Startup marketing is tough….really tough. Marketing an app is particularly difficult since it’s a pretty new industry and yet there’s so much competition out there. A lot of the time it’s a lottery but I’m convinced that it’s not all chance and that, as app/web developers, we can “buy a better lottery ticket”.
Rob Walling’s “Start Small, Stay Small: The Developer’s Guide To Launching A Startup” is required reading for any developer out there who is launching a product of their own. He also has a number of successful startups.
I interviewed Rob to pick his brains about marketing and sales techniques for mobile apps.
You state in your book that every startup needs a prelaunch marketing site and a mailing list. Do you think an entrepreneur should have a pre-requisite mailing list size or conversion rate in order to validate their idea before building it?
I look at conversion rates. If you’re converting less than 10% of your traffic to emails then you’ve done something wrong. Either the idea isn’t very good or you’re not conveying it very well on the page – you’re making a big mistake somewhere. I think you should be between 10% and 30% – that’s the typical range I see. If you’re doing above 30% you’re doing really, really well.
Frankly, if I get into the twenties range, like the getdrip.com landing page, I have a couple of traffic sources that convert above 30% and those are the ones that I’m going to go advertise to, try to guest post on and all that stuff once we launch. So basically, if you’re doing 20% to 30% you’re doing really well but 10% to 20% is where you at least need to be.
In terms of the first part of your question where you asked do you need a certain number – I’ve seen people try to launch with 100 emails and that’s just not enough because you’re probably going to convert somewhere between 5% and 20% and so, with a hundred emails, 5 customers when you launch is not a lot of customers. I like to think in the several hundreds – I think a good goal is somewhere between 400 and 1,000.
What do you think is the best way to build a mailing list, particularly for an app?
It depends on what kind of app you’re selling. If you’re selling a game and you’re going to sell for a one time fee then you’re in a different situation then someone who’s selling a SAAS app who is going to launch and charge twenty or thirty dollars a month for the lifetime of a customer. Your lifetime value of anyone who buys your app is going to be the price of your app plus any in-app purchases there might be. So your customer lifetime value is going to be ten bucks, as compared to if you run a B2B SAAS app where your customer lifetime value should be, at a very minimum, $100 – and other values in the range of $300-$400 are not uncommon.
So you’re in a very different situation because… well, I like to say that there are marketing approaches that scale and ones that do not scale. Marketing approaches that do not scale are things like: going to forums, doing podcasts, guest blogging – very time intensive things where you can’t just turn up a dial and more traffic will come through. Things that do scale are buying ads, SEO, content marketing – done right – with viral content that has link bait, like KISSmetrics for example – those things all scale and you can go to 50,000 uniques in a month.
So the approaches outlined in my book are more aimed at businesses with a higher customer lifetime value than an iOS app. For those businesses, getting one or two emails could really be worth something whereas you need to look more at press – that’s how I think you’re going to be successful – or some type of virality, if people are compelled to share this with other people. I don’t think you’re niche enough for forums – you’re going to be HackerNews, OnStartups.com, The Joel on Software Business of Software forums – those forums might be worth it.
The trouble with HackerNews of course is that it’s often a lottery of whether you can get upvotes or just slide down the New items page.
Yep, that’s right. I would never build a business on relying on a mention in TechCrunch or a popular post on HackerNews – [marketing] is more challenging than that, you have to get creative with it.
I’ve heard that the best way to get exposure is to do the journalist’s work for them by writing an article and feature a quote by yourself so the reader gets the impression that you’re an expert in the area. Do you think that’s a good idea?
Y’know…I’ve never done that – I’ve heard PR people say that and I’m sure it works but if you’re cold emailing someone with that then it’s a crapshoot. It’s going to be a real uphill battle because these journalists receive so many submissions. I have a blog and get a lot of pitches for guest posts and I probably don’t even get near as many pitches as they do. On almost all of those, if I haven’t heard of you and I don’t know you by name then I delete the post because I get so many of them and can’t research all of them.
I do get pitches from people that I know through Microconf or the academy, or I’ve met them and those I always consider because I know the guy is legit. If I haven’t heard of you or it’s not a referral or an introduction then I just don’t have time to do it and I bet journalists get five times the number of pitches I do. It’s a lottery.
I think I would consider two approaches that might help improve your chances. One thing is I would read the book Newsjacking, it’s a short book and it’s all about taking an event which happened today in the news and writing something about that – that somehow mentions your product or is related to your product. You can either publish on your blog and submit it to HackerNews or you could try to do the pitch idea which you just mentioned. That’s a way to evergreen news content. For example, when PRISM came out and everyone was being spied on and stuff, and let’s say I’m a security vendor or whatever and I write a really well researched article, I mean, we saw 10 articles at the top of HackerNews about PRISM that day – so if you publish a good one then it will be there, no doubt. Newsjacking goes into more detail about that.
The second thing I’d do is sign up for HARO – you sign up and you get three emails a day and there are tens of thousands of journalists who need comments in the stuff they’re writing and so they submit these requests to get “experts” opinions for their stories. It’s super time-consuming though.
You say a sales website should contain testimonials from customers but what if you’re prelaunch and don’t have any testimonials yet? How can entrepreneurs add validation to their product prelaunch?
If [the app is] a game – well I think it would give you some benefit but I don’t think it’s quite as important as someone writing a B2B app. There are two things you could do though: you could get testimonials about you, y’know that say “Gerard is the best gaming programmer I know” or “Ger made this killer game” – most people don’t read the full testimonials anyway – but that is a real testimonial and visitors will say, oh, that person endorsed him – great.
The second thing you can do is – well if you don’t have any code then its tough – but if you have anything to show anyone, give it to someone in your network and ask for their thoughts on it. If you have storyboards or screenshots or even mockups, you can get feedback from your network even on the potential of the product. Something like “Man, I’ve seen an early version of this and it looks awesome” – and that’s a testimonial and it’s true because they’ve seen it. Then, as soon as you have something that runs get it into the hands of someone and get that feedback.
So I guess you believe in revealing details on your app bit by bit rather than doing a grand unveiling like Apple?
Yeah, for sure. Apple is really the only one that does – they’re the exception to the rule in my opinion.
What are the best ways to decide on pricing a mobile app?
Well there are so many mobile apps out there, like Apple has 850,000 apps in the store right now so there’s always going to be competition and it’s such an open market out there; I think you have one of two choices. With a mobile app specifically, $4.99 is a no-brainer price and people will buy it on a whim. However, if it’s a mainstream app like Angry Birds you need to be 99c but if you’re going to be a smaller niche then you’re not going to have a ba-zillion people buying it so $4.99 is a non-brainer and $9.99 is the top end that I’ve seen so you need to be somewhere between those two.
Another approach which I’ve seen is that people try to set themselves apart and try to charge $30 or $40 just because it makes people say “Wow, this must be something really special”. I haven’t seen that work though because no-ones going to spend that amount of money on a mobile app just based on the four or five screenshots that you present in the app store and a few reviews. It’s just too hard a sell to try to do instantly, that’s why app prices are so low – that’s my take on it. I’m no expert on mobile but I do know mobile developers and that’s the experience I’ve heard.
Can a mailing list give relevant feedback on pricing prelaunch?
I’ve never asked the question “How much would you pay for this?”, I’ve asked “Would you pay X?” and then you name the price. So with my app I’m about to launch I emailed a bunch of people and asked “Would you pay $99 a month for this?” and some said Yes, some said No and then I emailed another group and asked “Would you pay $49 a month for this?” and everybody said Yes. So, for me, $49 is the no brainer price and for $99 I need a brand, more legitimacy and maybe a more mature product. So I kind of split tested it. I think if you ask them how much would they pay, I mean, has feedback been in the range $5-$10?
It’s been more in the $1-$5 range, and a few people said they would pay a bit more.
Yeah, I can understand that. I think $4.99 is probably your upper end.
Sometimes an entrepreneur does the prelaunch right but it still falls flat. For example, Dan Norris with Informly. How do you know when to stick with what you’ve got, when to pivot and when to throw in the towel?
Well that’s a broad question so it’s hard to answer with specifics. Let’s see, there’s three phases: Problem Solution Fit – someone has a problem and you’ve solved it with your software; the second phase is Product Market Fit and that means you have a product, you’ve found the market and you’ve found a way to market it to them; and the third phase is Scale – scaling it up and selling tons of them.
Getting to the very first one, meaning you have actually solved someone’s problem with your software and someone desperately needs your product – getting there is really, really hard…but then getting the Product Market Fit is really hard too.
So… it depends on where you are along that phase – if you’re still before Problem Solution Fit then I would ask questions like “How many emails do you have on your list? What was the promise you gave on that landing page?” and “Have you delivered that?”. If you got 5,000 emails, promising X and haven’t seen good sales then your app probably doesn’t do X because people don’t give their email for random reasons.
Or if you got 100 emails then your problem isn’t desperate enough or you didn’t send enough traffic to your website because 100 emails isn’t enough to validate an idea in my opinion. That’s what I’d say for the early phases. As far as throwing in the towel goes…I think people pivot and throw in the towel too much these days. I like some aspects of Lean Startup but I think it gives people too many excuses to just bail and give in and change too quickly.
I mean, I bought an app called HitTail two years ago and it took me five months to revamp and redesign it. Then, even knowing it had existing customers and knowing it solved a problem and me having the marketing knowledge I do, it took me five months of full time marketing work to get the Product Market Fit. I had the Problem Solution Fit day one and it took me five months to get to Product Market Fit…that’s a long time!
But when you look at what people do, I mean you mentioned Dan Norris with Informly. I think he pivoted within a month or two and then pivoted again within a month or two and that, in my opinion, is just too fast.
A big thank you to Rob for agreeing to do this interview. If you’re interested in testing your entrepreneurial skills from your iPhone then be sure to sign up for Hipster CEO.