Boston #StartupXYZ Activities
After an epic day of Ramencamp, a few folks unwinded with beers, poker, pizza and more beers. At the end of it, Jason Evanish, Captain America of the young Boston resurgence, and I, were convincing a Providence visitor that he should consider relocating to Boston. He said he had been considering a few locations, but if it was as good as the day he had just had, he definitely would. On considering location, I still think Boston has lost the sex battle, but the small clusters happening around the non-startup events scene is pretty awesome. No networking, just have a great time. This is just a short round-up:
#StartupDrinks
This is probably the most concrete event in the calendar where local startupers catch up for drinks on Friday evenings at 6pm. Follow @JonPierce or @KabirH for the latest.
#StartupPoker
This happens every other Thursday, usually in a Cambridge Innovation Center conference room. It’s hardly high stakes, but we split a few six packs, talk about each other’s businesses and generally have a great laugh. Ping me if you’re in.
#StartupDinner
Slightly sporadic but always a great time. We find somewhere cheap, around $15 a head (T&T incl); it’s a great way to meet new people in a tight-knit environment. @Evanish and I generally tweet about it.
#StartupBasketball
Now that the weather’s nice, we’ve been playing basketball on Flagg and Memorial right by Harvard every Saturday at 2pm. We usually get enough startupers to have full-court 5 on 5, otherwise there’s always pickup. It’s not very competitive, the talent ranges completely, and of course we have girls and guys. We usually grab a bite to eat and some Berryline afterwards. @Tuan617 usually sends out the reminders/ confirmations.
#StartupPingPong
So we’ve discovered there are many wannabe ping-pong champions in the community and several quality ping-pong arenas. Most of these are casual games where Wistia or Viximo will invite people over late on a work day for beers or games. Rumor has it there’s going to be an epic tournament. Follow @Graysky for deets.
The best part is, I actually learn more new things with small intimiate groups like these than large events; you share more vivid details, ask more pointed questions, and have harder reality checks. What will you be joining in?
6 Action Items for Non Techies with an “Idea”
This was originally posted at OnStartups
1. Pitch everyone your idea
2. Mockup wireframes
3. Hire a designer
4. Do customer development
Now the fun stuff begins. Host the three versions of your homepage on Unbounce. You now have a website, congratulations. Next you’ll want to sign-up for Snapengage so you can talk to customers when they get to your site. Then you’ll want to sign up for Optimizely so you can create even more versions of the homepage, to test button placement, wording and images. And you’ll want to sign up for Google Analytics to get even more data about how people are using your homepage. Finally you’ll want to sign up for Mailchimp, so you can properly collect emails. All of these services have free accounts for beginners, and they all work with each other seamlessly. With around $200 on Adwords, you’ll want to start talking to potential customers. Starting Adwords does have quite a steep learning curve, way outside the scope of this post, but for a non-programmer, it’s a very important skill to learn. With all the tools you’ve placed on the homepage, you can test what language and layout works best based on given metrics, e.g. how long they spend on it, how many people take an action, and you can have real-time conversations with them to learn why they visited, what about the site makes them uncomfortable, etc. Keep going until you have 200 unique visitors to your page.
6. Develop relationships with press
You should be able to move swiftly from steps 1-6 within 2 months. After those 9 aggressive weeks, you should go back to the programmers, angels and potential customers, and see if their decision to work with you has changed.
Lessons Learned from Getting a Ton of Press
Disclosure: Although this is being published at my personal blog, 99.9% of credit for anything PR related should go to my co-founder, Danny Wong. The other 0.1% for me turning up to the photoshoots.
If your startpup has less than $100k in runway, is less than 100 days old, and has less than 100 visitors a day, don’t use a PR firm. I don’t think you’ll be able to find a journalist who will tell you they’d rather receive a pitch from a junior media relations person at some PR firm than the founder of the company who lives, eats and breathes the story of the startup. With that said, how do you actually get journalists to care about you.
The Funnel: In a lot of ways, it’s not that dissimilar to business development with clients. For every 100 journalists you pitch, there will be 30 who open your email, 12 who reply to you, 5 of whom you can actually get on the phone with, and 3 who pitch the story to their editor and maybe one, if you’re lucky, who publishes the story. Let me say that if you’re got a 1/100 hit rate, you’re actually doing fairly okay. So before ever crafting a pitch, set up a CRM tool. At Blank Label and our new brand, Thread Tradition, we use HighRise. A CRM tool will help you keep track as you grow your database of journalists to the hundreds and thousands. It’ll help you visualize who is a warm lead so you can follow-up when you have new news, who is based where so you can meet them in person on travel, things you just won’t have visibility over when everything’s in your email.
Transaction vs Relationship: Obviously the earlier you start developing relationships the better but likely you’ll start just around launch of your product. It’s hard not to be very transactionally driven because you pitch, you follow-up, you follow-up and then if they’re not replying, you move on. From our experience, a lot of journalists really don’t like this approach and will likely blacklist you from their contact list. Damn! The relationship driven approach is replying to the journalists columns, dropping them really light emails with feedback on their article and nothing to do with your startup. After a few quality touch points, they will likely either ask you what you do (because they’ll just be curious and click on that link you’ve left in your email signature) or when you finally do drop the pitch, they’ll likely read the whole thing. Of course this takes a lot more time, both on a per journalist basis as well as needing to develop relationships weeks, if not months, before you want a story to go live. A lot of our bigger stories, we first reached out to the journalists 3-6 months prior.
Research: Something that will help a lot is doing your research up-front. This might sound like a no-brainer but read at least three articles of the journalist you’re about to reach out to. And drop a note about one of their articles in the first two sentences of the email, if in the subject line, even better. Research actually should take up 80% of your time doing PR. You’re reading anything in the news related to what you’re doing, e.g. small business sections of LA Times, Chicago Tribune, New York Times; any publication relating to startups, e.g. Entrepreneur Mag, INC Mag, Fast Company; and industry specific publications. You’re learning which writer covers which sections of the publications, they’re writing styles. You’re following them on Twitter. If it sounds like a lot of work, it is. At Blank Label, PR was one person’s full-time job.
Do you have any stories or advice on how startups can power their media relations efforts? Please feel free to add your tips in the comments below.
You and Blank Label
This is how I felt when I was in investment banking two and a half years ago. I liked the high-octane environment, the tight deadlines, and the chaos. And even my manager who an average person would call a grade A ass. But each day nagged at me, I kept finding myself asking “Would anyone really miss the work I did today if I just didn’t turn up”. Sure my boss would get annoyed and he’d need someone to pick-up the slack, but he wouldn’t really care. In fact no one really would. Last of all not me.
I needed to do something more important. Something more meaningful to others, but most importantly to me. If this rings somewhat familiar, or you know someone who might be in this position, the official blurb is below:
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Blank Label is a custom apparel company starting with men’s dress shirts. The company has been featured in NYTimes, MSNBC, Forbes, INC Magazine, Entrepreneur Magazine to name a few. We plan on being in more national publications in case you like to see your name and face in print.
We’ve been online for 15 months, we’re bootstrapped and pretty scrappy. We’re making enough money to pay a couple of salaries and are now looking for i) a full-time .NET/C# engineer and ii) a UI/UX/IA product designer to join the founding team. You’ll be working alongside our lead architect (remote).
We are not just asking you to take stock as salary, we’re actually making enough money to pay you, and the stock we’re offering is actually worth something! Like most startups, we’re asking you to take a 20-30% discount on your full market rate (other startups just call this “competitive salary”, and it will be 2-4X the Founder’s salary), offset with equity that’s actually worth something. Most important, you should value learning and independence.
You will be working with the Founder in Cambridge Co-working Center on 1 Broadway in Kendall Square
Boston Lost the Sex Battle
Healy Jones recently wrote a great piece on 8 Tips for Building An Internet Company Outside of San Francisco. If you’re in Boston and starting a company, you should read it. But if you’re under 27 and thinking about starting a company, it’s not going to keep you in Boston. I recently was invited to dinner with some local consumer web CEOs and we largely talked about how Boston is falling behind (or failing) to retain college grads interested in startups. Boston has an image problem. It has no sex appeal.
Jules Pieri of Daily Grommet talked about how her son (soon to be rockstar college grad) wants to work on products he can tell his friends about, or even better, that his friends are using. Now far more than ever, young startup folk want to get into startups because it’s incredibly sexy. Caused largely by Wall Street’s failure and Zuck’s incredible success, young people want to get rich AND famous doing startups. But as Niraj Shah said, Boston sucks at promoting itself, ergo young people don’t think you can get rich and famous doing startups in Boston. There is no PG or YC, there is no NYTimes, there is no Fred Wilson, no TechCrunch. Who outside of Boston actually cares about Boston?
Boston will continue to bleed talent. It’s not just the ThredUP’s, OnSwipe’s, RelayRides’, WePay’s, etc it’s also the hundreds and thousands that go to Facebook, Google, Microsoft and Amazon, that probably won’t come back to Boston to start their companies. Of the dozen or so close friends of mine (all under 27) working on startups locally, I expect 75% of them won’t be in Boston within a year. Of the other couple of dozen young people in the ecosystem I’ve met in the last few weeks since I’ve relocated back, they say they are largely here for personal reasons. The best quote of last week’s dinner came from Bill Warner who said Boston first has to admit there was a problem, and then go and try to fix it. I still don’t think most of the establishment thinks there’s a problem with losing the next generation of risk-taking, passionately driven entrepreneurs.
There are going to be a couple of things that will reverse the trend and get Boston sexy again;
1. Gemvara and SCVNGR need to have huge exits. Credit to Highland for backing a couple of young guys (23 and 19 respective when HCP invested). These will create mini mafias (this has actually already started to happen), where others have tasted the drug of success and want to replicate it for themselves.
2. BostInno really needs to get bigger and better. There needs to be a publication that largely focuses on new and shiny tech startups that provides said startups its initial early adopters.
3. Young smart folk need to be encouraged to leave companies like VistaPrint, Microsoft NERD, TripAdvisor, Constant Contact, etc after a few years to break out on their own. There’s already a large support network through events that these people can already engage in so now it’s really just cultural.
Best of luck Boston, I’m rooting for you 
Re-applying Lean Lessons Learned
We‘ve been working on a new product line, Thread Tradition, for the last several weeks. It’s still in private beta, although if you ask President, Jack Reyer (jack@threadtradition.com) nicely, I’m sure he’ll pass along an early invite. Attending an Eric Ries Lean Startup talk during the week, it reminded me of some lean tactics we’d applied in the early months at Blank Label (and still are!).
Test as Many Forms of Traffic as Possible
Something I touched on in my last post, one of the biggest mistakes we’ve made is not testing different forms of traffic early enough, especially paid search. If you can’t be profitable on a channel where people are actively looking for you, e.g. for us “custom dress shirts” you have a problem. If they’re looking for you, and you can’t convince them to convert, what chance do you have on converting a browser or passer-by?
Three Yes’s to Product Development
We take three things into consideration when building and iterating product. i) Analytics. Why is there a high bounce rate on this page? Why is everyone buying the gingham shirt? ii) Customers. “Hey guys this page sucks, I have no idea what’s going on here.” ” You guys need to get more gingham, didn’t you know everyone’s buying gingham now”. iii) Product vision. What message are we trying to convey on this page. Are we selling to hipsters or business executives.
Talking to Customers Is The Best form of Learning
TALK to CUSTOMERS! Talking I define here as a back and forth conversation. The best vehicles of talking are on the phone and on instant messenger. Don’t think you’re doing enough by throwing up a feedback tab on the right and answering a handful of people who bother to drop an email. We use Snap Engage for IM, just an awesome product. I’ve personally called hundreds of customers who’ve ordered to ask them about their experience. Some get annoyed because they want to keep the relationship online but the overall net is undoubtedly positive.
Start Thinking about CAC and LTV from Day One
Because our main sources of traffic for Blank Label for year one were press and word-of-mouth, we didn’t really think too much about CAC, we said PR is free so our CAC is zero! Awesome! Not awesome, because PR is hard to scale. And we definitely didn’t think about LTV. It wasn’t until only several weeks ago we started to seriously look at customers’ behavior over time rather than just at the single transaction level. Through talking to customers we get a better sense of how many dress shirts they purchase a year, and from that we can make better judgements of LTV and from that CAC. Wow we can actually spend $X to acquire a customer! That makes a lot more channels look profitable.
What lean lessons are you applying to your startup everyday?
Our Journey in Building a Customer Acquisition Model
This is mostly an anecdotal account of how Blank Label got to 60k in monthly uniques and what I hope can learn from it. When I talk to most non-technical founders, we share the pains of not being a builder. It’s painful because no investors will take us seriously without a prototype, most engineers won’t talk to us because they know we initially bring very little to the table, and we just feel stuck and helpless. We think, once we can get the site we want built, we’re golden. It’s time for my idea to shine, then everyone will see how right I was from the start. Not exactly.
1. Before Marketing Comes Economics
You first need to understand the fundamental unit economics of your business. If you’re running any kind of commerce site (travel, jewelry, custom dress shirts), what’s the average order value, how much are people spending per visit. And how much of that do you actually keep as profit.
Then you make up a number (because it’s very hard to actually get the number right without the actual data) which is how many times you think that customer will shop with you again. Is it 3 times, 5 times, 10 times? All depends on your business. Good advisors can help here. This will help you ultimately determine 1 of the 2 most important numbers in your business. Most people call it the Life-time Value (LTV), essentially it’s how much a customer is worth to you.
The other-side of the equation is the Customer-Acquisition Cost (CAC), how much you want to pay for a customer. The CAC number is the marketing spend divided by the number of customers; e.g. if you spent $5,000 this month and had 100 customers on your site, the CAC is $50. If you’re a logically minded person, you’ve already figured out that everything funnels back to
LTV > CAC
If you’re paying more to get the customer to buy something than the customer is going to give back to you in profit, you don’t a business.
2. How To Get Free Traffic
For us the first year of Blank Label, traffic was mainly driven by PR and word-of-mouth. Our Lead Evangelist Danny Wong was very determined in using PR as a pillar of traffic. We were featured in New York Times, MSNBC, BusinessWeek, Inc, Forbes, just to name a few. When starting out, PR is a great place to get traffic, mainly because its free and can often surprise you at how big it can be.
Invest time into it and you’ll see it as a funnel just like site usage. You’ll start tracking how many pitches you send out, how many replies you get, what pitches get more replies, whether in-person meetings with journalists are worth your time, that closing stories actually is very rare but if you pump that funnel with good leads, you will get write-ups.
3. Paid Traffic is Better than Free Traffic
We always thought as we grow our PR relationships, we’d get more PR traffic, times that by some viral word-of-mouth co-efficient and we’d be golden. Not quite the case. Here’s the best PR tip that no one has ever told us. Everyone wants to write about you when you’re starting out, when you’re “launching” but then you become old news. You’re most interesting when you’re the shinny new thing.
One of our advisors, David Hauser, told me pretty early that we should really be thinking about how to spend some of the money we were making from the free traffic on the paid traffic. Admittedly I wish I took this advice when he told me rather than four months later. The earlier you can budget paid traffic, the better. Ultimately if you can acquire customers for less than you’ll make back off them (LTV > CAC), that’s fairly scalable – you just poor more money on. Google, Microsoft and other ad exchange networks really don’t care whether you’re the shinny new thing.
If you’re in Boston and are looking to share notes on customer acquisition modelling (not social media marketing!) there’s a pretty cool group of people forming, drop your name in the comments and I’ll be in touch.
