Customer Acquisition in SaaS

September 12, 2009

Dhamesh Shah has a great bunch of insights on running a SaaS startup. One aspect that he does not really cover in great detail is how do we acquire new customers. It’s great if you are a Guy Kawasaki or have been funded by Y Combinator where you automatically get a reasonable launchpad and can expect some link-love from established presence in the community. But what about where you are launching something which is bootstrapped and you need to acquire customers. Here are some of the ways that you can acquire customers.

  • Make sure that you have your keywords set-up correctly, read Google Webmaster’s guide for SEO. It’s a great resource that gives good information and even if you are engaging an external SEO expert, it is well worth your time to understand how Search Engines view your site.
  • Build a presence on the web by writing and submitting press releases, blog posts related to your topic as well as participating in discussion forums or on blogs to raise the profile of your product.
  • One effective way that I have found regarding raising the profile of the product as well as getting initial customers is to create a survey and send it out to the demographic you are targeting. It’s a good low cost way of getting feedback. I have used Survey Monkey for this and it was very effective in the Customer Development Process.
  • If possible run a contest with some kind of free giveaway, popular things to give away are Electronic Goods, complementary services related to the software or even something simple like a T-shirt works if it is well designed and unique.
  • Use Google AdWords to drive traffic and acquire customers, an investment of as small as USD 5 per day can generate enough traffic for you to start getting a sense of how the product is being accepted and allow you to move to the next phase of tweaking the product.
  • Make sure there is a referral bonus for getting new customers, for your existing ones. Member-Get-Member or Viral marketing is one of the most powerful mechanisms of growing your customer base. Make sure you make it easy for existing customers to invite their peers. See Seth Godin’s talk on Viral Marketing.
  • Finally make sure that you provide a Free Trail Period

These are just some of the more cost-effective mechanisms of acquiring new customers and I hope you will benefit from utilising these and growing your business.


Understanding your business risks

April 9, 2009

Great lesson from Steve Blank Customer Development Guru on understanding what kind of risk a start-up has

Steve: Big idea here. It’s a big idea, one that I’ve never heard articulated before at all with startups, yet world-class VCs know this on day one. There are some industries where the risk is purely customer in market.

And by purely I just mean, in Silicon Valley we take for granted digital media and web, with all due respect, for the hard work your software engineers are going to do getting it up, it’s not invention.

It’s, gee, did, they do it efficiently or did the Oracle salesman convince them to buy half a million bucks of software they didn’t need. But it’s not invention.

There’s a whole other set of industries where it truly is invention. Where it truly is, we should be so lucky to get this product working. Because if we get an asthma drug or an oncology for cancer curing drug, our only problem is how big is the licensing deal going to be? And not whether customers are going to want this.

Is this distinction clear? When you start a company, question one to self. Memo to self. Am I in a market risk company? Or am I in an invention risk company?

A corrolary of this idea is that if your primary risk is Customer Market risk you better have a very good plan to scale. One of the big reasons that Web 2.0/social networking is so hot is that it has concept of scale built into the application. Unline traditional apps, which have to be sold individually, Web 2.0 apps naturally generate scale.