Struggling to Grow Your Startup? It’s Time to Start Trust Hacking
Marketing has never been harder than it is today
There is more competition than ever before.
Estimates show that three new companies launch Every. Single. Second.
(That’s over 10,000 new companies per hour.)
With so much competition for our limited attention, marketing has become increasingly complex.
Today there are over 5,000 apps designed specifically for marketers and salespeople.
And, there are more ways than ever to reach an audience. From ads, to email to DMs and content marketing, both consumers and companies are bombarded by marketing everywhere they look.
Did you know that the average executive receives 250+ emails every day?
(Yup. There’s a reason why your email reply rate may be going down.)
It’s not just email that’s suffering. Popular advertising platforms like LinkedIn and Facebook are literally running out of space in their regular newsfeeds.
Facebook is currently experimenting with a secondary “explore” feed, which moves all unpaid posts from brands out of the newsfeed all together.
To put that in context… that means that Facebook — a site that currently drives more traffic than Google — is fast becoming pay-to-play.
Email open rates keep going down, and ad prices are going up, up, up. It’s a scary time for small teams with minimal resources.
Why am I telling you all this? Well, there are two reasons:
First, I want you to know that if you’re struggling to grow your tech company, you’re not alone.
Many of the founders I talk to describe growth “as slow and painful.” It feels like you’re constantly pushing a boulder up a hill.
But, according to the world’s foremost growth experts — the people behind DropBox, HubSpot, Amazon, Apple, Stripe, AirBNB and Facebook — it shouldn’t feel that way.
Which leads me to my second point. And listen up, because this one is important…
Slow growth is rarely the root problem — it’s a symptom
According to Brian Balfour, the former VP of Growth at Hubspot, there are really only 4 things you need to get right early on to pave the road for rapid growth.
Brian calls these “the four fits.”
First, you need to build the right product for your market.
This is often referred to as product-market fit. Or as Brian puts it, “market-product fit,” because your product should be built for the customer — not the other way around.
You need to choose the right growth channel.
Your growth channel might be virality, direct sales, or inbound marketing — it totally depends on your business. But what’s important is that you need to find one channel that works early on and keep investing in it.
And, you need the right business model for your market.
As Brian describes it…
“When you get these four fits right, growth feels less like slowly pushing that boulder up a hill, and more like frantically guiding it down the hill.”
When the four fits are in alignment, growth becomes much easier. It’s at this time that growth hacking can help to rapidly scale your company.
There is just one itsy, bitsy problem though…
Most tech companies never achieve the four fits
In fact, most companies never even get the first fit right.
Studies show that the majority of tech startups fail for two main reasons:
- They ignore their customers
- They build a product no one really needs (if you’re wondering how this could happen, please refer to reason #1)
How are so many brilliant, hardworking founders making the same deadly mistakes? It’s because they’re focused on the wrong metrics.
According to Sam Altman, the President of Y Combinator, the most important activity founders should focus on in the early stages is finding their super fans and earning their trust.
As Sam explained on the Masters of Scale podcast, every one of Y Combinator’s most successful companies shared a common trait: they grew through referrals.
It didn’t matter whether they were a B2B company like Stripe and DropBox or B2C like AirBNB and Reddit, the secret for success remained the same…
Find your super fans and growth will follow
This “secret” to uber fast growth isn’t really a secret at all though, is it? Trust (aka. advocacy, referrals, loyalty, etc.) has always been the ultimate lubricant for growth.
If people trust you, they’ll talk about you. And that word-of-mouth marketing is oh so sweet.
Trusted referrals are powerful:
- 84% of B2B decision makers start the buying process with a referral
- 65% of all new business comes from a referral
- People are 4 times more likely to buy when referred by a friend
- The lifetime value for new referral customer is 16% higher than non-referrals
These statistics make it abundantly clear — if you want to grow your tech company, your customers need to trust you so much that they’d happily refer you to their peers.
In other words…
Trust is the most critical metric in business.
Or as Louis Grenier said in his podcast Everyone Hates Marketers, “Trust is the most valuable currency in marketing.”
But, how do you earn trust? Trust is typically built slowly over time and is hard to measure.
I’ve spent the last year obsessing about this problem. You see, I made all the classic mistakes when building my own tech company. Now I work with early stage tech companies to help them avoid these common pitfalls.
After working with more than 50 startups, I believe that there’s a better, faster way for high growth companies to achieve the four fits.
I call it “Trust Hacking.”
Trust Hacking: accelerate growth by prioritizing trust
While Trust Hacking as a framework is still very much in the early stages of development, the theory behind it is simple…
Trust Hackers use customer research, behavioural science, and feedback loops to find, delight and retain their super fans.
It isn’t a mantra or a tactic. Trust Hacking is a process for systematically auditing/improving every touchpoint along your customer journey.
Here’s a sneak peek…
However, Trust Hacking serves a clear and distinct purpose…
It’s not just about launching or refining your product (ie. Lean Startup, Design Thinking). And, it’s not designed to help you scale existing growth (ie. Growth Hacking).
Trust Hacking lives somewhere in the middle.
If you’ve launched a product, acquired some early adopters, but things aren’t going as planned, it’s time to start Trust Hacking.
(If you’re a Nova Scotia tech company and this sounds like you, I would love to talk to you. I’m working on something new that can help you. Shoot me an email: email@example.com)
5 Rules of Trust Hacking
Trust Hackers leverage customer intelligence
Many companies talk a big game about “putting their customer first,” but few actually walk the talk.
They haven’t invested enough time getting to know their customer.
Many struggling tech teams have done little customer research (aside from the prerequisite customer discovery phase when building their product).
And, scarier still, very few teams have a company-wide consensus about who their most important customer is, why that customer buys, or how they intend to position their company in the market.
Without a strong foundation in place, these companies are basically blindfolded and throwing darts at a wall — they might get lucky and hit the bullseye every now and then, but they can’t easily repeat it.
I see two common mistakes:
- Companies target too broad of an audience — as the old saying goes, “If you’re targeting everyone, you’re actually targeting no one.”
- Companies target multiple audiences, which often leads to an identity crisis, weak / inconsistent messaging, and a bloated product.
Trust Hackers can avoid these common pitfalls by using customer intelligence to niche down and zero in on their super fans.
Ongoing customer intelligence will inform your strategy and keep your whole team in alignment. When everyone really understands the customer and their needs, everything becomes easier:
- You’ll write more compelling copy
- You’ll know which features to build first
- Your marketing ROI will increase
- Your sales team will close more deals
- Your retention will increase
Trust Hackers know that this work is never really “done.” As with any valued relationship in life, building a trusting relationship with your customer requires that you continue to show up and do the work.
I’m not going to sugarcoat it: customer intelligence is “work.” But there’s an easier way to do it. Which is a great segway into the next rule…
Trust Hackers use customer data differently
Many tech companies pride themselves on being “data driven,” but few are collecting the right kind of data to help them make customer-centric decisions.
It’s important to remember that humans aren’t rational — they’re emotional.
If you want to acquire and retain more customers (and ultimately earn their trust), you can’t just look at WHAT your customers are doing. You need to know WHY they’re doing it.
As Steve Jobs put it,
“Your job at the early stage of innovation is to get into the shoes of your customer, understand their life, and look for insights that give you ideas on products that you could create that would surprise and delight them.”
This is where behavioural science comes into play. Trust Hackers rely heavily on both quantitative AND qualitative data in an effort to understand their customers at a deeper level.
Trust Hackers use qualitative data to better understand their customer’s behaviour and then use quantitative data to validate their assumptions. This is important as it gives you the full picture.
Combining qualitative and quantitative data is part art and part science. Even massive companies like McDonalds have struggled with it for years. But, when done the right way — the way I teach my clients how to do it — using data differently can help early stage tech companies to nail the four fits.
Trust Hacking teams work cross-functionally
Zappos, founded by Tony Hsish in 1999, was acquired for nearly $1 billion by Amazon just 9 years later. At the time, Zappos was selling ten times more shoes than Amazon, despite the fact that Zappos’ shoes were more expensive.
I met Tony a few years ago in Vegas while I was there building my startup (he’s a real character). I asked him how Zappos dominated the market so quickly. His answer was simple…
“People buy from companies they trust. We didn’t have to be the cheapest or even the fastest to win. We optimized for trust at every touchpoint.”
Tony understood something that many teams miss. Trust is built (and lost) along the whole customer journey.
Here’s a great example of the highs and lows of the customer journey:
To create the best possible customer experience, you can’t treat marketing, sales, and product as completely separate functions. You need to think holistically and analyze each customer touchpoint.
Similar to growth hacking, to begin Trust Hacking you must first break down departmental silos and get cross-functional teams working together.
Creating a better customer experience — one that evokes trust and loyalty — must be everyone’s responsibility. Building a cross-functional team and getting them working together on a common goal is critical for Trust Hackers.
Trust Hackers intentionally build speed bumps
When building a tech company, there’s no shortage of things to do. Founders are celebrated for their hustle, and startup dogma encourages teams to “move fast and break stuff.”
This is generally good advice, except that many founders take it too literally.
Founders often spend more time shipping product than thinking about why their product isn’t working in the first place.
This leads to what Brian Balfour calls “the product death cycle”…
Trust Hackers take a different approach. Rather than sitting around a boardroom brainstorming new product features or marketing tactics, Trust Hackers use customer intelligence to identify potential “trust gaps” along the whole customer journey.
This is a different way of problem-solving. It forces teams to stop, slow down, and put themselves in their customer’s shoes.
Once they’ve identified their biggest trust gaps, Trust Hackers brainstorm ideas to accelerate trust. Ideas are then prioritized and rapidly tested using a series of minimum viable tests (or “MVTs”).
If a test shows promise, Trust Hackers move onto the next logical minimum viable test (MVT).
However—and this is important—if more than 5 tests fail in a row, Trust Hackers must stop and revisit the core assumptions driving their strategies.
Why It Matters:
Testing ideas before heavily investing in them helps busy teams avoid wasting time on the wrong projects, and, more importantly, it forces them to slow down and reevaluate their strategy if tests keep failing.
Building in speed bumps is critically important. Too many smart, hardworking tech teams waste years of their lives grinding day and night and moving fast… in the wrong direction. (I should know. I was one of them.)
A Trust Hackers’ true north is trust
While a Growth Hackers “true north” is growth, Trust Hacking teams work together to prioritize projects based on what is most likely to accelerate trust.
Focusing on “building trust” requires teams to ask different questions.
For instance, rather than asking,
“How can we drive more traffic to our homepage?” (which inevitably leads to tactical thinking).
A Trust Hacker might ask,
“Who do our ideal customers already trust in our industry? Why do they see them as a trustworthy source for information? What can we learn from that relationship that can inform our own strategy?”
This subtle shift in thinking puts the focus back where it belongs — on your customer’s needs.
Focusing on trust forces teams to think more empathetically — something that I know can be very difficult to do when you’re running a tech company and things aren’t going as planned.
Human-to-human relationships require nurturing and patience. But when you’re working 80-hour weeks trying to build your tech company, it’s easy to forget that each new “user” is actually a human-being.
Adopting Trust Hacking reframes your team’s core objective from one that is company-centric (ie. growth) to one that’s customer-centric (ie. trust).
Amazon has operated this way for years. When Amazon has a board meeting, Jeff Bezos leaves an empty chair during meetings to symbolize the “the most important person in the room” — the customer.
A shift in focus from growth to trust will make a massive impact in how your team makes decisions.
The best part? Trust Hackers can easily analyze their team’s progress on a regular basis by measuring one simple metric — the net promoter score (“NPS”). If their NPS isn’t rising with each new cohort of customers, something isn’t working.
By redefining what success looks like and making it dead simple to measure if you’re moving the needle (ie. regular NPS surveys), Trust Hackers can reach the four fits much faster.
Technology changes rapidly. People don’t.
I believe that the next generation of high-growth companies, like their predecessors before them, must prioritize customer trust above all else.
As marketing continues to evolve rapidly and competition increases, customer loyalty and referrals will become the most viable path to sustainable growth.
Customer trust is no longer a “nice-to-have” for today’s fledgling tech companies. It’s their most valuable competitive advantage.
Every growth expert tells founders to “make something people want.” But, saying the words is not enough.
Early stage tech teams can’t just hope that they’ll build a product their customers love. They need an actionable framework to follow.
Trust Hacking is a systematic approach that forces teams to:
- Routinely learn as much as they can about their customer
- Prioritize their efforts and validate their assumptions
- Work more holistically and empathetically
- Slow down and reevaluate their strategy when things aren’t working
- Easily measure their progress using one simple metric
By taking a customer-centric approach to growth and focusing on increasing trust across the whole customer journey, Trust Hackers can avoid many of most common reasons tech companies fail.
If you want to reach the four fits faster and grow your tech startup, it’s time to start Trust Hacking!
Are you ready to start Trust Hacking?
If you’re a Nova Scotia based tech company, I’m working on something you definitely want to know about.
Shoot me an email and we’ll find a time to chat: firstname.lastname@example.org.