Avoiding Startup Tarpits

https://medium.com/@DanielTawfik1/its-not-a-feature-problem-avoiding-startup-tarpits-7d5ec4b8c81b

by dtawfik1 • 9 years ago

184 68 9 years ago

Half of this article could be summed up as "Validate your idea/product. Do not assume what people want."

The other half is "Marketing is not stupid". Marketing, sadly, is something that many of us are not good at. People still believe that if you build it, they will come. Myself, I have a several dead side projects that nobody came for, as do many here.

Also, maybe I've been out of the adword world for too long, so question for you folks that are living it now. Is a $70 CAC about average? I find that a bit high but I suppose if it only takes 2 months to recoup then their CLV must be good.

rpeden• 9 years ago

I see product/idea validation as part of the marketing process, too.

In the intro to marketing course I took in college, one of the points they really tried to ingrain in everyone was that the market research you do before you create a product or feature is one of the most important parts of marketing.

soneca2• 9 years ago

I believe the first validation of product must come regardless of marketing skills. If you built a side project and no one is using it, it is a product problem, not a marketing problem.

Actually, I believe a clever marketing tactic can be counter-productive in such an early stage, as you might lure customers to a product that doesn't deliver value.

So, your first few paying customers should come from building the product and putting it in front of few people (your personal and professional network, Show HN, Reddit).

After you have these first customers then it is time to stop underestimating the marketing effort a successful product demands.

mgkimsal• 9 years ago

If you built a side project and no one is using it, it is a product problem, not a marketing problem.

If you built it but no one knows about it to come and use it, how is that a product problem?

lj3• 9 years ago

I can't speak for most devs with a side project, but for me specifically, market validation and marketing don't feel like real work. I know it's real work and it's necessary work, but they don't feel like it. They feel like goofing off on the internet without the fun. I don't get the immediate gratification of posting on Hacker News or the satisfaction of coding up a new feature.

Then there's the added fear of being really bad at a new skill. It doesn't help that the iteration cycle of market validation and marketing is extremely long compared to programming. You could be screwing up for months and not have enough clear data to know you're screwing up.

To clarify, this is not me complaining. I realize I need to get over everything I've listed, press forward and learn a new (lucrative!) skill. But I can't be the only dev who feels this way about marketing.

rcarrigan87• 9 years ago

Average CAC in terms of dollars depends entirely on your industry/product. A good number is all relative.

andy_ppp2• 9 years ago

I think the thing that affected me the most is trying to solve all of the problems with ever more code and cleverness. I actually think the less code you have as a startup the better, I suppose this is a small expansion of "Do things that don't scale". Avoid writing code.

savrajsingh• 9 years ago

For many funded startups, they have the opposite scenario — growth that wholly depends on marketing that masks the product deficiencies. As soon as you lay off the gas, product deficiencies become apparent, so you are tempted to raise more and more money.

dtawfik12• 9 years ago

That's an interesting point that I hadn't really considered. Our startup never got to that stage. We raised money, burnt through it and then had to figure out how to salvage the situation being gritty.

ohadron2• 9 years ago

Absolutely. This is very common in consumer products where the burden of moving over to the competition is minimal (think food delivery, ridesharing, home maintenance etc.).

Additional symptoms are relatively low retention or no retention at all, and aggressive marketing tactics to the point where as a customer you're not sure how can they be possibly making money.

dpandya• 9 years ago

We invested all of our seed funding in developing a great product. In doing so, our feature list expanded, but our actual revenue growth never changed in a meaningful way to support that development.

I think the key distinction to make here is that a "great product" is not defined by whether or not it is feature- complete, pleasant to use, etc. but whether or not your customers like using it, consequently paying you for it. Likewise, any change you make to your product should only be considered a positive delta if it makes people like it more (or pay more for it); otherwise, it's just a prettier/faster/more complicated product, not a better one.

smikhanov• 9 years ago

If the author of this article would try to persuade me to join his company as a techie, I would say no. The reason is simple: as experienced as he sounds (and he sounds like a total badass, by the way), the overarching conclusion that a hacker may take away from this article is "startups are little more than a lot of clever marketing".

Which is sad, in a way. We all read about how Woz was hacking logic boards during the early days of Apple, or how Sergey and Larry built their company on top of their groundbreaking PhD research. As a techie, you would dream that you can join a team where your contribution is crucial and consists of something that can't be outsourced to Ukraine. Yet, this mostly doesn't appear to be the case.

Sad.

dtawfik12• 9 years ago

I am the author and I do agree with what you are saying. Our story was different. I mentioned that one of the original sins of our company was how we budgeted solely into product development. The other original sin was that the idea for the company was ill conceived. We had been working on tech at another company why not release as stand alone product. The idea frankly wasn't that differentiated enough from other products out there. When you don't have a truly differentiated idea like the companies you brought up, then marketing becomes more and more important to get peoples attention. Part of what made the examples you brought up special is that what they were working was so unique. That differentiation/uniqueness makes it a lot easier to market (the virality piece is more likely). In our case because we didn't have that. The way to survive was that we had to fight it out bidding for ads on Google. I would not recommend that path for anyone. It was just the environment we were in. I would say even for those companies to focus on marketing will not be a disservice, but focus on the initial conception of the idea even more. It makes a world of difference in determining what kind of head winds you'll face.

valuearb4• 9 years ago

No one would ever have heard about Woz and his logic board hacking if Jobs hadn’t decided his target market was non technical people in the home and office, insisted the products contain features targeting their needs (no kit, a working computer packaged to connect to a TV, disk drives instead of tapes, etc, etc) and then created massive awareness of Apple using great PR, advertising, and a worldwide sales network of resellers.

jnwatson• 9 years ago

I guess lots of founders forget that an early tech startup is still a small business and similar rules apply whether you're starting the next Uber or opening a new restaurant.

Marketing and sales are super important. R&D is super risky. This is true for every business. To de-risk, spend more on the former and less on the latter.

ne014• 9 years ago

I'm Sed and I'm addicted to adding more features to my startup.

This article talks to my heart. I have been working on my startup for 7 years now. For all these years, I have been adding more and more features, changing the product direction twice and still not knowing if we have something valuable.

I want to start marketing right now and stop adding more features!

P.S. Anyone interested in helping me? I am willing to split the profits for the lifespan of a user if you can help me acquire new paying users!

andy_ppp2• 9 years ago

Interesting, I wonder if you can set that up as a marketplace connecting successful marketers to recurring revenue.

icebraining2• 9 years ago

Isn't that essentially a marketplace for affiliate programs? There are a few around.

no1youknowz2• 9 years ago

I hear you and I'm in the same boat lol. Except that, I have been engaging potential customers prior to a launch.

I am having 30 minute conversations and asking THEM things like:-

1) What their process looks like. 2) What pain-points they have. 3) What they are actually using and paying...

We then brain storm what potential solutions could solve these pain points and move onto:

4) How much they would be willing to pay to solve these problems. i.e, if their ROI could increase by a certain % is paying the $$ a no brainer. 5) More importantly, how much time they would be saving and is the $$$ a now brainer now?

Features are great, they differentiate between yourself and your competitors. But they aren't the goal. What is the goal, is making those features part of a process flow and achieving a result that your customers want AND will be willing to pay for, compared to your competitors.

What's the point in building a feature a potential customer won't use or understand? Or even worse, is too complex and when they use it they leave frustrated?

Bottom line is, you don't know if you have something because you aren't talking to your market.

So stop what you are doing. Nowadays it's really easy. Go on Facebook, start searching for some groups. Sometimes the gold is there because people are asking questions and you can get a sense of where your product fits. Then insert yourself into the conversation and start asking questions.

Start adding people and trying to engage them directly. Say you'll send them a coupon or buy them lunch for 30 minutes of their time. You can setup a Skype conversation and then glean lots of knowledge.

I would also suggest doing this with those who are experienced and in the weeds. Because they could give you actual insights over what people THINK they need.

Best of luck! :)

ne014• 9 years ago

You are right! Without knowing the answer to those questions I feel like I have been creating these features for myself.

I should start engaging on social medias.

Do you think Facebook is better than Twitter for this?

Thank you! :)

icebraining2• 9 years ago

I can't help you with that, but since your product for programmers, I have a suggestion: show an example of the markup of a page. Doesn't have to be very complex, but not an hello world either. You've essentially built a programming language, and there's a reason why most of their sites have code examples on the homepage :)

ne014• 9 years ago

Great idea! Thanks! :)

robbiemitchell• 9 years ago

I am willing to split the profits for the lifespan of a user if you can help me acquire new paying users!

This is what affiliate programs (and networks) are for!

shrumm• 9 years ago

Month 2 into building a startup and found this article very relevant. I think one of the challenges I personally face is that building more features feels safe. You can spend a whole day trying to reach out to more people to validate the problem and come away with nothing. A day of coding gives you something tangible.

Since we're B2B focused, my co-founder and I resolved this by deciding to go the consulting route to build the product. We essentially banned ourselves from writing code until we found someone willing to pay us to write the feature.

jnetic• 9 years ago

I think one of the challenges I personally face is that building more features feels safe. You can spend a whole day trying to reach out to more people to validate the problem and come away with nothing. A day of coding gives you something tangible.

Coming away with nothing and then to keep on trying. This has been the hardest thing for me too. Coding/designing/building is way more fun and easy (in the short-term).

jwr4• 9 years ago

It seems I am one of those in the tarpit.

I think the problem for us engineering types is that there is so much bullshit around marketing, that it's offputting to us. That's the case for me at least. If I spend time/money on a feature, I know how long it will take, how much it will cost and when it will be ready. Compared to this, marketing seems like burning money with voodoo rituals.

It doesn't help that marketing efforts are only meaningfully measurable on a larger scale. If you're bootstrapping something yourself, you don't have 12k to spend on marketing this month. You have $300. It's easy to burn that $300 on adwords or facebook ads and get zero signups, with no meaningful data whatsoever.

The usual advice goes: hire a marketing expert. But how do I hire a marketing expert that a) isn't full of it, b) will even listen to me if my current budgets are in the hundreds of dollars?

I think the article is right on point, but I wish it pointed me to a way to deal with the marketing problem.

nedwin• 9 years ago

Hiring for marketing is incredibly tough. I’ve yet to work with a marketer I would recommend.

Re your situation I’m not sure there is much you can or should do with $300. It’s too small an amount to make a dent in any paid channels for sure.

Hire a marketing/growth coach is probably the most cost effective way to spend a budget like that imho

libertyEQ• 9 years ago

The way you and your parent comment are discussing "marketing" I would think would be more accurate to discuss as promotions/promoting.

This is an example of killing the language, and it minimizes the nuance involved. Advertising and promotions are a subset of marketing.

Edit: To be clear, I work in the area of addressable market/ /go-to-market strategy/ product definition/ competitive analysis and I have never had anything to do with outbound, promotional messaging.

freehunter3• 9 years ago

$300 buys a lot of gas or train rides. You could even buy a new pair of walking shoes, and get out the door to talk to customers face-to-face. It's scary out there, but actually speaking to people to get signups is cheap/free, and something really only a startup can do since you're not going to get huge numbers from it.

I'm struggling to find a single startup concept where you couldn't be served by walking through your city and finding a potential customer. If one exists, they're probably targeting the wrong customers.

rcavezza• 9 years ago

I like your comment and a lot of your thoughts are common. Allow me to help alleviate some of your concerns. I think the root of the issue is that many "Startup Tarpits" are not talking to the right customers early on. I also think you have only worked with marketing people who didn't use a methodical, scientific approach to user acquisition.

Don't hire a marketing expert. This is a bad first step. You should define a very specific subset of customers and talk to them. Find out their problems after talking to 10 very targeted people that fit into a user profile. I recommend reading "The Mom Test" (it's a book about how to phrase customer development interview questions) as a basis for how you talk to potential customers.

User acquisition efforts are not only measurable on a larger scale. You may have this idea because the people you worked with may have had a big company background. For a startup, it is very necessary for your advertising campaign to define a cost per click, find a conversion rate, and then test many different advertising phrases and avenues. This helps put a direct cost per user acquisition price on each campaign and you can compare apples to apples. It takes "voodoo money burning rituals" and turns it into numbers that are measurable.

If you rely on free marketing channels without a clear focus on who is using your product, it is very likely that you have 10 customers who fit 10 completely different segments with 10 different ideas of which features will give them value.

They key is learning. When you estimate future software releases, you typically point a story using things you have learned from previous, similar stories. When you attempt a new advertising campaign, you should use past learnings to determine which ads and messaging will work for different segments - how much they will cost, and how many users you can expect to get based on past results.

In summation, startup marketing should have a focused, scientific, numbers driven, methodical approach - just like writing software. If your marketers are not doing that, you probably aren't working with the right marketers.

j_s2• 9 years ago

The Mom Test: How to talk to customers & learn if your business is a good idea when everyone is lying to you

https://amzn.com/dp/B01H4G2J1U (2016, 4+ stars, 43 reviews, $9.99)

k__• 9 years ago

Well, you can do baby steps.

There are so many ways to promote stuff.

For example content marketing. Start writing a blog, when you get the ins and outs of blogging, start to use it to promote your product.

This year I wrote a blog article almost every week. Then I started to promote some educational videos I recorded for Skillshare. Made a few bucks on the side with that.

Just focus on some "type" of marketing that is easy for your and try it.

danenania3• 9 years ago

In my experience (this is something I'm in the midst of and still working on), the key to early low-budget marketing is establishing a feedback cycle. More important than reaching large numbers is gauging the reaction across a reasonable cross-section of the market. Apart from figuring out what's working and what isn't, it's also critical for zeroing in on who your early adopters will be.

Ads are an anonymous and low-touch acquisition channel, making them great for growing once you've got product-market fit, and (mostly) terrible before that point. If you're really clever with AB testing, analytics, lifecycle emails, etc., you may be able to get some useful info out of an ad campaign, but I think it's unlikely to be cost effective compared to higher touch options like networking, cold emails, posting on forums, meetups, conferences, etc. where it's easier to establish a line of communication and find out what people really think.

I don't think this is something you can hire for. Honestly, while it has its moments when things are going well, overall it's just not very fun work. It's tedious, frequently discouraging, and puts you in a lot of uncomfortable situations. It takes founder-level motivation to push through. Once you've done the hard work and have the machine running, there are tons of people who will be happy to scale and optimize it for money. Before that, I think a co-founder is probably the only realistic option if you're looking for someone to completely own early-stage marketing.

rsp1984• 9 years ago

The problem is that you think about marketing from the end rather than from the beginning. Spending money with FB or Google is one possible end. Another one would be inbound / content marketing. Another one would be trade shows. Etc.

However the beginning of marketing is researching how your product interacts with the market, which problem your product solves and for whom. A lot of times who you think your customers are isn't really who your customers are and why you think they buy your product isn't really why they buy it. And many times your product is capable of solving a problem for a much larger user group which however you just don't know about yet (but should definitely find out about).

Getting all these variables right is how marketing starts and besides your own time it doesn't cost you a dime. Once you have better knowledge about the market (who you target, at which price point, with what message, etc..) you will have a much better feeling on how to target that market and spending actual dollars on a marketing end (ads etc.) at that point will feel much more satisfying and less "voodoo".

jwr4• 9 years ago

Replying to myself, after 11h. There is a good number of replies, and they mostly underscore my point: I do not know how to deal with the problem and there is no defined way to go about it.

Most replies focus on "talking to your customers", validating your idea, etc. I know, you should talk to your customers. It's all good. I do. But this won't get you out of the tarpit. Talking to your customers mostly gets you new feature requests, so you end up building new features.

Also, once you have a business with a bunch of paying customers, the situation is different. You know the product can sell. If you can get 10 paying customers, you can also get 100, and probably 1000, too. That was what the original article was about.

There was precious little practical advice in the comments, apart from "content marketing" and guerilla marketing. One is something pretty much everybody does, and the other is difficult to pull out for B2B.

libertyEQ has a great point: we know so little about the whole subject that we even don't get the naming right. Sorry. For the moment I'll just keep calling all this stuff "marketing", until I understand it better.

My original point still stands: the article got it right, and the reason why we hackers build features instead of doing marketing is because marketing is hard, poorly defined, and there is so much fluff, myths and cliches around it. I'm still looking for a solution.

ddebernardy• 9 years ago

If talking to your clients mostly gets you new feature requests, it either means your product isn't adequate yet or you're not asking the right questions. In a nutshell you want to get of feel of:

- What was going on in your clients' heads before they found you. What precise problem were they trying to solve. This'll give you insights on whether or not your product is adequate, and on how to phrase your landing page.

- How they went about to look for you. What google search they did, whether they checked out reviews and how, etc. this is to better focus your SEO and adwords campaigns.

- What their decision process looked like. Was it a single person making the call, or were several people involved? What objections got raised? What were their key decision criteria? Raise them in your sales copy or in drip emails.

- Are they talking about your product? Would they? This is to help you spot segments with viral potential. Don't forget to politely ask for referrals if applicable.

- And, of course, feedback on the product itself. But don't spend too much time on this, and don't promise anything or build expectations.

iridium• 9 years ago

Have you read the book Traction yet? It provides a very usable growth framework. More importantly, It also allows you to start thinking of marketing as a testable iterative process, and this simple change in mindset can do wonders for the engineer/hacker.

https://www.amazon.com/gp/product/1591848369/ref=as_li_tl?ie...

throwaway7312• 9 years ago

Here's the thing with marketing: it is its own unique field that encompasses a large skill set. Copywriting, conversions, media buying. Product launches, if you're into that. Social media marketing or SEO/SEM. Guys who are good at it spend years learning it. Just like good engineers take years to learn their crafts.

If a marketer came to you and said hey, I can market like a champ, but I need a quick way to engineer a killer product by myself on a razor thin budget. Can't start marketing until I've got the product ready, and I also don't know much about product design or what to build. How do I do it and succeed? Same chicken-and-egg problem.

You can hire a professional who is GOOD, but then you're going to pay a lot of money for it. The better quality you want, the more you will have to pay. Or you can learn to be good YOURSELF, but then you're going to spend a lot of time to do it (and possibly still a lot of money).

In marketing, you cannot usually just hire talented marketers for low dollar amounts. If a marketer is any good, he knows how to make hundreds/thousands of dollars a day marketing any number of different things. He can affiliate market something off Clickbank, or take advantage of any of a number of other affiliate channels. Or he can debut his own product and market it himself and keep 100% of the profit. Or he can work for a beefy startup with lots of equity and high upside, or if he's risk averse take a high paying salaried job at an ad firm or mega corp.

So at the lower end, you get a bunch of aspiring marketers who are either brand new or just plain suck. (a few diamonds in the rough here and there, but they're few and far between and they don't stick around in the rough for long)

Best path if you're bootstrapping and have limited funds:

1.) Do your own marketing until you find a few okay-enough channels to get business from. This part sucks at the beginning because it's slow going and most of what you try doesn't work.

2.) Look for free ways to market until you have more cash to spend on marketing. The average paid media campaign takes somewhere between $5K and $50K of experimentation before it reaches profitability. That's $5K to $50K down the drain before you're making money. Don't go for paid until you can afford to absorb the upfront cost of creating a profitable campaign.

3.) Once you have a few okay marketing channels in place (could be search traffic, a popular presence on Reddit, Facebook, or Twitter, or maybe you have a higher dollar offer you can leverage networks and do direct sales for), you'll get more money coming in

4.) Once more money is coming in, you have a few options how you spend it. Hire professionals to boost the conversions of your sales funnel; hire professionals to experiment with new or better marketing campaigns; or hire professionals to train you on these things and make you the expert

Not fun (at first, anyway) and probably not the fast/easy way you might wish you could find. But when you don't have the skill yet, and don't have investment money or high enough sales already to pay for high skill professionals, you've got to grind it out yourself for a bit.

If you'll study marketing, I suggest you pick up a copy of Jeff Walker's Product Launch Formula. It's an effective way to get an initial burst of sales and designed for people with low/no marketing experience.

ExcitedByNoise• 9 years ago

Resources are obviously a constraint, but in my opinion the "right person, right time, right message" thinking is the best thing our marketing team taught me.

We used to run paid social/adwords campaigns, but once we were able to identify segments and customize the message, we ran smaller, more targeted campaigns.

I don't think having huge campaigns is as needed as figuring out your customers and how the present your product in a way they are ready to receive it.

We initially didn't have as much data to help us understand our segments, but we got a marketer that really had amazing intuition and experience. She was able to help us develop these targeted campaigns before we had the resources to really invest in better marketing software and bigger campaign budgets.

Many months we spend less than $300 on paid adverts and we're growing our customers and revenue. We've also got many good customer who advocate for us.

ohadron2• 9 years ago

Key word here is retention. The author was in a pretty good position to be in, where the paid users were happy enough not to churn and move to the competition. Once you're there - you have product market fit, and you should presumably move into growth mode. That means more expenses on sales and marketing, and diverting r&d resources to scale (if needed) and building features that will reduce churn or help marketing.

Another way to describe the situation here is - moving to growth mode too late, when you already have a good enough product to attack with but you're also almost out of runway.

strin• 9 years ago

Marketing is crucial when you have the right product. If a startup spends tons on marketing and there are product deficiencies, then users are going to come and go.

valuearb4• 9 years ago

If a products target customers think it has deficiencies, you need to reemphasixe marketing. Researching and understanding your target customers needs and wants is the first, and by far most important part of marketing.

jv22222• 9 years ago

Features != Success, is such an important truth, I wish every new founder could somehow be made to understand it.

Build one simple feature that people are willing to pay for and start marketing and selling it is by far the path of least resistance.

(Then carefully grow your product outward from that point)

philsnow• 9 years ago

It seems that you add more features, you attract more users, but I think that if you've prioritized your features 'right', each additional one makes your product attractive to fewer and fewer marginal users.

Also, when you get really down in the weeds, I bet it's easy to have a daunting feature list that people bounce off of, especially if you don't have a clear separation between marquee/headline features and detail features, meaning you might make your product attractive to an additional 1% of users, but 5% of your existing potential users fall out of the funnel because of the word soup.

marcosdumay• 9 years ago

if you've prioritized your features 'right', each additional one makes your product attractive to fewer and fewer marginal users.

Only if they are independent. Features A + B may attract a bigger public than both feature A or feature B alone.

j_s2• 9 years ago

There are many HN discussions with practical steps for startup marketing.

Side Project Marketing Checklist

・ https://news.ycombinator.com/item?id=15002079 (Aug 2017, 68 comments)

・ https://news.ycombinator.com/item?id=14942902 (Aug 2017, 68 comments)

Ask HN: Building a side project that makes money. Where to start?

・ https://news.ycombinator.com/item?id=14039135 (Apr 2017, 248 comments)

A couple more free resources:

Getting Real, chapter 13: Promotion (2006)

・ https://gettingreal.37signals.com/#ch13

Growth Hacking: How to Acquire Users (2017)

・ https://www.julian.com/learn/growth/intro

ouid• 9 years ago

startup tarpit is a juicy phrase.

thadk• 9 years ago

They missed `withstanding` in this classic https://www.newyorker.com/magazine/1994/07/25/how-i-met-my-w...

hellopat• 9 years ago

One thing I don't really have much experience in doing is measuring growth. Is this something you have to figure out before avoiding the tarpits?

kyaghmour• 9 years ago

This is a fallacy within technical circles: that the world will somehow immediately recognize the intrinsic value of a feature/addition as soon as it becomes public and that it'll therefore spread on its own merits. It's good to always keep in mind that history is littered with perfect technologies that failed miserably. Creating the perfect mouse trap without placing it where it'll catch mice is useless.

P.S.: Been there, done that.

Avoiding Startup Tarpits

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