If you want 1% of a market, you need to get everyone in that market to at least visit your website.
This ties in with the marketing funnel in our “measuring marketing” presentation. Start from the number of customers you want to meet your revenue targets and work backwards to the number of prospects you need to reach out to. You might be surprised.
This also fits in with Guy Kawasaki’s advice in the Art of the Start to take a bottom-up approach when you are forecasting your revenues, rather than a top-down approach. (That is, start from the number of people you can reach, not the size of the market.)
“We don’t and can’t compete on breadth with Comcast, Sky, Amazon, Apple, Microsoft, Sony, or Google. For us to be hugely successful we have to be a focused passion brand. Starbucks, not 7-Eleven. Southwest, not United. HBO, not Dish.”
Foursquare’s plight contrasts strongly with the success of shopping app Shopkick, which is pulling in cash in ways that most location-based mobile apps — including Foursquare — have so far been unable to. The app, which rewards people for shopping in certain stores, helped Shopkick’s partners make $200 million last year. More notably, it also allowed Shopkick to report its first profitable quarter late last year.
Wait, what’s Shopkick? The CEO says:
“We are not a check-in app or a social app. We’re a shopping app. Everyone who’s using Shopkick is by definition interested in shopping. And that’s inherently monetizable.”
And what’s Foursquare?
Foursquare, in contrast, is a lot of things. It’s a location app, but it’s a social app, too. It’s also a game and, most recently, a discovery app.
If you are small but you want to make money, you’re better off being Shopkick than Foursquare.
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