Customer acquisition

Customer acquisition is often a kind of forgotten part of building websites. Relying on just “viral” growth isn’t all that’s it made out to be. It’s usually hard work.

I’ve had the pleasure to work with some people that are very experienced in this area, and I’ve learnt quite a few things.

One, it’s easy enough to get 10,000 or even 100,000 users for your website. It’s much harder to get 1,000,000 or 10,000,000, and active users mean a lot more than just people who signed up and never came back.

Two, it’s hard to get paying users. The same numbers apply, but divided by about 100. So it’s realtively easy to get 100 paying users or even 1000. It’s a whole different ballgame to get 10,000 or 100,000 paying users. That’s very hard work, and it will cost you probably around 5 to 20$/user.

These numbers of course don’t mean a lot, but they give an idea. If you’re planning for a million paying users for your startup, you better realize it’s gonna take at least a year or two of hard work to get to that point even *if* you’re successful, and cost you millions, perhaps 10s of millions in customer acquisition cost (advertising, rewards, the whole customer acquisition engine).

If you’re going for a few 1000 paying users, that’s something that’s much easier to achieve. Just build a kick-ass useful product. If you can be way profitable with 10,000 paying users, you’re good.

I kind of hestitated to put numbers in this post, because things vary so much, but perhaps this can help some unexperienced entrepreneurs so here we are. Grain o’ salt please!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s