A Product Market Fit Show | Startup Podcast for Founders
00:44:48 · Pablo Srugo, Dan Novaes
[00:44:48] S1: And then ultimately from there, like it just takes, it's kind of like the same, I mean there used to be these influencer marketplaces, right? It's the exact same thing but for people that don't necessarily have followers. So I assume the prices are just less, you just need more of them. [00:44:57] S0: They're just way less and then you can see how they, like what campaigns they worked with past, who they've worked with, et cetera. Then you could, it's like literally if you think about Fiverr, like Fiverr for UGC creator is the best way I can think about it, right? Or Upwork for UGC creator is the best way. And then like there's like managers that you could hire to help you do this if you, or even agencies, right? So you could start with an agency, kind of give you the guidelines. I think that eventually once you figure it out, you can bring it in-house, you know, to, and see if it works, you know, but. [00:45:26] S1: And then just like that was going to be my final question, like what's the benchmark? Like just like any channel, sometimes it works, sometimes it doesn't work for you. What should you be looking for in terms of how much money should you put, how many videos until you can get gauge whether the strategy is working for you or for whatever reason isn't?
00:45:38 · Dan Novaes, Pablo Srugo
[00:45:38] S0: I think it really depends on your product. I mean, it's not easy. Look, I think like we probably spent about $30,000 on one of our apps. We got a ton of views, but we didn't have the script down. Like it wasn't driving installs. And so optimizing to the right metric is installs. And so that this, some of the stuff that why I'm telling you, it's like what I learned. It's like having a ton of views if the video is like a viral video that someone's going to click on anyways or watch anyways because it's the piece there and then having just like a brand. Like, you know, Stake did this, right? That's, that's I think the difference of clipping versus like this strategy because like Polymarket happens to do this probably one of the best. It's like, you know, the odds because the product is embedded into the underlying advert, right? But that's very unique to their business, right? Because they can stay on top of current events, which algorithms like. That's why clipping I don't think works for every other business because just having a brand on there with like some viral video, for at least at least it didn't work. Unless maybe if you're spending significant sums of money and then having a broader retargeting play around it. But if you're, if you're starting out zero to one, you know, it really should be founder led and I think, yeah, you'll know, I think within like 20, 30 grand. [00:46:46] S1: By founder led, you mean like the scripting of it and the first few videos like you want the founder to be part of it?
00:46:46 · Pablo Srugo, Dan Novaes
[00:46:46] S1: By founder led, you mean like the scripting of it and the first few videos like you want the founder to be part of it? [00:46:51] S0: It's not, he needs to be a part of the video but it's like he needs to understand like what am I selling really and then working with the creator and then yeah, you got to iterate and then eventually you'll find it. [00:47:00] S1: The second thing I want to spend some time on because you're, you know, you did this twice already, very successfully, it's crowdfunding. What did you learn about running a successful crowdfunding campaign? Like how did you do it?
00:47:09 · Dan Novaes
[00:47:09] S0: The main thing I learned about crowdfunding is like people think that you'll launch a crowdfund and people will just come. There are two types of companies that are successful at crowdfunding. Ironically, Revolut did a crowdfunding round. It was actually one of the best crowdfunding returns in history, right? A lot of people don't know that. Mercury Bank also did a crowdfunding round and the reason I mentioned some of these is like the people that use Mercury are well-to-do founders, right? Are well-to-do people, right? Same thing with Substack. They all did crowdfunding rounds and they were able to sell them out within a week because they could just send it to their like very well-to-do base that loves their product and they invest it. If you are a company like that, you should definitely do a crowdfunding round because it's amazing to be able to get your ambassadors and users and turn them into investors. Most new companies do not have that, right? And in my case, I had a lot of users but my users don't necessarily have a ton of money. You know what I mean? And so we allowed them to earn their shares which allowed me to actually remove some of the gross margin that I would have to put out, right? Going back to the underlying example but knowing that if people aren't going to come that are part of your user base then you need to think about this the same way that you would think about user acquisition and so we think about it in a way of like where do investors go? Like where do they find out about stuff? Like what do they read?
00:48:24 · Dan Novaes
And we found like newsletters as being one of the best channels for investors because people that read newsletters they like to read content they like to read news you can actually talk to someone in a paragraph or two it feels like a way more native ad and so for us we really utilize channels like that and one of the unlocks that we also figured out and this is not purposeful it just ended up what's happening when we did the demographics of people that were investing in Mode and you know think about in my business like there's a lot of aspects to it the average investor 80% of them were over the age of 55 and not our target market at all so understanding that just because you have a product that caters to a certain audience does not mean that the person investing in that product will be that and so you need to talk to that retail investor in a way that's kind of like more simplified than what you would talk to a VC but also understand that they may not be your consumer but they need to understand the opportunity the market opportunity that you're presenting and once we figure that out like we just look at it in the same way we look at user acquisition like the cost for me to acquire an investor is $1,000 the average investor you invest by $1,000 that's a 5 to 1 return a percentage of those investors reinvest it works very similar to SaaS cohorts where you then get a bigger LTV and so I think that that was like the biggest unlock of just how we approached it is just the same way you would approach it as a consumer-centric founder
00:49:39 · Pablo Srugo, Dan Novaes
[00:49:39] S1: Perfect well Dan let's stop it there I'll ask the one last question we always end on what would be like your top advice for an early stage founder? [00:49:44] S0: Top advice if I was starting again 10 years ago I think I would be focusing more on buying businesses versus starting them 0 to 1 I know this whole show is about product market fit but product market fit is really hard it's probably the hardest thing and I think that there's a lot of great apps out there that basically people don't have optimized and they've just kind of like let it die but it already has a foundation and if you have a great product mind you can go to that product amplify it and grow it quite significantly and the valuations are at the lowest they've been because everyone's scared of AI and so it's a great time if you have an opportunity to I think stack these businesses stack cash flow and grow and that's kind of like where I would focus my [00:50:24] S1: Perfect well Dan thanks so much for jumping on the show man it's been great [00:50:27] S0: for sure dude thank you for having me