"How do I actually go about approaching customers?"
"How can I test my customer acquisition channels?"
"What do investors look for in startups?"
So many questions but, fortunately for you, our Seed Sprint guest speaker Ross Sheil has the answers. We covered these questions and a whole lot more in today's Seed Sprint session that set our Sprinters up for a week of gathering customer acquisition related growth indicators. We had active angel investor and Head of VC and Private Equity at Stripe, Ross Sheil, on hand throughout the session. Aside from being former Head of Sales and Partnerships EMEA at Twitter, Ross has also built Stripe’s startup market, and was awarded Early Career Information Technology Professional in 2016, so you might say he knows his stuff.
Ross shared his very own exclusive tips and tricks to our audience of over 120 founders and these are so good, we didn’t want anyone missing out. Read on for our favourite 10 tips.
1. Customer Segmentation. Customer segmentation can both help and hinder your business, so this is a tricky one. A segmentation framework can be useful to help you understand your target customers’ characteristics, which in turn helps as you plan your customer outreach. When thinking about segmentation, be mindful of two things:
It will evolve as your business evolves so sticking to one framework forever will not work.
If you create your segmentation strategy too early, it'll serve as a distraction, and you’ll risk creating false positives & negatives about what's really working, so be careful.
2. Keep one eye on current successes, and the other where you want to be. As Ross so candidly said, “The goal is that you never hit the summit. When you think you’ve hit it, you see the next summit ahead. That’s why the iterative process of building a startup is so important.” Achieve, look forward, and grow!
3. What’s the right balance of customer focus versus & acquisition strategy? 80% of your time should be spent thinking about your customers and the other 20% focusing on how to connect to your customers faster.
4. How do you actually go about approaching customers? Think about what you want to get from the engagement, and what you need from them. Construct a strategy that reflects your company's values and goals. This could be to approach potential customers with educational content, flashy deals, etc. Make it fit your company.
5. Wondering how to measure your outbound sales efficiency? There are different ways to measure, and if you break it down using some clever maths, you can keep an eye on what’s working within your process, and what can be changed to make it more efficient. Remember, at this stage, A/B testing always helps, whilst you figure out which strategies work for your business.
6. So you know why you should (or should not) segment data but how can you do it? Think about three factors:
Core info: domain/employee count e.g. from public channels like linkedin
Triggers: key hires or conference sponsorships
Attendance/message: sub-vertical, tech install data, web traffic etc
7. No one likes being told no, but it's not all doom and gloom. Those early customers who have said no have provided valuable data on why. This is why it's important to be recording this feedback, as it will act as your product roadmap, plotting your journey to success. To be fully efficient, you need to be collecting ALL the data you can get - the customers saying no today could / should be your future customers.
8. How can you prove the effectiveness of your customer acquisition channels? When chatting to investors, Letters of Intent go a long way to evidencing a pipeline. Another easy way to start proving that customers will come to you is to stick a simple ‘register your interest here’ option on your website, and start collecting email addresses. Investors will be impressed by your customer demand.
9. What do investors really want to see at pre-seed and seed? Engagement data! Ross stressed this as a big one! If you start going granular when talking about metrics to investors, then you’re at risk of reducing the investment case for them. Ross says it’s the wrong focus, and instead you should look at engagement data such as signups, number of new customers onboarded, high levels of retention and any high level revenue metrics you have.
10. What if I’m a B2C company? You can still segment. Think about user profiles within your target market, and develop hypotheses you can test around their value. For example, does one profile spend more money, visit more regularly or refer more new customers? Then optimise for that customer group.
Wow - a lot of great content in there.
Sign up to Seed Sprint here to gain access to Ross’s workshop as well as previous sessions, including Q&A with investor Richard Howard, access to exclusive deals and more!