In this article, we’ll explore the infamous startup stall, along with actionable steps to take when sales, traffic and engagement stands still.
On the road to enterprise, most startups don’t magically fail and fall out of the sky like bird droppings. First, they stall. Like a plane with its engine propeller buzzing, then faltering, then going silent for a brief moment of suspended animation before the aircraft begins plummeting towards earth.
The startup stall – first timers can find it crushing, while for more experienced entrepreneurs, it’s par for the course. A bit like public speaking, you get used to it, but for most it’s never ‘easy’.
Let’s hit the runway with what I like to call a Quicksand Example.
Sally & Her Startup Stall
So, I’m approached by this gallant woman at one of the exciting Cleveland Entrepreneurs Meetups (I help manage/organize the group of 2,000+ members). She’s a brilliant inventor, who wouldn’t want to see what’s cookin?
I adore talking shop!
Turns out she’s patented a couple Health & Fitness solutions for women to lose belly fat. Great presentation, product design looks good, professional branding, the website/store is pretty nice, and right after release she landed a spot on a VERY popular daytime talk show.
Hmm, must have connections in high places within that network.
Anyway, right out the gate sales spiked and the launch was moving along well, so she confidently began to dump money into paid advertising. Fast forward a few months and she’s in the hole $8,000 on AdWords, sales completely flat, with the webstore sitting at maybe 30 visitors a month…
“Mayday, mayday, we’re goin down Sally!”
You’re wondering if it’s a product issue.
I thought the same thing. Not sure, but the stall she’s experiencing happens to amazing and not-so amazing products alike.
Let’s inspect solid steps savvy startups can take to get through the stall and back at flying off into the horizons…of…successful technology!
We begin, with a simple question.
Is Rapid Growth Necessary?
Maybe this quasi-stalling period is a chance to get your financial house in order.
Do you really need rapid spurts of revenue instead of steady and reliable growth? Perhaps you’re desiring to expand, ‘just because’. I mean, we do, we live in a world where the concept of infinite growth has somewhat taken over, but it’s possible this stalling period is a perfectly natural good thing.
If your stall is a period of slow-growth, consider these options as ways to strengthen your foundation:
- Get out from under some debt, hire an accountant for the brand if you haven’t yet.
- Reevaluate your product, service, and sales funnel – see what can be streamlined.
- Look for small investments that could be made inside your team, for your team.
- How much do you currently pay to acquire each customer and what’s their lifetime value?
- Perhaps a small investment in the product or service which could increase value.
Generally speaking, as your startup ages, putting a priority on profits over growth is often good housekeeping. It keeps you conservative. It keeps you from taking on too much debt early on, or spreading yourself too thin, etc.
I loved what Aytekin Tank (awesome name), Founder of JotForm had to say in his Medium post Slow growth is good for business.
“As a bootstrapped company, we write our own destiny. We don’t have time to worry about our competitors or woo VCs — focusing intensely on our customer base, not growth hacks, helped us grow to 100 employees and 3.2 million users in the past decade.”
Nice! Shocking really, when you consider how many people are stuck in a hyper-growth frame of mind, and shy away at a mere 3.2 million users in a decade. They’re hoping for 3.2 million users in the 1st or 2nd year…
However, there’s far more value below the surface of slow growth Mr. Tank touches on:
Founding members aren’t in a hurry and often wear a variety of hats, sit in multiple seats, and fill many roles to make things work. Over time, this empowers their hiring.
As such, a strong startup culture develops, optimized over time – wear & tear. Core philosophies, values, and processes get ironed out and upheld as a tribe.
Efficient onboarding, natural teamflow, and all the nuances of a seasoned startup on its way to enterprise is the natural result.
If you don’t aim for rapid growth, or expect infinite growth, your definitions of success will become far more grounded in reality.
Soberly Examine Your Marketing Methods
Startup stalls can often be a sign of nonexistent or horrid marketing.
From our conversation, I gathered Sally didn’t have any marketing going on. She invested in a website platform which again I admit is really nice, but that’s about it. No blog. No quality content marketing of any kind.
Instead, by the time we met she’d sunk $8,000 dollars into paid advertising over the span of months despite horrid conversions. According to an experienced copywriter I work with, this kind of behavior is so common it’s downright sad.
So, let’s say she sees the light and decides it might be a good idea to make the website better to improve conversions, then create content to attract people looking for her solution who don’t know it exists yet – along with content for people further along the purchasing process.
Here’s some examples of ineffective routes she could take…there are many more.
The Old Shotgun Approach: When you don’t know what you’re aiming at, or not trying to aim, the most logical and ineffective approach is marketing to everyone or anyone.
Quick & Dirty Content Mills: Where startups nickel & dime their own brands, creating tons of cheap low-quality to mediocre content: emails, blogs, ebooks, web pages, etc.
Social Media on Steroids: Having 2-5 people focused on social media platforms, commenting, creating Q & D content, sharing, and hoping revenue happens…
Effective content marketing isn’t rocket science. You get to know who loves your product/service, why, and exactly how they use it, then create valuable content that helps them discover, examine, and invest.
Consider Your Pivot
In my last article, Pivot Ideas for Startups Ready and Waiting to Take Off, we discuss ways to make changes if your brand wants to reach the clouds.
When not a part of slow growth, stalls mean it’s time to stop and take stock; to adapt and overcome. Many startups make a pivot, they streamline and get super-specific. Here’s four of the pivot ideas in brief, which you can delve into more deeply at your leisure, if you’re interested.
Find the specific cause of your stall, and see if it’s actually the way your startup can take off. Like, when a software company initially attracts a ton of users but then loses them and all growth, to find out users only liked one or two features. Those features then become the new business model.
Take this time to dive into recent events, news, and happenings within and around your specific industry to see if there’s anything going down that might be impacting your bottom line. Change is always happening, are you aware of it and how your brand can benefit from it?
Consider the so-called “crazy” steps you could take to get your brand in front of the right people. How many of those actions are actually just bold and ambitious? Think about what you’re choosing not to do out of fear, and in a stall, how much less there is to lose from experimenting.
Focus on social proofing or the lack thereof – ways in which your brand (vs. 3rd-parties, although those are useful), gives people the ability to leave reviews. A stall could mean it’s time to give your crowd a voice, and perhaps juice it up through elements of gamification.
This last one is a perfect segway into the next section which is about getting in touch with your customers/users and grasping why they make the choices they do. Sometimes, this can require drastic action to get actionable info.
A really basic way to look at a startup is the balance between growth and retention
If growth stops but retention is high, it’s because traffic has stopped – need more traffic generation. If both growth and retention stops, it’s time to understand why. The most direct way to do that is via interviews, or getting in contact with customers/users who’ve bailed on the brand.
Why did they leave?
What could be done to win back their favor?
What if your product or system is missing something?
What if there’s a glitch you didn’t know, something isn’t working?
An easy method is to use refund and free exchange guarantees as ways to spot consumer issues and win back favor simultaneously. That being said, they aren’t as reliable as they once were.
You may need to create a more alluring incentive than conventional guarantees, basic surveys and boring questionnaires. Those can be helpful, but pale in comparison to what can be learned by using two bits of data which are relatively easy to ask for during the checkout process – phone & email.
Pick up the phone, and call. Ensure it’s not a sales call, it doesn’t feel like an interview, and there’s a reward of some kind, whether that’s a gift card or handwritten letter of thanks.
It’s not about quantity. One conversation with the right person can provide deeper, more intense user-insights than 100 surveys. Which means….
Interview customer from time to time regardless of sales. What about when things are well into the green? Customers can still tell you things like,
How they really use the product or service.
The specific language and words, often laymen-style, used to describe it. This is the stuff that sales and advertising copy-dreams are made of!
Interesting ideas to test that you and your team might not have ever thought of.
Inights into how effective marketing is, presentation, etc.
And so on.
Need an example? Me too, so I searched around and found tone in a CrazyEgg article by Dustin Walker called Start Talking! How To Do Customer Interviews That Reveal Priceless Insights. In it I learned about the Febreeze example. Turns out, originally Febreze as a product was flopping hardcore because they were trying to sell it as a cure for America’s foulest stenches.
Nope. Didn’t work. People get used to the smells in their homes, most of them anyway, and the angle flopped. Until…a researcher hired by P & G talked to a woman who they knew kept an immaculate house.
She, only sprayed the Febreze as a final act of cleaning a space.
“It’s nice, you know? Spraying feels like a little mini-celebration when I’m done with a room.”
This insight caused the perfect ‘pivot’ to market Febreze as a part of the cleaning routine. P & G released new ads showing women not combating odors, but spraying the product over clean beds in clean rooms with big smiles on their faces and boom…sales doubled.
A little further down the article you find this quote from Kristin Zhivago, author of Roadmap To Revenue and it’s brilliantly said!
“They [customers] have plenty to say about how you presented yourself, what actually happened, what they wish would have happened, what the tradeoffs were in their minds as they were considering you, why they bought from you after all, and what they are now telling others about you. Yep, that’s priceless stuff, stuff that sends you running in the RIGHT direction.”
Who can argue with that. As consumers we know it’s merit, and yes how many of us can say we’ve had a genuine company call us, or email us, on the individual level to understand how we feel?
The idea we will be shy, or too busy, is really just a myth. Speaking of which…
Address Any Myths & Assumptions
Stop for a moment. Hit the universal pause button. Now, come to grips with the myths and assumptions your startup is or has been running on. And yes, there’s got to be some.
Don’t try and say you’re 100% clean because that’s nearly impossible.
Here’s a few examples from a great article I found on GrooveHQ called The 20 Biggest Myths About Building a Business.
- Founders assume they’re running things when ultimately they don’t. Customers do.
- Founding teams avoid outsourcing, assume they can ‘wing’ certain elements or skills.
- It’s a myth content marketing is only good for specific niches, it’s good for every niche.
- Far too many people operate on the assumption what works today will work tomorrow.
- More features is a good thing…
The list of myths and assumptions startups and solopreneurs have created could go on for ten pages. You see the morale of the story here. Be sure to get a handle on this stuff so you can a) make your team completely aware, and b) take appropriate calculated risks rather than waltz around the dancefloor blindfolded.
Spot Toxic Employees
This is a pretty touchy subject, ESPECIALLY when we’re talking about close-knit friends and family who go into business or follow a dream together. What if you’ve got two founding partners, and one is downright toxic?
Not all the time of course, because they’re an amazing individual….
But, personal issues have really put them in a frame of mind where they’ve become toxic and anything done to fix the situation makes it worse.
Then there’s the brilliant designers, developers, managers, etc., who are SO good at what they do, but they’re toxic. Not in general, but for whatever reason they don’t mesh well with your crew.
So many variations.
Often founders and management simply aren’t made aware of something brewing until it explodes into a drama-fest. They miss signs, and other team members don’t want to be a rat or complain or cause problems so attempting to avoid confrontation feels like the path of least resistance.
If you’re wondering about the signs, online the best most have done is summarize a variety of toxic employee personality types like the hot mess, the bully, the socialite, etc. Thing is, most people I know are all of these things from time to time.
Even the best people have horrible things happen that make them toxic. And we all know it’s ‘just business’ but we’re also human and startups can become like a family! I can’t tell you what to do. All’s I’m saying is, when your startup stalls and you’re trying to figure out why, if it’s someone toxic then the situation MUST be addressed.
Have A Co-Founder Yet?
Being a single founder can work, yes, to a point. But, for the vast majority of solopreneurs there’s a level of growth where they simply cannot, and should not, continue managing the company without a co-founder.
Then there are countless ideas entrepreneurs simply can’t make a reality themselves. They can do a lot of the leg work, but ultimately must work with an individual who has sufficient technical skills to build something serious.
No, not outsourcing someone for $5/hr from the other side of the world, or some desperate college student, but a talented certain someone that meshes well with you and can help bring the idea into the world.
I love how Dan Martell put information together on this very subject, but specifically for founders and entrepreneurs who need a coder or programmer! If you read his article 3 Steps for Attracting a World-Class Tech Co-founder, here’s a brief summary of the steps.
Prove Your Idea: Have more than an idea to show these people. Maybe you’re a gifted orator, and can really spin a yarn. So what? And so what if it all looks great on paper. If all you have is a good sounding idea, you’re not ready.
Engage in Target-Rich Audiences: If you have plenty to show and prove your idea, then it’s a matter of finding out where the types of technical nerds who could become serious co-founders are. If you don’t run in these circles, you’ll need to start branching out and doing research. Find them, go hang out, go to meetups and techy-presentations, etc.
Prove Value: This is all about you as a person. Why are you the right person to partner with to bring this particular solution into the world? How are you proving your value?
At the end of the day, no one wants to leverage their time and passion and sitting in front of screens for endless hours coding something that no one will ever use. The co-founder you’re looking for is ambitious, has vision, and isn’t going to go out on a limb for nothing but an idea, especially for someone who hasn’t proven their ability.
Wrapping Up – “Engine Check”
Alright, wow, so we covered some ground in a relatively short period of time. Hopefully one or more of these ideas helps if you currently find yourself neck-deep in a startup stall. I’ve been there before myself on a number of occasions, but everything happens for a reason in my world. Once an entrepreneur, always an entrepreneur – keep the faith! Here’s to your success.