Monthly newsletter: technology, startups, business growth and marketing

Monthly Newsletter: Issue 5

Hi, this is an issue of my monthly newsletter. I’ve picked a few interesting articles on technology, startups, growth, marketing and other topics for you.

I hope you enjoy the read with your morning cup of coffee. Let me know what you think! ~Max


Technology and Startups

Growth and Marketing

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How to Find Your Ideal Customers

Trying to market your product without knowing whom you should market to is like walking blindfolded. You might still end up in the right place. But it’s not very likely.

Any Customers Vs. Ideal Customers

A new startup might try anything to get its first customers. At this exploration stage, you cast the net wide. You approach different individuals and companies and do whatever it takes. Any customer is a great customer.

But as the company grows, it learns that not all customers are created equal. Some are easier to acquire. Others benefit more from the product and are easier to retain. Yet others are easier to expand and upsell to.

This raises a question. How do you know who is your primary target audience?

At an early stage, you “just know” your ideal customer. Your ideal customer profile is whoever was willing to buy your first product or sign an agreement before you even developed a prototype.

Of course, you can always stop here.

But if you’re planning to become a world-class company, you might need to take it to another level and make sure that your marketing is also world-class. All top technology–, and more narrowly, Software as a Service (SaaS) companies have a very clear understanding of their ideal customer profile. Even though this post will be particularly relevant to this type of companies, the general principles can be applied to any industries.

A side-note on terminology: terms such as “ideal customer profile” and “target audience” are often used interchangeably. “Buyer Persona” is another similar term that emphasizes the focus on individuals – as opposed to companies.

Why Define Ideal Customer Profile (ICP)

An ideal customer is a customer that is more likely to like your product and pay for it. Knowing your ICP should help you grow revenue while investing less. This higher return on investment is achieved through better targeting among other things.

Imagine, you sell software that helps cities analyze traffic patterns and make better urban planning decisions. You could place a TV commercial and hope that the right people will see it. This would be utterly inefficient.

Alternatively, you could identify a subset of cities that are most likely to adopt this type of software, then identify the right officials who are most likely to be decision makers and target them with a proposal that addresses their specific pains and explains how your product can alleviate them. Needless to say, this would be infinitely more effective.

And, by the way, customers will also appreciate this targeted approach. See “Principles of Ethical Marketing” for more on this.

If you need more reasons:

Ideal Customer Profile benefits: marketing targets, sales enablement, customer-centric products

How to Develop ICP

The approach will depend on a number of things:

  • Company size and stage
  • Available resources
  • Available data

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Monthly newsletter: technology, startups, business growth and marketing

Monthly Newsletter: Issue 3

This is an issue of my monthly newsletter. Main topics: technology, startups, business growth, and marketing. See other issues on my blog or subscribe. ~Max


Now, get a cup of coffee and enjoy!

Technology and Startups

Growth and Marketing

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How to Hire a CMO or VP/Head of Marketing

So, you’re a founder and a CEO with no or little experience in marketing who needs to hire a CMO, VP or Head of Marketing.

You know you want to grow revenue fast but you might be skeptical about marketing. How can you ensure that whoever you bring on board is going to help you build a rocket ship?

As with any key hire, the impact on the company success is hard to overstate. An “A” player will help the company achieve and exceed its goals. An “A player” will also build and continually develop a team of “A+” players. They, in turn, will help you fill key marketing leadership roles from inside.

A lot of smart and experienced people tried addressing this topic. I think I can bring unique perspective coming from marketing myself.

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Monthly newsletter: technology, startups, business growth and marketing

Monthly Newsletter: Issue 2

This is an issue of my monthly newsletter. Main topics: technology, startups, business growth, and marketing. See other issues on my blog or subscribe. ~Max


Now, get a cup of coffee and enjoy!

Technology and Startups

Growth and Marketing

  • Intercom on Marketing (ebook). A good intro to marketing and, in particular, product marketing that will be interesting to those who are relatively inexperienced.
  • How to Design Marketing Campaigns. Basics of marketing segmentation, messaging hierarchy, and campaign management – this article will be useful to those who’re new to marketing or looking for a refresher.
  • HubSpot’s Pricing Page Redesign → MQL Conversions 165%↑ & Free Sign-Ups 89%↑. How: research first – usability testing, internal feedback, and customer intelligence; then design based on insights and A/B test.
  • What’s next in growth?” (video) talk by Andrew Chen who leads the rider growth at Uber. Andrew recommends you ignore “growth hacks” and focus on fundamentals that worked for decades. E.g. user referrals, shareable content, and using discounts to jumpstart demand for new products.

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Principles of Ethical Marketing

“Aww, it’s just marketing…”

You probably heard people use marketing as a derogatory term.

Admit it, you probably did too.

Why?

You can probably think of many examples when marketing wasn’t practiced ethically. It’s true that one doesn’t need to go far to find them. Spam emails that lack “unsubscribe” buttons, misleading packaging, annoying pop-up or video ads that you cannot skip.

Marketing can go wrong for all the same reasons business can go wrong: misaligned incentives, short-term focus, and tunnel vision.

But business is not inherently and inevitably net-negative to society – quite the contrary. So isn’t marketing.

The thing is not all marketing is created equal. It’s just that some people in marketing make wrong decisions. Just like some engineers ignore safety standards, some doctors overprescribe medications, and some businesses pollute the environment.

Essentially, marketing is simply helping organizations serve more customers.

More specifically, marketing is about finding the right customers who actually need your product, using their feedback to make the product better, and consistently communicating useful information through the right channels and at scale.

With this in mind, I decided to outline a few high-level principles of ethical marketing.

Principles of Ethical Marketing

  1. Create value before capturing value.
  2. Long-term over short-term optimization.
  3. Customer feedback over company politics.
  4. Educate customers instead of misleading them.
  5. Build products that people want instead of selling the ones you have.
  6. Target customers who can benefit from the product instead of targeting everyone.
  7. Measure NPS, retention, virality, and product usage in addition ROI, revenue, and growth metrics.
  8. Consider the impact of marketing decisions on employees, other companies, society, government, and environment.

Here you go, a small manifesto of sorts.

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Key Growth Metrics, Part 2: CLV/LTV, and CAC

I wrote this blog post as part of blog series on growth and marketing. See more here: Growth Map: The Missing Guide That Connects Marketing Strategy, Research, and Campaigns.

Managing a business is a little bit like flying an airplane. Keep your eyes on the speed, altitude, drag, and fuel and you’ll get to your destination fast. Try flying blind and you’ll crash and burn.

Who Should Read This

Startup founders, marketing managers, and growth hackers who are new to the growth game. Anyone who’d like to understand basic business metrics tech startups use. Here is why you might care:

  • You’d like to grow your business faster and understand the highest-leverage areas to focus on
  • You’d like to evaluate performance of your marketing
  • You’re raising a new round and want to be ready for the questions VCs are going to ask

So, let’s dive right in.

What We’ll Cover

Last time we focused on user growth. We looked into acquisition, retention, and virality metrics, as well as interactions among these three. Today, we’ll assess the dollar impact one user has on our business. To do it, we’ll learn to calculate and use another metric: customer lifetime value.

Summary (TL;DR)

  • Customer Lifetime Value (CLV) = dollar value a company can earn from serving one customer.
  • Retention ↑ => CLV ↑
  • Price ↑ => CLV ↑
  • Discount rate ↑ => CLV↓

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Key Growth Metrics, Part 1: Churn/Retention, and Virality

I wrote this blog post as part of blog series on growth and marketing. See more here: Growth Map: The Missing Guide That Connects Marketing Strategy, Research, and Campaigns.

Managing a business is a little bit like flying an airplane. Keep your eyes on the speed, altitude, drag, and fuel and you’ll get to your destination fast. Try flying blind and you’ll crash and burn.

Who Should Read This

Startup founders, marketing managers, and growth hackers who are new to the growth game. Anyone who’d like to understand basic business metrics tech startups use. Here is why you might care:

  • You’d like to grow your business faster and understand the highest-leverage areas to focus on
  • You’d like to evaluate performance of your marketing
  • You’re raising a new round and want to be ready for the questions VCs are going to ask

So, let’s dive right in.

What We’ll Cover

First, we’ll focus on user growth. Here we’ll look into acquisition, retention, and virality metrics, as well as interactions among these three.

Second, we’ll focus on the monetary value associated with users. Here we’ll look into customer lifetime value and customer acquisition cost.

Summary (TL;DR)

  • There are multiple variables that will define business growth dynamics
  • Main ones are acquisition rate, retention rate, and virality coefficient
  • At any given time you might choose to prioritize some of these metrics over others
  • This decision will depend on the business strategy, available resources, customer feedback, stage of the product lifecycle, and hundreds of other factors
  • Models like the one shown here can assist you in making better decisions by letting you see where your business will be at in the future under different scenarios

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