You advised that startups should concentrate on "optimizing their funnel" before looking at customer acquisition tactics; can you explain what that means and what it entails?

The funnel is how a prospect moves from not knowing about you at all to paying you money. For an online B2C product the funnel might look like this: X people see your Google ad. Y% of people click on the ad. Z% of people visit the site for longer than a few seconds. A% of those people sign up for your trial version. B% of those folks buy your product. At each step you can do things to improve those percentages – write better copy, have better page layouts, make the signup less confusing, have more compelling offers, change your pricing, etc. Optimizing your funnel means you understand these percentages and you have taken as much slack out of the system as you can.

Founders who are talking

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Do you think purchasing leads is worthwhile for a new startup looking for new business?

Answered by April Dunford – Product Marketing Expert. Posted in Sales

Sure, if you can demonstrate ROI on purchasing them. My experience with buying leads has been mixed. Sometimes I got great business from them, others not. It pays to run s... (more)

What % of a company do you think a CEO should receive as part of his/her compensation package? Assuming they are not part of the founding team? And, what % do you think fou...

Answered by Robin Axon – Partner, Mantella Venture Partners

The biggest question that i'd ask in this scenario is how much more capital do you think the company will require prior to exit (or being independent of traditional venture... (more)

How would you advise a startup to get started with analytics?

Answered by Ryan Kelly – Founder, Pear Analytics Posted in Management

Every startup should at a minimum be running Google Analytics since it's free. Once you have that running, set up some very basic goals, like submit forms completed, or si... (more)

Do you believe in creating additional avenues to make money (i.e. pro services) for your startup during the early stages of operation, even if it's outside of your current ...

Answered by Benjamin Yoskovitz – Partner, Year One Labs

Fantastic (and very tough!) question. I don't believe in doing it, because it's ultimately a big distraction from the main purpose of the startup. It's the same reason why ... (more)

I am a non-technical founder in the process of creating a web based service; I have wireframes, a business plan and interest + validation from potential clients and end use...

Answered by Tim Berry – Founder of Palo Alto Software Posted in Management Money Operations

Your business plan isn't just a document for outsiders, it should be your idea source, experimentation canvas, and framework for analyzing questions like these. Start break... (more)

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