The Tech Bubble - 7 Ways to Protect Your Startup

Ebulliophobia - the fear of bubbles.

It’s a phobia that’s widespread in the startup industry, borne out of the ashes of the dot-com blowout. Right now, the debate rages on about whether we’re in another bubble.

There are over 103 ‘unicorn’ startups in Silicon Valley, many of which are yet to demonstrate a return. On the surface it seems not only likely, but all too realistic that we stand on the brink of a burst. In fact, prominent investor Mark Cuban says that now, it’s even worse, as this time around, private investors and crowd-sources have no liquidity for any of their investments. 

Those on the other side of the fence however, point out that tech investments are actually much smaller despite higher numbers of Internet users. VC firm Andreesen Horowitz point out that the total amount of VC and IPO financing now only works out to 2.6% of today’s GDP compared to the 1999% of 10.8%. They also point out that earnings are growing while P/E multiples (price/earnings ratios) are staying steady, and due to the lack of IPOs compared to the dot-com bubble, the majority of value appreciation is going to private market investors. The conclusion is that this time around, 15 years on, the markets are different. In other words, there is no bubble, and the markets are still strong. 

Bubble or no bubble though, both VCs and startup teams alike contribute to the growth of a bubble, so both need to protect themselves and the startup ecosystem. Here are 7 ways for startups (and VCs) to minimise ‘irrational exuberance’ and protect themselves better from the impact of a bubble (bursting).

 

1.            Get the Valuations Right in the First Place

Don’t get caught up in ridiculous valuations. As a startup, understand the principles of valuation and market activity in your region.

 

2.            Reduce Cash Burn

Set realistic expectations and plans for spending funds and make adjustments based on milestones and performance. Your startup office doesn’t need that glass whiteboard.

 

3.            Reduce Your Churn

Create inseparable bonds between you and your customers - by providing them invaluable services and making them wonder what they’d ever do without you, they’ll never let you fail. 

 

4.            Hire Right 

Startups are paying top-dollars for emerging talent. Make sure you hire only those essential to your growth, and not the “nice to haves” - it’s also a good idea here to abide by the “hire slow, fire fast” mentality. 

 

5.            Be Disruptive 

Time has shown that disruptive companies who challenge their industries have a higher chance of surviving a bubble burst. This again comes down to making your customers wonder, “what will I do without you?” Your company needs to be built on truly innovative ideas that transform broken industries for the best chance of survival. 

 

6.            As VCs, Ensure Discipline Amongst Your Company Leaders.

Be active on the board, set milestones for further funding and insist on regular financial reports. Make sure you touch base with your teams to check up on their milestones, and give them examples of what kind of reporting you expect. This is especially important in an age where VCs arguably have less and less control over their portfolio companies. 

 

7.            As VCs, Ensure Consistent Mentoring

Startup teams become good startup teams through mentorship. VCs need to provide essential and consistent coaching that purge out any excesses in the budget and ensure that the startup is as watertight as possible. 

 

Do you think a tech bubble is present? What are your best strategies to ensure you come out on top?  

 

Facebook Ads for Startups: The 5 Minute Guide

So you've set up a Facebook page. Now what?

With organic reach harder to achieve than ever before for a brand new company, it's tough for a cash-strapped startup to justify spending money on social media, especially when the return isn't immediately obvious. Many startup companies dabble in the platform just because it seems to be 'the thing to do', but without a good strategy, it can be an expensive exercise in futility.

However, Facebook advertising is a great method of gaining traction for startups at any stage. If done right, it can be incredibly cost effective, quick and it also offers flexibility in how you can target your ads. Facebook's own inbuilt tools such as Power Editor and Audience Insights allow you to create and A/B test often, and provide extremely in-depth information about your audience, all without having to purchase expensive 3rd party software. Even if it doesn't become a main channel of conversions, the amount of information Facebook can yield can be extremely useful for your content marketing strategy, and can be a perfect way to validate your product.

The main challenges you're likely to face are finding and targeting your audience on Facebook. Chances are, people who are going to buy your product already have a Facebook profile. However, finding these people, targeting them efficiently and bringing them out of the woodwork to engage with your brand can be almost impossible.

We've come up with a quick guide on how you can accurately find your audience on Facebook.

Graph Search

A company who is starting from scratch will arguably face the most difficult task. A good way to start is to do some research using Facebook’s Graph Search. Graph Search lets you find other pages liked by people who have already liked a certain  page. Try typing in your Facebook search bar: Pages liked by people who like [Competitor], and Facebook should pull up a list of similar pages you can then target via Interest Lists in the adverts manager. Most of the results might be pretty obvious, but every now and then, there are surprising results.

There are a few caveats to this approach – Graph Search currently only works if your language is in English [US], so if the search query isn’t working for you, check your language options. Also, Interest Lists may not show many of your most immediate competitors, as they will only display pages that have been liked by more than 50,000 people, so you might have to go broader initially.

Location

If you’re a brick-and-mortar store, or your startup has a geographic connection, you can target people who are close to your store address – in the locations, you can use your store’s address, and then select a radius around that address to target. This is perfect for cafes, retail stores, or any other places where walk-in traffic is really valuable. You might want to consider putting in your competitor's addresses as well, or specific locations where you may be undertaking offline advertising such as flyer drops.

Note - With location targeting, you must still narrow down your targeting through other demographics – age, gender etc. 

Custom Audience via Email List

A third method is only applicable for startups who have already built an email list. Facebook allows you to input any email list to create a custom audience you can target. Advertising to those who have already engaged with your brand is a great way to preach to the converted, and encourage interaction with these people via your social media. With a sizeable list, you'll be able to learn more about the people who have a signed up to your list - where these people are from, their other interests and who they socialise with. From here, you can step things up a notch and expand your reach even further by creating a lookalike audience, where Facebook will create an audience that it thinks is similar to your imported list. Try to keep the lookalike to 1%, especially in the beginning stages, or Facebook will start picking people out whose connections might be tenuous at best.

Something worthwhile noting - creating a lookalike audience is worth avoiding if you have less than a thousand emails, as the sample size is just too small for Facebook to make reliable suggestions. You will also need to further narrow down your lookalike audience using demographics; the audience might be similar, but you still want to weed out people who just aren’t the right fit.

 

There are other more...unscrupulous, but never-the-less very accurate ways to find your audience from scratch using imported lists, i.e. using grey and black hat tools to scrape the user IDs of the fans of your competitor pages and advertising to these  people.. These methods are AGAINST Facebook's Terms of Services, so engaging in these practices can very well get your advertising account banned, but for the sake of science and a complete review, it's still good to be aware of.

 

Here concludes our 3 methods of accurately finding and targeting your audience on Facebook. There are still a few things you need to remember when you're running and testing your ads.

·      It's all about the cost per conversions. It's really easy to get carried away when you see your Cost per Click or Cost Per Like results become low, and declare success! However, often the cost can be fairly low, but not many people are converting. Facebook can track your conversions via conversion pixels, so make sure you implement those from the very start.

·      Kings never stay kings for long. Audiences can get used up, and even the highest performing ads become less effective over time so keep an eye on your ad frequency and the trending costs.

·      A/B split test everything. Start with ad copy and ad imagery, and then progress to different audiences and placements. Facebook's Reports tool can break down the costs-per-engagement all the way down to genders, age and device, so make sure you use those to your advantage.

Did you have any successes finding your audience on Facebook? Do you have anymore tips and tricks to share? Let us know in the comments below!

 

 

 

7 Tools Every Startup Should Use

Tools are an entrepreneur’s best friends, and with the increasing popularity of SAAS’es (software as a service), there are tools to help you with almost any work activity, from automating tasks and increasing your efficiency to allowing you to communicate with your team better. The issue, however, lies within this choice and the sheer amount on offer.

Lucky for you though, we’re tool junkies.

To make this easier for you, we've done all the research and trials and waded through the river of marketing lingo to find you the easiest-to-use and best-value-for-money tools for your startup.

These tools will be relevant for most entrepreneurs regardless of the industry in which you’re operating. Early stage startups will most likely see the benefit, however if you’re a veteran team looking to make your lives a bit easier, then you’ll definitely find something here that will help. 

So, in no particular order, here are the 7 tools that we believe every startup should be using;

 

 1. Rescuetime

We’ve all had those moments at work in which we realize we have become carried away with unnecessary tasks that, honestly, we should just call procrastination. Enter Rescuetime.

Rescuetime is a time management app. It works in the background and logs all the time you spend undertaking various tasks on your computer and measures your productivity based upon your activity and time spent on specific tasks.

From answering emails to time spent on search or social media, the Rescuetime breakdown provides a real insight into time spent on certain activities and shows you how (un)productive you are.

Time is a precious commodity and we’ve found that even the knowledge that Rescuetime is tracking us has encouraged us to find a new focus. Who doesn’t love a challenge!

Rescuetime is free to use however there is a paid version that gives you extra features. These include the ability to block certain sites for a specified period of time, alerts to remind you to take a break when youve been working for a long time, or to get back on track if youve been distracted. 

Pricing: Free to Use, Pro Version at $72/year, or $9/month

 

2. Todoist

There are more to-do list/project management apps than you can poke a stick at but we’ve always stuck like glue to Todoist due to its ease of use, pricing, cross-platform availability and alerts system. 

On the surface, Todoist is an app that simply allows you to list down things to-do, and tick them off. It has a simple, clean UI and is intuitive to use. You can assign tasks into projects, break tasks into sub-tasks, and set reminders or recurring events easily using what Todoist refer to as ‘normal language’. However, hidden within its simple UI is great, great power. You can invite other users into projects for collaborations, receive alerts when shared tasks are ticked off, and add notes to tasks for others to see. You can also upload files to projects for others to use. 

We think the best feature of Todoist is that it is cross platform; there is a dedicated app for Android and iOS, and you can install it on either Mac or PC, so you’ll have your tasks everywhere you go.

Hint: There's also a nifty feature called ‘Karma’, which gives you points based upon how productive you been. Use this along with Rescuetime and there is no end to how productive you can be!

Competition: Theres a lot of hype around Basecamp however it can be much more expensive, is not cross platform (which means tedious logging in every time you want to use it) and in terms of UI, there is no comparison! 

Pricing: Free to use, $29/year if you want extra features like mobile push notification reminders, file uploading and project templates

                                                           

3. Instapage 

Instapage is a landing page builder. Good landing pages are the most effective way of building an email list, and everyone knows that the money is in the list. 

Instapage makes it super easy, even if you dont have a coding bone in your body. Its WYSIWYG (what you see is what you get), and the drag and drop system is one of the most intuitive (and bug-less) we’ve used so far. There are also some really effective templates to get you started. 

Of course, what’s the use of building a landing page without the ability to perform A/B testing? Instapage lets you perform unlimited A/B testing, allows you to build multiple versions of the same website, and then provides you detailed reports on which one is working best. 

Instapage can also integrate easily with Mailchimp (number 4 on our list), Google Analytics and a whole host of other websites

Competition : Unbounce and Leadpages appear to be the closest competitors however Instapage has been much cheaper and easier to use. 

Pricing: Free to use, but there are paid accounts starting at $29/month 

  

4. Mailchimp

Oh look at this; Mailchimp! If the money is in the email list, then Mailchimp is the bill press. For any of your automatic emailing lists, Mailchimp is the one to go to. Easy to use, with an intuitive interface, you can set up multiple campaigns, emailing lists and automation sequences. This means you can effortlessly set up automatic responders, hook your users with drip-feed campaigns, and easily send global EDMs to keep all your users updated with sales or news. 

Mailchimp also has super sleek templates to use and modify, as well as detailed reports, insights and analytics on your campaigns. You can also find profiles on all those subscribed to your list, enabling you to gain audience insights and to schedule and target more effectively. There’s also the ability to collaborate with your team members, integrate into widely used platforms like Wordpress, and there is a plethora of mobile supporting apps. In the right hands, Mailchimp is a serious weapon for any company. And on top of that, its free to use! 

 Competitors: When it comes to drip feed campaigns, Drip is a close competitor. However, it is far more expensive. 

Pricing: Free to use, with upgrades starting at $10/month

Mailchimp

 

5. SumoMe 

Developed by the taco loving AppSumo team, SumoMe is in fact a whole suite of tools that allows you to do a bunch of amazing stuff. These tools will help you optimise your website and build a bigger email list. Amongst the suite of tools are; (1) a heat map, which allows you to see where people are clicking on your website, (2) content analytics which show you how much content your visitors are viewing, and (3) good-looking popup and scrolling boxes encouraging people to subscribe to your emailing list. Theres also tight social networking integration so your visitors are encouraged to share anything interesting they read on your website. 

SumoMe is all free to use, easy to install on your website, and can really do wonders to your website performance. 

Competitors: There are a bunch of heat mapping services out there, but we love

SumoMe because its free and has a whole range of effective tools that would usually cost a lot of money. Also, the developing team at AppSumo has an amazing blog – check it out here.

Pricing: Did we mention its free?


6. BuzzSumo

BuzzSumo (no relation to AppSumo) is a content discovery tool, which shows you the content that has been the most popular with a particular topic or website, or the biggest influencers in a particular sphere. Its an awesome way to do research on what topics resonate the most with your audience. Paid accounts allow you to set up content alerts so youre always kept up-to-date with trending topics. 

We have to admit, the paid accounts is a tad pricey for what it offers, especially if you dont have a strong enough focus on content marketing to justify it. However, the free version is great to do preliminary research, and if you do plan on your content marketing being a money-maker, then definitely look into getting the other features. 

Competitors: We havent yet found anything quite like this, but if you know something similar, please let us know!

Pricing: Free to use, plans start at $99 a month

 

7. Google Keyword Planner

Google Keyword Planner is one of the tools found within the suite of Google Adwords. Its preliminary use is allowing you to research keywords to use in your Google ads, and showing the predicted competition, search volume and Cost per Click. However, its also a good way of looking up what people are searching for, which is an excellent method of generating content ideas or validating a product idea; youll be able to find out if people are looking for a way to solve the problem you’re trying to fix!

Keyword Planner is free to use. You’ll just need to set up a Google Adwords account to be able to use it.  

Competitors: Nothing like Google out there!

Pricing: Free

 

Obviously, this list is not exhaustive and we couldn't include every great tool under the sun. Use something you can't live without? Leave us a comment below of what tools you love to use!