Startup Launch Week 3:  How Not to Launch

tags: lean startups, customer discovery, Google Adwords

For the last few weeks, I have been chronicling some of my efforts at launching a new microblogging application call Runt.ly (http://runt.ly).  Runt.ly provides an easy way to create short blog posts that can be shared over Twitter with a single short url.  In this series of posts I describe my efforts to launch a brand new website from scratch, in my spare time, with no money and no connections. 

Follow me on Twitter: @MuhammadAtt

See previous post here: http://runt.ly/jbaaql

So here we are into the third week after launching the site.  I use the term "launch" pretty loosely, since it is not exactly a huge, guns blazing, promotional affair, with a PR team and an ad budget.  Instead, I am operating under the Eric Ries version of a "launch," who promotes kicking your baby out of the nest as quickly as possible. 

If you are involved with a technology related startup or idea, and you haven’t heard of Eric Ries, you should stop reading this and make your way over to his blog, pronto.  If you have heard of Eric Ries, then you know that he is a big proponent of launching early and iterating quickly.  The idea behind this is that launching a startup is really a process of discovery -  the early stage of a startup should be focused on finding a customer segment whose needs you can serve profitably and tailoring your product to those needs.  If you've read Paul Graham, you will surely recognize this advice, but Eric really gets into the nuts and bolts of how to do this with a great level of tactical detail.

Eric's advice about launching is simple: Don't Launch.  The point is simply that the initial release of the product need not (indeed, should not) coincide with the first big marketing push.  This serves two purposes:

1. It enables you to launch early.  If you are planning to put on a big, expensive promotion to launch your product then you are likely to hold off on releasing the product until you are "sure" that you are ready for primetime.  This is almost always a mistake since it only delays the opportunity to get your product in front of real customers and to begin the customer discovery process.  This is really the cardinal sin committed by a lot of startups - spending months working on a product in vacuum, without exposing it to the light of real customers.  Eric convincingly makes the case that longer you delay getting in front of customers, the more it will cost you in time and wasted effort. 
2. It helps you avoid mistakes when you finally are ready for the marketing launch.  Simply put, the marketing launch should be aimed a scaling up something that is already working.  You are not ready to scale until (a) you have found  a customer segment that you can serve profitably, (b) have a product that has been validated by customers, (c) you have a sense of how to position your product against competitors, and (d) have determined effective selling points based on testing and customer feedback.  Failing to have tested and validated each of these areas prior to your big marketing push, risks wasting time and money pushing the wrong message, chasing the wrong market, or worse.  

Instead of launching big, just release early and focus on getting to know your customers.  One of the tactics Eric describes for getting a few potential customers to visit your site without spending much money is starting a five dollar a day SEM campaign.  In this post, Eric describes how he used Google Adwords to drive visitors to his website after his initial product release.  This provided an inexpensive way to drive a few customers to his site in orer to start the whole customer discovery/iteration process moving forward.  By buying keywords at $0.05 per click and setting a budget of $5 per day, he generated 100 visits a day from Google, which was enough to start interacting with a few customers, gaining feedback and establishing metrics around customer acquisition.  The takeaway is that the objective of the campaign was not focused on promotion as much as it was focused on learning. 

Now, I am not sure when this campaign was launched, but I think it is fair to say that 5 cents a click no longer buys what it used to.  Most of the keywords relevant to my site have bid ranges that start around 40 cents per click.  At this rate, a $5/day campaign only garners 12 visits per day.  I am still experimenting with keywords terms and ad placement, but it should suffice to say that it does not look like I will be able to rely exclusively on Adwords to generate early visitors to the site.

Thankfully, our efforts to dont have to end there.  In my next post, I will get into some specific detail about 5-6 activities I have been working on to attract visitors to the site and a couple new ideas that I am hoping to launch in the next few days.  Stay tuned!