Thread by @bbourque

Startups often struggle to get customers.

I've overseen $100M+ in marketing spend to acquire customers online.

Here's a blueprint for B2C startups to acquire customers and scale quickly:

1) The Problem:

Many startups focus on their product first and wait too long to figure out distribution.

How will you get customers?

This is a complex topic and there's no single answer.

Let's look at your options:

2) Customer acquisition is typically broken into 3 types:

• paid marketing
• unpaid (SEO, PR, etc.)
• viral, product-led growth

Everyone wants to build a product that's so cool it magically attracts users.

This isn't that common.

3) Paid marketing

Many startups are afraid to spend money on marketing because it's easy to waste dollars and come away without clear answers.

Here's what often happens:

They start losing money and get scared.

Pause.

They hop to another platform. Same thing happens again.

4) On the flip side, paid customer acquisition can be rocket fuel:

• Identify winning messaging / value props
• Identify incorrect assumptions
• Find your best customers
• Improve your product itself
• Model out the cost of growth
• Iterate and scale quickly

5) Who this guide is for:

You have a product or service that consumers pay for

You have at least $10K in marketing budget (this figure will vary depending on price point and conversion rate

Best case is that you have enough money to continuously test and learn.

6) The "High & Wide" Framework

There's a reason that over 50% of digital ad dollars are spent on Google and Facebook.

Google has the highest intent customers.

Facebook has the best ad targeting platform across the widest audience.

These two sources will tell you all you need.

7) Buying traffic - now what?

Once you start getting users, you need to assess three things:

• Is everything tracking properly (if not, you're wasting your money)
• Are you attracting the right users?
• How many users do you need to draw conclusions?

8) If you're getting conversions at 1-4x your breakeven point, try to get 50-100 conversions.

If you're not seeing conversions, focus on pre-sale events such as add to cart, account creation, etc.).

You can use upper funnel metrics as less expensive proxies for optimization.

9) The range of potential outcomes:

Revenue > ad spend (unlikely. If so, you're awesome)

Revenue < ad spend (most likely)

Zero revenue but a lot of ad spend (worst case)

10) Let's look at the worst case scenario:

No one bought or converted.

You still have a ton of data.

At what rate did people click on your ads?

Which ads did people click on?

How much did it cost to get someone to your site or app?

Where in your flow did people drop off?

11) In the absence of conversions, use these "upper funnel" metrics to inform iterative testing.

If you see differentiation in ad performance, lean into what worked.

If you saw a steep drop-off in user activity after a certain step, re-design that step.

Etc.

12) Paid marketing is iterative

The virtue of paid marketing is you can buy as much instant feedback on your product as you want.

Get some data.

Learn from the data.

Improve your product, website, ads, etc.

Get more data.

Do it quickly.

13) Modeling a path to profitability

Once you have a decent number of conversions, you can model out what inputs you need to get profitable.

Again, you will refine your model as you acquire more data.

Let's walk through an example:

14) Assume the following:

$10,000 ad spend

5,000 visits ($2 CPC)

250 conversions (5% conversion rate, $40 cost per conversion)

$20 lifetime value per conversion

So now you've spent $10,000 to make $5,000 back.

Sound scary?

This is actually pretty awesome.

15) Why 50% ROI is awesome

All you have to do is 2x your effectiveness to be break-even.

At this stage, a 2x improvement should be pretty easy.

Improving 3 variables by 25% will nearly double your effectiveness.

Or try something simple like doubling your price.

16) Think of user acquisition as a machine

Each step of the conversion path is a part of your machine

Incremental improvements to any part of the machine will make the entire machine more effective and bring you closer to profitability.

17) Summary: The "High & Wide" framework for customer acquisition

Start on Google & Facebook

Split your budget

Measure everything

Model a path to profitability

Double down on what works

Iterate

Scale

18) If you found this guide useful, please share:

• Retweet the first tweet and help others find this thread

• Join 4,460+ of my friends & follow me: @bbourque

• You can find my previous thread on startups here:

https://twitter.com/bbourque/status/1444268274267693057?s=20