This article is a guest post from Eric Tarn. Eric is a co-founder of Onepager, a simple website builder which helps individuals and small businesses get beautiful sites up quickly and easily.

When you’re part of a startup, you’re usually working with a smaller team and budget to reach big goals. While it’s tempting to try to do it all by yourself (after all, isn’t that the go-getter startup way?) there may come a time when it’s most beneficial to work with another company to reach your goals.

It’s very likely that another company has developed a product or solution that you don’t have time to, and vice versa. Like the symbiosis between egrets and hippos, partnerships allow two parties to mutually benefit from each other’s work.

At Onepager, we’ve formed two very different partnerships. In our first, we incorporated fellow startup Gumroad’s e-commerce platform into our own; in the second, domain registrar Namecheap.com offered our services to their huge user base. In both cases, the other companies approached us with an initial proposal.

While luck is always part of business, I also think that by communicating our values honestly, both internally and externally, we attracted like-minded companies who were natural partnership fits. And throughout both negotiations, we made sure we were crystal clear on how the partnership would benefit each side.

Here’s how I’ve found working with both a small and large company beneficial to my own, and the reasons why any startup should be open to the idea.

Partnering with a fellow startup

Onepager’s main objective is to help small businesses build great-looking websites quickly and easily. However, since businesses tend to sell things (who would’ve thought?), many of our customers expressed the need for e-commerce functionality. Since we couldn’t address this immediately, we put e-commerce on our roadmap, and had customers link to their PayPal accounts as a provisional solution.

Then enters Gumroad, proposing a partnership in which Onepager would use Gumroad as its e-commerce tool, giving us the functionality we needed, and providing Gumroad with wider distribution. By integrating with Gumroad we were able to address the needs of our customers with a market-tested, user-friendly tool. Here’s how this partnership directly benefited Onepager, and how a similar partnership would benefit you.

1. We pushed out a sophisticated feature quickly

To build the e-commerce functionality ourselves would have taken two of our team members at least 40 hours each. Using Gumroad’s Platform API, it only took 20 hours of work over the course of a couple weeks to integrate everything and offer our customers beautiful e-commerce functionality. Not only had we reached a goal on our roadmap, but we were able to keep focus on other initiatives. And by giving our customers a product they had asked for with such quick turnaround, we demonstrated that we had prioritized their concerns.

2. We saved thousands of dollars

Using Gumroad saved us thousands of dollars in development hours, since a product we needed had already been built. If we had chosen to assign this project to existing team members, it would have taken two people at least 40 hours—a total of 80 hours, which, depending on who you ask, could have cost us $60,000.

Additionally, delaying e-commerce could have cost us thousands of dollars of potential revenue from prospective users for whom e-commerce was a make-or-break necessity. By partnering, we got a useful and elegant product for free, and delivered it to our customers quickly.

3. We worked with people like us

Other startups just get it. When you partner with a fellow startup, you both understand what it’s like to be a small business amongst many hoping to succeed in a highly competitive market. Chances are you entered the field because you’re super passionate about what you do, and working with like-minded people makes the whole process easier.

It’s also very rewarding to see both your company and their company grow. Being invested in each other’s success boosts morale all around, and this sense of kinship only happens when you self-identify with your partner. It makes the whole process that much more exciting because when one side wins, so does the other. Everyone’s in it together.

Partnering with the big guys

When Namecheap first contacted us, we couldn’t believe that such a large company was approaching us (the little guys!). Once we recovered from the initial disbelief, we felt validated to know that such an established company wanted to work with us. It reaffirmed the idea that being honest and forthcoming about our company’s mission attracted companies we were excited about. But besides merely boosting our ego, working with Namecheap has given our company huge advantages that would have been harder to gain on our own.

1. We have the seal of approval

When you’re working at a startup, you know you’re great, but it’s powerful to have a well-known company backing that up. No matter how revolutionary or useful your product is, having a trusted source vouch for you gives people confidence in your purpose. That’s what Namecheap does for us; they let people know we’re valuable. So valuable that they use us for their own customers. This type of reassurance makes people more confident in you, and thus more likely to use your product.

2. We got press you can’t buy

Being linked to a larger company gives you high-visibility press that’s much harder to come by on your own. When we partnered with Namecheap, we wrote a press release, which was either reposted or covered by various news sources. Now visitors on those sites, who we previously had no way of reaching, now know who we are. The partnership also means that anyone who registers a domain with Namecheap is offered Onepager as their site builder, putting us in front of potentially millions of their customers.

3. We gained wider distribution

It can be a struggle to balance lofty goals with a thrifty budget. While you probably didn’t found or join your startup purely for the sake of making money, the reality is that you need it to build your company. So if you can get sales in exchange for offering a product you’ve already developed, it becomes an almost effortless, and hopefully free, way to generate revenue. (Of course you have to get past the negotiation process first, which unfortunately can be lengthy.)

To give you an idea, Namecheap, who boasts a list of over one million users and three million domains, started offering us on their site December 14th, 2012. Since then, our revenue has increased by 50%. That’s high volume sales without much work. Any customer registering a domain is extremely likely to be looking for a website builder, and with the click of a button, they’ll get exactly what they need. That’s like having selling machine that presents our product to an ideal audience 24/7. Compare that to cold-calling, and you can see how desirable this model is.

Conclusion

Partnering with these two companies has allowed our company to grow in amazing ways that otherwise would have taken longer to achieve, or might not happened at all. As I mentioned before, being honest and in-touch with your team and other companies about your mission will help you develop partnerships that reach your goals with smart, like-minded people. If both companies are benefitting in clearly defined ways that directly contribute to their missions, you can rest assured you’re entering a very desirable partnership.

Down the line you might be able to enter partnerships that aren’t so clear cut (like co-branding ones), but in the beginning stages of growing your company, you need be laser-focused and protective of your resources. Partnerships like the ones we’ve formed with Gumroad and Namecheap are the kinds that directly benefit startups, allowing you to continue down your roadmap with more resources and support than you had before.

In this 3 part series I’m running through 13 pre-launch traffic strategies (actually it’s turned into 14) I am using for getting attention and building an audience and a list for my reporting app Informly.

In part 1, I went into detail about my onsite content strategy which forms the backbone for my traffic generation efforts.

In part 2, I went through 6 more strategies including forums, guest blogging, email newsletters, CSS galleries, partners and app comparison sites.

In this final installment I am going through my final 7 strategies.

8. App listing sites

There are a lot of sites that just list and / or review apps. When I launched my beta a few months ago I created a spreadsheet with a bunch of these sites, some general app sites and some mobile app sites and submitted to all of them. Because of the mobile explosion a lot are mobile only so it helps if you have a mobile version if your app (which I do).

The submission acceptance rates are generally pretty low and most will try to get some money out of you to guarantee inclusion. If budget permits you may decide to pay for some of them if they are particularly suitable (I didn’t). But you can get good long term traffic from these sites and you’ll often get picked up on other sites because they’ll see your listing on app sites.

My app was recently added to Cloudli.st (14 visits converts at 7%) without my doing and it was reviewed on Appvita (41 visits converts at 4.88%). These are just a few examples, I’ve also had it added to other sites as a result of my submissions and the overall conversions are surprisingly excellent (61 visits at 6.5%).

I have a spreadsheet of 100 or so mobile app sites, if you are interested feel free to email me if you want it.

9. Startup sites

Similar to app sites there are also loads of sites just dedicated to listing startups. Again if you build a list of these and add yourself to them you’ll also find that others often pick you up naturally. The one I got the most traction from when I initially added my site was KillerStartups.com (over 200 visitors – back before I was measuring conversions).

I also heard recently on Rob’s podcast a mention for http://betali.st/ which looks great and I will be submitting there also.

Often the experience with these sites is that you will get a fair bit of traffic when it first goes up but it will drop off dramatically once it leaves the homepage. This obviously depends on the site, on larger sites your submission won’t stay on the homepage long.

When you launch you’ll also want to look at getting some press from sites like these and other startup related news outlets so you can consider these sites in your “reach out” activities as well (see later on in this post).

10. Twitter / Tweet Adder

This strategy has been my biggest surprise in generating traffic to my pre-launch site. The process is basically:

• Follow a bunch of people on Twitter (you could start by following people who follow your competitors, or people who follow other services you integrate with for example).
• When someone follows you, send them a message thanking them for following you and letting them know about your app.

I used Tweet Adder to automate this process which requires more or less a one off setup and it runs 24 / 7 on my second computer. This is a potentially risky strategy as Twitter doesn’t love this kind of automation, I also use my second Twitter account so I don’t end up following loads of people on my main Twitter account (which kind of kills the Twitter experience).

Over the last 3 months this strategy has sent me 33 conversions out of 364 visitors (9%) putting it into my top 5 referrers by volume and right up there with the highest converting traffic sources. For my time spent (around 20 minutes setup) it is by far the best in terms of return on my time.

11. Podcasting

A few months ago I started a podcast called Web Domination. There have been 18 episodes so far so all up probably around 80-90 hours work across a few months. It’s been a real eye opener to see how much you can get out of exploring a totally different medium. Here are some of the specific things I’ve gotten out of doing the podcast.

• Over 3,000 visits to my podcast posts in around 3 months
• 20,000 episode downloads in about 3 months with episodes ranging from 1,000 downloads per episode up to 5,000 downloads.
• Around 250 podcast subscribers in iTunes and 11 5 star reviews.
• Personal relationships started with some very influential people including Neil Patel, Tim Reid, Tim Conley, Dan Andrews, James Schramko, Alan Branch, Ana Hoffman and more often than not Retweets or shares from my guests.
• Interviews on 2 other podcasts (more on the way).
• Backlinks from well regarded sites in the industry including Internetbusinessmastery.com, lifestylebusinesspodcast.com, tropicalmba.com, Foolishadventure.com, superfastbusiness.com and more.
• I’ve also been asked to present at 3 different conferences (I haven’t accepted but it’s interesting to note that 2 of the requests came from previous podcast guests – podcasting is a great authority builder).

One thing I didn’t do when I started out was really have any kind of strategy for the podcast. As a result I didn’t mention the app in the show all the time and didn’t have any way to benefiting from them visiting my podcast site. I’ve recently changed this by moving the podcast site over to the main webcontrolroom.com domain, adding a message at the start of the show and to all previous shows that mentions the app and I’ll also offer a specific deal to podcast listeners when I get closer to launch.

I was recently in an event in Bangkok where Dan Andrews presented to the whole room a sales pitch for Rob’s product HitTail. Dan’s point was that because he listens to Rob’s podcast each week, he knows everything about his product. While it’s sometimes difficult to measure the impact, podcasting can be extremely powerful.

There’s no telling how powerful the podcast will be long term in terms of my app but it could well be the most powerful strategy of all. Particularly if I get some assistance with the launch from some of these big players.

12. Weekly videos

I didn’t address video in my section on onsite content in part 1 because I was only just starting out with the idea of doing a weekly video at the time. So I’m adding video as a bonus strategy.

Since the first post went up I decided to take a different approach with the videos and they are starting to have a decent impact.

I started out doing a video series called 5 Minute Friday which was supposed to be a 5 minute video with some insights about marketing on the web. In episode 6 however I decided to do something a bit different and use a bit of humour. The episode was called ‘Overnight success – how to go viral’ you can watch it below.

This video was very well received – the chart below shows the impact of my 5 most recent posts and as you can see the How to go viral post is well ahead of the others (the Siri video is only a day old I suspect it will overtake the other blog posts shortly).

As a result I decided to do videos in this style from that point forward. Because it’s so early I can’t really offer too much in terms of results or advice but I have had a few things happen that are notable:

1. My viral video was shared on Facebook by 2 people I look up to with large audiences. It was also played in front of 60 people at a conference I attended.
2. I’ve had some great comments via email and on the site. If you look at the screenshot above you can see there are 15 comments on the viral video (The D logo is the commenting system I use Disqus). This is significantly more than I would generally get on a podcast episode or blog post so the engagement is very high.
3. I know there are people who have seen the videos who wouldn’t have seen any of my other content (I had a comment from Youtube guru Gideon Shalwick for example).
4. They’ve also enabled me to show a different side of myself and I really think they have the potential to spread my brand to a totally new audience. So far I have had over 1,300 watches on youtube. Early days but I think this is a good start.
5. In addition to youtube I’m extracting the audio (which takes a few seconds) and they audio version is syndicated to iTunes. I’m getting 500-600 audio file downloads per episode as well.

One thing I will be doing is installing Lead Player so I can convert better from the videos. At the moment the actual pages where I post the videos are very low in terms of conversions.

13. Social Media

I’m no social media guru and without paying for ads it’s not easy to build a following on social media. One thing that helps enormously is putting out a lot of your own original content. Again particularly with the podcast and the videos, these have resulted in a lot of new followers on Twitter, Google+ and Facebook.

My main strategy with social media at the moment for me is to use it to build relationships and also to share my content. I’ll discuss the relationship side in the next point on ‘Reaching out’. In terms of content I get a lot of traffic through social media and while it converts poorly (under 2%) I think it is probably one of my best sources of new audience members. This is a bit hard to measure but social media is one of the main ways that my content gets discussed by other people and in that sense it’s the main way for me to get in front of new people. Twitter and Facebook are both in my top 10 traffic sources.

Social media is as multiplier for your great content. If you are writing long, detailed useful articles or doing podcasts, or videos etc but have no presence on social media, they will be unlikely to get any attention. So if you are running with a heavy content strategy then social media is a must.

There are many more sophisticated things you can do with social media depending on your budget and available time and expertise. For me, the bare minimum is being active on Facebook (page, group and personal account), Twitter (personal and app account) and Google+, sharing my posts on each network and other useful posts and actively engaging with others, encouraging discussion, thanking for re-tweets etc.

I also use the post impact chart shown above to get a feel for what content is having the most impact on social media which points me in a direction for future content.

14. Reach out

My reach out strategy is a long and at times laborious set of tasks. When I launch in a few weeks time I want to get some attention and I want important people to know what I’m doing. If I do nothing now and just send a bunch of cold emails on launch then I’m not going to get noticed. So I’m taking a structured approach to it spending a bit of time each week on reaching out.

The specific steps are:

• Building a Google doc of influential people in my space (these include some international and local press contacts, influential people in the startup / web app world and bloggers and sites relating to my main target audiences (bloggers, small business owners, internet marketers etc).
• Spending a bit of time each week working through the list, finding their sites, their Twitter handle’s, their blogs, any communities they are part of etc.
• Engaging with them in some way such as retweeting their posts, commenting on their blog, engaging with them in the communities they are part of (if they have their own this is by far the best way). I’ll write down everything I did in the spreadsheet and if I got anything back from the person (if you have a decent memory you probably don’t have to do this).
• Help them out if at all possible, little things like pointing out broken links on their sites, leave them an iTunes review or if they ask for help with something – jump on it. A few months ago when I first started, Jason Calacanis put out a tweet asking for tips on free app review sites. I sent him my list and had a quick email exchange about my app. A few months later when I noticed he was looking for guests for an upcoming Ask Jason episode I volunteered and reminded him about the exchange last year. This lead me to being on episode 297 and getting me and my app in front of 100,000 people. Hopefully I’ll have more stories like this closer to launch.
• After 4-5 weeks of doing this, I’ll choose whichever journalist seems to be the most relevant and offer them an exclusive for a story on the launch. Again it’s early days so time will tell but hopefully when it comes time to launch this strategy will allow me to get some press.

In addition to journalists I am building a list of bloggers who talk about similar topics that my audience is interested in and I will reach out to them the week before launch with a bit of information on the app. I am hoping this will result in me getting some mentions on blogs when I launch.

What is your number 1 traffic strategy?

One of the main points to take out of this is I’ve arrived at this list of 14 things by testing many many more and working out what works for me. It’s an ongoing process as I get more and more feedback from people and continue to monitor the data on what is working.

With the right setup you can learn a lot from doing different tests and then over time refining your approach to focus on the ones that work best for you. With that in mind I’d love to hear from you. Let us know in the comments below what your number 1 traffic strategy is.

I’d also be happy to answer any questions relating to this article below.

Dan Norris is the founder of Informly a free tool that gives web entrepreneurs a simple report on the performance of their business. The app talks to popular services like Analytics, PayPal, Xero, Mail Chimp etc and simplifies the information into a 1 page live report available via the web or mobile.

In this 3 part series (part 1 here) I’m running through 13 pre-launch traffic strategies I am using for getting attention and building an audience and a list for my web app Informly. In part 1, I went into detail about my onsite content strategy which forms the backbone for my traffic generation efforts. In this part 2 I’m going through 6 more strategies.

2. Forums

I’ve always been fairly active in forums frequented by my target audience (generally tech savvy small business owners). Rather than going into a lot of forums and posting an intro thread, I tend to build up a decent presence in only a few forums.

Once you’ve built your chops, you’ll get support from other members, leniency from the forum moderators and additional benefits (like links in your signature).

I have a weekly task to spend an hour going through and either answering people’s questions or posting original content to forums I participate in. The latter seems to work better for me because a lot of people hang out in forums to answer people’s questions, not a lot take the time to produce well thought out original content for a forum. I also make sure I’ve got a compelling call to action in my signature and it links to my site via a trackable link.

Here’s an example of a thread where I’ve posted some original content. You can see from the replies that people appreciated it, thanked me, some even signed up to test the app.

You can also see that I wasn’t afraid to mention my app in the thread which is something I encourage for onsite content, forums and guest posts. With forums this can get a bit murky and it’s worthwhile checking the forum rules first before deciding to break them . If you build up your presence on the forum often you can make your own judgement on what is valuable to the audience and that will be respected by the moderators. If it’s not then generally the worst case is the post will be edited or removed.

The content for posts like this come very easily once you are in the habit of creating epic content for your own site because you can just post simplified versions of the content in the forums that are more relevant to the audience.

In addition to free forums I also participate in paid forums which I find an excellent (probably the best) place for building deeper relationships with people and advocates for my app. Since this post is about free methods though I won’t go into that more here.

3. Guest blogging

Guest blogging is a big part of my traffic strategy but there are a few tricks here. Check out these results from 2 guest posts I did on Problogger. Both had very similar traction on the site (40-50 comments / 270-300 tweets).

10 vital stats for blog health Visits: 45, conversions: 0 (this was for beta user signups)

Are you wasting your time guest posting Visits: 156, conversions: 35 (for email signups)

The main difference between the posts is the first one is a generic list post and doesn’t reveal specific information about my business. The second one does which means it mentions my app and educates the reader on what it is. So at least at the end of the post the readers know what my app does and they have some interest in heading to my site for a look. I also find posts where I’m talking about conversions or aspects of what I’m doing on the site will send me more traffic because people will be curious to see the site – some of these people will inevitably opt in.

The other strategies I recommend in guest posting are covered in the pro blogger post so I won’t repeat them here but despite a shaky start, guest posting is turning into a great strategy for me. Our of all of my strategies it is my number 1 source of conversions (in the last month).

4. Email newsletters

Most people will tell you that your email list will convert better than anything else. The truth is it depends on the list. I have 2 email lists (other than the list of beta testers):

• One that I have built up from my blogging efforts and writing ebooks and resources for small business owners over the past few years (using a free ebook as opt in bait).
• Another one that I am building as a pre-launch list for the Informly app (no opt in bait).

The people who signed up for my first list were interested in my content. Whereas the people who signed up for the second one are interested in the app. In terms of conversions I haven’t sent an offer to the launch list yet (I will do when I launch) but I suspect that will convert very well. My other list however converts very poorly. I send out useful information to this group but the information doesn’t drive people to sign up for the app.

I chatted to a few people about list building including Neil Patel and James Schramko and came up with my own strategy for my app (particularly focused on the launch stage).

Tip 1 – Build a list of people interested in the app

If you are just writing useful content and you are asking people to sign up for more content then you are building a list of people interested in your content. This is fine once you have launched but before you launch you want to get people who are interested in your app to increase signups on launch and help with the momentum.

So for my 4-5 weeks leading up to launch my site is very simple with no clutter and a clear opt in. This opt in is getting people excited about the app and asking them to opt in to be notified first when it launches. This goes into the footer of every blog post and every page on the site. Note I’m also experimenting with an opt in for my content in the sidebar on blog pages. What I will probably do when I launch is show the content opt in to current users (who are logged in) and show the app registration to all others:

Tip 2 – Make sure your content is about your app

I mentioned this above in the onsite content section and it’s also important here. If your articles talk about your app, use screenshots etc and generally build interest throughout the post then readers will be much more likely to opt in after reading it. I’d suggest either a locked opt in that moves down the page as the user does or a second post footer opt in box (I’m using WP Post Signature and doing the latter).

I’m not saying make every post about your latest feature – that’s a terrible idea. Follow the epic content notes in part 1 of this series and create awesome, meaningful content for your audience and use your app / site as the test case or where it’s relevant in the article. For an example check out my recent post on Actionable Analytics.

Tip 3 – Inform and educate the list

I’m keeping my list in the loop before I launch. I let them know about major new features (not all features) and I’ll be sending them some information on the importance of tracking metrics and some examples of people getting good results from the app. This will warm them up prior to launch.

After launch, my strategy will be a little different but prior to launch my goal is to get 1,000 people signed up to my launch list (I have around 450 so far). I want these people to be very keen to try the app when it launches and tell their friends to help with the momentum of launch.

If you have already launched I would encourage you to check out what KissMetrics are doing, particularly their emails. They do an exceptional job at educating you, building on your problems and positioning their app as the solution.

5. CSS Galleries

Most web startups will be pretty heavily into design so once you get your landing page up, submit it to a bunch of free CSS directories. You can either go through a list of popular directories yourself and submit manually or pay a small fee to be added to them. At CSS Gallery List you can get links to all of the sites or pay them $20 to do it for you (have a week off coffee and it’s still free).

I did this when I first put my site up and got quite a bit of traffic from the sites that included it. I’l be doing it again once the full re-branded site is launched soon. If you have a really exceptional design you can potentially get a lot of traffic from this.

CSS galleries are one of my top traffic sources however conversions are typically quite low. For a  site with a nice design though it’s a very quick, cheap way to get some attention (and particularly good if your app is useful to web designers).

6. Partners

Partnerships with other apps is a potential goldmine if you can get the mix right.

My app integrates with a number of other apps (Xero, PayPal, MailChimp, Aweber, Analytics etc). Some of these apps provide resources for integration partners and I’ve found the traffic I get from these partners is phenomenal – in some cases up to 5 times the site average!

Not only that, these directories are actually a big referrer of traffic volume. Xero.com is one of my biggest individual site referrers of traffic.

So every time I integrate with a new app, I’ll see if they have a partner directory and if so I will:

• Add myself to it
• If time permits, create a specific landing page for the app – here is my Xero landing page
• Look to see if they do anything else for integration partners. Xero have a community that I participate in, they have a specific API team Twitter account (which I’ve engaged with and had stuff re-tweeted which has in turn been re-tweeted by the main Xero account), they also have specific events for add-on partners that I’m looking into as well. They have also offered to do a blog post about my launch and they have given me a quote to include in my press release!

Other companies are keen to get their brands out there too and if they have your audience already they are potential gold mine if you play your cards right.

Even if your partners don’t have an integrations directory make sure you reach out to them and say something nice – Twitter is the best place to do this and sometimes you’ll be retweeted to their audience. I do this when I start working with a new partner and once we launch the integration.

7. App comparison sites

There are sites out there that will compare apps to each other. One is Alternativeto.net but there are quite a few of them. You can either add yourself to these or you might find you just get added naturally as you get more exposure.

My app has a free version and most of the incumbents are paid only. So being on these comparison sites as a free alternative to a paid app, sends some great traffic my way. Here is a competitor’s listing on Alternativeto.net which shows me as the only free alternative (thanks in advance for the like).

These sites not only send a lot of traffic but they also convert very well. Incredibly, my conversion rate from Alternativeto.net is over 10%, way above my site average and they are in my top 5 top referrers by volume. I wouldn’t have expected that to be the case.

Build yourself a spreadsheet of sites like this and submit your site to them either before you launch or after (I’ve submitted to a few already and will be doing some more after).

What do you think?

Feel free to let me know below what you think of these 6 traffic strategies. In part 3 I’ll be wrapping up with my final 6.

Dan Norris is the founder of Informly a free tool that gives web entrepreneurs a simple report on the performance of their business. The app talks to popular services like Analytics, PayPal, Xero, Mail Chimp etc and simplifies the information into a 1 page live report available via the web or mobile.

Part 1 (of 3) – Introduction and Onsite Content
Experienced entrepreneurs will tell you that no traffic is free. Even if you aren’t paying money for something you are paying in time (which is worth something) and once you try to scale it, you will have to part with cash.

But sometimes they forget what it’s like when you get started. The reality for most bootstrapped web startups is that you have time – but you don’t have money. And even if you did, it’s often very hard to make paid traffic like Google AdWords work.

To get the momentum going we have to rely more often than not on a bunch of free strategies.

My web app, Informly is a simple live dashboard that reports on your business performance showing charts from a number of services (MailChimp, Analytics etc). I’ll be launching it in a few weeks and over the last few months I’ve been working on a bunch of traffic strategies designed to build interest, develop an audience and launch with a decent pre-launch mailing list.

Over the course of 3 articles I’ll present 13 free traffic strategies that I am using to drive traffic to my site pre-launch. I’ll also include specific information on visits, opt ins, conversion rates etc where possible and what worked and what didn’t.

In this part (part 1) I’ll be addressing onsite content which is by far the most important part of my traffic strategy.

Start with Google Analytics Custom Segments
One note before I get into the details: If you are going to follow a structured approach like this then it’s imperative that you use Google Analytics to track progress so you can learn over time which techniques are working.

Because a lot of these strategies don’t lend themselves to use trackable URLs you will need to set up custom segments to get usable high level data on the traffic and the conversions for each of these strategies.

If you aren’t familiar with custom Segments in Google check out my post Google Analytics Advanced Segments. Here are 2 charts from Informly which show my last 30 days worth of traffic from my top 10 traffic strategies.

Traffic strategy 1. Onsite content

I live and breath onsite content and I believe it’s a huge opportunity for startups because it’s often ignored or at least misunderstood. Too often startups will focus 100% on the product and won’t be engaging with their potential audience enough prior to launch. Content is the easiest way to engage with new people online and it’s the backbone of my traffic strategy.

The main thing here is to work out who your audience is and create some useful content for them.

In my case the people who use my app are web savvy small business people and online marketers. These people use other SAAS platforms heavily and are eager to save time by having all of their stats in the one place. But importantly they are also looking for simpler ways of understanding complex data (particularly the small business crowd) and generally any information that will help them succeed online.

My onsite content strategy involves having an interview podcast (which I’ll address separately) a blog, a weekly 5 minute video and a weekly email.

Here are 6 tips that I can share on what to think about when formulating your own onsite content strategy.

1. Don’t just write about your niche
I’ve got news for you. What you are doing is probably boring. I know what I do is – Analytics and data is boring. If I was to constantly put content out about data I wouldn’t even want to read it myself!

When I spoke with Neil Patel from Kiss Metrics on my podcast he told me you don’t have to create content purely about your app’s particular use, just create content that is useful to the types of people using your app. If you check out the Kiss Metrics blog for example it’s not all content about metrics, it’s all sorts of useful content for tech savvy website owners.

Caption: For inspiration on how to create epic onsite content, check out the KissMetrics blog they are the best of the best.

This makes it a lot more fun and allows you to indulge a bit in your broader interests. So I write articles on cloud computing, small business, web marketing, content marketing, SEO as well as business intelligence, analytics etc.

2. Create a lot of content
Even if you know nothing about SEO, the act of creating content alone can easily be enough to make Google your biggest referrer of traffic.

My site doesn’t rank for any big keywords, I’ve only been actively creating content on it for a few months after all. But traffic from Google (even when I exclude anyone searching for my brand keywords) is by far my biggest referrer (recall the charts above). I’ve created around 40 posts on my site in the last few months and I’m already getting traffic from around 130 keywords a month. In my last business I created over 200 posts over a few years and in a typical month I would get traffic for 700-800 keywords.

This is mostly a result of creating content and mentioning a lot of words. It’s long tail traffic and it’s free, long term traffic that comes when you create a large amount of text content. The downside is while it’s at the top of my list of traffic it’s towards the bottom when looking at the conversion rates. So I wouldn’t rely on this alone.

3. Create epic content
As I mentioned above, the long tail traffic is a big source of traffic but it converts poorly. In addition it doesn’t really assist with any of your other strategies. When you create epic content it will do a lot more including:

• help build your social media following because people will be drawn to follow your advice.
• help with your “reaching out” efforts (more on this in parts 2 and 3) by building a body of work respected by influential peers.
• help build your authority over time to a point where people send you traffic via word of mouth, social media, forum mentions etc.

The content that works for me is longer, detailed posts about a specific topic. My post The simple guide to content driven SEO is an example which includes a lot of the things I like to do with my content such as:

1. It’s long and detailed (2,000 words)
2. It’s very specific. It addresses a specific topic and includes step by step instructions on how to undertake the necessary SEO tasks.
3. It includes lots of images. I love specific step by step instructional stuff because it lends itself well to screenshots which can be created easily and for free. Another option is original illustrations or pictures which you might be able to leverage somewhere else like Pinterest.
4. It attempts to simplify a complex problem. If you can take a complex topic that already has a lot of content written about it and simplify it for the audience, this is something that people love. I don’t try to become an expert in one particular area (Analytics, SEO etc) I try to distill the complex stuff that is out there into a specific, simple, actionable post and aim to become an expert in simplifying complex problems. My audience appreciates this and there is a good chance your audience will too.
5. It uses my business / app as an example. This is critical and is something I’ll talk about in the guest posting section as well. You want to make sure the reader knows who you are and they have some desire to opt in to your content or your app / business when they finish the post. Remember a lot of traffic will come direct from Google and may be seeing your stuff for the first time. The easiest way to gain their interest while still writing a post with 100% value for the reader is to make the post about your business / website etc.

I’ve also started doing a weekly video which is being very well received. The more mediums you can employ the better. I am using text and images for blog posts, audio for podcasts (supported by transcriptions) and video (converted to audio as well).

4. Utilise a range of mediums
So far on my site I’ve done:

• text articles
• info graphics
• weekly 5 minute videos, and
• an audio podcast.

I find some people love the podcast, others respond well the blog posts and I’m getting a whole new audience through the videos. I’m such a huge fan of podcasts that I’ll address this separately in part 2.

A lot of people assume that creating great content is about writing blog posts. In reality a lot of people don’t want to read blog posts. I watch more videos and listen to more podcasts than I read articles. And mediums like audio and video lend themselves very well to building trust and authority – much more so than writing blog posts.

5. Build your social presence
Onsite content and social media go hand in hand. Social channels like Twitter / Facebook, forums etc will be the main channel for promoting your posts to a new audience so if you don’t plan on investing time on them then you won’t get much return for your content efforts.

I go into this in a bit more detail in the social media and forum sections individually in parts 2 and 3 of this series.

6. Ignore most SEO advice
Here is my growth in backlinks over the last few months:

How have I achieved this growth? By doing zero back linking and ignoring pretty much every piece of SEO advice I come across. And the most recent Google Algo change – zero impact on my site.

SEO can be extremely complicated, particularly in the last few years. My last business relied on ranking for high authority keywords to bring me the vast majority of my new business. This is quite a risky situation to be in and it also requires that you know a hell of a lot about SEO (and I’m not talking about optimising H1 tags here).

I believe that long term a far better approach is to not worry about the specifics of SEO at all. Spend your time in more productive ways and focus on creating epic content and getting the word out about it.

*Note if you are a legit SEO guru then obviously ignore my advice here – this is written for the typical technical / product focused web startup founder. If you feel you can build an advantage through SEO then by all means go for it. But I’ve found a lot of people think they are SEO gurus but few really are.

Ignoring SEO advice means:

• No longer spending time learning about the latest Google changes. One thing will never change with Google and that is if you put out exceptional content and do a good job sharing it, you will be rewarded.
• Avoid elaborate on-page optimisation. Just do the basics and focus your attention elsewhere. Forget about keyword density, excessive internal linking, obsessing over optimised images etc. This stuff only has marginal benefit and the psychological overhead of having to be an expert in it is not worth it.
• Don’t do any off-page SEO (link building). This stuff is now trickier and riskier than ever. Forget about it, I have.

Here is what I think is a much better long term strategy for the typical web startup.

• Focus on what you are good at (in my case that is creating content on my topic of choice,  and building a great product).
• Create exceptional content that is good enough for people to naturally link to. If this isn’t something you are good at then get others to create the content like Kiss Metrics often does.
• Think long term. What will your site look like 2 years from now. Will it be ranking for 1 keyword with thousands of dodgy back links to your homepage waiting to be slapped by Google’s next algo change? Or will it be a well known resource in your field, filled with epic content that can effortlessly outrank your competitors for every new blog post you write (Make Grange, as James Schramko would say).
• Follow basic on page SEO for your site as a whole. In WordPress this is normally as simple as making sure your theme is using the right tags in the right places, is coded with clean HTML / CSS, using a sensible permalink structure (just postname is fine) and you have something like YOAST SEO installed to help with the rest – If you don’t know what I’m talking about here then you do need to read up on basic SEO with WordPress, if you do then you know enough.
• Make sure each post targets a specific keyword by searching for terms that you know you have a chance at ranking for. Forget about the big ticket keywords that you have no chance of ranking for in the short term. For me, I look for searches getting around 100 exact monthly searches and I don’t worry about looking at competition or how the front page of Google looks. Make sure your article name includes the exact keyword (which means your URL and title will to). You can tell YOAST what specific keyword you are targeting all via the post page in WordPress, aim to get the green light from YOAST and that’s enough.
• Monitor where you are ranking for each new post you put out. My app Informly enables you to do this for free or you can use a dedicated rank tracking tool like SERP Fox. The main reason to do this is not to obsess over where you are ranking but to learn over time which keywords work well for you and which ones don’t so you can make more educated choices about what to target going forward.

All of the above is very easy to do, if you get in the habit of doing it for each post you write, it’s only going to add a few minutes to your process of creating content. You don’t need to really know anything about SEO to do it, you just need to learn over time what’s working and what’s not.

Some posts will hit and some will miss from an SEO point of view. But if they are all great posts, they will all help towards building the authority of your site over time and building back links and social media signals which will increase the rankings for all of your keywords long term.

7. Simplify your blog and optimise for conversions
Finally, I would try to avoid the temptation to fill your site with every latest and greatest widget. All I have on my blog is the opt in on the right (modelled loosely off the Kiss Metrics blog), my social networks and social sharing icons on the left. You want your readers to opt in, either to get more content or sign up for your app – most other widgets are distractions.

Parts 2 and 3

In parts 2 and 3 I will be going into more detail on 12 other traffic strategies such as podcasting, social media, forums and more.

Share your success with onsite content

With that in mind I’d love to hear from you. Let us know in the comments below whether you are using onsite content as a traffic strategy and how it’s working for you. I’ll see you in part 2.

Dan Norris is the founder of Informly a free tool that gives web entrepreneurs a simple report on the performance of their business. The app talks to popular services like Analytics, PayPal, Xero, Mail Chimp etc and simplifies the information into a 1 page live report available via the web or mobile.

This artice is a guest post from Joel Gascoigne. Joel is is the founder of Buffer, a smarter way to share great articles with friends and followers. He Tweets at @joelgascoigne and writes regularly on his blog about startups, life, learning and happiness.

I was speaking at an event last week about the lessons I’ve learned along my startup journey, mostly focused on my recent experience of founding and growing Buffer. The first lesson I talked about was how being open with your ideas, and vocal about sharing progress can put you in a much greater position over time because you gradually grow a following and audience to use as a launchpad for future ideas.

After I finished my talk, someone in the audience asked a fantastic question, a concern they had which I think many aspiring startup founders have too: when being open and vocal about your idea in the early stages, isn’t there a danger someone will take the idea and run with it, and kill your startup in the process?

I want to share my personal experience of competition and talk about three specific reasons I now believe keeping your idea quiet could actually be hindering progress to success in a large way.

My “genius” idea turned out to be unoriginal

Before Buffer, I had a previous startup which I worked on for one and a half years. It wasn’t as successful as I would have liked, but it is where I learned a massive amount which enabled me to get traction for Buffer much more quickly.

The idea of my previous startup was that it would be your business card in the cloud. The benefits are that you would never run out of business cards (because you’d give them out digitally) and that your contact information would always be accurate and up to date (you can change your phone number after you’ve already given someone your card). My co-founder at the time, Oo Nwoye, and I thought this was a pretty damn good idea. We were hesitant to talk too much about it before we could launch the first version.

Once we had the idea, we needed a name. After countless discussions and lots of bad names, we decided on the name “OnePage”, which we were very happy with: it captured the concept (one page for all your contact information and social networks) and it was short and “speakable over the phone”.

After we decided on the name OnePage, we snapped up 1page.me as the domain name for the startup. After we grabbed 1page.me, we figured that some would try to access us through onepage.me, and we realised someone had taken that domain. We reached out to the person and tried to buy the domain, but they told us they had plans for it.

So we continued on with our idea, deciding we didn’t need onepage.me, and choosing to use myonepage.com as the domain instead of the more obscure “.me” domain. We started to prepare to launch a couple of months later, and we still hadn’t told many about our idea. Then, we found a Twitter profile with the username “onepageme”. We checked it out, and we were very shocked. The tag-line was “All of you, at OnePage.me” and the idea was almost exactly the same as ours. The guy we’d reached out to was behind the account, and he was based in Australia.

What had happened was that someone on the other side of the world to us had the exact same idea as us, without ever knowing we were working on the idea. Not only that, but he’d thought of the exact same name.

This really affected us, we thought it was a massive problem, but it was completely misguided: in the end, onepage.me never even launched. The landing page is still live, and you can see their last Tweet was almost two years ago.

This experience taught me one of the most important lessons of my startup journey: that ideas are cheap, and that execution is all that matters. Most of the time, someone else has the same idea as you and is working on it right now. If no one has the same idea as you, then you’ll want to think hard about why that is.

Startups: unknown solutions to unknown problems

Startups can usually be differentiated from other businesses because by the fact they have little validation. Whereas a more traditional service business might create websites for someone, a startup wants to innovate and hit upon something which solves a problem for people and can scale incredibly fast. With this element of innovation, it means that startup ideas are usually full of assumptions. The problem being solved is not validated, and the solution is not validated either. You’re not building websites for people like countless other small businesses now.

Therefore, as a startup, you need to be laser focused on validating these assumptions as soon as possible. You need to reach out to people and figure out if the problem you believe exists is a problem people actually have. Then you need to figure out if the solution solves that problem for people.

If you keep your idea secret, you’re delaying this validation, and as time goes on without the idea being out there, there’s an increasing danger you are spending time on a problem which doesn’t really exist or a solution which doesn’t solve a problem.

The idea thief has no passion

The best startups come from a personal need, and are driven by passion. Dennis Crowley founded a startup called Dodgeball before Foursquare which was also a location based social network. He has clearly been very interested about the location space for a long time, and has thought a lot about the problems in the space. He’s passionate.

Even if you don’t spend as long as Dennis Crowley thinking about a problem and space, I’ve seen a general trend that really successful startup founders are super passionate about the space they’re in. It goes beyond wanting to make money. Therefore, if someone was to simply steal an idea, they would lack this passion, and I believe they would make little progress before they give up.

Educating users about your new idea

A component of many startups is that they are new ideas and require some kind of change of habit, or push an idea beyond its current form or scope. People were used to posting on social networks, but not limited to 140 characters and with higher frequency, sharing more openly than they would before. This required a change of habit. In a similar way, Dropbox is something where generally users don’t realise they need the product until they try it. Word of mouth is vital for Dropbox.

With these kinds of startup ideas, if we keep them secret, we’re delaying educating our users about this habit change. The most interesting thing here is that any new competition out there is probably more beneficial to us than if it didn’t exist, because they can help to educate users and make them aware of this new way to do something. Apple’s Reading List is great for Instapaper and Pocket because it educates the masses about the problem, and these startups can simply build a great solution to the problem.

Have you ever felt uncomfortable about sharing your startup idea? I’d love to hear from you in the comments!

Photo credit: Kent Yoshimura

Find Joy in the Terror of Starting Something New - The terror of firsts is alive and well. We’re all scared of doing something for the first time. You have to get over it and do it anyway.

Talking to Customers: What a Concept – Cool post by Startup Success’s Pat Foley on how to start talking to customers before you build your product.

Fix the U.S. Patent System – via @spolsky, “The EFF’s new position on software patents is very good; if these rules were adopted, it will eliminate patent trolls.”

From programming to business: Lesson 0 – Some good takeaways: don’t ignore sales and marketing, business is about people, and you can’t be good at everything.

About 8 months ago I acquired a small startup called HitTail. You can read more about the acquisition here.

When the deal closed, the app was in bad shape. Within 3 weeks I had to move the entire operation, including a large database, to new servers. This required my first all-nighter in a while. Here is an excerpt of an email I sent to a friend the morning of September 16, 2011 at 6:47 am:

Subject: My First All Nighter in Years

Wow, am I tired. Worst part is my kids are going to be up in the next half hour. This is going to hurt

But HitTail is on a new server and it seems to be running really well. Feels great to have it within my control. There are still a couple pieces left on the old server, but they are less important and I’ll have them moved within a week.

I’ll write again in a few hours with the whole story. It’s insane how many things went wrong.

What follows is the tale of that long night…

The Setup
I acquired HitTail in late August and it was in bad shape. I had 3 priorities that I wanted to hit hard and fast, in the following order:

1. Stability – Before I acquired it the site went down every few months, sometimes for several days on end. To stabilize it I needed to move it to new servers, fix a few major bugs, and move 250GB of data (1.2 billion rows).
2. Plug the Funnel – Conversion rates were terrible; I needed to look at each step of the process and figure out how to improve the percentage of people making it to the next step.
3. Spread the Word – Market it.

The first order of business was to move to new servers, which involved overnighting 250GB of data on a USB drive to the new hosting facility, restoring from backup, setting up database replication until the databases were in synch, taking everything offline for 2-3 hours to merge two servers into one, test everything, and flip the switch.

If only it were that simple.

Thursday Morning, 10am: An Untimely Crash
We had planned to take the old servers offline at 10pm pacific on Thursday, but around 10am one of them went down. The server itself was working, but the hard drive was failing and it wouldn’t server web requests.

I received a few emails from customers asking why the server was down and I was able to explain that this should be the last downtime for many months. Everyone was appreciative and supportive. But I spent most of the day trying to get the server stay alive for 12 more hours, with no luck. Half of the users had no access to it for the final 12 hours on the old servers.

Thursday Afternoon, 2pm: Where’s the Data?
We had meticulously planned to have all the data replicated between the old and new database to ensure they would be in synch when we went to perform the migration. But there was one problem…

Replication had silently failed about 48 hours beforehand, and neither myself or my DBA noticed. So at 2pm we realized we were literally gigs behind with the synchronization. With only 8 hours until the migration window began, we zipped up these gigs and started copying them from server to server. The dialog said it would take 5.5 hours – no problem! We had 2.5 hours of leeway.

Thursday Night, 8pm: Copy and Paste
My DBA checked on the copying a few times in the middle of his night (he’s in the UK), and it eventually failed with 10% remaining. At that point we knew that even if we got everything done according to plan we wouldn’t have data for the most recent 48 hours. Grrr.

In a last ditch effort to get the data across the wire we selected the info from a single table that changes the most and copied it to the new server, which took only around 5 minutes. The problem was that this data should have been processed by our fancy keyword suggestion algorithm and it hadn’t been.

Friday Morning, 1am: Panic Sets In
It was about this time I began to panic. Trying to process the data using existing code was not going to happen – the algorithm is written in a mix of JavaScript and Classic ASP, which couldn’t be executed in the same fashion that it is when the app runs under normal conditions. And it wouldn’t run fast enough to process the millions of rows that needed it in any realistic amount of time.

So I did one of the craziest things I’ve done in a while. I spent 4 hours, from approximately 11pm until 3am, writing a Windows Forms app that combined the JavaScript and Classic ASP into a single assembly – with the JavaScript being compiled directly into a .NET DLL that I referenced from C# code. Then I translated the Classic ASP (VBScript) into C# and prayed it would work.

And after 2 hours of coding and 2 hours of execution, it worked.

Friday Morning, 3am: It Gets Worse…
During this time the DBA was trying to merge two databases – copying 75 million rows of data from one DB to another. This was supposed to take 3-5 hour based on tests the DBA had run.

But it was taking 20x longer. The disks were insanely slow because we were running during their backup window and some of the data was on a shared SAN. By 3am, when we should have been wrapping up the entire process, we were 10% done with the 75 million rows.

By 6am we had to make a call. It was already 9am on the East Coast and customers would surely be logging in soon if they hadn’t already. I was exhausted and at my wits end with the number of unexpected failures, and I asked my DBA what our options were.

After some discussion we decided to re-enable the application so users could access it, but continue copying the 75 million rows, but with a forced sleep so the app could run with surprisingly little performance impact. It took 4 days for all of the data to copy, but we didn’t receive a single complaint in the meantime.

Lucky for us, no one noticed. And the app running on the new hardware was 2-3x times more responsive than on the old setup.

Friday Morning, 6:45am: Victory
After some final testing I logged off at 6:45am Friday morning with a huge sigh of relief. I dashed off the email you read in the intro, then headed to bed to be awoken by my kids an hour later. Needless to say had a big glass of wine the following night.

Building a startup isn’t all the fun you read about on Hacker News and TechCrunch…sometimes it’s even better.

You Suck at Email – Great slide presentation on how to properly send and manage email. Actionable tips beyond the “inbox zero” stuff you typically hear.

The 100 Blogs You Need In Your Life (if you want to leave your job) - Sweetness…and this very blog made the list (#69).

Startup 101: Look Before You Leap – New article series by Patrick Foley of the Startup Success podcast.

Compare Venture Capital Firms - A new comparison engine from Find the Best.

Are you a PHP, Linux or WordPress Minor Deity? Apply here. - WPEngine is hiring (disclosure: I’m an investor). If I wasn’t so busy with HitTail I would apply, but I’d never make the cut.

Special thanks to Michael at LattePerDay for his new purchase page designs for my book website.

This is final installment of a 3-part series covering my acquisition of HitTail. I’d originally planned on a 2 part series, but when parts 1 and 2 went to the top of Hacker News I received so many questions that I decided to add this prologue to answer them.

Every question below has been asked via email, comment or Twitter over the past four weeks.

Could you talk a bit about the diligence you did during the acquisition? How long into the discussion before you commenced diligence? What did it entail and how did you verify what was told to you?

Due diligence is the most important part of the process because it dictates whether you should move forward with the acquisition, and at what price.

As such, due diligence consumed the majority of the two-month negotiation period between myself and the seller. I asked for all of the following information:

• Monthly revenue
• Monthly expenses
• Number of paying customers
• Number of free users
• How many customers cancel each month
• Monthly unique visitors
• Number of trial sign-ups per day
• Number of new paid accounts per month

The problem with the list above is that it’s long so as a buyer you need to take it slow and not blast the seller with it all at once. Once the seller indicated a sale might be possible I asked for the first 3 from the list above, asked for a few more in a subsequent email, and so on.

In addition, only some of the information above is verifiable, and we did that with screen shots and exports from Google Analytics. At some point I had to trust the seller, and I gained trust that she was legitimate fairly quickly after learning more about her background, and Skyping with her.

Bottom line: it’s pretty easy to come up with a laundry list of things to ask for. The trick is narrowing that list to the point that the seller will tolerate it. I’ve had several negotiations end with the seller indicating they don’t have the time or desire to dig up all of the data I’ve asked for. At that point you have to make a decision to reduce your list or shut down negotiations.

The point of the above data is to construct a picture of how the business works, where new customers come from, and calculate a customer lifetime value (LTV). The LTV number was critical for me, as it dictated what kind of marketing approaches I would be able to use and still turn a profit.

Details on which costs you chose to attack first (technical debt vs. free subscriptions vs. UX) is something all web businesses should think about.

HitTail had some stability issues when I acquired it – it was running on old hardware and drives would fail every so often. So my priorities from the start were in the following order:

1. Stabilize
2. Plug the marketing funnel
3. Spread the word

Stabilization
Stabilization involved moving all code and the 250GB database to a new server to ensure high uptime and improve performance. This step took was more involved than I had originally anticipated, but with the help of a contract DBA we planned, prepped and moved during the first 3 weeks I owned it.

During this time I was also fixing bugs like crazy: I fixed or removed around 25 broken features from the app. Developers in the audience will cringe, but for speed’s sake, and because the app was already limping along, I made all changes live on the server in the production environment. I’m thankful to be past that stage.

In fact, the day we were scheduled to move to the new server one of the existing servers failed about 8 hours before the planned move. No data was lost, but it really was just in the nick of time. All of the trouble I’d had sleeping for the past three weeks was true – these servers were just barely hanging on.

Plugging the Marketing Funnel
Once the app was stable and the major bugs fixed there was work to do on the marketing funnel. Essentially, the website was in bad shape both visually and in terms of conversions. Most visitors arrived at the site and wandered around for a while, then left. There were trial sign-ups coming in, but not as many as I would have expected based on the traffic levels.

So I began a complete re-design of the site with a high-end designer named Ryan Scherf, and I worked with a contract developer to have the new design applied to the existing 200 or so pages. Then I went through by hand and added calls to action to the most popular pages. The problem was that people arrived at the site, read an article, and never came to the “core” of the site to learn more about HitTail. I added prominent calls to actions on the most visited pages to funnel people into the sales flow.

Finally, I added scheduled tasks to disable trial accounts after 30 days (before this you could keep a trial account virtually forever), and to email trial users during their trial period, checking in if they haven’t installed their code, and updating them on their account status as the end of the trial approached.

This effort raised several key metrics, such as the percentage of trial accounts that install the tracking code – it went from 25% to around 75% – as well as the percentage of visitors who sign up for a trial in the first place.

Spreading the Word
This is the marketing effort I began around 6 weeks ago based on the 11-page marketing plan I’ve put together over the past 6 months. This effort is still very much in progress; more to come in future posts.

If you can go over the valuation methods each side used, that would be very helpful to know, even if you don’t share the cash figures involved.

I’m not sure what method the seller used – I would imagine I would use the “get as much as you can” method. But my initial offer was based on a multiple of monthly net profit – in the 18-24 month range. Typically I would stick in the 8-14 month range.

I offered a bit more than I typically would given the scope, reputation, and press mentions of HitTail. The seller came back at 5x that amount, and we settled on 1.5x my initial offer and I offered to cover legal fees (around $1500).

I would love more information about the acquisition process.
The order of events was pretty straightforward:

1. I send a cold email to seller (and assume I will never hear back)
2. I receive a reply from the seller
3. We begin some email chit chat to find out more about each other
4. I ask for some numbers
5. She asks me to sign an NDA, which I do
6. I receive the numbers, and over 2 or 3 more emails ask for additional info and clarifications
7. Based on these numbers I make an initial offer
8. We email back and forth for 4-5 weeks of price negotiations
9. We settle on a price
10. I contact my lawyer to write up a contract and patent transfer doc
11. We sign everything
12. I open escrow in escrow.com and wire the funds to the escrow account
13. She provides server logins and a slew of additional info, and puts the domain into escrow
14. I take 3-4 days to verify everything, then approve the deal at escrow.com
15. Funds are released to the seller and the domain transfer is completed by escrow.com
16. I stay up until 2am several nights in a row fixing bugs and stressing that the servers are going to die J

I’d love to see something about the mechanics of executing the deals without getting burned. Stuff like finding contracts, escrow, etc…

This depends pretty wildly, but in the past I’ve used the Flippa website sales contract, as well as a template I found online (which is not a good idea). Given the size of this one and the complexity of the assets (did I mention there was hardware, software, and a patent application involved?) I hired a lawyer with experience in IP website acquisitions to draft up a custom agreement.

For escrow I used escrow.com. The site looks dated but they are the only site I use for this kind of thing.

How did you find HitTail?

I’ve been a customer for 6 years and saw the service having trouble. It fit my criteria of a SaaS application with a dedicated fan-base (some might say product/market fit) in need of technical and marketing work, and given the LTV I knew there were many avenues I could use to market it profitably.

Can you say how long you estimated it would take, given your purchase costs and ongoing expenses, to make the acquisition profitable?

I typically shoot for 12 months and more often than not break even before that (not including my time investment). My best acquisition in terms of payback was around 4 months.

For HitTail I did not map out a specific schedule, but it looked like best case, hitting my growth numbers, I would pay back total expenses (excluding my time) in 9-12 months. Worst case was 24 months.

It’s too early to tell how that’s going to pan out, but given that I’m 5 months in and just finished the revamp I’m pretty sure I’m not going to make it back in 12 months.

How did you make the numbers work? As I understand it they had a site that they were putting virtually zero effort into, so they must have wanted a pretty hefty multiple of the annual income. Even if that income was declining, it was still taking zero effort to generate.

It wasn’t zero effort – the seller was handling ongoing email requests for support, trying to get new customers setup, and hating life when the site would go down. The site was not on auto-pilot and although there was no new development or marketing, it required ongoing time and headache to keep it around.

You, on the other hand, had to have assumed you could make the revenue grow significantly via active investment, right? You did mention that [some bugs were] leaving a ton of data and/or money on the table, but you couldn’t have known that ahead of time, could you?

Judging by the existing traffic, conversion rates and how poorly the funnel appeared to be functioning, I had a solid idea I would be able to incrementally improve many steps of the funnel, such as:

• Making the site more appealing and easier to navigate
• Providing a clear call to action on every page
• Providing a clear path to purchase
• Changing the sign-up form from 15 fields to 6
• Asking for credit card up front
• Offering free tracking code installation
• Touching base with trial users during their trial
• Increasing traffic

Each of the above improves a small step of the funnel, but together they’ve had a notable impact on the  number of new sign-ups.

Perhaps you could explain how you came to your opening offer — did you literally email them and say hi, I’d like to buy this and here is my estimated offer, or did you get some numbers first?

I emailed an introduction and attempted to build credibility that I was a serious acquirer. The seller has to know you are serious or they won’t spend time pulling numbers together (or divulging their proprietary data).

Once she expressed interest in a potential sale I signed an NDA and she provided numbers. Only then did I tender an offer.

Conclusion
If this series has been interesting, stick around (RSS feeds are cool).

In my next few posts I plan to dive deeper into some of the specific changes I’ve made to improve the marketing funnel, talk through why I let the patent application expire, and marvel at how everything that could have possibly gone wrong during the server migration, did. Stick around.

Why I Bought My Next Startup (Instead of Building It)
This is part 2 in a series covering my acquisition of HitTail; part 1 went to the top of Hacker News last week and I have a slew of questions from that discussion that I will answer next week.

But first I want to address the most common question I hear when I tell someone I acquired a startup:

Why did you buy instead of building?

If you’re a developer you’re probably scratching your head wondering how I could pass up the chance to do the awesome green field development. A new project with no legacy baggage…this is the stuff we live for!

But I did indeed opt to plunk down my hard earned cash instead of hunkering down for 6 months in my dev cave, and what follows are my reasons for doing so.

Reason #1: Saved 12-18 months
I have a little theory that a v1.0 should take 4-6 months from inception to launch. This includes time for marketing (which should start before you write a line of code), planning, development, launch, etc…

And if you have the luxury of working on it full-time then by all means you should get it out the door faster. Almost without exception, the sooner you get in front of real customers the better off you’ll be.

But in general, this is “Rob’s Theory of Time to 1.0″: 4-6 months, 300-600 hours.

But there’s another time frame, and I call it the “time to flywheel.”

A flywheel is a large, heavy wheel that requires an incredible amount of effort to get moving, but once it’s moving it can continue to do so under its own momentum for quite some time, without additional effort. The time it takes to get your business to “flywheel” will vary, but I’ve found that it’s typically 6-12 months after launch.

“Time to flywheel” is not profitability, but an app is typically on a rapid trajectory towards profitability when it hits.

It’s also after you’ve confirmed you’ve built something people need and are willing to pay money for, and have found your market (some would say product-market fit). You’ll also have some marketing channels that are bringing in new customers for less than they pay you during their time as a customer.

This is the point where you have a bit more work to do in order to scale, and when smart founders who are interested in funding begin to seek it out. My typical estimate when asked how long it takes to get there is 12-18 months. Some companies can pull it off in 9, for others it takes 24 if they are ever able to achieve it.

But the sweet spot is around 12-18 months.

Getting to “flywheel” is a slog. It’s painful (and yet also exhilarating). And frankly, I’m not a patient person when it comes to growing a business.

Given the hourly rate at which I value my time, and the value I place on 12-18 months of effort, buying an application like HitTail is a ridiculous bargain. It may be the best deal I receive on anything I buy during the next year.

Reason #2: It Has “Good Bones”
There’s something to be said for acquiring an app that’s already worked out the v1.0 kinks. HitTail has been around since 2006, and although some of the software architecture and code structure leaves something to be desired, a lot of bugs were ironed out in the early days.

Any problems that existed when I took it over had crept in over time due to changing APIs, lack of maintenance, and failed hardware.

In general, the code had been purring away for 3 years without intervention, and that indicated one thing to me: this thing had good bones.

“Good bones” is an expression realtors use about a house to indicate that the major systems like plumbing and electrical are solid, but that the house may need cosmetic upgrades like new paint and flooring. It means the house is pretty solid as it stands, and that with a bit of effort it could be more attractive and more valuable.

It’s an expression I would apply to HitTail, and one of the reasons I decided to acquire it.

Reason #3: Dramatically Reduced Market Risk
When you set out to build and launch a product there are three types of risk: product, market and execution.

• Product risk looks at whether or not you’ll be able to build the product. These days, most web apps we see have only a small amount of product risk.
• Market risk looks at whether there will be people willing to buy your product if you build it. This is the risk factor I encourage founders to look at the most, especially before they write a line of code. Market risk is the deadliest of the three because if you build something for which there is no market, it’s nearly impossible to adjust course later and fix it.
• Execution risk is whether you can pull off the whole package. Can you bring everything together, build and launch the product, and get it in front of the right prospects?

Given these, market risk is the one that scares me the most. Every time.

I have confidence in my ability to execute, but anything I can do to reduce market risk early is a no-brainer. Buying an app with paying customers is one of the best ways to ensure you have something people will pay for.

Reason #4: Better than Outsourcing
I talk a lot about outsourcing. Last year I paid $100 or more to at least 15 contractors ranging from developers to an infographic designer. And I’m a firm believe that you must learn to outsource or hire employees if you want to grow a business.

But I would take a completed product over a spec every time.

Outsourcing works, but avoiding the possibility of hiring a crappy developer, building the wrong feature set, and the enormous amount of time you need to invest to manage a development project is typically well worth the purchase price.

Counter-Reason #1: “If you buy, you’re not a real founder!”
This is from my internal monologue that attempted to talk me out of the acquisition.

At one point I actually stopped to wonder what people would think of the fact that I didn’t build HitTail myself from the ground up.

Are you a real technical founder if you don’t write every single line of code for your v1? Or at least oversee every single line of code as it’s being written by your team?

I’ve built and launched apps from the ground up in the past. Am I still a real founder if I skip it this time?

The conclusion I came to is that it doesn’t matter.

Growing HitTail into a more profitable business is the next phase of my learning (and the next test of my chops). Both personally and career-wise it’s the right decision.

Everything else is semantics.

Conclusion
If you’re interested in hearing more about due diligence, which things I attacked first after the acquisition, thoughts on valuation methods, and answers to other questions from the Hacker News discussion, stick around for part 3.

Based on the title of this post you might be thinking I have mad stacks of money in the bank.

That I’ve had a few “exits” and instead of hunkering down and writing code for 6 months I opted to talk to a few of my buddies at the yacht club and purchase a primed and growing social network for somewhere in the mid-seven figures.

Indeed, I did buy my latest startup, but the deal was done from a spare bedroom of my suburban home in Fresno, California for less than most people pay for a new car. And the funds came from revenue generated by my portfolio of web applications and websites that I’ve built over the past several years.

This acquisition is a long story, but if you have a few minutes let me tell you the best parts.

My Background
If you haven’t followed this blog in the past, I’m a guy who launched several web startup/product ideas, acquired several more, had many failures and enough successes that I was able to shut down my consulting firm back in 2008.

My apps range from an SEO keyword tool, an ASP.NET invoicing system, a web application for creating wedding websites, and a handful of others.

If you’re interested you can read about one of my acquisitions from a few years back in a post titled The Inside Story of a Small Software Acquisition.

I’m all about figuring out what’s going to make a person happy and then going after that with ravenous determination, instead of pursuing what we’re told is going to make us happy by the tech press (raise funding! exit big! lose control of your company and get fired by the board!).

So I tend to focus on ideas that have a 1000x higher chance of success than the next un-monetizable social website you have in mind, but the success I strive for is a bit more modest. Probably close to 1/1000th of the payout of a big exit.

But I believe this approach is far more likely to make you happy, and far more likely to actually make a difference in the lives of more than the handful of people who hit the startup lottery each year.

I believe this so much that I’ve written a manifesto and a book and hundreds of blog posts on the topic, and hold a conference every spring that focuses on self-funding your startup. I’ve put all my eggs in one basket, and that basket and the eggs were bought with money from my own self-funded pockets.

In Search Of…
So that’s an intro to my startup philosophy, but where was I? Aaaah yes…the search.

After co-hosting MicroConf in early 2011 I was on the prowl for the next big thing. After a few weeks of soul searching I determined I was going to build a SaaS app. Another week left me with a short list of problems that entrepreneurs need help with (since I’m pretty familiar with the space), and after another few days had them ranked in order of my interest.

In the top 3 was the following problem: entrepreneurs need more organic search traffic to their websites. That phrase may sound exciting to you, or it may be a complete snooze-fest.

The bottom line is that many successful startups (far more than you hear about) are masters at SEO. People don’t tend to talk about SEO as a sexy marketing approach, but it can generate enormous amounts of highly-targeted, high-converting traffic.

Depending on your market, the ROI can be better any other traffic source you can find (with viral traffic the most common exception).

As I pondered the entrepreneur SEO question I realized there was an application I’d been using for years that pretty much fit into everything I mentioned above, and it was all but abandoned. Imagine the luck!

HitTail is a tool that tells you the most promising organic search terms you should target based on your existing traffic. It has an algorithm that analyzes your visitor stream in real-time and provides you with a simple list of precisely which keywords you should be targeting to maximize your organic search growth.

And I’d been a user since 2006. Even through the five day outtage in early 2011, and the semi-regular downtime throughout 2010 and 2011.

Customers were bailing on the service because of the frequent downtime. But there was a hard-core customer base that had been around for years and had stuck with the service because the main algorithm that provided recommendations had never stopped working, even though everything around it had crashed and burned.

Closing
On a warm day in early June I cold emailed the owner through the website contact form. I have to admit – I didn’t know if I would get a response at all. But within 24 hours we were off and running, discussing a potential acquisition.

The site was once great; marketed by a high-end NYC PR firm. But when the firm had focused its attention on other things the site was neglected, and the technical headaches ballooned as the original developers left the company. Needless to say, the owner was definitely interested in discussing an acquisition.

So I made my offer and she countered with 5x the amount. Choke! I’ve acquired many web apps in the past, and I wasn’t prepared to pay “dot com” pricing for it. Although it had been mentioned in Inc Magazine, BusinessWeek, The Wall Street Journal, PC World, and many other mainstream news outlets, given what I know about rehabbing applications I had a firm figure in mind.

The site generated revenue but it was losing customers and the hosting bill was hefty given the performance requirements of the site (it’s basically performing real-time analytics).

It took three months emails before we settled on the final terms. The close was swift: I had a lawyer draw up an agreement, and we used an escrow service to handle the money transfer. It was a clean deal as deals go, and at the end of August, 2011 I was the new owner of HitTail.

And I was running scared…

Step 1: Like a Chicken With No Head
The big issue is that the server hardware was sketchy at best. It had ancient hard drives, an installation of Windows Server 2003 that hadn’t been refreshed for 5 or 6 years, and two SQL Server databases that had not been re-indexed (or had any visible maintenance) for 3 years.

All the while continuing to handle 10-30 DB inserts per second. Every day. For years. There are literally over a billion rows in the database and no one had touched it since 2008.

So I scrambled. I found an awesome DBA on oDesk and moved the 250GB database to a new cloud server infrastructure. A few weeks of prep and an all-nighter later I was feeling much better about HitTail’s stability.

Step 2: The Funnel
The next step was plugging the funnel. To give you an idea of the state of the site, here’s a glimpse of the home page from a month ago (and I think this is how it had looked since 2006):

In addition to design issues there were major leaks in the sales funnel. Examples include:

• Many 60-day trials had never ended. There was no script running that ended them so people continued to use the site for free for years.
• During the trial period a user received exactly zero emails. No reminders to check out their fancy new suggestions. No inquiry as to why they never installed the code. Zip.
• The website was architected such that it was easy to just wander off into the sunset and never be heard from again. No effort had been put into moving people from content pages back into the main marketing website that promoted the benefits of using the product.

Beyond that there were broken features. Oy vey, were there broken features. I commented out 3 or 4 “top line” features that were such a big deal they appeared on the pricing plan page. But no one had used them in years because they didn’t work!

And the algorithm that made suggestions was operating at around 10-20% effectiveness. In other words, due to the way Google had changed the way it passed URLs in the querystring, the algorithm was missing a slew of valuable keyword suggestions.

I can almost hear the voice in your head: “Something must be done!”

And that something involved me hiring a developer and a designer to help me revamp this thing (both contractors, of course, since I don’t hire employees). I also put in quite a bit of coding time myself.

And three months later, the joyous visage you see below you was unveiled upon the world (this is the new HitTail home page, replacing the one I showed above):

I’ll be the first to admit: it’s blue. But I like it. And so do people who need organic keyword suggestions, apparently, because it’s converting very well so far.

Conclusion
Those are the highlight of how, 4 months after acquiring a dying web property, I brought it back from the dead with the help of my ragtag team of intrepid oDesk contractors.

And you may be wondering why I bought a startup instead of building it from scratch. Stick around for that; I cover it in part 2.

There are far too many details to include in a blog post, so if you like audio and want to hear even more about the acquisition, I was interviewed on this very subject for 90 minutes on TechZing. Check out episode 165.

I can’t believe it’s this time of year again. MicroConf is in the air. If you’re starting, or thinking about starting, a self-funded startup this is the place to be in April.

My co-host and I are crafting a line-up of speakers that will be speaking to your specific needs as a bootstrapper, rather than someone with a bazillion dollars of funding in the bank. Honestly, MicroConf is unlike any conference you’ve ever attended.

First things first, here are the things we’ve nailed down so far:

MicroConf 2012: The Conference for Self-Funded Startups and Single Founders

• April 30 / May 1 at the Hard Rock Hotel in Las Vegas, NV
• Hosted by Rob Walling and Mike Taber

Speakers Include

• Peldi from Balsamiq
• Hiten Shah of KISSmetrics and CrazyEgg
• Rob Walling, author of Start Small, Stay Small
• Patrick McKenzie of Bingo Card Creator
• Mike Taber of Single Founder
• And many others…

128 pre-release tickets will be available next week (until we sell out).

Who Should Attend?
Anyone launching a startup with no outside funding who wants to hang out with and learn from 128 of today’s leading founders and entrepreneurs. We are intentionally keeping the conference small based on feedback from last year.

Wait…you didn’t hear about last year’s MicroConf?! You must check out this blog post or this podcast episode. Then sign up for the early bird notification list.

Sounds Awesome, What Should I Do Next?
We’re limiting total attendance to 128 and expect to sell out quickly. If this is up your alley, here are the next two things you’ll want to do:

1. Sign up to be notified about discounted pre-release tickets here
2. Tweet it!

It’s going to be a blast! Hope you can make it.

I received the following question from a reader a few weeks back:

I’m considering creating a mobile app and I want to know quick/effective ways to validate some of my assumptions. Is it more effective to put out small experiments that test your assumptions, or are surveys of the possible users a better approach?

My answer: it depends on what you’re trying to test.

In general a survey is going to give you decent results for little effort. A survey takes 20 minutes to put together (SurveyGizmo or SurveyMonkey), email it, and you get some info. It’s a simple approach that doesn’t take a lot of time.

However, it’s nowhere near as accurate as putting out experiments. Experiments that ask someone to buy something, sign up for a list, or perform some kind of behavior are the only real way to know if something works. But these kinds of things take so much longer to put together that you have to balance this level of effort with the value they provide.

If you had unlimited time I would always recommend experiments. But surveys save you time, so you’ll inevitably have to rely on them or you’ll never start building your app.

Two things you can’t get from surveys: actual conversion rates and pricing info. You can ask “would you sign up for this list” or “would you pay $x for this” but these are useless questions.

If you need this kind of knowledge, do an experiment. For most other information, surveys can be a solid, time saving approach.

I’m interested to hear your thoughts in the comments.

Once you’re too close to a design it’s hard to view it with an objective eye. That’s where external feedback from a knowledgeable source can help you discover potential improvements, as Derek has done in this video.

Please enjoy – it’s just over 15 minutes and it’s filled with insights on building a high-converting marketing website.

Direct link

I received the following question from a reader:

I was wondering if you had any thoughts on cost of customer acquisition for freemium businesses. When you calculate it out, it seems that paid marketing efforts like AdWords are almost universally doomed to fail. Our lifetime value of a customer is only around $1 when you factor in a high initial churn and all the free users. I imagine companies like Evernote are in a very similar position since they have a similar pricing model.

We are obviously hitting social media, PR, etc. quite hard, but I don’t think paid acquisition could possibly work here. Have you seen paid acquisition work for freemium businesses?

My Thoughts
I’ll admit up front: I’m not a fan of using freemium in a bootstrapped business. While I didn’t write the post Why Free Plans Don’t Work, I wish I had.

If you have funding then freemium is possible to pull off, but growing a company organically using its own revenue doesn’t work when you have an extremely low customer lifetime value (LTV).

I think of freemium like trying to build a campfire in the middle of a dry forest. If you are sufficiently skilled you can build a nice, warm fire, but you’re more likely to burn the whole place down. I don’t know of any bootstrapped business that have used freemium successfully (though I’d love to hear about them in the comments), and I know of many funded businesses that have not used it successfully.

Typically, low LTV businesses only work when there’s some kind of viral loop in place that ensures every customer you sign up brings in X more customers. This lowers your cost of acquisition to such a level that you can turn a profit eventually.

The problem is that pulling off a viral loop is extremely difficult; you either have to be an expert in doing so (a la Peldi, Sean Ellis, or Matt Inman) or get really lucky…or both. And I hate basing a business on luck and outlier-class talent.

Adjust the Funnel
So yes, your intuition that paid acquisition strategies are not going to work with a low LTV are correct. However, if you look not at every user who signs up, but only those who sign up for your paid plan, you will have a higher LTV (though a lower conversion rate).

Instead of thinking of it as “I can only spend $1 to acquire a free user” you can think of it as “I can spend $50 to acquire a paid user,” and look at optimizing that funnel.

Also, keep in mind that some of your freemium users may convert over time…Dropbox indicates they get a decent percentage of their users converting to paid within 12 months (I think it’s 3%?). The problem is that you need piles of cash to sustain yourself while you wait them out. And you need to have funds to support the other 97% who never convert. Both of these typically require some kind of funding.

If you are in a business where everyone else is freemium I would encourage you to think about charging for your product. Go upmarket or figure out a way to differentiate. What can you build that will provide your customers with $19, $39 or $79 per month of value?

Unless you have a large bank balance, I’m not sure how you can begin to compete with free unless your product is very, very different from your competition.

About the author: Robert Graham is a solo founder and maintains a blog about the experience. Robert has been working in software since 2005. He is a Ph.D. dropout who spent time working for Google. Someday he’d like to work for himself.

I don’t know if I have ever read an article about time management that didn’t have a collection of statistics about how much TV the average American watches followed by telling you that those hours are now free for you to use.

That advice isn’t really useful. Giving things up is hard. How do you quit TV? What if you don’t watch much? Isn’t quitting an addictive habit hard? What if you really enjoy watching TV? Read on, my friend.

I’m going to talk you through a few ways to better manage your time in order of efficacy.

Plan
It’s not the freshest idea in the list, but it may be the most critical. A saying that comes to mind is, “If you aim at nothing, you’ll hit it every time.” Writing down plans and goals for your time will force you to be realistic about how much time you have to spend and make you more aware of where you spend it. I use two planning tools for time management.

I write down a list of 6 things I want to accomplish every day. Often the list contains some easy wins, but the consistency of forward progress is the key. All those small wins are like compound interest. Not only did you get something accomplished, but it will usually grant you satisfaction that will build your momentum. I use a notepad and Google Tasks for my lists.

I also mentally track time estimates in my head for activities I do in the evening that are not producing. Here is an example:

• Arrive home 5:30 pm
• Dinner and Family Time 5:30 – 7:30 pm
• Chores 7:30 – 8 pm
• Watch Top Gear 8 – 9 pm
• Work Time 9 – 11 pm

Some days have more time available and some less. Don’t plan to multitask. Focus. Your accuracy in accounting for an evening or day will improve over time. I know I’ve only got 2 hours in this evening for work before I arrive home. That means I best plan how to use it well.

Prioritize
I have a good friend that never buys a drink when we eat out. I often do. We make jokes about this distinction frequently. I don’t spend a lot of money, but I really enjoy a tea or a soda with certain meals. He doesn’t really care for either.

This friend spends most of his time in the wood shop he made in his garage and he turns my cokes and sweet teas into shapers, joiners, lathes, and a nice table saw. I like the idea of wood working, but I’m not much good for it in reality. I am happy with my choice to buy a drink because I get value from it. Make sure you get the same value from your time. You won’t choose the same things as others, but you need to be sure you get value for what you do choose.

You don’t have enough time to accomplish what you want to. Start there. What are the one or two major things that could 10x your business? What actions can you do today to get closer to those? It is probably not learning Photoshop and it’s usually not writing code. Pick the most critical high-level items according to your goals and then pare down the scope.

You should outsource what you can. Ruthlessly optimize the rest. Find 80% solutions to problems. Apply the MVP philosophy to design, marketing, and SEO.

Environment
Research shows that people will eat less if they use smaller plates. It also tells us that you will eat less candy or reconsider getting seconds if it is six or more feet away. This makes sense. Much of landing page design and conversion optimization on the web is aimed at reducing any possible friction points like these. No matter how minor the barrier, it will hurt your conversion rate.

Changing your environment is a lot easier than changing your behavior. More than that, it’s a much better strategy to change behavior. My wife and I haven’t had cable in years. About a year ago we moved our only TV into a spare bedroom of our house. Each time we add these minor barriers in our environment I think about television less, I turn it on less, and I watch less.

Group dates for teens is an example of parents changing the environment to change behavior. Many restaurants increase turnover with noisy, sense-overloading environments. The more you consider it, the more examples and uses you can come up with.

Automation
You do things in life that you don’t have to.

Buy timers for your sprinklers or get a sprinkler system. Subscribe to grocery staples on Amazon and save money and time. Automate your finances and bills. Pay others to take over tasks like lawn maintenance, car maintenance, draft writing, and even answering email. Get RescueTime and automate focusing on your work.

Remove any recurring tasks from your plate to add more time you can spend getting things done. If you’re writing code make sure you automate repetitive tasks as you go. I can spin up a new instance of my production server from backups using one command, and I have a checklist so I don’t have to think about the procedure when I do it.

Recharging
I do some activities that burn me out and others that make me more apt to continue getting things done. I have only recently begun to isolate what tasks do this for me.

Many people assume that leisure activities like watching TV or playing games would let them relax and recharge, but I find that they leave you with less energy and make you more likely to continue being unproductive.

The type of task that gives me energy is productive in some sense, simple, mechanical, and repetitive. The best tasks for me are unloading the dishwasher, doing the dishes, cleaning up clutter behind my daughter (18 months old), and taking out the trash. These are easy to accomplish and usually gear me up to do work. Another good friend of mine prefers mowing the lawn or grilling. Pay attention and find the tasks that add energy for you.

You can stop watching TV if you are willing to change your environment. If you adopt each of these strategies you will be amazed what you have time for. Back to work! Right after this show…

Simple Diagrams – If you need to create simple diagrams quickly, Simple Diagrams is supremely cool. Love the UI.

The True Cost of Commuting – “You Could Buy a House Priced $15,900 More for Each Mile You Move Closer to Work.” Ouch.

Full Service Kindle Publishing for $50 – I wish this was out when I paid $300 to have my book converted to Kindle.

Read Entrepreneur Magazine for Free – On your iOS device. Yes, magazines are old school, but Entrepreneur has decent stuff from time to time.

And finally, Derek Sivers, The Startup Daily and HN-Books review Start Small, Stay Small: A Developer’s Guide to Launching a Startup

The more I learn about startups the more I realize that one’s chance of succeeding is a continuum rather than some kind of binary state.

In other words, when you read a blog post that talks about “X Ways to Succeed with Your Startup” what they really mean is “X Ways to Potentially Increase Your Chance of Success With Your Startup. But the second title is too clumsy so we bloggers abbreviate.

With that in mind, I’ve had this list sitting around for a long time, debating the best way to present it. The problem with this kind of list is that some people read it and see they are doing some of the things I’ve listed and they panic. This panic results in a need to rationalize their behavior and convince themselves they are not travelling a path to certain doom. Who wants to admit that?

But that’s not the point this list. As you read it keep two things in mind:

1. Doing any one of the items on this list is not a recipe for failure. But from my experience observing and working with over 1,000 entrepreneurs, each one will have a negative impact on your chance of taking your company to profitability.
2. This applies to bootstrapped companies. Funded companies can break these rules since the money they have sitting in the bank provides them with a bit of a reality distortion field.

#1: Choosing a Market with Funded Competition
I’ve seen first-hand how funded competition can crush a bootstrapping company.

AdWords go from $.50 to $5 per click overnight. Your funded competitor hires a PR firm and appears in Inc., Fast Company and Wired in the same month. And your search engine rankings drop as competitors hire high-end SEO firms.

It’s not that you can’t beat funded competition. But taking them on head to head is like wrestling 2 weight classes above your own. Instead of attacking them head on, I recommend avoiding the head to head conflict by choosing a niche that the funded competitor can’t afford to enter. Which leads us to our next one…

#2: Not Targeting a Niche (Going Horizontal)
This is perhaps the most common mistake I saw two years ago. I’m pleased to see this changing recently; I’m not sure if people are listening to myself, Jason Cohen, and others who have espoused the benefits of going niche or if it’s just the obvious approach these days.

Niches are easier to penetrate, cheaper to advertise to, have less competition, higher profit margins, and word of mouth is a vibrant force. All of this combines to make vertical niches the best option, by far, for someone bootstrapping a company.

#3: Doing Everything Yourself
Launching an application, even a 1.0, requires hundreds of hours. Everything from graphic design to coding, marketing to setting up a payment processor. If you are convinced you have to do every single step yourself you are decreasing the chance that you will make it to your launch day.

I’ve actually dubbed this need to keep everything under your control one of the most common startup roadblocks, and I talk about it in more depth (including how to avoid it) here.

#4: Basing Your Business on One-time Sales
This is one of the more recent lessons I’ve learned: one-time sales suck. On the first day of every month you start with zero dollars in revenue, and you have to hustle like crazy to hit your number. Starting from zero revenue every 30 days is no way to grow a business.

The more I’ve watched successful businesses grow, the more I realize they always have a built in recurring revenue stream. Netflix went from one-off movies to subscriptions back in the late 90s. Many desktop software vendors are moving to subscription billing. And I hear more and more people espousing the benefits of recurring payments, including Dharmesh Shah at his recent talk at Business of Software 2011.

If you’re building a product with a one-time fee I encourage you to look for a way to turn it into a recurring revenue model.

#5: Choosing an Idea with a Two-Sided Market
Having one group of people to market to is hard enough. But having to find and reign in two groups of customers is just brutal. Examples of this include Elance, eBay, Monster.com, and any sort of ad-supported website (since you have to sell to advertisers and visitors)

It can be done. It’s just doubles (or triples) the amount of marketing needed to get off the ground.

#6: Going Freemium
This topic was covered by Ruben in this guest post. Suffice to say, free plans rarely work for bootstrapped companies.

#7: Ignoring the Numbers
You can’t make money charging $1 per month. Wait…you can, if you have millions of customers. The problem is, getting to millions of customers requires more money and time than you have right now.

Trying to make money selling an app for $1/month is crazy unless your market is gigantic and you have the expertise or the funds to reach them (and even then, support will kill you).

Let’s look at some numbers:

1. If your goal is a meager $2k per month you need 2k customers.
2. To begin, that’s a lot of non-technical customers to support for that little money. You’ll still be working a full-time job at that point so it’ll be nights and weekends. Not cool.
3. To get 2k customers with a 1% conversion rate you’ll need 200k unique visitors (total, not monthly). If you crank really hard on promotion and word of mouth I can imagine you’ll ramp up to 1k-2k uniques per month. Even at 4k per month you’ll be waiting a long time to hit that 200k mark.

These days I advise people to go up-market and try for $30/month and $50/month price points. What can you build that will provide that much value to customers?

#8: Starting Your Marketing Once Your Product is Complete
If validating your idea, creating an instant beta list, having your best launch day ever and building links over time isn’t enough, how about building confidence in yourself that your idea is completely kick ass during the 6 months you’re sitting in your basement coding it up?

Rumor has it that DropBox had 200,000 emails by the time they launched, based on driving a ton of traffic to a landing page with a single video that discussed how the service was going to work once it was built. These days when people ask me if they have to build a product to pitch investors, I tell them they can…or they can gather 200,000 emails. Call me if you do this and I’ll write you a check.

For more on the specifics of how to approach this, check out Why You Should Start Marketing the Day You Start Coding.

#9: Expecting it to Be Easy
You’ll often hear that the number one cause of death among startups is running out of money. For bootstrappers this is not the case. When you’re launching from your spare bedroom, out of money is where you start. From day 1 your goal is to go from out of money to covering hosting.

So for you, stalwart bootstrapper, the number one cause of death is not running out of money, but running out of motivation. If you start with the expectation that you’ll be able to take your company from nothing to $100,000 in revenue in a few months working part-time, you’re going to be more likely to throw in the towel when it doesn’t happen.

And the day you decide to throw in the towel is the day your startup dies.

No, it’s not easy to start a company. But knowing you, it’s why you decided to start a company in the first place.

This is a guest article by Saba Younus. Saba currently works as the operations manager (Sumo) at AppSumo. When she’s not working to create the best experience for each and every user, she spends her time scouring the web for juicy details about the startup world.

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Who says a bootstrapped startup can’t succeed?

A lot of entrepreneurs think they need piles of money to make their startup a success, but that’s not always the case. Here are 10 bootstrapped companies that did it on their own with no outside funding.

Startup #1: Goldstar
Goldstar is the world’s largest online seller of half-price tickets to a broad range of live entertainment.

How’d they do it?
Starting with $1000 ($800 being paid to the state) Rich Webster, Jim McCarthy, and Robert Graff noticed something wrong with the ticketing business.

Venues were giving away tickets for free to shows that were unsellable. Instead of being able to fill up a show, venues found themselves with a lot of unwanted seats. The trio quickly realized that it was a lose-lose situation for both the consumers and the venues, and decided to take action. “No venue wants to be told that their product is worthless, and no customer wants to go see a show that’s unsellable,”  said Robert Graff.

In October of 2001, Webster, McCarthy, and Graff decided to do just that and GoldStar was born. They were able to get the company off of the ground by focusing on their solution for popular undersold shows.

Already disenchanted with the waste of funds and inefficiency caused by accepting VC investments they’d seen at another Startup, the trio decided against seeking any outside funding. “We purposefully didn’t want anyone else’s money because we didn’t want their advice” said Graff.

Today, Goldstar works directly with 4,000 venue partners to connect them with their huge and growing audience. Venues list tickets with Goldstar to sell to their members for a discounted price. The company has over 1.5 million subscribers and offers over 900 tickets to events at one time.

Startup #2: Carbonmade
Carbonmade helps over 100,000 people create online portfolios that require zero HTML skills.

How’d they do it?
Starting as a tool for one of the founders to update his portfolio, co-founders Spencer Fry, Dave Gorum, and Jason Nelson launched a self-funded, $12 per month plan in 2007, alongside their established free plan.

Looking back on their previous experiences working at startup companies, the founders decided to bootstrap their business in lieu of seeking outside funding. By generating a steady revenue from consulting projects and sales, the founders were able to spend time growing their business slowly.

Instead of spending tons on advertising, the site got noticed when bloggers started sharing the site with their communities. They continued to gain traction up until 2010, when they were able to exclusively focus on growing the site.

Today, Carbonmade is a bootstrapping success story, growing from a tool built for a personal portfolio to being used by over 200,000 people to showcase their artistic talents.

Startup #3: Litmus
Litmus is an email marketing tool allowing 30,000 customers to test their designs in all major email and mobile clients.

How’d they do it?
Founders Paul Farnell, Matthew Brindley, and David Smalley started Litmus in 2005 with a used computer and $800 dollars. While still in college doing freelance web design they realized that there was a need for a faster and less expensive cross-browser testing tool.

In order to answer their need and test if they could build a better service, they built the site and launched in one weekend. Farnell shared this first version with a group of designers on an email list he had been a member of for years.

Charging from the start, their initial version allowed users to see a web site on only a few different web browsers. Within a few months they had received positive feedback and around a 100 paying customers.

Included in that first version was a “coming soon” section, listing additional features that they had planned on adding. Instead they ended up listening to what their customers wanted and adding completely different features.

“These were the things that we thought were cool and we thought people would be excited to use, and, to an extent, people thought they were cool ideas, but they would say, yeah, they would be good, but what we really need is this other thing, which we maybe had considered but had ruled out as not being that important, said Farnell.

Today, Litmus has had over 30,000 customers, 1 million+ in revenue, and is growing by around 10% a month. They have no plans of selling the company or taking in outside investment. Farnell says,  ”Why would we want to give up the flexibility and freedom we have right now?”

Startup #4: Github
Source code hosting for companies and open-source projects, Github is used by nearly a million people to store over two million code repositories.

How’d they do it?
Founded in 2008, GitHub offers public and private source code hosting to companies and open source projects using either git or subversion.

Chris Wanstrath, PJ Hyett, and Tom Preston-Werner began GitHub as a solution to their own problem: they loved git but there was no way to share their codes with others. Started as a weekend project, the three spent money out of their own pockets to cover the cost of a domain, hosting, and started sharing their idea for free with their friends.

When they made the decision to make GitHub into a full time business, they scraped together the funds needed to setup a legal entity instead of seeking outside aid.

The real challenge they faced was supporting themselves financially as the business grew. Opting to eschew the traditional road of venture capital funding, Tom worked both at GitHub and at a full time job, while Chris and PJ consulted on the side. They paid themselves small salaries and setup monetary goals for the business each month. With some effort and patience, the three watched their salaries finally grow as profits from their paid plans started rolling in.

Today, GitHub has over 100,000 users, thousands of paying customers, and almost a million repositories – with thousands more added each day. In January 2009 they won a Crunchie for best bootstrapped startup.

Startup #5: FastSpring
FastSpring is an all-in-one e-commerce, merchandising and fulfillment solution to sell digital products online with over $45 million in revenue.

How’d they do it?
Started by four previously successful startup founders that were working for the same company, FastSpring was created  in order to solve current industry problems. Realizing that customer service, new technology, and price were important to businesses selling digital products, the founders began working together remotely to address the market needs.

Agreeing that bootstrapping the company was “common sense,” they started with $30,000 contributed from their own pockets. The biggest issue that the four founders ran into was finding a suitable name for their company.

Playing catch up to their competitors co-founder Dan Engle stated that they, “under estimated the quantity and quality of the functionality that we would need to build in order to even be on par with other companies in this space.” However one thing that they did do from the beginning was to talk to potential customers in order to find out which essential features were needed before launch.

Taking no salaries and doing all the work themselves, three of the four founders lived off of prior businesses they were running while the fourth was able to work on the business while living off his savings. They slowly built up their salaries as they brought in more customers and now are able to pay themselves a “nice” income.

Today, Fastspring can hardly be called a startup anymore; it processes payment pages for over 8,500 clients, has earned over $45 million in revenue, and been featured in 2010 as the Inc. magazines 41st fastest growing company.

Startup #6: SparkFun
SparkFun is an online store for electronic bits and pieces that brought in revenue of over $10 million in 2010.

How’d they do it?
After blowing up some electronic parts and searching the internet for replacements, founder Nathan Seidle saw a business opportunity for an online electronic parts store.

Starting the business with about $2500 in credit card debt, Seidle originally purchased a random assortment of products, unsure of what would sell. Orders started trickling in, about 1-2 per day, and all of the sales profit was funneled back into the purchasing of more products to sell on the site.

About reinvesting in his company Seidle said, “You take all the money you make and buy more inventory with it…I think it was more than 3 years before I was able to buy a new winter jacket.”

Seidle quickly realized that a bootstrapped startup is a cash guzzler and tightened his belt on personal expenses while continuing to expand his product base.

Today, SparkFun has a wide following and boasts over $10 million in revenue. From it’s humble beginnings in 2003 in Seidle’s living room, SparkFun has grown into a favorite supplier for the increasing popular “Maker” community.

Startup #7: Grasshopper
Grasshopper is a virtual phone system for entrepreneurs, allowing 100,000+ small businesses to create a more professional image.

How’d they do it?
Grasshopper was started when two college classmates, David Hauser and Siamak Taghaddos , wanted to solve the problem of  how to create a professional image while just starting a business.

Allowing entrepreneurs the capability of giving phone number extensions, even while working remotely, helped them seem like a larger company. “It is a capability [that lets] a one- to five-person team of entrepreneurs sound like a big company,” Taghaddos said.

Grasshopper was started with approximately $250,000 from personal and family savings, as well as credit cards. Even though they started with $250,00 they used what is called “negative cash converting cycle financing.” This means that they did not spend money until they got it, allowing them to be extremely conscious of hiring and spending money.

Before they were even able to start building they needed to obtain the proper equipment. Without raising any funds, the founders decided to funnel what resources they had to achieve their vision for Grasshopper.

Profitable within 2 months, their first year Grasshopper had $423,000 in revenue, in 2007 $8.8 million. Today, Grasshopper has over 100,000 customers with pricing from $9.95 – $199 a month.

Startup #8: Clicky
Clicky is real time web analytics running on over 350,000 web sites.

How’d they do it?
Started in October of 2006, founders Sean Hammons and Noah Merritt, wanted to provide an affordable and simple solution to real time analytics. Why bootstrap? Hammons says, “Owning 100% of your company and not having to answer to shareholders is ridiculously satisfying.”

Initially made as an internal tool for a previous company Hammons and his previous boss Merritt realized the potential immediately. Funded by Merritt’s savings, Hammons coded the project for release over a fourth month period.

Without any strong connections at the time they spread the word by contacting hundreds of bloggers and posting in forums. With a marketing budget of zero dollars, they initially had trouble getting anyone to try their service out. Finally, a big break occurred when they were able to obtain a single blog post on a “largish web site.”

After a few months they were making money, and dealing with scaling problems. Without doing any marketing they credit their affiliate program to be a major factor in growth. From the beginning they had the affiliate program in place allowing every user to take advantage of  20% per paid refferal’s payments.

Today, Clicky has about 150,000 customers with 15,000 of those paying between $4.99 and $24.99 monthly, not including their custom “white label” service.

Startup #9: WooThemes
WooThemes is a one stop theme shop of designs and cutting-edge commercial themes for WordPress.

How’d they do it?
Working as a virtual team, Adii Pienaar, Mark Forrester, and Magnus Jepson founded WooThemes in January of 2008. Sales started coming in almost immediately, making it possible for the team to stop freelancing on the side and focus completely on the business.

Believing in organic growth, WooThemes has grown at a steady rate of 10 – 15% monthly. Buying themselves time initially by doing freelance work, they were able to avoid taking on any initial funding. “We’ve been making money from the very first minute we released our first themes, which means that we didn’t need to pay back loans or really invest in any infrastructure when we started out,” said Pienaar.

A positive by-product of growing their business organically is founder happiness. Pienaar says, “With WooThemes we’re trying to find that balance between financial ambition and the happiness that WooThemes creates in our individual lives.”

Today, WooThemes has over 40,000 users and more than 1.8 million downloads, generating over $2 million in revenue. Co-founder Pienaar gives this advice for hopeful startups; stick it out and bootstrap for as long as you can, seeking outside funding should be kept as a last resort.

Startup #10: AppSumo
AppSumo is a daily deals website for the coolest web applications in the market, bringing massive savings to over 200,000 happy web geeks.

How’d we do it?
Launched in 2010, AppSumo is a daily deals website offering the coolest web apps and digital goods for technology geeks.

It all began when our co-founder Noah Kagan was helping run a payments company for Facebook games and noticed that partners were having a hard time finding new cloud applications and innovations in web distribution. Noah realized this was a niche not to be ignored.

For $60 Noah hired an outsourcer to build the back-end of what would be AppSumo and Noah built the front end using open-source member registration code. Within a month the site was launched; traffic was generated via Reddit ads and Noah sold over 200 of his first deal – 50% off pro accounts at imgur.com.

Following that minor success, Noah teamed up with co-founder David Cramer. They came up with the company’s core vision: to help solve distribution for startups and eventually all digital goods.  David rebuilt the entire site in Django/Python and AppSumo launched it’s next deal in June 2010: a productivity bundle that was featured on Lifehacker. They sold 500 bundles, proving that this was a service the community wanted.

AppSumo exists for one reason – to make our customers happy and help them succeed by providing them with low-cost tools and learning materials that are relevant to their career and today’s business climate. Everyday, AppSumo offers a deal that’s guaranteed to help you win (or at least become a better entrepreneur).

Today, AppSumo has nearly 200,000 subscribers, thousands of paying customers, and a growing fan base of individuals, startups, and businesses.