Your startup has skyrocketed at the local market and now you feel like conquering the American market. You drew investments, gathered a team of superheroes to make a breakthrough in the Western market, but it did not fly on the start. The familiar mix of channels does not work and customer acquisition costs are several times higher. All your US customers can be counted on one hand and receiving adequate feedback and sats is not easy. Your dream of attracting a large institutional investor for your A-round remains a dream, but you are sure that your team and your product are really cool and deserve success. Sound familiar?
At PromoRepublic, we went through the same experience. But suddenly, our lives changed after one chance Skype conversation with a cool guy by the name of Olman, who asked just a few questions. And from that point on, magic started happening to our startup. That magic was because of AppSumo.com. Our startup got off the ground and started to radically change right before our eyes.
Our recipe for success is simple at a first glance, yet difficult to execute and get the most out of it. And we are not going to hide it from the startup community. We were assertive and got lucky. We knocked at the right door and it was opened to us, although not instantly. In a matter of a few weeks, our PromoRepublic service turned from a tiny startup with a couple of hundred customers in the US to the project that we can proudly present even to the Sand Hill Road investors.
After gaining success in Europe, we made a tough decision, and in early 2016 we totally focused on the USA. We refreshed the team, changed positioning to make it more focused, and tried plenty of various marketing channels in the US in search of the ideal mix.
We gathered a team to work specifically with the American market, but we could not fully load it. The team was plainly bored. In one week, we changed from a downhearted team to a cheerful and energetic one ready for new achievements in the US. We were assured that we did something really cool and useful. We thought so, but we learned the American users thought so too. There appeared hundreds of cool user reviews and suggestions. We do our best to bring those to life as fast as we can! The team’s energy and culture have completely changed. And that is really cool! We are energized and motivated.
Jump into the league of skyrocketing SaaS US startups
Every self-respecting startup dreams about getting onto popular American platforms like AppSumo.com or to the top of the day list at ProductHunt.com.
What are these platforms and how do they help startups? These platforms provide a chance for new projects without wide user base to present a new product to the Western world. In a week or two, the project can build up an initial base of active users, receive feedback on the product’s functional features, check hypotheses and more. Product Hunt offers an absolutely free platform, but promotion and collecting upvotes is a startup’s own responsibility. If a startup manages to get into the top, Product Hunt adds the product to its mail-out list of hundreds of thousand subscribers and the project owners see the real value!
AppSumo uses a different model. The service facilitates promotion through its own channels and, in fact, sells subscriptions using a revenue share system.
There is plenty of info on Product Hunt, so in this article we will focus on the startup launcher – AppSumo.com.
How does it work?
AppSumo has 850,000 subscribers for their cool mailing list as well as 200,000 followers on social media. The subscribers and followers are great leads They’re heavy SaaS users, advanced business owners, marketing experts, freelancers and agencies. They are also professional discount hunters, people who wish to get more value for less money and spend not a penny on a mediocre service.
Most of AppSumo’s audience is from the US and other English-speaking countries. But there are also people from Europe and Asia. AppSumo has a global audience, like Facebook or Google. Not bad, eh?
But it is even more than that! AppSumo has a network of affiliate partners who promote their special offers to their own audiences, so the total reach is even over 1,000,000 people.
AppSumo copywriters write a simple, accessible and funny article describing the service. At the article’s end, there is a “superunbelievable” special offer urging subscribers to buy three-year, one-year or lifetime access to the promoted service with a huge discount.
AppSumo provides enormous reach, accurate description of your product or service, and unbelievable discounts with a limited time offers, which explains why they’re selling literally several thousand subscriptions a day.
How did we get there?
In February this year, we submitted two applications at AppSumo website. But there was no reaction on their part. We did not anything specific to reach the project founders as we did not know its real value. We applied and forgot. Now, I would approach it differently, I would get in touch with those who have already got promotion on their platform and ask for an intro.
And right before the fundraising was about to start – I was then in Boston – I received the message from Olman, AppSumo Head of Business Development. These guys are fun to talk with: ‘yo, man! yo-yo-yo! Give me a five! That’s a cool application! I saw it and thought I must reach out. So, what’s up? Where are you guys? Let’s make some magic happen!’ I was riding a taxi at that moment but replied immediately that I was ready to communicate right then on Skype. And the reaction was instantaneous, he added me to his Skype contacts and we talked.
How to negotiate with AppSumo?
Since the AppSumo guys sell a lot within a short time, they try to immediately understand how serious your company is. Their representative has to check how adequate and serious your company is and while having a fun chat he asks checking questions between the lines, like ‘who are you and why are you doing this? Do you know your metrics? Where are you located, in what time zones, how many of you are there? What about customer support team?’ A positive thing for them may be an experience with other resellers as well as a system for special offers using unique promo codes.
The AppSumo guy asked me something about product details and target users, told me about similar services that made their promotion on AppSumo and their results. Having analyzed my answers he said we had a very clear service and were likely to achieve results similar to our competitors. That means 4000 new paying users. My reaction to this was pretty usual – I was struck dumb with joy for 30 seconds. But still I replied ‘Well … not too much but still something’ 🙂
And that was that, we went on to discussing the launch date. I insisted on having the campaign this year, before the fundraising starts. This argument made a positive impression on my counterpart and he agreed. We set the date. Our chat lasted only 10 minutes and was megapositive. I managed to persuade AppSumo.com to accept us for their special offer in several weeks. I told our team and the preparations started immediately.
There is one more important thing to remember. Beware of cheap imitations! AppSumo clone-services may get in touch offering better deals. Copycats have low-quality base and dealing with them will only result in upsetting relations with AppSumo.
How did we prepare?
We had to seriously strengthen our customer support. It had to be 24/7 since most we were growing our US-based subscribers. It was tough. You cannot master the art of customer success in one day. So we announced that everyone at PromoRepublic would become a customer support and success manager for a week. That way, every team member would know how to support our customers.
After some time, our friend Olman at AppSumo, called us. He said ‘Look here guys, we saw you have packages for agencies. Let’s have two offers at once. There will be one individual offer and one team package’. We agreed to that as we were quite interested in agencies as our potential audience.
After that, we became proactive. We prepared a special landing page for those who purchased our subscription from AppSumo.com containing the video instructions for entering the unique code, securing access to the discounted subscription. We planned for huge traffic and such measures usually reduce the number of customer support questions.
On our web page we offered an added value: we prepared a video course, an e-book and templates for developing a social media strategy exclusively for those customers who purchased our subscription from AppSumo. Check it out here.
We told AppSumo guys we wished to launch our product on Product Hunt prior to their campaign. On the one hand, we wanted to learn how to work with comments and warm-up our support team. But also, we needed new customers in October to maintain our growth. They agreed and even posted the info about our launch at Product Hunt on their Twitter and Facebook pages.
It’s my recommendation to launch a Product Hunt campaign prior to starting promotion on AppSumo. Good Product Hunt reviews, as well as getting into their top list, will build up more trust and additionally motivate the AppSumo team. It definitely worked that way for us.
So, everything was ready for the launch. We came out on AppSumo with a double offer.
How does it technically work?
First, they made a nice special offer description for us. To help with that, we designed several pretty screenshots and gave links to the content about us.
Then came a funny article containing the special offer. Here it is.
Five days before the launch, a pilot launch started. We were posted on the AppsSumo.com website. The traffic is small there in comparison to their mail-out list but we still got some questions, and received reviews and first comments. We started working with them and it became clear what kind of questions to expect after the mail-out. That made us feel a lot more comfortable going into the big launch.
And of course, the first sales poured in! One can follow sales and money-backs online, in a partner’s section on the AppSumo website.
The mail-out started late at night. We prepared to answer comments. The whole team was ready. We engaged all the people we could: our team, our friends, friends of our friends, even our pets.
There were many nice comments and reviews.
But also, there was constructive criticism 🙂 We realized we needed to expand the library of post templates for other countries.
There was a hell load of work to do and as the night grew on the amount of comments and reviews has only increased. That was an action-packed game indeed!
The AppSumo guys sent out e-mails by portions. The first portion went to half of their subscribers. For two days there was an unbelievable registration spike. Then they did the second mail-out. Things got somewhat quieter. Just before the end they did one more mail-out saying that the offer was closing the next day.
That way they squeezed those who doubted and the total number of our users grew to 4500.
What were we promised?
Participation in this campaign was totally free for us. AppSumo works on a revenue share principle. That means that they keep a part of the revenue for themselves and the rest goes to the startup. We have participated with the special offer of an individual package for $25 and a small team-package for $49.
I cannot disclose the numbers on revenue shares but I can tell that the most of it went to AppSumo and we were paid the smaller part. However, their justification argument goes that they invest part of their share in the marketing. We did not request a budget report from them, but that was true enough – we saw posts boosting on Facebook, retargeting and posting on partners’ websites. As social media marketers ourselves, we understand the cost of push marketing. This experience was worth it to us.
What did we actually get?
In return, a startup gets a number of benefits:
- A huge global base of quasi-paid subscribers from the USA and English speaking countries (they buy long-term packages for a 1 month price). The audience is very active. In two weeks following the campaign we looked at the statistics. Two thirds of the users, who came from AppSumo, had created more than five posts using our system. For a beginner project, active users who are well informed about the alternative resources are very important! Experienced users ask great questions and give feedback. If there are many of them, it is easier to get 5-10 people agree to have Skype-conversations and give interviews. Of those who have actively commented on AppSumo, we recruited our Customer Advisory Board. It would be much more difficult to do with a 50-subscriber base.
- There appears more high-quality statistics of service usage. The more people who use your service, the better you see dead ends in user experience. There appears an array of highly informative statistics based on when we started making product decisions and conclusions on how to improve our product. You cannot improve what cannot be correctly measured statistically. After AppSumo, we got so much data that we ended up with a Data Scientist vacancy. AppSumo gave us all the data we needed.
- The costs were minimal. Very often, a startup spends a lot of money upfront to attract users to the website, persuade them to subscribe and, finally, pay for the product in order to – at least partially – result in ROI for the startup. It is a long and costly process, since there are different channels in the US and quite often unit economics does not work out in the beginning. AppSumo helps to avoid excessive costs and even pays you for every active user. As you gain thousands of new users, you get a substantial income that can be spent for attracting non-discount users.
- Recognizability. In this story, however, the money is not the most important thing. As AppSumo people say, the main thing is that a million people audience will get to know you. And a million people is a lot – even for the United States market. Your company name becomes a buzzword and you can refer to working with AppSumo, providing links to your special offers there. Partners read comments and reviews and they see that your service is good. The offer becomes a kind of Trust Machine for you similar to a successful product page on Product Hunt.
- Organic high quality reviews are beyond valuable. There is always an active discussion just below the article involving a huge amount of comments about the service from both actual and potential buyers. In those comments it is clear who has already purchased the service and who is still in doubt. In our case, there were about 800 comments and reviews. The AppSumo users are perfectly informed about similar services on the market. Their comments are of great value. It was based on those comments that we revised the whole development plan and changed our priorities. Comments provide an unbelievable social experiment with a huge number of participants.
- Powerful feedback. The difference between AppSumo and Product Hunt platforms is huge. On PH, most of the comments are friendly and encouraging. Something like “yo, that’s beautiful!”, “that is superb!”, “very cool!”, “well done!”. That is because it is mostly friends, relatives, and colleagues who vote there. There are only few users who give you valuable advice. But on AppSumo, it is a totally different story. Some users try to kick the tires of you and your service. You may get questions like, ‘show me your original code!’. There may be up to 10-11 points and questions in a single message. That is really cool and valuable, I think. And a person, whose criticism you heard and reacted correctly, would remain you friend for a long time.
- SEO impact. The team at AppSumo say that placing special offers on a large number of their affiliate resources, which generate their traffic, has a positive impact on search optimization. We do not see SEO results to be that great so far, but perhaps that will show later.
- Bonus. If an AppSumo campaign is mutually successful there is an opportunity to repeat it every 6 months. AppSumo favors long-term cooperation and respects loyalty very much. In our case the campaign was extremely successful and we are planning to launch it again in the nearest future.
- References, competitors, and opinion leaders. When the campaign was over, we continued communicating with the AppSumo team. Olman introduced us to our competitors. After talking to them we decided to launch co-marketing projects and shared our experience. After the intro from AppsSumo we were talked to as equals.
Another introduction AppSumo facilitated was with the organizers of the SaaS Growth Summit online conference, whose participants include the well-known speakers and founders of cool SaaS projects – Noah Kagan (AppSumo/SumoMe), Sujan Patel (Milkshake), Laura Roeder (MeetEdgar), Nathan Barry (ConvertKit).
What is more, you can recommend a project yourself and you will be heard. For example, we have recommended another Ukrainian project. Recently, there was a Skype conversation and everyone seemed satisfied. Now they are going to launch a campaign. Rinse and repeat. This is a great process for us.
- An AppSumo campaign raises a startup’s rating in the eyes of investors. They see both positive and negative comments and how we deal with them. They see that there is a ready team capable to adequately process a large array of user feedback. And that the team learns from the criticism and can change and move forward.
Investors see that users are ready to buy the product. And they see the demand and product’s popularity in dynamics. We emailed potential investors the link to our promo. For them, it was a good assurance that we offer a service that is needed. We could prove that we had over 4500 users in the US after 4 months of proactive marketing, which was extremely important for the fundraising that is now underway.
- And the last in the list, but not least important – since we were selling the smallest packages in terms of available features there is a potential to upsell more expensive packages to customers filled with special offers. It is like selling an upgrade of a rented car to a person who came with a Groupon coupon for a Nissan Micra :). Put them in an Audi RS7 and see how much happier they are.
Working with AppSumo was cool and useful experience for us! We got feedback, validated our product, decided to improve its quality and make it better and more thought-out and user friendly instead of introducing new features that nobody needs.
The AppSumo team has rewarded us with a prize for participation– in late January I will have the pleasure of personally shaking hands with our contacts as I will be attending the conference in Austin, TX, where AppSumo office is headquartered. See you there!