UX For Startup Founders
Or: How to Grow Faster With Less Marketing Spend
MELINDA ELMBORG • FEB 19, 2020
Are your sales coming too slowly? Maybe you’re spending some money on Marketing, just to realize that you are not getting a return on your investment… Ugh, that feeling of powerlessness is painful. Right?
If your startup is gonna have any chance of survival, you HAVE to grow. There is no way around that. No investors want to invest in a stagnating startup. As a previous VC investor, I can share an insider benchmark: if you want to raise more than $1M, you need to grow at least 10 % per month.
Sure, you can bootstrap… But with small revenues, it’s impossible to sustain costs. So even if you bootstrap you absolutely need to grow.
So now you’re thinking: But if marketing isn’t working, how the f*** are you supposed to grow? Marketing is the only source to grow, right? Well, then my reaction is Eeehhhh… no not at all!
Marketing and sales are of course important, but it is far from the only component to achieve growth. It is only the first step.
Let me present UX for startup founders. No, I’m not talking about button design or color schemes. I’m talking about the experience that the user meets from first hearing about you until becoming a loyal customer. That’s a long journey with a lot of steps. As a startup coach, I’ve realized that this is completely overlooked by most startups that I meet.
Those who don’t completely overlook this… become the few startups who actually succeed.
User Experience is the second component of growth. It’s that missing piece that stands between your market and the success of your startup. You don’t only need to attract the market. You don’t only need to have traffic to your website. You don’t only need to build your list of leads.
You also have to convert those people to loyal customers. Users will only convert to loyal customers if the user experience is top-notch.
The 2 Frameworks You Need
So how do we fix the conversion rate from marketing to growth? To explain this, I would like to present you with 2 frameworks. (If you would rather skip the explanations and move ahead to fill out the template directly, then download the template here)
The 1st one is the AAARRR (pronounced arr — pirates not included!) which explains each of the steps that your users need to achieve to become a loyal customer.
It stands for —
Awareness 👂: making your market aware of you and getting them to take the first step towards you (for example, click the link of your ad or answer when you’re cold calling them)
Acquisition 💥: getting that website visitor or lead to say “yes” a first time, either by downloading your app, book in a demo meeting, or starting a trial. This is usually where a marketer considers their job “done”; the rest is up to you as a startup founder.
Activation 🤳: getting your user to use your product for the first time. If you have a productivity platform it will be to create the first task. If you have a mobile game, activation would be when the user completes the first game. At the activation step, the user should feel “Aha! This is really great”. When does that happen with your product?
Retention 🤳🤳🤳: returning users coming back using your product over and over again. If achieved, it is proof that you create value for your users. If they keep on coming back it means that your product is needed and loved.
Revenue 💰: monetizing on your customers — if you create large value for them, they should be ready to pay you for the service you offer.
Referral 🗣️: word of mouth, getting your very happy customer to spread awareness about your startup. If you nail this step, you don’t need to depend on paid advertising. Very few startups actually manage this, and many can succeed anyhow.
You’ve probably seen this structure before but in the shape of a funnel. Maybe you’ve even seen this in a marketing or growth hacking course. This is awesome, you’re off to a great start to improve that User Experience!
It is important to define these steps because then you can start measuring them. When you know how many of your users have done each of these steps — you can start measuring the conversion rates. The conversion rates tell you how well you’re doing at your user experience. Higher conversion rates = better user experience!
But that is not all. Since you’re a startup and innovating a new technology or business model, you’re not like a normal business. As an innovative startup, YOU also need a second framework.
The reason why someone converts is that they feel like what you communicate and how you communicate resonates with them. So in short, to increase that conversion rate, you need to create something that resonates with your users.
But… it’s absolutely impossible to create something that resonates with EVERYONE. To improve that connection with your users and create something that resonates, you need to limit ourselves to a smaller target group.
To figure out our target group, we need to figure out the 3Ws, which our AAARRR framework is then built on top of.
The 3Ws stand for Who, What, and Why. This is to be clear on who your customer is, what they want to buy, and why they would want to buy.
To answer WHO your customers are, you need to define their exact profile and how you will segment the market to identify them
To answer WHAT your customers want, you need to look at the difference between what you’re selling and what they think they’re buying.
To answer WHY your customers buy, you need to find the difference why they think they’re buying and their deep underlying motivations for buying.
It’s not enough to just explain the 3Ws in a sentence. You need to go to a very granular level.
This also means that you can’t be too broad when defining your target market. Imagine that you are going after a subset of a sub-market. Don’t tell yourself that you’re going after coffee shops, that’s too broad. You’ll never be able to create a user experience that is top-notch compelling for ALL types of coffee shops.
A better target market would be, coffee shops in London owned by a small business with a founder below 40 years of age, who have already set up their Google Maps profile.
How the Frameworks Will Boost Your Success
To make your AAARRR effective, you’ll need to be extremely well-informed about your 3Ws. As an example: if you know why the user downloaded your app and what the user is looking for, it will be much easier to successfully onboard and activate that user.
If you don’t figure out your 3Ws, your AAARRR will fall apart:
When a user is exploring a new product, that might help solve a problem for them, they are looking for proof that your solution is right for them.
If you don’t know exactly in detail, who your user is, what and why they want to buy from you — how are you supposed to successfully convince the user that your solution is right for them? Sounds impossible, right?
When these two frameworks are successfully applied and combined with marketing — your success will skyrocket. Then, you acquire new users and you keep them on your platform… and that is how you really achieve growth!
Do you see the power in this?!
From my own network, I have seen startups such as Backmarket (Fr), Meero (Fr), and Karma App (Swe) succeed with this combination of marketing + user experience.
Now it’s up to you to make this happen for your startup! To help you get started, I’ve created a guide and template for you, you can download it here.
P.S. It doesn’t end here, for you to get started, you can join us in the incubator for only 1€! You will join a community of founders, get answers from me in to weekly calls and get access to a library of packages like the motivational package, the investment package, the product market fit package…
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About the Author:
Melinda Elmborg was a Venture Capital Investor at the French VC firm Daphni. To help founders build, grow and raise capital to their startups, she switched careers to become a startup coach. In 2018, she started Startup Action.
Based on her learnings, she has developed The Startup Action Framework that guides startups from launch to exponential growth.
So far, over 400 founders have already joined one of her workshops and thousands of founders have taken advantage of her templates and guides to succeed with their startup.