Brian Balfour On How To Identify Growth Channels In Early Stage Startups
#BiteSize is a video series where leading experts answer some of the most pressing questions entrepreneurs have while building or marketing their startups.
Joining us today is Brian Balfour. We asked him the steps that an early stage startup should take in order to identify their growth channels.[Transcript of the video below]
Brian Balfour is VP Growth at HubSpot. Formerly EIR @ Trinity Ventures, Co-Founder of Boundless, Co-Founder of Viximo, Co-Founder reCatalyze and PopSignal. Growth advisor to Boundless, Gametime, and Namo Media. Brian is also an investor in GrabCad, Helpscout, and Shareaholic. He blogs at Coelevate.
Transcript of the Video
First and foremost, it takes a lot of work to identify a growth channels in the early stages, but there are a few steps that I typically recommend.
The first step, I really ask is – are you looking for traction channels or are you looking for growth channels. And the difference is that there are a lot of different ways to get traction, but there are very few ways to get high scale growth.
And so, there’s a lot of tactics out there such as posting on forums or guest blogging or things that will help you get traction or that initial customer set and will help you prove out things like your core assumptions around things like your business hypothesis and product/market fit. But they’re not going to scale you to a really, really large company.
There’s only really five channels that are super scalable – sales, paid acquisition, virality or word of mouth, search such as large scale SEO and content marketing. And if you look at most $100 million companies, they have scaled off of one of those five channels.
So, you need to know what you’re looking for, what you’re dealing with, first and foremost.
Once you have that, the second step is you take all those options. So if I’m just trying to get traction, the process that I would go through is that think about where all the places online where my target audience might live. And I create a giant list of those things down a spreadsheet and then across the columns, I create a different number of elements that I can start to prioritise those channels by – things like cost, competition, time it takes to spin and test that channel up, the time it takes for me to get results back.
And I have a very specific framework on my blog at Coelevate, if you look for ‘how to choose a customer acquisition channel’. There’s a framework there to help people. But basically, the point of this is to go through each one of those elements for each thing on your list and sort of give it a rating and prioritize.
Because the biggest mistake I see startups make is that they take a shotgun approach. They don’t know what’s going to work, and so they take the standpoint of “I’m not going to decide, I’m going to try everything.” And the problem with that is that with very limited time, resources and people, you’re spreading yourself too thin and leading you to nowhere.
And so, the second step is just prioritizing.
And then the third step is really starting to work through that list, one or two at a time, running a very vigorous experiment process of running experiments against that channel, trying to figure out what works and what doesn’t work and sort of iterating based off of those learnings. Once again, rather than taking that scatter-shot approach.
So this typically is the process that I recommend. It’s different for every single company, business model, target audience and journey, so don’t believe anybody that says that these are going to be your customer acquisition channels. Everybody needs to go through that process of evaluating all of the options prioritizing, testing and iterating through.