Ask HN: Subscription web sites: How did you get your first customer?
Question for techies who started a web business with a subscription revenue model: How did you get your first customer?
I'm asking because I'm a typical shy coder: cranking out truckloads of Python code is not a problem, but socializing and having a big network of business contacts is. I'm still grooving on David Heinemeier Hansson's speech at Startup School, and I want to go the subscription route. And I believe that nothing will drive the evolution of a site better than having customers. How to get those early customers, though, looks right now to be a dark mystery. How have other techie folks overcome this problem and gotten those first few customers?
51 comments
[ 3.0 ms ] story [ 76.9 ms ] threadI think you'll be much better off with someone like this worrying about these problems while you handle the technical realities. Once you get customers, the problems of getting them will seem trivial to the problem of keeping them.
Good luck.
However, I'm not looking for tips or advice (right now), I'm just looking for stories of how techie types with subscription web sites actually got their first customer.
You can also use the testers for testimonials etc for your site. A referral fee will then help push your current customers to recommend it to their friends.
It'll be a lot easier to find people to sign up for free, then it will to sign them up immediately for a paid account.
You can then convert them later :)
If it's a B2B offering, find a related vertical and look for forums or industry websites for that vertical. Again, offer a free trial or some kind of benefit to entice these customers to sign up and keep them satisfied while you work out the bugs.
Generally there are very active and loyal members at these sites that are very interested in new tools that would appeal to their niche community.
If your problem solves someone's need chances are they will find you. If posting a link on one or more sites frequented by your target audience doesn't generate a single beta tester you might want to re-evaluate what you're building.
For example I was a beta tester for GitHub and converted to a paying customer after the beta period. Someone must have put an announcement here about the site and since it solved my need for git hosting I immediately signed up.
Write a blog and publish the articles on social networking sites. You'll get beta signups naturally from that.
When I started out I knew my users wouldn't necessarily know what HTML is, or CSS, or DNS, or FTP. But I did assume they'd know how to crop a photograph; have some understanding of what a web browser is; know the difference between the browser address bar and the Google search box; and know that you may need to press Refresh to see changes to a page. All those assumptions proved wrong for a significant minority of my customers. Which (at the risk of stating the obvious) isn't their fault for being non-technical. It's my fault for not understanding my customers.
I knew people liked it when they asked what it cost.
Disclaimer: I'm still a long way from profitable, and I'm not totally committed to the subscription model. In 2007 my subscription revenue was $70.50 and ad revenue was $2.05.
What is your site?
It's in my profile. I strongly suggest everybody edit your profiles to include yours.
I'm looking for how to get that evolutionary-feedback process started.
We made a big mistake when we launched to not have a free version that a lot of our competitors offer. Our ads would get clicked on, but they'd bounce almost immediately. Once we added the free version, our ad clicks went up substantially, and this time they actually created a free account and the increased volume and retention has led to more sales.
Putting videos on youtube proved to be a quick and dirty way to get visibility in search results while the site was nowhere near the top 500 in search results.
Only problem is it's a small, niche market and it's hard to get much quality traffic. Still, an extra 2-3K a month is always nice to have around.
This is what I am trying to do. Please share any other tips that you have please.
My tips:
1. Use conversion tracking. Dump keywords that don't convert. Try to come up with keyword combos that beat the keywords you currently have.
2. Use negative keywords if needed.
3. Try different ads. Dump ones that don't work and try to come up with ones that can beat those that do.
4. You don't have to be the top bidder to get clicks and conversions. I've done better in terms of conversions and cost/conversion in 5th place than in 1st.
5. In my case, avoiding the "content" network was a great move. My ads only show up in search results, not on parked domains. I refuse to use Yahoo! Search Marketing for the simple reason that they don't let me turn off the so-called content network.
What you're doing is direct marketing, so your ad copy in the ad is important as is the copy on the landing/conversion page. Don't be afraid to do A/B testing to see what copy works best and dump the old copy. Write copy that tries to beat the winner and test it.
This is what 37Signals do so well, we operate a similar model at Zamzar and more recently Animoto seem to have struck gold with this approach - with them you can cut a 30 second video mix of photos and music, but if you need more time you have to pay.
Sadly this percentage was far too low for it to become a 'big' business and my knowledge of how to grow a company was very poor back then (I used to believe you got the product right, then sold it.. no sirree, that's not how big business really works).
I'm not really sure about how those people found the service. There were a few minor writeups on reasonably unpopular blogs at the time, but 100 signups a day were coming in so I didn't care. Unfortunately I focused on the technology instead of the business so never bothered to keep track of it.
What would you have done differently in retrospect?
I'd start selling. Day one. Even if the product or service I'm selling still needs to be developed, I'd work out who wants what I'm developing, what they'll pay for it, and how I can sell to them. Once I have the product working in a saleable form (think 37signals "Getting Real" levels of "done" here - not perfectionism at all), I'd switch 80% of energy to selling it. Cash is king. With cash coming in, I can pay other people to do the grunt work as well as work on improving the product.
But.. selling is absolutely key. Last time I focused on making a kick ass product, and it worked, but I didn't know who the market was, and all the sales were from luck alone. I didn't sell the product whatsoever. It sold itself, but that's not a good strategy unless you have a mass market product. If you have a niche product, you need to be selling it yourself from day one.
I would highly recommend a book called "Ready, Fire, Aim" by Michael Masterson ( http://www.amazon.com/Ready-Fire-Aim-Million-Agora/dp/047018... ). It outlines the whole process of successfully generating a high revenue business from start to finish, and is written by someone who has launched several businesses that have gone on to reach 8 and 9 figure revenues.
Learning about your customer is crucial. The easy and cheap way to do this is run a survey on your site, while your service is still in the free phase. You can promote this survey aggressively to a portion of your user base and expect around a 15% response rate. One of my businesses had some obvious quantifiable differences between a free and premium version, so the survey included these 3 questions:
* Would you be willing to pay more for an enhanced service?
* How many Xs, Ys and Zs would you want?
* How much would you be willing to pay for this per month?
After collecting thousands of responses, I ran them through a Bayesian clustering algorithm (which can handle missing answers) and it spat out a bunch of service levels and price points that made a lot of intuitive sense. These were $5, $10 and $20/month, and later we added $40/month. Interestingly there was one big cluster that wanted the world for $1/month, whom we naturally decided not to cater for. We also learned that some features, such as RSS, didn't correlate at all with people's willingness to pay, so we added them into the free version.
Net result after a few years is about 1.5% of active users are on one of the premium levels, with the number approximately halving as you go from each price point to the next. Since the price doubles at each level, the total revenue from each price point is about the same. And it's a very tidy living for me and my partner.
One last thing: pay a lot of attention to what happens when people's subscriptions end involuntarily, because their credit card expired or stopped accepting payments. This happens a lot. You want to target these people with reminders about the premium service's benefits, and a discount promotion to sign up again with their new card.
1) Launch your free product (the free part of the freemium). 2) By the time you get it tuned up, you'll have a strong sense of where the pain is (and hopefully a reasonable guess of where to put the pay wall). 3) Put up a little permission marketing form that essentially says, "Hey-- we're going to launch a premium product soon that does this, this, and this. If you want to hear about the launch, give us your email address". Measure how many of your free customers sign up for that. 4) Look at the resultant list for interesting email addresses and send a personal email to some of them asking them if they'd want to dive in as pilot customers and help shape the product.
#3 helps you confirm your understanding of the value of your premium offering. #4 gets you your first customer.
If you don't have the sales-fu to reach out to pilot customer candidates, just launch it quietly, email a subset of the list who signed up to hear about it, and measure signup percentage (which will be WAY lower than you think it will be).
Know your competitors very well, and know what they do well and what they do poorly (or at least what you do better). This is important.
Third: Have a working demo. I don't give away free trials, I have a demo. This may or may not work for your product.
Fourth: Follow up with everybody, always send thank you notes, and follow up a week later, every week until they give you some straight answer.
I'm a coder who is very new to sales, but I've had some good people around me that were quite good at sales. Meet those people, show them your product, ask for some help.
http://corduroysite.com/
Then jump into the forums and start posting responses. You don't want to come off spammy, but definitely try to slip in references to your site whenever applicable.
So I'd say you have to know your first customer, and build from there. If you don't personally know them, go to a meeting, conference, or mixer and meet them. As uncomfortable as you may be, just do it, or find a partner who is good at it.
Maybe for a free site like facebook, you can "build it and they will come", but if you want people to pay you, you have to get up from your computer and sell your product.
Don't build your app and then look for your first customer.
Find your customer first, find a need, and then build an app that fills that need.
Listen carefully to things people you know say, if you're paying attention, you will hear tons of needs waiting to be filled.