by Kristoph on November 14, 2011
I tried to launch my first internet company in the finance space when I was 23. I thought I had an amazing product that investors would salivate over. “I just have to get the word out with some advertising,” I thought. As I tried to reach out to my ideal customers through Google’s Adwords pay-per-click service, I found myself running out of cash every month. Despite the profit margins on the small amount of sales that trickled in, kt was getting too expensive to get off the ground.
I needed marketing that would give me more leverage–less time and money spent in exchange for more paying customers. Common sense told me that if I had a remarkable product, it would almost sell itself through word-of-mouth, almost like a virus. Easier said than done.
Just telling someone about something doesn’t mean they’ll share it. I, like most business owners trying to promote through word-of-mouth advertising went from person to person through my offline and social networks, my initial customer base, and visitors to my website. I quickly realized that this was the wrong approach. I needed to go to where the customers already were. I needed to spread a virus.
Here’s what I realized: You need to gain a “critical mass” of people who will share your product with their friends. This cannot be done by approaching one person at a time. Rather, you must go where your customers already are and approach their leader or what I call their “influencers.” To spread a virus successfully, especially if you’re not yet known in your niche, the following steps need to be applied:
- Find the influencers. What blogs, forums, sites, and social networking groups do customers in your niche gravitate to online? Who are the well known people that attend conferences and make press in your industry? Which magazines or trade publications do your customers read? These are the influencers.
- Shoot for the stars on the list. The common tendency once you’ve found a list of influencers is to try to reach the C level and B level influencers and work your way up. I say life is too short. Besides, most people overestimate their competition and underestimate their chances in a given undertaking. The final motivation for going for the A+ level influencers is that the payoff is huge for the amount of work you put in.
- Cultivate a relationship. The first thing to do is not beg for their help to promote your product/business. Look at how they interact their customers/followers and see how you can add value and be in alignment with their goals. This could mean providing valuable information or sending free product to pass out to their followers.
- Have something worth sharing and give it to the influencers. Once you’ve added enough value and have gained the trust of the influencer, it’s time to ask for them to point their followers your way. To do this, you can’t have something to share that’s just good. It has to be worth sharing. This could feature either an incentive or a novel characteristic. An incentive could be financial, a reward/discount, or valuable information/resources. The novelty can come from either a unique and memorable characteristic, or something that evokes an emotional response. Think about the most highly viewed Youtube videos.
By targeting the influencers with large followers first, you gain a critical mass that allows you to launch your product virally. Put all the steps above together and you harness the power of crowds to spread your value offerings uncontrollably.
by Kristoph on November 7, 2011
It’s easy for school counselors, self-help gurus, and guest speakers at graduation ceremonies to give the inspirational advice that everything is going to be OK as long as you follow your passion. But come on, it’s so hard for most people to even find out what they may be passionate about. I thoroughly enjoy what I do now, but I’ve always had a voice in my head that would ask if what I’m doing is really my passion and what I’m “meant for.”
Image credit: Fortune.com
Like anyone else, I’ll never know that I did live my passion until after I’ve been with it for a while and created something with it. I suggest that instead of searching for your passion, follow the wisdom of Jeff Bezos and let your passion find you:
“One of the huge mistakes people make is that they try to force an interest on themselves. You don’t choose your passions; your passions choose you.”
Be open to the possibility that following what you’re interested in at the moment will lead to something bigger, and your passion will arrive. Isn’t it about the journey anyway?
by Kristoph on October 31, 2011
Diversification. It’s a word that’s been supported for ages by the finance industry alongside cliches like “don’t put all of your eggs in one basket,” (not taking into account whether the other baskets might be safe in the first place). At first glance, it seems sensible enough to apply your efforts and investments to multiple areas in case one or more of them fails. But is diversification really an optimal way to run a business?
In a business sense, I see diversification as a terrible way to operate. I’ve seen companies take money from whoever is willing to fund them, do any job a customer requests, and sell to everyone. The net results have been high strung employees, inefficient utilization of resources, conflicts of interest. By “watching all the eggs in different baskets,” employees found it difficult to focus on any one task and money was being wasted on projects that didn’t pay off as well as the star projects that really needed to be fueled.
When people choose to diversify in business, they often fail to underestimate the complexity of the elements in (and outside of) their business and the correlation between the diversified projects (which can often be conflicting). The systems in their business have so many moving parts that splitting everyone’s focus among different goals can dramatically reduce efficiency and can confuse customers.
I propose that instead of focusing on diversification of different tasks, projects, customers, and investments, etc., we diversify time. Entrepreneurs often spend enormous energy to diversify customers and investments to keep the company floating (and for good reason). But what if we made the company’s vision for creating something remarkable and extremely valuable as the top concern, and all else (even including finances) came second? This should be the reason for the company’s existence in the first place, and anyone joining the startup’s payroll should realize that when considering their job security. If we put the company’s original purpose first, we can accept that it may fail knowing that we kept the integrity of the company, and can start up something else in the future. This ability to restart things in the future in which we give each project 100% focus (i.e. no diversification), is what I call, “time diversification.”
Accepting money from different customers and investors just to diversify, in my opinion, subtracts from a company’s proactive stance in the market and is not dissimilar to “whoring out.”
(click image above)