Entrepreneur-ing In Public: Journey Log #9
It's time to scale customer acquisition... but how?
I teach entrepreneurship at Duke and I’m publicly growing a company — Autopest — from $0 to $100k/year in revenue in order to help entrepreneurs better understanding the process of building startups. Learn more about my journey here.
When I launched my first software startup nearly 20 years ago, I remember hosting a launch party. It was an expensive event that took lots of planning, and the turnout was mediocre at best. Still, there were more people at the startup’s launch party than visitors to the startup’s website that first week. Or even that month. There might have ultimately been more people at the startup’s launch party than website visitors during the startup’s entire first year of existence, but I’ll never know because the startup didn’t last an entire year.
My problem was that I thought “launch day” was the day some sort of magic was supposed to happen. It was the day when I had everything built, and people would suddenly start paying to use my product.
Fast forward to now, and I’ve learned that software startups don’t really have specific “launch dates.” Instead, they have soft rollouts during which the founders are trying to figure out two things:
Does the piece of software we built actually work?
Does anyone want to use/pay for it?
That’s what I’ve been doing with Autopest. I “launched” the company two-ish months ago, but the launch wasn’t any sort of grand event or key benchmarking moment. Instead, it was merely the moment I made it possible for people not named “Aaron Dinin” to start using the software so I could learn whether the software would work and whether anyone would actually pay for it.
At this point, I’ve got solid answers to those questions:
Yes! The software works. True, I’ve uncovered and fixed a number of bugs. I’ve also added a handful of small features. But, overall, based on the number of new signups and amount of autopests being sent by active users, I’m confident the software lets people do what they’re supposed to do.
As for whether people will pay for Autopest, I’m pleased with that answer, too. No, I don’t have hundreds of paying users. I don’t even have 10 paying users. But, considering how little time I’ve put into customer acquisition (which, aside from these blogs, is almost zero), I’m pleased with how many paying users I have, how much they’ve paid, how much they’re using the product now that they’ve paid, and, most importantly, how little I did to convince them to pay. This tells me I’ve got a product that delivers genuine value to some core group of people.
Now it’s time to move to the next stage of building the startup, which is figuring out how to find more people like the first paying customers. In other words, it’s time to build a cohesive customer acquisition strategy.
To be fair, if Autopest were my full-time startup and not a side project I’m running to help teach about building startups, I’d want more validation than what I have. I’d love to have 25-ish paying customers, and I’d use that cohort of 25 to get a much stronger sense about who to target in my next stage of building. But, I don’t have time for that, so I’m going to “shoot from the hip” and start testing a customer acquisition strategy based on what data I currently have.
Core Metrics
WEEKLY ACQUISITION METRICS:
Site Visitors: 466 uniques (0%)
New Free Users: 35 (0%)
Website Conversion Rate: 7.5%
New Paid Users: 0
AGGREGATE ACQUISITION METRICS:
Total Free Users: 456
Total Paid Users: 3
Total Revenue: $328
Total Costs: $30.90
Net Revenue: $297.10
WEEKLY USAGE METRICS:
Extension Installs: 12 (0%)
Unique Senders: 6 (+20%)
Developing a Customer Acquisition Strategy
In lieu of analyzing this week’s funnel (they numbers are almost identical to last week’s) I wanted to focus on how I’m thinking about building Autopest’s customer acquisition strategy.
When you’re bootstrapping a startup like I am for Autopest, you can’t afford to spend thousands of dollars on Google and Facebook ads and then start optimizing your sales funnel. Instead, the best way to develop a customer acquisition strategy for a new, bootstrapped startup is to find a way to send a small amount of traffic to your business from a variety of sources and see who buys.
That’s exactly what I’ve been doing with Autopest and these blogs. These newsletters (and some other sources) have been helping to send a steady trickle of 400-500 random people to the Autopest website every week for a couple of months. From there, I’ve been able to smooth out my onboarding funnel and get a sense of who wants to buy.
I’d initially assumed sales and marketing teams would be Autopest’s target buyer, but that’s not turning out to be true. At least, not initially. Instead, Autopest’s best users appear to be people operating as one-person sales and nurturing teams.
For example, a number of my most active users are people running small, B2C services businesses like landscaping companies, real estate agents, and insurance brokers. In other words, they’re people constantly sending emails to a small number of clients or potential clients with whom they have personal relationships. In those cases, Autopest is perfect because it saves users time by following up on emails for them in a very personalized way.
To understand what this looks like, imagine you’re a landscaper who, after visiting a new potential client, sends a service quote. If the client doesn’t respond in a few days, you’d usually need to send a follow-up, but, remembering to send the follow-up is a pain-in-the-you-know-what. That’s a perfect job for Autopest! It’s AI can easily customize a message that references the quotes from the original email and nudges the potential customer along.
Makes sense, right? I’m honestly not sure why I didn’t think about that type of buyer initially.
Regardless, now that I know who my customer is, I need to figure out how to reach lots of them, so that’s what I’ll be doing this next week… researching strategies for reaching small services companies.
For the record, from past experiences, I know that’s a terrible market of over-worked entrepreneurs who already get hounded by lots of people like me trying to sell them stuff.
Sigh…