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B2B SMM Tips: How To Use Social Media For Business

Is your business using social media for growth already? If not, then you need to start right now. Ever since Facebook became more conventional and expanded across the globe, social media has been one of the best tools for marketing.

This is where your audience is and this is where it’s easy to reach them and engage with them.

Is your B2C business ready to step into the crazy world of social media? Here is a definitive guide for that.

The Difference Between B2B and B2C

B2B companies have always been a bit skeptical about the benefits of social media. This has prevented them from really enjoying the benefits of these marketing activities, and they are just catching up now. However, B2C companies have been early adopters of each new platform that appeared, and as such, they have a significant advantage on the field.

Here are some differences between social media for B2B and B2C:

The difference in content

Content is an essential part of any marketing strategy, B2B, or B2C. However, content marketing has come a long way from where it was before, and the rules have changed a bit. It still provides value and avoids heavy promotion, setting the provider up for authority status.

B2C businesses use heavily visual content for their social media. Videos are critical and shareable and viral content too. They are also a lot more casual, friendly, and they often use humor and relatable things in their strategies for social media.

On the other hand, B2B marketers have plenty of content to share, as well. They do, however, need to be more professional with it. The type of content they can usually use are informative articles that their clients would benefit from, industry news as well as updates when they publish a white paper or an ebook. They can also post about case studies, their webinars, and information related to that, useful industry infographics, and so on. The important thing is that the content they share on social media is beneficial, informative, professional, in the industry and that it sets them up as an authority in the niche.

SM Platforms

The platforms businesses choose usually based on their audience. And we can see the most significant difference here because B2B companies and B2C businesses are using completely different social media channels, though they might overlap at some point. There are social media channels which are more visual, and there are those that are less visual, focused on something else.

B2C businesses see most use on Facebook, especially since it added new video features and put the main focus on visual elements; they use plenty of Twitter because it’s very open and anyone can see anyone’s tweets; Instagram, of course, is one of the biggest platforms for B2C businesses at the moment, especially those targeting younger people; finally, Youtube is another place to be as a B2C business that wants engagement.

B2B businesses wouldn’t have the same value of all of those social networks. For instance, Instagram or Snapchat would be quite useless to them, no matter how popular. LinkedIn is probably the most important social media network for these businesses.

It’s designed for businesses. They can also make use of Facebook and Twitter.

Goals

This is the one that sets them apart the most. Goals are really important, and these two have entirely different purposes.

B2C is focused on the community, engagement, and building brand awareness. Viral content that would bring them more audience is critical here.

On the other hand, B2B businesses want to generate leads. Their main goal is to get as much traffic to their website and generate as many leads as possible. All of their actions on social media are related to that as well.

Creativity and Promotion of Content

As a B2C business on social media, the best thing you can do is be creative and engage your audience with interesting content. Here are some content types that can prove extremely useful for achieving your goals:

User-generated content

Share images and videos that your fans have created with your products or while using your services. There is no better confirmation of your quality than other people engaging with you, and it’s one of the most effective types of social proof. It’s also very inexpensive and can easily create a wider reach.

Have a contest or a giveaway

Nowadays, one of the best ways to get tons of engagement is to have a contest or a giveaway on your social media page. Set some rules, make the rewards attractive, and watch your numbers grow. You can also combine this with user-generated content.

Tag a friend

People love to share relatable stuff with their friends. So, why not use that and create a campaign that entices people to tag their friends in the comments.

For example: “Tag a friend who hates Mondays as much as we do,” paired with a relatable meme or a picture.

Post-behind-the-scenes

People love to know that there are real people behind your accounts and behind the products, they use and love. Share company images and videos from inside of your office, from an event or something similar.

Use Facebook reactions

Entice people to give their answer to your post only with a response which is available on Facebook.

Use emojis

Emojis are relatable, a great way to engage with your audience. Use them in your posts and images whenever you can, make sure that they are relevant and that you don’t go overboard

Share a video – Videos are the perfect format for the current audience on social media. One of the best things you can do is make a how-to video on something related to your product.
Make a poll – This is a rapid way to engage your audience and also learn more about them. So, you get two things done at once.

There are many other ways to engage your audience on social media. Make sure that you use them and that you are always creative when it comes to spreading awareness and building a connection with your audience.

Using Hashtags

Hashtags are an inevitable part of social media. They help people find posts they care about, and they help you reach people too. But how do you even use them? Here are some simple tips for hashtag use:

Create your own branded hashtag so you can engage with your audience
Use hashtags to categorize your social media posts
Raise awareness of your brand
It can boost your reach – hashtags are searchable on social media, and using them can make you more discoverable. You can add them to your social media bios and make yourself easy to find. They are similar to hyperlinks so they can take the user to another page.
Find and join conversations – Hashtags can take you to great discussions that can help you boost your reach as well. Join in on these conversations and show off your personality and gain some recognition. Research the trending hashtag and understand what the discussion is about.
Use it for social listening – You can use the hashtag conversations to research your audience, competitors, learn about pain points, gaps in the market and then create content based on that or refine your products and services based on that.
Drive engagement for events – Use the hashtags to drive more engagement for the events you host. People can discuss events, answer polls, and so on. Share your hashtag in the events material
Build a community – People can find each other and you through hashtags.

There are three types of hashtags:

Branded hashtags – The ones you create for your brand and are unique, no one else is using them.
Trending hashtags – These hashtags are popular with millions of users and are the most popular on social media.
Content hashtags – These are the best hashtags for beginners, and they are usually keywords related to the content of the post

Make sure that you are not misusing your hashtags and that you are not overdoing it with the number of hashtags in your post – then again, this will depend on each social media channel.

Competitor Research and Analysis

You also need to keep a close eye on your competitors at all times and see what you can do better, what they are doing, and so on. This is really simple with these tools:

Ahrefs Content Explorer – This is a tool that allows you to enter the domain of your competitor and then see what they are sharing and what the stats are on their posts.
Mention – This is a tool that lets you monitor mentions of your competitors by entering the brand name or the keyword
BuzzSumo – This is a great tool for insights about social media. It’s simple and effective, very easy to use. Just enter your competitor’s domain or keyword and search. The tool will find your competitor’s most shared content.

Here are some things that you can do with the information you get there:

Create a similar piece to the one that received the best stats with your competitors.
Find out what the audience for that content is
Build a good following based on what social media channels worked best for your competitor
Share the popular content from your competitors that is relevant to your audience.

Learn More About Your Audience

Your audience is crucial, and you need to know as much as possible about it. Here are some tips on how to do that:

Do research in advance – Do market research and select the right demographics for your brand and your type of product.
Use the previous point and look at your competitors – Your competitors and you will likely have the same audience which means that you should look at their audience and buyer persona
Create your own buyer persona – This is a tested tactic which will give you plenty of information to work with. Create an outline of your ideal customer and then target your messaging to that particular customer.
Get to know the audience personally – Work with some of the best customers one-on-one to learn more about them and figure out what makes them tick
Use social listening – Social listening can help you learn more from discussions that people are having online and content they produce
Host surveys – Surveys are a fun and informative way to learn more about the audience. It’s simple and very effective.

Choose The Right Channel

When talking about social media, you need to recognize which platforms would work best for your brand. Not all social media channels will be good for you, so you need to make decisions on which to use. Using several when some of them are ineffective for your purposes is a bad idea because it can cost more than it brings in conversions or engagement.

So, you need to do the following to discover which social media platforms are right for you:

Ask yourself which features of a platform to fulfill your needs, which audience uses which platform, how much time will you need to make an impact, and so on.
Figure out where your audience is and where your competitors are
Look at all of the data and base your choice of platforms on that. Here are some, for starters: Facebook has 1.59 billion users, Instagram 400 million users, Twitter has 320 million and Pinterest 100 million

Connect With Your Audience In These Smart Ways

Connecting with your audience is the key to success on social media. Here are some tips:

Have a goal in mind and focus everything you do on social media on that. You can also build a strategy that will work for you.
Tell your audience an interesting story about your brand and your company. Be social and share interesting things, not promotional stuff, which is tedious. Focus on delivering value and building engagement.
Respond to comments and feedback your customers give you because this is the way you build a reputation. Make sure that you handle all communications with the audience properly. Leverage that to get more engagement
Set standards for everything you do. Make sure that you offer high-quality content because that is the most important element of social – good content
Understand how each platform works and how you can use it for your own benefit. You would post similar content on each of them, but you would do so differently.
Analyze and refine, as much as you possibly can to always improve your strategy and approach.

Trends on Social Media To Harness Right Now

If you’re ever out of ideas, here are some social media trends you should follow:

Post live video, it’s been trending since 2017, and it doesn’t show any signs of slowing down.
Consider chatbot technology because it can make a severe difference to your overall business strategy
Connect with an influencer and work together to promote your products in a natural, creative and seamless way
Use paid advertisements, of course. While the content you post shouldn’t be promotional and it should focus more on the interesting, your ads can do the promotional job for you
Use social listening tools to get ideas on what your audience may like to hear
Leverage user-generated content – it’s fun, interesting and really cost-effective
Use augmented reality to create really fun content for your audience.

Guest Contribution by Chloe Bennet, social media manager at Do My Essay Online . She helps her clients with content creation and distribution.

Business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

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Published on July 17, 2019 09:05

What Is Bootstrapping? Why A Bootstrapping Business Is The Way To Go

A bootstrapper isnʼt a particular demographic or even a certain financial situation. Instead, itʼs a state of mind.

That is how Seth Godin described bootstrapping in his “The Bootstrapper Bible.”

As firms which are venture capital backed get so much media attention, it’s easy to miss the other 99% of businesses out there which made it and which built a sustainable business model by bootstrapping.

That’s because by definition firms that are looking for venture capital needs a continuous PR coverage to play the “look cool game” to ease the hand in the pocket of the venture capitalist’s next door.

Thus, it’s easy to forget of the army of entrepreneurs that from day one decides to go the other route and first build a viable business model, then and when they feel the time is right (if it ever is) take outside money to scale the business.

Let’s start from a simple definition of bootstrapping.

What is bootstrapping?

The general concept of Bootstrapping connects to “a self-starting process that is supposed to proceed without external input.” In business, Bootstrapping means financing the growth of the company from the available cash flows produced by a viable business model.

This means using customers as the primary source of cash to grow the business. The bootstrapping process is critical when building up a new company as it enables us to reach product/market fit without relying on external money, which might distract the founders from the customer development journey.

But are all businesses made for bootstrapping?

Not all businesses can bootstrap

It is essential to distinguish among companies that have very high barriers to entry and those that don’t.

Indeed, due to regulations, technological development, or capital requirements, in general, bootstrapping might become hardly feasible.

If you’re building up a whole new technology in a whole new market, no matter how good you are, there will be no customers for years to come. That is because the development of that market requires that technology to becoming mature.

It also requires an ecosystem to develop. Therefore, in these cases, bootstrapping not only is not a good idea, but it’s not viable. In that scenario, you’ll need outside capital and substantial resources to keep going for years before seeing the first customer.

Instead, if you’re launching a business in an existing market, where other business models proved viable, bootstrapping is the way to go.

Thus, you want to first understand the playground you’re in, to identify the best way to go. Steve Blank identifies four main types of markets:

Existing markets: usually well-defined with existing customers and well-known competitors. This is straightforward, and in this kind of market, there isn’t necessarily a dominant player or monopoly.
Re-segmented markets: when a market, for instance, is taken over by one or a few companies (monopoly or duopoly), re-segmentation is the way to go. Thusm you enter by addressing a need that other dominating businesses can’t tackle. In this way, you can distinguish your brand (think of the case in which you target a specific niche of that existing market). We discussed several times how DuckDuckGo entered the search engine market quite late, and when Google was already a monopoly by targeting a specific niche, users’ who cared about privacy.
Clone markets: this is about copying existing business models to transpose them either in other markets (think of how Baidu built its fortune in China due to the impossibility for Google to take off). Or taking a successful business model in a market and transpose it into an adjacent one. Think of the “uberization” of several industries.
New markets: in this scenario, your solution is such a novelty that is very hard to identify a potential customer or competitor.

Now, if you find yourself to be in a new market, or you’re trying to clone an existing business model in a clone market, where regulations might make it capital intensive to enter, bootstrapping is not the way to go.

If you are in an existing market, or a re-segmented market, that is where the opportunity lies!

Let’s now dive into what bootstrapping means, what are its commandments, and why it makes sense.

The Bootstrapper’s commandments

In thebootstrappersworkshop.com Seth Godin sets the commandments for the bootstrapper.

He highlights the posture of a bootstrapper:

Ship real work.
Do it now. Not later.
Serve clients that are eager to pay for what you do.
Resist the urge to do average stuff for average people.
Build and own an asset that’s difficult to reproduce.
Scale is not its own reward.
Charge a lot and be worth more than you charge.
Create boundaries for yourself about what you do (and don’t do).
Become ever more professional.

Those principles are fundamental to internalize.

Bootstrapping is not easy, as you’re developing the business without outside resources. Thus, you need to be very good at understanding what’s your market, who is your niche, and what the customers in that niche want.

That’s because customers are your investors.

Customers are your investors

In a bootstrapping mode, you don’t have venture capitalists giving you a free ride to get clear about your business. Therefore, customers, purchasing what you make will be your investors.

It is essential to highlight that also, other key partners will act as investors. Your suppliers are also investing in the business if they extend the credit terms.

Your employees are your investors if they work extra hours to get the business off the ground.

Those are all key players that will make your business model viable.

The company’s vision is in your hands

Another thing to understand about bootstrapping is you won’t rely on someone giving you the vision for your business. You’ll need to have a clear vision and mission for where you want to go.

As you’re not taking outside money, you will be in control and in charge of your business, which requires a lot of focus.

Focus as the North Star

I am a bootstrapper. I have initiative and insight and guts, but not much money. I will succeed because my efforts and my focus will defeat bigger and better-funded competitors. I am fearless. I keep my focus on growing the business—not on politics, career advancement, or other wasteful distractions.

This is what Seth Godin says in his “The Bootstrapper Bible.” A bootstrapper can’t lose focus. Money is scarce at the beginning and either she manages to build a profitable business early on, she risks failing.

Speed of execution

My secret weapon is knowing how to cut through bureaucracy. My size makes me faster and more nimble than any company could ever be.

Once again, Seth Godin makes a good point where he mentions that a bootstrapper needs to focus on being faster and more agile, and avoid bureaucracy or politics. Where the founder who took a substantial investment from venture capital might be in the position of having to show how she is putting that money in motion.

The bootstrapper doesn’t have anything to prove except that building a viable business model, for the employees and the customers.

Mastery and Passion

When you build a company, especially in a re-segmented market, you better be passionate and be willing to master that niche. Otherwise, it will be hard to gain a strong position where incumbents have already an established brand.

In short, you want to look at being the best in the world for that vertical, which requires a lot of mastery.

A little to lose but a lot to gain

As you bootstrap your way up. You’ll initially have very little to lose.

That’s because you don’t have an established business model. And where incumbents can’t tweak their business model, as they would risk killing their cash cow – think of the case of Google (now Alphabet) if it were to stop tracking users, it would lose its advertising business which makes up most of its revenues.

You can go all the way in. You can experiment with your business model and make money in unconventional ways.

Salesmanship

If you’re bootstrapping your way up, you need to understand you are the most important salesman of the company. Thus, you need to go in understanding your market, your customers, and why your solution makes sense to them.

You need to be able to communicate it. You need to talk to your community regularly and that how you enable to bootstrap.

In it for the long-term

A bootstrapper is in it for the long-term. As we’ve seen, bootstrapping requires mastering and passion. And those don’t go along with short-term thinking.

Bootstrapping is about survival

A lot of this manifesto is about survival. A true bootstrapper worries about survival all the time. Why? Because if you fail, itʼs back to company cubicles, to work you do for someone else until you can get enough scratched together to try again.

Once again, Seth Godin highlights a critical point in “The Bootstrapper Bible,” there is no alternative to the failure of your business. That is why you need to be paranoid about survival.

Start from a proven business model

To be a successful bootstrapper, you don’t have to reinvent the wheel. You can start from a proven business model and copy it. Copying a business model won’t get you far, so you’ll need to add your twist, or improve X times on that existing business model.

You can start by looking at how exiting companies organized their distribution, sales, and marketing, how they positioned themselves, to bootstrap your way up.

Differentiate from the incumbent

The fact that a company controls a market limits competition. However, usually, that same company won’t be able to satisfy the whole market. If you’re good at listening to those people who are not satisfied with the incumbent, you can build a business on top of that.

Thus, be careful at what opportunities an existing market hides. You might think that as a market is dominated by a large player, a monopolist, less chances you have.

However, you’ll find out this is far from reality. The longer a company has been a monopolist, the more it might have imposed unfavorable conditions to its end customers, which might grow unsatisfied over time.

What the bootstrapper has that the big corporations don’t?

As we have seen so far, the bootstrapper starts from an unfavorable position when it comes to money and human capital. However, the bootstrapper also has a few unfair advantages. It is focused, it is fast in executing, it has nothing to lose, and it can grow its brand equity very quickly, due to an intimate relationship with its customers and the ability to charge higher prices if going for a niche. Coupled with the inability of the large corporation to cover that niche.

Beware, a bootstrapper is not a freelancer, but an entrepreneur

A freelancer sells her talents. While she may have a few employees, basically sheʼs doing a job without a boss, not running a business.

In “The Bootstrapper Bible,” Seth Godin highlights the critical difference between the bootstrapper, which is by nature an entrepreneur, and a freelancer.

In today’s world, that might be easily confused. But Seth Godin helps us understand the difference:

An entrepreneur is trying to build something bigger than herself. She takes calculated risks and focuses on growth. An entrepreneur is willing to receive little pay, work long hours, and take on great risk in exchange for the freedom to make something big, something that has real market value.

When to play venture capital game?

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Source: blog.leanstack.com

In my interview with Ash Maurya, we looked at when it made more to look for money from venture capitalists. And it was clear that the best time for that is scale.

As we’ve seen scale is not a prerogative of the bootstrapper, which is in the first place, building a business for the long haul.

However, if the bootstrapper decides that it makes sense to scale the business further, at that point, when product/market fit has been achieved, money and the competence of a venture capitalist might help.

It is worth mentioning that if you got to that stage, you’re in a desirable place to be. That’s because you managed to pass the hardest obstacle of an entrepreneur‘ path (the product/market fit) and now you have the option to keep growing organically, or scale.

In that circumstance, you’ll be able to negotiate the best deal to secure capital and to keep control of your company.

In a few cases, even when product/market fit is achieved, if the competition has picked up quickly, the business might still be in jeopardy, as scale might become a necessary condition to survival.

In that scenario, either you plan for an exit, or you get ready to blitzscale!

Scale requires money, and network

After product/market fit, you proved your business model at the point where money, which before was secondary, it becomes critical.

That’s because scaling becomes a game of dominating a larger and larger share of a market. Let’s be clear, scaling up is in many cases a matter of choice. And as you scale, you might lose or change your initial vision.

Also, scale requires (especially in industries dominated by regulations) a strong network of people that can help pass involve large stakeholders.

Thus, in that scenario, it makes sense to reanalyze the market and see how it has changed. If competition still enables you to keep growing organically, then you have the option to keep bootstrapping your way up.

If market conditions have changed, that is where you want to look at money as a way to defend your position, by scaling or niching down again!

Suggested resource
[image error] The Bootstrapper bible by Seth Godin is an ebook that explains how to bootstrap a business.

Business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

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Published on July 14, 2019 14:58

Business Failure: Do We Need To Remove Failure From Our Vocabulary?

Failure is painful. That is something unberable. We want to hide it as it makes us look bad to others. Especially if we were trying to prove our point by building a succesful business.

When that same business turns awry, in an instant you are proved wrong again, and that causes pain, insecurity and it puts us in an uncomfortable place to be.

Over the years, the start-up mantra has tried to change that. From things like “fail fast” “fail cheaply” “fail often.” No matter what perspective you look at it, failure remains something that has a high emotional charge.

I interviewed Ash Maurya, and we looked at continuous innovation and what it implies.

While talking about failure in business, he highlighted:

One of the key mindsets that we try to teach entrepreneurs that work with us very, very early on is removing failure from the vocabulary.

I want to emphasize that none likes failing, but that is part of the process of finding what works. As Ash Maurya highlighted:

Not because you’re not going to see it, but the problem that we have, even though we talk a lot about fail fast and failing is the way to learn, all of those things.

In short, failure is built in the learning process:

At the end of the day, we humans just do not like failure. No one goes out saying, “I failed 10 times today and I’m going to keep doing it.” It just doesn’t sound very good.

Over the years, Ash Maurya has seen a countless number of examples of companies, and he has helped many entrepreneurs and what he noticed is:

What I’ve observed, and I’ve seen this even of myself, is that when we encounter an experiment that has failed, our initial reaction is to try to hide it or to justify it. That’s where biases set in.

Rather than hide the failure of the experiment, or share what worked. A good practice would be to discuss what didn’t work:

That’s where we need to explain it in a way, and so we throw an explanation which is biased and oftentimes completely wrong to make ourselves feel good. Then we start selling that story to everyone else.

In fact, what makes today’s entrepreneurs can borrow the scientific method to test their ideas. And the scientific method itself is about experimentation to corroborate hypotheses and falsify previous assumptions.

Therefore, for modern entrepreneurs not to lose sight of the scientific method, it is essential to avoid biases in the process:

That is moving away from that scientific way of thinking more into covering up or using faith as a way to just explain things away when that isn’t really baked in reality. I find that “fail fast” is more easily said than done.

Ash Maurya uses a quote from Buckminster Fuller who is a celebrated scientist, which used to say

There is no such thing as a failed experiment, only unexpected outcomes.

In the business world, the whole scientific method transforms in the following process:

Entrepreneurs have a model of reality on which they wish to build a business
That model is based on hypotheses and a few assumptions
Those assumptions can be expressed into a business model
An entrepreneur can also formulate more business models and start testing in parallel the riskiest assumptions of each
The business model that passes the experimentation stage will enable the entrepreneur to build a company
In the process of experimentation, all the other business models will have failed. Those failures were feedbacks, in respect of the assumptions they carried
When one of those business models does succeed that is when a breakthrough happens

Thus, in this loop of feedback gathering, learning, and breakthrough, a successful business will arise.

Ash Maurya summarizes the process from his LEANSTACK:

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Source: Ash Maurya, Scaling Lean

Key takeaway

Besides all the buzz around failure, which seems to have become a mantra in the start-up world. When it comes to business modeling failure is simply a feedback loop which enables entrepreneurs to test the central assumptions and riskiest of a business model over another.

During the execution stage, several experiments will enable to test the assumptions of each business model, thus making it possible to exclude the ones that won’t work.

That is how entrepreneurs can finally find a viable business model for their company.

Related interviews:

Key Lessons In Lean Analytics With Alistair Croll
How To Design A Winning Business Model With Adam J. Bock [Interview]
Breaking Down Digital Transformation With David L. Rogers [Lecture]
A Guide To Disruptive Business Models With Thales Teixeira [Lecture]
Discussing Business Model Innovation With Felix Hofmann [Lecture]
Dissecting Platform Business Models With Nick Johnson [Lecture]
Pretotyping: How To Find The Right Idea To Avoid Business Failure With Alberto Savoia [Lecture]
Innovation Strategy Lessons With Greg Satell [Lecture]

Business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

The post Business Failure: Do We Need To Remove Failure From Our Vocabulary? appeared first on FourWeekMBA.

View more on Gennaro Cuofano's website »

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Published on July 13, 2019 13:48

What Is Niche Marketing And Why You Need A Niche Marketing Strategy

Niche marketing is a strategy which premise is to target a subset of a market which can be of various sizes. Where a marketing strategy focused on the whole potential market used to be effective when mass advertising was possible. A niche marketing strategy can help position your brand more efficiently, nowadays.

Niche marketing also helps create more intimate relationships between the subset you’re targeting and the brand you’ve built.

While in the past, it was possible through mass marketing and mass advertising to reach a massive audience. With the advent of the web, it has become possible to target particular segments of a market with a laser focus approach.

For instance, instruments like Facebook or Google Ads enable marketers and entrepreneurs to target in utmost detail the specifics of the audiene they want to focus.

How does a niche market look like?

It can be broken down based on many specifics, things like:

Geographic
Psychographic (interests)
Demographic (age, income level, gender, education)
Behavioral
Price
Style
Culture
And more

For a complete guide on Market Segmentation check this out.

In the short-term, we’re all starting from a niche market

Companies like PayPal, Facebook, LinkedIn, and Amazon, didn’t start right away as tech giants, ready to take over the world.

True, their founders did have (in some cases) a big vision. On the other hand, they started very – or relatively – small. Before Amazon expanded to pretty much sell anything, it was an online bookstore.

Before Facebook would become the largest social network on earth, it wasn’t the first player to come in (it was a late comer), but it had a very focused strategy, based on a staged rollout. Facebook made sure to open up, one campus at the time, and only when it had a waitlist that ensured high adoption, it opened up to the next college.

In short, before Facebook would become the social network for everyone, it was explicitly thought for specific campuses in the US.

Therefore, when you’re starting up, it makes sense to identify a niche market. This can be based on several factors, such as opportunity, understanding of the segment, passion, and more.

An excellent way to find a niche might be to mix all those factors:

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A niche market is the best place to start for three primary reasons.

Niche Market = Strong demand

A niche market is usually unfulfilled. As large corporations take most of the market share of a broader market, they also tend to standardize service and product, at the point of leaving out a small segment of it. That is where the opportunity lies.

A large business operating in a large market can hardly accommodate the needs of all the niches within that market. Those unmet needs are where you can build a business. The search engine DuckDuckGo has built a company where Google could not.

Indeed, DuckDuckGo (DDG) started very late (around 2008), over a decade after Google. If Gabriel Weinberg (DDG’s founder) would have told someone he was creating a search engine, chances are none would have made sense of that move.

However, he started by looking at where Google was weak. And among those weaknesses, there was privacy. Google (now Alphabet) makes money primarily via advertising.

Therefore, the whole company business model still revolves around collecting people’s data and reselling it on its advertising network.

Thus, DDG revolved its business model around privacy, where Google could not, as this would have jeopardized its core business model.

Over the years, as privacy concerns arose, DuckDuckGo grew on top of that. In August 2018, DDG got another round of investing for $10 million. Thus, getting ready to scale up.

Niche Market = Low competition

For how much we love the mantra of competition, as Peter Thiel, founder of PayPal mentions in his book, Zero to One, companies that dominate markets and reduce competition, so-called monopolies, are also the ones that hide this fact for as long as possible as low competition enables them high margins and status quo.

For a company that is starting and it is niching down, a small segment of a broader market helps kick things off. Imagine the scenario where other larger competitors are already serving that segment that would require massive resources for the niche player, thus making it extremely hard to build a company in the first place.

Niche Market = High margins

Building a successful company and a viable business model is also about guaranteeing high margins. Part of those margins can be reinvested back into the business.

A niche market usually has a strong demand and lower competition, which makes it easier for the niche player to charge higher prices.

Finding your niche

The web enables you to look for your niche pretty much all over the world. A few thousand people looking for bread recipes, or raw food can be a good place to start.

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Search volume for a keyword like “raw food recipes” across the US and other countries

The web enabled anyone to start a business with limited resources. On the other hand, you better understand what people in that niche are looking for, and you connect with them.

Thus, rather than just creating a business, you might want to build a community first.

Why? Tech companies like Google and Facebook have become pretty good in reaching out to any audience. This means that if you wish to build a company out of a niche, you can’t just be a company.

You better make sure to create a sense of intimacy with your community.

Where large brands can’t build this sense of belonging, that is where a niche player would be a way better option for that segment!

And the is where you have the opportunity to build your next business.

Additional business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas

Case studies:

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Published on July 13, 2019 12:19

Continuous Innovation And Lean Startup With Ash Maurya

https://fourweekmba.com/wp-content/uploads/2019/07/continuous-innovation-lean-startup-ash-maurya.mp3

Ash Maurya is a practitioner and entrepreneur. Author of Running Lean, Scaling Lean and the Lean Canvas, built on top of the Business Model Canvas. Ash is also the founder of LEANSTACK.

In this session, we focused on continuous innovation and scaling lean.

How did we go from lean manufacturing to continuous innovation?

Ash Maurya: If we go back to, let’s say, the last hundred years or so, that’s when we were in that manufacturing era, and the unfair advantage all companies were all about mass production.

The companies that produced the most amount of products for the lowest costs tended to win. It was all about efficiency. After the war, a number of companies started to get squeezed, and this is where Taiichi Ohno over at Toyota invented the Toyota Production System, which kind of spawned this new way of thinking.

Taking a lot of Just in Time techniques and bringing in what became eventually Lean Manufacturing. That’s kind of the origin that we trace back a lot of even what we talk about today in the startup world.

Some of those core principles go back to this idea of being less wasteful, and continuous improvement. Now it has morphed over the years, so as the world has changed, as we have moved from that manufacturing era to more digital products, the need for speed became ever more important.

As we got into PC computing, requirements began to change faster and faster, and so methodologies and frameworks evolved. We moved from traditional manufacturing to waterfall.

Some of you may have lived through that. We then moved from waterfall to agile where we began to bring in more iterations, and feedback along the way to where we are today.

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For more on the historic process that brought us from lean manufacturing to lean startup, check out blog.leanstack.com

When Lean Startup came on the scene, the big shift then was our move away from even just PCs to the internet.

As we moved onto the internet, the connection between us and our customers almost vanished. We’re more connected today than ever before to customers, which means that we can learn faster, but also it means that customers demand more than ever before.

Our need to go faster has reached a certain point to where we as a company to LEANSTACK started calling this continuous innovation. It’s no longer stop and go, we can’t take six months to do requirements analysis and then another six months to build a product.

If you look at some of the top companies today, the likes of Amazon, Facebook, Netflix, all of these companies are continuously building and launching products. The stages between requirements gathering and building and testing have all blurred together. It’s all happening continuously.

Gennaro Cuofano: Let me touch another critical point as today there is a sort of misconception that as we start using more and more, the scientific method for entrepreneurs.

Many people get confused between science and entrepreneurship when they’re two separate domains.

What’s the key difference between an entrepreneur and a scientist?

Ash Maurya: the difference is in goals. Certainly, the analogy helps. A lot of entrepreneurs tend to fly by guts. Gut feeling and instinct has its place, but it’s also a recipe for just driving on faith.

When the Lean Startup came on the scene, a big message there was this idea of thinking like a scientist, thinking of your project, your startup, your product as an experiment, and so we can run and learn and use facts to make course corrections along the way.

All that made sense. But there is the dark side, which is if we go to the other extreme and run a business like scientists, then we would take forever to launch anything because we would want to build the most perfect experiments.

If we truly are trying to uncover truths, we should be doing double-blind tests and have no selection bias. We should be looking for what is really true out there.

Business is different in that we want to not uncover perpetual truths, unlike science, we want to find temporal truths that may not even be absolute truths.

These might be quirks of demographics. Maybe the millennials behave a certain way that all of a sudden make certain products possible, and entrepreneurs are opportunistic. They need to act on that.

Being able to see signals in the noise and build something that can make the business model work is the goal of the entrepreneur.

Employing the scientific method to run some experiments to get there is helpful, but not at the expense of going overboard and taking too long to find something that will hold true forever, which just doesn’t happen in business. All business models get disrupted.

What are the key ingredients for an effective entrepreneurial experiment?

First I still think something that is common in both (science and entrepreneurship) is this idea of starting with models. You find a lot of entrepreneurs who kind of latch onto experimentation. What you find is that they just run lots and lots of experiments, but they pick and choose.

They run the experiments that are the most fun, like doing landing page tests or changing words here and there on the copy, which are nice. They’re optimization experiments, but they may not be the most critical things in the business.

Where we stand or where I stand is trying to,

Like a scientist, build some models, and for an entrepreneur that is the business model.

Build up a model, use that model to make certain predictions, prioritize what might be riskiest, which is more critical for an entrepreneur than a scientist because they are trying to, in a given timeframe, get to a point where their business can survive.

Finding a business model that works before they run out of resources.

Now to be able to do that we break it down as a model, prioritize, test.

Start with a model, a business model, prioritize what might be riskiest in that model, not what’s easiest, and do the hard stuff.

That’s the run experiments around those risky assumptions, not necessarily what might just be volumes of experiments.

It’s not about the volume but the quality that fundamentally matters.

Why monetization is a building block you want to test early on?

Ash Maurya: the way I like to make that difference clear, there’s a difference between a hobby and a business as one makes revenue. One has monetization potential or is monetizable and the other isn’t.

If the goal here is to build a business model that works, one of the key aspects is ensuring that that business model captures value, in other words, makes money. The sooner we do that the better.

We have from the dotcom days, so even now you see many people deferring that question to later, who is the customer, the customer is the one that buys, but who is that customer and what are they going to pay?

We tend to defer that to later because I find that a lot of entrepreneurs behave like artists. We try to create art, but we don’t want to put a price on it because in our minds it’s uncomfortable, it devalues that art, we don’t sometimes underprice our stuff.

All these biases come into play, but one needs to outgrow those.

If you’re really trying to build a business model, that’s one of the first things to test. I ask two questions:

who is the customer? Because in some scenarios you may have some people that are users, others that are customers. Knowing that distinction is very, very important.
How do you collect money? What is that pricing model? How do you collect it? How much is it? What is that?

So that’s that. That would be the second question.

Gennaro Cuofano: I think it’s very important to emphasize that if you’re creating a company today, it’s very important that you try to monetize it very quickly. As you explain also in Scaling Lean, many believe that companies like Facebook didn’t make money for a while. But as you explained in the book Facebook actually made money early on. Indeed, Facebook used an approach that you call staged roll out.

What can we learn from the early Facebook on monetization and execution?

Ash Maurya: It’s actually a strategy of not launching your product to everyone all at once. We find many examples in the world. I’ll share to Facebook being one of them, but Facebook was actually an accidentally staged rollout strategy.

It was accidental because, I don’t necessarily know, of course, because I’ve not spoken to Mark Zuckerberg about this, but through interviews, he was not able to launch to everyone because he was a college student.

They didn’t really have the resources to do so. They didn’t have the credibility to go and raise money because he wasn’t the first social network back then. There were many others out there with millions of dollars in revenue and millions of users as well.

Friendster, Myspace, they were all existing at the time. He couldn’t go in and do a public launch, so he launched on one college campus at the time.

The product immediately took off. It had amazing traction on one campus, and that made him pay attention to it.

Of course, he could benchmark his traction versus his closest competitors and saw that this was outperforming them in terms of usage and engagement and monetization potential because usage engagement in that world translates to advertising revenue.

He tested that by putting some Google ads, which was an easy way to test and he was able to show that this was producing twice as much revenue, potentially from a very small number of users, but very highly engaged.

That was the constraint he had is he didn’t have money to launch publicly, but by launching on one campus, he could show that this was working quite well.

Now to prove to himself and his team and potential future investors, he went to other campuses and he carefully picked which ones. He went to other schools that have social networks.

Those were his early adopters and his job was to displace the incumbent in there. He also picked Ivy League schools and well-named schools, and so that created also a sense of exclusivity.

By the time they were done with the next four schools, word got out that Facebook is the coolest college social networking platform out there. Only the elite schools have it, and so every other school in the U.S. and maybe other parts of the world wanted to get on that launch list.

They kind of used that very, very strategically to take a constraint, which is “I don’t have resources to publicly launch” and turn it into something where they got a pipeline of schools just waiting to be the next one.

I can see them going into their investor’s office and saying, “You pick the next school for us, and we can demonstrate amazing traction in that school just within 30 days,” because they had figured out the system for doing so.

This is what I call in the book a customer factory. They pretty much knew how to go in and get this factory up and running very quickly, where users would come, be highly engaged, they would monetize it, and make the whole business model work.

That’s kind of a superpower they gained, which is why behind closed doors investors were getting them huge valuation because they could see their metrics and in these microcosms of markets, which is these different schools.

They could see them lighting them up kind of at, well, they were like little Petri dishes (a cylindrical glass or plastic lidded dish used for experimentations in laboratories) of experiments that they were running, but because they have repeatability, they could tell a very compelling business model scalability story to their investors, which is why their valuation went through the roof.

How did Tesla instead execute a staged rollout?

Tesla and Elon Musk, the way he launched his electric car also followed a staged rollout. Those of you that know the story even at a high level know that they were three or four cars, but there are three cars that were part of his launch plan, which was starting with an expensive sports car, the roadster, which was a way for them to test the riskiest assumption, which was all about the battery.

Can we actually build a new electric battery that can go 200 miles on one charge? They started with that.

That was their stage one. They then went to stage two, which they built that model last, it was a car they built on their own. They had to get good at on building cars. It was all about addressing those risks, and then they finally launched their stage three, which was the less expensive, more affordable electric car. That was the model three.

This was a staged rollout as well. Had Elon Musk gone to stage three in the beginning, which he had the means of doing so. He could’ve taken the battery that they invented, put that in a cheaper vehicle, and sold that, but he didn’t do it because that would have brought on too many risks all at once. He too employed a deliberately staged rollout strategy.

I sometimes like to call that permission to scale, so whether you’re a startup, whether you’re a corporate, we have to realize that products go through a life cycle, and rather than trying to rush to get to scale prematurely and then making a lot of mistakes and getting overwhelmed with risk, if we instead give ourselves permission to scale, start with smaller numbers of customers and users and more systematically roll it out, it makes the process more manageable. It helps us tackle the riskiest assumptions first.

Gennaro Cuofano: So a staged rollout is a way to go from problem/solution fit to product/market fit, to scale. Isn’t it?

How do you go from problem/solution fit to scale?

If I put some goals around it, problem solution fit is proving that we have a big enough market. This is where we search for early adopters. In the roadster case with Tesla, those were those typically tech entrepreneurs or tech workers who are interested in an electric car. Those were the early adopters.

A lot of Silicon Valley and places around there were the early adopters of that vehicle. In the Facebook case, that would be college students on Harvard and those Ivy League schools.

You start with that smaller group and then as you begin to roll out, the product gets to more and more mainstream. That’s would be product-market fit, and then that’s when we really try to grow well beyond that. That would be the scaling stage. [image error]

Example of a staged rollout, from blog.leanstack.com

When is the right time, if there’s any, to take venture capital money?

Ash Maurya: I would say in an ideal world, and it’s not just me, even the venture capitals and other angel investors will give you the same advice. The best ideal time to raise your big round of funding would be as you cross product-market fit.

Once you have product-market fit, some success is guaranteed. The question is how big can it get?

The other thing that’s also going in your favor then is that your goal, you being the entrepreneur or innovator, your goal and the investor’s goals are completely aligned. It’s all about growth.

You have figured out the product, you have figured out the customer, now it’s really engines of growth.

[image error]

A classic example of engines of growth from Eric Ries’ “Three Engines of Growth”

How can we pump in money if you’re using paid engines or viral engines? How do we invest in those engines of growth and maximize the potential?

That’s something that investors care about, you also care about and so those goals are aligned.

That’s the ideal. Now in a realistic sense, everyone has the J curve, so before you get to profitability and product market fit, we have to invest in a product which takes time, money, effort.

When does it make sense to bootstrap?

This is, of course, going to be a function of the kind of business model and product that you have. If you can bootstrap, if you can go all the way to product market fit and then raise money, you maintain the most control in your company. You have a lot of say in where the company goes from that point on.

That’s a very powerful place to be, but it’s not the case for every kind of product. If you were doing something that required capital investment upfront, this is where VC makes sense, but there is now, increasingly so, a very mature market of other investors that play in that space.

Those would be super angels or angel investors that understand that you still haven’t reached product-market fit and you are going to be learning and pivoting and course correcting, and they tend to be more patient for those types of things.

They are taking bigger risks, so they do ask for bigger returns. They give you smaller amounts of money but want a bigger proportional return than a VC would. That’s just the nature of investing.

Even earlier than that, if you haven’t even launched, it’s going to be hard to find even Angel Investors. This is where things like bootstrapping come into play, or the three Fs (friends, families, and fools), kind of a joke that’s out there, but that’s where raising some seed capital is a way that people get started, and that, of course, tends to be smaller amounts of money just to be able to get that early validation, early traction.

How do you build the optimal business model?

Ash Maurya: This is both the challenge and the opportunity, which is just the nature of the early stage, is that we are trying to find optimal business models, but we can’t see the future. We don’t know what we don’t know. This is where a little bit of that scientific thinking comes in, and we need to experiment.

Even at the business model level, one of the things we are big advocates of takes the idea that you have but create multiple variants, multiple possibilities of places the idea might go.

I might take the same idea and sell it to businesses, so that would be a B2B type of a business model, or it could be B2C, or it could be something different. Maybe it’s a marketplace.

We encourage people in the early days to cast a wider net and try to create these multiple variants on the canvas. Go narrow and specific, but you can create a number of canvases.

They can see your idea from many different perspectives, and then we start running some experiments. What we are trying to do is see which of those canvases, which of those business models, which of those customers and markets are reacting the way we think they should, which ones are creating more traction than others? If that aligns with your mission, with your vision, you double down on that.

The reason I say that last part is that sometimes it is possible when we do this kind of searching to find yourself in business models that can work, but maybe don’t align with your values.

I have been in that situation a few times. I was trying to build products for entrepreneurs, and I found, for instance, that marketers were getting more excited with the product, and sure, I could go to marketers, and not that I do not like marketers, but it would have gone against a lot of the other assets we had in the company.

We had a brand, we had channels, we’d have to reestablish everything, potentially even create a wholly separate company or identity to be able to go into that customer segment.

We decided not to go there.

It’s a hard thing to say no to a good customer problem and potential solution that you have, but sometimes those are things that one has to do.

When you’re doing that casting of the canvases of the wider net, it is possible that you will find some promising ideas, some that you want to go down, others that you don’t.

You also find a lot of ideas that may seem promising on paper, but when you do a little bit of validation, you find that there may already be existing alternatives. Maybe the customers don’t have these problems and so you get rid of them. That generally is the process.

How is traction different from revenue and why is it a key metric?

Ash Maurya: that was the big message in this book (Scaling Lean). The first book was a lot about validation techniques. As we’ve described already using a canvas to better see your idea and go and do some validation, the challenge, of course, became when you came back and either look for stakeholders or investors, they wanted to see more.

They wanted to see growth potential. They wanted to see things like revenue and profit, and then they, of course, knew that in the early stages of revenue and profit are generally nonexistent because you have to first make that business model work.

What could we use instead? This is where traction comes in.

The key difference between traction and revenue and profit is that the right traction metric is a leading indicator for future revenue and profit.

It’s very powerful that can almost predict that revenue and profit will take care of themselves. That’s where the power comes in. In the early stages when you don’t yet have the revenue and profit to show, if you can show traction instead, that can be a good stand-in.

Facebook in the early days was getting lots of traction. They were getting lots of users hitting their site. They were engaging, they were doing all kinds of things, and so they asked themselves a question is that “This engagement is very high. What if we put ads, would that engagement drop? Would it stick? Would they click through?”

They ran some experiments using Google ads and found that it really did stick.

Today even the way they actually position their story to investors is they talk about the user growth, not so much the advertising growth side because one will control the other.

If you get more users on your platform, engaging more, even daily active users going up, the advertising naturally takes care of itself.

That’s the power of thinking in terms of traction versus revenue. One is a leading indicator, while the other is a trailing indicator.

*Note: a leading indicator is input oriented. In short, it is a key driver that determines also a trailing or lagging indicator to move. However, a leading indicator might usually be hard to measure and easy to influence. Contrary to trailing or lagging indicators might be simple to measure but hard to influence.

What is throughput accounting, and how it works?

Ash Maurya: throughput accounting, it was really a concept I borrowed from Goldratt’s work. Those of you that are familiar with the Theory of Constraints, or his popular book, The Goal, that’s where he shared this way of thinking, and he applied it in the manufacturing context.

He was working with factories and really got them thinking about throughput. If you’re on a factory floor, many people start going into cost-cutting mode. But the problem with cost-cutting is that there is a floor beyond which you can no longer go lower, you can only cut costs so much and then what are you going to do?

But if we flip this around and look at revenue potential, or the potential to make more money, that’s almost infinite, at least in theory.

The idea of throughput accounting is flipping that on its head and saying, “Yes, we want to worry about cost-cutting and efficiency, but the bigger potential here is thinking about upside potential.”

That’s some of the ideas that I share in the book is how to think about throughput accounting in that context in a business modeling context.

Similarly, on a business modeling side, we have the way we deliver value, so that would be the solution you build. Yes, we can make it as efficient as possible in the early days, but that is again chasing pennies and letting dollars slip through the cracks.

What we instead should be doing is focusing more on the revenue streamside, trying to maximize things like pricing, for instance. Trying to identify the right customers, for instance.

Let’s work on those problems first, and then we can optimize the cost structure side farther down the road.

How does the 10x growth model work?

Ash Maurya: when we looked at Facebook, for instance, they out of constraints of no money had to go to one campus and then they went to three other campuses and then they kind of rolled out systematically.

10x kind of puts that into more of a systematic context. What we generally tell people, if you’re giving yourself permission to scale, instead of thinking of, “I’m just going to launch to everyone,” start with one customer.

I know one sounds just wrong, but that is what I call the singularity moment of a product. The moment you can get one person to buy your product and part with their hard earned money, that’s something to celebrate.

Now one, of course, is not enough, but if you think about it, every company, whether it’s Amazon, Facebook, your company, starts with one customer. Everyone starts in the same place, and then they double and then double subsequently many many times.

If you think of 10x, that is really a sequence of doublings through the power of three is 8x. If you keep doubling, you will eventually 10x, and most people will have 10 customers. You will 10x once, some of you will get a hundred customers, you will 10x again.

The only difference between a company like Facebook and say, my company or your company, is Facebook just doubles more times in rapid succession and we will, and they keep doubling and then they eventually slow down.

We may not need to get that big because our business model starts working for our scale much, much sooner. The whole idea of 10x-ing is almost giving you a mathematical way of thinking of permission to scale.

The way I break it down is I get, no matter what the idea is, I will get a startup or corporate innovator to start thinking of, “How do I convert my first customer, and then how do I get to 10, how do I get to 100, how do I get to 1,000?”

That nonlinear thinking automatically works towards prioritizing the right types of risks.

If we think about the world we live in today, most products, not all, but most products don’t suffer from technical risks. They suffer from customer and market risk. When you are only serving 10 customers, you can fairly easily do that from a technical perspective.

You may only need one web server, for instance, or you may be able to provide high touch onboarding. That allows you to supplement the shortcomings of a fully scalable product.

By giving yourself that permission of doing 10 customers initially, you can do that. As you go to the next level, it’s not about getting another 10 customers, now you have to get 100 customers. That forces you to start investing incrementally in things that will need to scale.

You don’t have to go all the way to scale, but it’s an incremental way of not just doing easy jumps. It’s still hard, but they are manageable harder steps in that journey.

Why do we need to remove failure from our vocabulary?

Ash Maurya: that’s one of the key mindsets that we try to teach entrepreneurs that work with us very, very early on is removing failure from the vocabulary.

Not because you’re not going to see it, but the problem that we have, even though we talk a lot about fail fast and failing is the way to learn, all of those things.

At the end of the day, we humans just do not like failure. No one goes out saying, “I failed 10 times today and I’m going to keep doing it.” It just doesn’t sound very good.

What I’ve observed, and I’ve seen this even of myself, is that when we encounter an experiment that has failed, our initial reaction is to try to hide it or to justify it. That’s where biases set in.

That’s where we need to explain it in a way, and so we throw an explanation which is biased and oftentimes completely wrong to make ourselves feel good. Then we start selling that story to everyone else.

That is moving away from that scientific way of thinking more into covering up or using faith as a way to just explain things away when that isn’t really baked in reality. I find that “fail fast” is more easily said than done.

In the book, I actually put a quote from Buckminster Fuller who is a celebrated scientist. What he said was:

There is no such thing as a failed experiment, only unexpected outcomes.

The way that I interpret that, is that going back to the whole way of running experiments, we start with a model.

We start with a business model. We make some predictions about how customers will behave, and if they don’t behave that way, that’s an unexpected outcome.

That’s actually something that should be studied because what it’s telling you is that your way of thinking was off by some assumption. If you can find that assumption and fix it, you might actually find a breakthrough.

If you actually go to the dictionary definition of breakthrough, there is no breakthrough without some unexpected outcome, because if everything that you expected to happen does happen, then where’s the breakthrough?

Easy to rationalize, but I find that that’s an opportunity. A breakthrough comes from those unexpected outcomes, calling it failure just makes people act very silly and hide it. But if we instead try to act more like scientists and go after those unexpected outcomes, we may find those breakthrough insights hidden in them.

For me, when I run experiments or when we get other teams to run experiments when they make predictions and they don’t come true, we don’t just let them sugarcoat it with some justification, we actually want to go deeper.

Call that customer, find out why they didn’t buy, or let’s run another experiment to see if we can understand some of these root causes. When we have done that, we have found in those answers, you literally find the gems. That’s where you find those breakthrough insights. That’s where the inflection points on the hockey stick curve are hiding.

Key takeaways

The Internet has enabled an era where we are extremely connected. This brought us from a model of continuous improvement, where continuous testing, experimentation, and learning is the key.
Entrepreneurship and science are two separate domains. While science does provide a valuable framework for entrepreneurs to borrow. On the other hand, scientists want to uncover universal or more rigorous truths. Entrepreneurs instead look for opportunities, and to achieve business objectives.
An entrepreneur job is primarily to build a business model that works, by looking at signals in the noise and focusing on the opportunities at hands.
Making money is one of the keys and riskiest building blocks in a business model. Today, startups tend to think monetization can be deferred as long as possible. But in reality, monetization should be one of the building blocks to test early on, as among the riskiest.
Constraints, if used strategically, can be used as advantages to spur growth.
Permission to scale can be used as a way to grow a business by reducing risks and mistakes. Indeed, all products go through a life cycle, and rather than trying to rush to get to scale prematurely, permission to scale enables them to get there gradually.
The best ideal time to raise your big round of funding would be as you cross product-market fit. At that stage money and speed become critical for the next stage of scale.
Early on when you didn’t figure out yet a viable business model it is important to cast a wider net of variations of business models to test them out, also in parallel.
A business model is also a matter of choice, based on your entrepreneurial values. Thus, when casting the potential business model to test, you might want to take off those that do not make sense for you as they don’t align with your mission.
Traction should be the key metric for growth. Indeed where traction is a leading indicator, revenue is a trailing indicator. In short, if you focus on traction you also influence revenue.
A 10x staged rollout enables companies to gain permission to scale, by growing non-linearly, while getting ready to scale.

And a statement worth remembering comes from Buckminster Fuller:

There is no such thing as a failed experiment, only unexpected outcomes.

Why Innovation In Business Is About Business Modeling

As technology has become so pervasive in our lives; and as it has enabled new business models to emerge. There has formed this misconception and confusion around what innovation in business means.

Let me clarify that as many get very confused about this topic.

Technological innovation is not business innovation

The misconception starts from the fact that nowadays, technological advancement is pushing toward new ways of doing business.

The Internet is still enabling new, untested models to pick up. For instance, business models of companies like Netflix would not be possible if the Internet didn’t allow new ways of content delivery, and so also of how those same companies make money.

However, technological innovation is wholly different from business innovation. That’s because technological innovation often happens in labs or research centers (take the internet) rather than just companies, or in a business context.

In short, technological innovation requires a massive amount of resources upfront and researchers, which might not follow business objectives, but rather experiment freely with ideas that take time to work out.

One matrix that explains well, is the Innovation Matrix, that Greg Satell showed me when I interviewed him:

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In other words, often a technological innovation happens in basic research. And the more we move toward a well-defined domain and problem, the more we move toward sustaining innovation.

However, technology itself hardly becomes a competitive advantage.

That is when the business model innovation kicks in.

Why business innovation is about business modeling

One of the people that I like to follow the most in the business world, venture capitalist, Fred Wilson, in a recent article, highlighted something that many are still missing today:

I believe business model innovation is more disruptive than technical innovation.

That might sound trivial, yet it’s not. Most of us believe that technical improvements (what we call technology) are what enabled global changes.

While this is true, there is another component, the business model innovation which caused even more massive changes to our society.

That’s because technology enables a new way of doing business. And assumptions that in the past were the basis of doing business, suddenly become outdated.

As Fred Wilson further explained:

The move from desktop computing to the web. We saw massive disruption as we went from a licensed software business model to an advertising-supported business model, which has evolved into an advertising/subscription freemium business model.

When new, revolutionary technology finally is widely adopted, that is when a massive phase of business model innovation happens. For instance, we’re still looking at how the Internet enabled the digital economy still ongoing explosion.

We might be looking at a similar change and blossoming of new business models with the advent of the Blockchain and crypto-based business models.

Thus, next time someone in the business world is talking about innovation, ask what that means, and you’ll find out in their head they think about technology rather than business modeling.

Other business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas
Distribution Channels: Types, Functions, And Examples

The post Why Innovation In Business Is About Business Modeling appeared first on FourWeekMBA.

View more on Gennaro Cuofano's website »

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Published on July 11, 2019 13:09

What Is Venture Capital? Venture Capital Advantages And Disadvantages

A venture capitalist generally invests in companies and startups which are still in a stage where their business model needs to be proved viable, or they need resources to scale up.

Thus, those companies present high risks, but the potential for exponential growth. Therefore, venture capitalists look for startups that can bring a high ROI and high valuation multiples.

That’s because of the set of investments venture capitalists make; only a few will succeed. Therefore, they have to place more bets to make the system work in their favor.

In the end, the venture capitalist makes money (the so-called exit) by either reselling the stake in the company at a much larger valuation or with the IPO of the company they invested in.

When that happens, venture capitalists make substantial returns for their partners. Indeed, the venture capital firm is usually comprised by a group of partners which raised capital from another group of limited partners to invest for them.

The limited partners (or LPs) can be either large institutions or wealthy individuals looking for high returns.

Usually, venture capital firms invest in growth potential. Therefore, when a startup receives venture capital money, the venture capital firm – usually – expects aggressive growth.

Before we get to the advantage and disadvantages of taking venture capital money, let’s first understand the explicit and hidden incentives that drive venture capital firms. Indeed, at the end, taking venture capital money is mostly about interests alignment.

And if those interests do not converge, that is when probably it might be not a good idea to take that money.

Understand the venture capital incentives

To understand how venture capital works, we need to look at the two resources that they allocate:

capital;
and money

Time, because VCs funds, compared to other models, where financial resources are endowed, do contribute to the growth of the firm they invest in. This contribution can come in several ways, from assistance in hiring to providing guidance, or also having a VC on the board.

On the other hand, VCs provide capital for funding the scale of those startups.

Why is it important to understand the two essential resources? Well, while capital might be a relatively scalable resource, assuming VCs can bring in continuously limited partners.

Time is not. Indeed, VCs usually run out of capacity in managing a certain number of investments as those investments need to be also managed and supported.

And in general, VCs look for a return anywhere between 3-10 years, depending on the market condition, startup growth and more.

Which means they also look for 10-30x ROI in a 5-10 year timeframe.

Therefore, a few aspects we can highlight so far:

venture capital have limited time resources to allocate due to the fact they can only manage a certain number of investments (as they provide several forms of support to startups);
they look for extremely high returns (10-30x in the lifespan of the investment);
those returns can happen anywhere between 3-10 years depending on several conditions (this means in this period VCs will ask for aggressive growth)

Let’s look now at the advantages and disadvantages of getting VCs’ money.

Advantages of VC money

Some of the key advantages can be summarized in a few key points:

Guidance and expertise: usually VCs don’t bring just cash on the table but also the expertise of the team and partners part of the fund, which is one of the primary advantages of getting VCs’ money.
Rapid Growth: if you’re looking for rapid growth, VCs will look for the same thing. Thus, you’ll both be aligned in terms of objective, which makes it easier to make this sort of agreement work.
Connections: VCs will introduce you to the right people to unlock growth potential, which is another undeniable advantage.
Hiring: the VC investing in your company can also help you find the right people to form your team and scale.
Additional support: in some cases, VCs support can also come in other areas that are important to grow smoothly, which include legal, tax, and accounting matters.

For all these reasons, VC money makes sense. Let’s see when it doesn’t.

Disadvantages of VC money

There are two significant disadvantages in taking VC money:

Loss of control and ownership: this is by far the most significant disadvantage as if you let VC in it means you need to be ready to give up some or a good part of the control. Therefore, you won’t be the only one in charge of the company’s vision and mission, but you’ll need to share that with the VC.
While it is legitimate for VC to ask a high ROI for a risky startup which business model still needs to be proved viable. A very High ROI and an excessive push on growth might break things up. Remember that, companies, like products, might have a lifecycle and forcing too much on growth might well make the company implode.

When does it make sense to take venture capital money?

In a post entitled “The only thing that matters,” venture capitalist Marc Andreessen explained:

The only thing that matters is getting to product/market fit.

Product/market fit means being in a good market with a product that can satisfy that market.

How do you assess whether you passed through this product/market fit stage?

Marc Andreessen explained:

You can always feel when product/market fit isn’t happening.The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah”, the sales cycle takes too long, and lots of deals never close.

Therefore, there is no single way to measure that, but as Andreessen emphasized:

And you can always feel product/market fit when it’s happening.The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can. Reporters are calling because they’ve heard about your hot new thing and they want to talk to you about it. You start getting entrepreneur of the year awards from Harvard Business School. Investment bankers are staking out your house. You could eat free for a year at Buck’s.

And he highlighted something that would stick as a paradigm in the startup world for years to come:

Lots of startups fail before product/market fit ever happens.

On FourWeekMBA, I interviewed Ash Maurya, author of Running Lean and Scaling Lean and creator of the Lean Canvas.

As he explained to me:

This is (when to take VC money), of course, going to be a function of the kind of business model and product that you have. If you can bootstrap, if you can go all the way to product market fit and then raise money, you maintain the most control in your company. You have a lot of say in where the company goes from that point on.

And he continued:

In an ideal world, and it’s not just me, even the venture capitals and other angel investors will give you the same advice. The best ideal time to raise your big round of funding would be as you cross product-market fit.

Once you have product-market fit, some success is guaranteed. The question is how big can it get?

The other thing that’s also going in your favor then is that your goal, you being the entrepreneur or innovator, your goal and the investor’s goals are completely aligned. It’s all about growth.

You have figured out the product, you have figured out the customer, now it’s really engines of growth.

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Source: blog.leanstack.com

Thus, if you were in the condition to bootstrap – grow with your resources, or with a profitable business model – your company is in a perfect place to be.

You can decide whether to move to the next stage (scale), thus take VC money. Or keep growing organically.

And he also highlighted:

If you were doing something that required capital investment upfront, this is where VC makes sense, but there is now, increasingly so, a very mature market of other investors that play in that space.

Those would be super angels or angel investors that understand that you still haven’t reached product-market fit and you are going to be learning and pivoting and course correcting, and they tend to be more patient for those types of things.

What questions to ask before taking venture capital money?

Therefore before taking VC money, I would ask the following questions:

can I validate the idea without external resources?
Is the product technically complex that it requires additional resources to develop?
Do I need money to scale?
Am I ready to give up part of the control of my business?

In short, if you are a control freak, and you want to keep your vision of the company intact, VC money might not be the best option. If you’re willing to give up some control in exchange for money and expertise that might make sense.

In other cases, if you managed to bootstrap your way to product/market fit you might be in a good position as VC will want you. Thus, you will be able to negotiate better deals.

In the case in which you need a long term perspective to grow your business and still be in charge of angel investing or “super angels” might be a better option.

In all the other cases, bootstrapping is the way to go!

Other business resources:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas
Distribution Channels: Types, Functions, And Examples

The post What Is Venture Capital? Venture Capital Advantages And Disadvantages appeared first on FourWeekMBA.

View more on Gennaro Cuofano's website »

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Published on July 11, 2019 11:29

6 Things You Need To Know Before Investing In SEO

Search Engine Optimization (SEO) is the easiest way to earn viewership from the audience. A whopping 61 percent of digital marketing experts agree that improving SEO and growing organic presence is their top marketing strategy. With stats like these, no wonder why SEO is popular among entrepreneurs.

However, SEO campaigns and strategies vary. Simply put, SEO could be a more complicated process than you might assume. So, before investing in SEO, having some prior knowledge about this often-talked-about feature will do a world of good to you.

Here the top six things you must know before calling up to an SEO company:

SEO is probably more expensive than you think

Regardless of what people whisper in your ears, SEO is not that cheap. Though costs are based on the kind of SEO campaign you want to subscribe, yet, by and large, SEO will sweep a significant chunk of your budget.

The reason is that Google has an exceptionally complex algorithm in place. It takes a team of SEO professionals to comprehend that fully. Unless you are an expert, you can’t take a chance with it. Therefore, give a good look at your resources before hiring an SEO firm.

SEO takes time to provide desired results

One can’t doubt the role of SEO services in uplifting many cornered businesses. That being said, the capacity of SEO is beyond question. But over the years, SEO has been painted in such a way that it works like a magic wand, and it guarantees you overnight benefits. If you have any such exaggerated perception about SEO, better let go of that. Because it can’t get any further from the truth.

As said above, SEO has proven its metal, but you have to take it as a long term assignment. It is because the Google algorithm does not absorb changes instantly. It takes time to implement changes. Generally, results start appearing in three months, and this is the minimum period.

SEO includes a lot of planning, audits, discovery, and much more in the beginning. So no matter what you do and how many turns and tricks you play, SEO will have its due course of time before translating into your anticipated results.

The ranking is not a metric to measure ROI

So now that you have been brought to the first page, you should take it as a success of your SEO company, right? Wrong. While appearing on the first page is, by all means, necessary but this is a battle only half won. The mere upper ranking is the wrong metric to measure success.

It is all about the traffic. The number of people that are opening up your website, for how long they are staying there and the ratio of conversion, that’s what matters the most. Indeed, you can quickly lose the number one spot if you are falling short of the audience. So unless you have succeeded in achieving significant traffic, SEO is of no use.

SEO is an investment, not expense

We have talked about the costs of SEO in the above passage that it takes decent money. We can’t doubt the fact, the money you spend on SEO could be peanuts compared to its ROI.

About 60 percent of the traffic goes to click the top three websites that show up in the search engine. How about that for an increase in your brand awareness? Imagine how many visitors you can gain by somehow breaking into the top three. Therefore, don’t think of this amount as an expense or unnecessary burden. Avoid being too tight-pocketed in the SEO procedure. The invested money will flow back to you one way or the other.

Indulging in black hat SEO is tempting but terrible

Being competitive is good, but don’t allow the competition to drag you towards the wrong path. Unfortunately, in the face of fearsome competition, many businesses don’t shy away from taking this route known as black hat SEO.

Black hat SEO techniques is an illegal way to improve ranking. These techniques include keywords stuffing, using invisible text, creating fake pages to get more backlinks, and so on. In the past, these practices were quite frequent, but over time, Google has improved its algorithm to stop them.

So don’t be lured into black hat SEO even if somebody boats its success to you. Otherwise, you can well be penalized and deindexed by Google. These threats should suffice to keep you away from this prohibited method.

Fresh content is king

There were days when you could get your site promoted in the search engine without bothering too much about the content. Today, again, due to the changes made by Google in the pattern of its algorithm, the content has become an indispensable component to measure websites reputation. Talking about numbers, 72 percent of marketers call marketing content as the most effective SEO tool.

Make sure that the content should be a quality one. Superior content will have greater chances to be backlinked by other websites which will add to the site’s popularity. Hence, a better ranking. The takeaway message is that don’t count content out of the SEO ammunition – a mistake most businesses tend to commit.

Key takeaway

By now, you must have got the idea that SEO is not done one-dimensionally. It can take many twists and turns. So to cope with such complications, you should be well-stocked about its crucial information in advance. Being well-equipped with the above points, you shall face no problems in hiring and working with an SEO agency.

Guest contribution by Alma Causey, a Freelance writer by day and sports fan by night. She writes about Fashion and Tech. Live simply, give generously, watch football and a technology lover. She is currently associated with Thriveagency.

And: SEO Guide: How To Grow Your Blog With SEO

Resources for your business:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas
Distribution Channels: Types, Functions, And Examples

The post 6 Things You Need To Know Before Investing In SEO appeared first on FourWeekMBA.

View more on Gennaro Cuofano's website »

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Published on July 10, 2019 06:14

Best B2B Marketing Strategies You Need To Use For Your Business

The online marketing industry has changed a lot, and it has replaced the old habits of marketers which are no longer acceptable. This is the time of great new technologies and entrepreneurs looking for new ideas and inventions.

The customers are more informed, and sometimes it may feel impossible to find the right strategy, the one that will work well. As a business owner, you need the best marketing strategies on your side, and you need to be competitive on the market.

While there is a new trending tactic coming out now and then, some techniques are tried and tested, definitely something that works and that you should try.

That is why it is important to push and focus on those strategies that can help build long-term success. It’s not easy to think long-term, however, if you can master the mindset to push on the marketing strategies and distribution channels that have a higher potential for your business model, that is when you’re building a company that is meant to last.

Content marketing

Working with an informed customer means power. Giving information to people is power as well. Content is one of the best things that you could have on your website because it’s your best and primary source of information and communication with your audience. It’s your way of delivering your message, and it’s a motivator for turning visitors into customers.

Your website is an essential part of that because it can be great for showing off your great content. It needs to be quick in loading, the information needs to be easy to consume, and it needs to be valuable.

Having a lot of graphics and videos are not going to load well on all devices, especially on older ones. Make your content more interesting instead of adding interest through heavy files.

SEO

You can also outsource SEO, especially if you think that you are not the best at it. Online marketing relies on SEO, and it’s very important. So, doing it poorly can affect your success. You can delegate this and focus on more important things and things that are more in your area of expertise.

When you are not the best with computers – in the sense that you can use one, but you don’t understand cybersecurity well, for example – you should delegate your tasks to someone great at that.

Outsource to another agency so that you can do what you do best. Delegate your tasks so that you can focus on high-priority things (unless SEO can be part of your core offering, in that case, it makes sense to keep it internal).

Search engine marketing

You can reach more customers through search engine marketing because it’s all about understanding your customers and what they need as well as their habits. Everyone can do this, even small businesses with no problem. Establish an online presence and then help your brand become successful by setting up your search engine ads. It can boost your online productivity by 80%. Adwords is a win-win thing.

Email marketing

Email marketing is a method that works exceptionally well, despite the people who are saying that email is a thing of the past. This is the best way to reach your consumers and it can boost your revenue by a lot.

You can generate more sales while helping your customers be more satisfied with what they are getting at the same time. It makes for the most effective channel for marketing aside from search engine marketing. It has the lowest cost as well, so it offers a generous ROI.

Social Media

Social media has taken the world by storm, and this is precisely the reason why you should get involved if you haven’t already. You can use Facebook, Twitter, Instagram, Pinterest, Snapchat, LinkedIn, and many other social media channels, depending on where your audience is.

You can reach your target audience easily by maintaining a constant and active presence.

Build a community and connect with your users. It’s essential, and it can help you grow your revenue by being involved and personal with your audience.

Online reviews

Manage your reputation as it can either make you or break you. You need to manage your online reviews in the first place. There are reviews on social media and third party sites which are dedicated to reviews.

When someone looks at your business up, they are likely going to see your reviews.

So, you need to make sure that you have great reviews, organically created by your customers. This will make your audience trust you more and buy from you more often.

Key takeaway

Building a successful business model in the long-run implies a relentless focus and emphasis on a few distribution channels that can help your organization to thrive. In this article, we identified a few channels that have that potential. It is now your turn now to act on them!

Guest Contribution by Angela J. Bryant, a successful marketer at Luckyassignments.com and Gumessays.com . She specializes in social media marketing and B2B marketing. Her motto is “What doesn’t kill you, makes you stronger”.

And: SEO Guide: How To Grow Your Blog With SEO

Resources for your business:

What Is a Business Model? 30 Successful Types of Business Models You Need to Know
The Complete Guide To Business Development
Business Strategy: Definition, Examples, And Case Studies
What Is a Business Model Canvas? Business Model Canvas Explained
Blitzscaling Business Model Innovation Canvas In A Nutshell
What Is a Value Proposition? Value Proposition Canvas Explained
What Is a Lean Startup Canvas? Lean Startup Canvas Explained
What Is Market Segmentation? the Ultimate Guide to Market Segmentation
Marketing Strategy: Definition, Types, And Examples
Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
How To Write A Mission Statement
What is Growth Hacking?
Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas
Distribution Channels: Types, Functions, And Examples

The post Best B2B Marketing Strategies You Need To Use For Your Business appeared first on FourWeekMBA.

View more on Gennaro Cuofano's website »

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Published on July 08, 2019 04:15

Facebook Vs Instagram: What’s Best For Your Business

Whether you are a beginner or an experienced marketer, you will prefer to launch a social media campaign with lead generation to boost your audience engagement and brand awareness.

This is because social media marketing is the most accessible way for you to get versatile, and it’s cost effective as well.

Social media platforms are powerful when it comes to sales, engaging targeted audiences, getting traffic to your website, and improving your organic search positions.

Undoubtedly, more and more businesses are including social media as a prior part of their marketing strategy.

Hence, for an active social media campaign, you should know which platform to choose best for your niche to get the best results.

Facebook vs. Instagram: what do they have to offer?

Facebook is a large platform. Since its launch in 2004, its daily user number has grown to 1.47 billion till the mid of 2018. Initially, it was launched to get people in touch, and now it is used to get in touch with the audience through advertising.

While Instagram was launched in 2010 as the home to storytelling, it gained popularity with 800 million users in 2017 globally. Seeing this, Mark Zuckerberg bought it in April 2012.

Hence, selecting a social media platform is tough, both platforms are powerful for marketing, but which suits for you? Let’s figure it out!

1) Brand Engagement

There are around 60 million business pages on, while only 32% of them are regularly engaging their followers. Moreover, 70% of companies are using Instagram for their marketing among 80% of them is followed by a decent amount of users, and 68% engage them with posts and brands regularly.

Hence, Instagram has high brand engagement, while Facebook has a huge number of untapped audiences. If used smartly, both can serve a fruitful platform to generate revenue.

2) Targeting Audience

Hence if you are trying to reach younger lead generation, Instagram might be the best option for you while if your customer lies in the professional segment with a trait of decision making, then Facebook might be the best choice for you. While the middle-aged population can be approached on both of them.

3) Mobile-friendliness & Usage

Facebook may have an edge here because it has a fantastic desktop version with a full-fledged working feature as well as a responsive app that looks as good as on small screens as that on a desktop. Its messenger is also optimized for all kinds of mobile usage. Alternatively, Instagram lacks a good desktop experience. There are a lot of limitations for users on desktop as compared to mobile devices. You can’t upload or edit posts lively.

Hence, Facebook can be useful in this manner for marketers who want to approach a broad audience on multiple devices because 95% of Facebook users access their accounts on their smartphones and only 38% active users on desktops while 9% on tablets.

4) Type of Ads

There’s a variety of ads from video posts to events creation on Facebook, and all can give you great results. Most of them are engaging, giving you a lot of space for creativity. Instagram has four types of ads which give you limited options, but the fact cannot be denied that Stories Ads are better than Feed Ads.

Instagram stories have a 23% higher conversion rate than feed ads and have 78% more clicks when compared to Facebook. This is why stories are versatile to give you a good ground to play.

It is recommended checking every type of ad to suit your campaign and deliver results to make your strategy successful.

5) Cost of Campaign

Social media marketing is a bit costly, despite the platform you use. However, there may be some factors that influence the cost of your campaign. This includes; targeted audience, industry, ad quality, ad objective, bidding amount, and category. Hence you will have to pay as much as you want to buy.

Hence, the cost of social media can be high. However, it is worth it. Both of them will give you a high ROI. To manage the campaign within your budget, you need to smart in terms of ad creation and buzz.

We recommend you to invest in ads that suit your niche perfectly. Also, make sure to create them on purpose. Target the right audience and do add a CTA linked to your website on the relevant page. This will increase your overall traffic, brand awareness, and ultimately, sales.

You can also hire a digital marketing professional with updated trends to take care of your social media campaigns. He /she will help you in multiple ways and will overcome the flaw of you being a beginner in the field. Ask yourself the worth of adding a cost and its possible outcomes on your revenue positively. Don’t be afraid to take the risk and strike with an experiment to get your potential prospect to yourself.

Key takeaway

If you have come to this far, you are now much clear about your choice of the social media platform for your marketing campaign. Both Instagram and Facebook have a lot to offer you with a predictable to actionable high ROI. So you can use both equally if needed. Some ads do better on one while others on the second one. You are the one who can decide what best for you. There are several possible strategies you can use to make ends meet. Good luck!

Guest Contribution by Stella Lincoln, a qualified business consultant having rich experience in customer service and business development. She is currently working as the Business Executive at Crowd Writer. Stella is an excellent academic writer and enjoys reading books. She also owns a business consulting firm since 2012.

And: SEO Guide: How To Grow Your Blog With SEO

Resources for your business: