Quant Based Marketing for Start Ups
When I first got the job at Mint before they launched Aaron Patzer (founder) told me I had to get Mint.com 100,000 users 6 months after launching. Shit, I was a bit nervous. This is common in most startups, fortunately Mint had over a million users after 6 months.
How did that happen?
First off, the product was awesome. That makes marketing less about “marketing” (whatever that is) and more about educating and sharing with people. Still, there is always that annoying quote about if a tree falls, blah blah you know what I mean.
Instead of doing “social media marketing” and flailing around with random posts throughout the web we needed a framework and a new approach to pre-launch marketing.
Quant Based Marketing.
Work backwards to the solution of what you need and map it in Excel. Dave McClure is an Excel / PowerPoint guru if you ever need some inspiration.
Here’s an example for Mint:
Target: 100,000 users in 6 months.
Link to spreadsheet for your usage. Amazing update from @davestone to SpreadSheet v2.0
This is they KEY to any pre-launch marketing you are doing.
Most people have the tendency to wait for their thing to launch, email a few friend, tweet about it and get on their knees to pray it works.
There are two columns, total users and confirmed users. When you setup your metrics on the pre-launch like above and then confirm the marketing channels you cannot fail. Only confirmed matters!!
You must confirm the marketing ahead of time: blogs, twitterers, ad buys, etc… Don’t leave it up to chance.
The Meat:
- Make your target list prior to launch.
- Figure out your target list through: wefollow.com, google searches, pick specific niches (at Mint it was Personal Finance, geeks (Paul Stamatiou) and GTD people) and other wild ways
- Track with the Google Spreadsheet to know what’s working and what’s not.
- Consider testing 2-3 different messages to people to see which get highest responses.
- Use new methods to get a hold of people. Don’t be like everyone else
- Oh yea, build a great product.
Follow me on Twitter if you like this and want more.
Thanks Jason Baptiste for reviewing.
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Noah Kagan wrote Quant Based Marketing for Start Ups on July 15th, 2010 and there are 34 comments. There will be one more after you add yours, though. Read more posts by Noah Kagan.
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34 Responses to “Quant Based Marketing for Start Ups”
July 15th, 2010
8:38 am
Good post Noah – too many people take a “give it our best shot and pray” approach to marketing. I’ve always been a big fan of finding out what works quantitatively, and iterating rapidly. There’s no reason not to in today’s age of instant analytics and easy A/B tests.
I’m curious though – it’s fairly easy to estimate traffic numbers, but your whole model really boils down to your estimates of click through and conversion rates. How did you arrive at the numbers you did?
July 15th, 2010
11:06 am
great job bud,
I’d love to see you expand upon “The meat”
July 15th, 2010
11:12 am
Thanks for the tip Noah.
One question: How are you getting the CTR and conversion column data?
July 15th, 2010
11:34 am
but what about getting customers/users organically? what about “word of mouth” like email invites, twitter invites(/spam), etc etc, stuff like that; that’s the modeling i’d really like to see (taking into account friends of friends, etc.), because that’s way more effective than just press, SEM, etc. for a lot of companies and services (not all)
thanks for this post!
July 15th, 2010
12:28 pm
Thanks for the insightful techniques. It is a cool concept.
I would love to better understand how you are getting the target figures in the excel sheet. I am unclear on where you you are pulling this data from and how you are determining the friend status of something like TechCrunch.
July 15th, 2010
1:12 pm
Thanks for this very useful post!
What does “coordinated” under Reddit and Digg mean? Having a bunch of friends upvote once you post?
July 15th, 2010
1:19 pm
That pertains to “Personal Finance Sponsorships” as well (can you elaborate on that? They were your highest traffic source!)
July 15th, 2010
1:50 pm
Hey Bill,
Some of the estimates are clearly estimates but you can base that on compete #s, search for people who’ve talked about the traffic they’ve received from certain sources and just a good old fashion guess.
Conservative is always ideal and overshoot your target makes things more realistic…
July 15th, 2010
1:57 pm
Azeem
Ill pull together #s so you can see how to do that.
For CTRs you can run some ads to get a baseline, data really depends on how well you do. A lot for me is past experiences. I can pull some data from ads and blogs to see what happens.
July 15th, 2010
1:59 pm
Adam
Personal finance blogs include sponsoring, stopbuyingcrap, bargaineering, I Will Teach you To be rich and other very targeted blogs.
July 15th, 2010
2:10 pm
You guys can get tons of great traffic data form http://siteanalytics.compete.com/sitehere.com
Will do a post about other ways to find your customers / marketing targets.
July 15th, 2010
2:24 pm
this isn’t quant-based marketing; it’s simple, obvious arithmetic. knowing that channel X has a 10% CTR and a 25% conversion rate, then doing this calculation is just basic math. there’s nothing insightful here, and you never mention costs or quality, the real quant issue for most start-ups.
while goals (like 100,000 subscribers) are always great, marketers need to go far beyond your spreadsheet to include cost per lead, lead quality, free-to-paid conversion rate (or other up-sell), etc. if new leads cost $100 each in channel A and $20 each in channel B, it’s clear where you should spend, right? not if it takes 25 channel B leads to get a single repeat user (or paying customer).
you do have some good points in “the meat,” including using new methods and doing some testing, but there needs to be much more thought put into this than just those few points. what about tailored messages for each channel? understanding who your ideal customers are before choosing channels? the actual “offer” or call to action?
July 15th, 2010
4:29 pm
Jason,
Awesome response. I love getting called out.
You are discussing more direct response marketing which is a whole other ball game. I agree I need to dig into LTV, costs, etc, but this was more of a high level discussion of how people need to actually be objective based in their marketing. I will do a follow up that has more on the quants for measuring costs over time and figuring out how much you can spend to buy a user.
Appreciate any other things you want me to write about…
July 15th, 2010
10:32 pm
I’m also interested in seeing costs per lead, so your follow up will be most welcome.
July 16th, 2010
3:08 pm
Working on it right now Jen:)
July 17th, 2010
6:10 am
Noah,
What “Confirmed” column means in your spreadsheet?
July 18th, 2010
5:53 am
Confirmed means the channels that are definitely going to help you promote. So you can confirm that you should be reaching that many users.
July 18th, 2010
7:39 am
@noahkagan So you verify by executing on a small scale?
July 18th, 2010
7:40 am
@Andriy,
yes and just from past knowledge. You can also ask the sources too.
July 19th, 2010
11:28 am
Noah -
3 very basic questions:
It appears you used a combination of Paid Search/Ads + Key Relationships + PR/Media – what % would you say you had to pay for versus ‘earned’ media?
Did you leverage many relationships (i.e.: TechCrunch, etc) or did you work your way into their hearts?
Lastly, you knew your niche from the beginning (Finance + geeks) – how can some of us who cater to more than just one sector (we are for anyone that uses email – pretty broad) choose the right networks to find interest / users initially?
Over to you for your 2-cents!
Cheers,
Heather
July 27th, 2010
3:06 am
We paid for about 40% of the traffic.
Fortunately we had a lot of relationships from being involved in the personal finance blogs and our investors had great connections with many people.
You can’t cater to more than one sector and have a niche. I think you just need to pick 1 right niche, own it and then move to other ones.
Hope this helps.
July 29th, 2010
10:35 pm
The math is fairly basic as a comment called out, but your points on leaving nothing to chance are good ones.
If you really got those conversion rates that is pretty amazing. Most sites convert at 5% on a good day. Of course Mint was an awesome product and had huge WoM (which I don’t see on there, I guess because this was a pre-launch model).
To that point, you mention about 40% of the initial 100k signups were paid, but if the product kicks butt and generates strong “net promoter score” etc. it’s a worthwhile expenditure.
August 9th, 2010
1:31 pm
What a great idea – plan before you launch. If I was being pedantic I would suggest that is not a new framework but merely common direct marketing principles which are not new.
June 27th, 2012
8:28 am
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June 27th, 2012
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[...] to guide your brainstorming. To structure your thoughts and the actionable tactics you create, use Noah Kagen’s quant-based marketing approach. As you document your approach and track the results using Noah’s template, you will be able to [...]
June 27th, 2012
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[...] to guide your brainstorming. To structure your thoughts and the actionable tactics you create, use Noah Kagen’s quant-based marketing approach. As you document your approach and track the results using Noah’s template, you will be able to [...]
June 27th, 2012
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[...] to guide your brainstorming. To structure your thoughts and the actionable tactics you create, use Noah Kagen’s quant-based marketing approach. As you document your approach and track the results using Noah’s template, you will be able to [...]
June 27th, 2012
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[...] to guide your brainstorming. To structure your thoughts and the actionable tactics you create, use Noah Kagen’s quant-based marketing approach. As you document your approach and track the results using Noah’s template, you will be able to [...]
June 27th, 2012
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[...] to guide your brainstorming. To structure your thoughts and the actionable tactics you create, use Noah Kagen’s quant-based marketing approach. As you document your approach and track the results using Noah’s template, you will be able to [...]
June 27th, 2012
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[...] to guide your brainstorming. To structure your thoughts and the actionable tactics you create, use Noah Kagen’s quant-based marketing approach. As you document your approach and track the results using Noah’s template, you will be able to [...]
June 27th, 2012
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July 2nd, 2012
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July 5th, 2012
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[...] I ran across the post “Quant Based Marketing for Start Ups” by Noah Kagan. Noah was the director of marketing and took Mint.com to over a million users [...]
November 8th, 2012
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[...] Even though Noah did it for pre-launch marketing, we are applying some of those ideas to post launch marketing as well – http://okdork.com/2010/07/15/quant-based-marketing-for-pre-launch-start-ups/“ [...]
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