New startup does $150K in 12 months but still doesn’t have a landing page 🤔

Listened to Jeremy Thiessen explaining how and why, on the Sales for Founders podcast

3 takeaways...

1/ new essay: What's next for marketplace startups? Reinventing the $10 trillion service economy, that's what. Co-authored with @ljin18 https://t.co/fgKbrHTnH5. A short thread 👇

2/ Marketplace startups have done incredibly well over the first few decades of the internet, reinventing the way we shop for goods, but have been less successful services. It's bc services are complex, subjective, fragmented, and often in real life. Makes it hard

3/ There's been 4 major eras at making the service economy work online. The Listings Era, the unbundled Craiglist era, the Uber for X era, and the Managed Marketplace era

4/ Each era has added more value than the last, and utilized technology innovations, from internet to social / "read/write web" to mobile. The "Unbundling Craigslist" era was particularly epic at generating startup ideas

5/ The problem is, all the low-hanging fruit has been picked off. The techniques that got us to here won't get us to the next phase. So we have to do some pretty different things. That's why "Managed Marketplaces" have been a big deal - hire folks as W-2s, certify quality, etc.

Yesterday, I wrote about how easy it is to sell ice cream on a crowded beach: https://t.co/a9z2ZTixb7

Today, I’m at the local fair.

There are hundreds of vendors.

But there are also huge crowds who are hot and thirsty; lots of demand for cold drinks!

Go where the crowds are!

Again, this is just a metaphor!

But it’s a good reminder:

🍋 If you have a lemonade stand, it’s better to go somewhere hot, where there are a lot of thirsty people.

💻 If you want to make software, it’s better to go where there are a bunch of potential customers.

BTW - targeting a good market doesn’t mean you’ll automatically win!

There are a TON of factors that influence a business’ success (or failure).

But choosing a market that has a lot of demand (and good channels) is essential for future success.

In business, nothing is guaranteed.

You might be in a good market today, but tomorrow it could fall apart.

Markets are fickle.

Some days they want 🍦, other days they want 🥤.

The economy can go up, or it can crash.

A good competitor can come in and grab market share.

But this reinforces the point:

“Business is already hard, why make it harder?” – @asmartbear

Why try to enter a niche where there’s no demonstrable demand?

Why try to serve a total addressable market of 500, when you could go after 500,000 potential customers?

If you’re a SaaS entrepreneur, you need to study Hubspot

Here are the inbound strategies they used to grow from 0-100M+ users📈

A thread: 👇👇

1) Hubspot introduced/created the term inbound marketing.

Founders Brian Halligan and Dharmesh Shah grew their inbound marketing software business (founded in 2006) to an IPO in 2014 at $25/share (now around $450).

They are the 2nd fastest SMB SasS company to IPO

2) They noticed a shift in the way people shop/buy. Consumers weren’t tolerating interruptive ads and were ignoring them.

Part of this shift was due to the internet/Google. People now had the power to do their own research to find products that could help solve their problem

3)Theme: Inbound Marketing
They learned conversion rates from inbound/organic leads compared to outbound/paid were more than double. It was cheaper to acquire traffic and resulted in higher quality leads. 75% of their lead gen was inbound, focusing on blogs, webinars, free tools

4) Strategy 1: Blog
They share resources/tips/steps to improve your inbound marketing. They drew people to their posts, provided value, and added a unique CTA related to the topic at the end to capture the lead.

The blog resulted in 20% of their organic leads and 3x their leads

🔥 A lesson in pricing

THREAD ...

Peter Thiel spends 6 months writing down everything he knows about business. His book sells for $10.

Adam Wathan and Steve Schoger spend 6 months writing down everything they know about design. Their “book” sells for $79.

Believe it or not, both prices make perfect sense.

Thiel is selling to the masses and the masses are sensitive to price changes (price elastic).

If he raises the price to $30 they wouldn’t think twice before substituting his book for one of the many cheaper alternatives on Amazon.

Adam and Steve are selling to hardcore fans and hardcore fans are insensitive to price changes (price inelastic).

They've all been following the Twitter tips, watching the screencasts, reading the Medium posts.

In their minds, there are no substitute resources available.

When demand for your good is inelastic, you raise your price.

In the case of Adam and Steve, all the way up to $79.

As the diagram shows, a 8x price increase ($10 to $79) results in just a 2x drop in books sold (20k to 10k) and 4x more revenue (area of the rectangles).