Coffee is for Closers only!

August 3, 2014


When we launched ShipBob six weeks ago, we wrote down the ten reasons we thought we could fail on one of our office walls. Our goal as a startup was to work down the list and systematically remove all of those risks of our startup. Of all the reasons on that list, the one which I was most paranoid about was Sales and Marketing. Being an engineer, I understood product and technology, but sales and marketing was a completely new beast. Six weeks in and a little less parnoid me, I penned down the five lessons I have learned so far on sales and marketing:

1. Create a single growth metric. Set targets. Achieve. Repeat

Learned this from visiting the Groupon office, which is a massive sales driven organization. Right from day one, we established a single metric to measure our progress and set weekly targets for the team to achieve against that one metric. For us, it was the number of packages shipped per week. Having a single metric, helped the entire team focus solely on that metric and not be distracted by invalid data points and false signs of growth. 

2. Early on, focus on One on One sales

Unless you are Facebook, which achieved 90% penetration within Harvard in under four weeks, it is unlikely your start-up will go viral on day one. Hence we focused on acquiring our first hundred users by directly pitching our product to them, wherever we could find them. The result of our direct one on one sales was that we now knew each one of our early users personally and on-boarded them right in front of us. This was particularly useful in getting their feedback and refining our product very quickly in the early days.

3. For early stage startups, mass marketing has a very low ROI

The problem with mass marketing( Tv, Radio Ads, Banners etc.) is that they require a large amount of ad-spend over a rather long period of time to generate any return. Most startups have very limited resources which could be better spend somewhere else. We invested in radio advertising, which was a giant waste of money for us!.  Word of mouth is the only best form of marketing for a startup. Each one of our early users, referered us to atleast three other users. By directly interacting with our early users, and making them refer us to their network, we were able to convert our users into our marketing team,strongly advocating our product to their friends and family.

4. Find a target niche audience and optimize on it.

This lesson is counter-intuitve for consumer-startups who want to focus on the mass consumer market right from day one. However, with your limited startup resources, it is impossible to reach out to everyone in the consumer space. Instead, find a niche market segment who  absolutely love your product and then optimize on the marketing channels to reach out to the audience with similiar characteristics as your niche segment. For us, it was people selling items online and shipping them through USPS. For the next two weeks, we solely experimented with different means of reaching out to this audience, and we had surprisingly great results with this targeted marketing strategy.

5. There is no magic formula- Keep iterating

In these six weeks, we have gone through four different versions of our website, twelve versions of our mobile app and have experimented with Facebook, Twitter. Yelp and Google advertising. There is no one medium which is the absolute winner for us. The goal is to keep conducting short measurable experiments and then use the data collected  from each campaign to guide us in deciding the money spend on each medium.

It is still early days for us, but its been a lot of fun building ShipBob from the ground up. As we scale up, a lot of these lessons will be re-learned. If you have some similiar or contrasting notes on building your startup, would love to discuss them over coffee!.  If you are wondering about the choice of the blog title, you should watch this epic Alec Baldwin speech from Glengarry Glen Ross movie!