A start-up’s main job is to grow fast. Fundraising through seed rounds is a key way to drive speed, however, to get investment you must be able to demonstrate to investors how your product or service has the potential to get new users and retain them consistently.
The current state of the venture market presents some additional challenges and it can pay-off to be prepared. Market conditions since circa 2018 have been white-hot and many commentators were calling for a correction. We’re now in a correction phase it seems, and investors are more risk-averse. For founders, it is important to make sure your start-up has the metrics to identify performance and demonstrate validation of your hypothesis. This will help you raise capital and fuel growth.
To make sure start-ups can showcase the ability for their product to work and get returns, being able to show consistently high user growth and regular user interaction with the product is imperative. User growth is part of product-market fit, which is essential in any product or service.
Who are your users?
Before you can think about user growth strategies, you need to be able to define your users. You need to know exactly who they are, their habits, and where you find them. A method often used to find your user is to create various personas of an ideal user. Start with a sketch and map out specific things about them. Continue to refine this map the more you research and test the product on the market. Using this user persona map as a focal point is imperative, especially when making iterative changes to the product.
“The first step in exceeding your customer’s expectations is to know those expectations”Roy H. Williams
Once you know your customers, you want to make sure you are positioning your product or service towards gaining product-market fit. What is product-market fit? To simplify, product-market fit is when the product or service you’ve designed has high market demand, with customers who are willing to pay for it. Whilst it’s an ambiguous point in time to define, when it happens it’s unmistakable. This is a concept that the industry relies on heavily to assess whether a start-up will fly high or crash and burn. You want to make sure you are getting it right from the beginning and showing solid user growth is one major way to do so.
How do you grow users?
The million-dollar question! Iconic companies like Google, Facebook, Canva wouldn’t be here today if they hadn’t cracked the code to this. While having a great product that works and solves a real problem removes most of the work in this regard, people aren’t going to naturally be aware of your product. You need to employ proven strategies to get the word out there to the right users who will be willing to pay for and use your product or service. The main methods to achieve this is utilising tailored growth channels and removing any user pain points that hinder the purchase funnel experience. Growth channels help gain new users, while a great user experience helps retain users.
1. Growth Channels
Growth channels are different methods designed to attract new customers into creating product awareness. Different start-ups will utilise different methods based on their individual product and user needs. The best initial growth tactic for an early stage start-up – spread the word. Have everyone around you test out the product. More importantly, have your target customer test your product. Go to your target customer, make them aware of it and try different things on them to see what works. Experimentation is key because you know what can scale and what cannot. Growth channels include things like marketing and creating brand awareness through social media, paid advertising like Google Ads and SEO. For example, Tinder first began to grow users by throwing large private parties at University of Southern California where attendees had to download the app to experience them. Tinder went to their target market, and found an innovative way to introduce their product to them.
2. Purchase funnel experience
The second method is focussed on user retention. Once users have decided to sign up or think about purchasing your product or service, you must be able to retain them. This is done by making sure the purchase funnel experience is as smooth as possible for the user. Users should not be deterred from any part of the process, from awareness to post purchase. This is assessed through – again – knowing your customer base well and experimenting on them till you know what works and what doesn’t. This experience should make it easy for them to keep coming back.
Growing users is an important step in every start-up’s life cycle. It is one that requires a tailored approach that is based on the start-up’s target market, and their individual needs and habits. If you have the end consumer in mind when creating a growth strategy you will get there eventually.
If you do want to get there faster, contact us! We are always on the hunt for bright minds with bonkers ideas. We can help give you the tools and resources needed to fast-track your growth. If you or anyone you know has an idea and wants to make it a reality contact us!