Types of startups (and ad channels) that are profitable most often
Just stumbled upon a Techcrunch premium article by Julian Shapiro in which he explains what type of startups and which ad channels are most likely to turn out profitable based on his agency clients' experience (their clients are mostly YC startups).
Below are some of the most interesting findings.
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Types of companies (from most to least likely to be profitable):
E-commerce
Chrome extensions
Mobile apps
Enterprise SaaS
SMB SaaS -
Business model and market are often not the best predictors of success. The approach to customer acquisition is.
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Startups often try search or social ads as their first acquisition channels. This is mostly due to lack of expertise to pursue other channels. As a result, they deplete their funding as ads turn out to be unprofitable for them. Then they die.
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Ad channels (from most to least likely to be profitable):
Instagram
FB mobile
Google search
Apple search
Banner retargeting
FB desktop
Pinterest
Quora
Snapchat
YouTube video
Twitter
Reddit
LinkedIn
Spotify
Here's the full article with details on each type of startup and ad channels.
Thanks for sharing this!
Julian Shapiro is an amazing writer and definitely knows his stuff.
It's interesting that he says a lot of startups choose organic search as their first channels. I've had a lot of organic success with two startups I've worked for (Fundstack and Attio).
I think a bigger issue is the implementation of people's organic search strategies. People very rarely understand the differences in searcher's intent, how to target different types f intent, and how to structure their content and site architecture.
It doesn't help that almost all professional-grade SEO tools are hundreds of dollars a month and have a steep learning curve. It's partly why I set up Keywords Fast. We offer a report that details exactly what your users are searching for and where/how to target their searches. If anyone's interested in learning more just send me a DM on twitter!
Interesting service Keywords Fast, just what I've been looking for.
Looking forward to my report! 👀
Thanks for the interest Mathias!
Good points, @kacper, I agree with most of them. FWIW, we at RiteKit have tried many things and got to what works with organic social media. Never had a need to use social ads. On the other hand, of the Ad channels you listed, we can share anyone's content and advertise on top of it, sparing us the need to create lots of blog posts or videos, etc.
The content is out there, and good for anyone's customer avatar. Why make new content when you can curate, advertise on top of it, and while growing a targetted audience, soft-sell to them?
We built our 9-year-old 100% bootstrapped RiteKit (4 SaaS products, 17-endpoint API) in Twitter. Social is what powers our inbound marketing, and nearly all of it is from Twitter and Instagram.
The ability to curate the best content for our customer avatar and share posts with our ads riding on top is what makes this possible.
Example:
Meetedgar is a competitor to one element of our RIteBoost. Here's us advertising on their video - and showing how it can be done. Try the Rite.ly link in that Tweet. Yes, that's me.
For the why and how, please see this post of mine, including a Tweet that continues to get a heck of a lot of Retweets and likes. This could work for a great many of us indiehackers.
Marketing is war. Questions welcome.