The most celebrated companies are shrouded in buzzwords... Hockey stick growth, Going viral, Rocketship.
The reality is that in the early days you’re elbows out, moving fast, and doing things that don’t scale, while trying to get customers by any means possible…
But if you want to build a lasting business, you need to figure out a scalable way to grow after that initial burst of customer validation.
This is where most startups fall.
In this session, Eventbrite's CPO will help us look beyond the jargon and think through the 5 key steps to drive a sustainable user acquisition strategy from his experience helping iconic brands like Pinterest, Airbnb, GrubHub, Tinder, Canva, and Lyft scale.
The Coffee Bean & Tea Leaf(CBTL), Business strategy case study
5 Steps to Drive a Sustainable User Acquisition Strategy - Casey Winters, Eventbrite
1. Five Tips to Drive a Successful User
Acquisition Strategy
August 2022
2. Casey Winters | @onecaseman | caseyaccidental.com
I help companies scale.
3. #1 There are Kindle Strategies and Fire Strategies.
● Kindle strategies are used by startups to
get initial user acquisition traction
● Fire strategies are used to scale to a
broader audience
● There are only a few fire strategies for
software companies
● Kindle strategies are only useful if they
help you hit minimum scope for a fire
strategy
Hipcamp created a landing page about where to camp to watch
the solar eclipse in 2017.
Casey Winters | @onecaseman | caseyaccidental.com
4. Kindle strategies are usually unsustainable.
● “Do things that don’t scale.”
● They either have limited scale or are too
expensive to pull off at any scale.
● Unlike fire strategies, they are numerous
and in many cases bespoke to individual
startups
● Quick > Sustainable
● The goal is to use kindle strategies to
sequence to fire strategies as soon as
possible
Airbnb founders launched election themed cereal to raise money.
Casey Winters | @onecaseman | caseyaccidental.com
5. Fire strategies are sustainable growth levers.
● Sales
○ Why It Scales: Use salespeople’s compensation to manage payback period of customers they bring in
○ How to Sequence to It: Increase monetization to size that can support above
○ Problems With It: Hard to have very low payback periods
● Paid Acquisition
○ Why It Scales: Use value of purchases/lifetime value to fund more ads
○ How to Sequence to It: Improve lifetime value so that paid ads can drive healthy payback period
○ Problems With It: Tends to get worse over time
● Content
○ Why It Scales: Volume of content distributed through channels like SEO, user sharing, online communities
○ How to Sequence to It: Amass enough content over time so that above channels drive enough volume
○ Problems With It: Company generated content rarely scales, so product has to get users to create content
● Virality
○ Why It Scales: Users tell other users about the product
○ How to Sequence to It: Build sharing into the product, and figure out right incentive (social or financial)
○ Problems With It: Can die out much quicker than other channels
Casey Winters | @onecaseman | caseyaccidental.com
6. Sequencing is your friend: Pinterest edition
● 2010-2011: Founder visits DIY/Craft Meetups and convinces Influencers to start “Pin It Forward” Campaign
○ This gets people to learn how to use the “Pin It” functionality in their browser
○ Pinterest uses Facebook Sign-In to bootstrap network of friends as more people join the platform
● 2011-2012: Pinterest leverages Facebook Open Graph to share every Pin into user’s Facebook feed
○ Pinterest starts to amass enough content to make discovery, not saving, primary value prop
○ Retention and frequency of use improve
● 2014: User Generated Content distributed through SEO
○ Pinterest finds another channel to distribute its high quality content to after Open Graph turned off by
Facebook
○ Users now coming in with less of a match to current network, so friend graph ceases to work as well for
ongoing discovery. Retention decreases.
● 2015: Data network effects kick in
○ While friend graph ceases to work, Pinterest now has scale of content to recommend great content just
based on users’ interests. Moves to interest, not friend based discovery. Retention improves again.
Casey Winters | @onecaseman | caseyaccidental.com
7. #2 Attribution and Payback Period Tracking are important to nail early.
● Payback Period: How long it takes me to make my money back in contribution margin from acquisition
spend
○ Early Stage: 3 months
○ Mid Stage: 6-12 months
○ Late Stage: 12-18 months
○ Public: 18-24 months
● The above can change depending on your LTV to CAC ratio, which most early stage startups won’t know
very well as lifetime values take a while to measure accurately
● This also implies if you’re not making money you don’t want to be spending money on CAC unless it’s the
only way to sequence to a different fire strategy
● Payback period should be measured for each channel separately early on
Casey Winters | @onecaseman | caseyaccidental.com
8. Attribution is about understanding where each customer comes from.
● Need to define channels well. Generally, a good report includes:
○ Channel, Volume of New Customers, Cost to Acquire, Historical Payback
● This helps you track which channels drive the most and most valuable customers so you can focus more
energy on them.
● Some common mistakes to avoid:
○ Direct is not a channel! Survey those customers to understand what drove them.
○ Separate brand and non-brand for SEO and SEM. Something else drove that branded search. Survey
for that.
○ Retargeting is not a channel. It is a conversion optimizer for another channel.
Casey Winters | @onecaseman | caseyaccidental.com
9. #3 Why I believe Operations is a dirty word.
● When startups try to scale, they usually try to do this with people. They create Operations functions like
Marketing Operations or Growth Operations.
● This implies the team isn’t spending enough time setting up process, automation, or building software to
help user acquisition scale.
● At Grubhub, one person managed over $10 million in acquisition spend because we invested in process,
automation, and software.
● It’s okay to use people to manage efficiency issues for a time, but strive to remove these efficiency issues
rather than stabilize people as solutions to scaling problems.
Casey Winters | @onecaseman | caseyaccidental.com
10. How to prioritize problem solving.
Casey Winters | @onecaseman | caseyaccidental.com
Software > Process > Employees
Consultants
Agencies
11. #4 Don’t just optimize the acquisition channel.
Casey Winters | @onecaseman | caseyaccidental.com
Retention
Activation
Conversion
Creative
Channel
14. #5 Why network effects, core competencies, or differentiation matter
The default is that acquisition channels get worse over time
○ Paid acquisition has to target customers who are less of a fit
○ Sales always targets easy customers before hard ones
○ The millionth piece of content is rarely as strong as the first
piece of content
○ Virality eventually reaches people who reject the value prop
Casey Winters | @onecaseman | caseyaccidental.com
15. What network effects do
● Network effects allow the product to get better faster than the customers you target get worse
○ Grubhub’s user retention increased year over year because of restaurant selection
Casey Winters | @onecaseman | caseyaccidental.com
16. What core competencies and differentiation can do
● Can’t create network effects? Then leverage core competencies or differentiation.
○ Ro has leveraged its ability market pharmaceutical products online to launch multiple new
pharmaceutical ecommerce companies
Casey Winters | @onecaseman | caseyaccidental.com
17. If you’re looking for more content...
Reforge.com
Casey Winters | @onecaseman | caseyaccidental.com