In today’s episode of the Startup Chat, Steli and Hiten discuss the current trend of applying personal growth hacks to business issues. As they’ll highlight, it’s critical to step back and analyze whether there are any fundamental issues with your business model before thinking about the applying any growth hacks. If you don’t, any growth hacks or other incremental solutions you try will only result in failure. Tune in to hear Steli and Hiten discuss when it’s appropriate to applying growth hacks.
Time Stamped Show Notes:
00:42 – Details of the software company that sought out Steli for advice
00:42 – Looking for growth hacks to convert free trials to paid customers
01:32 – Cash-flow positive company that has built an open source software tool
02:02 – Looking to make a SAAS offering where people can enjoy a free trial
02:49 – Out of 40,000 unique website visitors, 2,000 create a free trial and less than 10 upgrade to a paid account
03:16 – Product costs just $15 per month
03:40 – Client was considering sending out drip emails and building an onboarding step by step guide to improve conversion
04:15 – Steli advised client against these. A good conversion rate is needed before considering optimization
04:40 – Client is not targeting the right audience yet
05:20 – If the numbers are really bad, it means that there is something fundamentally wrong with the business
05:47 – 1990 people who took up the free trial did not find value in the product
06:35 – Brand is known for selling open source software tools which makes it all the more difficult to convince people to pay up
07:41 – Poor conversion rates indicates a value mismatch
07:58 – Talk to customers and understand their mindset in order to improve conversion rates
08:15 – An open source brand makes it difficult to control the kind of traffic driven to the website
10:15 – Can really poor conversion rates be improved by better onboarding?
10:50 – Even a poor product will sell well if your product is really unique and addresses a market need
11:20 – Close.io was successful in spite of not having a reporting functionality
12:16 – Founders tend to work on optimization techniques rather than concentrating on product fundamentals
13:05 – Are you setting your business up for success?
13:11 – “There is no growth hack that will save you if you don’t understand why your customers are signing up for your product”
13:30 – Need to build a product that people love, and that has value outside of any growth hack
16:30 – Looking at other successful companies, people often believe that it is the growth hacks like drip emails and a great website which are driving their success. However, it is the product that matters
18:32 – “It is easy to look at parts of your business that are not that great yet and think that is the reason for zero success”
19:36 – Fundamental issues can’t be fixed through incremental solutions
19:50 – The route to fix your business issues is through your customers
20:11 – End of today’s episode
3 Key Points:
If you are staring at really poor conversion rates, it is likely that there is a fundamental issue with your business.
Do not attempt to fix fundamental issues through incremental solutions such as sending out drip emails or improving your website.
Understanding customer mindset is critical if you wish to improve your conversion rates.
Hey everybody, this is Steli Efti
And this is Hiten Shah.
In today's episode we wanna talk about situations, as a startup or as a founder, where growth hacks can't save you. Here's why I wanted to talk to you about this. I was in a phone call recently with a founder and basically he wanted adv...