor analytics related to your page. You can also buy landing page templates from sites like ThemeForest, which are customizable through basic HTML or WordPress. 

On the landing page, you’ll pitch why customers should buy your product. Then, provide them with an offer to pre-purchase it. However, some entrepreneurs choose not to offer a pre-purchase option but use a shadow button. A shadow button gives the impression that a user can purchase the product, but when they click the “Buy Now” or “Checkout” button, it sends them to a “Product Unavailable” or “Coming Soon” page. While this won’t generate revenue, you can monitor how many people clicked the button and know that those people intended to buy the product – if it existed. 

Week 5-6: Soft MVP Launch

Congratulations, you’ve built your first minimum viable product! But unfortunately, developing it and doing nothing else won’t get you anywhere. In the next two weeks, you’ll launch your soft MVP, market it to your target audience, and begin collecting data to validate that customers will actually purchase your product. 

How to Market a Low-Fidelity MVP

There are over one billion websites on today’s internet. Considering this vast number, you won’t get a single click if you don’t have a strategy for promoting your landing page to your audience. Hundreds of millions of businesses, organizations, and individuals actively promote their websites and landing pages, and everyone is fighting for visibility. 

Generally, there are two ways to promote your landing page. There is the organic (free) way, which is less effective, and the paid way, which is most effective. Likely, your strategy will incorporate both approaches. 

Organic Marketing Methods

On the organic end, there are a few activities you might want to consider. Posting a link to your social media profiles may get you a few clicks, but it won’t drive significant traffic. However, you can use several other social media methods, such as joining related Facebook and LinkedIn groups and participating in relevant subreddits (Reddit). After you’ve engaged organically within these groups and provided value to the other members, you can post your landing page to introduce it to the community. The benefit of these groups is that you can surround yourself with people who directly fit your customer persona, engage deeply with them, and create brand awareness among the group. 

Influencer marketing can also be impactful in driving traffic to your page. A micro-influencer is an online personality with 10,000 to 50,000 followers in a specific niche. By partnering with and hiring them to mention your business or product, you can immediately promote your page to thousands of people with the recommendation of someone they trust. This method isn’t necessarily free; likely, they will expect something in return. However, if your product is something truly innovative and impressive, you may be able to offer them future access to your problem in return for their promotion. 

Paid Marketing Methods

Paid strategies will give you the most and the quickest traffic. For example, running a Google Ads campaign with a large enough budget can drive hundreds or thousands of targeted individuals to the landing page within a few days. That is, as long as you focus on the keywords and phrases your customers are actively searching. When they type in those terms, you want your page to show up, allowing them to click the link and view your offering. Since this is a paid strategy, it’ll cost you every time someone clicks on your link. The industry you’re targeting and the keywords you select will determine how little or how much you’ll spend on each click. 

In addition to driving traffic to your low-fidelity MVP, this method will also show you what marketing tactics work. Then, once you launch your official product, you’ll know the most impactful strategies, and you can scale those activities to drive attention to your products. 

Monitoring Data for your Low-Fidelity MVP

With a strategic marketing plan, you’ll have people coming to your page consistently. But keep in mind that the point of launching this low-fidelity MVP isn’t to just generate traffic but mainly to figure out if people would buy your product. To validate your product’s potential to attract customers and drive sales, you’ll need to pay attention to the data. A few essential metrics you should monitor and assess include (but are not limited to): 

• Click-Thru Rate (CTR): The number of people that see your offer and click through to the landing page. 
• Time Per Session: The length of time people spend on your page in a single session – allowing you to determine whether they read through the page or immediately leave before learning more. 
• Conversion Rate: The percentage of page viewers who take action, such as downloading a lead magnet or pre-purchasing your product. 

Week 7-8: High-Fidelity MVP Development

By the sixth week, you will have already learned what customers want, conceptualized a solution, and validated that customers are willing to buy it. During weeks seven and eight, focus on developing your initial high-fidelity minimum viable product. In other words, you will build your product but with the minimum amount of features necessary to provide value to early adopters. 

Example: Airbnb’s MVP

Airbnb followed a similar strategy, launching with a minimum viable product. Realizing that a design conference was coming to San Francisco, the founders created a simple landing page, giving attendees a chance to rent a bed in their apartment. The price was much lower than other accommodations (like hotels) and gave a much different experience. So instead of launching a complete solution and struggling to find properties to fill the marketplace, Airbnb’s founders started with what they had – a landing page and their apartment. 

Airbnb’s platform would probably cost millions of dollars to build today, but their initial MVP cost almost nothing. Through the MVP, they validated the demand and potential of their concept and even earned their first revenue. 

During weeks seven and eight, you’ll take the same steps – build the simplest form of your solution that provides value to customers. Then, choose a limited market that you can promote to. Again, the goal is to get to market quickly, validate your product idea, and get the product into users’ hands. Once you collect data from those users, you can create valuable insights regarding your market, customer, and product. 

Week 9-10: MVP Launch

You will launch your high-fidelity MVP in the market during weeks nine and ten. Once you introduce the product, you’ll follow the same steps you did for your soft MVP. These steps include scaling up your marketing plan, getting people to your sales page, and convincing customers to buy your product. The good news is that you should know what conversion rate to expect since you tested for conversions and collected the data during your low-fidelity MVP launch. 

Week 11-12+: Build-Measure-Learn

Now, your product is on the market, and you’re making sales. But your job is just beginning. In weeks 11, 12, and beyond, you’ll continue generating customer data and insights, developing the product, and ensuring the optimal product-market fit. To accomplish this, you will implement a build-measure-learn feedback loop. During this process, you will build and launch a new feature (build), collect data and feedback (measure), and use that data to make insights on whether you have created the right thing (learn). 

Some of today’s fastest-growing startups utilize the build-measure-learn feedback loop. For instance, Facebook started with straightforward profiles and targeted a single market – students at Harvard. After validating their initial idea, they added new features like the news feed and messenger, tested them, and decided whether to keep them or pivot.

Some features, like virtual gifts, didn’t last. Facebook launched them, tested them, and learned that customers weren’t fond of those features, so they ditched them. Likewise, you might ditch some ideas as you build up your product. Some you’ll keep – but only after validating that customers actually want them. 

How To Launch A Tech Startup: Key Takeaway

You’re only 90 days from launching your startup, but you have to start small and build your way up using data from genuine customers. At this point, you have a product on the market, you’re generating traction, and you’ve validated demand for your product. You know how to launch a tech startup, and you’ve proven it through your actions. Now, you can start seeking investment to scale your product and business. For this, you’ll need a fantastic pitch deck and business plan – and we can help! Contact us today and learn how we’ve helped hundreds of startups grow their businesses and achieve their fundraising goals.

The post How To Launch A Tech Startup in 90 Days appeared first on Startup Squared.

Great teams can turn average concepts into million-dollar brands, and in the same vein, terrible teams can run amazing companies into the ground. Startup founders eventually realize that building a startup team is the most important, but most difficult, part of launching, establishing, and growing a successful business.

Before you can build your powerhouse startup team, you first need to consider which roles are required to propel the business forward. In this article, we will evaluate whether you need to build an executive team, and explain some of the roles you should consider.  

How Important Is A Startup Team? 

Keep in tune with startup media, and it would be easy to believe that there’s a unicorn company around every corner. Let’s be clear here – there’s not. There are 600,000 businesses that launch in the United States each year, but only 600 unicorn startups worldwide. The chance of failure is one hundred times higher than the potential for becoming a unicorn. Many studies estimate that as many as nine out of ten businesses fail within their first several years. 

What causes so many startups to fail? Well, there are many reasons. Some of the top reasons include no market need for the product, a lack of capital, or for 23% of failed startups, the wrong team. Startups can quickly fail if they don’t have the right people in the right positions, lack enough team members to maintain capacity, or even if their team members lack the optimal chemistry. 

Excellent products alone don’t create successful startups. Fast-growing startups are built on a foundation of intangible factors like knowledge, experience, creativity, and skills. There are many benefits that come along with developing a startup team, including: 

1. Financial Contribution: Launching a startup is expensive, and it can take years for a new startup to secure investor funding. Around 75% of startups used their own personal savings during the product development process, and this can be a major burden for a sole founder. With several founders, a team can spread the financial contribution across multiple team members, reducing personal financial strain, and providing more runway for the company. 
2. Knowledge Coverage: Delivering a product or service is only a small part of what it takes to manage a startup. As the startup grows, it will require experience in several areas from marketing and finance to operations and product development. Sole founders are rarely knowledgeable across every one of these areas and must depend on outside consultation in the absence of a team. 
3. Performance: Statistically speaking, teams deliver better performance. Adding a second member doesn’t only duplicate the productivity of the business, but it drives motivation, reduces stress on each member, and allows the startup to grow quicker and with fewer obstacles.

Yes, you can build a startup without a team – but doing so will increase your workload tenfold. Knowing that you need a team is one thing, but knowing which team members you need is the most important part. In the following sections, we will describe five positions you should consider as you build your startup team to put your company on the path towards greatness. 

How To Build The Ultimate Startup Team

Chief Executive Officer (CEO)

The chief executive officer (CEO) position is usually the most coveted role in a startup – but that doesn’t make it more important than other roles. 

In a startup, the CEO is the visionary. Depending upon the company, this person may hold the title of Director, Managing Director, or President – but generally, these terms are interchangeable. The individual in this role serves a critical role in the organization, with responsibilities ranging from setting goals and defining strategies to monitoring progress and developing the culture of the entire organization. 

An effective CEO is a big-picture thinker. They manage the organization from the top and set the plans to lead the team toward success. With a focused and powerful vision, they keep the entire team concentrated on the end goal. Their passion is contagious, and their enthusiasm about the future of the business spreads throughout the organization like wildfire. Through their leadership, the CEO sets the organization’s pace; and by keeping a pulse on the market, they constantly seek to identify potential opportunities that the startup can take advantage of. 

It is a misconception to believe that the startup’s founder is the best fit for this position. While it is common, it is not always the case – and you shouldn’t adopt this approach for your startup. Instead, the person who is most qualified to lead the startup from a visionary standpoint should serve in this role. 

What Makes A Good CEO? 

There are three main qualities and attributes you should consider when seeking the right person to serve in this position. These qualities include: 

1. Vision: The Chief Executive Officer should be a visionary – the type of person always five steps ahead and constantly defining the startup’s future. However, they aren’t dreamers, dreaming up new ideas with no reason. Instead, they should know how to analyze markets, identify opportunities, and create new products and services to take advantage of them. Other executives typically focus on their specific department (like marketing or finance), but the CEO can see the big picture well enough to ensure that each department’s efforts move the startup closer to its long-term goals and objectives. 
2. Execution: A good CEO recognizes valuable opportunities, but a great CEO knows how to strategize and execute on new ideas. The right person for your startup’s CEO role can take big ideas, dissect them into SMART goals, determine what tasks are necessary to obtain those goals, and delegate each activity to the right team members to achieve the startup’s vision. 
3. Relationships: CEOs usually serve as the face of the brand, and they need to be exceptional in building relationships with their team and outside parties, including investors, journalists, and partners. To accomplish this, the individual needs to possess reliable communication and interpersonal skills, along with a motivational and persuasive attitude. Even during a crisis, the CEO keeps a cool head – communicating progress to all stakeholders and leading the team through the situation. 

The CEO is the glue that holds all the departments together with a single vision, and they play a crucial role in the startup’s success. However, they can’t build a successful startup alone. While they are looking at the big picture, someone needs to monitor the numbers – and that’s where the Chief Financial Officer comes into play. 

Chief Financial Officer (CFO)

Startups shouldn’t overlook the importance of a Chief Financial Officer or Finance Director – their role is critical from the moment a startup spends or earns its first dollar. 

Too often, new businesses choose to omit this role early on, since the startup doesn’t have tremendous sales, revenues, or finances to manage, but this is a mistake. A Chief Financial Officer is more than just an accountant, and managing the company’s books is only a small portion of their job. 

A good CFO ensures that the startup manages every dollar in a healthy way. They build scalable financial systems that support the business as it grows, and they analyze financial data to develop insights about customers, business progress, and new developments. Furthermore, they focus on finding capital sources for the startup and communicating with banks, angel investors, and venture capitalists during the fundraising stages. 

The CFO constantly monitors the startup’s numbers, ensuring that all incoming and outgoing funds are recorded and accounted for. By interpreting the business’s financial performance, they can foresee financial challenges and identify potential opportunities. From financial planning to record-keeping, the Finance Director has a hugely important role that is necessary for every startup.

What Makes a Great Startup CFO? 

You need a great Chief Financial Officer on your team, but what qualities should you look for when hiring one for your team? The most important qualities of a great CFO include: 

1. Deep Financial Knowledge: The most crucial quality of a CFO is having immense knowledge across all facets of startup finances. Succeeding in this role requires more than just being “good with numbers.” An effective Director of Finance has accounting experience, financial aptitude, and a firm understanding of business operations. In the role, they are responsible for recording, analyzing, and reporting financial data – so deep know-how is imperative to proper performance in the role. 
2. Insightful: Examining an organization’s financial data can provide substantial insights into a company’s health and its future trajectory. Financials don’t just tell you where the business is, but it tells you where it is going. Financial evaluation can generate insights regarding how quickly the business is growing, which products customers are most interested in, and whether the business has the optimal pricing strategy. The ideal CFO can interpret the numbers and recommend insights that progress the business, increase revenue, and drive profitability. 
3. Results-Oriented: CFOs should be result-oriented and able to make decisions with the organization’s short- and long-term objectives in mind. Analysis is important, but a great Chief Financial Officer can see beyond the numbers. They can set realistic goals and incorporate the financial strategies to meet them. The optimal team member can work alongside the rest of the executive board, help develop the team’s metrics, and ensure that the startup meets its objectives from a financial perspective. 

Finding the right person for this role will help your startup ensure its financial health and stability. But unfortunately, the Finance Director’s job becomes quite ineffective if the business isn’t making sales or bringing in revenue – and that is why your startup would also benefit from a competent Chief Sales Officer (CSO). 

Chief Sales Officer (CSO) 

The main job of a Chief Sales Officer is to identify sales growth opportunities, meet with potential customers, and close sales. This role can go by many titles, including Head of Sales or Director of Sales. As an executive, this person has several responsibilities, from building sales processes to hiring sales reps and making sales forecasts. 

Chief Sales Officers provide direction and leadership to the sales department and are accountable for the department’s performance and the organization’s ability to achieve its goals and objectives. They identify new sales opportunities, build and implement sales strategies, and maintain relationships with leads and potential customers. 

What Makes an Impactful Chief Sales Officer?

Selling a new product or service is a tough job, and it’s not for everyone. To successfully operate in this role, an individual should possess the following qualities: 

• Experienced: The last thing you want is an inexperienced salesperson standing in front of your prospects and misrepresenting your brand. In sales, experience builds confidence, and confidence is necessary to closing prospects. The person you place in this role should be comfortable identifying potential customers and partners and adept in creating strategies to reach them effectively. It takes a tremendous number of rejections for a salesperson to build up confidence, and you don’t want those rejections happening on your dime – so choose someone who already has a background dealing with clients as a brand representative, establishing new sales plans, and seeing the sales process through to completion. 
• Customer-Centric: A good CSO listens to the customer, asks the right questions to identify their pains and challenges, and implements a personalized approach in their sales strategy. The CSO should know how to discover the issues that customers face and persuade them that the startup’s product makes their lives more comfortable or convenient. As they execute their sales strategy, they will build valuable customer relationships and develop a feedback loop to continuously learn more about the customers’ needs. 
• Communication: In many cases, the CSO will be the point person for potential customers and partners – so you need someone who can clearly and effectively communicate the brand message. They should know how to explain the benefits of the product, express the startup’s value proposition to customers, answer any objections, and push leads from the initial inquiry to purchase. 

If your company relies on sales (and most do), the CSO will prove an integral part of your team. But if your product requires software or development, then someone has to build and maintain it – and that’s where the Chief Technology Officer comes in. 

Chief Technology Officer (CTO)

Startup teams need someone proficient in technology to build the solution, ensure its quality, and develop new products and features. The Chief Technology Officer, who may also go by the Director of Technology, makes the executive decisions regarding the company’s technology interests. For tech startups, the CTO’s job is to direct the development of the product, oversee its maintenance, and implement new ideas for later product releases. 

Additionally, the CTO is responsible for detailing the startup’s technological vision, developing new strategies for product development, implementing third-party software to help progress the product, overseeing technical projects, and directing the product team. 

How To Choose The Best CTO

Product development is critical to any successful startup. That’s why your team needs someone that understands the intricacies and nuances of creating and building new developments. There are several qualities that you should look for in a candidate when filling this position. 

1. Tech Knowledge: First, your CTO should have a deep knowledge of technology and product development. This person may not be a software or product developer, per say, but they need to know how to manage team members and contractors to build the required technology. Using their knowledge, they should recognize when a new solution is necessary, plot out a development strategy, and identify the technology stack required to build it. A great CTO stays on top of the market and relies on technology to help the organization succeed. 
2. A Designer’s Eye: The CTO should also have a designer’s eye. Coding isn’t enough to develop an app or software product – design is equally important. Design goes beyond layout and color. Great design ensures that the product is easy to use without confusion and easy to operate from a customer standpoint. The ideal candidate understands the importance of design, user experience, and user interface. Furthermore, they ensure that the product’s design aligns with the brand’s character and personality. 
3. Project Manager: Project management is a necessary component of this role. The CTO participates in technical projects daily, especially in a tech startup, so they need to have experience organizing and managing teams. When the board conceptualizes new ideas, the CTO establishes plans to develop and see them through to creation. There are many moving pieces when building new products and features, and your Chief Technology Officer needs to have the experience and skill to manage it all. 

Once you have a great tech person in place, you’ll feel confident knowing that you’re delivering a quality product. But who cares about having a quality product if no one ever hears about it? This is where the next team member comes into play – the Chief Marketing Officer. 

Chief Marketing Officer (CMO)

Startups need to create a brand presence and generate a buzz in the market – and that requires effective marketing execution. The Chief Marketing Officer, also commonly referred to as the Director of Marketing, develops and executes the go-to-market strategy for new products. The CMO creates the organization’s messaging, monitors marketing performance, and launches market tests. 

A quality CMO can have a dramatic impact on a new startup. Their job is to maximize the organization’s marketing budget and oversee its entire program. They establish the tactics that make prospects aware of the products and nurture them through the marketing funnel until transforming them into leads or customers. Additionally, they implement techniques to transform customers into re-purchasers and encourage them to recommend the startup to their peers. 

Why is the CMO important? We now know that having the wrong startup team is the third most common reason that startups fail. But it’s not the only reason. Of all the startups that fail, 42% fail because there is no market need and 14% fail due to poor marketing (according to CBInsights). The ideal CMO tests the market to ensure that a market demand exists, and they have the insight to implement the right marketing techniques at the right time to drive new interest in the product or service. 

The Must-Have Qualities of a CMO

Hiring the right CMO on your startup team can make or break your business. A bad fit can blow through a startup’s marketing budget quickly with no return on investment – putting them in dire straits. When seeking a CMO, here are the qualities your team should look for: 

1. Robust Marketing Capabilities: The marketing industry changes daily, and your CMO should be familiar with various marketing channels to keep up. For example, TikTok advertising is popular now, but a few years ago, the platform didn’t even exist. The person in this role should understand the big picture of marketing, have knowledge across all of the most effective channels, and have the ability to quickly learn, adapt, and execute new strategies when the opportunity presents itself. 
2. Creative: CMOs should possess a high level of creative brilliance. Marketing is a competitive game. No matter what product your startup is promoting, there’s a competitor out there looking to eat your lunch – literally. A productive CMO has enough creativity to communicate the marketing message effectively, produce or oversee the production of excellent branded content, and explain the benefits of the product in a way that makes customers want to purchase it over competitive products. 
3. Analytical: Effective marketing campaigns are those that are tested and optimized over time. The CMO you bring on board should be data-driven and confident in assessing marketing numbers to gain new insights. To optimize the campaigns, they will run A/B tests on ad copy, try out various types of content, and test different systems and platforms. The right candidate should have the analytical skills to assess the data, decide which channels deserve the most focus, and figure out what changes the campaign needs for maximum optimization. 

With an effective Director of Marketing, your startup should be able to quickly gain a presence in the market and begin nurturing loyal customers. 

How To Find Awesome Startup Team Candidates

With these five members, your startup will vastly improve its likelihood of success. However, finding great candidates isn’t easy, and it can be a tedious, frustrating, but necessary process. 

The first thing you need to do before approaching a candidate is to define exactly what your startup can offer them. People with amazing skills can work for any startup. To get their attention and commitment, you need a startup concept with real potential and the evidence to back it up. For them to commit their time and energy to your product, they need to believe wholeheartedly that they will receive a major return on their investment in the future. 

The traditional way of finding team members consists of networking, attending related events, shaking many hands, and introducing your business to as many people as possible. Post-pandemic, the event market may shift and these networking opportunities could remain limited. Fortunately, the internet exists, and there are many ways you can leverage the internet to find co-founders for your startup. For instance, you can reach out directly to professionals on LinkedIn. The LinkedIn platform is brilliant since you can see the candidate’s qualifications right on their profile. There are also platforms explicitly made for matching co-founders like Founder Dating, and even subreddits for individuals looking to join startup teams. 

Building the right team isn’t easy – but it is necessary. Take your time and find the players you need to create your dream team. Make sure you put the right pieces in your puzzle and that every piece fits into the big picture. When you’ve built the ideal team, investors will look at your startup with more confidence, and with every department managed by a qualified leader, your company will be in the ideal position for growth and success.

The post How To Build A Growth-Oriented Startup Team appeared first on Startup Squared.

Startups use these metrics to understand where they stand in every stage, including acquisition, activation, retention, referral, and revenue. Unfortunately, teams that fail to monitor metrics, or those that monitor the wrong metrics, usually do not know whether they are succeeding or failing. And if they do know which path they are on, they don’t understand why they are on that path. This article will explain the exact pirate metrics you should be using to collect the data you need to grow, scale, and reach success with your startup. 

What Are Pirate Metrics? 

Yes, the name sounds childish, but there’s a reason why “pirate metrics” is the perfect name for this group of data points. If you’ve ever heard a pirate say, “AARRR MATEY!” then you already have a grasp of what these metric categories are. In the case of real pirates, they use the phrase to showcase happiness, joy, or glee. And in business, if you use them right, it will give you the same joyous feelings! 

AARRR is an acronym that stands for: 

• (A) Acquisition: Acquisition refers to how users find your business, what channels they use to find you, and how you introduce your products or services to them. 
• (A) Activation: Activation metrics track how users engage with your brand and how they perceive your brand during their first experience. 
• (R) Retention: Retention tracks how often customers come back to visit your site, repurchase products, or how many times they engage with your brand. 
• (R) Referral: Referral refers to how many people tell others about your brand, product, or service – creating new clients through their networks. 
• (R) Revenue: Revenue metrics track users who make a purchase or participate in some type of monetization event. 

Here’s a quick disclaimer. Some sources will define pirate metrics as AAARRR, including an “awareness” stage. Others will put revenue before referral. However, the original introduction of pirate metrics from Dave McClure of 500 Startups defined the acronym excluding awareness, and it positions revenue as the last category. And for that reason, so will we. 

Monitoring Acquisition Metrics

Before you can bring on a new customer or initiate a sale, you must first make them aware that you exist. Many channels are available that you can leverage to market your product and get in front of potential users or customers. Channels can include social media, blogs, Google Ads, YouTube, or even more traditional marketing techniques like television commercials and billboard advertising. 

Why Track Acquisition? 

Marketing is expensive, and low click-thru rates, high acquisition costs, and lower-than-average conversions can cause you to run through your advertising budget quickly, yielding few results. By tracking acquisition channels and performance, your team can better understand which channels work best and which don’t work at all. In addition, these metrics can help you identify ways to improve the techniques that are performing well, leading to more views, more leads, and more conversions. 

Which Acquisition Metrics Should I Track? 

As you bring in potential customers to the top of the funnel, you can track several metrics to help you adjust and improve your acquisition strategies. While there are many metrics you could monitor, some of the most popular and helpful acquisition metrics include: 

• Impressions: You can’t always access impressions directly – but when you can track them, you should. Impressions showcase how many people viewed one of your ads, whether on Google, Facebook, Twitter, or another platform. By tracking this metric, you can ensure that your ads are optimized and that you are covering the right keywords or audiences to maximize views. 
• Number of Clicks: It’s essential to know how many clicks you are receiving from your campaigns. If you notice that only a few clicks are coming in, you can dial in the cause, which can be numerous things, including your ad description, your selected keywords, and more. 
• Click-Thru Rate: CTR describes the percentage of impressions that turn into clicks. On most platforms, you pay for clicks, not impressions. For that reason, monitoring impressions is not enough. Unfortunately, monitoring clicks alone doesn’t give you the complete picture either – at least, not on its own. Click-Thru Rate tells you how many users view your ad and then click over to your site. Research the average CTR for your industry, and if you fall behind the average, you can make the tweaks necessary to improve the metric and your ad performance. 
• Cost Per Click: It’s satisfying watching traffic come to your site from your ad campaign, but not if your spending on the click costs more than potential revenue from a sale. Some industries are just naturally more competitive and clicks cost more for these sectors. But other times, high costs per click could come from low-quality scores on your ads or because of an unoptimized campaign. 

Utilizing Activation Metrics

The second category in pirate metrics is activation. First impressions are everything, and customers will make immediate judgments about your entire business based upon their first experience. Activating a customer means getting them to reach the “ah-ha moment.” 

The “ah-ha” moment is defined as the moment of sudden realization, inspiration, insight, recognition, or comprehension. In terms of business, it’s the point where the customer realizes that your product or service is what they need to solve the specific problem they are experiencing. 

Why Track Activation Metrics? 

Acquiring visitors is a significant accomplishment, but it’s a waste if their first experience with your product is negative – or if they are unimpressed with your brand when they happen upon your website. By tracking activation metrics, you can ensure that visitors realize the value of your offering. 

Depending on your business, you can activate a client with several different techniques. For example, a SaaS company might activate a customer by offering a free trial – allowing them to get a hands-on experience with the product. A car dealership activates a customer by getting them behind the wheel; some offer a test drive, and some allow the customer to take the car home for a week. 

The activation stage prepares the customer for purchase. If you aren’t achieving the ideal targets here, you might get users to your site, but they will all click away without even considering a purchase. Inevitably, your overall conversions and sales will grow as you collect metrics and optimize your activation efforts based on the data.

Which Activation Metrics Should I Track? 

Activating customers gets them one step closer to purchase. Activation metrics will allow you to ensure that each visitor has a successful first experience as they engage and interact with your brand. Some of the essential activation metrics to track include: 

• Number of Free Trial Downloads: Some businesses, like SaaS startups, use free trials to activate new users. These companies will track the percentage of visitors that download or request a free trial. Furthermore, this metric could also represent the number of visitors that schedule a consultation or request a demo.
• Number of First Events: Activation could also be a “first event.” For example, the first event for a social media site may be setting up a profile or posting the first status. For a business like Dropbox, activation could be the number of visitors that upload their first file – as they know that once someone uploads one file, it is much more likely that they will continue uploading more. 

Understanding Retention Metrics

According to studies, it can cost five times as much to acquire a new customer when compared to retaining an existing customer. Retention metrics allow you to understand how many customers stick around and why others churn. The goal is to make sure that every user becomes sticky – meaning that they come back to your product frequently or use it consistently. 

Why Retention Metrics? 

Customer retention is a sign of satisfaction. Dissatisfied users will churn quickly, but they can also cause harm by leaving negative feedback and reviews. On the other hand, if you can retain customers for the long term, you will ensure that you are solving their specific problems. These users often become a business’s most loyal brand ambassadors. 

If you don’t understand what causes customers to retain or churn, you can’t make the necessary adjustments to maximize user satisfaction. As you collect and assess these metrics, you will gain insight into what users really want – and once you deliver it, your retention rate will expand drastically. 

Which Retention Metrics Should I Track? 

Retention can differ based on your particular business type. For example, for a SaaS business, retention could be the number of re-subscribers each month. On the other hand, retention may be defined as the rate of return purchases for a product retailer. Here are a few examples of retention metrics: 

• Retention and Churn Rate: Retention and churn are opposites. The term “retention” refers to a measure of the number of customers a company retains over a given period. Churn refers to the rate at which customers end their engagement with a business over a given time. 
• Repeat Purchase Ratio: This metric measures the percentage of customers or users who return in the future for another purchase. The higher the percentage, the more revenue your business will generate. 
• Net Promoter Score: NPS rates the likelihood of a customer recommending a company, product, or service to one of their peers. The rating is given on a 0 to 10 scale, with 0-6 being detractors, 7 and 8 being passives, and 9 and 10 being promoters. 

Measuring Referral Metrics

Referral metrics help you answer the question, “How likely is it that an existing customer will refer someone else to your business?

Referrals are critical to a company since they can help enhance visibility and reduce acquisition costs. As we mentioned, acquiring a new customer through traditional marketing channels is expensive. An acquisition could cost hundreds or thousands of dollars in some industries, like finance or business services. In contrast, it costs the business nothing to bring on a prospect referred by another customer. 

Why Referral Metrics? 

The more referrals you can inspire, the more revenue you will generate. Furthermore, referrals are also a great way to assess customer satisfaction. There is no marketing channel as effective in persuading customers to purchase as a recommendation from their peers.

It is essential to know how many people refer your products to their networks and which channels they use. Understanding why they share, when they share, and who they share with can inspire new efforts for incentivizing brand ambassadorship and increasing your referral potential. 

What Referral Metrics Should I Track? 

To get the most data, you want to track metrics across all the channels where customers review and refer products to their peers – social media, review sites, and more. Some of the essential referral metrics you should track include: 

• Social Shares: Social media is a powerful tool for introducing products to new customers – especially when those products are shared by their closest friends. By encouraging and incentivizing social shares, businesses can increase their visibility with the backing and recommendation of individuals that prospects trust most – peers. 
• Ratings & Reviews: Positive ratings and reviews are another form of referral. Customers can refer products to prospects they don’t know by leaving public ratings on platforms like Google, Facebook, TrustPilot, BBB, etc. The higher your ratings are, the more confident prospects will be that your product will solve their problems sufficiently and successfully. 
• Customer Satisfaction: Only satisfied customers make referrals, and by tracking how satisfied your customers are, you can also predict the likelihood that they will share your product online, tell a friend, or leave a favorable review. 

The Most Important Metrics – Revenue

Revenue is arguably the most critical metric category. Ultimately, none of the other metrics matter much if it doesn’t eventually earn revenue. What’s the point of referrals if they don’t bring more income into the business? 

By knowing how your business earns revenue and understanding its drivers, you can position the startup to focus on its strengths and consistently grow its monthly income. 

Why Revenue Metrics? 

Revenue metrics allow you to assess how much revenue your business generates and how it generates that revenue. Entrepreneurs often see the money coming in and just assume that things are in great shape. And when an unexpected expense comes up, or sales take a shift, these entrepreneurs freeze like a deer in the headlights. When you are fully aware of your revenue metrics each month, you’ll notice if things take a turn for the worse and can address any issues as they arise. 

What Revenue Metrics Should I Track?

To get a big picture idea of revenue, you can track every dollar that comes in – keeping a close eye on monthly recurring (MRR) and annual recurring revenue (ARR). However, there are several other metrics you can track to better understand your business’s revenue position. These metrics include: 

• Average Transaction Revenue: Businesses find it much easier to predict future revenue when they know the average transaction revenue. Furthermore, awareness of this data enables you to ensure that each transaction is profitable and that your customer acquisition rates are low enough to earn positive profit each time a customer makes a purchase. 
• Customer Lifetime Value: We’ve already mentioned how necessary retention is; the longer you keep a customer around, the more revenue you will generate from that customer over time. The duration of that time is the customer lifetime. If you understand the actual value of each customer, you can better gauge how the acquisition of each customer will impact your business’s bottom line – both presently and in the future. 
• Conversion Rates: Another vital factor for revenue is conversion rate. Revenue is directly related to how many customers you can convert. Therefore, you should always track your conversion rates and seek to improve them over time. 

How To Apply Pirate Metrics

The whole goal of pirate metrics is to develop a funnel that helps you understand your customer and business on a granular scale. Collect metrics intentionally – know what information you want to collect, and then decide which metrics are most important to track to give you the essential details about your business. Pirate metrics are crucial to developing a lean startup since you can use them to adapt and further develop your product. They also give you the supporting data that you need to prove your business case in your pitch deck or business plan. 

As always, if you need help writing your business plan, creating your pitch deck, or developing your app – we’d love to hear from you. Contact us today to discuss your startup with one of our expert consultants.

The post How To Improve Business With Pirate Metrics (AARRR) appeared first on Startup Squared.

These days, the legend has disappeared, and you can find unicorns in the pages of any startup or business magazine. In today’s world, the word unicorn is tossed around the startup scene more often than at a Harry Potter conference – and every new startup hopes to one day earn the title. Being referred to as a unicorn startup is a dream by many entrepreneurs, but what does it even mean? 

While there are very few physical commonalities between the mythical unicorn and a unicorn startup, they both share the quality of being rare. Over 627,000 startups launch in the U.S. each year, but there are only 449 total unicorns in the world. 

What does it take for a startup to grow its horn? In this post, we’ll examine what it means to be a unicorn company and explore the essential steps of becoming one. 

What is a Unicorn Startup?

A unicorn startup is a privately-held company with a valuation of more than $1 billion. Aileen Lee, founder of Cowboy Ventures, coined this term in 2013. When she used the phrase, unicorns were uncommon, and only a small handful of startups even had hopes of reaching this level. 

Not even a decade later, unicorns have become more common. With innovative solutions continually being developed and competition growing between venture capital firms, the valuations of fast-growing startups have become more substantial. Some solutions have reached this level without even generating significant revenue. For this reason, becoming a unicorn is no longer a marker of success; even some fast-growing startups fail over the long term. 

Characteristics of a Unicorn Company

Unicorn companies exist over a variety of industries, built from entrepreneurs of all backgrounds. While there is no formula for becoming a global startup, there are a few qualities that all successful startups share. Some of the most common attributes of a unicorn company include: 

1. Innovative Solution: Companies that reach the top do so because they introduce new innovations that critically disrupt the effectiveness of solutions already on the market. They are first movers that provide products and services that work faster, more effectively, and differently than competitors. Since they are early to market, they are often able to gain the eye of the media and quickly establish brand awareness across their entire market.
2. Rapid Growth: Triumphant startups test and validate their solutions quickly, pivoting until they find their path. Once they identify the right road, they put the pedal to the metal and accelerate quickly. Rapid growth doesn’t necessarily mean that they generate revenue quickly. Instead, they have one or several growth metrics that prove their potential. For some businesses, this means that they build a broad base of millions of free users. Other companies may have above average engagement rates or a high conversion rate. No matter what growth factor makes them unique, all unicorns have an incredibly high metric that outpaces the competition.  
3. Ability to Quickly Monetize: Investors invest because they want to realize a healthy return. The more potential a startup shows for creating massive revenues, the higher it will be valued. Even if a unicorn has not yet monetized its solution, it has an effective monetization plan in place. For example, take a dating app that has attracted a million sign-ups and now has the potential to convert users into paid customers. Although they aren’t currently earning revenue, just having a strong foundation for future monetization drives a much higher startup valuation. 
4. Talented Team: Anyone can ride a horse, but only a master can saddle up a unicorn. When valuing a company, investors look for skillful teams that have experience and display a knowledge of how to launch a startup. While the company may have started with inexperienced founders, they have brought in new members to strengthen their position. Unicorn teams display the ability to scale the solution rapidly and have a vision for the future. Not only are they experienced, but they are also committed and solely-focused on bringing the business to success. 
5. Consumer-Based Solution: Businesses don’t have to be direct-to-consumer to earn a valuation of $1 billion or more, but b2c companies are statistically more likely to become unicorns. There are many extraordinary b2b companies, but those that can generate interest from millions of end consumers are often valued higher. 

Popular Unicorn Companies

There are hundreds of unicorn startups today, spread across many industries. Here are a few notable unicorns that have launched in the last few years, disrupting their markets and growing to a billion-dollar value. 

RobinHood

RobinHood is an app-based stock brokerage that allows users to buy and sell stocks. The company launched in 2014 with the hope of appealing to a demographic of millennials who were increasingly turned off by traditional trading. 

Streamlining the way people invested in stocks, Robinhood was able to grow its user base to over 2 million users in only three years. By 2017, they had already executed $75 billion worth of transactions. Further monetizing, they introduced Robinhood Gold, giving users the ability to borrow money for stocks. In only 36 months after its launch, the company reached a valuation of $1.3 billion, cementing its status as a unicorn startup. 

Instacart

Other grocery delivery apps exist, but Instacart was the first to earn significant market share, gaining an industry-leading position early on. As of 2018, the company was valued at $7.6 billion. 

Instacart, which first launched in San Francisco, grew rapidly to serve more than 15,000 grocery stores with a reach across 70% of the country. By 2018, they had over 50,000 independent shoppers serving over 500,000 grocery customers. 

Airbnb

Airbnb launched in 2008 and quickly overtook the room-booking market. Initially, Airbnb was just a way for the founders to make a few extra bucks to pay their rent that month. They took advantage of an opportunity and offered a sleeping mat in their loft to attendees of an upcoming design conference. After proving that people would pay for these accommodations, they began building the business. 

Today, Airbnb is worth an estimated $38 billion. In only 12 years, the company has completely redefined the market and built its customer-generated listings to over 6 million properties worldwide. 

Casper

Casper launched in 2014 as an online bed-in-a-box supplier. By 2015, they were already gaining steam, and by May of that year, celebrities like Kylie Jenner were posting about the company on their social media pages. Today, only six years later, Casper is worth over a billion dollars, and rumors of a soon-to-come IPO are swirling. 

Even early on, Casper had all the makings of a unicorn company. On the first day their website launched, they sold out of their complete starting inventory. Although they hoped to make $1.8 million within a year, they were able to hit the goal within only two months. By 2018, the company was earning over $400 million per year. 

Lemonade

Lemonade launched in 2015, hoping to disrupt the insurance industry – and they did just that. Using a mobile application and sophisticated algorithms, Lemonade makes the insurance process more efficient than ever. They give insurance quotes in only 90 seconds, and process claims within 3 minutes. Although Lemonade hasn’t yet put a dent in the overall insurance market, they appeal to a niche market of millennials who are purchasing homeowners or renters insurance for the first time. Today, over 75% of their customers are under the age of 35. 

By 2017 (only two years after launch), Lemonade was already serving 425,000 customers, with over $57 million in total annual revenue. During that year, the company’s valuation was over $2 billion. 

How To Become A Unicorn Startup

Here’s the truth – even if you know the exact steps required to reach unicorn status, your chances of actually reaching it are meager. Statistically, the chance of building a company worth $1 billion is only 0.00006%. However, companies that reach this level often follow a specific process. Here are five things companies must achieve on their way to the top: 

1. Solve a MAJOR Problem: Entrepreneurs solve problems, but founders of unicorn startups solve significant challenges for millions of consumers around the world. Standout startups disrupt established industries and create considerable competition for market leaders, some of who have been on the top for decades (such as large hotel chains before Airbnb). By approaching a substantial issue in a new way, they quickly earn market share – even in highly saturated industries. 
2. Pivot Quickly: Many businesses don’t start with the same idea that propels them to unicorn level. Growing a successful startup takes frequent testing, learning, and pivoting. Fast-growing startups test their hypotheses quickly and use those tests to adjust their offering until they find the right solution.  
3. Strengthen the Team: Billion-dollar companies are led by experienced teams who can foresee future opportunities and avoid potential threats. Inexperienced founders must eventually surround themselves with experienced team members who can guide them to make the right decisions as they scale. 
4. Raise Funds: It takes money to fuel billion-dollar growth. Startups that reach this level build strong investor relationships and have constant access to capital. With the right startup, this financial arrangement is mutually beneficial. Investors desire to put their money in fast-growing vehicles where they can earn a high ROI. As they invest more money, their equity percentage rises. When it’s time for an exit, their investment pays off many times over. 
5. Scale Like Crazy: The most essential but most challenging part of becoming a unicorn is scaling like crazy. Unicorn startups are often able to penetrate multiple markets and build brand awareness across the globe. Showcasing the potential for multimarket penetration is extremely valuable to investors. As you generate more users across more markets, the value of your company will increase in parallel. 

The Last Word On Becoming A Unicorn

Here’s the thing about becoming a unicorn, if your only intent is to become a unicorn, you probably never will. Entrepreneurs who take over an industry don’t do so because they are focused on reaching a billion-dollar value; it happens because they are super passionate about providing a new solution that genuinely helps consumers. If you want a significant valuation, solve a big problem for a big number of people. 

The post What Does It Mean to Be A Unicorn Startup Company? appeared first on Startup Squared.

Unfortunately, many app entrepreneurs won’t have a success story to share when all is said and done. App startups fail everyday, and some apps that once had thousands of users now struggle to survive. Developing an app, getting users to download and actually use it, and retaining that position for the long run has proven to be a rather difficult undertaking – too difficult for most. As it seems, what may look like a smooth journey on the pages of your mobile app business plan will probably be quite the bumpy road in actual execution. App success stories aren’t overnight successes, they overcome many hurdles along the way.

Most app ideas will never become an actual app, and most apps will never even have a glimmer of hope in competing with more dominant apps within their industry. Many startup teams who once aspired to be on the list of app success
stories will only become a short story. Ranging from bad app ideas to a lack of commitment, there are several factors that prevent 95% of app entrepreneurs from reaching their app success goals. We recently spoke to several app startup founders about their app success stories to give you some mobile app inspiration and find out what it takes to become an app store success.

Do You Have The Right Idea?

Ask any successful app startup founder (or any entrepreneur for that matter) and they will tell you that app ideas are truly a dime a dozen. However, you need to have a solid app idea in place before you can execute it and introduce it to consumers. Successful apps don’t just ‘exist’, and users don’t download them just because they are in the App Store. Startups that become “app success stories” solve problems and attract users who are facing that specific problem and seeking a solution. There are entrepreneurs making millions from apps because the platforms that they have built solve millions of problems each and every day.

Steven Benson, the founder of Badger Maps, found that a problem existed while working in his industry. Steven told us, “My career has been spent in field sales, and so I understood the challenges faced by field salespeople first hand…”

Some say that success is the result of what happens when preparation meets opportunity. Sometimes, when you prepare yourself enough, the opportunity will find you; instead of the other way around. In the case of Badger Maps, Steven said, “Looking back at it, it was a combination of my role in sales and my industry background with software and mapping that made me well positioned to launch a company and solve the problems of field sales. I was in the right place, at the right time, with the right background to come up with the idea and start the company.”

SportMe founder, Andrew Greenstein, had a similar story of being prepared. With a background in AI and automation, he was able to identify how his expertise would be beneficial to the sporting industry. When we asked about his app idea, he said, “I’ve always believed that technology can play a strong role in helping everyone improve themselves, every day. We started SportMe to apply my technology, AI, and automation experience to participatory sports; choosing marathon training because of its supportive and rapidly growing community.”

There’s an insight here – sometimes the best ideas will come to you when you are most prepared to receive them. The more you know about something, the better prepared you will be able to identify challenges that need a solution and
opportunities where your knowledge can be applied to solve niche issues.

What Will Stop You From Succeeding?

There is one common theme present in all app success stories – overcoming obstacles. Building any business is tough, but app startups have unique challenges that founders must overcome to reach their goals and objectives. Sometimes, overcoming these challenges will require you to be extremely creative and to put yourself in positions that may make you uncomfortable. Just how far will you go to overcome your challenges and become an app success? The founders of Friendz App pushed the limits – and it worked! Here’s an awesome story that co-founder Alessandro Cadoni shared with us:

“At the beginning, everything was a challenge! That is why we spoke with every relevant person in the field. We took part in startup competitions, filled white papers with ideas and improvised ourselves as skilled graphic designers, developers, and salesmen. We improvised and we tried, a lot. Initially, one of the biggest issues was getting the attention of big brands and marketing managers: we didn’t have a track record or a product yet, but we had the
courage to dare and to try every route. Stalking? We tried that too (and it worked!). We stationed in front of the headquarters of big brands, close to the smoking areas, hoping that someone at some point would have left the door
open for us to enter and meet all those people we emailed who never answered back. And finally, the lucky day arrived: we were able to sneak into unknown corridors and nobody ever noticed us or called the security (fortunately). Directly knocking at the doors, we were able to tell managers what we wanted to do and ask them for feedback in order to develop a service that could perfectly answer the needs of their future clients. From that day on, nothing scared us anymore!”

You probably won’t have to stalk anyone during your journey, but you will likely have to shake many hands, deliver your pitch to a million people, convince customers, and complete many other tasks that you may not be used to doing. Will it stop you from reaching your goal and writing your own app success story?

Is Your App Really That Different?

There are far too many ‘copies’ in the App Store today. For every Uber, there are 20 more ride-sharing apps that offer the exact same service but have failed to catch on. Successful app developers approach unmarked territory, they don’t just follow suit because they catch wind of a gold rush. Apps that win big are those that have clear competitive advantages and unique selling propositions that make them significantly different than their competitors – even if the core of their app idea is similar.

No matter what your app solution is or what industry you serve, some type of competition exists. Even if there are no other apps providing the same solution, there’s always some other way that consumers are solving their problem;
although it may be inefficient or ineffective. For Steven Benson, Badger Maps gave sales reps a more streamlined way of completing an inefficient process:

“Since we’ve created a new category of software, meaning that it didn’t exist before we made it, our biggest competitor is our user doing what we do by hand. They’ve been solving the problem that we solve with our app by hand for years,
and our biggest job is letting them know that we can solve it for them. Sales Reps have always had paper maps, lists of where their customers and prospects are, and a paper (and later a computer-based) calendar.

What we did was combine all of these things together and put them on a mobile device to create a mobile solution for Field Sales Reps to be more successful. Field Sales Reps have a very unique workflow because they’re always on the move, so they need mobile solutions more than anyone. As a result, Badger differentiates itself by prioritizing a great mobile experience via iPhone, Android, iPad and tablet – not just a desktop.”

Is Your App Scalable?

Successful apps are able to take their initial momentum and scale it rapidly across their industry. They don’t just work for a handful of people, but they provide a solution that can be adopted by a great proportion of a specific niche market. Most app success stories start small with a handful of testers or early adopters but are able to scale consistently to reach more and more users each and every month.

When Steve Carlton first founded Invitd, only a handful of people downloaded it, but he was able to scale drastically to increase his user base at an exponential rate. Invitd allows event hosts to create an invitation in under 60 seconds and send out invitations via text message. Steve told us, “ The day the app launched in 2014 was a rush, we got a total of 34 downloads! Since day one our mission has been focused on making the process of sending invitations as easy as possible. We have focused on making a great experience for the host and the guest. Just over 3 years later, we surpassed over 250,000 registered users and 5 million invitations sent.”

What Is App Success, Really?

Success in any capacity is never ‘one-size-fits-all’. An app in a niche market might be widely successful with 20,000 users, while a mass-market app may need a million users to be considered a successful app. Some apps may need to
convert 50% of their users into subscribers to reach their definition of success, while others may need 100,000 active users per day to earn enough ad revenue to turn a profit.

Andrew Greenstein of SportMe met a major milestone when, “we reached a six figure revenue and our smart marathon run trainer started ranking as the #2 Marathon Trainer in the Apple App Store.”

For Alessandro Cadoni, the Friends App team found success when, “…in 2017, we consolidated the Italian market, creating a community of nearly 200k users with a Monthly Active Users (MAU) of 27%. Last summer, we organized the ‘Friendz Tour’ – offline meetings with our community in several Italian cities where we had picnics together and spent some afternoons talking about the app, pictures, their life, and their interests. In the last several months, we have been working with more than 120 clients, mostly multinational enterprises (FMCG). We made more than 200 brand campaigns and published more than 2 million photos; earning over a million Euro in revenue.”

App Success Stories – Will You Be Next?

The first step to building a successful app is to define exactly what success means for you, your app, your team, and your business. The second step is to get started. Over 95% of app ideas die within one of these two stages; either the founders never define success and therefore can never reach their unspecified goal, or they define success and realize that it’s a much bigger journey than they are committed to pursuing.

If you’re serious about building a successful app, but confused about where to start, ThinkLions can help. We have worked with dozens of app entrepreneurs to define their ideas, launch minimal viable products, secure app funding and bring their app ideas to reality. Contact us today for a free consultation!

The post App Success Stories: How To Build An Amazing App That Wins appeared first on Startup Squared.

Why is it that everyone wants to claim this glorious title? Mostly, it’s because of media sensitization. Every day we hear about how the average CEO among the largest 3,000 companies in the U.S. earns $7.4 million a year. Through television, internet, business news, and every other form of media – we’re constantly shown the glamorous life of some genius CEO that launched a startup and took it public in 2 years.

With so many perks, why would anyone not want to be Director? Ask any successful CEO and they’ll tell you the same answer – because it’s one tough ass job.

Before you change your LinkedIn job position to Chief Executive Officer of XYZ, let’s talk about what the job of CEO really entails.

What is a CEO?

The Chief Executive Officer (CEO) is an organization’s highest-ranking member. They have many responsibilities, but their main focus is to create and implement the company’s strategic vision.

As company leaders, CEOs constantly communicate with internal and external parties including board members, managers, staff, press and media, investors, and more. They set the culture and ensure that the company’s values are established within the organization.

Effective directors are visionaries that look to the future. They put their organizations on a path to success – both in the short-term and long term. They engage in consistent competitive research, align themselves with industry developments, and work persistently to identify expansion opportunities. Using insights gained from their research, they help develop new strategies and monitor the organization’s performance to ensure that goals are met.

What is the Difference Between a CEO and an Owner?

Many people mistakenly equate being the founder of a business to being its CEO. Granted, in many early organizations, the CEO is often one of the founding members. However, being an owner or founder is not a qualification or prerequisite for being the Director of a company.

Hiring experienced executives is expensive, and new startups can’t afford the expense. Instead, these positions are often filled by early owners – even if they have no executive history. As startups begin to bring in investment and expand their businesses, in some cases, C-level members are replaced with more experienced members. Being a founder of a company doesn’t necessarily equate to holding a C-level position.

In established organizations, a CEO is chosen by the board of directors based upon their previous accomplishments and their ability to progress the company forward. CEOs, both owner and hired, can be fired by a board vote. There is an exception though – if the CEO still retains a controlling share of the company, his vote will outweigh the rest of the board.

A successful business may have one founder, but often, there will be several CEO changes over the lifetime of the Company. According to studies, the average tenure for a CEO across all industries is around 8 years.

What are the Qualities of a Great CEO?

The role of Chief Executive Officer is not meant for everyone. It’s an intense job that requires deep commitment and long hours. While the average worker works around 40 hours per week, the average CEO works 62.5 hours per week.

There are several qualities that a Director must possess in order to successfully run an effective business organization. The most important qualities include:

1) Vision:

The CEO must be able to analyze the current and future state of the market to foresee and take advantage of any upcoming opportunities. In some cases, they may be the lone visionary responsible for persuading the rest of the board to see their vision. They are knowledgeable of the customer and their needs, and able to create effective strategies to reach them. In addition, they use their foresight to identify potential future threats and establish plans to quickly pivot the organization to avoid these obstacles.

2) Leadership:

This individual is responsible for leading the entire organization. As the leader, they motivate employees, support teams and individuals, delegate and oversee tasks, and inspire a productive culture – leading by example. As the head of the organization, they often take the most credit for major business successes; however, they also take the most responsibility for the team’s failures.

3) Relationship Building:

CEOs are responsible for building valuable relationships, both internally and externally. They communicate with managers and staff members by listening intensely, asking the right questions, and being open to others’ ideas. As the highest representative of the company, they build relationships with potential partners, investors, media associates, and other individuals and entities that can help progress the business.

What Does It Take To Succeed as CEO of a Startup?

Successful CEOs share many qualities, but their responsibilities may differ based upon the industry they operate in and the business’ maturity level. Startups and established businesses don’t operate the same, and neither do their CEOs. For established businesses, CEOs focus on growing the business, increasing revenues, and gaining a competitive edge. Startup CEOs are usually leading the business from the very beginning, and they must establish these areas before they can expand them.

There are a few qualities that are especially important when leading a startup, including:

1) Enthusiasm

A startup CEO needs to be the ultimate salesman and to make others excited about a product, service, or business, they must possess a high level of enthusiasm themselves. They need to be inspirational, motivational, and able to make others excited about the startup and its potential. When team members feel discouraged, a great startup CEO is able to stimulate them and get them back on a path to success. The entire organization will reflect the CEOs enthusiasm, so if they aren’t motivated for the business to succeed, other staff members will lack motivation as well. When they are enthusiastic about the mission, however, the rest of the organization adopts the same enthusiasm.

2) Adaptability

Early startups are fickle. The CEO and the organization must be able to adapt and pivot quickly and frequently. Effective startup CEOs learn constantly, seek advisement from others, and soak up new information like a sponge. It’s impossible to know how to properly run a business from day one, especially as a first-time startup CEO. The learning curve can be demanding, but a successful CEO reads books, follows industry news, and constantly seeks new information so they will be prepared to make confident decisions.

3) Perseverance

The road from startup to unicorn is a bumpy one and over 90% of businesses fail before they find success. Sometimes it’s unavoidable and the startup simply cannot continue, but other times it’s because the team gave up too soon. Successful CEOs are willing to persevere through hardships and stay committed even when things get tough. Much of the pressure will come down on their shoulders during hard times – investors will expect a turnaround, other members will look to them for direction, and their reputation as a business leader will be on the line. Even when all bets are against them, they must stay focused and continue to move the business forward.

Ready to lead an organization to the top? The first job of a CEO is to create a great business plan. We’ve worked with hundreds of executive teams around the world to develop effective strategies, raise investor funding, and build new products. We’d love to help you too. Contact us to speak to one of our expert startup consultants today!

The post Everything You Need To Know About the Role of CEO appeared first on Startup Squared.

Everyone makes a huge deal about apps that made millions in profit, but we rarely hear about the tech companies that are barely surviving. Ken Delaney of Gartner said, “…of paid applications, about 90 percent are downloaded less than 500 times per day and make less than $1,250 a day. This is only going to get worse in the future when there will be even greater competition, especially in successful markets.”

What does this mean for you as an app entrepreneur? It means that to become a dominating app today, you basically need to be a unicorn; and to succeed at all, you must have a strong startup growth strategy that allows you to rise way above the competition.

What Is A Growth Strategy?

Let’s start from the basics. The definition of a growth strategy is a game plan for capturing a wider share of the market. For a more established business, this means diversifying product offerings, expanding into new regions and etc. A new startup however, must take a different approach to growth, first ensuring that they have built the right product and then identifying how to get even the first few users to their app. Another difference is, startups must rely mostly on internal growth strategies while established businesses that have enough resources can tap into external growth strategies for even quicker growth.

What is an internal growth strategy?

An internal growth strategy refers to techniques that grow your business by relying on resources from within the business. These methods involve activities such as improving staff, optimizing marketing, and further developing the product offering.

What is an external growth strategy?

An external growth strategy relies on external measures of growth such as acquiring another business or building a strategic alliance with another brand.

External growth strategies can allow businesses to grow rapidly, but in the beginning, startups typically don’t have the resources needed to successfully implement these techniques. Acquiring technology takes money that startups don’t typically have, and strategic alliances often require a strong brand awareness and a highly-defined product – other attributes that startups don’t typically possess. Instead, startups must implement the right growth strategies at the right time to first acquire early adopters; then to establish the business within the market; and finally to scale wide and expand rapidly.

Startup Growth Strategies for Establishment

While you may envision having a million users on your application, the truth is, securing just the first 1,000 users is quite challenging. In your eyes, the app you’re building may seem like the only solution for the customer problem, but it probably isn’t. Today, there are more app solutions on the market than there has ever been, meaning your consumer has options. According to data by Sensor Tower, by 2020, there will be over 5 million apps active in the App Stores.

When implementing a startup growth strategy, start by attracting enough early adopters to test your solution and ensure that you are building the right product for the market.

Identify Your Market

No matter how you choose to market or advertise your application, you will only succeed if you truly identify what market you are serving and who your consumer really is. One customer group may respond to your marketing efforts much differently than another, and the better you understand the customer – the more effectively you will be able to reach and serve them.

Here are a few ways to identify your target market:

• Consider Your App’s Features: Think about the features that you are developing, and the benefits that relate to each of those features. Then, match them to the type of consumer that needs those benefits most. A productivity app startup for instance, may find that while they can serve a wide range of different businesses, web development teams would be most helped by the specific benefits that their features provide. With this insight, they can optimize their marketing campaign to attract this specific market.
• Analyze Your Competitors: A thorough competitor analysis can provide great insight into which customer groups you should focus your attention on. On one hand, analyzing other apps with similar features will allow you determine what types of customers they are targeting and attracting. On the other hand, you may be able to find customer types that they aren’t focusing on – which may uncover market gaps that your team can take advantage of.
• Develop Your Ideal Customer: Draw up a model of your customer. Give them a name. Write everything you know about them – where do they work, what do they read, how many children do they have, what is their annual income, who do they follow on social media, what type of apps do they download, what types of problems they face, and etc. Learn how they think and how they make decisions. Identify what they don’t like about current products. Again – the more you know about your consumer, the better you will be able to reach and serve them.  
• Justify Your Decision: After you have decided on a customer demographic and/or consumer group to target, perform market research to calculate how big the market really is. You will never penetrate the market by 100% and realistically, a successful app will likely only penetrate a small fraction of the total addressable market. If you were only able to secure 1% of your addressable market, would that be enough to sustain your business? Analyze your market thoroughly and determine whether there is enough value in your target market for you to continue to grow without limiting your ability to scale.

Find Early Adopters with an MVP

Launching your minimal viable product will allow you to test your software with early adopters for proof of concept. What is a minimal viable product? According to Techopedia, a MVP is “a development technique in which a new product or
website is developed with sufficient features to satisfy early adopters.” In terms of your app, it means a stripped down software that only includes the features needed to prove that the concept is viable.

Instead of building a full-scale application with a large number of features, launch only the number of features that will allow you to validate your initial assumptions. Then, seek to bring in a handful of users and track how they behave. User behavior will give you the most valuable insight into whether your app solution is meeting the customer need in the way you expected.

How do you find early users? Here are a few tips to help attract early adopters to your solution:

• Join Communities: The great thing about the internet is that like-consumers seem to find each other and organize themselves into awesome little communities. These communities are spread across different forums and even social media sites like Facebook and Reddit. The caveat is that these groups typically hate marketing spam cluttering up their discussions. Don’t approach these communities as a marketer, but become an engaged member of the group by asking and answering questions, and naturally interacting with other members. Once you become known as a valuable member of the community, it will be much easier to tell individuals about your application without seeming like an unscrupulous salesman.
• Launch A Video: A great video has the potential to connect with the emotions of consumers and build wide scale anticipation for your app launch. Create an awesome video that showcases the features and benefits of your application and get it in front of potential viewers. In some cases, a video can be used to measure user interest before a single feature is even developed.
• Social Media Ads: Social platforms like Facebook and Twitter allow you to get your marketing message directly in front of a targeted audience. Since you’ve already listed the demographics of your consumer, choosing the right audience to showcase your ads to should be simple. Continue to optimize your ads for better performance, and it will be much easier to get the ball rolling when you scale later on.

Track Metrics

Now that early adopters are downloading and accomplishing tasks with your application, it is important to track a variety of app metrics to best assess their behavior. Tracking metrics will give you the immediate data you need to determine whether your solution is a good product-market fit or whether it is necessary to pivot your solution. There are many metrics that will come into play at different stages of your business, but here are a few that you should be tracking from day one:

• Number of Users: Is anyone downloading your app? Knowing how many users are downloading your app is the first measure of how well users are responding to your marketing message. If your marketing message is strong and you are showcasing features that truly serve your market’s need, you should be able to convert a good number of those who view your ads into downloaders. An app that is receiving little downloads (compared to marketing efforts) is typically either offering features that consumers aren’t interested in, or aren’t properly presenting valuable features in their marketing campaigns.
• User Retention: It’s important that users are downloading your app, but it’s more important that you’re able to keep them around after you’ve acquired them. If you are successfully acquiring new users but they are only using the app once or twice before they delete it; this is a clear sign that an issue exists. This could mean that users aren’t satisfied once they download the app; or that they find it too confusing to navigate; or even that the app is too buggy for them to use effectively. The longer you are able to retain customers, the more value you will be able to pull out of them in the long run.
• Cost Per Acquisition (CPA): Acquiring new users doesn’t mean much if you are paying more to acquire them than they are worth. For instance, is it worth spending $50 to acquire a customer for a $2.99 app? Probably not. Tracking your cost per acquisition will keep you informed on what it costs to get a single customer to download your application. Once you have dialed in your marketing strategy and have created a great product-market fit, you should be able to improve marketing conversion; reduce your cost per acquisition; and increase your overall profit margin.

Develop Your Product

App development is never complete; and as you continue to learn more about your consumer, your app will morph to better serve the market. An app that never progresses in functionality will eventually reach a market plateau. Think about this – how many times does your smartphone notify you to update apps on your phone? Some of the most popular apps out there like Facebook and Instagram update regularly with new features and abilities.

Don’t make assumptions – use the data that you’ve collected in the previous steps to decide whether you are on the right path, or whether you should pivot your idea to serve your customer better. 

Take Groupon for instance. When they first launched, the model was quite different than what it is today. Initially, it was called “The Point”, and was a platform where people could get together to solve problems. After launching a simple WordPress blog and tracking user behavior, the founders realized that what people were really interested in – was grouping together to receive deep discounts on their favorite products and services.

A pivot in strategy based on customer behavior data allowed Groupon to grow into the multi-billion dollar mega platform that it is today.

Product development is necessary across every growth stage. As you further develop your product, you will be able to attract more users, retain them longer, and acquire them at a lower cost.

Startup Growth Strategies

After a product has successfully passed through an initial stage of user testing and all immediate assumptions have been validated, startups can begin widening their startup growth strategy to increase user acquisition, consumer spend and internal capability. The following techniques can be used during this stage to bring an app startup to the next level.

Test Monetization Strategies

The only way to become a financial success as an app is to monetize users. Even ‘free’ apps must have some type of revenue model (like advertisements) to sustain and grow. There are several types of monetization strategies, and finding the right app business model is critical to your growth as a business. Here are a few models you can test to generate the most value from each user:

• Freemium: A basic version of the application is offered for free, but users can access additional features by paying a monthly subscription fee.
• In-app Purchases: The app can be downloaded for free, but some type of virtual goods can be purchased within the app. Mobile games often use this model, allowing users to purchase additional credits, coins or virtual items.
• Advertising: Users can access the application for free, but advertisers are charged to display ads to these users.
• Paid Apps: Users are charged an initial fee to download the application.

Optimize To Convert Better

It’s important to acquire customers, but what’s more important is being able to convert them into paying customers. Unfortunately, startups often don’t pay enough attention to or put enough effort into converting users into customers. According to HubSpot, for every $92 spent acquiring customers, only $1 is spent in converting them. If you can’t convert users into customers, it will be impossible to earn enough revenue to maintain growth. As is the case, it is vital to optimize conversions before scaling your marketing campaign; ensuring that you are growing your revenue potential as you grow your number of users.

While the technique you use will be specific to your individual business, here are several common ways that app entrepreneurs have effectively improved their conversion rates:

• Free Subscription Trials: In some cases, freemium users may not upgrade to paid subscriptions because they don’t understand the value of doing so. Maybe they are able to fully satisfy their need just from the free version, or maybe they are just confused as to whether the upgrade is worth their money. Offering a free month of subscription will allow them to try the upgraded package with no risk, and access additional features without any payment. Apps that offer free trials acquire significantly more sign ups to their paid packages and typically have a much higher conversion rate than apps that do not offer a trial period.
• Discounted In-App Purchases: For apps that sell in-app goods (like mobile games), offering limited time discounts is an extremely effective way of increasing conversions. Games that allow you to buy coins or credits for instance, are known to frequently push notifications to consumers during usage; offering a high number of credits for a discounted price – but only if you capture the deal now. Just like in a convenience store, consumers who engage heavily with mobile games are more likely to buy on impulse when a discount is involved. Furthermore, by offering a discount, you may be able to convert users who would not have purchased otherwise.
• Pricing Optimization: In some cases, users may not purchase larger subscription packages simply because they don’t like the price. Optimizing your pricing is critical – charge too much and users won’t purchase, but charge too little and you may kill your profit margin. Run A/B tests on your packages,
  trialling different pricing structures against each other to find the ideal balance between customer value and price.
• Feature Optimization: If users don’t find enough value in the additional features offered in upgraded packages, they’ll simply continue to use the free version. Consider the features that you are asking them to pay for, and the ones that you are offering for free. Confirm that there is a considerable value added each time the user upgrades to a higher package; and furthermore, verify that each upgrade helps them solve their problem more effectively than the less-costly or free packages.

Generate Referrals

One of the best ways to grow at any stage is to tap into the networks of your existing users through referrals. According to reports by Nielsen, 92% of consumers trust recommendations from family and friends above all other forms of marketing. No matter what your marketing message is, it is exponentially more effective when your consumer hears it from someone that they trust, as opposed to when they hear it from you as a marketer.

In today’s online world, users love to share- that is, if something is worthy of them sharing with their peers. Take advantage of this by offering user incentives for recommending your app to their friends, family and associates. Referral marketing isn’t just one of the most powerful methods of marketing, it is also the most fruitful. This means that by compelling your users to refer your app, you can acquire several new users for the price of one.

Build Your Team

Don’t underestimate the value of an awesome team. Great strategies bring in valuable users, but it’s the team that forms and implements the strategy. Take an objective and subjective look at your current team – and the skills that they possess. Compare existing skills to those that are really needed to push your startup forward. When you find gaps, fill them in with the right people. As a result, you will strengthen your team, build your internal capacity, and leverage the abilities of other specialists to get to the next level of growth.

Startup Expansion Strategies

At this point, you should have a large number of users, a proven product, a winning marketing strategy, an app business model that converts well and a strong founding team. Now, you should be able to access external resources to expand the application or launch it into new markets. Here are a few techniques that can be added to your startup growth strategy in the expansion stage.  

Secure Funding

If you’ve penetrated enough of your initial market with a proven solution – you’ll likely be in a strong position to secure seed funding from an angel investor. Write your app business plan, create an awesome pitch deck and network like crazy.

Pitch your idea everywhere you can and to everybody that will listen. You never know who knows who, and ‘six degrees of separation’ is more real than you could ever imagine.  

Joining an app incubator is also an effective avenue to raise funds for your software business. In addition to funding, these entities also typically provide advice, office space and even connections with potential investors and customers within their network.

For more information, check out our article: The Best Ways To Raise Seed Funding For Your App Startup.

Build A Great Marketing Funnel

Unfortunately, not every consumer who needs your app will realize they need it the first time they see your marketing message. At the time they see an ad for your app, they may not yet need the solution; or may not realize that they need the solution; or may not realize that they need your solution. Building a great marketing funnel allows you to capture consumers across all purchasing stages and funnel the most qualified leads into customers.

Fully examine each stage of the marketing funnel and determine whether your funnel best serves the customer at every step. Focus on on strengthening any weaknesses. For example, you may find that you are losing customers in the consideration stage, because when they search your app online they don’t find anyone talking about it. This may mean you need more press or that you need to showcase your app on more online outlets.

As another example, you may find that users downloaded the app but often leave at the sign-up stage because the process is too lengthy or difficult. A strong app marketing funnel ensures that you are able to best serve a customer from the time they discover your app until the day they become a customer – and beyond.

Scale Your Business

Finally, you are in the position to really scale your business. With financial backing and a strong marketing funnel in place, your startup can leverage this foundation to grow even further — and even faster.

There are several ways to expand an app business once it has been proven and validated, such as:

• Seek New Audiences: Once you’ve successfully penetrated your initial target audience, start looking other market sectors that may benefit from your technology. Preferably, look for niche markets that your competitors are not serving – which will give you a major competitive and first mover advantage.
• Penetrate New Locations: Many app startups have realized the extreme advantage in initially targeting one specific location. After you have figured out how to effectively penetrate one particular region, it is highly likely that you can duplicate the same strategy to quickly penetrate new locations. Seek locations that are similar to your launch region – locations where you can reach the same consumer demographic and attract them the same way you did previously.
• Add New Features: Finally, as you are building your user base, you should also continue to seek opportunities to further monetize your existing users. By adding new features and functions to your technology, you can create new revenue streams and add more product value; enticing users to stay on your app longer, return more often, and spend more over their customer lifetime.

A strong startup growth strategy is integral to your success, and if the optimal strategy is followed, you will be able to set yourself apart from the dozens of competitors that you will likely compete against over your journey.

At ThinkLions, we have worked with hundreds of businesses around the world, helping them develop and implement startup growth strategies that win. If you have an awesome app idea or a soon-to-launch app, we’d love to help you develop a step-by-step startup growth strategy and business plan. Contact us today to set up a free consultation with one of our app startup experts.

The post The Best App Startup Growth Strategy For Each Business Stage appeared first on Startup Squared.

What is Mobile App Advertising?

In-app advertising is the method of delivering marketing messages to consumers through apps on their smartphone devices. For marketers, mobile advertising is an effective way to display advertisements to consumers. 

In exchange for that advertising, marketers pay a fee that is collected by the app’s creators – providing an effective and profitable monetization method for many apps. 

The History of Mobile Advertising

Although smartphones existed even before the iPhone, it was the launch of the iPhone that gave way to mobile ads. When the App Store launched, the concept of “mobile apps” was introduced – software that was built specifically for the device; unlike traditional mobile websites that were built for display on desktops.  

Many of these early apps were free to users. However, apps are expensive to build, market, and maintain. App developers needed a way to earn back their expenses – and hopefully, create a profit. 

Enter mobile app advertising.

As smartphones quickly penetrated the entire globe, mobile apps became more integral in marketing and advertising. For the first time ever, advertisers could connect with consumers right at their fingertips.

The Value of In-App Advertising to Marketers

In-app advertising grew to over $70 billion in 2018, a 20% increase from a year before. According to eMarketer, this represented over 75% of the total digital spend. 

But what makes mobile app advertising so attractive to marketers? There are several major benefits to advertising through mobile apps. 

User Engagement

At one point in time, television commercials were all the rage. The only problem? Viewers weren’t that engaged. Even if they were engaged with the show they were watching, they’d walk away from the television or flip to a new channel when commercials came on. 

Mobile apps completely changed how users engage with advertisements. Today’s average smartphone owner spends around 3.1 hours each day consuming digital media on their device. This equates to 69% of their total media time. 

Not only do users now spend an unusually lengthy amount of time on their mobile phones, but they are also increasingly using mobile to make purchases. In 2017, mobile e-commerce sales already accounted for 34.5% of total e-commerce sales. By 2021, it is expected that this number will rise to 54%. 

Accurate Targeting

It’s incredible how much information one’s phone is able to collect about their interests and purchasing habits. Unlike a desktop computer or even a tablet, mobile phones are often unique to the device’s owner. 

Users download apps that are meaningful to them. They use apps that are impactful in their personal lives. They watch YouTube videos on their smartphones that entertain them and make purchases of products/services that solve their own unique challenges. In some ways, the way you use your smartphone almost tells everything about you. 

This data allows marketers to target consumers more accurately than was previously possible. Whether by demographics, spending habits, location, or etc.; marketers can now promote their products and services directly to their ideal customer. As a result, they are able to convert higher and spend less on customer acquisition. 

Click-Through Rate (CTR)

With better user engagement and more accurate targeting, mobile advertising often leads to significantly higher click-thru rates. 

According to studies, while web ads only receive a CTR of around 0.23%, mobile app ads reach as high as 0.58% on average. 

For companies, higher CTRs mean more customers and less money. It’s not hard to see why advertisers increasingly prefer mobile app advertising over other marketing avenues. 

Should You Offer Ads In Your Mobile App? 

Now that you know what mobile app advertising is, it’s time to answer the most important question. Should you use in-app advertising as a monetization strategy for your app? The answer to this question is — well, it depends. 

There are a number of benefits and weaknesses associated with offering mobile ads. When deciding whether you should monetize this way, consider the following pros and cons. 

Pros of Mobile App Advertising

There are several reasons that an app creator would decide to add in-app advertising. Mostly, these benefits revolve around the ability to monetize. 
In-app ads shift the costs away from the business and its users and put them on advertisers instead. Over the last decade, app developers have realized that free apps are downloaded much more often than paid applications. Instead of making the consumer pay to download the application, they could offer it for free, but charge advertisers to market their products/services to users. Offering a free app means more downloads, and for many apps, this is a big enough reason to implement in-app advertising.

In-app advertising is also often used as a secondary method of revenue generation. Although paid apps don’t attract as many users, pay per download is still quite common. Instead of supplementing income with ads, mobile apps that generate tens of thousands of paying customers may choose to use ads to further maximize their potential revenue from each user. 

Cons of Mobile App Advertising

While the monetary draw of mobile ads can be tempting, they don’t always provide a positive experience. In fact, monetizing with ads can have the opposite effect and cause you to lose users and earn less money. 

Used incorrectly, mobile ads may severely diminish a user’s experience. Some ads are extremely intrusive and can heavily annoy users. Consumers are forced to see ads all day long, from billboards as they drive to video ads on their favorite TV streaming platforms. Sometimes, consumers just want the ability to do something (anything!) without being advertised to. 

Some of this intrusiveness can be managed by ad format, placement and timing. Spammy ads popping up in the middle of a user’s intended action can totally ruin their experience and cause them to abandon the app. Users already paying for an app are even more likely to get annoyed by advertisements. 

Just be careful and know – when using ads, you run the risk of making your app seem spammy and may cause users to lose trust in your brand. 

Best In-App Advertising Platforms

For app developers that choose this route of monetization, there are several platforms that make it easy to implement and track ads.

Here are a few of our favorites:

• AdMob: Google AdMob is an ad platform that maximizes the value of every impression by combining global advertiser demand, innovative ad formats, and advanced app monetization technology. AdMob works with millions of advertisers across a variety of industries, providing a variety of ad formats including rewarded, native, banner and interstitial.
• AppLovin: This platform is a multi-faceted solution that allows mobile game developers to earn revenue and engage users in a single place. AppLovin helps increase app revenue for developers by working with advertisers around the world. 
• Vungle: This solution allows app developers to reimagine the way their app makes money by showing innovative content from global advertisers. Vungle works to improve the ad experience by bringing pixel-perfect, tech-tailored formats that blend in without slowdowns or interruptions. 

Making A Decision

Now that you know what it takes to earn revenue through mobile app advertising, it’s time to decide whether you will use ads in your app. 

The best way for an app entrepreneur to decide on which monetization strategy is best is to test them. Set up a monetization strategy and send traffic to it for a few weeks to see how it performs. If it performs negatively, pivot to something else. However, if it performs positively, then continue to persevere – you’re on the right track to earning revenue! 

Do you use in-app advertising to monetize your smartphone app? Tell us about it in the comments below! 

The post How To Improve Revenue With Mobile App Advertising appeared first on Startup Squared.

While a great app idea may start at a hackathon, most apps aren’t built overnight… or in a week… or within a month. According to a study by Goodfirms, it takes an average of 3-5 months to fully build out and launch a mobile app. Why does it take so long? An app launch doesn’t just rely on how quickly your app developers can code it – but also includes many other steps like customer research, concept validation, pre-launch marketing, and more.

To build a successful startup and experience a strong app launch, there are many factors that need to be in place before, during and after you push your app to the app stores. If you’re just starting development today, you’ve got at least 90 days to get everything together before launching. In this guide, we’ll guide you through each step that you need to take as you approach the day of your app launch.

Phase I – 90 Days Before Your App Launch

Three months before the official day of your app launch, you should already be setting the foundation for a strong launch. More specifically, you should be focused on validating your app idea and laying the groundwork for your marketing and branding.

Validate Your Assumptions

Before taking on the expensive journey of building a new piece of software, it is critical to validate your concept; proving that there is actually a market experiencing a specific problem, and that your product is the solution that the market is looking for to solve that problem. Not every app startup will change the world like Facebook or Uber, but there are thousands of highly successful apps that simply solve a small problem for a large number of users.

True market disruption comes when a founding team creates an app that solves a problem that no other solution exists for. However, you don’t have to be the first to market to succeed as an app startup, you just need to solve the problem better or more effectively than other competing solutions. Consider how some of our favorite apps solve our largest problems:

• Uber solved transportation problems for citizens, making it easier to procure a ride without waiting on a taxi. Furthermore, Uber made it simple for the average person to earn extra income by monetizing their automobile and free time.
• AirBnb simplified the property booking process by giving easy access to short-term rental options outside of the traditional hotel. Furthermore, it made it easy for property owners to earn an income without a long-term tenant, by monetizing their property through the platform.
• Tinder didn’t solve a new problem. Online sites like Match were already leading the market – but they were expensive to use and was a huge commitment for the average person looking to casually date. Tinder made it easy for singles to mingle with other singles by literally bringing dating right to their fingertips. A simple swipe of the screen can generate a new dating relationship without the huge monthly commitment of other dating solutions.

Believing that your concept is the best solution for your market isn’t enough. Your ‘belief’ can quickly lead you to blowing through your development budget only to find that your audience doesn’t believe in your solution as much as you do. There’s something that’s better than great assumptions – validation through real data. No matter what, you will validate your app – you’ll either validate it early on, or you’ll use all of your resources to build it and then validate that there is a major flaw when no one downloads it. Successful apps are able to validate their assumptions early on and pivot where necessary to ensure that they are building the type of solution that is truly in demand by users experiencing a specific problem.

There are several ways to validate an app idea, including:

1. Smoke Tests – The purpose of a smoke test is to determine buyer intent as cheaply as possible. In practice, a smoke test gives the impression that there is a product to be purchased, even when the product hasn’t actually been built yet. An example of a smoke test could be a landing page that explains the functionality of an app, displays several app design screens and allows users to ‘purchase’ a subscription. The ‘smoke’ part of the test is that there is no product to be purchased because it doesn’t yet exist. This allows startups to test how many people would be interested in the application if it already existed; giving them immediate clarity on whether it is worth it to go forward in building out their app concept. Smoke tests can be built and executed rather inexpensively but can provide an incredible amount of insight to make your app launch more successful.
2. Crowdfunding – Platforms like Kickstarter and Indiegogo give startups the opportunity to pre-sell their product or service and raise the funds to build it. Pre-selling is a great way to prove demand for your app before it’s official launch. App startups that are able to crowdfund successfully have an additional advantage since they are usually able to generate enough capital to build at least an initial minimal viable product (see below), are able to build strong brand awareness and are able to sign up thousands of customers months before their app launch.
3. Minimal Viable Product (MVP) – Launching a minimal viable product is another excellent method for proving your concept and validating your assumptions on all aspects of your application. A minimal viable product is a stripped down version of the product that only includes enough features to satisfy early users. In terms of apps, an MVP will be a real and launched application but stripped down to only its core features. This allows developers and app startups to launch their software quicker and with a smaller budget, but be able to attract early adopters in order to generate insights and feedback. Instead of spending tens or hundreds of thousands of dollars to build a full-featured app that may or may not succeed in the market, an MVP only includes very few features to test interest and usage behavior before developing further features.

Lay The Groundwork for Branding & Marketing

Marketing is critical to the success of any startup, and you don’t actually need a launched product to start communicating with your audience and building brand awareness. If your plan is to wait until your app is already on the market before you decide to begin building the foundation for your branding and marketing, you will be seriously behind the ball on the day of your app launch.

Ninety days before your app launch, take the following steps to build a strong branding and marketing foundation:

Buy a domain and launch your website:

At some point, your app will need a website, and the sooner you launch a site that explains the features of your upcoming app, the quicker you can start building up anticipation from potential users. A website for your app gives you many benefits – you can offer pre-registration, showcase demos of your application, generate feedback and use it to launch a content marketing campaign. Furthermore, setting it up early ensures that you align your app name and website domain.

Create all your social media handles:

Marketing through social media is one of the most effective ways for app startups to reach their audiences. Lay the foundation by creating all of your social media handles on the various social platforms such as Facebook, Twitter, Instagram, Pinterest, Reddit, and others. Even if you don’t think you’ll use a certain platform, having your app’s handle there ensures that if you ever change your mind, you will already own the appropriate handles.

Become part of the community:

If you know exactly who your target audience is, it isn’t hard to find them. In many cases, your audience has probably already organized itself into a community on a platform like Facebook, LinkedIn or Reddit. Become active in these communities and groups, but don’t start immediately advertising your app and annoying everyone. Instead, engage with them – answer their questions, get in on the action, learn about their likes and dislikes, and identify their complaints about your competitors. These groups are a highly valuable source of market research, and after you establish yourself as an expert; advertising your solution will be perceived as an expert recommendation instead of an annoyance.

Phase II – 30 Days Before Your App Launch

If you’ve been building your app according to lean startup principles, you should have some core product built for testing with early adopters – even before the full app that will be launched to the public is completely developed. Thirty days before your initial launch, you want to start testing your software to validate your assumptions and kicking off your marketing plan. Here are several steps that should be taken a month before your app launch date.

Submit MVP To The App Store

Even though your full-version app may not be ready, you should still submit your minimal viable product (core-features only) to the appropriate app stores. Be sure to take a look at all the guidelines for both the Google Play Store and the Apple App Store to make sure your app meets their submission guidelines.

Why submit your app 30 days in advance? There’s a chance that your app may get rejected by either store. If this happens, you’ll have a 30 day buffer to make the necessary changes and get it resubmitted before your app launch date arrives.

Invite Beta Users For Testing

After your app has been successfully submitted to the appropriate app stores, launch it in beta – an initial private launch that allows only invited guests to access, download and use the application. Fortunately, both app stores (Google and Apple) allow developers to invite users to test their apps before officially launching it.

Don’t launch your app without beta testing it first. A beta test is basically a dry run that allows you to test each feature, discover any bugs, and gain valuable feedback from your users. Furthermore, it will help you identify any final improvements you need to make before the official launch and will help you earn some initial reviews.

How do you find initial beta users to invite? If you’ve completed the previous steps, you’ll already be in the right position – you will have a list of pre-registered users from your website, as well as an expert presence in several communities and groups. People who need your solution will be more than happy to be invited as a beta user, you just have to let them know that the opportunity exists.

Kickstart Marketing Activities

What does a failed app launch look like? It’s when you’re anticipating your launch for a whole month, and then on the day you launch, not a single user downloads your app. It can be a depressing day for those who are not prepared. Due to this, it is essential that you kick off your app marketing  activities early on to start building up brand awareness and anticipation throughout your market. Here are three marketing activities you can focus on thirty days before your app launch:

Create Marketing Materials:

Ideally, you want to have strong marketing assets ready to go on the day of your app launch. It takes time and effort to optimize a marketing campaign for ideal conversion, and time will be wasted if you wait until the day of your app launch to start producing your marketing materials. Focus on high converting assets like the content for your app’s website landing page and creating engaging promotional or explainer videos that will draw interest from consumers.

Develop and Market Your Content:

Many app startups fail to take advantage of one of the most effective marketing strategies out there – content marketing. Developing great content has two major advantages. First, it allows you to establish your brand as a leading industry expert. Second, if optimized correctly, content can help you rank for important keywords on search engines like Google, which can drive organic and free traffic directly to your application.

Optimize Your App Store Listing:
According to Forrester, 63% of apps are discovered through app store searches. Just like ranking on Google, ranking highly in the app store can bring significant traffic at no cost. Optimize your app listing using ASO best practices to ensure that potential users can find your app when they are looking for a great solution.

Phase III: 7 Days Before Your App Launch

A week before your app launch, you want to start building anticipation amongst your audience. When users are excited about a new app release, they will rush to download it as soon as they are able to. Facebook, for example, first launched to a single university, and slowly spread university to university. Each university knew when it was coming and students anticipated the day that they could join in on the platform that all of their friends at other universities were talking about. As soon as Facebook opened up to a university, it was quickly adopted by a large portion of that school’s student population.

Likewise, you want to build anticipation for your application and get the word out that your app launch is coming soon. Here are a few ways to start spreading the buzz about your upcoming app launch:

Build Strong Media Relationships

One of the quickest and most effective ways to gain the trust of an audience is to gain the trust of people that they trust. Sure, you can acquire customers by persuading them one-by-one; but media and influencer relationships allow you to immediately reach pre-existing networks with the backing of a credible source. Building strong media relationships can be a difficult task, and it takes some practice to learn how to reach out to influencers and journalists successfully. Many businesses choose to hire Public Relations agencies who already have contacts so they can gain coverage sooner. Whether you hire a PR agency or choose to do it yourself, here are a few tips to getting your app mentioned by the right people, shortly before the day of your app launch:

• Contact Influencers – Look for individuals that influence your market; whether they are on Twitter, YouTube, Instagram, or anywhere else. An influencer is someone who possesses enough power to sway the purchase decisions of individuals who follow them. ‘The Oprah Effect’ for example, is a phrase that was coined to explain the influence that Oprah Winfrey had over her viewers for the last couple of decades. A simple mention on her show immediately transformed never-before-heard-of businesses into multi-million dollar brands. Maybe you can’t reach Oprah, but there are thousands of influencers out
  there from social media influencers to published industry leaders. Identify who these influencers are in your industry. They may not have millions of followers, but even someone that can influence several dozen people to try out your app may be valuable to your mission. Contact them and introduce them to your
  software. Offer them a free trial or invite them to your beta, and ask them for their feedback. If they like it, they may mention your app on their blog, podcast, YouTube video, or even just share it with their social media following – providing you with valuable exposure.
• Pitch Your Brand Story To Journalists – Brands need their stories exposed, and journalists are always looking for great stories to write about. This creates a mutually beneficial relationship between entrepreneurs and the media. However, a great story has to really be extraordinary – nobody really cares about a new app that no one has ever heard of. Instead, find the parts of your story that really matters. Do you have a fantastic founder story or some never-before-seen industry data that would be interesting to those in your industry? Find the angles that give the most light to your business and pitch it to journalists that write for the publications that your audience read. The amount of exposure you can get a week before your app launch will directly relate to the number of downloads you can expect on the day you launch.
• Showcase Your Expertise With Guest Posts – Many blogs also often look for new and interesting content that they can expose to their audiences. Identify which blogs are most popular among your market, and offer to provide an expert article to that blog. By guest posting articles on popular blog sites, you can directly reach large established networks that may have been impossible to reach previously.

Setup Analytics and Tracking Software

The day of your app launch, you’ll need to start measuring KPIs and tracking app metrics to analyze how your software is performing. Without the right software in place, you will be unable to collect the metrics needed to optimize your strategy and progress the success of your application. There are many metrics that can be tracked, and here are some awesome analytical tools that you can use to measure your app’s performance:

1. Flurry is an analytics tool that allows you to measure how many users you have, what actions they are taking when using your app, and what pages they are dropping off at. Furthermore, Flurry provides a report any time there is an error or crash; and allows you to track revenue, sales, events and other important metrics.
2. Apple App Analytics is Apple’s developer analytics tool. This tool offers in-depth reports on the performance of your app store listing, gives you an overview of your user engagement metrics and provides detailed reports on crashes and bugs.
3. App Annie allows you to easily access an in-depth analysis about your app’s performance over any period. You can measure unique metrics like the performance of your keywords, your position on store charts, cross-app usage and much more.

In addition to your app tracking software, it’s also a good idea to make sure you are subscribed to and setup with all relevant marketing software as well. If you’re using apps like Mailchimp, Squarespace, Buffer, Unbounce, ActiveCampaign or another marketing software, ensure that your subscriptions are up to date and that your marketing materials (like email marketing scripts) are already put together and ready to send.

Decide On A Monetization Strategy

Apps can be expensive to grow over the long run. While some app startups turn to investors for funding, many successful app startups are able to sustain their initial growth through earned revenue. How much you charge for your product or service – and how you charge – depends on what your app is, how it works, and how much your audience is willing to pay. For example:

• Minecraft and Afterlight are successful apps that charge up-front for full access to the application.
• Headspace and Evernote rely on a subscription model, requiring users to pay a monthly fee to access and operate the software.
• Fortnite and Pokemon Go rely on in-app purchases to earn revenue and monetize their users.
• Social media sites like Facebook don’t charge anything to users, but instead, charge advertisers to promote ads directly to their users.

According to statistics however, the most successful model for most apps is the freemium model. With this monetization approach, users are able to access a basic version of the application for free; but if they want to access additional features, they must upgrade to a premium monthly subscription. This model allows developers and app entrepreneurs to capture a broad audience and transform a handful of these free users into paid customers.

For more information about monetizing your mobile app, check out the article, “How To Identify The Most Profitable App Business Model”.

Phase IV: The Day Of Your App Launch

One of the most important days as an app entrepreneur is the day of your app launch. If you’ve taken the proper steps so far, you will start receiving downloads immediately. The day of your app launch, there are two major steps you should take – announcing your launch and measuring your app metrics.

Announce The Launch of Your App

Remember a month ago when you started interacting in different social communities and built a widespread email list of interested consumers? Today is the day you can finally take advantage of the relationships you have built. Announce the launch of your app on your social media pages and send an email out to your list. Remind them of the benefits of your application and provide them with a link where they can access your software immediately.

Furthermore, send out a press release and a link to your app to reporters and influencers that you have built relationships with. Invite them to download the application and encourage them to share it with their audience. Influencers have power, and this power can give you a major advantage. Offer influencers an incentive to check out your app; maybe consider giving them free access to a premium package or some initial credits for in-app purchases.

There is much benefit in driving traffic on day one. Apps with promising traction can end up in the “New and Noteworthy” or “Trending Apps” categories; making it quickly visible to millions of users.

Start Analyzing Your App Metrics

Since you have already decided which metrics you need to track and have setup the right software to do so; now you need to start actually analyzing these metrics. At minimum, on day one you should begin measuring your number of downloads, active users and engagement metrics like Daily Active Users, Monthly Active Users and Number of Sessions Per Day.

Furthermore, stay in tune with customer feedback and seek to quickly identify any bugs, crashes or weaknesses on your app. Users can be unforgiving towards an inconsistent app that is heavy with bugs. Software isn’t always perfect, but quickly identifying and fixing any bugs will be critical to establishing an exceptional user experience.

Phase V: App Success For The Long-Term

Assuming you’ve accomplished each of the previous steps, you will now have a strong foundation for a successful mobile app. The final step is to grow your user base and scale frequently; converting users into paying customers and earning a substantial profit. But how do you get there? Here’s a couple tips:

1. Analytics Tell The Real Story – Your app metrics will always give you the real story on how well your app is performing. Just having downloads isn’t enough – over time, it’s also important that you know how well you are converting these users into customers, how much each customer is worth, what your Net Promoter Score is, cost per acquisition and more. The more that you understand your app metrics, the better you will understand your users; and the more you understand your users, the better you will be able to deliver them the most effective solution.
2. Keep Your Users Happy – Always pay attention to what users are saying about your app in your reviews, on social media, and online. Sometimes you will have an unhappy customer (or ‘detractor’) that may say negative things about your solution. Every app has a few dissatisfied customers, but if you see a pattern of many users complaining about the same thing then it may be a sign that you need to quickly make changes to better serve them.
3. Never Stop Promoting – Always continue to improve and optimize your marketing campaigns. Continue building strong relationships with influencers and media; continue to interact with consumers on social media; and continue to optimize each technique for better performance. As you scale, your marketing strategy will become even more important.

The day of your app launch will either be a major success or a major failure, but if you follow these tips effectively, you can almost ensure that you will receive at least some positive traction on your first day of app launch.

The first step to launching an app is actually building one, and we’d love to help! Our team of startup experts and app developers know exactly what it takes to bring your idea to life. Contact us to setup a free consultation today!

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