Julian Shapiro of Bell Curve: Things Every Founder Should Know About Growth – Indie Hackers (Episode #079)

Check out the Indie Hackers Episode Page & Show Notes

Key Takeaways

  • Startups should use ads to generate growth
    • Contrary to popular belief, ads are very often profitable – people simply don’t use them correctly
    • Organic traffic can take YEARS to build up
  • Why do you want traffic to your business/website as quickly as possible?
    • Once you have a lot of it, you can start running A/B tests to optimize the user experience and improve your page
  • Find out what channel your niche users like to spend time on (e.g., Facebook, Instagram, Twitter, etc.) and advertise there
    • But do know that Twitter is often one of the worst channels to advertise with (meaning the cost per click is very high)
  • Advertise on new social media channels as early as possible
  • Video ads almost always outperform image ads
  • Focus on building a product or experience that is so good, people will want to talk about it and share it with others

Intro

Startups That Succeed

  • When Julian looked at all of his clients, he found that “E-commerce businesses succeed the most frequently…then it’s probably mobile apps…the third was Chrome extensions.”
    • “I feel pretty confident with that sort of hierarchy that I just shared.”
  • E-commerce businesses outperform Software as a Service (SaaS) companies….why?
    • (A SaaS company is a company that hosts an application and makes it available to customers over the internet. This infers that the software sits on a SaaS company’s server while the user accesses it remotely.)
    • With e-commerce, typically you’re selling a good, like a toothbrush or a mattress, that people are already buying
      • People already know what the product does, but they likely aren’t aware of the benefits of your new software. This requires SaaS companies to use valuable ad space on explaining their product – ”you’ve now taken up half or more of the real estate available to you in your ad to pitch why your solution is amazing”
      • It is also easier to sell physical goods than software because people expect to pay a certain price for a toothbrush but aren’t sure, for example, what video-conference software will cost
        • “If you’re selling a mattress and one of your key selling points is that your mattress costs $400, as opposed to the $3,000 an extremely premium mattress would cost, people are like, ‘Wow. I know for sure that’s how much a mattress costs normally. So I know for sure you’re giving me the deal of a lifetime. And I have no problem paying your $400.’”

Why Ads Are Good For Startups

  • Julian encourages startups to use ads to generate growth
    • “For any client that even approximates profitability, ads should always be run. They’re not self-indulgence.”
    • Julian likes running ads because they are “the quickest, most in your control, most scalable, and most reliable form of getting traffic”
    • Building organic traffic for a new site can take months or years
      • ”If you’re just waiting on word of mouth or organic traffic, meaning traffic coming from Google, that could genuinely take months, half a year, or a year to build up to any sort of significance…if ever.”
      • Why try to get traffic as quickly as you can? – Once you have a lot of it, you can start running tests to optimize the user experience and improve your page
  • Contrary to popular belief, Julian says ads are very often profitable
    • “People simply don’t do them right, so they cannot sustain the profitability indefinitely”
      • A lot of people don’t know what they’re doing when running ads, and are just getting burned by the experience and thus give ads a bad reputation. The truth is the average person probably just lacks the skill or the experience necessary to keep those ads running profitably for a long time.
        • “Ads are great in the short-term at a minimum. But the argument I want to make is, even in the long term they’re usually also great as well…if you do them properly.
  • For business-to-consumer (B2C) e-commerce companies, Julian recommends running Instagram ads, content marketing, sponsoring influencers, and getting affiliates
    • Also consider Pinterest ads, Google AdWords, and Google shopping

Advice On Building A Startup

  • Although passion is great, it isn’t enough
    • ”I don’t care how passionate you are about an idea. If it’s failing miserably for half a year, you will feel miserable. You will give up.”
    • “Don’t work on something doomed to fail, because there is an infinite amount of ideas you could be pursuing”
      • Instead, find a problem that you are passionate about AND that has growth potential
  • The world is huge – there’s a slice of the pie for everyone and the global economy is only getting bigger
    • “The population is growing quickly. The amount of people in countries with quickly increasing purchasing power and with access to the internet is rapidly expanding – so it doesn’t matter if competition exists.”
      • If you’re curious about a competitor’s site, go to Alexa.com and use their free tool – there you can see website traffic, bounce rates, and other important metrics
        • Also, look at your competitor’s engagement on their social media pages – are people liking their pictures, are they commenting, are their posts being shared etc.?
  • Data > Hunches
    • “You don’t want to go off hunches, ever. Hunches can propose some things for you to try, but data should then be what validates them. Hunches should not be what concludes on experiments or concludes on really important decisions.”
      • There is data everywhere
        • For example, there are third-party tools that allow you to mine Instagram hashtags to determine emerging areas and trends
        • There’s also tools like Google trends and Alexa
  • When it comes to ads – experiment often, quickly, and cheaply
    • Julian says that for his clients, he starts by running very small ads that cost only $500-1,000 on multiple channels (e.g., Snapchat, Instagram, Facebook, etc.)
      • Find out which channel has the best potential without wasting too much time or money
        • ”We want to know early on because if it turns out that Snapchat is a quarter of the price of Instagram, and we only tested Instagram, we’re shooting ourselves in the foot”

Targeting A Niche

  • Find out what channel your niche users like to spend time in (e.g., Facebook, Instagram, Twitter, etc) and advertise there
    • On Twitter, you can target users based on who they follow
    • Also – “Twitter can be used to target keywords. So if someone’s publicly tweeting about widgets, you can target people who’ve entered those keywords into their tweets.”
      • “The downside is, Twitter is one of the worst ad channels. It’s usually worse performing than Facebook, Instagram, and even Snapchat – meaning the cost per click to your website is very high.”
    • On Facebook, you can target people based on the pages they’ve liked
      • They also have alike targeting which allows you to target people who have the same demographic and purchasing behaviors as the people on your website
        • Julian calls it “extremely effective”

Different Types of Virality

  • Aim to make your product inherently viral
    • For example, if you share a Dropbox file with an outsider, they have to sign up to use it. It was the same with PayPal, to receive the money you needed an account.
      • “It works organically. No surprise Gmail, Hotmail, PayPal, Airbnb, and Dropbox all exploded. Those are all examples of inherent virality.”
  • Focus on building a product or experience that is so good, people will want to talk about it and share it with others
    • AKA word of mouth virality
  • Artificial virality is when you offer users a discount to use your product
    • AKA – “Get 10% off your first order” or “Invite a friend for 10% off”
    • The problem with this is that you’re paying users to buy more instead of trying to figure out a way to get people to share your product organically or inherently
    • “Try to avoid it as your only means of referral if you have better options like inherent virality or word of mouth…If you are going to do it, here’s how I would do it – offer a huge bounty, something like – ‘get the product for free if you refer five friends’.”
      • For more info on virality, Julian recommends listeners to visit his site

Julian’s Thoughts on Advertising with New Social Media Channels

  • Julian recommends advertising on new social media channels as early as possible
    • “I was on Quora super early, and was able to take advantage of the fact that no one else was advertising on Quora”
  • Julian says Snapchat and Pinterest are improving their ad platforms and you should also consider testing with them
    • “Not only do you want to look for new channels. You want to periodically assess old ones because they have hundreds of people spending the majority of their days doing nothing but trying to improve the performance of their ad platforms. So give Pinterest and Snapchat another shot.”
    • He also recommends trying Spotify and Pandora’s ad platforms

Closing Thoughts

  • “Video ads almost always outperform image ads. If you can attract people’s eyes when they’re scrolling through their feed, do it.”
  • “Demographics do actually respond differently to different selling points. A man in his 40s might respond significantly better – and when I say respond, of course I mean click through at a higher rate and all that stuff with the ad – to one type of message, than a woman who’s younger.”
    • Think about them as separate people

These notes were edited by RoRoPa Editing Services

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