finding customers ain’t THAT hard, a blog on startups, marketing, & technology

I’ve found out about this Webkinz phenomenon in a marketing meeting today. You can read more about it here on Wikipedia. This is a brilliant business strategy that make use of social media to make the transition from retail commerce to virtual commerce. Maybe Facebook or MySpace can ask these Webkinz for advice on how to monetize their users base.

Webkinz are stuffed animals that were originally released by the Ganz company on April 29, 2005. The toys are similar to many other small plush toys, however they come with a special code on their labels that allows access to the “Webkinz World” which is a website to own a virtual version of the pet for virtual interaction. There are also smaller, less expensive versions of the toys called Lil’ Kinz. The More Webkinz you buy the more money, rooms and items you get.

Each Webkinz stuffed animal and Webkinz accessory comes with an 8-character code. By registering this code on the Webkinz website, you “adopt” this pet in the virtual Webkinz World, which is an online play area with its own economy. The user receives money (called KinzCash) by adopting new pets, playing online games, answering general knowledge questions, and through daily activities like clicking “I love my Webkinz!”, spinning the Wheel of WOW, playing Wishing Well 2, or completing jobs (minigames) available once every 8 hours. Each day, there is a Game of the Day which can be played for bonus KinzCash, and other bonuses are available each hour, full days on weekends and afternoons only on weekdays.

Users can spend their KinzCash at what is called the W Shop, where they can purchase food and clothing for their pet, items for their pet’s room or to build additional rooms onto their house, or outdoors areas etc. Users can decorate a room for their pet with pre-made themes, or mix and match their own furniture.

The online world also contains many rare or exclusive items. Some of these items require developing a friendship with the Curio Shop owner to purchase, while others you get for registering other Webkinz accessories you purchase in the real world. Each type of pet gets a special food available exclusively for them. Also, a Pet of the Month is announced at the beginning of each month. If a person registers the announced pet in that month, they will receive other exclusive items.

Many of the tasks in Webkinz World involve collecting items. For example, recipes are released for the players through cookbooks you can purchase or one of the TV Shows called The Secret Chef. Gems can be mined once a day at the Curio Shop, with a full set of gems being turned into the Webkinz Crown of Wonder and buy exclusive items. You can also go to Dr. Quack for a check up on your Webkinz’ health.

Some other features of Webkinz include:

• The ability for players to create their own shows with the Webkinz Studio, and enter to be chosen to appear on the Webkinz television.
• Buying a swimming pool, where you can have your Webkinz swim around. This increases their health.
• Sending gifts or letters to friends on a peer-to-peer network.
• Invite a friend over to your house, where you can chat and interact with some board games and items.
• Participate in the hourly events, which can earn you prizes, KinzCash, and coupons, among other things.
• Play Wacky Bingoz, a form of Bingo where you get one, two, and three ball games every day.^[1]
• Brushing your pets teeth, hair, washing paws/feathers/feet ect, bathing.

The More Webkinz you buy the more money, rooms and items you get? How about that for upsell?

If you are into startups, marketing, and technology, this is the book to read, Founders at Work, by Jessica Livingston

The interviews in the book covered some important aspects of startups that any business can learn from. The founders of 32 successful startups talked about how the project got started, how they got funding or bootstrapped their company into a successful exit. They also shared in details about the obstacles they faced as a first time entrepreneur, the scaling problems they experienced and how they dealt with it. There were also some really interesting conversations about the marketing strategies that were used to find users and customers with a limited budget. In the interview with Sabeer Bhatia, he talked about viral marketing and how a simple message in the footer of every Hotmail’s message helped grew the users based to 300 millions in less than two years.

The success of these Internet startup were not overnight as the media made it sound like. The founders had problems with VC, partners, technology… It took more than just an idea and product to make it big. It was the founders’ passion, determination, and persistence that led them to success. Awesome book, thanks Jessica.

Interviews:

David Heinemeier Hansson
Partner, 37signals and creator of Ruby on Rails

Charles Geschke
Founder of Adobe

Ron Gruner
Founder of Alliant Computer and Shareholder.com

Steve Wozniak
Founder of Apple

Philip Greenspun
Founder of ArsDigita

Evan Williams
Founder of Blogger.com and Odeo

Craig Newmark
Founder of Craigslist

Joshua Schachter
Founder of Del.icio.us

Joe Kraus
Founder of Excite and JotSpot

Blake Ross
Creator of Firefox

Caterina Fake
Founder of Flickr

Joel Spolsky
Founder of Fog Creek Software

Paul Buchheit
Creator of Gmail

Ray Ozzie
Founder of Groove Networks and Iris Associates

Sabeer Bhatia
Founder of Hotmail

James Hong
Founder of HotorNot

Mitch Kapor
Founder of Lotus

Bob Davis
Founder of Lycos

Arthur van Hoff
Founder of Marimba

Mark Fletcher
Founder of ONElist and Bloglines

Ann Winblad
Founder of Open Systems and Hummer Winblad

Max Levchin
Founder of PayPal

Mike Lazaridis
Founder of Research in Motion

Mena Trott
Founder of Six Apart

Dan Bricklin
Founder of Software Arts and creator of VisiCalc

James Currier
Founder of Tickle

Mike Ramsay
Founder of TiVo

Steve Kaufer
Founder of TripAdvisor

Paul Graham
Founder of Viaweb and Y Combinator

Brewster Kahle
Founder of WAIS, Internet Archive and Alexa Internet

Steve Perlman
Founder of WebTV

Tim Brady
First employee at Yahoo!

I started this blog less than a month ago and it’s now in google first page of search results under the kind of keywords I was going for: finding customers for a startup, finding customers using google

This is without any inbound links, any ads, any pr. I didn’t use any secret or special seo tricks. I just follow the very basics of seo. Here are text and tags from one of the landing page:

Title: About this blog | finding customers ain’t THAT hard

Description: Many of the posts here will be about my personal experience of what works, what doesn’t, and how to find customers for your startup. I will also share in details about how to actually execute those marketing campaigns.

H1: finding customers ain’t THAT hard, a blog on startups, marketing, & technology

Body Text: See it here and here

This was no coincident nor was it the first time that I was able to get on google first page of search results in a few weeks. As long as you have the right keywords you in the title tag, the description meta, the h1 and h2 tags, the body text, and the url, you’ll have a good chance of getting on google first page of search results.

The conversion rate speaks for itself.

Despite the data above, I think eventually someone at facebook or outside of facebook will figure out a way to monetize their data. Facebook knows their users’ name, age, sex, location, interests, hobbies, social connections, browsing patterns, etc. Search engines, magazines, or TV programs don’t have anything close to the demographic and behavioral data that facebook, myspace, or other social networking sites have.

Facebook Beacon is still in its infant stage but when it can leverage those data and the word of mouth quality in their user base, it will be a powerful form of advertising medium. I just hope they can get there before people give up on them.

Our normal targets are small businesses, but this past April, I wanted to try selling graduation invitations to see what kind of responses we would get from consumers. One of the first question I had was how much would consumers pay for personalized graduation invitations. I looked at many different vendors and their prices ranges from $10 to $100 for basically the same quantity and offerings, very inconsistent pricing. I went to the business section of facebook and create a quick poll to see how much students would pay. A survey of 100 responses cost $25, which is enough for me to get an idea for pricing.

The facebook poll was easy, quick, and pretty accurate. I created the poll and got 100 responses within a day. The report gives you detailed breakdowns by age groups and sex. The only thing I should have done different was to select the right age group. Many of the respondents were over 35 years old and didn’t need invitations. This was a bit surprising to me considering the fact that facebook started mainly for college students. It’s amazing how they got such a diverse user base in such a short period of time after opening facebook to the general public.

Over all, it’s a great tool. It was easy, fast, and accurate. I priced the invitations using the results of the poll and customers had no problem with the price.

Take a look at my facebook poll details below (click to zoom in)

* Although the facebook poll was great, facebook social ad wasn’t great at all or even comparable to Google Adwords or Yahoo ad. I’ll talk more about this in a later post.

There’s a few posts from Brian Solis, Loïc Le Meur, and Mark Cuban that I find very interesting. They’re all great bloggers and entrepreneurs but have strong differences about PR. Here are a few excerpts:

Brian Solis: PR Secrets for Statups

Your investors or advisors will tell you one of two things, usually starting with “you need PR.” From there, they’ll usually recommend that you either bring on an agency or consultant, one that they’ve worked with and can highly recommend. Or, they’ll suggest that you need to do it yourself (DIY) in order to build relationships with those who are highly respected in your target markets while conserving cash.

While DIY PR sounds good, you’ll quickly learn however, that it takes more time than you think to reach those people. Besides, you have other things to focus on and any good PR program will place you in a position to build relationships with the influencers that matter to your business.

Loïc Le Meur: PR secrets? bullshit

Not a secret #1
who cares about stories, you can get traction and users if you have a good product

There aren’t only bloggers and journalists looking for stories, there are also users with passion about a product that can just spread the love as the power equation between journalists-bloggers on the one side and happy users spreading the word with blogs, twitter etc on the other side has completely changed. In fact, I think startup CEOs should care more about the community members than the journalists and professional bloggers. If the product gets traction, it will get coverage anyway.

Mark Cuban:A Couple of My Rules for Startups

11. NEVER EVER EVER hire a PR firm. A PR firm will call or email people in the publications, shows and websites you already watch, listen to and read. Those people publish their emails. Whenever you consume any information related to your field, get the email of the person publishing it and send them an email introducing yourself and the company. Their job is to find new stuff. They will welcome hearing from the founder instead of some PR flack. Once you establish communications with that person, make yourself available to answer their questions about the industry and be a source for them. If you are smart, they will use you.

First, I find it hard to believe that establishing communications with top bloggers and journalists today is as easy as sending them an email. This might be true for Mark ten years ago when blogging was still new and startups were still interesting to the media.

Second, if Loïc has a good product, doesn’t he want to spread the word and gain ten times more traction faster?

I think if you can afford it, do hire a credible PR firm with a good startups portfolio and let them do what they are best at and go back to building your product and business. Your time is better spent on doing something you know and good at. Sure, your users will spread the word for you if the product is great but why not spend a little money and grow the users base faster?

As web developer and graphic designer, I have a lot of entrepreneurs with limited marketing budgets come and ask for logo, website, business cards, etc. 9 out of 10 don’t even have the products or services ready to sell and haven’t even tried to find any customers yet.

I have personal experience in this as well. When I started my first business in college, I wanted to have a complete business plan with all the financial forecasts, sales and marketing strategies, executive summary… I spend countless hours designing logos, business cards, brochures, websites. I also worried a lot about getting a business phone number and a formal business address so that it doesn’t look like I’m working out of my mom’s house.

Long story short, the business didn’t work out, I wasted time and money on business plan, logo, business cards, brochures, flyers.

The point is why spend time writing a business plan when you already know what it is. Why spend too much time thinking about business name and logo when it’s going to change. (Apple, Microsoft, Google all had their business names and logos changed). How can you have financial forecasts when you don’t know if anyone will buy your product or service yet? A nice looking business plan and logo will not impress investors if you have no users or customers. Also, no one is going to care if you have an 800 phone number. No one is going to investigate where your address is or use Google earth to zoom down your house to look for you. You wouldn’t want that kind of creeps for customers anyways.

If people need your products or services, they could care less about your business plan or how your business cards look or what type of phone number or address you have. People pay you for your products and services, not your business plan or stationaries.