Ask Our Featured Experts Your Entrepreneurship & Startup Questions

Other than your blog, how did you attract so many users so quickly at Mint?

Posted in Marketing

We gave our initial beta sign ups red-carpet treatment. By the time we were ready to launch, our blog had generated about 20k email addresses of people who said they were interested. Taking them all would have overloaded the system, so we told people that if they wanted "Alpha" access before everyone else, they could put up an "I Want Mint.com" badge on their website or blog. We had about 600 people do this. That meant 600 free advertisements, plus and increase in Google PageRank, plus those 600 people got special treatment and became our biggest advocates.

Aaron Patzer
Founder of Mint.com
How can I test pricing?

Testing pricing and optimizing are 2 diff things. If you want to test that someone might pay for your service - prompt them. Put a fake upgrade page with a bunch of feature and a big "Upgrade" button - when they click it, add them to a list and let them know you were just gaging interest and when/if you deploy those features you'll let them know. This way you can track the features, price, conversion - without building anything. Optimizing is a way longer conversation.

Dan Martell
Founder & Investor.
What questions should I be prepared to answer when taking a call from a VC?

Posted in Money

They will likely want to know: 1) who are you? how did you get to where you are? 2) what are you building and why? (what made you decide to do this?) 3) what problem is it solving? 4) who has that problem? 5) is it a big problem? 6) who else is solving that problem? Those will be the key things. The answers to those questions will lead to all sorts of other tangents and they will all be different depending upon the VC with whom you are talking.

David Hornik
Partner, August Capital
What are the most favorable deal terms for startups?

One of the most important things to look at is CONTROL. Who controls your company? If it's the investors, that's bad. If it's you, that's good. There are other control issues you want to understand around your investors' rights to invest in follow on rounds, block acquisitions, etc. So I'd focus mostly on control and less on valuation or $$ raised.

Benjamin Yoskovitz
Partner, Year One Labs
If I haven't launched yet how can I provide proper forecasts for potential investors?

You need to show 18 months of monthly forecasts and IMO 5 years of annual (i.e. not monthly). Crazy, right? Not really. The 18 months should show how you think you'll make money through the build up of the revenue line (even if small) and they'll show your assumptions on cost. Nobody is looking for perfection - just how you think. The 5-year plan is high-level and nobody will hold you to it. But it shows that you've thought about the TAM (total addressable market) and how big you'll be relative to that. People want to know "can this be a big company some day." Some people advise against this - they just want to see product and imagine what could happen if your product takes off. There are investors like this. But they're in the minority so better to have a back-up plan.

Mark Suster
Partner, GRP Partners
Any thoughts on timing of initial product launch and big PR push? Ramp up first or just put it out there?

I always suggest big PR pushes wait until you have actual customers using and ready to speak about the product. You can launch anytime. Having said that, novelty does appeal to media, so you might want to go stealth until you have those customers and then have your launch with the big PR push. Good luck!

Jen Evans
Founder, Sequentia Environics
What are the most important parts of the business plan that should be included in my pitch to investors?

Investors want to know about - you and your team, backgrounds, experience, etc. That includes experience with investors, valuations, etc. - your market, your growth potential, who needs what you're selling, why, how they're solving that need now, how much they'll pay for it, how many of them are there. - your product or service, defensibility, where it came from, who owns it, what other offerings compete with it. - your exit strategy, meaning how you'll get money out of the company and back to investors - what you intend to do with invested money to grow the company - what you think your company is worth.

Tim Berry
Founder of Palo Alto Software
What should customer acquisition costs be? Should it be a certain percentage of revenue? What's deemed acceptable?

Really varies. No common standard. You can estimate bottom up by looking at the cost of relevant key words and applying click through / conversion %s. Ideally, acquisition costs are considerably less than lifetime revenue from the user, but some businesses violate this rule initially to drive growth. As long as the costs go downnevery month and you know when user value will become positive. Obviously you need outside capital to use this approach

Mark MacLeod
Partner, Real Ventures
Where do you draw the line between satisfying customer feature requests and overbuilding the product?

I'd love to know the answer to this one! It's hard, particularly when you are at the stage where you don't have many customers and the ones you do have are demanding. It helps to have a clear vision of the market you are trying to address and unique value you deliver. Then you can hold up each of the new proposed features against those and ask yourself "will this help me sell more into my key market" and "does this strengthen or diminish my unique value". Hope that helps.

April Dunford
Product Marketing Expert.
How do you know when it is the right time to start to try to get PR for your start up? We are heading into beta but not sure when to lift the veil.

Don't fall prey to the "we need to be on TechCrunch" syndrome. Sure, any exposure you get is great. Put up a landing page and generate some buzz. But I'd worry more about signing up and learning from your beta users. PR should be used to either get enough beta testers or to scale up your business. The hard part is the learning in between. Getting PR means a lot of legwork on Twitter, Quora, Sprouter, blogs etc. The best buzz comes from your users so make sure you build in mechanisms for them to talk about you.

Raymond Luk
Partner, Year One Labs
How important would you say it is to give users the option for quick and simple feedback with a new web startup? Will people actually provide feedback or will they just assume the site is useless and move on?

Very important, in the early stages of a web startup you are going to have (for the sake of argument) 90% of the people kicking the tires and 10% of people actually interested. Those 10% are going to be early adopters, people who love to be engaged and around new products and businesses, this is your chance to make them evangalists and to build in a sense of product ownership. Peer judgement and word of mouth are very powerful marketing tools!!!!

Scott Rutherford
Founder, UserVoice
what's the best way to find a co-founder?

Networking. Go to events, talk to people in your community interested in what you're doing. Ask people you know if they know anyone in your area that is interested in the industry you are going after. Those are the first steps in my mind. I would definitely recommend being cautious in adding co-founders to your team too quickly though. It takes quite a while to develop a level of trust and comfort with someone new before considering making them a permanent part of your new company.

Corey Kossack
Partner, Game Change Ventures
How did you market GetSatisfaction when you first started it?

Posted in Marketing Lessons

Our marketing rule when we launched Get Satisfaction was simple: Great philosophy, great product, and great parties. Though that might sound facetious and self-serving (and, ok, it was a little), it's not entirely. Back in 2007 we identified the startup community that was growing up all around us as a major source of both initial customers -- especially since our product at the time was completely free and focused on initial growth and scale -- as well as a major source of potential marketing. And the benefit of creating a product that's about helping other firms interact with their customers is that it's highly promotable -- a company needs to tell its customers it's available for feedback and community, and in the process points everyone to our product. Want one of your own for your own company? Well, look, there's a simple 3 minute sign-up right there on the page. The "Feedback" tab (you know, the one on the right-hand side of this page) was just an acceleration of that plan that came about a year in

Lane Becker
Founder, GetSatisfaction
Is it critically important to patent a software idea or should I "just go for it" and get started?

Depends. Patents can be helpful in defending something very unique and valuable. They are also hard work to get and take a long time. In start-up-landia though, the key is to create something of value fast and to prove it with some market metrics - that should be your sole focus. Along the way you'll find that the thing you thought was so cool - changes a hundred times and you were spared the extra costs of updating your patent application. If you find a cure for cancer though - you should ignore the above advice and definitely patent that.

Michael Garrity
Founder, CommunityLend
Can you share example text from one of your marketing emails? How do you structure it?

Don't have anything off hand but here are some quick thoughts: 1) Keep it short! 2) Test your subject lines --- things you never thought work will somehow get a high open % 3) Include only one link --- too many links = right to SPAM 4) Have your full signature (social media / email / phone) -- you never know how someone will want to contact you 5) Test, test, test

Arjun Arora
Founder, ReTargeter.com
How do you approach iteration?

Posted in Product Development

We run pretty agile, so we try to do 2 releases per month and adjust on feedback. This is pretty frenetic and will be slowing down in future months, as the product gets more mature.

Ryan Holmes
Founder, Hootsuite
If you are a new startup and looking to get the prototype/alpha version build quickly and cheaply, how do you find the developers who would help you with it?

Any way you can. It's hard to find developers but at the same time there are so many options to get a early version of a product out. Lots of companies are out there that you can outsource to. I would also consider trolling the colleges near you and trying to find some engineers who want to help you build something.

Hiten Shah
Founder, KISSmetrics
How do you teach your team and make product suggestions without making yourself look like a know-it-all?

As someone who has totally made himself look like a know-it-all (or fool) with a super experienced team... I can appreciate the question. A few tips. 1. Run experiments. Instead of debating forever, see if you can run small experiments to see which idea is best vs. who is the best debater. Even simple small things can be tested with fast prototyping. 2. Share interesting ideas, posts, etc. Summarize what you think is neat (don't just sent a link!) but don't make it a polemic. Basically, teach by sharing. 3. ASK QUESTIONS. Rather than debating, simply ask questions about why decisions were made. And keep asking why and using that as a way to build dialog. And, of course, the corollary - LISTEN when people explain.

Daniel Debow
Founder, Rypple
What is the benefit behind getting a lot of "ilkes" on a Facebook fan page for a startup? Is there any real benefit?

Posted in Marketing

You can message everyone who likes your page. That's free communication with hundreds or thousands of people who are interested in your product, again and again. So yes, I believe that to be a benefit.

Maggie Fox
Founder, Social Media Group
What's the best piece of advice you have for someone just getting started with their idea?

1) Solve a real problem. You shouldn't be starting a company just to start a company, or because you like the idea of being your own boss. You should solve a problem that will still exist in 5 years or 10 years. Do not start a company that's based around creating better Twitter groups - that's a feature, it's not a business. 2) Address a big market. 3) Have a sustainable competitive advantage. That means you have technology / patents, or you are an expert here, or a proven executive.

Aaron Patzer
Founder of Mint.com
We're launching a new service and are struggling with pricing - any insight on how to determine how much to charge?

I think Paul Graham said it best. As much as you can where customers complain but still pay ;-) No easy answer other than to market test and compare with other options available on the market and your positioning (up stream product to charge more versus cheap option in the market).

Mark Suster
Partner, GRP Partners
During customer development phase, how many people should you talk to in testing your assumptions? Is 1000 enough? Or if you send a prototype that has rousing success, should you move into developing the service? Or is more cust dev needed?

Customer Development is an iterative algorithm. You never stop doing customer development. You ship while you do it. The question about when to stop any particular hypothesis test is a very important one and is one of the hardest to answer. It very much depends on the test. Ultimately, the goal is convergence to an outcome. If you are talking to people face-to-face, you start seeing the same points over and over. If you are doing a high-volume online test then you may want to run two separate groups and end the test when you see them converge (the idea here is that random effects would have disappeared by then). You can find some more info about hypothesis testing on my blog.

Simeon Simeonov
Founder, FastIgnite

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