3 Simple Steps for solving your Start-up’s Customer Acquisition Headache
Timi Olagunju is a recipient of several Awards for his…
- 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.
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
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.
a compelling User Experience
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.
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
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.
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.
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.
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 email@example.com
or reach me via www.twitter.com/timithelaw.