
Don't Pay to Acquire Your First Users - jenthoven
https://www.kapwing.com/blog/dont-pay-to-acquire-your-first-users/
======
Meekro
I don't necessarily agree with the author. Her suggestions for how to get
early users are all good ones, and by all means, do them all if you can!
Except producthunt -- that one's a rigged vote with its own secret
influencers. Google around, you'd be surprised how deep the rabbit hole goes!

But back to my point: there's nothing wrong with trying some Google or
Facebook ads. Don't spend too much up front! Google will try to get you to
broadly target a bunch of generic words. You should resist that pressure and
use their keyword research tool to home in on specific phrases that your
potential customers often search for.

Once you have your phrases, just put in $500 and see what happens. If you pick
up a handful of customers who pay you $1000 over the next 6 months, then
you're golden! Put in $5,000 next time and see if you can turn it into
$10,000. Honestly, this kind of thing works for some businesses and people end
up dumping as much as they can into ads. Don't ignore this strategy just
because it's not as "sincere" or "personal" or something.

[Edit] Fixed author pronoun.

~~~
superasn
I think you're being unfair to product hunt. I've launched two sites on there
- one was the product of the day (www.uploader.win) and the other one in top 5
and I don't know anyone there.

I even created my profile on the same day and yet it was so well received. Got
a lot of paying users as well. Maybe there are some people who try to game the
system (just like there are people on HN too) but I wouldn't make them
generalization since my experience has been very good on PH.

~~~
Meekro
Here are a few citations for what I'm talking about[1][2]. My objection is not
that some people try to game the system, but that the system was secretly
rigged from the start. There is a group of curators -- VCs, startup advisers,
journalists, important founders and the like -- who get to jump the queue and
post directly onto the top of the front page of ProductHunt. The majority of
front-page posts came from these curators, and the "upcoming" section is
nothing more than a pool from which they can hand-pick submissions. It's a bit
like Slashdot pretending to be Hacker News.

According to [1], many founders have taken on "advisers" with curator
privileges, giving them a little bit of equity in return for the publicity.

Hacker News is _nothing_ like that. Although your social group can help you
promote things here, there's no startup adviser that I can give 0.5% ownership
to in return for bypassing the voting queue.

[1]
[https://news.ycombinator.com/item?id=10739875](https://news.ycombinator.com/item?id=10739875)

[2] [https://www.recode.net/2015/6/18/11563670/product-hunt-
the-s...](https://www.recode.net/2015/6/18/11563670/product-hunt-the-startup-
kingmaker-faces-charges-of-elitism)

------
jsonne
I'm tired and it's late but I just want to say that the author makes a fair
number of unsubstantiated claims and assertions.

1\. That "organic" users are somehow more real than users acquired by paid
acquisition. 2\. That ads are super duper simple and you just turn them on
then bam users are there. Plenty of companies in fact spend quite a lot on ads
and get almost nothing. 3\. That the channels she mentions are in fact
"organic" I want to know, truly, what the super secret learnings are that one
gets from gaming google rankings rather than simply buying a Google ad or
spamming Facebook groups rather than buying a Facebook ad.

By all means, do customer discovery, but pretending that hanging kitschy
neighborhood signs instead of running Google ads is somehow more authentic is
just arrogance not really backed up by anything other than feelings. Plenty of
profitable and sustainable businesses run on ads. Other companies ads aren't
right for. Just try stuff and see what works.

------
mikekchar
I don't want to be too critical because I (naively) agree with the idea, but
all of the suggestions in the blog post cost time/money. I'm especially
thinking about start ups that have a large technical component and have
limited resources. You've got that thing in the back of your head where you
are going, "I need to spend time marketing. Or I need to spend time writing
code. Or I need to spend time making real sales. Or I need to spend time
gathering requirements from potential users. Etc, etc".

It's easy to think about founder-effort as being nominally zero cost, but
there is always a cost of lost opportunity. Choosing what to do is important.
If you have cash that you can spend that will make one of the things on your
TODO list disappear, that's a pretty sweet thing.

It's always going to be a judgement call as to what to spend time vs money on.
In my (again naive) way of thinking, you should probably take a hard look at
yourself (and any other partners you have) and decide what your "value-add"
is. If you could make a unicorn simply by spending money, then everyone would
do it. It's the people who make the difference and so you need to be realistic
about where you are going to make that difference. Prioritise the areas where
you are needed (and are able to make a difference) and spend money on the
areas where it matters less.

~~~
TomK32
A huge part (some say 80%) of your work on a product/startup should be
marketing, getting to know your market and customers.

------
benatkin
Kapwing adds a giant watermark to the videos to help acquire users. This won't
work for products that aren't video meme makers.

Side note: I've seen articles from Kapwing on here recently. It seems they're
following formulas to get on HN. It reminds me of TripleByte, and in the past,
Mattermark. Please don't take the bait.

~~~
smbullet
Sure but is it really all that different from a free trial or a limited free
version?

~~~
cm2012
Most free trials aren't visible to other people.

~~~
SmellyGeekBoy
Gives me an idea for a free trial where you unlock the software every day by
sharing on social media. I think a lot of mobile games already do something
along these lines to gain extra lives etc.

Marketing people: You didn't see this comment. Move along.

~~~
yoz-y
Building up on your idea I might actually do that. I have trouble reaching out
to new customers and ads are not an option, but maybe I could add a trial
version that only becomes available once you shared the app link on some
social media. (And of course by sharing I mean you were catapulted to a
website of your choice, if you don’t share anything I have no way of knowing)

~~~
TeMPOraL
Share the name of the product so that I can avoid it in advance. I consider
such marketing techniques abusive.

~~~
yoz-y
Sure thing: [https://eventail.app](https://eventail.app)

What in particular do you dislike in such a model? I get that a pestering to
share is bad and dislike it myself, but this idea is far from it.

~~~
TeMPOraL
What I dislike is poisoning of social signals. Sharing something to your
social media friends implies you believe it may interest them; doing so in
exchange for a reward is an abuse of this mechanism, a violation of trust your
friends may have in your posts.

I get that at this point, one app isn't making it much worse, just like
farting into a dumpster fire isn't making things significantly worse either.
But intent matters. You could say that it's a naively idealistic stance, but
then again, the problems of social media weren't caused by a conspiracy of few
evil actors - they're caused by hundreds of thousands of small sleazy actors
doing their small seedy things.

~~~
yoz-y
I see your point. Just giving a share option somewhere near is better. I’ll
ruminate on it a bit and try to think of a better way to motivate people.

------
burtonator
I'm literally heads down in the weeds on this now growing a new startup I'm
working on.

Just hit 10k users! [https://getpolarized.io/](https://getpolarized.io/)

I would agree with 60% of what the author is trying to say.

First, devils advocate.

If your app is actually making money it's totally reasonable to buy ads to
grow.

If you spend $100 on ads and make $500 in revenue that's probably a pretty
solid deal (assuming your costs are reasonable).

In that case - go for it.

Additionally, there are a lot of channels that you can work with which might
need cash to get you bootstrapped.

For example, if you find a really great blog or mailing list it might make
sense to just throw down $500 for an ad to the author to mention your product
(and disclose of course).

The reason why is that these niche communities can be VERY VERY valuable.

They don't scale but getting your first 10k years is really helpful.

The other things mentioned in the article take a LOT of time. Befriending
influencers? Yeah. That can take a while!

...

but I think the spirit is right. If you're lazy and only depend on ads -
you're in a world of pain. Most of what you have to do is understand how the
ecosystem around your company works.

That just takes a ton of time and the only way to do that is to have legs on
the ground feeling it out.

Which sites have traffic? What are some growth loops you can use?

A LOT of startups have found some REALLY cool and interesting growth 'hacks'
that you wouldn't really think of unless you're in the weeds for months at a
time.

Startups like Duolingo, Dropbox, etc don't just happen. They take time and
effort and continual iteration.

~~~
warent
Congrats on 10k users. Did you reach out to niche blogs to get your product
listed? A quick search shows that you bought the domain in September last
year, so I'm trying to figure out how you got 10k users in 4-5 months.

------
tomnipotent
> Paid advertising might test if your solution works for a very specific user,
> but it doesn’t tell you that the unit economics will work at scale.

Paid channels like Facebook & Google have incredibly diverse audiences with
any number of sub-populations you can target, and there's nothing special
about organic traffic that inherently makes it unbiased and special.

> In contrast, the customer acquisition cost is zero for organic channels.

It just seems free because you can't measure the effects of other channels on
direct and branded search (unless you're not doing any paid) or your
accountant got creative and put the social media, PR, influencer, and
affiliate spend in "Brand Marketing" so it doesn't count towards your customer
acquisition cost under "Paid Marketing". You're spending money one way or
another regardless of where you're putting it in the books.

> Instead, embrace the hustle and find ways to sell, distribute, and persuade
> without cash

Your time is money, and is probably worth more than the ad spend you're trying
to get out of. Burning cash on salary while you try to hunt down "free"
customers can be misleadingly expensive.

Free traffic is great, and I'd like to get as much of it as possible, but it's
very hard to build a business on something you have little direct influence
over.

~~~
z3t4
Yes, spending your own time is only for poor people.

~~~
tomnipotent
This business is VC funded, not a couple of kids spending some summer job
savings to bootstrap a website.

------
thkim
Paying is the easiest way to acquire a user. If you can't retain, that's a
product problem. There is no need to rule out paying to acquire a user. What
author probably meant is that you don't spend on marketing unless ROI is
proven. That's a whole lot different than saying "don't pay to acquire first
users."

------
matt_the_bass
I disagree with the author’s statement “We did not spend any money to acquire
our first user.“ she then listed a ton of efforts with real costs. She spent
money. She just didn’t spend money on generic search result ads.

------
philipodonnell
> Most companies never get paid acquisition channels to work...

Is this true? Or is it one of those truisms where there are exceptions but you
shouldn't assume you'll be one of them.

~~~
whoisjuan
Of course this is not true. If paid channels didn't work, then companies
wouldn't consistently deploy marketing budget into these channels.

I think what the author was trying to convey is that new companies have
trouble coming with a paid acquisition strategy with a low cost/positve return
over investment.

------
TomK32
My product isn't yet at a point where it has a market fit but I came up with a
small excel file that goes in the same direction as my product. I can offer
that for free and it starts to pull in organic traffic from google, bing and
other places like forums where I suggest my free tool as a solution for
someone's problem.

My tip for most SaaS out there: If your "keyword + excel/pdf/template" is an
easy target, then think about creating a free sub-product with a decent
landing-page for it.

------
DisruptiveDave
Schmeh. You should do EVERYTHING in the early stages, because you simply do
not know what will work and what won't. You have assumptions, but ego can get
in the way here. Paid users are not always less valuable (talking LTV here)
than organic. There are a bunch of really important things you can learn by
doing paid ads early on, specifically around potential audience demographics,
messaging, site behavior, conversion funnels, CAC, etc. Don't listen to
marketers, just do everything and learn a bunch.

------
ninefoxgambit
The thing is not all products and apps are marketable organically. But I to
agree with the spirit of what their saying.

My recommendation would be to modify your product in such a way that it has an
organic marketing angle, I think that can make a real difference.

------
gnicholas
> _because we grew it without marketing expenses, we could bootstrap and live
> out of our savings while we got our first customers_

It’s nice to avoid spending on marketing, but here it seems like they just
made the product free — which means they incurred platform costs (AWS or
whatever) in lieu of marketing spend. Not really a victory.

> _advertising distances you from the problem_

Except when it helps you learn about your target markets by seeing what
keywords perform better than others. It’s definitelu important to talk to
customers, as the author advocates, but you can also learn about your
customers by seeing what advertising channels/focuses work better than others.

------
briandear
Holy crap. There is just so much wrong and arrogant in this piece that I don’t
know where to start. She talks about all of the users her company got; how
many of them are paying customers? Depending on your business, it’s easy to
get a bunch of “users,” but it’s very hard to get a bunch of paying users. If
my product were free, I would have tens of thousands of users, (my niche is
pretty narrow, a TAM of 200k people in the US and about 3 million worldwide.)
But those users are worth exactly nothing if you can’t convince them to pay.
So I am not impressed with squirting a bunch of free users — if you have 5
million free users, maybe then I would be impressed, but anything less than
that, unless it’s a paid product, they’re actually costing you a whole lot
more than they are worth. Unless you are ad-supported, but even then, less
than 5 million isn’t at all impressive (to me.)

I tried the hanging up fliers bit 6 years ago. I also tried to build thought
leadership and similar nonsense. For my little company, we are just now
getting high rankings in Google for relevant keywords, but that took literally
years of relentless blogging on highly focused quality content directed
specifically at our potential customers. As far as product hunt? I can
guarantee you not a single customer of mine has ever heard about Product Hunt
let alone used it to find solutions to their problems. My business deals with
mental health practitioners and they sure as hell aren’t looking for our
solution on product hunt. The author mentions startup directories. That’s
about as dumb as expecting a Tech Crunch article to get you customers. Our
customers don’t read Tech Crunch. Most potential customers of products don’t
read it either. We were even featured in a Wired Magazine feature in 2012 and
that didn’t get us customers either because our customers don’t read Wired or,
if they do, it isn’t much. We literally got more leads from a Readers Digest
mention than from Wired. We were in a Forbes article about top health startups
and years later, we still get leads from that. But counting on that as a
customer acquisition channel? That’d be crazy. As far as getting friendly with
bloggers — that could help except all the bloggers that matter are already
friendly with the competition as well. And, in the mental health practitioner
space, there aren’t a great many bloggers that actually have an audience. You
know what does work? Content marketing and paid search. Paid ads on industry
organization websites work very well too. Professional conferences work to
some extent as well. But paid search (not just on Google, but sites like
Capterra) works extremely well, especially if you are clever with the long
tail.

If you are making some kind of trendy toy for the technorati or a non-specific
audience of “the general public,” then perhaps some of her tactics might work,
but for reaching actual people in your niche that are willing to pay, content
marketing, paid search and paid ads in industry-relevant places work far
better than some high school student council election style promotion. I
intend to be harsh because in the 9 years I’ve been running this business,
almost everything she says is wrong (at least in my anecdotal case.) Paid ads
absolutely work, but like anything else, you have to be smart and disciplined.
Paid ads can just as easily be a money pit, but if you know anything at all
about your customers and your product is worth something, you should be able
to find success with initial customers using paid advertising (and not just
online.) If I were to raise another funding round, I’d devote almost all of it
to content marketing and paid ads because they absolutely work. It costs us
about $200 to acquire a customer with an LTV of $750. There is a direct
correlation for us with ad spend and customer acquisition. It’s just
mathematics at this point. Figuring out the product-market fit and knowing
your customer extremely well — those are the hard parts. Once you figure that
out, the rest is just about executing and measuring.

------
orasis
Hard disagree here as an app entrepreneur. My goal is to test product
positioning, functionality, and pricing as quickly as possible. I want to get
close to an 80% LTV/CAC on a very early version to be confident that I can
eventually turn a profit on the product.

I’m not doing VC backed and don’t care about exponential growth. I’m just
delivering apps that meet existing demand in the marketplace.

------
monokai_nl
I think you really have to do it all. I'm paying for ads and that bring in
users. I'm posting on message boards to get users. I do cold outreach via
email, etc.

I must say I have actually launched today on Product Hunt and that's bringing
in a big chunk of visitors already. But still have to see if they'll convert
to paying users at some point.

------
rdlecler1
Online advertising can be very good for quick hypothesis testing, getting
alpha users, and can help you figure out your customer acquisition cost. These
can help you move quickly. I don’t see the problem if you have the budget as
it doesn’t need to be either or.

------
tux1968
Not sure there is a hard and fast rule on this one. It sure worked out for
Paypal.

~~~
aey
Those were not their first 10,000 users.

~~~
tux1968
If I remember correctly it was at least their first 100,000 users. Every
person who signed up got $20 and $20 more for each referral; that's paying to
acquire your first users directly. Was eventually trimmed down to $10, then $5
before being dropped altogether around 1,000,000 users or so I think. And
advertising mostly took care of itself via word of mouth. Of course, that's
ridiculously out of reach for a lot of startups, but it is definitely paying
to acquire your first users.

~~~
aey
If you can get 10k grassroots users, you can make the argument for raising
capital to scale the company through marketing. If you can't get any
grassroots users by giving away the product for free and you need to pay to
acquire them it might not be a great idea to raise capital.

------
GrumpyNl
No dating site ever started without buying first "fake" customers.

------
2T1Qka0rEiPr
The link is broken to the "longer article on this topic" link (looks like a
markdown issue).

------
koolhead17
What will happen to the head of growth and google ads?

------
the_other_guy
I remember Kapwing, they got lucky with the media and probably through paying
some influencers and journalists like many startups under the table but who
knows, congratulations anyway

~~~
dare0505
When other successful companies/people teach others how to be successful, I'm
always reminded of:

[https://xkcd.com/1827/](https://xkcd.com/1827/)

------
gammateam
> During our call, the founder - whose startup is backed by a top-tier VC -
> said to me “I assume that you acquired your first users through paid
> marketing.” Really? Is this an assumption nowadays?

WOAH, a top-tier VC AND they did something you don't consider to be a best
practice!? HERESY! Flagrantly discrediting the meritocracy you think might be
necessary to get in the presence of - let alone the PORTFOLIO of - a top tier
VC!

Also, that company is still right. Yes, this is an assumption nowadays.
Congratulations on getting some funding after doing it your way.

