In the podcast series, Seth Godin’s Startup School, Seth Godin gave a guided tour to a group of highly-motivated early-stage entrepreneurs on some of the questions they will have to dig deep and ask themselves while they build up their business. Here are my takeaways from various topics discussed in the podcast episodes.
- Understanding the funnel is key to understanding customer acquisition.
- Attention can cost you in the effort and cash. That is because you are expending energy to get someone to see what you have to say. At each step of the way, some people will choose not to continue, so only some of those people will go to the next step.
- At every step in the direct marketing funnel, it is critical to figure out the percentage of people that survive to the next step. Multiply all the percentages and then divide that number into the cost of the initial ad, and now you know how much you paid for a customer.
- The funnel works the same if you have a sales force. It is the same thing if you run ads in magazines, and it is the same if you are buying shelf space. In every case, there is an amount of money you are willing to pay to get the attention of the prospects. There is an amount of money you pay at the bottom of the funnel for the cost of making a sale.
- The Rogers Curve is another powerful tool for understanding how ideas can spread.
- It turns out that the distribution curve of worldviews for a particular idea works like a normal distribution curve. There are a few people on the left-hand side of the curve who like new things and like to experiment an idea before most other people. Then there are the masses in the center who are not the trailblazers but stick close enough with the mainstream. Finally, there are the laggards.
- The gulf between the left and the center of the curve is essential to note.
- As an entrepreneur, we must think hard about this. Are we selling a product that is going to appeal to early adopters because it’s new? Or are we selling something that is going to appeal to people only by when they must because everyone has it? Or are we trying to appeal to the masses? Those are fundamentally different groups of people.
- There is a bunch of people who buy something right away because it is new and cool. There are those people who don’t want to hear about that – they want to hear that it is a complete solution that has nothing to do with cool. So, what we must think about is. Am I happy being a small enough business or a freelancer? Is all I need is a few early adopters, and I can declare victory for? Or am I building something for the masses and it doesn’t work until I have the masses?