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[Interview] How Upstart Avoided the Four Common Mistakes of Community Building

[Interview] How Upstart Avoided the Four Common Mistakes of Community Building

Community building is an integral part to growing any business. Nielsen recently published a research report that states 77% of consumers are more likely to buy a new product when learning about it from friends or family. So how then does one convert regular users into vocal advocates? Although each business has its own unique path to developing a strong community, there are some common practices to be avoided.1

I sat down with Brigitte Bradford, a startup marketer based in Palo Alto to discuss how she helped Upstart overcome the common mistakes in community building.

Upstart is a business that provides loans to students and new graduates. It solves the problems that young adults go through to secure a financial loan. By taking academic backgrounds and work experience into consideration, Upstart sees more than just a “credit score” and offers reasonable loans to high potential applicants. Started in 2013, Upstart has since raised more than $7 million in seed funding and was part of the Thiel Fellowship.

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1) Simplifying  messaging

“The best start-up idea is not the most complicated one”

What would your business look like on a car bumper sticker? How would you explain it in a tweet? These were the questions Brigitte asked herself when customers expressed difficulty explaining Upstart to friends. Upstart first launched with a novel financial product. On top of considering academic backgrounds and work experience during the underwriting process, Upstart had a unique loan system called the “Income Share Agreement”. Instead of a traditional loan with principals/interest, borrowers agreed to share a percentage of their future income for 5 or 10 years.

Startups often make the mistake of trying to change too many things in an industry to be “disruptive”. A fine balance needs to be made. How do you expect customers to advocate for you when they can’t even sum up the different things your business is trying to accomplish?

Evernote is a great example of an online business that boasts a simple ‘cut to the chase’ tagline. They pride themselves on being “one workspace” – an application that lets you store notes whether its on your phone, computer, at work, or at home.

2) Parking emotions at the door

“If the markets aren’t listening or responding, then you have to let go and do what people want.”

It can be hard not to get emotionally attached to your startup – after all it’s a product made by you! With Upstart, although many users appreciated the unique underwriting process, it became clear that there was a strong market and interest for a more traditional loan. Using the same income prediction model at the heart of their original  offering, the company began exclusively offering a more conventional 3 year fixed rate loan.

By listening to their customers, Upstart has since experienced 100% month-over-month growth. Not only did this change attract new customers but it made it easier for current users to share and advocate for Upstart. Additionally, features that you take out today could very well come back at a later stage of the business. Boasting this “customer-first” mentality is important when community building.

3) Own your messaging

“If you are calling yourself disruptive, own it, be willing to put yourself out there.”

Part of having a brand is owning that relationship you have with customers. When you think of your best friend, would you classify that relationship as authentic or fake? Hopefully its authentic. This same principle applies when building a community. This is how Brigitte describes Upstart:

  • We are a smart, hardworking bunch
  • We boast an open door policy (Send anybody an email anytime – [email protected])
  • We love data
  • We want to empower people financially with information and services that utilize technology

The personality that you are forming in your mind right now is exactly how Upstart is. From their open email policy to lightning fast customer service, Upstart truly lives up to who they promote themselves to be. For example: they just ran a bold, “hipster-esque” advertisement on Facebook, receiving likes, dislikes, and even media coverage. Upstart ran a unique email campaign entitled “Are you financially smarter than the average American?” – Sparked by recent news suggesting how US citizens generally have lower financial IQ than other OECD countries, Upstart created a 10-question quiz that challenged blog readers. This was extremely well received and generated a large number of views and referrals. By embedding core values into the company DNA, your customers will have a better expectation and appreciation of your brand.

4) Engage in ways your competitor can’t

“…the things our competitors are not doing well, how much time would it take for us to do that stuff well…”

Nothing rallies people together more than solving a problem. Every business answers a problem or need. Companies use this subject matter to their advantage! When Upstart created their blog, they wanted to ensure it embodied the company’s core personality and mission. Looking at the blogs written by large American banks, a lot of complicated financial jargon was used. To contrast, Brigitte made sure that every article was written in a friendly, easy to understand manner. Gifs, graphs, and pop-culture references were even used to add a more human element to this traditional, boring financial content. Brigitte mentions its important to respond to customer feedback with quick adaptivity. If readers enjoyed the blog post on credit scores, then write 3 or 4 more articles on different angles of credit scores! Always test your market and maximize customer responses.

Upstart: The Kickstarter for People

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A huge thanks goes out to Brigitte from Upstart as she shares these best case practices in community building. If you are interested in learning more about Upstart be sure to check out their website and follow Brigitte on Twitter! Comments or suggestions for community building? I would love to read them so write them out below. To wrap things up, here are some fun questions I asked Brigitte:

Pet Peeve:

People who say they are bored.

Cups of Coffee a Day:

On average 2 – 3 big cups of coffee a day.

Morning Ritual:

10 minutes of meditation and 10 minutes of yoga.

Book Recommendations:

Predictably Irrational by Dan Ariely. Check out our team’s summer reading list!

Unique fact:

Travelled and volunteered in Tanzania for 2 months.

Favorite Quote:

Upstart lives by the “Just Do it” model – At the office, if you need to do something, just do it. If you have to apologize later that’s fine! No need to ask for permission, just get stuff done.

[Interview]: How Sweet Tooth Turned their First 30 Customers into a Multimillion Dollar Business

[Interview]: How Sweet Tooth Turned their First 30 Customers into a Multimillion Dollar Business

One of the toughest challenges startups face is the transition from small fry to big fish. The secret “growth” formula behind each business is very different! The race to the top is seeing who can determine their proven growth strategy first while capitalizing on itSteve Deckert.

I sat down with Steve Deckert, Co-Founder and Marketing Lead for Sweet Tooth and discussed with him some of the early stage growth tactics his team used to grow their business from 30 customers to over 3000+.

Sweet Tooth is a Canadian-based E-commerce loyalty platform for online businesses. The platform helps brands increase sales through points-based programs and campaigns. Started in 2011, Sweet Tooth has since raised more than $2.25 million in seed funding.

From our interview together, I highlighted three key learnings points below:

1) Pre-sell your Product

“We identified a need, where no solution existed.”

Before Steve and his co-founders built a product, they had already generated sales.  How? By speaking to potential customers and simply asking if they would put money down for Sweet Tooth to be built. Not only does pre-selling provide early financial funds to carry out development costs, but it also acts as the strongest form of customer validation.

Magento is an opensource E-commerce platform that helps businesses sell to customers online. Browsing through the Magento forums, the Sweet Tooth team noticed a need for a loyalty rewards function. After talking to 300 people through cold emails and phone calls, around 35 people expressed interest in a solution. Steve mentioned that even if he could not get a customer to pre-pay, he would try to get them to verbally commit.

2) Involve your Core Customers

“If you make other people successful, you will generally be successful.”

Your first set of paying customers are extremely important because they act as a sample size of the bigger market. Their feedback will help you determine whether your product and marketing is working or not. Involving your customers in the product development phase of the business will create an evangelical-like relationship. As Steve puts it, if you make other people successful, in general you will be successful as well. Your core customers can help create half of your users through word of mouth marketing.

What really helped kick-launch Sweet Tooth were positive testimonials and reviews on third-party websites. By establishing a personable relationship with customers, Steve and his team were able to rally a team of vocal ambassadors. People who will verbally market your product to others, for absolutely no cost to you!

To this date, Steve is still in touch with many of his first customers. He always tries his best to meet in person or video call for meetings. The customer sales team has since been expanded to offer the same great service to Sweet Tooth’s 3000+ customers.

3) Be Human

“If you understand people enough, you can present things in a way people want to be a part of.”

The last piece of advice that Steve shared is the the importance of preserving a human element while building a business. At the end of the day, your business is for the people! If you can put yourself in your customers shoes and make a connection, they will be on your team. This could means tweeting at individual customers, sending personalized emails, or showcasing the employees behind Sweet Tooth. Essentially, anything that helps build a human connection between business and customer.

In the online web product industry, customers would much rather pay an up-front cost over a subscription fee. When Sweet Tooth made this exact change after their 2.25M seed funding, part of their easy transition was due to strong customer relationships.

Becoming the standard for loyalty online

Starting as what was originally a side project, Sweet Tooth today is a fledgling startup growing at a healthy 15%+ customers per month. Things are looking really exciting for Sweet Tooth as they hope to launch on other platforms. Their goal? To become the standard for loyalty online.

I would like to give a huge thanks to Steve for sharing his words of wisdom. Be sure to follow him on Twitter and check out the company blog. To end things off, here are a few fun questions we asked Steve!

Pet Peeve:

When people don’t believe in themselves.

Cups of Coffee:

Usually 3 extra-large cups a day.

Morning Ritual:

Wake up, read the news, clear our emails & notifications, shower, food, head to work, and grab a coffee.

Book Recommendations:

Lean Startup by Eric Ries is a must for any entrepreneur. Anything by Seth Godin.

Teenage Mutant Ninja Turtles or Transformers:

Definitely Teenage Mutant Ninja Turtles! I remember once getting two of the same Ninja Turtle puzzles for Christmas and I decided to keep both since I loved them so much.

Favorite Quote:

This is my own quote – “Life is a vacation”.  Just as we go on “vacations” to experience new things and feel different, this same approach can be used for life! You only have one life. If there is anything worth doing, you should be happy doing it.