Marketing Hack – Fake It Till You Make It

Any startup, especially an online one, can use this hack to build trust and credibility. You can try to look bigger than you actually are. If you act like a big deal, customers will treat you as a big deal.

We did this in Beveragewala as well. We were actually a very small startup doing around 10-15 orders a day when thought about doing this. Some of the things we did were as follows.

Professional Packaging – We started using good quality branded packaging to dispatch the goods. This made the look of the packages very professional and coming from a ‘big’ player.

Customer Care – We bought a toll free number which started with the 1800 series rather than having a regular mobile phone as our customer support helpline. Also a professional recording giving users various options to navigate through gave the entire experience a very professional and big player touch. Along with this, we also created multiple email ids, one each for every possible query.

Stationery – All our printed material like flyers, invoices etc. had our branding on it and were well designed and printed on reasonably good quality paper.

Website Interface – We added a lot of sections to our homepage to make the site look very busy. Also the banners and photographs were changed frequently.

Making your startup look as big as some of your competitors can be done with little investment. However, this tends to make an impact which is quite strong in the minds of your customers.

Gamification for Startups

Gamification implies the use of game mechanics to startups. We use the mechanics of traditional games to increase startup metrics such as customer retention.

Acquiring new customers is expensive. Hence startups are increasingly looking to increase their customer retention rates and reduce churn. This is where gamification has emerged as an important tool. The metric which most startups look to target using gamification is the Lifetime Value(LTV) of a customer.

Startups give users incentives (generally monetary) to engage more with the product. This generally affects users in 2 ways – it gives them an incentive to use the product more due to a monetary saving and it also tends to hit on their competitive instincts while competing with other users.

Incentives can be in multiple forms.

Points – which increase with the engagement level of the user with the product. Points can be redeemed for discounts or at times act merely as a score to compete with other users.

Targets – which when achieved lead to the unlocking of a host of benefits for users.

Gamification must be used well by a startup. It does not always add value. For it to do so, the game setup must be relevant for the business, must highlight the product benefits and must be able to add to the customer experience. Without all this, a gamification effort might end up irritating customers.

Learning from Shark Tank - Educating Customers is Costly

We often see the sharks (in Shark Tank) not too happy about investing in a product where customer education is required. Customer education refers to making potential customers aware about the product features, usage and benefits.

The reasons why the sharks shy away from startups requiring customer education are the following.

Money – A sale is a process which results after a series of steps. First a potential customer is made aware of the product. Then the use cases and benefits are explained. In the case of new products, repeat visibility is required to stay in the mind of the customer when a need arises. Eventually trust Is built and this results in a sale. This entire process requires a lot of investment of money by a startup.

Time – Along with money, this sales process is time taking. A longer time period tends to reduce the ROI of the business.

Hence investors mostly prefer to invest in startups which operate in a market which is established and customers are aware of. Growth of a new startup tends to be faster in such a space.

How Much Investment Can My Startup Raise?

A standard question which comes up in the mind of an entrepreneur when looking for funding is how much investment can his/her startup potentially raise. The amount of investment which can be raised by a startup is totally dependent on 2 factors.

Traction – This is what the startup has already achieved. This can be actual sales, users acquired, traffic acquired etc. The higher the traction, the more confidence an investor gets in a startup model and hence higher is the amount the startup can potentially raise. (Also if you do not need to raise a high amount, lower equity can be offered)

Business Potential – This refers to the vision of the entrepreneur and potential of the scale of the business. The bigger the potential, the more money an investor will be willing to put in.

To conclude, the amount of investment a startup can raise is directly dependent on the traction the startup has been able to achieve till that point and the potential of the business going forward.

Note: This being said, a startup must only raise the amount which is actually required. Taking more money leads to inefficiencies and also a higher offload of equity to the investor.

Designing a Logo

A startup’s logo should be designed keeping the following in mind.

- It is a representation of the startup and should, if possible, be indicative of the business or the USP of the startup

- It tends to give an idea about the culture of the startup

- It should be in a colour that is easy to read

- It should ideally not have too many designs such as lines and curves and should be clean and structured

- It should look like a logo and not a banner or a flyer

Amazon is an online ecommerce store which sells virtually everything under the sun. The name Amazon indicates the vastness of the scope of the store. Also the arrow which we see in the logo which goes from the alphabet A to the alphabet  Z indicates that everything from a to z is available on the store.

Big City Startup vs. Small City Startup

Starting up in a big city differs a lot from starting up in a small city. No matter what business model, there are certain fixed differences when you start a company in either case.

Costs – Big cities tend to have higher costs of living and an entrepreneur will find it more difficult to sustain himself/herself.

Availability of Talent – A startup is as good as it’s team. Finding the right talent is crucial for any startup. Bigger cities tend to have a higher number of better and specialized colleges (though this cannot be generalized) and hence the availability of a good talent pool is higher. Also talent from bigger cities generally avoids settling in smaller cities due to the loss in lifestyle.

Regulation/Support – Bigger cities tend to be some years ahead in development as compared to smaller cities. The regulatory and support systems in bigger cities tends to be stronger for new entrepreneurs.

Market Size– Bigger cities have a bigger population, which implies a bigger target market for the startup.

Competition Levels – Startups in bigger cities tend to have more competition as compared to startups in smaller cities (this can partly be attributed to the bigger market size).