Startup School:Acquiring Customers(aka Get/Keep/Grow)

Andy MossEntrepreneur-in-Residence, NYU Entrepreneurial InstituteDirector, Blackstone LaunchPad at NYUAdjunct Faculty, Tandon School of EngineeringOctober 11th, 2016

Customer RelationshipsHow do you acquire customers…and keep them and

grow your relationship?

Customer Relationships Get Customers

©2012SteveBlank

Paid Demand Creation Activities

u Public Relationsu Advertisingu Trade Showsu Webinarsu Email marketingu On-line SEM u Biz Dev

Free Demand Creation Activities“Earned” Media

u Publications in journalsu Conference speeches/papersu Educational seminarsu Public relationsu Blogging / Sharable contentu Social Mediau Communities

Customer Relationships Get Customers

©2012SteveBlank

CAC = Customer Acquisition Cost

Customer Relationships Keep Customers

©2012SteveBlank

Customer Relationships Keep Customers

©2012SteveBlank

Attrition/Churn

Customer Relationships Get/Keep/Grow

©2012SteveBlank

LTV = Customer Lifetime Value

What you should be looking for(and investors will too)…

Monetization(LTV)

Cost toAcquire aCustomer

(CAC)

A well balanced business model

Source:DavidSkok MatrixPartners

Customer Acquisition

GET: How does your customer find out about products like yours?

Activity Cost ($) Yield (# ppl) CAC ($)

KEEP: How do you keep your customers using your product?

Activity

GROW: How do you increase the $ your customer spends with you?

Activity

Total CAC:

Total LTV:

ChannelsHow does your product

get to customers?

13

Question 1: What kind of product do I have?

Physicalü

Virtualü

Question 2: How will I distribute my product?

Physical Channel

ü

VirtualChannel

ü

Question 3: Who will distribute my product?

Direct (yourself)ü

Indirect (through others)ü

Direct Sales

VARs

Retail

Web, Telesales

Systems Integrators

Mainframes

MinisLANs

PC ServersDesktop PCs

PrintersKeyboards

Toner

WANs

Global Systems

Solution Complexity

Mar

ketin

g C

ompl

exity

Distribution Channels

Different channels have different economic impact!

Channel Economics: “Direct” Sales

Profit + SG&A + R&D

End

Con

sum

er

EU

Dis

coun

ts

Your RevenueList

Price

Source: Mark Leslie, Stanford GSB

Cost of Goods(Supply Chain)

Cost of Goods(Supply Chain) Profit + SG&A + R&D

End

Con

sum

er

EU

Dis

coun

ts

Reseller

Your RevenueList

Price

Source: Mark Leslie, Stanford GSB

Channel Economics: Resellers

Profit + SG&A + R&D

End

Con

sum

er

EU

Dis

coun

ts

Reseller

Dis

trib

utor

Your RevenueList

Price

Source: Mark Leslie, Stanford GSB

Cost of Goods(Supply Chain)

Channel Economics: Distributors / Resellers

Your product becomes your customer’s Cost of Goods

Source: Mark Leslie, Stanford GSB

End

Con

sum

er

ResellerProfit + SG&A + R&D

Cost of Goods

(SupplyChain)

EU

Dis

coun

ts

Reseller

Dis

trib

utor

Mas

ter

Dis

trib

utor

Profit + SG&A + R&D

Cost of Goods(Supply Chain)

Your RevenueList

Price

Channel Economics: OEM

Channel Economics

What kind of product? Physical Virtual

How do your customers buy products like yours today?

Who will distribute?

Who are the players that touch your product before it gets to the customer?

YOU CUSTOMER

Estimated cost (%)

How will I distribute? Physical Channel Virtual Channel

YOU CUSTOMER

Questions???

24

Appendix

25