Tag Archives: Startup Marketing

How To Determine Market Traction For Your Startup

How To Determine Market Traction From The Startup Garage

How To Determine Market Traction For Your Startup

The major thing to know about the first few years of funding a startup business is that in order to attract investor capital you must accomplish certain milestones.

Accomplishing milestones helps to reduce the risk associated with the startup venture.

Investors are constantly assessing risk when evaluating a startup and obviously prefer those that assume less risk. Additionally, accomplishing milestones allows you to raise capital at a much higher valuation because you’ve thereby improved the risk-to-return ration (i.e. the riskier the business the more equity the investor will need to compensate the level of risk).

There are seven main categories of milestones that most investors assess when evaluating a startup
investment opportunity:

Business Planning

– Team Building

– Market Traction

– Legal

– Operations

– Product Development

– Founder Leadership

The specific milestones that you need to achieve within each categories varies depending on the type of business and the stage of capital that is being raised(startup round, seed round, series A, etc).

In this post, we’ll be focusing on the milestones that demonstrate market traction.

What is Market Traction?

According to Naval Ravikant, the Co-Founder of Angel List, market traction is simply defined as
“quantitative evidence of market demand.” Traction is proof that somebody wants your product, it communicated momentum in market adoption.

Why is Market Traction Important?

Per usual, it all boils down to risk for an investor. The more market traction you can demonstrate the less risk there is in the investment.

How Do You Demonstrate Market Traction?

Adequate market traction will vary at each round of capital simply because you have limited resources
to demonstrate it. Furthermore, one of the major reasons that you are raising capital is because you
want to grow your current traction.When raising capital from Friends, Family, and Founders in the Startup Round the amount of market traction that you can demonstrate is limited. You likely don’t have a product developed that is ready for market, so traction in the form of sales is not attainable. However, you can show potential traction by demonstrating the size of the market and trends that support your product claims and solutions.

Additionally, you can conduct primary research such as surveys and conversations with potential
customers and/or partners to help validate your value proposition. Lastly, you can put together a clear marketing plan to demonstrate how you will reach potential customers.

When raising Seed capital from Angel investors you will need to take your market traction to the next
level. This includes obtaining some Beta testers and ideally, some paying customers. You’ll need a full scale marketing plan that proves a significant market opportunity exists based on what you’ve learned about the market to date.

Ultimately, you need to prove that you understand the sales cycle for your business.

Lastly, when raising Series A capital and beyond from Venture Capitalists or institutional investors you need to show how you will scale the business. By this point, you want to deploy the capital raised in earlier rounds to not only show that there is a demand for your product but that you can scale the product. In order to demonstrate this you need to understand what it costs to acquire a new customer and what the lifetime value of that customer is.

If you have a question about your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Social Media A Startup Must-Have

5 Reasons Why Social Media Is Key For Startups from The Startup Garage

Social Media A Startup Must-Have

5 Reasons Why Social Media Is No Longer Optional For Your Startup Business

Reason #1) Have you heard of a Website?

Does your Startup business have a one?
Chances are unless you’re stuck in 1994, it’s fair to say any successful business on and offline has a website.
Social Media Platforms are the WWW.’s for a new generation.
A generation of people, who know the power of the World Wide Web, and value instant connectivity both locally and globally.

Reason #2) “Your network is your net worth”

Well, what if your network was endless? We’re talking Billions of people Network/Networking just fingertips away.
Individuals exchanging key Resources, Connections, and Knowledge.
Investors, Advisors, Customers, Partnerships and even your Competition… all-waiting for someone to strike up a conversation.

Reason #3) Brand Equity

Behind any successful Startup there is a well-cultivated brand.
Wikipedia said it best, “Brands are one of the most valuable assets a company has.” The consumer’s perception of a brand increases both financial and market appeal. Social media provides the ultimate stage for a Startups brand personality to develop. As well as a massive instant audience ready to grow, evolve and help mold the business.

Reason #4) Startups = Innovation

As a Startup company it’s essentially your social responsibility to stay on top of technology and cutting edge trends. You are The Early Adapter, The Visionary, and The Magician, who predicts and creates the future for the rest of us. Social Media tops the technology and trend lists, providing a turnkey foundation to build Startup empires.

Reason #5) “Like” it or Hate it, Facebook, Instagram, Google+, Twitter, LinkedIn and others are our present and future.

The names and features might change, but their presence and influence in our lives are unavoidable.
 

Have questions? Feedback? Intrigued?
Tweet us @Startup_Garage We’re happy to help.
 

Whether you have a question about your Startup or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

How To Name Your Startup?

How to Name your Business from The Startup Garage

How To Name Your Startup?

Welcome to video Fridays from The Start Up Garage


A place where The Startup Garage’s team, answers questions directly from viewers

Key Take Aways From Video:

1) What do you want your Startup to be remembered for?

2) A lot of companies make their name very descriptive, and get pigeon-holed in that one niche, and then in the future want to expand into different markets because they’re stuck with that name.

3) The best name you could come up with is one where people want to wear it and people want to put it on a sticker somewhere and people want to do the advertising for you. If you can get people to do your advertising for you then you have a really great name.

4) One thing to really consider in the digital age is the URL and what the .com is going to look like, creating an effective online presence

5) Is this business name going to fit the mold of the company as I’d like to see it in the future?

Complete transcript below:

Question= “How do I go about naming my startup?”

I like to start with a couple of pretty basic questions. Really what do you want to be remembered by? Is it something that is really going to make you stand out? Or is it to blend in? A lot of financial institution types give themselves very descriptive, by the book names to get that initial market share. And then once they do they kind of achieve that first step, and then they go “Oh we wish we positioned ourselves a little bit more edgy, you know make it stand out a little bit”.

Standing out, going that route often once you get there is a good way to go, so something to think about. A lot of companies make their name very descriptive, and get pigeon-holed in that one niche, and then in the future want to expand into different markets because they’re stuck with that name. You know a lot of companies think “Oh we have this name and this brand, and if we change it they won’t know who we are”. And that is the case you have to be careful about it, but really don’t be afraid to re-brand yourself.

The name doesn’t carry as much weight as you think it does. The best name you could come up with is one where people want to wear it and people want to put it on a sticker somewhere and people want to do the advertising for you. If you can get people to do your advertising for you then you have a really great name. There’s definitely some routes you can go with how to name it. The Startup Garage for example we named our space, our virtual space as the Startup Garage, which was really brilliant if you ask me.

Another route to go is sort of creating a new name with the sounds that your market can relate to. A good example of that is Nike. And then one thing to really consider in the digital age is the URL and what’s going to look like. Te dot com credibility has carried a long way. The perception of having a dot-com is that you’re established, you know you have that space so that’s something to consider, Although don’t be afraid to get a little bit adventurous with your URL because the truth is that of they want to find you they will.

But one thing to really be concerned with the URL is the spelling. A lot of times misspellings direct traffic to the wrong space so you have to be pretty careful about that and make sure it’s well thought out before executing, so keep those questions in mind when choosing a name for your business and just think longevity. Is this business name going to fit the mold of the company as I’d like to see it in the future?

Whether you have a question about your business plan or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Exclusive Q&A With The Founder Of The Startup Garage

Q&A with The Startup Garage Founder from The Startup Garage

Exclusive Q&A With The Founder Of The Startup Garage

Tyler the founder of The Startup Garage and previous founder of Vavi Sports and Social Club spoke exclusively with George Meszaros of Success Harbor.

Success Harbor is a podcast, “where it’s all about making success happen for you.”

To listen to the complete audio with additional entrepreneurial insights please vist:
Tyler Jensen Success Harbor Podcast

12 Key Take Aways from Serial Enterpreneur Tyler Jensen:

Question1 What was one of the greatest challenges you were faced with during the first year of business?

Tyler Jensen: I think that most of the challenges entrepreneurs face are personal challenges.
I didn’t really put into place a `pay my bills plan’ before we started. I just thought the company would start making money really quickly, and I could pay myself a salary. The reality was that that wasn’t true, and isn’t true for most start-ups, so I struggled for a while just trying to figure out how to pay my bills, while still having time to get the business started.

Question2 Not only were you starting a business, but you were starting something that hasn’t really been done here locally. How did you approach marketing your business?

Tyler Jensen: We had $2,000 and so our marketing plan was to print out some flyers, go out to the beach and hand out flyers one-on-one, and have conversations with people that we thought would be in our target market.

Once we got the first couple hundred people interested (which was the hardest) and in specifically in having those conversations, I really got to learn how to present the brand in a way that would really resonate with potential customers.

Now, whenever I start a new business, I always go out and talk to a whole bunch of customers about it. I pitch to people one-on-one to really learn about the brand, and getting the message out in the right way.

Question3 Now, why did you sell VAVi? What was the reason for selling it? It sounds like it was going really well.

Tyler Jensen: You know, it was more personal than business related. I had read online a whole bunch of places where there was something about the 6th or 7th mark for entrepreneurs where they get burnt out and that was…I felt `oh well, people are different’ but looking back (like) that’s about the time when I really got burnt out. I just wasn’t as excited and motivated anymore to continue to build the company

Question4 Do you think it’s possible, or do you think it would have been possible to build VAVi without burning yourself out or you think it’s just part of the territory when you build a business?

Tyler Jensen: No, I absolutely think that it’s possible and that’s what I am doing now. I have a consulting company and I advise other entrepreneurs on how to go through the start-up process. One of the big pieces of our business really is around writing business plans and helping start-ups raise capital.

One of the things that is motivating for me is to help coach them through the personal process of it and how do you make sure that you plan the right way so that you are not in crisis mode all the time and how do you make sure that you have enough capital to do what you need to do.

Question5 So when did you start that business and why did you start it?

Tyler Jensen: The Startup Garage started around 2009 when we picked up our first client. I had learned so much through the process of starting and running and eventually selling VAVi and if I had known what I knew at the end, at the beginning then I would have done it very, very differently.

I wish I had somebody like me at the beginning to teach me what I teach other entrepreneurs now. That has been my real motivation and so for the last five years I’ve helped over a hundred different companies get started all over the world.

Question6 What were the biggest mistakes that you made with VAVi, maybe in the beginning or maybe later on in the business that were a good learning experience?

Tyler Jensen:The under-capitalization problem that was a big issue. I was personally not set up so I didn’t have a good `pay the bills plan’ and so I didn’t know how I was going to pay my bills each month.

I was making business decisions that would lead to being able to pay my bills when they weren’t the best business decisions.

Question7 If you had to start VAVi over again what would be the biggest change that you would make? Would it be the capitalization part? What would you do differently?

Tyler Jensen: I had a lack of planning, I didn’t plan ahead, I didn’t understand the financial part of the business.

I really had a huge passion for the product, but I really didn’t understand the financials and that includes more than just capitalization.

I didn’t understand how I was going to make money, what were the expenses that it was going to take to actually do it the right way.

I didn’t put the financial projections together the right way and I didn’t put a business plan together beforehand, which would have saved me a lot of headache, heartache and a lot of mistakes if I had done that before I started the business.

Question8Early on in business what do you think is the biggest time waster for entrepreneurs? Stuff they shouldn’t spend their time on but they insist on spending all their time on it?

Tyler Jensen: Well, I can answer this a couple of different ways. The first thing that pops into my mind is that entrepreneurs end up falling in love with their product or service.

In the big picture of things the product and service is really only about 5% of building a company and so I find that you can spend so much time just diving in, doing product development…product development and reiterating it…reiterating it which is important, but they ignore all the other parts of the business as well.

Question9 ”What advice do you have for others to deal with the roller coaster ride of being an entrepreneur?

Tyler Jensen: What works for me is having a really good personal practice, focussing on making health my number 1 priority. That includes not only physical health but mental and spiritual and emotional health as well.

I would put a daily practice into place, like I have now, where I get up and either run or walk in the morning and then I do about 30 minutes of meditation and prayer.

I also make sure that I have a very clear plan, and I take breaks to make sure that I’m not getting off track, this really helps me stay efficient and focused.

Question10 Today you working with entrepreneurs and start ups consulting with them, what do you think are areas that they need help with?

Tyler Jensen: There are two types of entrepreneurs that I generally work with: one is the brand new entrepreneur and one is the serial entrepreneur and they have different needs.

For the beginning entrepreneur they generally come to me and say `I’ve got this great idea for product and service and to be really honest I don’t know how to make this into a business.’

So, it’s really just learning how the whole process works. There is a step by step process that really makes sense when you are starting a business and a lot of times just understanding what to focus on when changes the whole game for entrepreneurs.

They start doing things that really don’t need to be done for 12 months or 18 months and ignore things that are really important earlier on in the process. For the first-time entrepreneurs I think the biggest thing is just understanding what to focus on.

For the serial entrepreneurs when they come to us they generally have gone through the process and they know how it works and everything and they just need help, they just don’t have the bandwidth to do the work that we do,
Business Planning and the financial model.

They just need a great service provider to provide objective opinion and really poke holes in their plans before they go to investors.

It’s already been picked apart and put back together so that investors don’t have to pick it apart as much.

Question11 What do you think serial entrepreneurs successful over and over?

Tyler Jensen: You know, this is my opinion and I’m certain many people will disagree with me, but having worked with so many people,

I really think it has little to do with the business and more with their personal practices.

Their personal beliefs of who they are and really ultimately their spiritual grounding. I find that the ones who are most successful have something that grounds them in life.

No one knows all the things in business.
Everyone has their own strengths and weaknesses as entrepreneurs.

Question12 If a first-time entrepreneur came to you, what would you teach that person about becoming an entrepreneur?

Tyler Jensen: The first thing I would say is `don’t quit your job’.
You want to hang on to your job for as long as you can because that takes care of the bills.

The place that I tell them to start is the research. So, specifically, industry research, market research and competitor research. Generally they have a new idea and sometimes they are going into an industry, that they are not that familiar with, they don’t know all the different types of competitors and they don’t know who their target market is.

Whether you have a question about your business plan or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Mobile is Transforming Consumer Retail Behavior

Mobile Retail Development Trends from The Startup Garage

Mobile is Transforming Consumer Retail Behavior

Multi-Device Retail Preference

Multi-device usage is quickly becoming the norm in consumer behavior.  Consumers will research a product on their phone or iPad, test the product in a brick-and-mortar store, and go home to purchase the product online from their laptop computer.  While this shift to multi-device usage can make it difficult for marketers to reach their consumers, it does come with added benefits.  This behavior evolution enables brands to engage their audience multiple times across devices with the same marketing campaign, thus increasing brand awareness, recall and ROI.

The Move to Mobile

Consumers are turning to their mobile platforms now more than ever for research and purchasing retail items.  The consumer market has experienced a rapid increase of in-store mobile usage.  Furthermore, thanks to mobile, consumers have changed the way they engage with brands.  Thanks to a research study conducted by JiWire, we’ve discovered the following shifts in consumer retail behavior:

  • 42% of consumers prefer to research retail-related shopping on their smartphones and tablets over other devices, while 45% prefer purchasing in-store.
  • Consumer engagement with retail ads increases 42% within a two mile radius of the store’s location compared to ads inside the store.
  • Of all the commercial venues where people use their mobile devices, retail venues are #1, representing 31% of all mobile usage.
  • Smartphones replace laptops as the device connecting to public WiFi for the first time in history.

 

Whether you have a question about consumer mobile behavior or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Pricing Strategies Than Can Improve Sales

Pricing Strategy for Growth from The Startup Garage

Pricing Strategies Than Can Improve Sales

The Right Price Can Make a Big Difference

Using smart pricing strategies can make a big difference to your sales and help you succeed in a competitive marketplace.  Each product and service is unique and therefore what works for some companies may not work for others.  Nonetheless, the strategies outlined below may be a good solution for your business.

1. Give Your Customer Choices

By giving your customers choices, they feel in control of the purchasing process and are more likely to feel committed with their purchase.

2. Limit Your Choices

However, when you provide your customers with too many options, they can experience action paralysis, feeling demotivated to purchase or incapable of making a decision.  Provide enough options to allow your customer to make a decision about their purchase but not so many that you confuse them.

3. Utilize a Price Anchor

Price anchoring utilizes a human psychological tendency where people rely on the first piece of information offered when making decisions.  With that said, the best way to sell a $500 necklace is to sell it next  to a $1,500 necklace.  By placing a premium product or service next to your standard version, you can create a value or bargain comparison that will drive your customer to make the purchase.

4. Reduce the Pain Points

By making the sales process as simple, efficient, and quick as possible, you will find that your customers are more prone to purchase.  The less that is required of the customer to buy your product or service the better.

5. The Old #9 Classic

One of the oldest tricks in the book is ending the price of your product or service with a 9.  Rather than selling your necklace for $500, try $499.  While there is much anecdotal debate about the effectiveness of this strategy, several researchers conclude that this strategy is in fact effective.

6. Test Your Pricing at Different Levels

See how your total sales and profits change when you test your product and pricing mix.  When selling a premium and a standard product, try adding a third version.  See if sales go up if that third version is a notch below the standard.  And likewise, if that third product is a notch above the premium.

 

Whether you have a question about pricing strategies or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Understanding Barriers to Entry

Barriers to Entry from The Startup Garage

Understanding Barriers to Entry

Entry into any market by a startup business is in some way possible, though it is often constrained by some sort of economic, procedural, regulatory or technical obstacle.  Such obstacles are often referred to as ‘barriers to entry.’  Some examples of barriers to entry include high startup costs, strict laws and regulations, inability to access resources, economies of scale, high tariffs, high switching costs, zoning, distributor/supplier/vendor agreements and customer loyalty.

Creating Barriers to Entry

Industry leading competitors often put a lot of focus on establishing barriers to entry to keep new entrants out of the market.  The more a competitor can achieve customer loyalty, benefit from economics of scale and limit new entrants access to resources, for example, the more difficult it will be for a new entrant to compete.  The most effective way to establish barriers to entry is through developing sustainable competitive advantages that are difficult for competitors to replicate.  Some sustainable competitive advantages that many companies turn to include

  • Intellectual property – patents, trademarks, domain names, copyrights and trade secrets that provide competitive protection)
  • Dynamic product lines that allow companies to establish multiple revenue streams and follow-on product variations
  • Cost advantages – economies of scale, vendor relations, or some other factor that allows you to offer a significantly lower cost than your competitors
  • Brand loyalty – keeping your customers happy can be the most effective way of keeping them from turning to your competitors.

When you are in the business planning process and writing your business plan, be sure to think about sustainable competitive advantages and barriers to entry that you can establish to make it difficult for new entrants to cut into your successes.

 

Whether you have a question about sustainable competitive advantages or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

Sustainable Competitive Advantages

Sustainable Competitive Advantage from The Startup Garage

Sustainable Competitive Advantages

A competitive advantage is some aspect of the company and/or its product or service that gives it an edge over its competitors and allows it to generate greater values for the firm (in sales and/or profit margins) for the firm and its shareholders.  Two primary examples of competitive advantages include: 1) comparative cost advantage – a firms ability to sell a good or service at a lower cost than its competitors as a result of lower production costs; and 2) differential advantage – a firm’s ability to product products or services that are seen as better than its competitors’.

Sustainable Competitive Advantages

Simply put, the more sustainable the competitive advantage, the more difficult it is for competitors to adopt the advantage.  Sustainable competitive advantages are not easily copied and generally stem from one or more of the following: vendor relations, product sourcing advantages, prime location, unique products/services; customer loyalty, customer service reputation, or distribution channel advantages.  When developing a business plan and business model, it is important to look beyond the product/service/competitive advantages and try to establish advantages that are truly sustainable.  The following are some tips to help you with this process:

  • Intellectual Property

While all I.P. has its shortcomings, patents are probably the best sustainable competitive advantage on offer as they provide 20 years of competitive protection.  Beyond patents, it is important to consider trademarks, copyrights,  domain names, long-term contracts and trade secrets.

  • Dynamic Product Line

A one-of-a-kind, differentiated product line may have several competitive advantages.  But for how long?  Don’t be the one-hit-wonder of the entrepreneurial world by coming out with one great song but failing to back it up with a great album and future albums.  Discover how your innovative technology can incorporate with add-on products that bolster your revenue sources as well as follow-on products that keep you ahead of the competition.

  • Dramatic Cost Advantage

In order for a cost advantage to be a sustainable competitive advantage you will need some dramatic breakthrough in the technology, manufacturing or revenue model of the product.  A breakthrough that is not easily copied by your competitors and that is ideally protected via patents or tightly held trade secrets.

  • Seasoned Management Team with Key Relationships

One of the greatest competitive advantages is a great management team.  A great management team with proven success in the past is most likely to continue their track record, lending to a real sustainable competitive advantage.  One of the main reasons for their past and continued success will come from the key relationships they have developed over the years with vendors, manufacturers, suppliers, distribution channels, industry influencers, major contractors, etc.

  • Brand Loyalty

By building strong relationships with your customers and keeping them happy, you will benefit from repeat businesses even if you do not offer the cheapest or most effective product.

 

Whether you have a question about Sustainable Competitive Advantages or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

The Importance of Differentiation

Standout Competitive Advantage from The Startup Garage

The Importance of Differentiation

When asked about their product or service, most entrepreneurs could go on and on with the various features and advantages.  However, once you ask them, “what makes your product or service desirably different?” their pitch begins to flounder.  They begin to fall back on their key features or advantages over their competition.  But, the question remains, while your product may have an advantage over the competition, is that enough to make it desirably differentiated?  When determining how you can differentiate your product or service, consider the following:

Core Competencies

Too many entrepreneurs and startups get caught trying to be everything to everyone.  Identify a problem that is not be solved and determine how you can best apply your core competencies to solve that problem.  It doesn’t take endless features and nuances to solve a problem well.

Know Your Customer

Know the fears of your customer.  Determine the reasons that they either avoid a purchase or run towards it.  Continue to narrow your target market until you can identify the crux of the problem for a segment of the population.  The better you know this segments pain points, the better able you will be to create a product that solves a unique problem in the market.

Write a Positioning Statement

A positioning statement is a one or two sentence statement that articulates your product or service’s unique value to your customers in relation to your direct competition.  It explains why your customers should purchase your product or service over that of your competitors.

 

A Note On Intellectual Property

If your product or service truly is well-differentiated and one-of-a-kind you may be able to acquire some intellectual property to help secure your idea from competitor theft.  Discuss your product, service, processes, etc with a startup lawyer to determine if you can obtain any trademarks, patents or copyrights. 

 

Whether you have a question about Differentiation, or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!