Hubspot acquires the Hustle: Do all software startups need to be media companies now?
Wisdom from the trenches // weekly startup myth-busting
This is a newsletter about building a software company, written from the trenches of building one.
I write brief essays to reflect... and to counter all the startup myths and “hacks” peddled by influencers looking to make a quick buck.
This week’s myth: “Your software startup has to become a media company.”
The myth in real life
Alright, this myth hits close to home.
I’ve previously written about building communities, audiences, and media-first companies. FFS, I write a newsletter every week! Obviously I believe software startups should be media companies, right?
It hurts to admit: I’m pretty sure I was wrong about being “audience-first”, building a media company that turns into a SaaS startup.
Here’s why.
A startup comes to you and says,
“We’re going to build a media company targeted at SaaS marketers. And then once we’ve built that successful media company, we’re going to build a SaaS product targeted directly at our audience, and convert our audience into SaaS customers.”
It sounds so rational and compelling… just like most bad ideas.
For this to work, here’s what you have to believe:
You can build a successful niche media company (difficult)
You can build a good SaaS product (difficult)
You can convert a meaningful percentage of readers to buyers (difficult)
It struck home when I was watching this great video on bootstrapped entrepreneurship: The founder of WPEngine had 40k blog subscribers and… 2 turned into customers. A friend told him, “Yeah, that’s about right. Move on.”
Some companies will execute this playbook well, and they’ll get stories written about them where their founders proclaim truisms like, “Media is the future of SaaS”, and we’ll all clap and then lose sleep over why nobody gives a shit about our newsletters.
But then we’ll think about what really drives predictable success for software businesses and get back to work.
The alternative: Focus on bottom-of-funnel execution
Instead of hoping for magical, six-sigma outcomes from “top-of-funnel” activities, startups that build revenue engines focus on “bottom-of-funnel” execution.
In plain English: When you’re an early-stage founder, don’t waste time on lofty brand-building in hopes of going viral; focus ruthlessly on selling to people who want to buy.
There’s a lot to get right here, potentially including:
Outbound email / cold calls
Paid ads
Affiliate deals
Demos, winning deals
Bottom-of-funnel content & SEO (e.g., comparison pages for people looking to buy, webinars directly tied to purchasing your product)
Website conversion rates
Trial / freemium conversion rates
Customer success / expansion / referral rates
The problem is that none of this is sexy. It’s definitely not what’s advertised in entrepreneurship media (or, worse, LinkedIn). It won’t get you into TechCrunch, it won’t put you on anyone’s 40 under 40 list, and it won’t build your personal brand.
But it will build a revenue engine with raving customers and a fast path to profitability. Call me old-fashioned, but isn’t that what business is all about?
PS - Obviously, bottom-of-funnel execution only matters if:
You have a good business strategy, positioning, etc. etc. etc.
Your product doesn’t suck
Are you more or less likely to get these right if you’re focused on building a media company too?