Most startups begin with the founders investing a startup capital to get their business up and running. As a startup slowly refines its business model in order to complement their sales model and start generating revenue, the founders would then be focused on expanding and growing the startup. It is at this point having an investor on board would be a huge help for the health of the startup. An investor would provide the much needed capital to expand a startup and scale up the business model, in order to amplify demand and increase supply to match it. But finding an investor is not always an easy task but, there are some simple steps which can be used to maximise probability of finding the right investor.
Have A Product or Demo Ready
Investors need to know where they are investing their money and therefore they will always request a demonstration (demo) of the product before investing. Therefore, it is important to have a working demo along with the sales pitch in order for the investor to make a calculated decision.
Research on investor portfolio
It is important to research prospective investors as in what kind of portfolios they have invested their money. Learning about an investor portfolio gives an insight into the health of an investment company. If an investor has experience with handling similar startups to yours in the past, they would be able to provide guidance and mentorship. However, the most important reason for research is to see if the investors have a similar kind of startup in their portfolio, which would mean the investor would be reluctant to invest because the startup in question would be a direct competitor to your startup.
Finding a mentor and a core team
A mentor in this case is someone who has prior experience navigating the choppy waters of the startup industry. FInding a mentor will be invaluable in the long run as a mentor brings their experience to the forefront and would be able to guide the founders by nudging them in the right direction. A good mentor will also be able to attract investors through their network as well. A core team should consist of skills not just from the technical side but also from the business and revenue perspective. A good example here would be Larry Ellison, the founder of Oracle and Marc Benioff, founder of Salesforce. Ellison mentored Benioff during the initial days of Salesforce by providing valuable technical and business inputs and even investing in Salesforce, which paid off in multiples later on in the future. Benioff founded Salesforce while he was still working at Oracle and Larry Ellison was supportive of the endeavour so much that he let Benioff split work so that he can work on Salesforce in the mornings and at Oracle in the afternoons.
Proven Business Model
Investors are more likely to invest in a startup which would be able to show a proven business model complemented with numbers. The business model need not be elaborate and can instead focus on a small demographic which would provide a lot of valuable data useful for scalability like revenue forecasting, sales and marketing demographics, overheads, burnout rates, processes which can be automated and troubleshooting, but more importantly it offers investors a glimpse into the revenue model.
Prepare for due diligence and have documentation ready
Startups need to be ready for a due diligence check by an investor and therefore ensure they have all the documentation ready and up to date. There would be due diligence checks on various fronts. If a startup is building a software, investors will be running various scripts to check compliance and software licensing requirements. Important documentation includes product roadmap (from demo to live,) timelines, cash burnout rate and financial projections for the future among others.
A startup should have a clear goal and define specific outcomes with their investors in order to achieve the maximum output from the partnership. Onboarding investors is the first major hurdle any startup should clear and then focus on scaling up, in order to increase a startup valuation which in turn will attract more investors. Following these steps will help finetune the search to identify a potential investor which would go a long way in scaling up a startup.
How To Generate More Sales On Social Media
If you are a frequent Instagram user, there is a high likelihood of stumbling upon a business ad which interests you. There are also high chances of you making a purchase from a business whose ad you might have seen on Instagram. As the social media penetration into our daily routine gets deeper each day, businesses are realising the opportunity to sell their products on social media platforms like Instagram, Facebook, Twitter and Snapchat to name a few. In the current day and age social media is one of the top avenues to generate solid sales and also gives a good return on investment. However, figuring out a good approach for a business does not come easy and requires some time and effort to figure out how a social media platform works. In this article, we explain some simple techniques to generate more sales on social media. A good organisation which has a proven track record in this arena is Whacked Out Media based out of Hyderabad.
1) Understand where the target audience is:
It is very important to understand what social media platform your target audience uses. If your target audience prefers to use Instagram over Facebook, then it makes sense your ads should be running on Instagram. The easiest way to find out where your target audience is is by identifying the right hashtags which are relevant to your product or business and find out where it is being used. Once a business understands where their target audience is, it will be much easier to drive online sales. Online streaming platforms like Netflix and Amazon prime Video are known to promote their content on platforms like Instagram and Facebook in order to gain new subscriptions.
2) Working with influencers
Influencer marketing is a form of social media marketing involving endorsements and product placement from influencers, people and organizations who have a purported expert level of knowledge or social influence in their field. Influencers have a very high chance of generating sales on social media for your business. Having an influencer tell a unique story about your brand or product, having influencers give honest reviews about your product or something as simple as an influencer promoting a unique discount code can drive sales effectively. Noted South Indian actress Samantha Akkineni is known to partner with organic food businesses to promote their products.
3) Turn customers into brand advocates
When you make a sale on social media, it is ideal to request the customer to post reviews of your product or service should they like their purchase. This will turn your customers into brand ambassadors and at the same time generate more organic sales. It will be helpful if you can provide relevant hashtags to be used so as to accurately identify leads. Take the case of mobile phone manufacturer OnePlus, which regularly posts or shares their customer photos and product reviews on their social media platforms. OnePlus believes in storytelling through customer testimonials and customer content. #NeverSettle is the hashtag which is most commonly used by the OnePlus brand to identify content relevant to them.
ALSO READ: How To Increase Online Sales Of A Business
4) Share customer generated content
More often than not, if a customer is satisfied with their purchase they will post it on their social media accounts. For a business, identifying these posts and sharing the customer generated content on their own social media accounts will improve the authenticity of their products. Prospective customers visiting your social media page can see honest customer reviews which will in turn bolster chances of a sale. This is also an easy way to increase loyalty with your existing customers, and to add credibility to your brand whenever potential customers visit your social media profiles.
5) Creating content around products/inventory
It is highly recommended to create content around the products which are being sold on social media accounts. For example, if you are a clothing brand, it will be helpful for customers/leads if they see content on how to mix and match various dresses, or what dresses can be worn in spring or summer. This establishes a broader context for your brand and will also boost engagement with prospective customers. This kind of content will also provide a reason for customers to buy your products.
There is no hard and fast way to figure out social media sales and each business should take the plunge themselves to figure out the best approach for themselves. However, the above mentioned tips will definitely help the chances of success in getting sales. Alternatively there are plenty of organizations which provide consulting services to businesses in order to help them with digital marketing and sales.
How Does WhatsApp Generate Revenue
If you own a smartphone, there is a very high chance that you are a WhatsApp user. The simple and lightweight online messaging application has embedded itself into our lives and has become indispensable. Family groups, friend groups, office groups, play groups and many other groups like these see millions of conversations happening on a daily basis. But have you ever wondered how this leading online messaging application makes its money? There are no ads on WhatsApp and if that is the case from where does Whatsapp generate its revenue?
The answer to the question goes back to the beginning of WhatsApp which was founded by Brain Acton and Jan Koum, both of whom were ex- Yahoo employees. When Whatsapp was first developed and deployed for public use it became an instant hit with users but the founders quickly realised they required data centers to handle the huge volumes of data from the user conversations to keep WhatsApp running. So, they set a price of $1 for some countries and for some other countries it was free for the first year but charged $1 for renewal from the second year onwards. In short this was a subscription model and Whatsapp had 700 million users at the peak of this model which meant it was generating 700 million dollars in revenue.
Facebook ended up purchasing WhatsApp in 2014 for $ 19 billion but one of the founders Jan Koum decided to leave WhatsApp because of a disagreement with Facebook over its use of user data and its desire to allow advertisements on WhatsApp. Both the founders were vocal supporters of user data privacy. As of 2020, WhatsApp has over 2 billion users, the second largest user database after Facebook.
But How is Whatsapp generating its revenue now since there are still no ads on display in the mobile app. In a 2016 blogpost WhatsApp said “Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from. The goal is to have people communicate directly with their banks, airlines, etc. over the app, while the businesses pick up the bill previously paid through subscriptions.” Facebook also uses the data from the user messages in WhatsApp to increase the reach of its ads on Facebook. However, a user has the ability to turn off the settings which allow Whatsapp to share the data with Facebook. According to a Forbes estimate, WhatsApp is generating a revenue of $ 5 billion at an average revenue of $4 per user.
Facebook is benefiting from Whatsapp by generating a huge wealth of consumer behavior data which inturn is being used to improve the ads on Facebook. WhatsApp has a growing revenue stream because of the new users it keeps adding to its database and still has a lot of room to grow.
How To Identify Your Target Audience
Startups are created when there is an existing problem which needs to be solved. Startups often spend years in moulding and creating a product or a service which aims to address a need or a problem. However, it can be easy to lose track of the end goal if the product or the service is not in the hands of the actual target audience. Target audience is a group of people you want to reach with your publication, advertisement (ads) or a message. For example ads related to non vegetarian food would not do any good if they are placed in areas with a high vegetarian population. Ads related to high end cutting edge computers would not do any good if they are not placed in areas which have a high density of industries. Simply put identifying a target audience will translate into sales for your product or service.
Target audiences can be identified by following three simple steps
1. Creating a customer profile:
The first step in identifying a target audience is to assign certain characteristic attributes to the audience which include
- Age: What is the age demographic that is most likely to use your product or service. This is important because customers across different age groups think differently, which would mean the marketing campaign needs to be tweaked accordingly.
- Gender: This is an important metric to be established because a product needs to be able to address these differences. For example, it does not make sense for a male grooming product to be advertised to the female gender.
- Spending Capability: The ability of a target audience to spend greatly affects marketing strategies. People who are able to afford spending luxuriously respond well to marketing campaigns which stress luxury and exclusivity. For example, OnePlus the mobile phone developer positioned itself as a flagship killer with the features of a flagship. It was able to appeal to the middle class spectrum which in turn translated into a huge volume of sales.
Other key characteristics can include marital status, geographic location, hobbies, interests and many more.
2. Conduct market research
A lot can be gleaned from conducting primary and secondary market research. Primary research involves learning about customer buying habits through direct contact like surveys, interviews and focus groups. This is why a lot of startups and businesses usually ask customers to answer survey questionnaires when they make a purchase. Secondary market research is a kind of a market research method that involves collecting information or data from secondary sources. This means a business collects and uses information that has previously been collected by some other person or entity. A simple example would be food delivery platforms like Swiggy and Zomato asking feedback about a recent food order. The purpose of this is to curate a better restaurant selection experience for you when placing a new order.
3. Observing competition
It is safe to say that no product or a service would be a monopoly as new players will keep on emerging in the market. It is always a good idea to know what your competitors are doing with their businesses. This would offer fresh insights related to your marketing strategy like what other offerings could be added to your portfolio, or how a marketing campaign can be changed to tailor the ever changing customer demands. Analysing a competitor can lead to valuable modifications to your offering and yield new business. An example here would be how Zomato acquired UberEats thereby making them the market leader in the food delivery industry in India. Previously Swiggy used to rule the market by holding a majority share in the market. Zomato realised that instead of putting in resources to penetrate the market, acquiring UberEats would give them the advantage. Zomato now holds around 50% of the market in the food delivery business in India.
Target audiences will need to be reassessed periodically on a regular basis. The customer profile needs to be refined regularly and the marketing campaign changed accordingly. As the market trends keep constantly evolving, one can stay ahead of the curve by doing their due diligence in gathering market research data. Start defining and understanding your target audience so that you can make the most of your precious time.
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