Today’s podcast episode welcomes Drew Williams, an expert in running startups and author of Feed The Startup Beast. Tune in as he shares tips for starting, maintaining and selling businesses.
00:57 – The experiences behind “Feed The Startup Beast”
04:23 – Creating a repeatable marketing system
07:17 – Ask and listen
08:27 – Focus
09:10 – Attracting – all about social media
09:32 – Who should you go after?
09:58 – Nurture and grow
12:16 – The breakthrough
16:28 – An under-utilized marketing weapon
19:42 – Engagement ladder vs. chocolate wheel
27:09 – Building to sell
31:40 – The value of PR support
36:36 – Should you invest in an idea?
41:24 – Start out with something achievable
42:48 – How I differ from most business owners
45:14 – Creating credibility with a book
47:36 – Getting a good price on an existing business
52:07 – Resources and tips from Drew
The fastest path to growth is finding customers like your best customers. [Click To Tweet].
Build to fill a hole. [Click To Tweet].
Engage till they buy. [Click To Tweet].
Intrigue is an under-utilized marketing weapon. [Click To Tweet].
Be responsible first to yourself. [Click To Tweet].
Ask first: Is there enough of a market? [Click To Tweet].
James Schramko here, welcome to SuperFastBusiness. This podcast episode is with an author of a book actually called Feed The Startup Beast. His name is Drew Williams and looks like it was co-authored as well with Jonathan Verney but I’ve just got the Drew part of the show and we’re going to be talking about building your business, growing your business but also I’m interested on the story of selling a business. Welcome to the call, Drew.
Drew: Thank you James, happy to be here.
James: So you’ve got this book out. It’s got some pretty good tips about business growth. It’s a topic that we cover a lot on this particular podcast. A lot of the steps may be familiar to our listeners. I’d love to just get your take on firstly, why did you put out the book?
The story behind the book
Drew: I’ve been running startups over the last 20 years. I’ve run six different companies at this point and sold the company number four and I’m still running five and six, and through all of that kind of bashed my way through marketing and did everything wrong you could do wrong pretty much.
So early 2000’s I started scratching my head. Mid-2000’s I started writing an approach to marketing down, sort of just a workflow thing. And that evolved over time. I started using it with clients and I realized that I had something that I thought other startups could use, and really give them a shortcut to the fact of marketing, because in my experience most people don’t get into business to be marketers, right?
They get into business to do what it is they love to do. And so they got to get to marketing, doing it to get back to what they want to do.
James: Well interestingly enough, a lot of our audience got into business because they’re marketers and then they try and back fill it with a business.
That’s why the topic is quite interesting to me and potentially to a lot of our listeners is if we’re a marketer and we already know a lot about the marketing so we’re not going to labor over all of the points because we know a lot of this stuff, it’s common sense to us but obviously not to your average candlestick maker or bread maker.
Businesses Drew kept and sold
What I think is the really interesting story is we know that it’s important to have solid marketing foundations but I’m interested in the stuff like of the businesses you’ve sold and kept, why did you sell some and why have you kept some?
Drew: Well, I’ll start with the kept first. So the ones that I’ve kept – I decided I only wanted to grow to certain points and keep them growing as lifestyle businesses, and so I’ve kept them running.
One, I’ve got running without me, one I’m running quite actively involved. They’re a couple of million-dollar businesses, and they’re just chugging along. What happened is, after I sold my business, it was nearly 2000’s, I was really tired of managing people.
So we got up to around 250 people, and I just found that I was doing stuff I didn’t want to do, I didn’t feel like managing people and running the ship and all that kind of stuff I really don’t like doing so I sold that business and got start up with smaller businesses and have kept them that way. So really for me, it’s about doing what I love and not worrying about having tons of mouths to feed.
James: Right, so I had another guest on the show, Sam Carpenter and he talked a lot about setting up processes and automating the business even if there are a lot of humans involved.
James: To some extent, I guess I have both types of businesses – people intensive business and non-people intensive business which is more of a “me” intensive business. But also some leverage of information and community so I can relate to what you’re saying.
Making a repeatable system
I’ll dig further into that in a second but just to finish up the first point, I’m guessing that you wrote down and developed and systematized and refined and came up with a marketing system that would work well for most businesses who don’t have marketing knowledge whatsoever.
Drew: Yeah that’s right and it was really focussed more on B2B as opposed to B2C but what I realized is that to succeed in marketing, you’ve got to create a repeatable system and if you do, if you’ve got this repeatable system, you can actually have people running it who don’t have to be marketing experts as long as a system underlies it.
So I work with startups and take equity positions and startups to help them get to market and in exchange for marketing services. I just find this idea of a repeatable system is something that really works for them because they can’t afford expensive marketing talent so they put the system in place, they get a $30,000-a-year person and they can make it go and be quite effective with it.
James: You and I are doing pretty much the same thing. Although credit to you for taking an equity state. I’m wondering with some of those startups do they all go to a point where you get a return on your investment or do you sort of some balance out the others?
Drew: No. That’s a portfolio. Absolutely so. I’ve got one which was a Greek company and interesting story too. It’s a big pivot. So they’re pointing into one direction and we moved them to another. So they’re on their fourth round of financing right now and they’re up over $2 million. So they kind of lessened $50,000 a year about a year and a half ago and they’re up to two million right now.
So I’ve got equity in that company, now as we keep raising money of course I get deleted. It’s not great but… somewhat like that and then others can unfortunately as much as I think I’m the perfect marketer, not everything works, so some don’t as well.
James: Well that’s the thing, I’ve decided to work with only businesses that work but I do it on a fee basis and I don’t take equities. So it’s attractive for them to have I guess a solid business partner or a board member on their team who’s taking a fixed amount but because of filtering I only work with something that’s beyond the startup that’s now proven and established.
I did have a recent guest from the Foundation who was a focused entirely on that startup market. Well you know Dane Maxwell. Right from that you know, don’t even have an idea, have no money, have no talent, then we’re the right business for you. A lot of our audience are trying startups, they’re interested in it, they’re doing it, they’re pretty good with the marketing.
Let’s briefly talk about some things that you developed for your system because they do make sense and hopefully it’s refresher training for a lot of us. Do you want to step up through the things for the advance student?
1st 2 steps: Ask and Listen
Drew: Yeah. I’ll go quickly through it. So it is seven steps and we start with ASK and LISTEN as the first two steps and that’s really sitting down with issues. Sitting down with your customers and talking to them and we have a bunch of tools to do that and really these are the people that know what you need to know.
We provide the tools so that a reader can download these tools off the website and use them to capture insights that really most our competitors will ignore.
So we beacon something we call the laws of engagement in there so how do you mind your best customers and we talk about how to find your best customers for that information so you can go out and find others like them because the fastest path to growth is finding customers like your best customers. So ASK and LISTEN is really a strategy in value proposition and that kind of thing.
Step 3: Focus
The next third step is FOCUS and we’re getting the resources organized and in particular your website. So a lot of websites are all-you-can-eat buffets; prospects hit them, there are tons of information whatever, but what we like to do is create an engagement path through the website so that as somebody hits it the website becomes something more like a den of seduction.
So there’s path through to offers that are developed that also come out of the Ask and Listen steps to convert unknown visitors to known prospects. So FOCUS is very much around that. We get into sales teams too if you have sales teams of if you have third party people that you work with.
Attract, then Pursue
Once you’ve got all of that nailed down, we move to ATTRACT and then PURSUE, so the fifth and sixth steps. And attracting is entirely about social media so we do the 80-20 in social media, what to do, how to do it because we all know, social media can suck up a lot of time. We give essentials on what you need to do, what stuff you can ignore.
PURSUE is outbound, so one thing to do, inbound social media-type of things but if you know who you should be going after, if you’ve identified a profile that matches your best customer, makes a ton of sense to go and get them so we talk about developing lists and how to develop break-through campaigns. We’re big fans of intrigue. How do you use intrigue to break-through and get the attention of your prospect.
Nurture and Grow
And then the last two steps are NURTURE and GROW. NURTURE is once you’ve got an engagement through either attracting or pursuing, now you need to nurture that prospect. How do you do that, how do you keep them engaged until they’re ready to buy because everything’s on their timetable.
And then GROW. Important thing is about measurement. So if you can figure out what works and what doesn’t work and you can dump what doesn’t work and double down on what does work and of course that’s a faster path to growth as well.
So through this whole process, we realized that software is an important part of the repeatable marketing system. We didn’t want to force our readers to have to go buy software so we actually built a free software tool that we put up on the website that can be downloaded.
It’s a really simple marketing automation tool but it kind of does 80 percent of what you need to do in marketing automation and it’s spreadsheet-based; very, very simple. Pretty cool thing, works with macros but you can use that and it produces reports for growth.
So again you can see what’s going on, you can build list quite effectively, you can take action before it’s too late. So that kind of wraps up the whole cycle and then you repeat it. So what you’ve got is something that’s repeatable and can be run by again it doesn’t have to be a VP of marketing type of person.
James: Yeah, it all makes sense. It’s exactly the sort of things we talk about although in our industry we use a slightly different terminology. In some of the sections we talked a lot about funnels which might be your seduction den.
Drew: Yeah, we talk about funnels too.
James: And we have cohort analysis, segmentation, feedback loops and I guess lead scoring helps us identify our best customers in the beginning and certainly nurturing and growing, we hear a lot about that with automation software solutions that are out there like Infusionsoft and Office AutoPilot are really active in our market and those tools would be a foreign concept for your average florist or hair dressing salon etc. but the ones who use it well are killing it.
One word you used that I liked is the breakthrough, I’d love to ask you to tell us more about that. Tell me more about the breakthrough.
Drew: So this just came out of me trying to come up with ways to break through to my audiences, you know, my prospects years ago. And so I sort of stumbled on something that seemed to work well and we’ve continued to use it ongoing and sort of bake it into the book. Big fan of direct mail.
You know, most people who direct mail, oh, that’s really old, who does that? And the point is that yeah, most people don’t. You’ll still get a lot of junk in your inbox, but it’s mostly… junk, I guess. And so we do these 3D mailings, a lot of people call them, but we do it a bit differently.
So as an example, one that we did for ourselves, kind of kicked it all off, we printed a 6 by 9 postcard, we glued a big dog biscuit to it, so it was a big milkbone dog biscuit. Had a picture of our beast, which is the beast from Feed The Startup Beast, with his mouth wide open, looking like he’s going to chomp on the cookie.
And printed on the card was Drew, so if it was to me, “Here’s your beast biscuit, for further instructions go to, whatever it was, TheBeastAwaits.com, question mark, Drew Williams. And that was it. And that goes in a padded envelope, and it’s sent by mail. And it’s actually really inexpensive. Everything I just described is under a buck total cost, plus postage.
So anyway, we do these things. We’ve done it with house keys, we’ve done it with masks, we’ve done it with all kinds of things. And I’m not kidding you, we have typically between 40 and 75 percent open rates, so we know that people are opening them because they’re going to the URL on the card.
They go to the website and then we’ve got a… you know, we talk about what you have there to engage people and convert them. But so we’re getting huge, huge engagement rates and conversion rates, not only to prospects but to actual sales.
We ran it for IBM. We ran a program like this for IBM. You know, I do work for some large companies. And they were trying to reach 600 other business partners who were very busy small- to medium-size companies, and we had a… 75 percent of the people who received this mailing had a key in it in this case, went to this website and we had a 15 percent conversion rate to a sale out of the one mailing.
So it’s just, the point is when you get something that’s different, like a dog biscuit, most people look at it and they smile. And if they smile, you’ve intrigued them, and if you’ve intrigued them, you’ve got that first step towards a relationship. That’s worth a whole lot and… so we’ve found it works well.
And then we’ve taken that and we’ve brought it into email. How do you get the same idea across in email? And we’ve run the same thing in email, where you’ve got one big picture, like a billboard, like an ad to our billboard, one big picture and just a few words with a cryptic link on it, no branding whatsoever, and again we get between 30 and 50 percent open rates on those things. And then between 15 and 25 percent click-through rates, which are way way ahead of what we get for anything else we do.
So the whole idea is… and we’ve got a whole chapter dedicated to it, in fact we’ve got a free, I call it an e-pocket guide, that I’d be more than happy to give you the URL for, that people can download. It talks all about this idea of intrigue, and how powerful it can be, and it doesn’t have to cost a lot. It’s especially useful when you don’t have a big budget and you want to get through to people.
James: Yeah, I’ve got a few questions around that. I’m friends with quite a few people who still use direct response marketing, especially people like Bond Halbert, I think they still do those dollar bill mailers as well.
Drew: Right, right.
James: Certainly the letterbox is going to have a higher open rate than a lot of emails, in some markets. Do you use things like SMS as well?
Drew: We use it to communicate. We’ve not used it in campaigns at all, so far. This could be because I’ve really not seen a good example of it yet that’s inspired me.
James: Does this work outside of North America?
The power of intrigue
Drew: I think it does. You know, the whole idea of intrigue, regardless of whether you do it the way I suggested, the idea of intrigue – I think it’s a really strong one. I think it’s one of the most under-utilized marketing weapons, tools, whatever out there. And I think all human beings are prone to being intrigued.
James: Oh, I like that word. The much more familiar word in our circles is curiosity.
Drew: Yeah, yeah.
James: Yeah, curiosity’s worked. But there’s a lot of evidence that shows it might be gimmicky or hypey and I think it’s certainly one to watch outside. Different markets are going to respond perhaps differently.
I know, whoever is down at my local bank is probably drinking from the same fountain because when I go down there, it’s like a Matchbox car on the counter or there’s like $500 bills stuck to it or a house key and I’m supposed to ask them what it’s for and I’m like my immediate reaction is like: “F**k off! I’m not going to ask you about this because it’s a ploy it’s a cheap trick.”
Drew: Oh, for sure and you’re right. You’re going to get a certain percentage who’d say “Yeah, whatever that’s a marketing gimmick.”
James: Well, I think you know I’m not normal by any stretch.
Drew: Well, you’re in the business, yeah.
James: I’m a savvy marketer. I understand what’s happening but I’m sure it probably works because they’ve been doing it for more than a year now.
Drew: Yeah, and I can say that just by the numbers we get, more than half the people go for it. So, maybe 40 percent or 30 percent think it’s junk in the…
James: I have no doubt it works in your market because your market is insane. They’ll buy cars out of a catalog. They’ve been trained to buy like that for years. There’s less education, more selling in that North American space than other markets. So, I’m just wondering if for a company like IBM, if you tried it in different markets because I found different sensitivities.
In fact, there was one campaign where in Australia I heard of a car dealer had purchased their database and started sending gifts to neighbors of someone who bought a new luxury car that would send back a cap to the person across the road.
Drew: Oh, yeah.
James: And he’ll be like: “Hey, here’s a Mercedes cap because your guy across the road just bought a new Mercedes and we thought you should at least enjoy something.”
James: And it backfired terribly like they were pissed off.
Drew: Oh, really?
James: Breach of privacy. They felt violated and it upset neighborhoods and it was really interesting to listen to these stories. But, really interesting idea about breakthrough and I think the action step for our listener would, at the very least, is OK, if you already know what funnels are and you already know what all the other things we’ve talked about, which you probably do because we talked about it to death, think about what could intrigue or capture the imagination or the curiosity of your prospects and how you could access them.
And, I think the direct response marketing technique is super strong. I still send lumpy packages like T-shirts and hoodies and workbooks and stuff to really break out of this fact that we’re just a predominantly online business in the world we talk about.
Drew: Yeah, for sure. Yup, yup.
Engagement ladder or chocolate wheel?
James: So, I got to ask you another thing. You mentioned that your attraction is mostly all social media. What about videos and podcast and things like, how do you use those?
Drew: Yeah, so we use that as content. So, back when we’re talking to our customers to figure out what is the profile of our best customer, we do get into segmentation at that point as well. So we create what we call in the book an engagement ladder. And the engagement ladder is, imagine, an eight-rung ladder.
The lowest rungs are kind of general information, the higher rungs are much more specific information to the sale. So we populate the rungs of the ladder with podcast, with all kinds of the things you’re talking about, because what we want to do is we want to get an early prospect on the bottom rungs of the ladder.
So industry education, tell me what this is all about and how does it work? And as they reach for the rung, and download a piece of content, we then try and lure them up to the next rung.