Traction

Each step—from 100 to 1,000, 10,000 to 100,000, 1,000,000 to 10,000,000—involved figuring out how to get traction again. That’s because, as you will see, often what works in one growth stage eventually stops working.

Traction is basically quantitative evidence of customer demand. So if you’re in enterprise software, [initial traction] may be two or three early customers who are paying a bit; if you’re in consumer software the bar might be as high as hundreds of thousands of users.

We call these customer acquisition channels traction channels. These are marketing and distribution channels through which your startup can get traction: real customer growth.

it’s hard to predict the traction channel that will work best. You can make educated guesses, but until you start running tests, it’s difficult to tell which channel is the best one for you right now.

Before you jump into this material, however, we’d like to introduce you to the nineteen traction channels and some of the people we interviewed for them.

Many entrepreneurs who build great products simply don’t have a good distribution strategy. Even worse is when they insist that they don’t need one, or call [their] no distribution strategy a “viral marketing strategy.”

Traction and product development are of equal importance and should each get about half of your attention. This is what we call the 50 percent rule: spend 50 percent of your time on product and 50 percent on traction.

Through traction development you get a steady stream of cold customers. It is through these people that you can really find out whether the market is taking to your product or not, and if not, what features are missing or which parts of the experience are broken.

This is exactly what happened with Dropbox. While developing their product, they tested search engine marketing and found it wouldn’t work for their business. They were acquiring customers for $230 when their product cost only $99. That’s when they focused on the viral marketing traction channel, and built a referral program right into their product. This program has since been their biggest growth driver.

MOVING THE NEEDLE Before you can set about getting traction, you have to define what traction means for your company. You need to set a traction goal. At the earliest stages, this traction goal is usually to get enough traction to either raise funding or become profitable. In any case, you should figure out what this goal means in terms of hard numbers. How many customers do you need and at what growth rate?

For example, early on DuckDuckGo focused on search engine optimization to get in front of users searching for “new search engine.” This focus was successful at obtaining users, but did not bring in enough users to get close to the traction goal. It didn’t move the needle.

From the perspective of getting traction, you can think about working on a product or service in three phases: Phase I—making something people want Phase II—marketing something people want Phase III—scaling your business In the leaky bucket metaphor, phase I is when your bucket (product) has the most leaks.

Startup growth happens in spurts. Initially, growth is usually slow. Then it spikes as a useful traction channel strategy is unlocked. Eventually it flattens out again as this strategy gets saturated and becomes less effective. Then you unlock another strategy and you get another spike.

That’s why traction channels like community building and viral marketing can be so powerful: they scale with the size of your user base and potential market. In any case, always consider your traction efforts in terms of whether they are moving the needle for your traction goal.

TARGETS Put half your efforts into getting traction. Pursue traction and product development in parallel, and spend equal time on both. Think of your product as a leaky bucket. Your early traction efforts are pointing you toward the holes worth plugging. Set your growth goals. Focus on strategies and tactics that can plausibly move the needle for your company. Get some hard numbers. Learn what growth numbers potential investors respect. How much traction is needed for investors is a moving target, but a sustainable customer growth rate is hard for investors to ignore. Potential investors who understand your business are likely to appreciate your traction and thus invest earlier. Traction trumps everything.

THE OUTER RING: WHAT’S POSSIBLE The first step in Bullseye is brainstorming every single traction channel.

For each channel, you should identify one decent channel strategy that has a chance of moving the needle. For example, social ads is a traction channel. Specifically running ads on reddit, Twitter, or Facebook is a channel strategy within social ads. Through brainstorming, identify the best channel strategy you can think of in each of the nineteen traction channels.

You should know what marketing strategies have worked in your industry, as well as the history of companies in your space. It’s especially important to understand how similar companies acquired customers over time, and how unsuccessful companies wasted their marketing dollars.

THE MIDDLE RING: WHAT’S PROBABLE The second step in Bullseye is running cheap traction tests in the channels that seem most promising.

These tests should be designed to roughly answer the following three questions: How much will it cost to acquire customers through this channel? How many customers are available through this channel? Are the customers that you are getting through this channel the kind of customers that you want right now?

THE INNER RING: WHAT’S WORKING The third and final step in Bullseye is to focus solely on the channel that will move the needle for your startup: your core channel.

The way this step gets most often messed up by founders is by keeping around distracting marketing efforts in other traction channels. For example, suppose you ran tests in three traction channels: search engine marketing, trade shows, and publicity.

Noah Kagan talked to us about how he used a version of Bullseye at Mint, a site that helps you track your finances and was acquired by Intuit for $170 million. Its initial traction goal was 100,000 customers in the first six months after launch. Noah and his team brainstormed and picked several traction channels that seemed promising (targeting blogs, publicity, search engine marketing). Then they ran a series of cheap tests in each (sponsored a small newsletter, contacted financial celebrities like Suze Orman, placed some Google ads) to see what worked and what didn’t. Noah kept track of the test results in this spreadsheet: After running these experiments, Mint focused on the traction channel that seemed most promising and that could move the needle for its traction goal. In this case, that meant targeting blogs was its core channel.

When this channel maxed out and stopped moving the needle, Mint repeated the Bullseye process, and found a new core traction channel to focus on: publicity.

Pursuing both traction and product in parallel will increase your chances of success by both developing a product for which you can actually get traction and getting traction with that product much sooner.

In particular, your tests should be designed to answer these questions: How much does it cost to acquire each customer through this channel strategy? How many customers are available through this channel strategy? Are the customers you are getting through this channel the ones you want right now?

Andrew Chen, a startup adviser on growth, coined the Law of Shitty Click-Throughs: “Over time, all marketing strategies result in shitty click-through rates.”

DEFINING YOUR TRACTION GOAL You should always have an explicit traction goal you’re working toward. This could be one thousand paying customers, one hundred new daily customers, or 10 percent of your market.

To refresh your memory, here are the nineteen channels: Targeting Blogs Publicity Unconventional PR Search Engine Marketing (SEM) Social and Display Ads Offline Ads Search Engine Optimization (SEO) Content Marketing Email Marketing Viral Marketing Engineering as Marketing Business Development (BD) Sales Affiliate Programs Existing Platforms Trade Shows Offline Events Speaking Engagements Community Building

There are three reasons why founders ignore potentially profitable traction channels: Out of sight, out of mind. Startups generally don’t think of things like speaking engagements because they are usually out of their field of vision. Some founders refuse to seriously consider channels they view negatively, like sales or affiliate marketing. Just because you hate talking on the phone doesn’t mean your customers do. Bias against schlep—things that seem annoying and time-consuming. Channels like business development and trade shows often fall into this category.

TARGETS Lay out your milestones. Determine your traction goal and define your Critical Path against that goal, working backward and enumerating the absolutely necessary milestones you need to achieve to get there. Stay on the Critical Path. Assess every activity you do against your Critical Path and consistently reassess it. Building such assessment into your management processes is a good idea. Quantify traction subgoals and put them on a calendar so you can properly monitor your progress over time.

Targeting blogs prospective customers read is one of the most effective ways to get your first wave of customers. However, this traction channel can be difficult to scale in phases II and III due to the limited number of relevant high-traffic blogs.

To test targeting blogs, he contacted a few that were representative of different customer segments and got them to write articles about Mint.

Mint’s initial series of tests revealed that targeting blogs should be its core traction channel. Noah then created a long list of blogs to target, and set about focusing on this channel. Initially the focus was on more standard articles and guest posts. Through inner ring testing, Noah additionally uncovered channel strategies that further improved Mint’s traction: VIP access and direct sponsoring. Mint did something that few startups had done before to increase awareness and build excitement for its launch: it asked people on its prelaunch waiting list to recommend Mint to their friends in return for priority product access. As part of the signup process, users could embed an “I Want Mint” badge on their personal blogs, Facebook, or other Web sites. Users who drove signups through these badges were rewarded with VIP access before other invitations were sent out.

Mint used a second innovative strategy to acquire customers through this traction channel: direct sponsoring of blogs. Each sponsored blog would place a small Mint advertisement on its site for a period of time.

Many personal bloggers have strong readerships, but don’t make money from their writing. Noah offered them a way to show off a cool new service and make some money doing it. He simply sent them a message with “Can I send you $500?” as the subject and told them a bit about the product and what Mint was trying to do.

Mint also created content partnerships with larger sites like The Motley Fool, a personal investing site. With this content partnership (each site contributed content to the other), Mint exposed its valuable, free product to more than 3 million readers who would likely be interested in its service.

TARGETING BLOG TACTICS It can be difficult to uncover the smaller blogs that cover your niche. Here are several tools you can use to find all the influential bloggers in your space:

Dropbox, the file storage startup, targeted these communities for their initial traction. By sharing a video on Hacker News, Dropbox received more than ten thousand signups. Soon, it was trending on Digg (significantly bigger at the time), which drove even more signups. Quora, Codecademy, and Gumroad saw similar success from initial postings on Hacker News because their products were a good fit for users of that site.

TARGETS

Below is an email pitch Jason Baptiste sent to TechCrunch just before launching PadPressed, his startup that helps blogs look better on iPads. It’s a solid example of a good pitch:

Jason Kincaid warned against having your pitch come across as a “wall of text,” something busy reporters who receive hundreds of emails get tired of seeing. Be succinct and clear. When pitching to any media outlet, it’s your job to also create an angle that makes your story compelling. If you can craft a narrative and present it well, you greatly increase your chances of getting a story written.

Ryan offered this template email he’s used to pitch reporters successfully:

PUBLICITY TACTICS As we discussed earlier, the best way to get early publicity is to start small. A good first step is using a service like Help A Reporter Out (HARO), where reporters request sources for articles they are working on.

Once you have a solid story, you want to draw as much attention to it as you can. Here are a few ways to do it:

WePay, a Web payments startup, pulled another popular stunt at PayPal’s annual developer conference. Rather than marketing to PayPal’s customers traditionally, they placed a six-hundred-pound block of ice at the conference entrance.

We talked with Alexis Ohanian, founder of reddit and Hipmunk, about how he’s made customers fall in love with his companies. Shortly after Alexis launched Hipmunk, a travel booking site, he sent out luggage tags and a handwritten note to the first several hundred people who mentioned the site on Twitter.

Holding a contest is a great, repeatable way to generate publicity and get some word of mouth. Shopify.com, a popular e-commerce platform, is famous for its annual Build a Business competition (and its six-figure prize). Last year, the contest drove 1,900 new customers and more than $3.5 million in sales on its platform. Dropbox used to hold a similar contest with its annual Dropquest competition. In Dropquest, users who successfully completed an intellectually challenging online scavenger hunt were rewarded with online recognition, Dropbox-themed items, and free Dropbox packages for life. In the first year of the competition, almost half a million people went through the quest.

TARGETS Do something big, cheap, fun, and original.

works well for companies looking to sell directly to their target customer. You are capturing people who are actively searching for solutions.

One application that is unique to social ads and where they have performed exceptionally well is when they are used to build an audience, engage with that audience over time, and eventually convert them into customers.

TARGETS

If dealing with national magazines, consider using a print or “remnant ad” buying agency such as Manhattan Media or Novus Media that specializes in negotiating discounted pricing of up to 90% off rate card. Feel free to negotiate still lower using them as a go-between.

Jason also included an offer for a free book on code review in Smart Bear ads. This book offer was another way to track the effectiveness of the ads.

TARGETS Run cheap tests by first targeting local markets. It is hard to predict what will work, so it is often useful to run several small offline ad tests in parallel. Each offline ad medium is testable locally. Then you can scale up to regional or national campaigns if warranted. Seek out remnant ad inventory for the highest discounts. You can use remnant ads for both initial tests and scaling this channel. The downside is less targeting ability, both in terms of demographics and timing. Use unique codes or Web addresses to track the effectiveness of different offline ad campaigns. Make sure before you set up tests or campaigns that you can trace conversions back to specific offline ads.

SEO is starting with a content strategy and finding a way to attract relevant visitors through search engines. You have to intelligently design this kind of [content] and make sure search engines can find and rank that content.

Instead of these more obvious basics, we’ll head straight to specific strategies and tactics. In SEO, there are two high-level strategies to choose from: fat head and long tail.

A fat-head strategy involves trying to rank for search terms that directly describe your company. For example, a toy company that specializes in wooden toys might try to rank for “wooden toys.” These are all fat-head keywords. On the other hand, a long-tail strategy involves trying to rank for more specific terms with lower search volumes. That same toy company might try to rank for searches in that long tail like “poisonous chemicals in wooden toy blocks” or “wood puzzles for 3 year olds.” Again, even though these searches have lower volumes, in the aggregate they account for the majority of all searches.

Long-Tail Strategy The majority of searches conducted through search engines are “long-tail” searches. These are longer terms that are highly specific—things like “gluten free for arthritis” or “private search engine.” Individually, searches for these terms don’t amount to much: together, though, they make up 70 percent of all searches. Because it is difficult to rank high for competitive (fat-head) terms, a popular SEO strategy for early-stage startups is to focus on the long tail. With this strategy, you bundle long-tail keywords together to reach a meaningful number of customers.

SEO TACTICS Whether you pursue a fat-head or long-tail strategy, SEO comes down to two things: content and links. The more aligned your content is with the keywords it’s targeting, the better it will rank. Similarly, the more links you can get from credible and varying sources, the better your rankings. Getting links is often more difficult because it involves people outside of your company. Here are some ways to build links: Publicity—when you are covered by online publications, reporters will link to your Web site. Product—with some products, you can produce Web pages as part of your product that people naturally want to share. A great example is LinkedIn profile pages. Content marketing—creating strong, relevant content that people want to read, and thus share. Widgets—giving site owners useful things to add to their sites, which also contain links back to yours.

Rand suggests using infographics, slideshows, images, and original research to drive links, as these are all things people naturally share. Since the end goal is to get links, you’ll want to specifically target people who will link back to you. This group of people will vary depending on the product, but in general people who run blogs are big social sharers. Reporters are usually good targets as well.

SEO is one of the cornerstones of what is commonly referred to as “inbound marketing.” Inbound marketing brings customers inbound, from things like social media and SEO. Rand told us that Moz gets 85 percent of its customers inbound. Mike Volpe from HubSpot said something similar:

TARGETS Find search terms that have enough search volume to move the needle for your company. If you can’t find enough search volume, or can’t rank high for those terms, SEO won’t be a great strategy for your business. If you identify some terms that could work, you can further qualify them by running search ads against them to test whether they actually convert customers. Generate long-tail landing pages by using cheap freelancers. Or, if your product can naturally produce good long-tail content, use it to create the landing pages yourself. Focus on how you will build links. Whether you pursue a fat-head or long-tail strategy, SEO comes down to two things: content and links. Link building is often the more challenging of the two. Creating amazing content is one way to quickly build links.

Compare that experience to reading a well-known company blog like those of Moz, Unbounce, or OkCupid. They write posts that receive hundreds of comments, lead to major publicity, and result in thousands of shares.

many startups fall into the product trap—building a product before thinking about distribution.

Rick’s first hire was actually a full-time blogger!

If we had not started blogging at the beginning the way we did, Unbounce would not be here today. . . . Our content still drives customers. Something we wrote in January 2010 still drives customers today. Whereas if I had spent money on advertising in January, that’s it. That money is spent. If you invest in content, it gets picked up by Google. People find it, they share it, and it refers customers almost indefinitely.

Now our blog is our primary source of customer acquisition. People write about Unbounce. Other people tweet about our posts. . . . Our blog is the centerpiece of all our marketing.

The Unbounce team relied heavily on social media to drive readers to their blog. After every post they wrote, they’d ping influencers on Twitter asking for feedback. They also engaged with their target customers by writing useful answers on targeted forums like Quora. Though actions like these may not scale, they’re okay when getting started because you’re building toward a point where your content will spread on its own.

Getting to this point wasn’t as easy as it might seem. Even with awesome biweekly posts about online marketing, it took six months for the Unbounce team to see significant results from their blog. However, once they captured this significant audience, they never looked back.

Unlike Unbounce, the OkCupid team wrote longer posts with less frequency. Each of OkCupid’s posts took a month to write and drew on the data they had from studying the usage patterns of their members. They intentionally wrote controversial posts (e.g., “How Your Race Affects the Messages You Get”) to generate traffic and conversation.

This meant that traction channels without per-user acquisition costs (e.g., publicity, content marketing, SEO, viral marketing) needed to drive all of its growth.

CONTENT MARKETING TACTICS The most common hurdle in content marketing is writer’s block. To overcome it, simply write about the problems facing your target customers.

Unbounce found that infographics are shared about twenty times more often than a typical blog post and have a higher likelihood of getting picked up by other online publications.

Most marketers fail to realize that quality is no substitute for quantity. Both Rick and Sam made it a point to say there’s no shortcut to creating quality content. If what you’re writing isn’t useful, it doesn’t matter how hard you try to spread your content on Twitter. It just won’t spread. The secret to shareable content is showing readers they have a problem they didn’t know about, or at least couldn’t fully articulate. A solution is nice, but it’s not as good for drawing in readers as showing them they’ve been going about some aspect of their life all wrong.

content. It took awhile longer for the blog to grow to twenty thousand monthly visitors. Fortunately, there are ways to build momentum faster. Unbounce engaged in any online forum where conversations were taking place about online marketing, and did its best to contribute. It was particularly successful reaching out to influential people on Twitter. It would simply follow marketing mini-celebrities and ask them for feedback on recent posts. One of the best methods of growing your audience is guest posting. This tactic is especially powerful in the early days when you essentially have no audience to work with yourself. Unbounce started doing guest posts on other popular blogs after just three months of blogging on its own.

One of the best things about this traction channel is how it positions you as a leader in your space. Unbounce and OkCupid are both great examples of how a popular blog can make a company a recognized industry leader in a highly competitive space. Recognition as a primary voice in an industry leads to opportunities to speak at major conferences, give press quotes to journalists, and influence industry direction. It also means your content is shared many more times than it would be otherwise. For Unbounce, some of the biggest benefits of having a strong company blog came in the form of comarketing opportunities. When they were just starting out, they tried contacting popular companies to arrange partnerships. These types of business development pitches were ineffective early on, but that changed after their blog started getting readership.

Having a strong company blog can positively impact at least eight other traction channels—SEO, publicity, email marketing, targeting blogs, community building, offline events, existing platforms, and business development.

TARGETS If you blog, dedicate at least six months to it. A company blog can take a significant amount of time to start taking off. Do things that don’t scale early on. Reaching out to individuals to share posts, for instance, is okay, because you’re building toward a point where your content will spread on its own. Contacting influential industry leaders (on Twitter, etc.), doing guest posts, writing about recent news events, and creating shareable infographics are all great ways to increase the rate of growth of your audience. Produce in-depth posts you can’t find anywhere else. You need to create quality content to succeed in this traction channel. There is no silver bullet, but a decent approach is to write about problems your target customers have. Another approach (not mutually exclusive) is to run experiments or use data from your company that leads to a surprising conclusion.

Email marketing can be used for all stages of the customer life cycle: building familiarity with prospects, acquiring customers, and retaining the customers you already have.

Another popular approach to building an email list is creating a short, free course related to your area of expertise.

In addition to your own email list, consider advertising on email newsletters complementary to your product.

Customer activation is a critical and often-overlooked component of building a successful product. “Activating” a customer means getting them to engage with your product enough that they are an active customer.

Email marketing is a great way to improve your customer activation rates. A popular approach is to create a sequence of emails that slowly exposes your new customers to the key features in your product.

[Y]ou create the ideal experience for your users when they sign up for your trial. You then create all of the paths they can go down when they fail to go through the ideal experience. And you have emails in place to catch them and help them get back on that [ideal] path.

Let’s take Dropbox as an example. If you create an account but never upload a file, you are not active. Maybe you signed up for the site but got busy and forgot about it. When this happens, Dropbox automatically emails you, reminding you to upload a file.

For these emails, you should determine the steps absolutely necessary to get value from your product. Then create targeted emails to make sure people complete those steps. For those who fail to complete step one, create a message that automatically emails them when they’ve dropped off. Repeat this at every step where people could quit, and you will see a major uptick in the number of people finishing the activation process. With tools like Vero and Customer.io, automating these messages is easy. For example, you can use these tools

EMAIL MARKETING FOR RETAINING CUSTOMERS

This seven-email sequence leads to a better conversion rate than driving potential people to a sales landing page.

In fact, many companies like WP Engine now use advertising to drive leads to a landing page where they ask for an email rather than a sale. They then will use email marketing to sell a prospect over the course of a month or so. When WP Engine has prospects they know are not ready to convert, they put them on a different list where they send them less frequent (monthly) emails with relevant content.

For feature-based freemium products, emails that explain a premium feature a customer is missing out on can have high conversion rates. For example, if you run a dating Web site, you can explain that upgrading to a premium plan will lead to more dates. If you have a subscription product, ask them to upgrade to annual billing, which guarantees they will not cancel within the next year.

This kind of referral program was a major growth driver for Dropbox as well. In order to get more free space, users send referral emails asking their friends to check out Dropbox.

As with other traction channels, testing is essential to maximize this channel’s impact. Effective email campaigns A/B test every aspect: subjects, formats, images, timing, and more. Timing is especially relevant to get higher open rates: many marketers suggest sending emails between nine a.m. and twelve p.m. in your customer’s time zone or scheduling emails to reach them at the time they registered for your email list

Last, an effective email sequence will be meaningless if you don’t have great email copy. Copywriting is an art on its own, but we suggest checking out some of the resources and information that Copy Hackers provides.

TARGETS

Other products grow by encouraging collaboration. In this case, the product is still valuable on its own, but becomes more so as you invite others. Google Docs is useful alone, but it is far more valuable when used collaboratively. This type of viral loop can take longer to spread if your customers don’t need to immediately collaborate. However, once they do, strong network effects kick in as the service becomes a central tool around which collaboration occurs.

To fully appreciate the viral loop concept and to understand whether viral marketing can work for you, you have to do a tiny bit of math. This viral math helps you quickly identify how close you are to getting traction through viral marketing, as well as which areas you need to focus on. The two key factors that drive viral growth are the viral coefficient and the viral cycle time. The viral coefficient, or K, is the number of additional customers you can get for each customer you bring in. The viral coefficient formula is: K = i * conversion percentage where K is the viral coefficient, i is the number of invites sent per user, and conversion percentage is the percentage of customers who sign up after receiving an invitation. For example, if your customers send out an average of three invites and two of those people usually convert to new customers, your viral coefficient would be: K = 3 * (2/3) = 2 If you were to add one hundred new customers in a week, you could expect them to send out three hundred more invites to your site and two hundred more customers to sign on with you as a result. That’s viral growth!

VIRAL MARKETING TACTICS

ENGINEERING AS MARKETING TACTICS

talked about how building tools can help with publicity and SEO, while also nailing down the core value proposition for your product. As he mentioned in our interview: Building noteworthy tools that your target audience finds useful is a solid way to gain traction that also pays dividends down the road by helping build your SEO. A simple roadmap to executing this technical strategy includes: Providing something of true value for free, with no strings attached. Making that offering extremely relevant to your core business. Demonstrating that value as quickly as possible. When you build valuable tools for prospective customers, you get more leads, a stronger brand, and increased awareness while also solving a problem for the individuals you want to target.

Charlie O’Donnell, partner at VC firm Brooklyn Bridge Ventures, suggests maintaining a large list of potential partners: Create an exhaustive list of all of your possible [partners]. Don’t ever list Condé Nast without listing every single other publisher you can think of. Make a very simple spreadsheet: Company, Partner Type (Publisher, Carrier, Reseller, etc.), Contact Person/Email, Size, Relevance, Ease of Use, and then a subjective priority score. That list should be exhaustive. There’s no reason why any company shouldn’t have fifty potential business development partners in their pipeline, maybe one hundred, and be actively working the phones, inboxes, and pounding the pavement to get the deals you need to get—be it for distribution, revenue, PR, or just to outflank a competitor. The latter is totally underutilized. If you go in and impress the top fifty folks in your space, it makes it that much harder for a competitor to get a deal done—because you’re seen as the category leader. Once you have a list of potential partners, send it to your investors, friends, and advisers for warm introductions.

BUSINESS DEVELOPMENT TACTICS Once you have a few partners you’re targeting, the real action starts. You start approaching potential partners with a value-focused proposition that outlines why they should work with you. Often these are larger companies. Brenda Spoonemore, former senior VP of interactive services at the NBA, put it like this:

When it comes to structuring your initial sales conversations, we suggest using the approach developed by Neil Rackham as outlined in his book SPIN Selling. It is a four-part question framework to use when talking to prospects, based on a decade spent researching 35,000 sales calls:

David believes it’s less effective when trying to build a repeatable sales model: I’m in favor of gaining traction through some kind of marketing channel first, then using sales as a conversion tool to close [those leads] into business.

Mark Suster, two-time entrepreneur and partner at Upfront Ventures, suggests a simple approach to bucket leads into three categories: A’s, B’s, and C’s:

Marketing’s job in working with salespeople is twofold: To arm—which means to give the reps all of the sales collateral they’ll need to effectively win sales campaigns. This includes presentations, ROI calculators, competitive analyses, and so forth. To aim—which means helping sales reps figure out which target customers to focus on. It’s about helping weed out the nonserious leads from the urgent ones.

As David said in our interview: You want to recognize that your prospect has a series of issues and questions they will want resolved before they make a buying decision. These are things like “Am I sure that this is the best product?,” “Am I sure that this will work for my situation?,” “Will I get a good return on investment?,” “Will this integrate with a system I have working in place today?,” and so on. A lot of companies design their sales cycles around how they think things should work. I believe very strongly in the notion that you have to design it from the customer standpoint inwards, as opposed to your standpoint outwards, which is the normal way I see people thinking about this stuff. Once you know what that buyer’s questions are, you want to design your process to effectively address all of their questions and recognize what kinds of things need to be handled. Ideally, as many of these questions you can handle on your Web site, the better. Your job, once you have their email, is to answer all of their buying questions and then create a trigger that gives them a strong reason to buy.

You can keep track of when prospects are dropping out of your sales funnel. The points in your funnel where many prospects drop off are called “blockages.” Blockages are usually due to sales funnel complexity. You want to make purchasing your product as simple as possible. Some ways you can minimize blockages:

but JBoss had no contact information for these prospects. Knowing it needed a way to consistently generate leads, JBoss gave away its software’s documentation (which it had previously charged for) in exchange for a customer’s contact information. This worked out well because customers were motivated to get the software documentation, which showed them how JBoss worked. Contact information was a small price to pay. For JBoss, this information was essential, as it could now communicate with prospects about its paid offerings. This tactic generated over more than ten thousand leads per month.

Unqualified leads not yet ready for sales were put into lead nurturing campaigns. These prospects received the JBoss Newsletter, as well as invitations to webinars, and were encouraged to subscribe to the JBoss blog. Customers who reached a certain level of interaction with nurturing campaigns (e.g., those who clicked on certain links in emails or attended a webinar) would then be put back into the sales pipeline and contacted by someone from sales. JBoss built an impressive and wildly successful sales funnel. A big reason for JBoss’s success was that its sales funnel was designed from the standpoint of the customer. The company utilized free tools to generate leads at a low cost by offering customers the documentation they wanted in exchange for contact information. It then qualified them through marketing built on internal analytics. Finally, JBoss used an inside sales team to close each deal at an average deal size above $10,000.

Build a repeatable sales model. An effective sales funnel has prospects enter at the top, qualifies these leads, and closes them effectively. Map out your sales funnel, identify blockages, and remove them. Keep the buying process as simple as possible.

Keep the customer’s perspective in mind. Talk to people who need your product and understand their common concerns. Address those concerns specifically on your Web site.

TARGETS Figure out where your potential customers are hanging out online. They

TRADE SHOW STRATEGY Almost every industry has a large number of trade shows: the tough part is deciding which ones to attend. The best way to decide whether to exhibit at an event is to visit as a guest and do a walkthrough the year before. Attending as a guest allows you to get a feel for an event without straining your budget. If this isn’t possible, the next best option is to get the opinions of people who have exhibited at previous shows: How crowded was it? How high was the quality of attendees? Would you go again?

Set your goals for attending trade shows this year. For example, are you trying to get press, lure investors, land major customers, work out significant partnerships, or something else? Your goals should drive your decisions about which events to attend and how to approach them. Write down all events in your industry. Next, evaluate each event in the context of your goals. In particular, think about the type of interactions you want and whether these interactions take place at each event. For example, if you need to have long conversations with prospects to do customer development, seek out an event with an intimate atmosphere. If your goal is to interact with as many potential customers as possible, a crowded event would be a better fit.

Sponsoring or running offline events—from small meetups to large conferences—can be a primary way to get traction. Twilio, a tool that makes it easy to add phone calls and text messaging to apps, attracts its customers by sponsoring hackathons, conferences, and meetups, large and small.

COMMUNITY BUILDING STRATEGY Every individual we interviewed emphasized how helpful it was to have an existing audience to jump-start their community-building efforts.

Community members love to hear from other members. But they would also love to hear from you. You will want to connect with your evangelists and let them know that you value them.

To prevent this negative cycle, it is important to focus on quality early on and set standards that can be maintained as the community grows.