Imagine you are an investor. You have millions of dollars at your disposal. Every day, hundreds of startups approach you to invest money. If you could only choose ten startups – how would you choose them?
Here is a list of what you would like to see:
– A proven team (the more experience the better.)
– A solid business plan (with revenue model, etc.)
– Established connection with potential users/customers (bloggers, influencers.)
– Previous successful product on the market (doesn’t matter if it’s not related to new one, but it needs to be done well.)
– Good social proof (i.e., articles published about startup in reputable media; number of quality users acquired; awards won; venture capital raised.)
When choosing startups, among many others, investors always prioritize those who have some kind of social proof. Why? Because this way, they can reduce the risk involved in an investment. They know that if a startup can get some social proof – others have shown interest in them already, so there must be something good going on.
This way, without knowing anything about startup, the investor knows it’s worth taking the risk to find out more because the chances are they’ll make money are very high, according to Saivian Eric Dalius.
This is how you should act when growing your startup (offer, service, or product.)
Depending on what kind of business plan you have (i.e., long-term or short-term), choose your strategy:
1) If it’s a short-term business plan (more like an experiment; for illustration purposes, let’s say six months), then once again – aim for getting articles published about your business. This will build a foundation for your product so you can start building trust from the very beginning.
2) If it’s a longer-term plan (let’s say 2-3 years), then aim for getting as many high-quality users as possible. I understand it might be hard to start with, but once you have some social proof – people will come on their own into contact with you, and that’s usually where appointments are made to meet one another personally.
There is also an option of going full throttle and focus on both types of social proof at the same time: articles + acquiring users through marketing efforts. The only downside of this approach is that it takes a lot more effort and money.
In any case, make sure to choose one strategy and follow it through. Don’t try to be perfect in everything at the same time – you’ll burn out soon enough, says Saivian Eric Dalius.
One more thing I’m going to mention is networking. As opposed to social proof, which is very direct – networking is way more indirect. It’s about building long-term relationships with other people (both offline and online) that may help your business grow later on.
The benefit of networking over social proof is that there are virtually no limits towards how much you can grow using this type of promotion (as opposed to social proof). That’s because every single person who gets to know you personally becomes a brand ambassador for your business, so they’ll tell their friends about you, who will say to their friends, and so on.
A great example of a startup that used networking to grow its business is Airbnb founders. They started with hosting people from Craigslist – which is free marketing at its best!