3 Simple Steps for solving your Start-up's Customer Acquisition Headache

By Timi Olagunju | 4 min read
4th December 2017
3 Simple Steps for solving your Start-up's Customer Acquisition Headache

In my work experience with startups across Nigeria, Kenya, and Ghana, I find that a lot of startups, particularly those in the 'tech' space ask me more or less the same question; "how do i get my first line of users for my platform?" "Should I focus on building the demand side first or the supply side first?" These questions prompted me to do some research and pen this article which draws on my findings and personal observations from my years of consulting. Hopefully, this write-up will help you develop the frame of mind and strategic thinking necessary for finding first users and consolidating on them, as well deciding on who is important to your business first. 

For clarity sake, I have chosen 5 popular and successful startups — Konga, Jumia, Uber, Airbnb, and Jobberman as focus points for this write-up. You may be familiar with Konga, Uber, Jobberman, and Jumia, how about Airbnb? Well, Airbnb is an online community marketplace that connects people looking to rent their homes with people who are looking for accommodation. Airbnb users include hosts and travelers: hosts list and rent out their unused spaces within their homes, and travelers search for and book affordable accommodation, rather than hotels.

In the next paragraphs, I will share how some of these start-ups moved from having just one customer to having thousands and millions of customers, and why some are lagging behind. I will discuss three of four points under this title, and discuss the last point in my next write-up for the the MSME hub platform.

  1. Think like your user

One way to improve your customer reach is by thinking like the user and like your potential market. Steven Covey in his book "7 Habits of Highly Effective people", says 'seek first to understand, then be understood" or like I put it in my Design and Disruptive thinking classes for start-ups - think the problem, not the solution first. For instance, from the beginning, it was clear to the founders of Airbnb that they would need to find users willing to list their homes before finding those interested in staying in them. Being a start-up, and knowing the possible resistance of people to new things, the magnitude of the competitors, and the odds against them, Brian Chesky and Joe Gebbia, founders of Airbnb, thought like customers themselves and tried to figure out where they would go if Airbnb did not exist. It did not take them long to figure out the answer: Craigslist, an online classified advertising site listing jobs, apartments, services etc. The entrepreneurs figured they could do a better job of making apartments appealing than the online classified site, but first, they had to siphon away its customers. To do that, Chesky and Gebbia created software to hack Craigslist to extract the contact info of property owners, then sent them a pitch to list on Airbnb as well. The strategy worked. With nothing to lose, property owners doubled their chances of finding a potential renter, and Airbnb had a ready supply of homes with which it could consolidate and attract customers.

For Jobberman, they knew their potential market well. These were mostly the young and mobile population, who hardly read newspapers but needed jobs. So Jobberman started with getting together job opening from newspapers and pasting online for free to attract this initial set of users, before scaling.

2. Create a compelling User Experience

Recently, I used www.similar.com to compare the bounce rate on Jumia as against Konga, and I discovered that in addition to the lower ranking of Jumia as against Konga, the bounce rate on Jumia is higher than that of Konga - thanks to Clive Ayonye and other members of the Konga design team. Now, for clarification, a high bounce rate is not a positive thing as bounce rate is the percentage of visitors that have visit a particular website but navigate away from the site after viewing only one page. A rising bounce rate is a sure sign that you need to pay attention to the simple things that make viewing your page inviting. On asking one of my classes what they liked about Konga or Jumia and why they would surf more as against the other, I discovered that 90% of the class prefered to navigate Konga for a longer time, because of the user experience and the virtual interface that Konga provides. 

When the founders of Airbnb started, they hired professional photographers to go to property owners' homes to take inviting pictures. The gambit worked, making the site much more attractive than the competition, and setting a standard for photography that later property owners rose to match in order to compete against other homes.

Uber pursued a similar strategy. Rather than starting out with Uber Pool or Uber X, in which drivers use their own cars, the company started with their own black cars driven by professional drivers. That way, they could ensure that customers would have a great experience virtually every time they used the service - and they could then rely on customers to spread the news of that experience by word of mouth.

3. Don't be timid, be timely

Looking at Uber and Airbnb, you can say that they were smart about how they chose to expand, picking the right cities at the right time to maximize their success. They focused first on getting the supply side settled and then sorted the drivers.

Since Uber's main competition was taxi cab companies, the start-up researched which cities had the biggest discrepancy between supply and demand for taxis. They then launched during times when that demand was likely to be the highest, for example during the holidays when the tendency to stay out late partying was higher. It also ran promotions during large concerts or sporting events, when big crowds of people would need cabs at the same time.

Airbnb followed a similar strategy with its rollout, launching in Denver in 2008 to coincide with the lack of hotel space during the Democratic National Convention and adding new cities at times when they had major conventions or other events.

Leveraging on the circumstance of high demand and low supply helps your startup acquire the right type of users - those early adopters who might be more forgiving of your business, while you work things out and perfect your model.

I will like to hear from you. Please send feedback to timithelaw@gmail.com or reach me via www.twitter.com/timithelaw.

Timi Olagunju
Timi Olagunju is a recipient of several Awards for his distinction, including receiving an Award from President Barack Obama as an exceptional young African leaders. He is a technology lawyer with specialization in Cyber/AI law and also a professional trainer with focus on Design Thinking and Leadership.
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