How To Create Middle Managers Your Employees Can Work With
By AJ Agrawal
It can be a tough life being a middle manager. 18% of all middle managers suffer from symptoms of depression, for example. While it can be difficult to be a middle manager, it can also be difficult to toil under them. One huge study by Vanderbilt University revealed a lot of middle managers don’t have a good relationship with their bosses, and these effects reverberate down the whole chain of command.
As a CEO, you need to make sure you are creating middle managers your employees can work with. You want everyone to have a good working relationship, otherwise, it can impact your ability to function as a team.
This guide is going to show you how you can go about creating middle managers your employees can work with.
Open Up Lines Of Communication
Every great sales team knows how to communicate effectively. Make sure you are opening up those lines of communication between the upper echelons and the middle manager. Don’t allow them to feel like they’re alone, otherwise, this can stop your company from being one of the best places to work.
You likely already know that communication is important for your brand. If you are communicating with your customers, why wouldn’t you do it with a middle manager?
The number one communication problem for managers is not having enough contact with executives. Schedule regular meetings so you can coordinate and make sure you’re all working towards the same goals. The solution really is that simple.
Train And Develop Your Middle Managers
You wouldn’t expect someone to explain the details of selling a structured settlement for cash without training. You wouldn’t expect a doctor to perform brain surgery without training, so why would you allow a middle manager to operate without the right tools?
Middle managers experience a high volume of work and few opportunities for advancement. You need to develop them to prevent them from feeling like they’re on their own. When managers feel hopeless they become hard to work with. It’s not a problem with them it’s a problem you caused.
Support their career growth and allow them to advance up the corporate ladder. Show them new skills and do your best to make them better leaders through providing them with leadership development programs.
Let Middle Managers Turn To Someone
Mentorship is a critical part of running any company. You likely experienced some form of mentorship during your initial entrepreneurial years. And most CEOs invest in mentorship for those at the bottom of the company. The middle often goes forgotten, and that’s why managers get so frustrated. They don’t feel like they’re going anywhere.
Bring in mentors to help middle managers get better at what they do. This will allow them to turn to someone for advice, and it will make them more effective at what they do.
On top of that, you need to make middle managers feel like they’re doing something useful. An easy way to do this, and to save money, is to have your middle managers become mentors to your employees. The chances are they have skills you would like to impart on to your employees.
With their help, you can become a better company. You can build essential bonds between managers and staff that will help to avoid conflict and achieve more together.
Give Them Control
Middle managers are there to lead employees. Entrepreneurs can fall into the trap of micromanaging, and that can cause middle managers to wonder what they are doing there. One of the harsh realities of entrepreneurship is you need to let go of micromanaging and allow your middle managers to do the job you employed them to do.
You want to give them control so they can feel like they are making a positive difference to the company.
It can be difficult to trust middle managers with important decisions. Giving them responsibility can be difficult to do, especially if you’ve spent a long time micromanaging everything. Try to hand over some control and trust in their skills.
Conclusion – Frustration And Stress
Middle managers gain their stereotypical reputation of being tyrants because they feel stressed and frustrated. It’s difficult to expect anything different when they feel their position gains no respect and they are constantly being overruled by the powers from above.
A happy middle manager will lead to a better work environment. Work on their needs and think about how you can improve their day. You’ll be shocked at the results you get back.
What are your experiences working with middle managers?
DIGITAL AD PURCHASES TO BE 80% PROGRAMMATIC BY 2018
A new study from the Internet Advertising Bureau (UK) has just been released. This study looked at the rapid growth of programmatic ad sales, especially in mobile. The report found that back in 2014 approximately 50% of all display ads were purchased through programmatic systems. For mobile, however, 64% of ads were programmatically purchased.
Looking forward, they estimate that as much as 80% of all digital ad spend will be done programmatically by 2018, just under a year and a half away. For marketers, this may be a strong reminder that if you’re still making digital ad purchases manually, you’re likely part of a dying breed. Programmatic buying has become so effective that in almost all cases, it doesn’t make sense to handle things on a case by case basis.
The Chief Strategy Officer at the IAB UK, Tim Elkington, said, “Programmatic’s role in digital ad buying has grown from virtually zero to nearly half of all transactions in just five years. However, the impact on mobile has been even greater due to its more fragmented ecosystem providing a ripe breeding ground for intermediaries.”
The trend will likely continue beyond 2018 as well, with the future looking like it will be dominated heavily by programmatic ad buying. Given the rapid improvement in the ability for systems to buy effective ads, this will help to improve ROI while also freeing up a lot of time for marketers to spend focused on other things.
Skills and Behaviors that Make Entrepreneurs Successful
Research at Harvard Business School by Lynda Applegate, Janet Kraus, and Timothy Butler takes a unique approach to understanding behaviors and skills associated with successful entrepreneurs.
What makes a successful entrepreneurial leader?
Is it the technical brilliance of Bill Gates? The obsessive focus on user experience of Steve Jobs? The vision, passion, and strong execution of Care.com’s Sheila Lirio Marcelo? Or maybe it’s about previous experience, education, or life circumstances that increase confidence in a person’s entrepreneurial abilities.
Like the conviction of Marla Malcolm Beck and husband Barry Beck that high-end beauty retail stores and spas, tightly coupled with online stores, was the business model of the future, while other entrepreneurs—and the investors who financed them—declared such brick-and-mortar businesses were dinosaurs on their way to extinction. The success of Bluemercury proved the critics wrong.
“We’ve always had a hard time being able to identify the skills and behaviors of entrepreneurial leaders”
Despite much research into explaining what makes entrepreneurial leaders tick, the answers are far from clear. In fact, most studies present conflicting findings. Entrepreneurs, it seems, are still very much a black box waiting to be opened.
A Harvard Business School research team is hoping that a new approach will enable better understanding of the entrepreneurial leader. The program combines self-assessments of their skills and behaviors by entrepreneurs themselves with evaluations of them by peers, friends, and employees.
Along the way the data is also allowing scholars to study attributes of entrepreneurs by gender, as well compare serial entrepreneurs versus first-time founders.
“We’ve always had a hard time being able to identify the skills and behaviors of entrepreneurial leaders,” says HBS Professor Lynda Applegate, who has spent 20 years studying leadership approaches and behaviors of successful entrepreneurs.
“Part of the problem is that people usually focus on an entrepreneurial ‘personality’ rather than identifying the unique skills and behaviors of entrepreneurs who launch and grow their own firms.”
Complicating this understanding are the many types of entrepreneurial ventures that exist, says Applegate. These can include small “lifestyle” businesses, multi-generational family businesses, high-growth, venture funded technology businesses, and new ventures designed to commercialize breakthrough discoveries in life sciences, clean tech, and other scientific fields.
“These types of ventures seem to both appeal to and require different types of entrepreneurial leaders and we are hoping that our research will help us understand those differences—if they exist,” says Applegate, the Sarofim-Rock Professor of Business Administration at HBS and Chair of the HBS Executive Education Portfolio for Business Owners & Entrepreneurs.
The answers are already starting to come in, thanks to initial results from a pilot test of “The Entrepreneurial Leader: Self Assessment” survey taken by 1,300 HBS alumni. Results allowed the researchers to refine the self-assessment and to create a second survey, “The Entrepreneurial Leader: Peer Assessment.” Both are being prepared for launch in summer 2016.
The team included Applegate; Janet Kraus, entrepreneur-in-residence; and Tim Butler, Senior Fellow and Senior Advisor to Career and Professional Development at HBS and Chief Scientist and co-founder of Career Leader.
Dimensions of entrepreneurial leadership
A literature review combined with interviews of successful entrepreneurs helped the team define key factors that formed the foundation for the self-assessment. These dimensions were further refined based on statistical analysis of the pilot test responses to create a new survey instrument that defines 11 factors and associated survey questions that will be used to understand the level of comfort and self-confidence that founders and non-founders have with various dimensions of entrepreneurial leadership (Chart 1).
These 11 dimensions are:
Identification of Opportunities. Measures skills and behaviors associated with the ability to identify and seek out high-potential business opportunities.
Vision and Influence. Measures skills and behaviors associated with the ability to influence all internal and external stakeholders that must work together to execute a business vision and strategy.
Comfort with Uncertainty. Measures skills and behaviors associated with being able to move a business agenda forward in the face of uncertain and ambiguous circumstances.
Assembling and Motivating a Business Team. Measures skills and behaviors required to select the right members of a team and motivate that team to accomplish business goals.
Efficient Decision Making. Measures skills and behaviors associated with the ability to make effective and efficient business decisions, even in the face of insufficient information.
Building Networks. Measures skills and behaviors associated with the ability to assemble necessary resources and to create the professional and business networks necessary for establishing and growing a business venture.
Collaboration and Team Orientation. Measures skills and behaviors associated with being a strong team player who is able to subordinate a personal agenda to ensure the success of the business.
Management of Operations. Measures skills and behaviors associated with the ability to successfully manage the ongoing operations of a business.
Finance and Financial Management. Measures skills and behaviors associated with the successful management of all financial aspects of a business venture.
Sales. Measures skills and behaviors needed to build an effective sales organization and sales channel that can successfully acquire, retain, and serve customers, while promoting strong customer relationships and engagement.
Preference for Established Structure. Measures preference for operating in more established and structured business environments rather than a preference for building new ventures where the structure must adapt to an uncertain and rapidly changing business context and strategy.
While the 11 factors provided some level of discrimination between founders and non-founders, five factors showed statistically significant differences. For example, founders scored significantly higher than non-founders on “comfort with uncertainty,” “identification of opportunities,” “vision and influence,” “building networks,” and “finance and financial management.” Founders also had significantly lower ratings on their “preference for established structure” dimension (Chart 2).
Although some of the factors—like comfort with uncertainty and the ability to identify opportunities—seemed like obvious markers for entrepreneurial success, the study built a statistically reliable and valid tool that can be used to deepen understanding, not only of founders versus non-founders, but also of differences and similarities among founders who start and grow different types of businesses, between male and female founders, serial founders and first-time founders and founders from different countries.
In addition, a deeper examination of the individual questions that make up each factor provides richer descriptions of specific behaviors and skills that account for the differences in the profile of entrepreneurs who are launching different types of ventures and from many different backgrounds.
Take vision and influence, for example. Although it is a long-standing belief that great leaders have vision and influence, the researchers found that entrepreneurial leaders have more confidence of their abilities than the average leader on this dimension—and that leaders working within established firms actually rated themselves much lower.
Financial management and governance turned out to be another non-obvious differentiator.
“Financial management is a skill that all of our HBS alumni should feel confident in applying,” Kraus says. “Yet among the alumni surveyed in the pilot, those who had chosen to be founders rated themselves as much more confident in their financial management skills—especially those related to managing cash flow, raising capital, and board governance—than did non-founder alumni.”
Self-confidence in financial management and raising capital was especially strong for male entrepreneurs, she says. “Our future research will broaden our sample beyond HBS alumni to enable us to differentiate between those who graduated with and without an MBA, and to assess confidence in raising capital and financial management and a wide variety of other skills by different types of founders and non-founders.”
Efficient management of operations was another crucial, yet less obvious, factor. “While we often think that employees within established organizations would be more confident in their ability to efficiently manage operations, we were surprised to see that it is a distinguishing and differentiating attribute of entrepreneurs,” says Kraus. “All entrepreneurs know that they must do more with less—which means that they must work faster and with fewer resources.”
Differentiating male and female entrepreneurs
The pilot study allowed researchers to examine gender differences. While men and women rated themselves similarly on many dimensions, women were more confident in their ability to “efficiently manage operations” and in their “vision and influence,” while men expressed greater confidence in their “comfort with uncertainty” and “finance and financial management” (Chart 3).
These differences rang true for Kraus, herself a serial entrepreneur who founded and grew three successful entrepreneurial ventures.
“Successful women entrepreneurs that I know have lots of great ideas, and are super skilled at creating a compelling vision that moves people to action,” she says. “They are also extremely capable of getting lots done with very little resources so are great at efficient management of operations. That said, these same women are often more conservative when forecasting financial goals and with raising significant rounds of capital. And, even if they have a big vision, they are less confident in declaring at the outset that their goal is to become a billion-dollar business.”
Indeed, research confirms observations that women start more companies than men, but rarely grow them as large.
Based on his earlier research, these results also resonated with Tim Butler: “When it comes to self-rating on finance skills, women are more likely than men to rate themselves lower than ratings given them by objective observers. There are definitely implications for educators when lower self-confidence in skills associated with entrepreneurial careers becomes a significant obstacle for talented would-be entrepreneurs.”
The researchers hope to deepen their understanding of male and female entrepreneurial leaders as they collect more data.
Differentiating serial founders and first-time founders
Not all founders are cut from the same cloth, the study underscores. Analysis of the pilot data also revealed important differences between first-time founders and serial founders—those who launch and grow a number of new ventures, such as Elon Musk (PayPal, Tesla Motors, SpaceX) and research team member Kraus (Circles, Spire; peach).
One key difference the research team discovered: serial founders appear more comfortable with managing uncertainty and risk. That doesn’t mean they enjoy taking risks, Kraus says, “but they appear to be confident that they are adept and capable of knowing how to ‘de-risk’ their venture and manage uncertainty from the very beginning” (Chart 4).
While the data are not yet robust enough to say so with certainty, Kraus believes that serial entrepreneurs often enjoy launching businesses where the risk is highest because of confidence in their ability to manage uncertainty, and perhaps because they enjoy the process of creating clarity from uncertainty.
Other factors that set serial entrepreneurs apart from one-timers include confidence in their skills at building networks, securing financing and financial management, and generating creative ways to identify and meet market opportunities.
As more people take the assessment and HBS develops a richer data set, scholars, educators, entrepreneurs and those who support them will be able to develop insights that will have a number of payoffs.
“The entrepreneurial leaders we know are constantly searching for tools that can help them become more self-aware so they can be more effective,” Kraus explains. “This tool is going to be uniquely useful in that it was specifically developed to help entrepreneurs gain a deeper understanding of the skills and behaviors that they need to be successful.”
In addition, researchers will be able to examine the data by age, gender, country, industry, size of company, pace of growth, and type of venture “to understand the full range of entrepreneurial leadership skills and behaviors, and how different types of entrepreneurs are similar and different,” Applegate says. “These insights will enable us to do a better job of educating entrepreneurs, designing apprenticeships and providing the mentorship needed.”
The data will also be useful in identifying skills and behaviors needed to jumpstart entrepreneurial leadership in established firms, and in understanding how an entrepreneurial leader continues to lead innovation throughout the lifecycle of a business—from startup through scale-up.
“Today, I often see that the creativity and innovation that was so prevalent in the early days of an entrepreneurial venture gets squeezed out as the company grows and starts to scale,” says Applegate. “But, rather than replace entrepreneurs with professional managers, we need to ensure that we have entrepreneurial leadership and creativity in all organizations and at levels in organizations. We hope that our research will help clarify the behavior and skills needed and, over time, will help us track the entrepreneurial leadership behaviors and skills of companies of all size, in all industries, and around the world.”
Given the critical importance of entrepreneurial leaders in driving the economy and improving society, shockingly little is understood about them. The data and analysis emerging from HBS will provide important insights that can help answer the questions, “What makes a successful entrepreneurial leader and how can I become a successful entrepreneurial leader?”
Are Podcasts a Part of Your Content Strategy? They Should Be!
Podcasts have been around for quite a long time now, but they are rarely talked about by most marketers. While everyone knows they exist, most people don’t realize just how popular they are and how they can help you to build a loyal audience that can lead to a big boost in sales. Many people have even been able to build entire businesses around podcasts with advertisers paying them thousands of dollars per episode.
According to a recent report from comScore, podcasts actually lead to the highest increase in perception of all the forms of advertising used on mobile devices.
You may be surprised to hear that two-thirds of podcast listeners also report that they conduct research for purchases specifically because of a product they heard about on a podcast. This makes it quite clear that those who are listening to podcasts take what the podcaster is saying to heart, and then take action.
To make it even better, podcasts continue to get more and more popular over time. The recently released study found that one-third of current podcast subscribers say they plan on increasing the amount of time they spend listening to podcasts in the next six months.
Andrew Lipsman, VP of marketing and insights at comScore, reported, “It’s clear that we’re in the midst of a new podcasting boom, spurred in large part by improved accessibility via mobile and a tidal wave of rich and compelling content.”
If you think that the audience size of podcasts is going to be limiting, you’re wrong there. Currently about one in three men 18-34 listen to podcasts. About 1 in 5 Americans age 18-49 report that they listen to podcasts at least once per month. With these numbers continuing to grow, this is a huge opportunity for brands and marketers to capitalize on.
To make it even more attractive, podcast listeners tend to have a higher level of education and a household income of over $100k per year. Obviously this makes the demographic quite attractive to brands and marketers.
How Great Leaders Manage Their Time
The more responsibility we have, the more people need our time. As we progress in our careers we’re often in more meetings, on more calls, need to have more one-to-ones, and we have more areas across the business we need to stay on top of and drive… there just seems to be more. But the time we have doesn’t change. So how do the best leaders make it all work?
Here are five practical ways to manage your diary like a successful leader:
Plan realistic reactive time. It’s tempting and seems sensible to plan 100% of our day. I frequently ask coaching clients, “What percentage of your day on average is reactive?” That is, how much time is taken up by things that arise on the day, which genuinely need your attention and input? The answer is usually between 40–60%. So, by engaging in the discipline of only planning the remaining 60-40% and leaving the rest free for the reality of necessary reaction, we can build a diary that is sustainable.
Respond realistically not habitually. How do we find this extra time so that we can build in substantial necessary reactive time? One way is to push out deadlines even by a day or two. When a client, for example, asks, “When could we get that?” we often answer habitually with the soonest possible time we could get it to them, taking into account our other commitments in our diary. But we haven’t built in our necessary commitment to reactive time. Suggesting a day or two later, or a week or two later, is often surprisingly met with the response, “That’s fine, thanks.” Then we can deliver before expected deadlines and still build a little extra time in for our reactive realities
Avoid the 25-minute meeting rule. People are regularly in meetings that last too long, often with little that directly involves them. One response can be to instigate a 25-minute maximum (or similar) meeting rule. But this seeming quick fix can undermine collaboration and creativity, which typically requires longer, giving people space to brainstorm. Instead, address the root of the problem and challenge managers to ensure and continually check the right people are in the room and encourage people to take some conversations “off-line”.
Carve out your best brain time. We all know when our best brain time is – when we have our most productive time for getting heavy thinking work done. For many it is in the morning. Whenever your personal best time is, plan your day to give yourself these energizing windows. If others arrange your diary, ensure they know to block out this time, and in the case of the organization-wide shared calendar, add this window as a calendar event to avoid others filling it up with meetings that may not be a priority or the best time for you
Answer, “Yes…” It’s easy to get frustrated with constant interruptions when in the middle of some work, yet we know people interrupting often genuinely need our input. We can easily unintentionally follow, “Do you have a minute?” with, “No, I’m really busy” or “Yes” but with an accompanying facial expression that shows our frustration or we don’t look up from our computer. Great leaders answer either, “Yes, sure” and give their full attention, or “Yes, I’d be happy to chat, let’s find a time” and make plans for when it will work.
The best leaders are proactive and purposeful about their day, every day. It enables them to use their best brain time, ensure interactions with team are positive and productive, and are energized knowing that they run their diary – not it runs them.
How Uber, Airbnb, And Etsy Attracted Their First 1,000 Customers
New businesses often struggle finding their first customers. The challenge is even more difficult with startups in the sharing economy that launch as platforms connecting independent service providers with consumers.
Taker Uber. Its platform is two-sided, connecting people who need rides with people who have rides to offer. (Same ideas as Airbnb, which connects people needing rooms with home-owners.) So to launch as a platform service, these companies need to find users on both the supply and demand sides.
“When you have a two-sided platform, you have to acquire both the customers and the services,” says Harvard Business School’s Thales Teixeira, Lumry Family Associate Professor of Business Administration.
“It’s the classic chicken-and-egg problem,” he says. You can’t have one without the other, but which one do you find first - the customer chicken or the service egg?
“As a small company you cannot afford to focus on both with the same amount of effort,” he says. “You may need to prioritize one side.”
Preparing to teach a new course on e-commerce marketing next spring, Teixeira made it his goal to find an answer. He studied three of the best-known and most successful startups- Uber, Etsy, and Airbnb- hoping to find some commonalities in how those businesses solved the dilemma.
Spoiler alert: it’s the egg that needs incubating.
As Teixeira reports in a new HBS case, Airbnb, Etsy, Uber: Acquiring the First Thousand Customers, all three platforms concentrated on getting the service side of the equation first, customers second. But there’s a catch.
“It’s not just the chicken and the egg, you also want to select the right eggs,” explains Teixeira. “If you acquire the wrong eggs and ostriches come out, then you are in trouble. The chickens will run for the hills.”
Lesson One: Think Like a Customer
From the beginning, it was clear to the founders of apartment-sharing site Airbnb that they’d need to find people willing to list their homes before finding people interesting in staying in them.
“If you don’t have a supply of houses and apartments, people are not going to come,” says Teixeira. The problem was, where to find people willing to let strangers stay in their places. It’s not like they could go around San Francisco knocking on doors.
Instead, founders Brian Chesky and Joe Gebbia thought like customers themselves, trying to figure out where they would go if Airbnb didn’t exist. It didn’t take them long to figure out the answer: Craigslist. The entrepreneurs figured they could do a better job of making apartments appealing than the online classified site, but first they had to siphon away its customers. To do that, Chesky and Gebbia created software to hack Craigslist to extract the contact info of property owners, then sent them a pitch to list on Airbnb as well.
The strategy worked. With nothing to lose, property owners doubled their chances of finding a potential renter, and Airbnb had a ready supply of homes with which it could attract customers.
“Poaching customers is something all competitors do in different ways,” says Teixeira. “If you are a website and you are providing content to users publicly, others can grab that information.” It’s not enough to just take someone else’s customers, though, he warns—you’ve got to give them something better than they had before.
Lesson Two: Create A Better Experience
Once they had apartment owners on the hook, the Airbnb founders realized they had a problem: The subpar photos that property owners were taking for Craigslist on their iPhones would never work for customers looking for an alternative to a hotel.
“The first time a person goes on Airbnb, they are comparing the quality of photos to hotels that take glamorized shots,” says Teixeira. “They needed to compete at that level.”
In order to do that, Chesky and Gebbia did something that would never be scalable: hired professional photographers to go to property owners’ homes to take inviting pictures. The gambit worked, making the site much more attractive than the competition, and setting a standard for photography that later property owners rose to match in order to compete against other homes.
“The underlying principle of this is you should help your suppliers portray themselves in the best way possible, even if that is not scalable,” concludes Teixeira. “If you don’t have customers, there is nothing to scale.”
Ride-sharing app Uber pursued a similar strategy. Rather than starting out with Uber Pool or Uber X, in which drivers use their own cars, the company started with black cars driven by professional drivers. That way, they could ensure that customers would have a great experience virtually every time they used the service—and they could then rely on customers to spread the news of that experience by word of mouth. “That’s why you get the supply side first—if you get the right suppliers, the customers will experience their high quality service and then do the marketing for you,” says Teixeira.
Etsy also pursued a decidedly non-scalable strategy in finding the right eggs with which to launch its business. The platform, which serves as an online marketplace for craft vendors, started its business with an offline strategy: scouring craft fairs across the country to identify the best vendors at each, and pitching them on opening up an online store on the site. “They first brought their customers, and then they brought other artisans who followed the customers.” Once Etsy had the first-tier artisans on the site, the next tier naturally followed them.
Lesson Three: Sequencing Is Everything
Uber and Airbnb were also smart about how they chose to expand, picking the right cities at the right time to maximize their success.
Since Uber’s main competition was taxi cab companies, the startup researched which cities had the biggest discrepancy between supply and demand for taxis. They then launched during times when that demand was likely to be the highest, for example during the holidays when people tend to stay out late partying. It also ran promotions during large concerts or sporting events, when big crowds of people all needed cabs at the same time, and an individual might be more likely to take a chance on an unfamiliar company named Uber.
In that way, the company acquired a large group of customers in one swoop. “First, they figured out how to get a bunch of customers all in one night, when the demand was high. Then, they made sure this first group of users had a great experience and brought in the next wave of customers via word-of-mouth,” says Teixeira. The company banked on the fact that once users realized how easy it was, it was only a matter of time before they started using it to go to work, then shopping for groceries, and so on.
Airbnb followed a similar strategy with its rollout, launching in Denver in 2008 to coincide with the lack of hotel space during the Democratic National Convention and adding new cities at times when they had major conventions or other events.
In addition to the obvious demand, the strategy has another benefit: “Your competitors don’t see you as a threat, since you are not taking away from their demand,” says Teixeira. By the time you have a foothold in the marketplace, it’s already too late for them to do anything about it.
Launching in situations of high demand and low supply also helps startups acquire the right type of customers—those early adopters who might be more forgiving of a company while it works out the kinks. After all, beggars can’t be choosers, and if you are thankful to even have a room during a conference, maybe you’ll forgive the lack of hand towels. The last thing a company wants during its early phases is negative word-of-mouth.
“You are still a startup,” says Teixeira. “You have to find people who are willing to accept your flaws and cut you some slack. Satisfying all their needs and wants is just not feasible at this early stage.”
From 1,000 to 100,000,000
With early adopters in place, a company can start thinking about how to expand their customer base through more traditional means of marketing.
To tackle that problem, Teixeira wrote a sequel case study, Airbnb, Etsy, Uber: Growing from One Thousand to One Million Customers, and is currently working on a third entry in the trilogy that will examine how a platform can go from one million to many millions of customers.
In each case the strategies are different. While word-of-mouth might work for the first thousand it’s not going to get you to a million. “You have to be more proactive and control the acquisition process, which word-of-mouth does not allow for.”
That’s where digital marketing can help, allowing companies to target specific customers through search ads or social media at a low cost.
“It’s highly targetable and you can do it on the cheap,” says Teixeira—adding that digital marketing also makes it easy for companies to rapidly iterate its advertising message, tweaking it to figure out what works best. “Only after passing the millionth customer can you go into advertising on traditional media. That’s when you need massive scale, so you go to mass marketing.”
As a company grows, it must consider the purpose of advertising in order to achieve the best effects in gaining new customers.
“Some tools are better for the beginning, some are better when you are bigger,” says Teixeira. “It’s not about, should I use digital marketing or word-of-mouth or TV ads. The question only makes sense when you say, ‘I am at this stage, what approach should I take?’ Only when you answer that question will you know what tool is most appropriate.”
In other words, he says, “You need the right size of eggs for each stage of your nest.”