This is an archived version of the original newsletter, sent via email.
Today’s interview is with Ilya Lichtenstein, CEO and co-founder of MixRank, a platform that allows you to spy on your competitors’ ad campaigns. Ilya is a very good marketer himself, so I invited him to Startup Frontier to talk about getting customers before building a product.
He was also generous to offer Startup Frontier readers complementary access to MixRank for one month. Take advantage of this!
Tell us — how did you come up with the idea of MixRank?
So the big general problem that we were trying to solve was that it’s too hard to build successful ad campaigns. [But, there are lots of different kinds of advertisers.] We decided to start segmenting our audience very early on. We thought we’ll focus on the performance advertisers, because they are easier to sell to. [Editor's note: performance advertisers are marketers who advertise to be directly profitable. E.g. spend $1 on advertising and make $2 in revenue attributed to that ad campaign. Brand advertisers are marketers who will often advertise to gain mindshare or for branding reasons. E.g. if Coca Cola spends $1 on banner ads, they don't necessarily expect consumers to buy $2 of Coke online.]
So we broke down performance advertisers even more — there are guys that do SEO. Some do media buys. And, we kept drilling down and segmenting until we had a very well-defined group. Once we had that defined audience, we got a few hundred beta users by identifying where they go online.
Ok, so how did you get beta users for a product that didn’t exist?
We started advertising on Google Adwords spending about two thousand dollars a month.
Two thousand per month?
From my previous affiliate marketing business, I knew that all campaigns lose money in the beginning. But, you have to spend money upfront to learn the market and see what works. I didn’t see it as taking a risk but rather as paying for market research to learn what people wanted and figure out what the numbers were for customer acquisition.
And we tried to create content that the group would respond to. So, say for example, Google announces some new feature for Adwords. We would make sure to do our best to break the news on that or create some unique content around that. We would reach out to bloggers or submit our posts to Hacker News or other social bookmarketing sites. At the bottom of each blog post, we would write something like “We are working on a product to help you get more traffic. Enter your email, and you’ll be the first to know when it launches.” We split tested different messaging for that, and I think the one that worked best said, “Use this product before your competitors”. We were able to get up to I think about six or seven hundred people on the list before we had written a line of code, which was encouraging.
What did you do with that list?
I just really wanted to talk to people and really figure out what their problems were exactly. In exchange, I offered to build a marketing campaign and do free consulting for the people on the list, and I had a hundred and fifty people email me, which was overwhelming. I did respond to all of them. It took me a few weeks of like twelve hour days writing emails. But, it was definitely worth it because I got really valuable market research, and all it cost me was my time. At that time I had a lot more time than money—this was before we got any funding.
The other benefit is that now I have a list of 150 people who essentially “owe me a favor,” because I’ve given them my time and hopefully valuable advice that they’ve used. So, when it comes time to prioritizing features, I have 150 people who are going to pick up the phone when I call or who are going to answer my e-mail.
It sounds like you didn’t message a particular product — how did you get people to sign up?
I had been building my own brand and my own credibility by blogging long before we put up a signup page, so I think the sign ups were more a function of trust that I could deliver something useful.
Ilya will return next week with part II of his interview.
Illustration by Orissa Jenkins