No One Wants To Be Alone On The Dancefloor:

How to Gain Your First Users. And Keep Them.

Intro

AirBnB, while now a cautionary tale of companies maintaining product quality and the importance of a supportive policy environment. However, their origin story is worthwhile for those seeking to build an expansive platform, starting from 0. Founders Brian Chesky, Joe Gebbia and Nate Blecharczyk had a vision for short-term home rentals: they recognized the need, but could not find a way to validate their idea on a bootstrapped budget, given the high cost of renting units. And because the goal was to test prospective customers’ willingness to stay in a lived-in apartment, rather than a sterile unit, this approach would not have validated their major business risk. 

The three co-founders targeted weekends with large conferences in the city & rented out their apartments. These initial customers, sleeping in air mattresses and given personal tours of San Francisco by the founders, became the bedrock of their company, and gave them the boost they needed to take their company to the worldwide firm it is today, with millions of rental properties. 

Fledgling companies and start-ups, particularly those focused on marketplaces or relying on network effects, have difficulty proving their value with early users. Because a large portion of their value comes from the access to users they provide, convincing users to try out their platform with a reduced value add can prove difficult. Even for companies not relying on network effects or other users, getting initial customers is challenging — users often rely upon the informational conformity hundreds of online reviews offer, which products only accumulate (honestly) over many months or years on the market. However, there are multiple methods early companies and products can employ depending on their capacity & products offered. I’ll outline 5 of those strategies below. The biggest takeaway is that you need to do whatever you can to build an enduring advocate community for your product or service. You accomplish this by making the app experience live up to what you promise the user, and failing that, identify a complimentary value add that keeps the user engaged when your product falls short. You don’t need to be perfect. You just need to be good enough, and inspire a subset of users on your vision. 

For Platforms Leveraging Network Effects — these strategies primarily apply for companies that may struggle with, for example, finding enough drivers to suit the needs of their ride-share app end-customers, or having enough individuals on their dating apps for users to swipe through and connect with.

Strategy #1: “Wizard of Oz” Matching: 

Get Scrappy with your sourcing & onboard new stakeholders in the process.

Most applicable for: 2-sided marketplaces like Uber or Grubhub

Wizard of Oz matching is a common “lean startup” technique to allow you to launch an idea before it’s fully operationalized. It technically refers to just doing the work for the user before you’ve figured out a way to automate it. For example, I tell you I have an algorithm that will look at your skin and tell you what moisturizer to buy, but I haven’t refined the algorithm. To test if people would even want the algorithm, I can just get a dermatologist to review photos daily & send them the recommendation. You act like “the algorithm” did it, and you ask the users to “pay no attention to the man behind the curtain”.

In this case, Wizard of Oz matching specifically means manually finding matches that meet the need of initial users in a multi-sided marketplace. It enables you to overcome user growing pains and circumvent the “chicken-and-egg” problem that plagues so many early stage marketplaces. 

Just because you build it, doesn’t mean they’ll come; if only every product was the Field of Dreams. Users don’t just come when you want them to. (Sometimes they specifically come when you don’t want them to, raising costs astronomically & leading to cash flow issues, but that’s a topic for another day) so you need to make sure there is enough supply to meet the needs of your first customers. Ideally, you can run demand tests on your key stakeholders to identify which side of your marketplace will be your bottleneck. If needed, you can do this on the fly after launch, but you need to have a backlog of each stakeholder (or places to source those stakeholders for the lowest possible cost) so you’re not scrambling more than necessary. 

Demonstrative example:

If you’re creating a marketplace for installation of consumer-scale electric heat pumps and leveraging federal tax credits, you would want to have a beachhead area for which you have a list of potential solar installers. You choose Central and Eastern Massachusetts as your beachhead due to business connections in the area and friendly regulatory headwinds, and recognize that some of your users will only want companies that will handle federal refunds and financing, and thus, before launch, create a backlog of leads who have declined an invitation to join the site but are open to referrals. After launch, user engagement grows more quickly than anticipated and outpaces installer capacity, while installer sign-ups lag — when this occurs, your platform draws from your database of referral partners, providing a direct phone number to call and walking them through their installation process. Without this alternative matching flow, user growth would drop as dissatisfied users are unable to use the app to meet the needs it promised to meet. Wizard of Oz matching is a powerful tool that can be in a variety of instances beyond marketplaces. Feel free to message me if you’re thinking about designing your own early stage operations and want to think through your structure or plan.

Strategy #2: Pilot or partner as an add-on

Find an organization or community that’s solving a complimentary problem, and try to plug in as an add-on.

Most applicable for: Marketplaces, Dating Apps, Community/Social Apps

Partnering is crucial for gaining an early market foothold, by both adding credibility to products or services without a track record, and introducing the product or service to the audience of the partnering organization. Fortunately, most organizations are consistently looking for support and partnership opportunities as well, particularly if you can find non-profits or community organizations focused on your problem space. 

Cold emails are your friend. Asking your network for warm introductions and leads is your best friend. And you need to be a comfortable and powerful advocate of your product and problem space if you are going to pursue partnerships. If you don’t have a background in sales, this likely sounds like a more daunting task than it is: as long as you know the mission and direction of your organization or product, even if it is very early stage or not yet launched, those in the space will tend to be receptive to your shared interest. In all but the most rent-seeking industries, more firms in the space is seen as a good thing, particularly if they’re complementary products or focusing on different customer personas. You can be allies in future policy fights, leverage each other's advertising about the issue to have greater general awareness from consumers, and, of course, can identify mutual partnership opportunities to grow your marketing presence, sales pipeline, or operational know-how.  

Partnering is also a huge boon to early stage organizations because it allows for operation strategy sharing with organizations that have likely faced similar or overlapping issues to those you are facing, while also generating opportunities for unexpected connection— one person you speak to may take a shine to your solution or you personally and introduce you to a big mover and/or shaker. Partner readily and often, and identify a clear operational plan to leverage those partnerships to be an engine to power user growth or sales. 

Demonstrative example:

Your electric heat pump start-up reaches out to central and eastern Massachusetts electrification and residential home owner organizations such as the Central Massachusetts Realtor Association or Boston’s Building Electrification Institute, as well as government organizations focused on expanding electrification in your beachhead markets, such as the Boston Home Center. You identify mutual goals with each organization, and event and marketing opportunities based on those mutual goals. These goals should be aligned with your initial KPIs, likely user growth, revenue growth, or sales pipeline opportunities. 

Strategy #3: Build low-lift features or content that keeps users happy when network is too small

Most applicable for: Social Media, Comprehensive Marketplaces, News/Media Products

Some networks take a while to build without egregious amounts of cash to burn. And even with egregious amounts of cash to burn, there’s no guarantee that throwing cash into the furnace will lead to the network size needed to create a tipping point. How many users do you need before your short-message-sharing social media site dethrones Twitter? Meta has shown us that even 10s of millions of users funneled in does not guarantee success. 

Rather, you need to make sure that you have a secondary value add beyond your “marketplace” (be it a social media feed or a traditional marketplace for exchanging goods and services) that keeps users “sticky” even when the user base isn’t wide enough to fulfill the ultimate vision of your startup. These features can be mind-bogglingly simple: users don’t need to have an incredibly sophisticated interface to stay engaged, just a satisfying activity that keeps them coming back. For example, Dudel Draw, an app that exclusively allows users to make simple doodles over colored backgrounds & shapes, won awards for best app & experience and achieved huge user growth. Users are just using Dudel Draw absentmindedly, not because it’s solving a major problem they’re experiencing.

One key question to ask here is to what extent you’re able to maintain focus by leveraging these features. For example, a heat pump installation app trying to keep users engaged with simple doodling is likely not a winning strategy: the value proposition added is too far apart from the core value proposition. However, a music sharing social media app including a music review feature or an AI-music-generation feature, both of which can likely be spun up using out-of-the-box white labeled software, could keep users engaged even while new user acquisition is still struggling. This stickiness compounds your recruitment efforts on platforms that leverage network effects: more users who stay on the platform means that new users who join will have an even better experience, making them more likely to recommend the platform to new users. Without this “sideshow” feature, acquiring users for a platform requiring a significant user base will feel like dumping water into a sieve. This isn’t useful for all start-ups. But you do need to understand your value proposition to users before you reach network scale and can enjoy network effects. Adding in a low-lift feature to provide that can be a smart way to go.

Demonstrative example:

Your heat pump start-up is expanding into new markets where you have less certainty about the stickiness of either side of the market — either installers or home-owners could end up being a bottleneck. To ensure both have a clear value prop to join the platform when they may not have “matches” immediately, you identify the needs of each stakeholder. For users, you realize you want them on the app relatively frequently, so that they think of it when they are ready to buy a heat pump, and you can notify them when you find a good match for them or have a discounted offer. So you include a simple “electricity usage” integration with major power companies in the area. (In practice, this is likely not the “lowest lift” feature you could generate, and thus might not be ideal, but it gets the concept across, I think). This keeps users evaluating their app to see energy usage along with tips to reduce their usage. You have a “reason” to notify them when their energy usage is high, and to push them towards installation of electric heat pumps when you have an appropriate match. For installers, you recognize you want to decrease their lift to the extent possible, decreasing the onboarding time and integrating directly into their workflow — e.g. automated emails, phone calls, or project management software — ensuring that even if they go a few months without receiving a customer, they are no less likely to respond to homeowners who match with them on the app. 

These final couple strategies apply to all companies, including those leveraging network effects. So, pretty great article for those guys, huh?

Strategy #4: Superfans & Micro-Growth

Find your quirky fanatics who’ll shamelessly plug your app farther & wider than you’d ever think of. Then find a friend group full of them.

Most applicable for: Media (art, comedy, podcasts), DTC-focused products & services, very early stage B2B2C brands

The value of a “superfan” varies by industry, but universally, it is a huge boon to your product or business to have hardcore supporters: organizations rarely survive without them. Superfans not only spend more of their money on your brand, they also are authentic and strong marketing advocates for you. In the music industry, this is particularly stark, both in streaming, where on average, the top 1% of fans account for over 20% of streams for smaller artists, and its estimated that superfans spend twice as much as regular fans on music each month, including over 100% more on merch.

In other industries, while the impact is less visible, it is none-the-less real. Apple has continued to gain market share even at its higher price point thanks in no small part to the Apple-Proselytizers in every corner of the art, tech, and now consumer, world. Malcolm Gladwell covers these types of individuals who help create fashion or social change in The Tipping Point — not influencers as we use the term today, but individuals with natural proclivities towards sharing information far and wide, or collecting it in a systematic way. Brands finding “connectors” who resonate with their product, who will become advocates in their community, can be more powerful sales reps than your top performing team members. They are shameless in their promotion, because it is selfless and fully authentic. 

Leveraging influencer marketing can lead to conversion of superfans, but they are not the same thing. Unless the influencer you partner with aligns very, very closely with your brand voice, this is unlikely a way to connect with individuals who are likely to become superfans. The key is to find those who naturally resonate with your brand — who identify with the pain points you’re solving, match your identified personas well, and are the type to start a brand page for a paper towel they really enjoy. You should create an experience that keeps them engaged — include offers to provide direct feedback, get notified about marketing events early, and even provide input on those events. Help them feel involved. If you’re a social media app in particular, mico-targeting a friend group or community to validate interest can be a good strategy: focusing your energy on creating a small, connected network can be more efficient that a broader user acquisition strategy.

Demonstrative example:

During your initial user and demand testing, 4 of your prospective users have been particularly responsive to requests for feedback and verbose in their feedback. 2 are members of local electrification organizations, and all 4 are active participants in their local homeowners associations. As you are launching your platform, you reach out to these “superfans” and look for opportunities to share information with their HOA, and even visit a meeting to distribute materials with a QR code for special offers. You create a newsletter with a “Customer of the Month” award highlighting advocacy efforts from your customers, not just towards your sales but towards home electrification as a whole, ensuring your superfans feel your brand mission is aligned with their goals.

Strategy #5: Create shareable & enviable UI or product experiences

Most applicable for: Everyone, let’s be real.

7 years ago, Minneapolis native John Edwards, (no relation to the philandering 2008 presidential hopeful) led a small group of friends and acquaintances on a “tour” of his Minneapolis community, admiring the crown jewels of the neighborhoods: cats. What started as an intimate gathering and, in John’s mind, a joke, has transformed over the last few years to an event, drawing hundreds of kitty-lovers from near and far to revel in the beautiful cats all around. This is, weirdly, a perfect example of a shareable and enviable user experience. It wasn’t technical, and didn’t have the luxurious user journey funnel to ensure all logistics were perfect. But none of that matters when you have dozens and then hundreds of individuals posting highlight clips of their “cat walk”, or ranking the top 10 cats in the neighborhood. 

Wordle did this fantastically as well: the user interface was clean and satisfying, with a stylized plaintext shareable format that piqued the interest of the uninitiated and immediately reminded current users they had a new puzzle to complete. This strategy netted the creator a multi-million dollar purchase offer from the New York Times. Much of the initial LLM-AI hype was generated by the hyper-shareable products that dropped, making users feel envious and excited for the products, prompting new user adoption. 

Even for B2B start-ups, user experiences that are remarkable to users (that is, users actually remark to others about the impact that they have) are key to adoption. In the healthcare industry, trends towards consolidation necessitate new systems that displace traditional workflows provided by EPIC, Cerner, or other major EHR providers, require experiences that feel truly impactful to users. This could mean taking your key time-saving feature & creating an animation and “time saved” report that administrators can view and other users may naturally save and share with co-workers or administrators. 

It’s obviously easier said than done. But identifying key user experiences that will lead to satisfying moments for users that are sticky in their mind and ultimately reduce churn and increase net promoter score is key to early brand success. At play here is something called the “peak-end” rule: people primarily remember experiences based on the most salient moment (whether good or bad) and how they felt at the very end. More on that in a future article, but you can google “Peak End Rule Colonoscopy” if your interest is piqued.

Demonstrative example:

After conducting market research, your heat pump start up determines that energy savings & support for eco-friendly practices is the most “shareable” piece of information for users. While they are unlikely to share on social media, they are likely to share with friends or family, and even convince others to make their electrification purchases together. You create a dynamic infographic feature that allows them to plug in basic information about their home & energy use and project their savings. When they do make their purchase, you can provide projections of how much CO2 they’re saving and some comparisons: major advocates will use this to promote on social media, while for others, it’s simply a “buyer’s remorse reduction tool” to help them feel secure they made the best financial and environmental choice.

Concluding Thoughts

One last thing to keep in mind is that operations are hugely important throughout all of this. You should have a centralized place for all of your leads and current customers/users, including specific “levels” of engagement so you can identify your super users and reliably predict how many you can expect to respond to a given engagement. This is, again, a topic for another article, but feel free to reach out if you’re struggling with any of these strategies or the operations surrounding them.