Securing initial buyers stands as a grueling obstacle for business startups, and early interest fails to guarantee long-term retention.
Panelists Elia Wallen, founder and chief executive officer of travel startup Engine, Gamma founder and chief executive officer Grant Lee, and Crystal Huang, general partner at Google Ventures, offered advice on customer acquisition and retention during TechCrunch Disrupt last week.
While social media appears to be a magic bullet today as young artificial intelligence firms build large audiences through founder online presences, Grant Lee warns that entrepreneurs need a deliberate strategy.
Gamma, creator of artificial intelligence presentation software, scaled rapidly through an influencer approach called the Ambassadors or Gambassador program before influencer marketing became common for small enterprises, eventually achieving a multi-billion dollar valuation.
Grant Lee explained that simply providing creators a platform to promote a brand online fails to automatically produce sales.
"If you have a product that can serve many different segments or use cases, then you want to basically have creators that can target each one of those," Grant Lee stated. "If you have folks that are in consulting versus people that do all their marketing and create all the decks for their CMO, there's all these different segments you might want to go after."
Grant Lee noted that entrepreneurs occasionally treat creator marketing as a passive task.
"I think you're better served by really spending a lot of time with these creators, because if they're not able to understand how to articulate the value of your product, it doesn't matter how much money you spend, it's just going to fall flat," Grant Lee added.
Social media utility relies heavily on business type, and alternative customer acquisition methods often prove equally or more effective.
Elia Wallen experienced this firsthand, growing his midsize business lodging and travel management firm Engine to $150 million in bookings through bootstrapping before accepting external funds, all without any visible social media presence, proving traditional sales methods surpass viral videos.
"We did events and we smiled and dialed," Elia Wallen stated. "We still have a lot of people picking up the phone. A lot of people who didn't grow up with that or don't understand it think that it's outdated or it doesn't work but it does. It's a hard thing. There are a lot of companies that just refuse to do it or don't know how to do it well. But they're missing out on a very big offline client base." He added: "The phone still works."
Elia Wallen described an early in-person tactic involving a magician named David who performed tricks at events to draw prospective clients to the Engine booth, demonstrating that personal engagement matches digital trends.
Crystal Huang advised that examining how initial customers use a product unlocks substantial value.
"Can you look into usage data and figure out if it's recurring, if it's increasing, if they are referring their friends?" Crystal Huang asked. "It can come across in early usage and retention information as well. And then also, do you see some super fans, right, who even want to work at the company, promote the company, be attached to the brand?" She added: "You need to have ways to create evangelists who are really passionate about the product."