The Startup Chat with Steli and Hiten on Smash Notes

The Startup Chat with Steli and Hiten podcast.

Unfiltered insights and actionable advice straight from the trenches of startup and business life. The show hosts, Steli Efti and Hiten Shah, are both serial entrepreneurs who have founded multi-million dollar SaaS startups. Being busy CEOs of fast-growing companies, they know the value of your time and make sure you get the most out of each 22 minute episode. Tune in for new episodes every Tuesday and Friday.

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In today’s episode, Steli and Hiten discuss the various shortcuts that startups need to avoid at all costs. While tactics like inflating sales figures, copying marketing tactics, discounting and reporting vanity metrics might lead to short-term gains, the long-term effects are disastrous. Taking the path of least resistance is tempting, but does not lead to any value addition. Tune-in to discover why you need to plan for the long-term to create the successful business you desire.

Time Stamped Show Notes:

00:03 – Today’s Startup Chat is about deadly shortcuts that should be avoided by startups and founders

00:27 – Startups are tempted to resort to shortcuts in a bid to grow faster, but they often end up stumbling

00:59 – One of the shortcuts that startups take is trying to purchase big leads of potential buyers or leads

01:08 – In a bid to meet their revenue goals, startups end up purchasing low quality email lists

01:52 – Emails have not been updated and nearly 30% of emails bounce—therefore, you end up getting only 70% of emails

02:25 – Your email address will be on the spam list

02:39 – Google might block your email address

02:59 – Open rate and reply rate is really dismal

03:25 – In most cases you will not end up converting even a single customer

04:10 – Another popular shortcut is blindly copying a marketing tactic

04:30 – Customers might not be even using that marketing channel

05:28 – Begging is another shortcut to be avoided at all costs

05:44 – Requesting clients to make a purchase to meet sales target; heavy discounts and option to cancel purchase at a later date are the incentives offered

06:22 – Carrying this too far might lead to fudging numbers

07:05 – You are thinking you are fixing your today’s problems but you have signed your death penalty for tomorrow

07:26 – Goals that a company sets for the next two quarters are going to be based on the fake success of this quarter

07:41 – Your future numbers will be worse because of a high level of churn

08:21 – Discounting: another shortcut that will only cause long-term harm

08:32 – In the short run, you will make a lot of money; over the long run, people start waiting for you to offer a discount

09:03 – Groupon is a classic example of a company which has utilized this shortcut time and again

10:00 – A 5-10% discount offered by ecommerce companies can still be justified somewhat since this is already built into the price

10:19 – Picking vanity metrics to satiate egos and create delusions

10:35 – Some startups tend to report convenient numbers only—numbers that display the complete truth are not displayed at all

11:00 – For instance, tech companies tend to report total number of users. However, metrics such as active users, last 30 day signups, and activity levels are not reported at all

11:52 – Everyone in your startup will have delusions about success

12:35 – While Myspace was focused on accounts created, Facebook was focused on active users

13:20 – Your metrics to a certain degree should make your life uncomfortable, it should push you to work harder

13:55 – Taking the path of least resistance is a big blunder

14:44 – Rather than purchasing a trashy email list, there is a need to put in effort and build your own list using the latest tools and by sending personalized messages

15:10 – Most things that will net you significant gains are through lot of trial and error or deliberately thinking through what you are doing, why are doing it and why it is right for you and your business

16:14 – Do the right thing—don’t go the easy route and always think long-term—shortcuts lead to places where nobody wants to visit in the first place. They don’t really lead to where you want to go or what you want to create!

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