From Zero to a Hundred - Acquiring Your First set of Users
Acquiring the initial set of users may vary between B2B and B2C models, but the fundamental goal remains unchanged at its core – persuading individuals to embrace your product or service.
In this article, Rathin Shah, an ex-Investment Banker turned entrepreneur, talks about how the right time to acquire your first set of users is always now. Whether your product is in its early stages or undergoing improvements, don't hesitate to attract users if you have a vision worth sharing. He shares real-life examples like how his Y Combinator-backed startup Spenny acquired its first set of users.
Taking the leap, you managed to kickstart your entrepreneurial journey and built something great. However, customer acquisition is the part where most startups need help finding paying customers for their product/ offering. Acquiring the initial set of users may vary between B2B and B2C models, but the fundamental goal remains unchanged at its core – persuading individuals to embrace your product or service.
“The journey of a thousand users begins with acquiring the first.”
For example, Lil Nas X devised a remarkably inventive approach to market his song. He comprehended the psychology behind attracting initial users and harnessed the power of cowboy memes, cleverly pairing them with the background music of his debut track, "Old Town Road." The amalgamation of trending memes and catchy tunes piqued people's curiosity, driving them to explore the music further. Through this ingenious marketing tactic, he successfully built intrigue around his song and captured the attention of first potential users who helped transform his journey towards growth & success.
A quirky way to get high-intention users, indeed! But when it comes to the startup landscape, it isn’t as easy. Most startups fail due to their inability to get paying customers. So, as a startup, how can you overcome this?
What are a few ways to grow & scale?
As mentioned before, customer acquisition can differ for both B2B & B2C startups. The below table talks about some actionable ways to acquire customers.
There is, however, an important thing that we must remember here. All of these techniques are general ways to acquire customers, which may not necessarily be the same for the first customers. Provided you have zero traction, zero finance, and you are still hellbent on getting someone to notice what you’re building- It’s time to use growth hacks!
What are growth hacks?
Growth hacks are clever strategies and tactics implemented to achieve sustainable business growth and retain an active user base, often by optimizing user experiences, enhancing customer satisfaction, and maximizing the overall value delivered to users.
A growth hack should have these two key characteristics:
Life Time Value (LTV) > Customer Acquisition Cost (CAC) - Revenue should be more than the cost you are spending on the customer)
A high number of users acquired
How do you structure a growth hack?
To structure a growth hack effectively, follow these key steps:
1. Generate Ideas: Begin by creating a pool of innovative ideas that align with your business objectives and address the needs of your target audience.
2. Identify Real Needs: Understand what your potential customers truly need and how your product or service can provide a solution to their pain points.
3. Acquisition: Devise strategies to make your presence known to your target audience, attracting them to your offering and encouraging them to become users.
4. Activation: Focus on delivering a compelling and seamless first experience to users, enticing them to engage with your product or service. The goal here is to change acquisition to activation.
5. Core Call-to-Action: Integrate the growth hack with your main product or offering through a clear and compelling Call-to-Action (CTA).
6. Retention: Implement tactics to foster user loyalty and encourage repeat engagement, ensuring that users keep coming back for more.
7. Generate revenue: Explore ways to monetise your user base and convert engaged users into paying customers.
8. Referral Program: Encourage your satisfied users to spread the word about your product or service, creating a network effect and attracting more users through word-of-mouth referrals.
Keep iterating & pivoting based on user feedback and data insights unless and until you have that head-turning product that everyone wants to buy!
In a nutshell, be it hacks or general advice, how do you acquire your first users?
Research & understand the demographics or persona of the user.
Promote your product/service in the online community. "Throw away your pen drives" was a brilliant marketing campaign used by Dropbox to promote its cloud storage services in online communities. By positioning itself as a reliable, secure, and convenient solution, Dropbox successfully captured the attention of potential users and effectively expanded its customer base.
Engage with your customers & keep building curiosity through waitlists or beta versions of products.
Find influential champions to advocate for the product.
Leverage curated hacks for growth like RedBull’s marketing strategy, which involved placing empty crushed cans near trash cans outside colleges, capitalizing on consumers' psychology of FOMO (fear of missing out) and curiosity surrounding the drink. This clever approach triggered a surge in demand and boosted sales for the brand.
Build a community to engage and connect with users.
“Your first users are not just customers; they are your product ambassadors.”
Summary: As we mentioned again & again, it’s never too early or late to acquire your first users. Even if you fail initially, there is always scope to improve as, most often, either your product isn't aligned with the market demand or your messaging fails to resonate with your audience.
So, Keep learning from your mistakes, be open to making necessary changes, and pivot if needed. When it comes to reaching out to a large audience, remember that it's not an overnight process. Instead, focus on gaining your first 100 users and refine your approach based on their feedback while keeping in mind a rough timeline for testing and validation. Building a solid foundation with a dedicated user base will pave the way for future growth and expansion.
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