May 26th, 2020

Live your Business Model

I was listening to Girish Mathrubootam of FreshDesk giving a talk about: How to build a start-up and something struck me as insight and an idea that in hindsight is so obvious.

The story goes that Girish builds the now 1.5 billion valuation behemoth out of Chennai in India out of some basic and fundamental strategies.

One of the fundamentally different approaches he has is to not to try and extend the runway like every startup tries to do. Most people would agree that a startup should primarily try to live as long as possible and keep their costs to a minimum.

Girish's approach was drastically different. I wouldn't say it was the opposite but definitely coming from a higher level of thinking and strategy where the benefits of extending or not extending the runway are moot.

When his startup was still very nascent, he happened to win a small grant of about $30k from a government-run competition. The way he viewed it, this was extra money that he never had counted on. That gave him the freedom to be creative with it. He and his small team decided to invest all of it into buying online ads to his SAAS software and run all sorts of experiments to see what converts. So even though he ran out of that money in 2-3 months what he got was a few channels tested at a decent statistically significant scale and show the math to a bunch of VCs. He got about 70 odd customers for his SAAS product but more importantly knew exactly what it would cost and what channel it would take and also the scope for improvements in conversions, size of the sale, market positioning, and optimizing the ads to drive down per click costs.

Knowing this gave mathematical certainty to his business. What he was doing was, as he puts it at the end of the video., "Living his business model from day one".

This might be bar none, the fastest way to get to a proven business. The model he picked was Google/Facebook ads. That was his hypothesis and he tried to prove the merits of it by running the whole model from start to finish without doing anything extraneous.

He also mentions something very important, he didn't want to sell. He didn't set up any way to even take the initial customers' phone number so his team can persuade them on a call.

"After launch, within the first 3 days we had a customer. We saw the customer come in from Australia, look around for a couple of hours, put the credit card in, and make the subscription purchase". That's an entire model, working on a stranger without interference.

How it applies to us:

This talk set all the gizmos in my brain on fire.

We are have never mentioned this explicitly to each other, but our model, as far as our hypothesis goes, is built around content marketing.

Here are the business models we have to live from day one...

Model 1

Here is what we believe. We will get out users in 2 ways. One through places like a Medium where we share our stories and ideas as we document our journey and a small percentage of the readers that might be interested in a cloud crawling solution might sign up over time. This might give some immediate trickle of users who know a bit about us already and might result in some conversions.

How do we test the model?

Write 10 blog posts on places like Medium, Linkedin, etc, and measure how it performs.

Model 2

Our users are searching for terms like web crawling, online web crawlers, etc and we want to be ranked in Google when they do. We believe, SEO focussed blog posts on our website will get us there if weblog all the things we can about a topic and do it in substantial quantity. We are aware this will take longer than Model 1, but it will give us lasting results for years to come.

How do we test the model?

Write at least 12-14 blog posts a month centered around a single topic per month. Distribute the content, do some guest posts, and see if we climb up the rankings.

Model 3

Go where the users are asking questions. Places like Stackoverflow, Reddit, Quora, etc, have developers, data scientists, SEO agencies, and even retail industry marketers asking questions about various topics related to web crawling. We want to be present and active in these platforms by simply being helpful and that will in turn naturally create enough awareness about our new product in the market.

How do we test the model?

Answer 60 questions with well researched, well thought out answers where we know what we are talking about and then measure the inbound traffic and conversions.

Do nothing else

It's important to note that apart from product development, all our activities should be concentrated ONLY on one of these models. We do nothing else. We dont go posting on Product hunt, do other growth hacks, submit to directories, talk to our friends, none of that. Because at the end of that activity I am no closer to a model that repeatedly works you see. IT also helps us focus. It doesn't mean we dont do any other growth hacks that occur to us. We will do it later on once we have the primary routes proven and optimized. But for now, we just want to "Live our business model every single day"

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