By Fletcher Martin - January 2, 2014
Tags: app, Marketing, mobile apps, small buisness ideas, startup
Has anyone else been watching Betas? It’s an original series from Amazon that follows a Silicon Valley startup with a revolutionary app idea as they try to make it big. One of the biggest problems their startup is having is with their consumer numbers. It’s a bit of a Catch 22 because they’re trying to get investors so they can grow their business but investors want them to grow more before they’ll invest.
It’s a problem many startups face. If you’ve ever seen Shark Tank or Dragon’s Den then you should have an idea of just how much your customer base matters to investors. The more people you have already buying your product, or at least wanting to buy your product, the more likely investors are to jump on board.
I’m not going to present you with a list of basic growth methods. You should already know the power of networking and mailing lists, so I’m not going to cover those – at least not here. What we’re going to talk about is host-beneficiary relationships and how they can help your company grow exponentially in no time.
What is a host-beneficiary relationship?
A host-beneficiary relationship is an arrangement between a startup and an established business where the startup is allowed to promote itself to the established company’s customer database. The startup generally choose a company that has a similar target audience as their own to increase effectiveness and bring in the most customers possible.
The host company doesn’t do this out of the good of their hearts. The startup generally gives something to the prospective customers for free; making it look like the host is rewarding customer loyalty in some way, shape or form. The startup gets new customers, the host make theirs happier, and it turns out a win-win for both parties.
Where are you supposed to find these “hosts”?
First you have to know what to look for. You need to narrow down your target audience as much as you can and then create a list of established companies that cater to those individuals. The more prospective hosts you have, the better.
The next thing you need to do is come up with the hook for the promotion. What product or service are you going to giveaway that won’t cost you too much while still attracting your target audience. It has to be something worthwhile. You can sell something at a greatly discounted rate instead of just giving it away, but that’s not generally advisable.
Once you know who you want to partner with and what you’re giving out, it’s time to pitch your idea. Make sure you highlight how the relationship is going to benefit the host company. Don’t ask for a handout or make the case of how much the deal will help your startup. It doesn’t matter how much your company’s growth could potentially help the host later on. All that matters is how you can help them now.
Close a few deals and you’ll have new customers flocking to your startup faster than you know what to do with them. All you have to do now is retain them, but that’s a different lesson for another time.