A while ago I read on TechCrunch that Pilot.com had raised $15M. It made me think of Dixie.io, a Founders portfolio company that offered more or less the same bookkeeping service, but which unfortunately ended up closing down. Closing a company is never nice. But while at Founders we obviously always want our companies to succeed, our discipline around learning from our mistakes [and our successes] means we improve our chances of success next time around.
Here are three simple but crucial tips that are easy to apply to any early-stage B2B company, which I learned from Dixie.io and helped shape the way we do early-stage growth at Founders today.
For more learnings gathered from building 10+ companies check out the Founders Growth Toolbox. You can also hear more about how we use failure as a process in my talk from Techfestival.
This sounds obvious, but it’s something we underestimated the power of at Dixie.io. It’s not because we didn’t think about what kind of customers we wanted to serve, we just didn’t stress about defining it too narrowly. Why? Because we offered a service that every company could use since every company needs to do bookkeeping. But this doesn’t mean that you should just go ahead and target everyone.
No matter how generic your product is, you need to define elements like the company size, industry, etc you are targeting. You should also consider the kind of people within the companies you will be reaching out to and what their pain points are because it has a huge impact on how you approach them, position yourself towards them, which marketing and sales channels you use, etc.
At Dixie.io we had an overall idea about who we wanted to target and what their pain points were: companies who were tired of 1) doing bookkeeping themselves and 2) the traditional way of doing bookkeeping. But that’s still a very broad audience to position a product and deliver clear and targeted communication to.
You need to be very specific about your audience in order to deliver clear marketing and sales efforts. Looking at Pilot’s website, it’s very clear that they are targeting startups and their communication is well shaped around that in terms of their positioning and value propositions, which are focused on startups’ pain points. Because we were busy trying to get everyone on board and served customers of all sizes, we ended up addressing pain points that were too generic and being too generic in our communication on the website, leading to sub-optimal results.
Remember, at this early stage you don’t know 100% if the audience you’re targeting is the right fit for your product or service. It’s something you will fine-tune as you go along [as we’ll cover in the next section] by e.g. talking to potential users about their needs and pain points to find out if your product is relevant for them. But it’s 100 times easier to refine your messaging if you’re working with a narrow audience rather than “everyone”.
Looking back, I think we were afraid of excluding potential customers by sticking to one primary audience when everyone, in theory, could use our service. We should have picked just one primary audience and tested whether it was the right audience.
Time is precious for any startup. Although it can be tempting to just get started, however, the more you “prepare” before you start executing, the better outcome you’ll get.
This is particularly true when it comes to your first efforts to speak to potential customers. The second learning I’ll share is from our first cold email campaigns at Dixie.io (keep in mind that this was way before GDPR!). The objective was to book meetings with potential customers. The approach: reaching out to as many people as possible using what I call the “shotgun method” where you send a generic email to a big list of email addresses and hope something sticks.
We sent the email campaign to a large and very broad list of emails we had collected over time from signups, LinkedIn connections, events etc. We didn’t think much about whether bookkeeping was relevant for them because we had already had contact with them in some way. We just wanted to reach out to as many as possible to spread the word about this new way of doing bookkeeping and increase our chances of booking meetings. The results were nothing to write home about — and most painful of all, people got annoyed. First of all, because bookkeeping wasn’t relevant for their job position, second of all because we didn’t “care enough” to take the actual time to consider who we wrote to.
At another early-stage company, Wonderwerk.io, which we built after Dixie, we were facing the same challenge about booking meetings with potential customers. The learning from Dixie was on the top of my mind and I wanted to get a better response and conversion rate this time. Instead of using the shotgun method and reaching to as many as possible, we decided to invest a bit more time by writing personalised emails.
With learning #1 and the importance of defining your audience in mind, I started out by building a super relevant and targeted list of all the companies and job roles within the companies we wanted to reach out. We researched each person’s email and LinkedIn account so we could reach out on both channels. This requires quite a lot of work but there are plenty of tools out there to use, like LinkedIn Sales Navigator and Hunter.io.
The next step was to reach out to everyone on the list with a personalised email. By personalised I don’t mean inserting merge tags like first name, company name, etc. I mean writing an actual personal email, where the receiver is in no doubt that this email was written to them and not sent to 1000 others. A good rule for writing personalised email is to think about how you’d approach it if you were talking to them in real life. You need a common starting point about something they do or have done that’s relevant and related to your product to create interest. To get that, I did some quick research on every single person.
E.g. did they write a blog post with a topic related to the product? Did they tweet or comment on something related to the product? Did they get a new job where it would make sense for them to use the product?
You don’t have to write every email from scratch. Make it easy for yourself and create a standard template where you only have to rewrite the intro about why you are writing to them. There’s no need to rewrite your selling points.
This approach requires a lot of work and you can expect to spend an average of 10–15 minutes on each email, but it’s time well spent. We did a small experiment with Wonderwerk by sending out a generic email and a personalised email. The conversion rate for meetings booked was 20% higher on personalised messages.
The third and final learning is about the value of talking to potential customers without putting too much emphasis on selling your product.
At Dixie.io we focused a bit too much on selling the product when reaching out to potential customers in our cold email campaigns. We used the feedback approach: offering a free trial in exchange for their feedback on our product. Our intention was not to be too salesy, but it was ultimately very clear our objective was to sell the product. We didn’t really succeed in setting up meetings or getting feedback.
What we do with early-stage startups we build today is to focus more on starting a dialogue by asking simple questions about their pain points and letting them know we are curious to learn more about them. Our experience is that people are more likely to reply to our emails and start a conversation because it’s about something that relates to their pain points. We also found that they become more excited to get involved and provide their feedback for the product. They can relate to the product and its solution to their problems, which also starts the process of turning them into customers.
This approach not only helps us setting up more meetings and getting new trial users, but it also provides us with valuable feedback and insights. This helps us build and improve the product, website and marketing activities by making it more specific and targeted to their needs and pain points. You get to know a lot about what potential customers actually need in their daily work life and learn about which angles and words you should use to communicate with them.
This information enables you to develop a product they can’t live without and marketing/communication your audience resonates with.
The learnings in this blog post are very much related to each other, and they are important to keep in mind when reaching out to people. Not only on email, but also for your overall sales and marketing activities.
Learning is an ongoing process and I’m still learning something new every week. I’d love to hear about your experiences as well! Please feel free to share your learnings and reach out to me if you have questions or want to continue the discussion.